UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 19, 2021

 

 

BLUE OWL CAPITAL INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-39653  

86-3906032

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

 

399 Park Avenue

38th Floor

New York, NY

  10022
(Address of principal executive offices)   (Zip Code)

+1 (212) 419-3000

Registrant’s telephone number, including area code

Altimar Acquisition Corporation

40 West 57th Street

33rd Floor

New York, NY 10019

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading
Symbol(s)

  

Name of each exchange

on which registered

Class A common stock, par value $0.0001 per share    OWL    New York Stock Exchange
Warrants to purchase Class A common stock    OWL.WS    New York Stock Exchange

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Introductory Note

On May 19, 2021 (the “Closing Date”), Altimar Acquisition Corporation, a blank check company incorporated as a Cayman Islands exempted company (“Altimar”), domesticated as a Delaware corporation (the “Domestication”) and changed its names to Blue Owl Capital Inc. (“Blue Owl”). Immediately following the Domestication, Blue Owl consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement, dated as of December 23, 2020, as amended by the Amendment to Business Combination Agreement, dated as of January 4, 2021, the Second Amendment to Business Combination Agreement, dated as of March 25, 2021, and the Third Amendment to Business Combination Agreement, dated as of April 11, 2021 (as may be amended from time to time, the “BCA” or the “Business Combination Agreement”), by and among Altimar, Owl Rock Capital Group LLC (“Owl Rock Group”), Owl Rock Capital Feeder LLC (“Owl Rock Feeder”), Owl Rock Capital Partners LP (“Owl Rock Capital Partners”) and Neuberger Berman Group LLC (“Neuberger”).

Unless the context otherwise requires, “we,” “us,” “our,” the “Company” and “Blue Owl” refer to Blue Owl Capital Inc. All references herein to the “Board” refer to the board of directors of Altimar or Blue Owl, as applicable.

Upon the completion of the Business Combination and the other transactions contemplated by the Business Combination Agreement (the “Transactions,” and such completion, the “Closing”), the combined company was organized in an “Up-C” structure. Prior to the Business Combination, Altimar formed a wholly owned subsidiary, Blue Owl Capital GP LLC (“Blue Owl GP”), which serves as the sole general partner of two operating partnerships, Blue Owl Capital Holdings LP (“Blue Owl Holdings”) and Blue Owl Capital Carry LP (“Blue Owl Carry” and, together with Blue Owl Holdings, the “Blue Owl Operating Partnerships” and, together with their consolidated subsidiaries, the “Blue Owl Operating Group”). The Blue Owl Operating Group directly or indirectly holds substantially all of the consolidated assets and business of Blue Owl.

The aggregate value of the consideration paid to the existing equityholders of Owl Rock Group (the “Owl Rock Equityholders”) and Dyal (the “Dyal Equityholders”) in the Business Combination was approximately $12.15 billion, of which:

 

  (a)

approximately $5,467,500,000 was paid to the existing Owl Rock Equityholders (inclusive of the Special Incentive Award described in the Notes to Owl Rock’s Consolidated and Combined Financial Statements) consisting of: certain cash consideration in the approximate amount of $350,000,000 (subject to adjustment as described below, the “Owl Rock Cash Consideration”), which was financed with the funds available in the trust account established in connection with Altimar’s initial public offering (the “Trust Account”) and a portion of the proceeds of the private placement of 150,000,000 shares of Class A common stock immediately prior to Closing (the “Private Placement”) or “PIPE Investment” with certain institutional and other accredited investors (the “PIPE Investors”) and the remainder in shares of Class A common stock at a price of $10.00 per share (or, in lieu of such shares of Class A Common Stock for Owl Rock Equityholders making a valid and timely election, in Blue Owl Operating Group Units (as defined under the heading “Exchange Agreement”) and vote-only shares of Blue Owl); and

 

  (b)

approximately $6,682,500,000 was paid to the Dyal Equityholders consisting of: certain cash consideration in the approximate amount of $1,100,000,000 (subject to adjustment as described below, the “Dyal Cash Consideration”), which was financed with the funds available in the Trust Account and a portion of the proceeds of the Private Placement, and the remainder in Blue Owl Operating Group Units and vote-only shares of Blue Owl.

Immediately after giving effect to the Business Combination (including as a result of Altimar shareholder redemptions validly submitted prior to the Shareholder Meeting), there were 320,005,528 issued and outstanding shares of Blue Owl’s Class A common stock. One business day following the Closing, Altimar’s Class A ordinary shares and warrants ceased trading, and Blue Owl’s Class A common stock and warrants began trading on The New York Stock Exchange (“NYSE”). Altimar’s public units automatically separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from NYSE. As of the Closing Date, our directors and executive officers and affiliated entities beneficially owned approximately 0% of the outstanding shares of Blue Owl’s Class A common stock, and the former securityholders of Altimar beneficially owned approximately 4.5% of the outstanding shares of Blue Owl’s Class A common stock.

 

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Item 1.01.

Entry into a Material Definitive Agreement.

Amended and Restated Warrant Agreement

In connection with the Closing, Blue Owl entered into an Amended and Restated Warrant Agreement (the “Amended and Restated Warrant Agreement”) with Continental Stock Transfer & Trust Company (“Continental”), Computershare Trust Company, N.A. and Computershare Inc. (together, “Computershare”), pursuant to which, among other things, Continental assigned all of its rights, interest and obligations thereunder to Computershare, as warrant agent. In connection with the Closing, all of the outstanding warrants to purchase Class A ordinary shares of Altimar became exercisable for an equal number of shares of Class A common stock of Blue Owl, par value $0.0001 per share (“Class A common stock”), on the terms and conditions of such warrants set forth in the Amended and Restated Warrant Agreement.

The foregoing description of the Amended and Restated Warrant Agreement do not purport to be complete and is qualified in its entirety by the full text of the Amended and Restated Warrant Agreement, a copy of which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.

Tax Receivable Agreement

In addition, in connection with the Closing, Blue Owl, Blue Owl GP and the Blue Owl Operating Partnerships entered into the Tax Receivable Agreement with the Dyal Equityholders, the Owl Rock Equityholders and certain other parties thereto. Pursuant to the Tax Receivable Agreement, Blue Owl GP is required to pay 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of any increases in tax basis of the assets of the Blue Owl Operating Partnerships related to the payment of the cash or stock consideration pursuant to the Business Combination Agreement and any exchange of Blue Owl Operating Group Units for shares of Class A common stock or Class B common stock or cash in the future, certain other tax attributes of the Blue Owl Operating Partnerships, the Blue Owl GP, or the corporations acquired from certain Owl Rock Equityholders in the transaction, and certain tax benefits related to entering into the Tax Receivable Agreement. The payments under the Tax Receivable Agreement are not conditioned upon the recipients’ continued ownership of Blue Owl or the Blue Owl Operating Partnerships.

The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless (i) Blue Owl GP exercises its right to terminate the Tax Receivable Agreement for an amount representing the present value of the agreed payments remaining to be made under the agreement, (ii) there is a change of control or (iii) Blue Owl GP breaches any of the material obligations of the Tax Receivable Agreement, in which case all obligations will generally be accelerated and due as if Blue Owl GP had exercised its right to terminate the Tax Receivable Agreement.

The Tax Receivable Agreement provides that upon a change of control, Blue Owl GP’s obligations under the Tax Receivable Agreement will be accelerated based on certain assumptions, including that Blue Owl GP will have a sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the Tax Receivable Agreement.

The foregoing description of the Tax Receivable Agreement does not purport to be complete and is qualified in its entirety by the full text of the Tax Receivable Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Investor Rights Agreement

At the Closing, Blue Owl, Altimar Sponsor LLC (the “Sponsor”), certain equityholders of Altimar, certain of the Owl Rock Equityholders and Dyal Equityholders and certain other parties thereto entered into an Investor Rights Agreement (the “Investor Rights Agreement”). The Investor Rights Agreement provides, among other things, that (i) Neuberger, the Dyal Principals (as defined in the Investor Rights Agreement) and the ORC Principals (as defined in the Investor Rights Agreement) have the right to nominate one, two and three director(s), respectively, to the initial

 

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board of directors of Blue Owl, which shall initially consist of nine members, (ii) for the establishment of an “Executive Committee” consisting initially of the ORC Principals and Dyal Principals that will be delegated day-to-day management of Blue Owl and its subsidiaries, subject to certain limitations, (iii) certain material actions of Blue Owl and/or its subsidiaries require approval of its Board, the Executive Committee and/or, until certain ownership thresholds are no longer maintained or, in some cases, an applicable time period has not expired, Neuberger, (iv) Neuberger with certain preemptive rights with respect to future equity offerings by Blue Owl, Blue Owl Holdings, Blue Owl Carry and their subsidiaries and (v) contractual lock-ups on the sale of Blue Owl common stock and Blue Owl Operating Group Units by the parties to the Investor Rights Agreement.

The foregoing description of the Investor Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the Investor Rights Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

Blue Owl GP LLCA

Upon consummation of the Business Combination, Blue Owl, in its capacity as the sole and managing member of Blue Owl GP, entered into the Amended and Restated Limited Liability Company Agreement of Blue Owl GP (the “Blue Owl GP LLCA”), which, among other things, provides that Blue Owl GP will act as general partner of Blue Owl Holdings and Blue Owl Carry. Concurrently with the execution of the Blue Owl GP LLCA, Blue Owl, as managing member of Blue Owl GP, organized an exchange committee of Blue Owl GP, which is vested with the power and authority to determine whether to make certain elections on behalf of the Blue Owl Operating Group with respect to the exchanges contemplated by the Exchange Agreement (as defined below).

The foregoing description of the Blue Owl GP LLCA does not purport to be complete and is qualified in its entirety by the full text of the Blue Owl GP LLCA, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

Blue Owl Limited Partnership Agreements

Upon consummation of the Business Combination, Blue Owl Holdings and Blue Owl Carry each entered into their respective Limited Partnership Agreements (collectively, the “Blue Owl Limited Partnership Agreements”), which, among other things, permit the issuance and ownership of units of Blue Owl Holdings (“Blue Owl Holdings Units”) and units of Blue Owl Carry (“Blue Owl Carry Units”), admit Blue Owl GP as the general partner of Blue Owl Holdings and Blue Owl Carry, and otherwise amend and restate the rights and preferences of the Blue Owl Holdings Units and the Blue Owl Carry Units set forth therein.

Subject to certain limitations, Blue Owl GP, as the general partner of each of the Blue Owl Operating Partnerships, will have the sole authority to manage the Blue Owl Operating Partnerships in accordance with the Blue Owl Limited Partnership Agreements and applicable law. Pursuant to the Blue Owl Limited Partnership Agreements, except with respect to “tax distributions” described below, Blue Owl GP has the right to determine when distributions will be made to the partners of the Blue Owl Operating Partnerships (including to Blue Owl GP, with respect to its economic general partner interest in Blue Owl Holdings and Blue Owl Carry) and the amount of any such distributions, subject to certain limitations provided therein. The Blue Owl Limited Partnership Agreements provide for mandatory “tax distributions” to the partners of the Blue Owl Operating Partnerships if the taxable income of Blue Owl Holdings or Blue Owl Carry, as applicable, gives rise to taxable income for its partners, and previous distributions to the partners with respect to the applicable taxable period are less in the aggregate than the amount of such partners’ income tax liability with respect to such taxable income.

The foregoing description of the Blue Owl Limited Partnership Agreements does not purport to be complete and is qualified in its entirety by the full text of the Blue Owl Limited Partnership Agreements, copies of which are attached hereto as Exhibit 10.4 and Exhibit 10.5, respectively, and are incorporated herein by reference.

 

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2021 Omnibus Plan

At the special meeting of the Altimar shareholders held on May 18, 2021 (the “Special Meeting”), the Altimar shareholders considered and approved the Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Plan”). The 2021 Omnibus Plan was previously approved, subject to shareholder approval, by the board of Altimar on May 17, 2021. On the Closing Date, our Board ratified the approval of the 2021 Omnibus Plan. The 2021 Omnibus Plan became effective immediately upon the Closing of the Business Combination.

The 2021 Omnibus Plan provides that the total number of shares of Class A common stock and Blue Owl Operating Group Units, collectively, that may be issued under the 2021 Omnibus Plan is 101,230,522 (the “Share Limit”), subject to adjustment in accordance with the terms of the 2021 Omnibus Plan. Of this amount, the maximum number of shares of Class A common stock for which incentive stock options may be granted is equal to the Share Limit; and the maximum number of shares of Class A common stock and Blue Owl Operating Group Units subject to awards granted during a single fiscal year to a non-employee director (or with respect to each single year in the event awards are granted for more than one year), taken together with any cash fees paid to such non-employee director during the fiscal year, will not exceed $400,000 in total value with respect to each fiscal year. Blue Owl Operating Group Units granted under the 2021 Omnibus Plan shall reduce the number of shares of Class A common stock that may be issued or used for reference purposes, or with respect to which awards may be granted, under the 2021 Omnibus Plan on a one-for-one basis. Any award settled in cash will not be counted against the Share Limit. To the extent that an award expires or is canceled, forfeited, terminated, surrendered or exchanged, the unissued shares or units will again be available for grant under the 2021 Omnibus Plan. Additionally, shares of Class A common stock delivered or withheld to satisfy any tax withholding obligations or that are tendered in payment of any stock option, including for the exercise price, will again be available for grant under the 2021 Omnibus Plan; provided, that, such shares may not be issued pursuant to any incentive stock options. No award may be granted under the 2021 Omnibus Plan after the tenth anniversary of the effective date of the Omnibus Plan, but awards granted before then may extend beyond that date.

The foregoing description of the 2021 Omnibus Plan does not purport to be complete and is qualified in its entirety by the full text of the 2021 Omnibus Plan, a copy of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

Exchange Agreement

At the Closing, Blue Owl GP, Blue Owl Holdings, Blue Owl Carry, Blue Owl and the holders of Blue Owl Operating Group Units entered into an Exchange Agreement (the “Exchange Agreement”). The Exchange Agreement provides, among other things, that such holders may, subject to any applicable transfer restrictions, exchange an equal number of units of each of Blue Owl Holdings and Blue Owl Carry (together, the “Blue Owl Operating Group Units”) and cancel an equal number of shares of Class C common stock or Class D common stock of Blue Owl, as applicable, for an equal number of shares of Class A common stock or Class B common stock of Blue Owl, as applicable, or cash. Under certain circumstances, an exchange committee to be established by Blue Owl GP may elect on behalf of Blue Owl Holdings and Blue Owl Carry to pay holders of Blue Owl Operating Group Units a cash payment in lieu of delivery of Class A common stock or Class B common stock described in the foregoing sentence, with such cash payment equal to the five-day volume weighted average price of shares of Class A common stock immediately prior to the applicable exchange date. A holder must exchange at least 10,000 Blue Owl Operating Group Units in each exchange, unless such holder owns a lesser amount of such units and is exchanging all of the Blue Owl Operating Group Units held by them at such time.

The Exchange Agreement contains restrictions on the timing and amount of exchanges of the Blue Owl Operating Group Units that are intended to prevent either of the Blue Owl Operating Partnerships from being treated as a “publicly traded partnership” for U.S. federal income tax purposes; such restrictions are modeled on certain safe harbors provided for under applicable U.S. federal income tax law. Blue Owl GP may also impose additional restrictions on exchanges that Blue Owl GP determines to be necessary or advisable so that neither of the Blue Owl Operating Partnerships is treated as a “publicly traded partnership” for U.S. federal income tax purposes.

 

5


The foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by the full text of the Exchange Agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated herein by reference.

Indemnification Agreements

On the Closing Date, Blue Owl entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification and advancements by Blue Owl of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to Blue Owl or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.

The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is attached hereto as Exhibit 10.8 and is incorporated herein by reference.

Transition Services Agreement

On the Closing Date, Blue Owl entered into a Transition Services Agreement with Neuberger (the “Transition Services Agreement”), pursuant to which Neuberger has agreed to provide certain transition services, including, among other things, the sublease of Dyal office space at 1290 Avenue of the Americas, New York, New York. Blue Owl will reimburse Neuberger for certain third party expenses incurred by Neuberger in connection with providing the transition services.

The foregoing description of the Transition Services Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Transition Services Agreement, which is attached hereto as Exhibit 10.9 and is incorporated herein by reference.

 

Item 2.01.

Completion of Acquisition or Disposition of Assets.

The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.

FORM 10 INFORMATION

Item 2.01(f) of Form 8-K states that if the predecessor registrant was a shell company, as Altimar was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, the Company, as the successor issuer to Altimar, is providing the information below that would be included in a Form 10 if the Company were to file a Form 10. Please note that the information provided below relates to the Company as the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

Forward-Looking Statements

Certain statements made in this Current Report on Form 8-K and in any document incorporated by reference herein are “forward looking statements.” Statements regarding the expectations regarding the combined business are “forward looking statements.” In addition, words such as “estimates,” “projected,” “expects,” “estimated,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of the parties, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include:

 

   

the projected financial information, anticipated growth rate and market opportunity of Blue Owl;

 

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various conflicts of interest that could arise among us, our funds, affiliates, investors and partner managers;

 

   

our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

 

   

our directors and officers potentially having conflicts of interest with our business, as a result of which they would receive compensation;

 

   

intense competition and competitive pressures from other companies in the industry in which the combined company will operate;

 

   

factors relating to the business, operations and financial performance of Owl Rock and Dyal, including market conditions and global and economic factors beyond Owl Rock’s and Dyal’s control;

 

   

the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our industry and the global economy;

 

   

the effect of legal, tax and regulatory changes; and

 

   

other factors detailed under the section entitled “Risk Factors.

The forward-looking statements contained in this Current Report on Form 8-K and in any document incorporated by reference are based on current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in the Proxy Statement/Prospectus and in our registration statement on Form S-4 filed in connection with the Business Combination. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Business

The businesses of Altimar, Owl Rock and Dyal prior to the Business Combination and the Company following the Business Combination are described in the Proxy Statement/Prospectus in the sections titled “Information About the Parties to the Business Combination,” “Information about Altimar,” “Historical Business of Owl Rock,” “Historical Business of Dyal” and “Business of Blue Owl” and that information is incorporated herein by reference.

Risk Factors

The risk factors related to the Company’s business and operations and the Business Combination are set forth in the Proxy Statement/Prospectus in the section titled “Risk Factors” and that information is incorporated herein by reference.

Financial Information

Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of Altimar, Owl Rock and Dyal. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Selected Historical Condensed Financial Information of Altimar,” “Selected Historical Consolidated and Combined Financial Information of Owl Rock,” “Selected Historical Combined Financial Information of Dyal,” “Comparative Historical and Unaudited Pro Forma Per Share Financial Information,” “Unaudited Pro Forma Combined Financial Information” and “Notes to the Unaudited Pro Forma Combined Financial Statements,” which are incorporated herein by reference.

 

7


Management’s Discussion and Analysis of Financial Condition and Results of Operations

Reference is made to Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations as of March 31, 2021 and for the three months ended March 31, 2021, included in Exhibit 99.5 and Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations as of March 31, 2021 and for the three months ended March 31, 2021, included in Exhibit 99.6 of this Current Report on Form 8-K, and incorporated herein by reference. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Altimar’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated herein by reference.

Quantitative and Qualitative Disclosures about Market Risk

Reference is made to Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations at March 31, 2021 and for the three months ended March 31, 2021, included in Exhibit 99.5 and Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations at March 31, 2021 and for the three months ended March 31, 2021, included in Exhibit 99.6 of this Current Report on Form 8-K, and incorporated herein by reference. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Altimar’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated herein by reference.

Properties

The properties of Owl Rock and Dyal are described in the Proxy Statement/Prospectus in the sections titled “Historical Business of Owl Rock” and “Historical Business of Dyal,” respectively, and that information is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information known to the Company regarding the beneficial ownership of Company common stock as of the Closing Date by:

 

   

each person known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting common stock;

 

   

each of the Company’s executive officers and directors; and

 

   

all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the rules of the Securities and Exchange Commission, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.

The beneficial ownership of Company common stock is based on 320,005,258 shares of Class A common stock, 0 shares of Class B common stock, 628,380,707 shares of Class C common stock, 294,656,373 shares of Class D common stock and 14,990,864 shares of Class E common stock issued and outstanding as of the Closing Date.

Unless otherwise indicated, the Company believes that each person named in the table below has sole voting and investment power with respect to all shares of Company common stock beneficially owned by them.

 

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Name of Beneficial Owner(1)

   Class A Common
Stock Beneficially
Owned
    Class C Common
Stock Beneficially
Owned
    Class D Common
Stock Beneficially
Owned
    Combined
Total
Voting
Power
 
   Shares      Percent     Shares      Percent     Shares      Percent  

Directors and Executive Officers of Blue Owl

                 

Douglas I. Ostrover(2), †

     —          —         107,540,000        17.1     161,847,700        54.9     50.6

Marc S. Lipschultz(3)

     —          —         —          —         0        *       *  

Michael Rees(4)

     —          —         —          —         132,808,673        45.1     40.6

Alan J. Kirshenbaum(5)

     —          —         —          —         0        *       *  

Craig W. Packer(6)

     —          —         —          —         0        *       *  

Sean Ward(7)

     —          —         —          —         0        *       *  

Dana Weeks

     —          —         —          —         —          —         —    

Claudia Holz

     —          —         —          —         —          —         —    

Andrew S. Komaroff

     —          —         —          —         —          —         —    

Andrew Laurino(8)

     —          —         —          —         0        *       *  

Andrew Polland(9)

     —          —         —          —         0        *       *  

Junot Foradada

     —          —         —          —         —          —         —    

Neena A. Reddy

     —          —         —          —         —          —         —    

Stacy Polley

     —          —         —          —         —          —         —    

All Directors and Executive Officers of Blue Owl as a Group (14 Individuals)

     —          —         107,540,000        17.1 %      294,656,373        100.0 %      91.2 % 

Five Percent Holders:

                 

Owl Rock Capital Feeder LLC(2)(10)

     —          —         107,540,000        17.1     161,847,700        54.9     50.6

BB Holdings AA LP and Affiliates(11)

     50,000,000        14.9     —          —         —                *  

Dyal Capital SLP LP(12)

     —          —         —          —         132,808,673        45.1     40.6

NBSH Blue Investments, LLC(13)

     —          —         443,286,854        70.5     —          —         4.7

 

9


The number of shares and class ownership percentages reported for Mr. Ostrover excludes 66,762,175 Blue Owl Operating Group Units and 5,587,312 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, held by Owl Rock Capital Feeder LLC on behalf of Mr. Ostrover, his spouse or one or more vehicles controlled by him, as limited partners of Owl Rock Capital Partners. The number of shares and class ownership percentages reported for Mr. Lipschultz excludes 54,623,600 Blue Owl Operating Group Units and 4,571,438 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, held by Owl Rock Capital Feeder LLC on behalf of Mr. Lipschultz, his spouse or a vehicle controlled by him, as limited partners of Owl Rock Capital Partners. The number of shares and class ownership percentages reported for Mr. Kirshenbaum excludes 4,855,431 Blue Owl Operating Group Units and 406,350 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, indirectly held by Owl Rock Capital Partners as a member of Owl Rock Capital Feeder LLC on behalf of Mr. Kirshenbaum, his spouse or a vehicle controlled by him, as limited partners of Owl Rock Capital Partners. The number of shares and class ownership percentages reported for Mr. Packer excludes 32,369,540 Blue Owl Operating Group Units and 2,709,000 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, indirectly held by Owl Rock Capital Partners as a member of Owl Rock Capital Feeder LLC on behalf of Mr. Packer. Each such person disclaims beneficial ownership of all such shares and units, except to the extent of his pecuniary interest therein. See footnotes 2, 3, 5, 6 and 10 for additional detail.

*

Less than one percent.

(1)

Unless otherwise noted, each of Blue Owl’s directors, officers and five percent holders is 399 Park Avenue, 38th Floor, New York, NY 10019.

(2)

Owl Rock Capital Partners, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting control over 35,558,825 shares of Class D common stock, 35,558,825 Blue Owl Operating Group Units and 2,975,911 Seller Earnout Units on behalf of Mr. Ostrover; 14,512,725 shares of Class D common stock, 14,512,725 Blue Owl Operating Group Units and 1,214,567 Seller Earnout Units on behalf of Mr. Ostrover’s spouse, Julie J. Ostrover; and 16,690,625 shares of Class D common stock, 16,690,625 Blue Owl Operating Group Units and 1,396,834 Seller Earnout Units on behalf of The Douglas I. Ostrover 2016 Descendants’ Trust over which Mr. Ostrover has sole investment and voting power. Due to certain provisions in the organizational documents of Owl Rock Capital Partners LP, Mr. Ostrover may be deemed to beneficially own the shares of Class C common stock and Class D common stock, the Blue Owl Operating Group Units and the Seller Earnout Units held by Owl Rock Capital Feeder LLC. Mr. Ostrover expressly disclaims beneficial ownership of the shares and units held by Owl Rock Capital Feeder LLC, including any shares of our Class A common stock or Class B common stock that may be acquired upon exchange of Blue Owl Operating Group Units and Class C common stock or Class D common stock, as applicable, and Blue Owl Operating Group Units and shares of Class C common stock and Class D common stock issuable in respect of the Seller Earnout Units upon the satisfaction of certain vesting conditions, in each case, except to the extent of his pecuniary interest therein.

(3)

Owl Rock Capital Partners, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting control over 21,604,375 shares of Class D common stock, 21,604,375 Blue Owl Operating Group Units and 1,808,066 Seller Earnout Units on behalf of Mr. Lipschultz; 22,360,538 shares of Class D common stock, 22,360,538 Blue Owl Operating Group Units and 1,871,349 Seller Earnout Units on behalf of Mr. Lipschultz’s spouse, Jennifer Lipschultz, and 10,658,687 shares of Class D common stock, 10,658,687 Blue Owl Operating Group Units and 892,023 Seller Earnout Units on behalf of the Lipschultz Family OR Trust over which Mr. Lipschultz has sole investment and voting power. Mr. Lipschultz expressly disclaims beneficial ownership of the shares of Class C common stock and Class D common stock, the Blue Owl Operating Group Units and any Seller Earnout Shares held by Owl Rock Capital Feeder LLC, and any shares of our Class A common stock or Class B common stock that may be acquired upon exchange of Blue Owl Operating Group Units and Class C common stock or Class D common stock, as applicable, held by Owl Rock Capital Feeder and Blue Owl Operating Group Units and shares of Class C common stock and Class D common stock issuable in respect of the Seller Earnout Units upon the satisfaction of certain vesting conditions, in each case, except to the extent of his pecuniary interest therein.

(4)

Dyal Capital SLP LP holds 73,428,587 shares of Class D common stock, 73,428,587 Blue Owl Operating Group Units and 6,043,505 Seller Earn Out Units on behalf of Mr. Rees, his spouse, or one or more entities controlled by him. The foregoing amounts reflect an estimate and are subject to change. By virtue of Mr. Rees’s indirect control of the general partner of and his indirect interests in Dyal SLP, Mr. Rees may be deemed to beneficially own the shares of Class D common stock beneficially owned by Dyal Capital SLP LP. Mr. Rees disclaims beneficial ownership of the shares of Class D common stock held by Dyal Capital SLP LP, except to the extent of his pecuniary interest therein. The number of shares and class ownership percentages reported for Mr. Rees exclude the 10,930,754 shares of Class D common stock issuable upon the vesting of the Seller Earnout Units held by Dyal Capital SLP LP. The business address for each of Mr. Rees and Dyal Capital SLP LP is 1290 Avenue of the Americas, New York, NY 10104.

(5)

Owl Rock Capital Partners, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting control over 80,924 shares of Class D common stock, 80,924 Blue Owl Operating Group Units and 6,772 Seller Earnout Units on behalf of Mr. Kirshenbaum; 80,924 shares of Class D common stock, 80,924 Blue Owl Operating Group Units and 6,773 Seller Earnout Units on behalf of Mr. Kirshenbaum’s spouse, Stacey Kirshenbaum; 2,427,716 shares of Class D common stock, 2,427,716 Blue Owl Operating Group Units and 203,175 Seller Earnout Units on behalf of the Alan Kirshenbaum 2015 Family Trust and

 

10


  2,265,867 shares of Class D common stock, 2,265,867 Blue Owl Operating Group Units and 189,630 Seller Earnout Units on behalf of Kirshenbaum 2019 Family Trust, in each case, over which Mr. Kirshenbaum has sole investment and voting power. Mr. Kirshenbaum expressly disclaims beneficial ownership of the shares of Class C common stock and Class D common stock, the Blue Owl Operating Group Units and any Seller Earnout Shares held by Owl Rock Capital Feeder LLC, and any shares of our Class A common stock or Class B common stock that may be acquired upon exchange of Blue Owl Operating Group Units and Class C common stock or Class D common stock, as applicable, held by Owl Rock Capital Feeder and Blue Owl Operating Group Units and shares of Class C common stock and Class D common stock issuable in respect of the Seller Earnout Units upon the satisfaction of certain vesting conditions, in each case, except to the extent of his pecuniary interest therein.
(6)

Owl Rock Capital Partners, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting control over 23,621,826 shares of Class D common stock, 23,621,826 Blue Owl Operating Group Units and 1,976,906 Seller Earnout Units on behalf of Mr. Packer; 4,054,131 shares of Class D common stock, 4,054,131 Blue Owl Operating Group Units and 339,289 Seller Earnout Units on behalf of Packer Family Trust 2017, over which Mr. Packer has sole investment and voting power; and 4,693,583 shares of Class D common stock, 4,693,583 Blue Owl Operating Group Units and 392,805 Seller Earnout Units on behalf of Mr. Packer’s spouse, Suzanne Packer. Mr. Packer expressly disclaims beneficial ownership of the shares of Class C common stock and Class D common stock, the Blue Owl Operating Group Units and any Seller Earnout Shares held by Owl Rock Capital Feeder LLC, and any shares of our Class A common stock or Class B common stock that may be acquired upon exchange of Blue Owl Operating Group Units and Class C common stock or Class D common stock, as applicable, held by Owl Rock Capital Feeder and Blue Owl Operating Group Units and shares of Class C common stock and Class D common stock issuable in respect of the Seller Earnout Units upon the satisfaction of certain vesting conditions, in each case, except to the extent of his pecuniary interest therein.

(7)

The number of shares and class ownership percentages reported for Sean Ward excludes 15,834,778 shares of Class D common stock, 15,834,778 Blue Owl Operating Group Units and 1,303,274 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, held by Dyal Capital SLP LP on behalf of Sean Ward, his spouse or one or more entities controlled by him. Sean Ward disclaims beneficial ownership of all such shares and units, except to the extent of his pecuniary interest therein.

(8)

The number of shares and class ownership percentages reported for Andrew Laurino excludes 10,215,643 shares of Class D common stock, 10,215,643 Blue Owl Operating Group Units and 840,794 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, held by Dyal Capital SLP LP on behalf of Andrew Laurino, his spouse or one or more entities controlled by him. Andrew Laurino disclaims beneficial ownership of all such shares and units, except to the extent of his pecuniary interest therein.

(9)

The number of shares and class ownership percentages reported for Andrew Polland excludes 229,759 shares of Class D common stock, 229,759 Blue Owl Operating Group Units and 18,910 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, subject to certain vesting conditions, in each case, held by Dyal Capital SLP LP on behalf of Andrew Polland, his spouse or one or more entities controlled by him. Andrew Polland disclaims beneficial ownership of all such shares and units, except to the extent of his pecuniary interest therein.

(10)

Owl Rock Capital Partners, as the managing member of Owl Rock Capital Feeder LLC, will exercise voting control over 161,847,700 shares of Class D common stock and 13,545,000 Seller Earn Out Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class D common stock, on behalf of the ORC Principals and 107,540,000 shares of Class C common stock and 9,000,000 Seller Earnout Units, each of which represents the right to receive one Blue Owl Operating Group Unit and one share of Class C common stock, subject to certain vesting conditions, on behalf of Dyal Capital Partners IV Holdings (A) LP. Owl Rock Capital Partners is managed by Owl Rock Capital Partners (GP) LLC,

 

11


  which is governed by an executive committee comprised of Messrs. Ostrover, Lipschultz and Packer with decisions over certain matters requiring the vote of Mr. Ostrover. As such, Mr. Ostrover may be deemed to beneficially own all such shares and units. Each of these individuals and entities disclaims any beneficial ownership of these shares and units, except to the extent of their pecuniary interest therein.
(11)

Includes 3,500,000 shares of Class A common stock held by BB Holdings AC LP, a Delaware limited partnership (“BB Holdings AC”), 2,000,000 shares of Class A common stock held by Glide Path Solutions 2021 LP, a Delaware limited partnership (“Glide Path Solutions 2021”), 4,500,000 shares of Class A common stock held by Glide Path Solutions 2020 LP, a Delaware limited partnership (“Glide Path Solutions 2020”), 20,000,000 shares of Class A common stock held by BB Holdings AA LP, a Delaware limited partnership (“BB Holdings AA” and, together with BB Holdings AC, Glide Path Solutions 2021 and Glide Path Solutions 2020, the “ICQ Limited Partnerships”), 10,000,000 shares of Class A common stock held by Co-Investment Portfolio 2020 LP, a Delaware limited partnership (“Co-Investment Portfolio 2020”) and 10,000,000 shares of Class A common stock held by Tactical Opportunities Portfolio 2020 LP, a Delaware limited partnership (“Tactical Opportunities 2020” and, together with the ICQ Limited Partnerships, the “Limited Partnerships”). ICQ BB GP, LLC, a Delaware limited liability company (“ICQ BB”), is the general partner of the ICQ Limited Partnerships, Co-Investment Portfolio GP II LP, a Delaware limited partnership (“Co-Investment Portfolio GP”), is the general partner of Co-Investment Portfolio 2020, ICQ Co-Investment II TT GP LLC, a Delaware limited liability company (“ICQ Co-Investment”), is the general partner of Co-Investment Portfolio GP, Tactical Opportunities Portfolio GP, LP, a Delaware limited partnership (Tactical Opportunities Portfolio GP”), is a the general partner of Tactical Opportunities 2020 and ICQ Tactical Opportunities TT GP, LLC, a Delaware limited liability company (“ICQ Tactical Opportunities” and, together with ICQ BB and ICQ Co-Investment, the “General Partners”) is the general partner of Tactical Opportunities Portfolio GP. Divesh Makan is the managing member of each of the General Partners and may be deemed to have voting, investment, and dispositive power with respect to the shares held by the Limited Partnerships. The address of the foregoing entities and person is 394 Pacific Avenue, 2nd Floor, San Francisco, CA 94111.

(12)

By virtue of his indirect control of the general partner of, and his indirect interest in, Dyal Capital SLP LP, Mr. Rees may be deemed to beneficially own the shares of Class D common stock, the Blue Owl Operating Group Units and the Seller Earnout Units beneficially owned by Dyal Capital SLP LP. Mr. Rees disclaims beneficial ownership of the shares and units held by Dyal Capital SLP LP, including and any shares of our Class B common stock that may be acquired upon exchange of Blue Owl Operating Group Units and Class D common stock, and any Blue Owl Operating Group Units and shares of Class C common stock and Class D common stock issuable in respect of the Seller Earnout Units upon the satisfaction of certain vesting conditions, in each case, except to the extent of his pecuniary interest therein. The number of shares and class ownership percentages reported for Dyal Capital SLP LP exclude the 10,930,754 shares of Class D common stock issuable upon the vesting of the Seller Earnout Units held by Dyal Capital SLP LP. The business address for each of Mr. Rees and Dyal Capital SLP LP is 1290 Avenue of the Americas, New York, NY 10104.

(13)

By virtue of the control of NBSH Blue Investments, LLC by affiliates of NBSH Acquisition, LLC, NBSH Acquisition, LLC may be deemed to beneficially own the shares of Class C common stock beneficially owned by NBSH Blue Investments, LLC. Three or more individuals are expected to have decision making authority with respect to the shares of Class C common stock held indirectly by NBSH Acquisition, LLC, and therefore no individual is a beneficial holder of the shares held by NBSH Acquisition, LLC. The business address for each of NBSH Acquisition, LLC and NBSH Blue Investments, LLC is 1290 Avenue of the Americas, New York, NY 10104.

 

12


Directors and Executive Officers

The Company’s directors and executive officers after the consummation of the Transactions are described in the Proxy Statement/Prospectus in the section titled “Management Following the Business Combination” and that information is incorporated herein by reference.

In addition, as of the Closing Date, Junot Foradada was appointed as Chief Accounting Officer. The biography of Mr. Foradada is set forth below as follows:

Junot Foradada, 40, is the Chief Accounting Officer of Blue Owl. Prior to joining Blue Owl in 2021, Mr. Foradada was a Managing Director and the Head of Management Company Accounting at Sculptor Capital from 2007 to 2021. While at Sculptor, Mr. Foradada was responsible for public company accounting, SEC and regulatory reporting, and Sarbanes-Oxley controls. Mr. Foradada also served on the board of various special purpose investment vehicles. Prior to joining Sculptor Capital, he served as a Financial Reporting Manager at MetLife, Inc. from 2001 to 2006. Mr. Foradada received a B.S. in Accounting from Florida State University, and is a certified public accountant in the State of Virginia.

Director Independence

Information with respect to the independence of the Company’s directors is set forth in the Proxy Statement/Prospectus in the section titled “Management Following the Business Combination—Independence of the Board of Directors; Controlled Company Exemption” and that information is incorporated herein by reference.

Committees of the Board of Directors

Information with respect to the composition of the Board immediately after the Closing is set forth in the Proxy Statement/Prospectus in the section titled “Management Following the Business Combination—Altimar Executive and Director Compensation” and that information is incorporated herein by reference.

Executive Compensation

A description of the compensation of the named executive officers of Altimar before the consummation of the Business Combination is set forth in the Proxy Statement/Prospectus in the sections titled “Executive Compensation,” and that information is incorporated herein by reference.

At the Special Meeting, the Altimar shareholders approved the 2021 Omnibus Plan. The description of the 2021 Omnibus Plan is set forth in the Proxy Statement/Prospectus section entitled “Proposal No. 7 — The Equity Incentive Plan Proposal,” which is incorporated herein by reference. A copy of the full text of the 2021 Omnibus Plan is filed as Exhibit 10.6 to this Current Report on Form 8-K and is incorporated herein by reference. Following the consummation of the Business Combination, the Company expects that the Board will make grants of awards under the 2021 Omnibus Plan to eligible participants.

Director Compensation

A description of the compensation of the directors of Altimar before the consummation of the Business Combination is set forth in the Proxy Statement/Prospectus in the section titled “Executive Compensation—Altimar Executive and Director Compensation,” and that information is incorporated herein by reference.

Employment Agreements

Simultaneously with execution of the Business Combination Agreement, Blue Owl entered into an employment and restrictive covenant agreement with Messrs. Ostrover and Rees (each, a “Key Individual”), effective as of the Closing (each, an “Employment Agreement”). The term of each Employment Agreement is perpetual until terminated in accordance with its terms. Each Key Individual has the right to terminate his employment

 

13


voluntarily at any time, subject to minimum notice requirements, but Blue Owl may only terminate such Key Individual’s employment for cause (i.e., as required by a final, non-appealable court order or the conviction of (or plea of no contest to) any felony) or by reason of the Key Individual’s death or disability.

Each Key Individual is entitled during his employment to a base salary of $500,000, additional compensation, paid quarterly, in an amount equal to 1.33% of the management fee and certain other revenues of Blue Owl (subject to downward adjustment and, in certain circumstances, approval rights in each case as set forth in the Investor Rights Agreement) less the Key Individual’s base salary (subject to a 10% holdback and an annual true-up following receipt of audited Blue Owl financials), and to participate in Blue Owl’s employee benefit plans, as in effect from time to time.

Each Employment Agreement requires the Key Individual to protect the confidential information of Blue Owl both during and after employment. In addition, during the Key Individual’s employment and (i) until two years after the Key Individual’s employment terminates (such Key Individual’s “Termination Date”), such Key Individual is required to refrain from soliciting employees under the circumstances specified therein, (ii) until one year after the Key Individual’s Termination Date, such Key Individual is required to refrain from soliciting Blue Owl’s clients under the circumstances specified therein and (iii) until five years after the Key Individual’s Termination Date (the “Restricted Period”), such Key Individual is required to refrain from interfering with Blue Owl’s relationships with investors and from competing with (a) a business line of Blue Owl’s as of the Key Individual’s Termination Date or (b) a business line planned, as of the Key Individual’s Termination Date, to be implemented within the 12-month period following such Termination Date.

Under the Employment Agreements, Blue Owl may terminate each Key Individual’s employment solely for cause or by reason of his death or disability (as such terms are defined in his Employment Agreement). Furthermore, (i) if Blue Owl terminates such Key Individual’s employment for cause or such Key Individual’s employment is terminated by reason of death or disability, or if such Key Individual terminates employment voluntarily, such Key Individual will be paid accrued but unpaid salary through the date of termination and (ii) if the Key Individual’s employment is terminated for any reason, such Key Individual shall be entitled to an annual amount of 1.33% of annual management fee revenues of Blue Owl during the Restricted Period, but such entitlement does not apply in the case of a termination of such Key Individual’s employment (a) for cause or (b) as a result of voluntary departure by such Key Individual prior to the fifth anniversary of the Closing. The continued compensation described in clause (ii) in the preceding sentence is subject to the Key Individual’s execution and delivery to Blue Owl of a general release of claims and continued compliance with his covenants not to compete with Blue Owl and its affiliates during the Restricted Period.

The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the Employment Agreements, which are attached hereto as Exhibit 10.10, Exhibit 10.11 and Exhibit 10.12, respectively, and are incorporated herein by reference.

Certain Relationships and Related Party Transactions

The certain relationships and related party transactions of the Company are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions” and that information is incorporated herein by reference.

Legal Proceedings

Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Information About Altimar—Legal Proceedings,” “Historical Business of Owl Rock—Legal Proceedings” and “Historical Business of Dyal—Legal Proceedings” and that information is incorporated herein by reference.

On May 3, 2021, the defendants in GCDM Holdings LP, et al. v. Dyal Capital Partners Mirror Aggregator (A) LP, et. al., pending in the Supreme Court of the State of New York, County of New York, filed a motion to dismiss Golub’s complaint. Under the current schedule the motion will be fully briefed on June 16, 2021.

Separately, on May 14, 2021, the Supreme Court of Delaware affirmed the Delaware Court of Chancery’s entry of final judgment against Sixth Street in Sixth Street Partners Management Company, L.P., et. al v. Dyal Capital Partners III (A) LP, et. al.

Golub Capital Partners also filed suit in the U.S. District Court for the Southern District of New York on May 4, 2021 against Neuberger Berman and NB Alternatives Advisers LLC. Golub sought a preliminary injunction purportedly to enforce rights in a non-disclosure agreement between Golub Capital and Dyal Capital Partners and asserted related federal and common law trade secret claims arising from the Business Combination. The action is captioned Golub Capital LLC v. NB Alternatives Advisers LLC, No. 21-cv-03991. On May 14, 2021, the court denied Golub’s motion for a preliminary injunction, holding that Golub’s long delay—and the resulting prejudice to the defendants—barred injunctive relief on laches grounds, that Golub Capital had not shown irreparable harm, and that Golub was unlikely to succeed on the merits.

On May 17, 2021, the emergency arbitrator denied Golub’s application for emergency relief in the arbitration proceeding in its entirety on the grounds that Golub failed to show a likelihood of success on the merits or that it would be irreparably harmed and because the balance of equities favored Dyal IV.

 

14


Market Price of and Dividends on the Registrant’s Common Stock and Related Stockholder Matters

On the business day following the Closing Date, Blue Owl’s Class A common stock and warrants began trading on NYSE under the symbols “OWL” and “OWL.WS,” subject to ongoing review of Blue Owl’s satisfaction of all listing criteria post-Business Combination. Altimar’s public units automatically separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from NYSE.

Blue Owl has not paid any cash dividends on shares of its Class A common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Board.

Information about the ticker symbol, number of shareholders and dividends for Altimar’s securities is set forth in the Proxy Statement/Prospectus in the section titled “Market Price, Ticker Symbol and Dividend Information” and such information is incorporated herein by reference.

Recent Sales of Unregistered Securities

Reference is made to the disclosure set forth below under Item 3.02 of this Current Report on Form 8-K concerning the issuance and sale by the Company of certain unregistered securities, which is incorporated herein by reference.

Description of Registrant’s Securities to Be Registered

The description of Blue Owl’s securities is contained in the Proxy Statement/Prospectus in the section titled “Description of Blue Owl’s Capital Stock” and “Proposal No. 2—The Domestication Proposal—Comparison of Corporate Governance and Shareholders” and that information is incorporated herein by reference.

Immediately following the Closing, there were 320,005,258 shares of the Company’s Class A common stock issued and outstanding, held of record by 179 holders, and 14,159,381 warrants to purchase shares of Class A common stock outstanding held of record by two holders. The numbers of holders of record do not include Depository Trust Company participants or beneficial owners holding shares through nominee names.

Indemnification of Directors and Officers

Blue Owl has entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification and advancements by Blue Owl of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to Blue Owl or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.

Further information about the indemnification of Blue Owl’s directors and officers is set forth in the Proxy Statement/Prospectus in the section titled “Description of Blue Owl’s Capital Stock—Limitations on Liability and Indemnification of Officers and Directors” and that information is incorporated herein by reference.

Financial Statements and Exhibits

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

The information set forth under Item 4.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

15


Item 2.02.

Results of Operations and Financial Condition.

Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial statements of the Company and the disclosure contained in Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations and Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations, filed as Exhibit 99.5 and Exhibit 99.6, respectively, to this Current Report on Form 8-K, is incorporated herein by reference.

 

Item 3.02.

Unregistered Sales of Equity Securities.

Transaction Consideration

In connection with the Business Combination, Blue Owl issued 320,005,258 shares of Class A common stock, zero shares of Class B common stock, 628,380,707 shares of Class C common stock, 294,656,373 shares of Class D common stock, 14,990,864 shares of Class E common stock, consisting of 7,495,432 shares of Series E-1 common stock and 7,495,432 shares of Series E-2 common stock.

Private Placement

In connection with entering into the Business Combination Agreement, Altimar, Owl Rock and Neuberger entered into subscription agreements, each dated as of December 23, 2020, with the PIPE Investors, pursuant to which, among other things, the PIPE Investors party thereto agreed to purchase an aggregate of 150,000,000 shares of Class A common stock immediately prior to the Closing at a cash purchase price of $10.00 per share, resulting in aggregate gross proceeds of $1.5 billion in the Private Placement.

The shares issued to the PIPE Investors in the Private Placement were issued pursuant to and in accordance with the exemption from registration under the Securities Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act.

 

Item 3.03.

Material Modification to Rights of Security Holders.

In connection with the Business Combination, on May 19, 2021, Altimar domesticated into the State of Delaware from the Cayman Islands by filing a Certificate of Domestication (the “Certificate of Domestication”) and Certificate of Incorporation (the “Certificate of Incorporation”) with the Delaware Secretary of State, and also adopted bylaws (the “Bylaws”) which together replace Altimar’s Amended and Restated Memorandum and Articles of Association. The material terms of the Certificate of Domestication, the Certificate of Incorporation, the Bylaws and the general effect upon the rights of holders of the Company’s capital stock are discussed in the Proxy Statement/Prospectus under the section titled “Proposal No. 2 — The Domestication Proposal—Comparison of Corporate Governance and Shareholders” which is incorporated herein by reference.

Blue Owl’s common stock and public warrants are listed for trading on NYSE under the symbols “OWL” and “OWL.WS,” respectively. Upon consummation of the Business Combination, the CUSIP numbers relating to Blue Owl’s common stock and warrants changed to 09581B 103 and 09581B 111, respectively.

Copies of the Certificate of Domestication, Certificate of Incorporation and the Bylaws are filed as Exhibits 3.1, 3.2 and 3.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

16


Item 4.01.

Change in Registrant’s Certifying Accountant.

On May 19, 2021, the Audit Committee of the Board approved the engagement of KPMG LLP (“KPMG”) as Blue Owl’s independent registered public accounting firm to audit Blue Owl’s consolidated financial statements for the year ended December 31, 2021. KPMG served as independent registered public accounting firm of Owl Rock and Dyal prior to the Business Combination. Accordingly, on May 19, 2021, WithumSmith+Brown, PC (“Withum”), Altimar’s independent registered public accounting firm prior to the Business Combination, was dismissed following completion of the Company’s review of the quarter ended March 31, 2021, which consists only of the accounts of the pre-Business Combination special purpose acquisition company, Altimar.

The reports of Withum on Altimar’s consolidated balance sheet as of December 31, 2020 and the consolidated statements of operations, changes in shareholders’ equity and cash flows for the period from August 20, 2020 (inception) to December 31, 2020, did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.

During the period from August 20, 2020 (inception) to December 31, 2020, and the subsequent interim period through May 19, 2021, there were no disagreements between the Company and Withum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Withum, would have caused it to make reference to the subject matter of the disagreements in its reports on the Company’s financial statements for such period.

During the period from August 20, 2020 (inception) to December 31, 2020, and the subsequent interim period through May 19, 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), except that for the year ended December 31, 2020 and the quarter ended March 31, 2021, based upon an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer of Altimar concluded that its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective solely as a result of the restatement of its financial statements as of and for such periods in light of the SEC Staff Statement dated April 12, 2021 which required Altimar to reclassify the outstanding warrants as liabilities on its balance sheet. Based on the foregoing it was determined that Altimar had a material weakness as of December 31, 2020 relating to its internal controls over financial reporting, and such material weakness had not yet been remediated as of March 31, 2021.

The Company has provided Withum with a copy of the foregoing disclosures and has requested that Withum furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements made by the Company set forth above. A copy of Withum’s letter, dated May 21, 2021, is filed as Exhibit 16.1 to this Current Report on Form 8-K.

 

Item 5.01.

Changes in Control of Registrant.

Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “The Business Combination Agreement,” which is incorporated herein by reference. Further reference is made to the information contained in Item 2.01 to this Current Report on Form 8-K, which is incorporated herein by reference.

Immediately after giving effect to the Business Combination, there were 320,005,258 shares of Blue Owl’s Class A common stock outstanding. As of such time, our executive officers and directors and their affiliated entities held 0% of our outstanding shares of Class A common stock.

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Upon the consummation of the Transactions, and in accordance with the terms of the Business Combination Agreement, each executive officer of Altimar ceased serving in such capacities and Kevin Beebe, Payne Brown, Richard M. Jelinek, Roma Khanna, John Kim, Michael Rubenstein, Vijay Sondhi and Michael Vorhaus ceased serving on Altimar’s board of directors. Claudia Holz, Andrew S. Komaroff, Marc S. Lipschultz, Douglas I. Ostrover, Craig W. Packer, Stacey Polley, Michael Rees, Sean Ward and Dana Weeks were appointed as directors of Blue Owl and Douglas I. Ostrover was elected Chairman of the Board.

 

17


Upon the consummation of the Transactions, the Company established an audit committee. Claudia Holz, Stacy Polley and Dana Weeks were appointed to serve on the Company’s audit committee, with Claudia Holz serving as the chair and qualifying as an audit committee financial expert, as such term is defined in Item 407(d)(5) of Regulation S-K.

Upon the consummation of the Transactions, the Company established an executive committee consisting of Alan J. Kirshenbaum, Andrew Laurino, Craig W. Packer, Doug I. Ostrover, Marc S. Lipschultz, Michael Rees and Sean Ward.

Following the consummation of the Transactions, the non-employee directors of Blue Owl will be entitled to the following compensation for their service on the Board: (i) an annual cash retainer of  $150,000; (ii) an equity retainer with a grant date fair value equal to $100,000; (iii) an annual cash retainer of $50,000 for the chair of the audit committee; and (iv) an annual cash retainer of $25,000 for other members of the audit committee. Each grant of equity-based awards described above will vest in full on the first anniversary of the grant date subject to continued services on the Board. It is expected that directors affiliated with Neuberger will waive their right to any compensation payable pursuant to this program.

Additionally, upon consummation of the Transactions, Junot Foradada was appointed as Chief Accounting Officer; Alan J. Kirshenbaum was appointed as Chief Financial Officer; Andrew Laurino was appointed as Senior Managing Director; Marc S. Lipschultz was appointed as Co-President; Douglas I. Ostrover was appointed as Chief Executive Officer; Craig W. Packer was appointed as Senior Managing Director; Andrew R. Polland was appointed as Chief Operating Officer; and Neena A. Reddy was appointed as General Counsel and Secretary; Michael Rees was appointed as Co-President; Sean Ward was appointed as Senior Managing Director.

Reference is made to the disclosure described in the Proxy Statement/Prospectus in the section titled “Management Following the Business Combination” beginning on page 335 and to the information included under the heading “Directors and Executive Officers” in Item 2.01 of this Form 8-K for biographical information about each of the directors and officers following the Transactions, which is incorporated herein by reference.

The information set forth under Item 1.01. Entry into a Material Definitive Agreement—Indemnification Agreements and 2021 Omnibus Plan of this Current Report on Form 8-K is incorporated herein by reference. The material terms of certain transaction-related awards granted by the Company prior to the Business Combination are described in the Proxy Statement/Prospectus in the section titled “Executive Compensation—Pre-Business Combination Company Executive Officer and Director Compensation” beginning on page 330 and are incorporated herein by reference.

 

Item 5.03.

Articles of Incorporation or Bylaws.

The disclosure set forth in Item 3.03 of this Current Report on Form 8-K is incorporated in this Item 5.03 by reference.

 

Item 5.06.

Change in Shell Company Status.

As a result of the Business Combination, which fulfilled the definition of an “initial business combination” as required by Altimar’s organizational documents, the Company ceased to be a shell company upon the closing of the Business Combination. The material terms of the Business Combination are described in the sections titled “Proposal No. 1 — The Business Combination Proposal” and “The Business Combination Agreement” beginning on page 164 and 113, respectively, of the Proxy Statement/Prospectus, and are incorporated herein by reference.

 

Item 7.01.

Regulation FD Disclosure.

On May 20, 2021, the Company issued a press release announcing the closing of the Business Combination. The press release is attached hereto as Exhibit 99.1.

The information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

18


Item 8.01.

Other Events.

Registration of Securities of Blue Owl

Upon the closing of the Business Combination, (i) all of Altimar’s outstanding Class A ordinary shares were exchanged on a one-for-one basis for shares of Blue Owl’s Class A common stock; (ii) all of Altimar’s Class B ordinary shares which were converted into shares of Blue Owl’s Class F common stock in connection with the Domestication were exchanged on a one-for-one basis for shares of Blue Owl’s Class A common stock, 2,289,375 of which were subsequently forfeited by the Sponsor; and (iii) Altimar’s outstanding public and private warrants were assumed by Blue Owl and became exercisable for shares of Blue Owl’s Class A common stock on the same terms as were contained in such warrants prior to the Business Combination. By operation of Rule 12g-3(a) under the Exchange Act, Blue Owl is the successor issuer to Altimar and has succeeded to the attributes of Altimar as the registrant, including Altimar’s SEC file number (001-39653) and CIK Code (1823945). Blue Owl’s Class A common stock and public warrants are deemed to be registered under Section 12(b) of the Exchange Act, and Blue Owl will hereafter file reports and other information with the SEC using Altimar’s SEC file number (001-39653).

Blue Owl’s Class A common stock and public warrants are listed for trading on NYSE under the symbols “OWL” and “OWL.WS,” respectively, and the CUSIP numbers relating to the Class A common stock and public warrants are 09581B 103 and 09581B 111, respectively.

Holders of uncertificated shares of Altimar’s Class A common stock immediately prior to the Business Combination have continued as holders of uncertificated shares of Blue Owl’s Class A common stock.

Holders of Altimar’s shares who have filed reports under the Exchange Act with respect to those shares should indicate in their next filing, or any amendment to a prior filing, filed on or after the Closing Date that Blue Owl is the successor to Altimar.

Adoption of Share Repurchase Program

On May 19, 2021, the Board also approved a new share repurchase program that authorizes the Company to repurchase up to $100 million of its Class A common stock. The repurchase program has a one-year expiration date. Repurchases may be made from time to time in the open market, by round lot or block purchases, in privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934 , as amended, and applicable federal securities laws. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the Company’s shares, general market and economic conditions, and other factors. The share repurchase program does not obligate the Company to acquire any particular amount of Class A common stock, and it may be terminated, modified or suspended at any time at the Company’s discretion.

 

Item 9.01.

Financial Statements and Exhibits.

 

  (a)

Financial statements of businesses acquired.

Information responsive to Item 9.01(a) of Form 8-K is set forth in the financial statements included in the Proxy Statement/Prospectus on pages F-24 through F-60, which are incorporated herein by reference. In addition, the unaudited consolidated and combined financial statements of Owl Rock and the unaudited combined financial statements of Dyal, in each case, as of March 31, 2021 and for the three months ended March 31, 2021, and the related notes thereto are attached as Exhibit 99.2 and Exhibit 99.3, respectively, and are incorporated herein by reference.

 

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  (b)

Pro forma financial information.

Certain pro forma financial information of Blue Owl is attached hereto as Exhibit 99.4 and is incorporated herein by reference.

 

  (c)

Exhibits.

 

Exhibit
Number
   Description
  2.1†    Business Combination Agreement, dated as of December  23, 2020, as amended from time to time, by and among Altimar, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and Neuberger Berman Group LLC (incorporated by reference to Annex C of Altimar Acquisition Corporation Proxy Statement/Prospectus on Form S-4 filed on April 22, 2021)
  2.2†    Amendment to Business Combination Agreement, dated as of January 4, 2021, among Altimar Acquisition Corporation, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and Neuberger Berman Group LLC (incorporated by reference to Annex C of Altimar Acquisition Corporation Proxy Statement/Prospectus on Form S-4 filed on April 22, 2021)
  2.3†    Second Amendment to Business Combination Agreement, dated as of March  25, 2021, among Altimar Acquisition Corporation, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and Neuberger Berman Group LLC (incorporated by reference to Annex C of Altimar Acquisition Corporation Proxy Statement/Prospectus on Form S-4 filed on April 22, 2021)
  2.4†    Third Amendment to Business Combination Agreement, dated as of April  11, 2021, among Altimar Acquisition Corporation, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and Neuberger Berman Group LLC (incorporated by reference to Annex C of Altimar Acquisition Corporation Proxy Statement/Prospectus on Form S-4 filed on April 22, 2021)
  3.1*    Certificate of Domestication of Altimar Acquisition Corporation
  3.2*    Certificate of Incorporation of Blue Owl Capital Inc.
  3.3*    Bylaws of Blue Owl Capital Inc.
  4.1*    Amended and Restated Warrant Agreement, dated as of May  19, 2021, by and among Blue Owl Capital Inc., Computershare Trust Company, N.A. and Computershare Inc. and Continental Stock Transfer & Trust Company
10.1*    Tax Receivable Agreement, dated as of May  19, 2021, by and among Blue Owl Capital Inc., Blue Owl Capital GP LLC, Blue Owl Capital Holdings LP, Blue Owl Capital Carry LP, and each of the Partners (as defined therein) party thereto
10.2*    Investor Rights Agreement, dated as of May  19, 2021, by and among Blue Owl Capital Inc., the ORC Sellers (as defined therein) party thereto, the Dyal Sellers (as defined therein) party thereto, the Sponsor and the other parties from time to time party thereto
10.3*    Amended and Restated Limited Liability Company Agreement of Blue Owl Capital GP LLC
10.4*    Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP
10.5*    Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP
10.6+*    Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan
10.7*    Exchange Agreement, dated as of May  19, 2021, by and among Blue Owl Capital Inc., Blue Owl Capital Holdings LP, Blue Owl Capital Carry LP and the Blue Owl Limited Partners (as defined therein) from time to time party thereto

 

20


Exhibit
Number
   Description
10.8*    Form of Indemnification Agreement
10.9*    Transition Services Agreement, dated as of May 19, 2021, by and between Blue Owl Capital Inc. and Neuberger Berman Group LLC
10.10    Employment and Restrictive Covenant Agreement, dated as of December  23, 2020, by and between Altimar Acquisition Corporation and Doug Ostrover (incorporated by reference to Exhibit 10.4 of Altimar Acquisition Corporation Current Report on Form 8-K filed on December  28, 2020)
10.11    Employment and Restrictive Covenant Agreement, dated as of December  23, 2020, by and between Altimar Acquisition Corporation and Marc Lipschultz (incorporated by reference to Exhibit 10.5 of Altimar Acquisition Corporation Current Report on Form 8-K filed on December  28, 2020)
10.12    Employment and Restrictive Covenant Agreement, dated as of December  23, 2020, by and between Altimar Acquisition Corporation and Michael D. Rees (incorporated by reference to Exhibit 10.6 of Altimar Acquisition Corporation Current Report on Form 8-K filed on December  28, 2020)
16.1*    Letter from WithumSmith+Brown, PC to the SEC, dated May 21, 2021
21.1*    List of Subsidiaries
99.1*    Press Release
99.2*    Unaudited Consolidated and Combined Financial Statements of Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC as of and for the three months ended March  31, 2021 and for the twelve months ended December 31, 2020
99.3*    Unaudited Combined Financial Statements of Dyal Capital Partners (a business of Neuberger Berman Group LLC) as of and for the three months ended March  31, 2021 and for the twelve months ended December 31, 2020
99.4*    Unaudited Pro Forma Condensed and Combined Financial Statements of Blue Owl Capital Inc. as of and for the three months ended March 31, 2021 and for the twelve months ended December 31, 2020
99.5*    Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the three months ended March  31, 2021 and for the twelve months ended December 31, 2020
99.6*    Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the three months ended March  31, 2021 and for the twelve months ended December 31, 2020

 

Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

+

Indicates a management or compensatory plan.

*

Filed herewith

 

21


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

BLUE OWL CAPITAL INC.

By:  

/s/ Neena A. Reddy

Name:   Neena A. Reddy
Title:   General Counsel and Secretary

Date: May 21, 2021

 

22

Exhibit 3.1

CERTIFICATE OF CORPORATE DOMESTICATION OF

Altimar Acquisition Corporation

(Pursuant to Section 388

of the General Corporation Law of the State of Delaware)

Altimar Acquisition Corporation, presently incorporated as a Cayman Islands exempted company (the “Corporation”), DOES HEREBY CERTIFY:

1.    The Corporation was first formed, incorporated, created or otherwise came into being on August 20, 2020, under the laws of the Cayman Islands.

2.    The name of the Corporation immediately prior to the filing of this Certificate of Corporate Domestication was “Altimar Acquisition Corporation”.

3.    The name of the Corporation as set forth in the Certificate of Incorporation being filed with the Secretary of State of the State of Delaware in accordance with Section 388(b) of the General Corporation Law of the State of Delaware is “Blue Owl Capital Inc.”

4.    The jurisdiction that constituted the seat, siege social, or principal place of business or central administration of the Corporation immediately prior to the filing of this Certificate of Corporate Domestication was the Cayman Islands.

5.    The domestication has been approved in the manner provided for by the Amended and Restated Memorandum and Articles of Association, said Amended and Restated Memorandum and Articles of Association being the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the Corporation and the conduct of its business or by applicable law of the Cayman Islands, as appropriate.

[Signature Page Follows]


IN WITNESS WHEREOF, Altimar Acquisition Corporation has caused this Certificate to be executed by the undersigned authorized officer as of this 19th day of May, 2021.

 

ALTIMAR ACQUISITION CORPORATION
By:  

/s/ Tom Wasserman

  Name:   Tom Wasserman
  Title:   Chief Executive Officer

 

[Signature Page to Certificate of Corporate Domestication of Altimar Acquisition Corporation]

Exhibit 3.2

CERTIFICATE OF INCORPORATION

OF

BLUE OWL CAPITAL INC.

Blue Owl Capital Inc., a corporation organized and existing under the laws of the State of Delaware, does hereby certify as follows:

ARTICLE I

NAME

Section 1.1    Name. The name of the Corporation is Blue Owl Capital Inc. (the “Corporation”).

ARTICLE II

REGISTERED AGENT

Section 2.1    Address. The registered office of the Corporation in the State of Delaware is 1209 Orange Street, Corporation Trust Center, Wilmington, New Castle County, Delaware 19801; and the name of the Corporation’s registered agent at such address is The Corporation Trust Company.

ARTICLE III

PURPOSE

Section 3.1    Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the General Corporation Law of the State of Delaware (the “DGCL”). The Corporation is being incorporated in connection with the domestication of Altimar Acquisition Corp., a Cayman Islands exempted company (“Altimar Cayman”), as a Delaware corporation (the “Domestication”), and this Certificate of Incorporation and the Certificate of Corporate Domestication of Altimar Cayman are being filed simultaneously with the Secretary of State of the State of Delaware.

ARTICLE IV

CAPITALIZATION

Section 4.1    Authorized Capital Stock; Rights and Options.

(a)    The total number of shares of all classes of stock that the Corporation is authorized to issue is 4,906,875,000 shares, consisting of: (i) 100,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”); (ii) 2,500,000,000 shares of Class A common stock, par value $0.0001 per share (“Class A Common Stock”); (iii) 350,000,000 shares of Class B common stock, par value $0.0001 per share (“Class B Common Stock”); (iv) 1,500,000,000 shares of Class C common stock, par value $0.0001 per share (“Class C Common Stock”); (v) 350,000,000 shares of Class D common stock, par value $0.0001 per share (“Class D Common Stock”); (vi) 100,000,000 shares of Class E common stock, par value $0.0001 per share (“Class E Common Stock”), which shall consist of two series: (A) 50,000,000 shares of “Series E-1 Common Stock” and (B) 50,000,000 shares of “Series E-2 Common Stock”; and (vii) 6,875,000 shares of Class F common stock, par value $0.0001 per share (“Class F Common Stock” and together with the Class A Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock and Class E Common Stock, the “Common Stock”). Upon the effectiveness of the Domestication and this Certificate of Incorporation (A) each Class A ordinary share, par value $0.0001 per share (a “Class A Cayman Share”), of Altimar Cayman that is outstanding immediately prior to the


effectiveness of the Domestication and this Certificate of Incorporation will, for all purposes, be deemed to be one issued and outstanding, fully paid and non-assessable share of Class A Common Stock, without any action required on the part of the Corporation or the holders thereof, (B) each Class B ordinary share, par value $0.0001 per share (a “Class B Cayman Share”), of Altimar Cayman that is outstanding immediately prior to the effectiveness of the Domestication and this Certificate of Incorporation will, for all purposes, be deemed to be one issued and outstanding, fully paid and non-assessable share of Class F Common Stock, without any action required on the part of the Corporation or the holders thereof, and (C) any stock certificate that, immediately prior to the effectiveness of the Domestication and this Certificate of Incorporation, represented Class A Cayman Shares or Class B Cayman Shares will, from and after the effectiveness of the Domestication and this Certificate of Incorporation, automatically and without the necessity of presenting the same for exchange, represent an identical number of shares of Class A Common Stock or Class F Common Stock (respectively) of the Corporation.

(b)    The number of authorized shares of any of the Preferred Stock, Class A Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock or Class E Common Stock may be increased or decreased (but not below the number of shares of such class or series then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no separate class vote of the holders of any of the Preferred Stock, Class A Common Stock, the Class B Common Stock, Class C Common Stock, Class D Common Stock or Class E Common Stock shall be required therefor, except as otherwise expressly provided in this Certificate of Incorporation (including pursuant to any certificate of designation relating to any series of Preferred Stock).

(c)    The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board of Directors of the Corporation (the “Board”). The Board is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options. Notwithstanding the foregoing, the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of capital stock a number of shares of the class of capital stock issuable pursuant to any such rights, warrants and options outstanding from time to time.

Section 4.2    Preferred Stock.

(a)    The Board is hereby expressly authorized, subject to any limitations prescribed by the DGCL, by resolution or resolutions, at any time and from time to time, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series and to cause to be filed with the Secretary of State of the State of Delaware a certificate of designation with respect thereto. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.

 

2


(b)    Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted thereto by this Certificate of Incorporation (including any certificate of designation relating to such series).

Section 4.3    Common Stock. The powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations and restrictions of the Class A Common Stock, the Class B Common Stock, the Class C Common Stock, the Class D Common Stock, the Class E Common Stock and the Class F Common Stock are as follows:

(a)    Voting Rights.

(i)    Except as otherwise expressly provided in this Certificate of Incorporation or as provided by law, each holder of record of Class A Common Stock, as such, shall be entitled to one (1) vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, including the election or removal of directors, or holders of Class A Common Stock as a separate class are entitled to vote.

(ii)    Except as otherwise expressly provided in this Certificate of Incorporation or as provided by law, each holder of record of Class B Common Stock, as such, shall, prior to the Sunset Time, be entitled to the B/D Voting Power for each share of Class B Common Stock held of record by such holder on all matters on which stockholders generally, including the election or removal of directors, or holders of Class B Common Stock as a separate class are entitled to vote.

(iii)    Except as otherwise expressly provided in this Certificate of Incorporation or as provided by law, each holder of record of Class C Common Stock, as such, shall be entitled to one (1) vote for each share of Class C Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, including the election or removal of directors, or holders of Class C Common Stock as a separate class are entitled to vote.

(iv)    Except as otherwise expressly provided in this Certificate of Incorporation or as provided by law, each holder of record of Class D Common Stock, as such, shall, prior to the Sunset Time, be entitled to the B/D Voting Power for each share of Class D Common Stock held of record by such holder on all matters on which stockholders generally, including the election or removal of directors, or holders of Class D Common Stock as a separate class are entitled to vote.

(v)    Except as otherwise expressly provided in this Certificate of Incorporation or as provided by law, no holder of record of Class E Common Stock, as such, shall be entitled to any vote on which stockholders generally, including the election or removal of directors, are entitled to vote.

(vi)    Except as otherwise expressly provided in this Certificate of Incorporation or as provided by law, each holder of record of Class F Common Stock, as such, shall be entitled to one (1) vote for each share of Class F Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, including the election or removal of directors, or holders of Class F Common Stock as a separate class are entitled to vote.

 

3


(vii)    Except as otherwise expressly provided in this Certificate of Incorporation or required by applicable law and without limiting the rights of any party to the Investor Rights Agreement, the holders of Common Stock having the right to vote in respect of such Common Stock shall vote together as a single class (or, if the holders of one or more series of Preferred Stock are entitled to vote together with the holders of Common Stock having the right to vote in respect of such Common Stock, as a single class with the holders of such other series of Preferred Stock) on all matters submitted to a vote of the stockholders having voting rights generally.

(viii)    Notwithstanding the foregoing provisions of this Section 4.3(a), to the fullest extent permitted by law, holders of Common Stock, as such, shall have no voting power under this Certificate of Incorporation with respect to, and shall not be entitled to vote on, any amendment to this Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon under this Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) or under the DGCL. The foregoing provisions of this clause (viii) shall not limit any voting power granted to holders of Common Stock or any class thereof in the terms of such Preferred Stock.

(b)    Dividends and Distributions.

(i)    Class A Common Stock. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any other class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions in cash, stock of the Corporation or property of the Corporation, each share of Class A Common Stock shall be entitled to receive, Ratably with other Participating Shares, such dividends and other distributions as may from time to time be declared by the Board in its discretion out of the assets of the Corporation that are by law available therefor at such times and in such amounts as the Board in its discretion shall determine.

(ii)    Class B Common Stock. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any other class or series of stock having a preference over or the right to participate with the Class B Common Stock with respect to the payment of dividends and other distributions in cash, stock of the Corporation or property of the Corporation, each share of Class B Common Stock shall be entitled to receive, Ratably with other Participating Shares, such dividends and other distributions as may from time to time be declared by the Board in its discretion out of the assets of the Corporation that are by law available therefor at such times and in such amounts as the Board in its discretion shall determine.

(iii)    Class C Common Stock. Dividends and other distributions shall not be declared or paid on the Class C Common Stock.

(iv)    Class D Common Stock. Dividends and other distributions shall not be declared or paid on the Class D Common Stock.

 

4


(v)    Class E Common Stock.

(A)    Dividends and other distributions shall not be declared or paid on the Class E Common Stock, except as provided in this Section 4.3(b)(v) or in Section 4.3(c)(iii).

(B)    If, at any time the Board declares a dividend or other distribution on the outstanding shares of Class A Common Stock, and any shares of Class E Common Stock remain issued and outstanding, then, the Board shall at such time declare a dividend on the outstanding shares of Class E Common Stock in the form of the right to receive an amount per share equal to the per share amount of the dividend declared by the Board in respect of Class A Common Stock (the “Class E Dividend Amount”). In declaring any such dividend, the Corporation shall fix the same record date for determining holders of Class A Common Stock and Class E Common Stock entitled to receive such dividend (each, a “Specified Record Date”) and the same payment date therefor (each, a “Specified Payment Date”). If, as of the applicable Specified Payment Date, shares of Class E Common Stock that were outstanding as of the applicable Specified Record Date have been converted into shares of Class A Common Stock in accordance with the terms of this Certificate of Incorporation, then the Corporation shall pay the Class E Dividend Amount on the Specified Payment Date to the holders of such shares of Class E Common Stock as of the Specified Record Date. With respect to any shares of Class E Common Stock that remain outstanding as of the applicable Specified Payment Date, the Corporation shall, in lieu of paying the Class E Dividend Amount directly to the holders of such shares of Class E Common Stock, set aside or reserve for payment an amount equal to such Class E Dividend Amount in respect of each such outstanding share of Class E Common Stock (the “Reserve Amount”), which Reserve Amount shall be paid to such holders, if at all, only upon the occurrence of a Triggering Event with respect to such shares (as determined pursuant to the definition of “Triggering Event”); provided, however, that if a Triggering Event does not occur with respect to any shares of Class E Common Stock prior to the Earnout Termination Date, any amounts in the Reserve Amount with respect to such shares shall automatically be released to the Corporation, the right to receive the Class E Dividend Amount in respect of any share of Class E Common Stock for which a Triggering Event has not occurred as of such time shall be deemed to have expired, and the holders of Class E Common Stock for which a Triggering Event has not occurred as of such time shall have no entitlement to receive the Class E Dividend Amount.

(vi)    Class F Common Stock. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any other class or series of stock having a preference over or the right to participate with the Class F Common Stock with respect to the payment of dividends and other distributions in cash, stock of the Corporation or property of the Corporation, each share of Class F Common Stock shall be entitled to receive, Ratably with other Participating Shares, such dividends and other distributions as may from time to time be declared by the Board in its discretion out of the assets of the Corporation that are by law available therefor at such times and in such amounts as the Board in its discretion shall determine.

(vii)    Notwithstanding anything to the contrary in the preceding subsections (i)-(vi), dividends may be declared on any one class of Common Stock payable in additional

 

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shares of such class if, substantially concurrently therewith, like dividends are declared on each other class of Common Stock payable in additional shares of such other class at the same rate per share.

(c)    Liquidation, Dissolution or Winding Up.

(i)    Subject to Section 4.3(c)(iii), in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock or any other class or series of stock having a preference over any Participating Shares as to distributions upon dissolution or liquidation or winding up shall be entitled the remaining assets of the Corporation shall be distributed Ratably to the Participating Shares.

(ii)    In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, (A) the holders of shares of the Class C Common Stock shall be entitled to receive the par value of such shares of Class C Common Stock and (B) the holders of shares of the Class D Common Stock shall be entitled to receive the par value of such shares of Class D Common Stock, in each case Ratably on a per share basis with the Participating Shares. Other than as set forth in the preceding sentence, the holders of shares of the Class C Common Stock and Class D Common Stock, as such, shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(iii)    If, as of the date of determining the stockholders of the Corporation entitled to participate in a distribution of the remaining assets of the Corporation in connection with a liquidation, dissolution or winding up contemplated by this Section 4.3(c) any shares of Class E Common Stock remain issued and outstanding, then the holders of such shares of Class E Common Stock shall only be entitled to receive the par value of such shares, unless the amount of the distribution in connection with or following such liquidation, dissolution or winding up that would be payable in respect of a share of Class A Common Stock would cause a Triggering Event for such share of Class E Common Stock. To the extent that any remaining assets of the Corporation are to be distributed to the holders of Class E Common Stock pursuant to this Section 4.3(c)(iii), then such amounts shall be distributed Ratably to the Participating Shares and the shares of Class E Common Stock (assuming that, notwithstanding anything to the contrary set forth in this Certificate of Incorporation, the shares of each series of Class E Common Stock then outstanding are treated as Participating Shares and tested separately on a series-by-series basis to determine whether a Triggering Event has occurred with respect to such series, and without duplication of any amounts that would otherwise be payable in respect of the shares of Class A Common Stock into which such shares of Class E Common Stock would otherwise be convertible in connection with a Triggering Event).

(d)    Splits. If the Corporation at any time combines or subdivides (by any stock split, stock dividend, recapitalization, reorganization, merger, amendment of this Certificate of Incorporation, scheme, arrangement or otherwise) the number of shares of any class or series of Common Stock into a greater or lesser number of shares, the shares of each other class or series shall be proportionately similarly combined or subdivided. Any adjustment described in this Section 4.3(d) shall become effective at the close of business on the date the combination or subdivision becomes effective.

 

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(e)    No Preemptive or Subscription Rights. Without limiting the rights of any party to the Investor Rights Agreement, no holder of shares of Common Stock shall be entitled to preemptive or subscription rights.

(f)    Conversion of Class B Common Stock and Class D Common Stock.

(i)    Each share of Class B Common Stock that is Disqualified Stock shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be converted at the Determination Time into one fully paid and nonassessable share of Class A Common Stock, and each share of Class D Common Stock that is Disqualified Stock shall automatically and without further action on the part of the Corporation or any holder of Class D Common Stock be converted at the Determination Time into one fully paid and nonassessable share of Class C Common Stock.

(ii)    Upon the Sunset Time, (x) each share of Class B Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be converted at such time into one fully paid and nonassessable share of Class A Common Stock; and (y) each share of Class D Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class D Common Stock be converted at such time into one fully paid and nonassessable share of Class C Common Stock.

(iii)    Each outstanding stock certificate that, immediately prior to such conversion, represented one or more shares of Class B Common Stock or Class D Common Stock (as applicable) subject to such conversion will, upon such conversion, be deemed to represent an equal number of shares of Class A Common Stock or Class C Common Stock (as applicable), without the need for surrender or exchange thereof. The Corporation will, upon the request of any holder whose shares of Class B Common Stock or Class D Common Stock (as applicable) have been converted into shares of Class A Common Stock or Class C Common Stock (as applicable) as a result of such conversion and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class B Common Stock or Class D Common Stock (as applicable, if any), issue and deliver to such holder certificate(s) representing the shares of Class A Common Stock or Class C Common Stock (as applicable) into which such holder’s shares of Class B Common Stock or Class D Common Stock (as applicable) were converted as a result of such conversion (if such shares are certificated) or, if such shares are uncertificated or the stockholder otherwise consents, register such shares in book-entry form.

(g)    Conversion of Class E Common Stock. In the event that there has been a Triggering Event with respect to shares of Class E Common Stock (as determined pursuant to the definition of “Triggering Event”) prior to the Earnout Termination Date, such shares of Class E Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class E Common Stock be converted on the applicable Class E Conversion Date into an equal number of fully paid and nonassessable shares of Class A Common Stock. Each outstanding stock certificate that, immediately prior to such conversion, represented one or more shares of Class E Common Stock subject to such conversion will, upon such conversion, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation will, upon the request of any holder whose shares of Class E Common Stock have been converted into shares of Class A Common Stock as a result of such conversion and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class E Common Stock (if any), issue and deliver to

 

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such holder certificate(s) representing the shares of Class A Common Stock into which such holder’s shares of Class E Common Stock were converted as a result of such conversion (if such shares are certificated) or, if such shares are uncertificated or the stockholder otherwise consents, register such shares in book-entry form.

(h)    Reservation of Shares. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock and the shares of Class E Common Stock into shares of Class A Common Stock, such number of shares of Class A Common Stock as will from time to time be sufficient to effect conversion of all outstanding shares of Class B Common Stock and of all outstanding shares of Class E Common Stock into shares of Class A Common Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class C Common Stock, solely for the purpose of effecting the conversion of the shares of Class D Common Stock into Class C Common Stock, such number of shares of Class C Common Stock as will from time to time be sufficient to effect conversion of all outstanding shares of Class D Common Stock into shares of Class C Common Stock.

(i)    Cancellation of Class E Common Stock. In the event that there has not been a Triggering Event with respect to any share of Class E Common Stock as of the Earnout Termination Date, such share of Class E Common Stock shall, automatically and without further action on the part of the Corporation or any holder of Class E Common Stock, be transferred to the Corporation and cancelled for no consideration, on and effective as of 5:00 p.m. New York City time on the Earnout Termination Date, and thereafter the Corporation shall take all necessary action to retire such shares of Class E Common Stock that are reacquired by the Corporation and shall not be disposed of out of treasury or otherwise reissued. Any certificates that, prior to the Earnout Termination Date, represented shares of Class E Common Stock (to the extent representing shares of Class E Common Stock that were not converted) shall, if presented to the Corporation on or after the Earnout Termination Date, be cancelled.

(j)    Conversion of Class F Common Stock.

(i)    Shares of Class F Common Stock shall automatically convert into shares of Class A Common Stock on a one-for-one basis (the “Initial Conversion Ratio”): (A) at any time and from time to time at the option of the holder thereof; or (B) automatically and without further action by the Corporation or the holder thereof on the day of the closing of a Business Combination.

(ii)    Notwithstanding the Initial Conversion Ratio, in the case that additional shares of Class A Common Stock or any other Equity-linked Securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of a Business Combination, all outstanding shares of Class F Common Stock shall automatically convert into shares of Class A Common Stock at the time of the closing of a Business Combination at such ratio (unless the holders of a majority of the outstanding shares of Class F Common Stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) that results in the number of shares of Class A Common Stock issuable upon conversion of all outstanding shares of Class F Common Stock be equal to, in the aggregate, 20% of the sum of all shares of Class A Common Stock and Class F Common Stock outstanding upon completion of the IPO plus all shares of Class A Common Stock and Equity-linked Securities issued or deemed issued in connection with a Business Combination, excluding any shares or Equity-linked Securities issued, or to be issued, to any seller in a Business Combination.

 

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(iii)    Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional shares of Class A Common Stock or Equity-linked Securities by the written consent or agreement of holders of a majority of the outstanding shares of Class F Common Stock consenting or agreeing separately as a separate class.

(iv)    The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share split, subdivision, exchange, capitalization, rights issue, reclassification, recapitalization or otherwise) or combination (by reverse share split, share consolidation, exchange, reclassification, recapitalization or otherwise) or similar reclassification or recapitalizations of the outstanding shares of Class A Common Stock into a greater or lesser number of shares occurring after the Effective Date without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class F Common Stock.

(v)    Each share of Class F Common Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this Section 4.3(j). The pro rata share for each holder of shares of Class F Common Stock will be determined as follows: each share of Class F Common Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one multiplied by a fraction, the numerator of which shall be the total number of shares of Class F Common Stock into which all of the outstanding shares of Class F Common Stock in issue shall be converted pursuant to this Section 4.3(j) and the denominator of which shall be the total number of outstanding shares of Class F Common Stock at the time of conversion.

(vi)    Notwithstanding anything to the contrary in this Section 4.3(j), in no event may any share of Class F Common Stock convert into shares of Class A Common Stock at a ratio that is less than one-for-one.

(vii)    As used in this Section 4.3(j):

(1)    “converted”, “conversion” or “exchange” shall have its ordinary meaning under Delaware law, and thereby shall have the same effect as a compulsory redemption without notice of shares of Class F Common Stock of any stockholder and, on behalf of such stockholders, automatic application of such redemption proceeds in paying for such new shares of Class A Common Stock into which the shares of Class F Common Stock have been converted or exchanged at a price per share of Class F Common Stock necessary to give effect to a conversion or exchange calculated on the basis that the shares of Class A Common Stock to be issued as part of the conversion or exchange will be issued at par. The shares of Class A Common Stock to be issued on an exchange or conversion shall be registered in the name of such stockholder or in such name as the stockholder may direct;

(2)    “Equity-linked Securities” means any debt or equity securities that are convertible, exercisable or exchangeable for shares of Class A Common Stock issued in a financing transaction in connection with a Business Combination, including, but not limited to, a private placement of equity or debt; and

 

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(3)    “Trust Account” means the trust account established by Altimar Cayman upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of warrants simultaneously with the closing date of the IPO, have been deposited.

(k)    Shares of Class F Common Stock converted into shares of Class A Common Stock pursuant to Section 4.3(j) shall be cancelled by the Corporation and may not be reissued. At any time after consummation of a Business Combination, when there are no longer any shares of Class F Common Stock outstanding, the Corporation shall take all necessary action to retire and eliminate the Class F Common Stock, and shall amend this Certificate of Incorporation to eliminate references thereto.

(l)    Nothing in Sections 4.3(j)-(k) of this Certificate of Incorporation shall limit or amend any obligation or agreement of any party to the Forfeiture Agreement. To the extent of any conflict or inconsistency between the terms and provisions of the Forfeiture Agreement and the terms and provisions of this Certificate of Incorporation, including (without limitation) Section 4.3(j) and (k) hereof, the terms and provisions of the Forfeiture Agreement shall control.

ARTICLE V

CERTAIN MATTERS RELATING TO TRANSFERS

Section 5.1    Exchanges.

(a)    The Corporation, Blue Owl Holdings, Blue Owl Carry, and the other Persons party thereto are parties to the Exchange Agreement.

(b)    Subject to (and in accordance with the terms of) the Exchange Agreement:

(i)    To the extent that an Exchanging Partner (as defined in the Exchange Agreement) is exchanging Blue Owl Holdings Common Units and Blue Owl Carry Common Units with respect to which there are shares of Class C Common Stock associated, the Corporation shall (unless and to the extent Blue Owl Holdings or Blue Owl Carry has elected in accordance with the terms and provisions of the Exchange Agreement to pay cash in lieu of shares of Class A Common Stock) issue jointly to Blue Owl Holdings and Blue Owl Carry a number of shares of Class A Common Stock, as requested jointly by Blue Owl Holdings and Blue Owl Carry, in exchange for an equal number of (x) Blue Owl Holdings Common Units and (y) Blue Owl Carry Common Units, provided that the aggregate number of shares of Class A Common Stock issued shall not exceed the number of Blue Owl Holdings Common Units and Blue Owl Carry Common Units surrendered to each of Blue Owl Holdings and Blue Owl Carry by the exchanging partner thereof. For the avoidance of doubt, the foregoing exchange is intended to be (x) one share of Class A Common Stock in exchange for (y) one Blue Owl Holdings Common Unit and one Blue Owl Carry Common Unit. Notwithstanding the foregoing, if the Corporation elects to consummate a Direct Exchange (as defined in the Exchange Agreement), in lieu of issuing such shares of Class A Common Stock to Blue Owl Holdings and Blue Owl Carry as provided in the first sentence of this paragraph, the Corporation shall instead issue such shares directly to the applicable exchanging partner(s). Concurrently with the issuance of such shares of Class A Common Stock, whether to Blue Owl Holdings and Blue Owl Carry or directly to the exchanging partner(s) (as applicable), an equivalent number of shares of Class C Common Stock held of record by the applicable exchanging partner(s) shall, automatically and without further action on the part of the Corporation or any holder of Class C Common Stock, be transferred to the Corporation and retired for no consideration.

 

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(ii)    To the extent that an Exchanging Partner (as defined in the Exchange Agreement) is exchanging Blue Owl Holdings Common Units and Blue Owl Carry Common Units with respect to which there are shares of Class D Common Stock associated, the Corporation shall (unless and to the extent Blue Owl Holdings or Blue Owl Carry has elected in accordance with the terms and provisions of the Exchange Agreement to pay cash in lieu of shares of Class B Common Stock) issue jointly to Blue Owl Holdings and Blue Owl Carry a number of shares of Class B Common Stock, as requested jointly by Blue Owl Holdings and Blue Owl Carry, in exchange for an equal number of (x) Blue Owl Holdings Common Units and (y) Blue Owl Carry Common Units, provided that the aggregate number of shares of Class B Common Stock issued shall not exceed the number of Blue Owl Holdings Common Units and Blue Owl Carry Common Units surrendered to each of Blue Owl Holdings and Blue Owl Carry by the exchanging partner thereof. For the avoidance of doubt, the foregoing exchange is intended to be (x) one share of Class B Common Stock in exchange for (y) one Blue Owl Holdings Common Unit and one Blue Owl Carry Common Unit. Notwithstanding the foregoing, if the Corporation elects to consummate a Direct Exchange (as defined in the Exchange Agreement), in lieu of issuing such shares of Class B Common Stock to Blue Owl Holdings and Blue Owl Carry as provided in the first sentence of this paragraph, the Corporation shall instead issue such shares directly to the applicable exchanging partner(s). Concurrently with the issuance of such shares of Class B Common Stock, whether to Blue Owl Holdings and Blue Owl Carry or directly to the exchanging partner(s) (as applicable), an equivalent number of shares of Class D Common Stock held of record by the applicable exchanging partner(s) shall, automatically and without further action on the part of the Corporation or any holder of Class D Common Stock, be transferred to the Corporation and retired for no consideration.

(iii)    The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock and Class B Common Stock, a sufficient number of shares of Class A Common Stock and Class B Common Stock to permit Blue Owl Holdings and Blue Owl Carry to satisfy their respective obligations under the Exchange Agreement.

Section 5.2    Additional Issuances. Subject to the DGCL and the other terms of this Certificate of Incorporation and without limitation of the rights of any party to the Investor Rights Agreement, on or following the Effective Date, the Corporation may issue from time to time additional shares of Class A Common Stock from the authorized but unissued shares of Class A Common Stock, including as provided in this Certificate of Incorporation. The Corporation shall not issue additional shares of Class B Common Stock, except as provided in this Certificate of Incorporation. In addition to any approval otherwise required by the DGCL and this Certificate of Incorporation, the immediately preceding sentence may only be amended by the affirmative vote of the holders of shares of issued and outstanding Class A Common Stock and Class C Common Stock, voting together as a single class. The Corporation shall not issue additional shares of Class C Common Stock or Class D Common Stock, except in connection with the valid issuance of Blue Owl Holdings Common Units in accordance with the Blue Owl Holdings A&R LPA and Blue Owl Carry Common Units in accordance with the Blue Owl Carry A&R LPA, or except as provided in this Certificate of Incorporation; provided, that upon a Unit Triggering Event with respect to a Blue Owl Seller Earnout Unit (determined pursuant to the Blue Owl A&R LPAs), the Corporation shall issue to the holder of such Blue Owl Seller Earnout Unit (x) one share of Class C Common Stock, if such holder is not a Qualified Stockholder, or (y) one share of Class D Common Stock, if such holder is a Qualified Stockholder. Following the Effective Date, the Corporation shall not issue additional shares of Class E

 

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Common Stock or shares of Class F Common Stock. In addition to any approval otherwise required by the DGCL and this Certificate of Incorporation, the immediately preceding sentence may only be amended by the affirmative vote of the holders of shares of issued and outstanding Class A Common Stock and Class C Common Stock, voting together as a single class.

Section 5.3    Cancellation.

(a)    Shares of Class C Common Stock and Class D Common Stock that are reacquired by the Corporation shall not be disposed of out of treasury or otherwise reissued. Any certificates that, prior to the cancelation of such shares of Class C Common Stock or Class D Common Stock, as the case may be, represented shares of Class C Common Stock or Class D Common Stock so cancelled shall, if presented to the Corporation on or after the date of cancellation of such shares, be cancelled.

(b)    Shares of Class B Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be converted into an equal number of fully paid and nonassessable shares of Class A Common Stock upon any Transfer of such shares of Class B Common Stock, except for a Qualified Transfer. Each outstanding stock certificate that, immediately prior to such conversion, represented one or more shares of Class B Common Stock subject to such conversion will, upon such conversion, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation will, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of such conversion and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class B Common Stock (if any), issue and deliver to such holder certificate(s) representing the shares of Class A Common Stock into which such holder’s shares of Class B Common Stock were converted as a result of such conversion (if such shares are certificated) or, if such shares are uncertificated or the stockholder otherwise consents, register such shares in book-entry form.

(c)    Shares of Class D Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class D Common Stock be converted into an equal number of fully paid and nonassessable shares of Class C Common Stock upon any Transfer of such shares of Class D Common Stock, except for a Qualified Transfer. Each outstanding stock certificate that, immediately prior to such conversion, represented one or more shares of Class D Common Stock subject to such conversion will, upon such conversion, be deemed to represent an equal number of shares of Class C Common Stock, without the need for surrender or exchange thereof. The Corporation will, upon the request of any holder whose shares of Class D Common Stock have been converted into shares of Class C Common Stock as a result of such conversion and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class D Common Stock (if any), issue and deliver to such holder certificate(s) representing the shares of Class C Common Stock into which such holder’s shares of Class D Common Stock were converted as a result of such conversion (if such shares are certificated) or, if such shares are uncertificated or the stockholder otherwise consents, register such shares in book-entry form.

(d)    If the Corporation has reason to believe that a Transfer giving rise to a conversion of shares of Class B Common Stock into Class A Common Stock or shares of Class D Common Stock into Class C Common Stock has occurred but has not theretofore been reflected on the books of the Corporation, the Corporation may request that the holder of such shares furnish affidavits or other evidence to the Corporation as the Corporation deems necessary to determine whether a

 

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conversion of such shares of Class B Common Stock into Class A Common Stock or shares of Class D Common Stock into Class C Common Stock has occurred, and if such holder does not within twenty-five (25) days after the date of such request furnish sufficient evidence to the Corporation (in the manner provided in the request) to enable the Corporation to determine that no such conversion has occurred, any such shares of Class B Common Stock or shares of Class D Common Stock, as applicable, to the extent not previously converted, shall be automatically converted into shares of Class A Common Stock or shares of Class C Common Stock, as applicable, as of the date of the Transfer in question and the same will thereupon be registered on the books, records and stock ledger of the Corporation. In connection with any action of stockholders taken at a meeting or by written consent (if action by written consent of the stockholders is not prohibited at such time under the DGCL or this Certificate of Incorporation), the stock ledger of the Corporation shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders and the class or classes or series of shares held by each such stockholder and the number of shares of each class or classes or series held by such stockholder.

Section 5.4    Certain Restrictions on Transfer.

(a)    Without the prior written consent of the Corporation, and without limiting the rights of any party to the Investor Rights Agreement, neither any Restricted Transfer nor any public announcement of any intention to effect any Restricted Transfer of any Lock-Up Shares Beneficially Owned or otherwise held by any Non-Electing Seller (or any Permitted Transferee that Beneficially Owns any Lock-Up Shares as a result of a Permitted Transfer) may be made during the Lock-Up Period applicable to such Lock-Up Shares. During the Lock-Up Period applicable to any Non-Electing Seller (or any Permitted Transferee thereof that Beneficially Owns any Lock-Up Shares as a result of a Permitted Transfer), any purported Transfer of Lock-Up Shares by such Non-Electing Seller (or such Permitted Transferee) other than in accordance with this Certificate of Incorporation shall be null and void, and the Corporation shall refuse to recognize any such Transfer for any purpose.

(b)    No Transfer of any shares of Common Stock or shares of Preferred Stock may be made, except in compliance with applicable federal and state securities laws.

(c)    No Transfer of shares of Class C Common Stock or Class D Common Stock may be made, unless such Transferor also Transfers an equal number of Blue Owl Holdings Common Units and Blue Owl Carry Common Units (as applicable) to the applicable Transferee in accordance with the terms and conditions of the Blue Owl Holdings A&R LPA and Blue Owl Carry A&R LPA, as applicable.

(d)    The Corporation may place customary restrictive legends on the certificates or book entries representing the shares of Common Stock and, if applicable, the shares of Preferred Stock subject to this Section 5.4 and remove such restrictive legends at the time the applicable restrictions under this Section 5.4 are no longer applicable to the shares of Common Stock or shares of Preferred Stock represented by such certificates or book entries. To the extent shares of Common Stock and, if applicable, shares of Preferred Stock subject to this Section 5.4 are uncertificated, the Corporation shall give notice of the restrictions set forth in this Section 5.4 in accordance with the DGCL.

 

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ARTICLE VI

BYLAWS

In furtherance and not in limitation of the powers conferred by the DGCL, but without limiting the rights of any party to the Investor Rights Agreement, the Board is expressly authorized to make, amend, alter, change, add to or repeal the by-laws of the Corporation (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof, the “Bylaws”) without the consent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Certificate of Incorporation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation or any provision of the DGCL, the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any such provision of the Bylaws, or to adopt any provision inconsistent therewith.

ARTICLE VII

BOARD OF DIRECTORS

Section 7.1    Board of Directors.

(a)    Board Powers. Except as otherwise provided in this Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.

(b)    Number, Election and Term.

(i)    Without limiting the rights of any party to the Investor Rights Agreement, or except as otherwise provided for or fixed in any certificate of designation with respect to any series of Preferred Stock, the total number of directors constituting the whole Board shall be determined from time to time by resolution adopted by the Board.

(ii)    Without limiting the rights of any party to the Investor Rights Agreement, the directors (other than those directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more such series, as the case may be, such directors (“Preferred Stock Directors”)) shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of such directors. Class I directors shall initially serve for a term expiring at the first annual meeting of stockholders following the Effective Date, Class II directors shall initially serve for a term expiring at the second annual meeting of stockholders following the Effective Date and Class III directors shall initially serve for a term expiring at the third annual meeting of stockholders following the Effective Date. At each annual meeting following the Effective Date, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third succeeding annual meeting of stockholders. If the number of such directors is changed (other than in respect of any Preferred Stock Directors), any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any such additional director of any class elected to fill a newly created directorship resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decrease in the number of directors remove, or shorten the term of, any incumbent director. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding

 

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in respect of any Preferred Stock Directors and without limiting the rights of any party to the Investor Rights Agreement, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. Without limiting the rights of any party to the Investor Rights Agreement, the Board is authorized to assign members of the Board already in office at the Effective Date to their respective class.

(iii)    Any such director shall hold office until the annual meeting at which his or her term expires and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal from office.

(iv)    Directors of the Corporation need not be elected by written ballot, unless the Bylaws shall so provide.

Section 7.2    Newly-Created Directorships and Vacancies. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding in respect of any Preferred Stock Directors and without limiting the rights of any party to the Investor Rights Agreement, any newly-created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director (and not by the stockholders). Any director (other than a Preferred Stock Director) elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.

Section 7.3    Resignation and Removal. Any director may resign at any time upon notice to the Corporation given in writing or by any electronic transmission permitted by the Bylaws. Without limiting the rights of any party to the Investor Rights Agreement, any or all of the directors (other than any Preferred Stock Director) may be removed only for cause and only upon the affirmative vote of the holders of a majority in voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Without limiting the rights of any party to the Investor Rights Agreement, in case the Board or any one or more directors should be so removed, new directors may be elected in accordance with Section 7.2.

Section 7.4    Preferred Stock Directors. Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect Preferred Stock Directors, then the election, term of office, removal and other features of such directorships shall be governed by the terms of this Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) applicable thereto. Notwithstanding Section 7.1(b), the number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed in accordance with Section 7.1(b) hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly and whenever the holders of any series of Preferred Stock having such right to elect Preferred Stock Directors are divested of such right, the terms of office of all such Preferred Stock Directors shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.

Section 7.5    Quorum. A quorum for the transaction of business by the directors shall be set forth in the Bylaws.

 

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ARTICLE VIII

CONSENT OF STOCKHOLDERS IN LIEU OF MEETING; ANNUAL AND SPECIAL MEETINGS OF STOCKHOLDERS

Section 8.1    Consent of Stockholders in Lieu of Meeting. At any time any shares of Class B Common Stock or shares of Class D Common Stock are outstanding, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation 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, shall be 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 entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with the Bylaws and applicable law. At any time when there are not any shares of Class B Common Stock or Class D Common Stock outstanding, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Notwithstanding the foregoing, any action required or permitted to be taken by the holders of Preferred Stock or any class of Common Stock, voting separately as a class or series or separately as a class with one or more other such series or classes, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable certificate of designation relating to such series of Preferred Stock or in this Certificate of Incorporation with respect to such class of Common Stock.

Section 8.2    Meetings of Stockholders. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called only by or at the direction of the Board, the Chairman of the Board or as otherwise expressly provided in the Bylaws. An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date, and at such time as shall be fixed exclusively by resolution of the Board or a duly authorized committee thereof.

ARTICLE IX

LIMITED LIABILITY; INDEMNIFICATION

Section 9.1    Limited Liability of Directors. To the fullest extent permitted by law, no director of the Corporation will have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Neither the amendment nor the repeal of this Article IX shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the Corporation existing prior to such amendment or repeal.

Section 9.2    Indemnification and Advancement of Expenses.

(a)    To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each Person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (for purposes of this Section 9.2, a “Proceeding”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, member, manager, officer,

 

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employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, member, manager, officer, employee or agent, or in any other capacity while serving as a director, member, manager, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, Employee Retirement Income Security Act of 1974 excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such Proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an Indemnitee in defending or otherwise participating in any Proceeding in advance of its final disposition. Notwithstanding the foregoing, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Section 9.2 or otherwise. The rights to indemnification and advancement of expenses conferred by this Section 9.2 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 9.2(a), except for Proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

(b)    The rights to indemnification and advancement of expenses conferred on any Indemnitee by this Section 9.2 shall not be exclusive of any other rights that any Indemnitee may have or hereafter acquire under law, this Certificate of Incorporation, the Bylaws, insurance, an agreement, vote of stockholders or disinterested directors, or otherwise.

(c)    Any repeal or amendment of this Section 9.2 by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Certificate of Incorporation inconsistent with this Section 9.2, shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any Proceeding (regardless of when such Proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

(d)    This Section 9.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to Persons other than Indemnitees.

(e)    The Corporation shall purchase and maintain insurance (or be named insured on the insurance policy of an affiliate), on behalf of the Indemnitees and such other Persons as the Board shall determine, in its sole discretion, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with such Person’s activities on behalf of the Corporation, regardless of whether the Corporation would have the power to indemnify such Person against such liability under the provisions of this Certificate of Incorporation.

 

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ARTICLE X

DGCL SECTION 203

The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.

ARTICLE XI

CORPORATE OPPORTUNITIES

Except with respect to any corporate opportunity expressly offered or presented to any Indemnitee solely in his or her capacity as a director or officer of, through his or her service to, or pursuant to a contract with, the Corporation and its Subsidiaries (an “Excluded Opportunity”), to the fullest extent permitted by applicable law, each Indemnitee shall have the right to engage in businesses of every type and description and other activities for profit, and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by the Corporation or any of its Subsidiaries, independently or with others, including business interests and activities in direct competition with the business and activities of the Corporation or any of its Subsidiaries, with no obligation to offer the Corporation or any of its Subsidiaries the right to participate therein. Nothing in this Certificate of Incorporation, including (without limitation) the foregoing sentence, shall be deemed to supersede any other agreement to which an Indemnitee may be a party or the rights of any other party thereto restricting such Indemnitee’s ability to have certain business interests or engage in certain business activities or ventures. To the fullest extent permitted by applicable law, but subject to the immediately preceding sentence, neither the Corporation nor any of its Subsidiaries shall have any rights in any business interests, activities or ventures of any Indemnitee that are not Excluded Opportunities, and the Corporation hereby waives and renounces any interest or expectancy therein.

To the fullest extent permitted by applicable law, but without limiting any separate agreement to which an Indemnitee may be party with the Corporation or any of its Subsidiaries, and except with respect to any Excluded Opportunities, (i) the engagement in competitive activities by any Indemnitee in accordance with the provisions of this Article XI is hereby deemed approved by the Corporation, all stockholders and all Persons acquiring an interest in the stock of the Corporation, (ii) it shall not be a breach of any Indemnitee’s duties or any other obligation of any type whatsoever of any Indemnitee if an Indemnitee engages in, or directs to another Person, any such business interests or activities in preference to or to the exclusion of the Corporation or any of its Subsidiaries, and (iii) no Indemnitee shall be liable to the Corporation, any stockholder of the Corporation or any other Person who acquires an interest in the stock of the Corporation, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person, or does not communicate such opportunity or information to the Corporation or any of its Subsidiaries.

In addition to and without limiting the foregoing provisions of this Article XI, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation or any of its Subsidiaries if it is a business opportunity that (i) the Corporation and its Subsidiaries are neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the business of the Corporation and its Subsidiaries or is of no practical advantage to the Corporation and its Subsidiaries, (iii) is one in which the Corporation and its Subsidiaries have no interest or reasonable expectancy, or (iv) is one presented to any account for the benefit of an Indemnitee or an Affiliate of Indemnitee (other than the Corporation or any of its Subsidiaries) over which such Indemnitee has no direct or indirect influence or control, including, but not limited to, a blind trust. To the fullest extent permitted by applicable law, but without limiting any separate agreement to which an Indemnitee may be party with the Corporation or any of its Subsidiaries, no Indemnitee shall (x) have any duty to present business opportunities that are not Excluded Opportunities to the Corporation or any of its Subsidiaries or (y) be liable to the Corporation, any stockholder of the Corporation or any other Person who acquires an interest in the stock of the Corporation,

 

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by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to the Corporation or any of its Subsidiaries.

For avoidance of doubt, the foregoing paragraphs of this Article XI are intended to renounce with respect to the Indemnitees, to the fullest extent permitted by Section 122(17) of the DGCL, any interest or expectancy of the Corporation or any of its Subsidiaries in, or in being offered an opportunity to participate in, any business opportunities that are not Excluded Opportunities, and this Article XI shall be construed to effect such renunciation to the fullest extent permitted by the DGCL.

Any Indemnitee may, directly or indirectly, (i) acquire stock of the Corporation, and options, rights, warrants and appreciation rights relating to stock of the Corporation and (ii) except as otherwise expressly provided in this Certificate of Incorporation, exercise all rights of a stockholder of the Corporation relating to such stock, options, rights, warrants and appreciation rights.

To the fullest extent permitted by applicable law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article XI.

ARTICLE XII

SEVERABILITY

If any provision of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby.

ARTICLE XIII

FORUM

Unless the Corporation consents in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, or any claim for aiding and abetting such alleged breach, (c) any action asserting a claim arising under any provision of the DGCL, this Certificate of Incorporation (as it may be amended or restated) or the Bylaws or as to which the DGCL confers jurisdiction on the Delaware Court of Chancery or (d) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, in each case, to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery. Notwithstanding the foregoing, in the event that the Delaware Court of Chancery lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Failure to enforce the foregoing provisions would cause the Corporation irreparable harm and the Corporation shall be entitled to equitable

 

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relief, including injunctive relief and specific performance, to enforce the foregoing provisions. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XIII.

ARTICLE XIV

AMENDMENTS

Except as otherwise expressly provided in this Certificate of Incorporation and without limiting the rights of any party to the Investor Rights Agreement, in addition to any separate vote of any class or series of capital stock of the Corporation required under the DGCL, this Certificate of Incorporation may be amended by the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE XV

DEFINITIONS

Section 15.1    Definitions. As used in this Certificate of Incorporation, the following terms have the following meanings, unless clearly indicated to the contrary:

(a)    “501(c) Organization” means an entity that is exempt from taxation under Section 501(c)(3) or Section 501(c)(4) of the Internal Revenue Code (or any successor provision thereto).

(b)    “Affiliate” has the meaning given to such term in the Investor Rights Agreement.

(c)    “B/D Voting Power” means, at the time of determination (but in any event, prior to the Sunset Time), (i) solely with respect to any matter on which holders of Class B Common Stock are voting separately as a class as required by this Certificate of Incorporation or the DGCL, one vote, (ii) solely with respect to each matter on which holders of Class D Common Stock are voting separately as a class as required by this Certificate of Incorporation or the DGCL, one vote, and (iii) with respect to each matter on which stockholders of the Corporation are voting generally or any matter in which the Class B Common Stock and Class D Common Stock are voting together as a single class, a number of votes per share equal to the Total B/D Voting Number divided by the total number of shares of Class B Common Stock and Class D Common Stock issued and outstanding. For purposes hereof, the “Total B/D Voting Number” shall mean a number equal to (A) the quotient determined by dividing (1) the sum of (x) the total number of shares of Class A Common Stock and Class C Common Stock issued and outstanding and (y) the total voting power of all shares of Preferred Stock issued and outstanding by (2) 10%; multiplied by (B) 90%.

(d)    “BCA” means that certain Business Combination Agreement, dated as of December 23, 2020, by and among the Corporation, Blue Owl Holdings, Blue Owl Carry and other Persons party thereto, as the same may be amended, restated, supplemented or waived from time to time.

(e)    “BCA Transaction” means the business combination transactions contemplated by the BCA.

 

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(f)    “Beneficially Own” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act. When used in the context of Economic Shares, Beneficially Owns assumes the Exchange of all Blue Owl Carry Common Units and Blue Owl Holdings Common Units.

(g)    “Blue Owl A&R LPAs” means the Blue Owl Carry A&R LPA and the Blue Owl Holdings A&R LPA, collectively.

(h)    “Blue Owl Carry” means Blue Owl Capital Carry LP, a Delaware limited partnership.

(i)    “Blue Owl Carry A&R LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Carry, dated on or about the Effective Date (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof).

(j)    “Blue Owl Carry Common Unit” means one Common Unit as defined in the Blue Owl Carry A&R LPA.

(k)    “Blue Owl Carry Seller Earnout Unit” means a Seller Earnout Unit as defined in the Blue Owl Carry A&R LPA.

(l)    “Blue Owl Holdings” means Blue Owl Capital Holdings LP, a Delaware limited partnership.

(m)    “Blue Owl Holdings A&R LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Holdings, dated on or about the Effective Date (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof).

(n)    “Blue Owl Holdings Common Unit” means one Common Unit as defined in the Blue Owl Holdings A&R LPA.

(o)    “Blue Owl Holdings Seller Earnout Unit” means a Seller Earnout Unit as defined in the Blue Owl Carry A&R LPA.

(p)    “Blue Owl Seller Earnout Unit” means one Blue Owl Carry Seller Earnout Unit and one Blue Owl Holdings Seller Earnout Units, collectively.

(q)    “Blue Owl Unit” has the meaning given to such term in the BCA.

(r)    “Business Combination” means a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the Corporation, with one or more businesses or entities (the “target business”), which Business Combination: (A) must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into such Business Combination; and (B) must not be effectuated with another blank check company or a similar company with nominal operations. For the avoidance of doubt, the BCA Transaction constitutes a Business Combination as such term is used in this Certificate of Incorporation.

 

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(s)    “Charitable Trust” means a trust that is a 501(c) Organization (whether a determination letter with respect to such exemption is issued before, at or after the Effective Date), and further includes any successor entity that is a 501(c) Organization upon a conversion of, or transfer of all or substantially all of the assets of, a Charitable Trust to such successor entity (whether a determination letter with respect to such successor’s exemption is issued before, at or after the conversion date).

(t)    “Class E Conversion Date” means, with respect to (i) any share of Class E-1 Common Stock, the date upon which a Triggering Event with respect to such share of Class E-1 Common Stock shall have occurred (as determined pursuant to the definition of “Triggering Event”) and (ii) any share of Class E-2 Common Stock, the date upon which a Triggering Event with respect to such share of Class E-2 Common Stock shall have occurred (as determined pursuant to the definition of “Triggering Event”).

(u)    “Determination Time” means 5:00 p.m. New York City time on such date as the disinterested members of the Executive Committee (or, if no Executive Committee is then constituted, the disinterested members of the Board) determine that any shares of Class B Common Stock or Class D Common Stock are shares of Disqualified Stock.

(v)    “Disqualified Individual” means a Qualified Individual that (1) has been removed from the Executive Committee for Cause (as defined in the Investor Rights Agreement, and as applicable), (2) is found by either the Board or a final non-appealable judgement of a court of competent jurisdiction to have breached (and not cured, if curable) a non-competition covenant agreement with the Corporation or any of its Subsidiaries or (3) is deceased.

(w)    “Disqualified Stock” means shares of Class B Common Stock or Class D Common Stock (i) of the Qualified Individual as to which such shares were initially issued (beneficially or of record) who has become a Disqualified Individual or (ii) which have been Transferred to a Person other than a Qualified Transferee; provided, that no shares of Class B Common Stock or Class D Common Stock Beneficially Owned by Owl Rock Capital Feeder, LLC (“ORC Feeder”), Owl Rock Capital Partners, LP (“ORC Partners”), Dyal Capital SLP LP or any other Dyal SLP Aggregator (as such term is defined in the Investor Rights Agreement) or any Person that is a Qualified Stockholder (whether or not a Disqualified Individual or its Qualified Transferees are direct or indirect equityholders thereof, as long as Voting Control of such Person is held, directly or indirectly, by Qualified Individuals other than such Disqualified Individuals and its Qualified Transferees) (each person referenced in this provision an “Included Person” and collectively the “Included Persons”) shall be considered Disqualified Stock, unless unanimously determined by the Executive Committee (other than a Disqualified Individual) (or, if no Executive Committee is then constituted, unanimously determined by the Board).

(x)    “Earnout Termination Date” means the date that is the fifth anniversary of the Effective Date.

(y)    “Economic Shares” has the meaning given to such term in the Investor Rights Agreement.

(z)    “Effective Date” means the date of the filing and effectiveness of this Certificate of Incorporation with the Secretary of State of the State of Delaware.

(aa)    “Exchange” has the meaning given to such term in the Exchange Agreement.

 

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(bb)    “Exchange Agreement” means the Exchange Agreement, dated on or about the Effective Date, by and among the Corporation, Blue Owl Holdings, Blue Owl Carry and the other Persons party thereto (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof).

(cc)    “Executive Committee” means the Executive Committee of the Corporation or other management committee exercising day-to-day management of the Corporation in accordance with the Bylaws and the Investor Rights Agreement.

(dd)    “Family Member” has the meaning given to such term in the Investor Rights Agreement.

(ee)    “Forfeiture Agreement” means that certain Forfeiture Agreement referred to in the BCA pursuant to which, among other things, Altimar Sponsor LLC acknowledged and agreed (1) effective upon the closing of the transactions contemplated by the BCA, (x) as holder of a majority of the Class B Cayman Shares prior to the Domestication and a majority of the shares of Class F Common Stock at the Effective Date to waive certain anti-dilution adjustments set forth in Section 17.3 of Altimar Cayman’s Memorandum and Articles of Association and Section 4.3(j) of this Certificate of Incorporation in connection with the transactions contemplated by the BCA and (y) to forfeit 2,289,375 of the shares of Class A Common Stock received upon the automatic conversion of its shares of Class F Common Stock upon the closing of the transactions contemplated by the BCA for no consideration; and (2) to the conversion of Class F Common Stock into Class A Common Stock automatically upon consummation the BCA Transaction.

(ff)    “Initial Qualified Stockholder” means (1) ORC Feeder, and (2) Dyal Capital SLP LP, in each case with respect to the shares held by such Person for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that the Qualified Individuals have Voting Control over the shares directly or indirectly held by such entity.

(gg)    “Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended.

(hh)    “Investor Rights Agreements” means the Investor Rights Agreement, dated on or about the Effective Date, by and among the Corporation and the other Persons party thereto (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof).

(ii)    “IPO” means the initial public offering of Altimar Cayman.

(jj)    “Lock-Up Period” means:

(A)    with respect to any shares of Class A Common Stock, Class B Common Stock, Class C Common Stock or Class D Common Stock held by a Non-Electing Seller or a Permitted Transferee thereof, the period commencing on the Effective Date and continuing until the date that is six months following the Effective Date; and

(B)    with respect to any Class E Common Stock held by a Non-Electing Seller or a Permitted Transferee thereof, the period commencing upon the Effective Date and continuing until the later of (1) the occurrence of a Triggering

 

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Event for such Class E Common Stock (as determined pursuant to the definition of “Triggering Event”), at which time, such Class E Common Stock shall be converted to Class A Common Stock on the applicable Class E Conversion Date as provided in this Certificate of Incorporation, and (2) the date that is six months following the Effective Date.

(kk)    “Lock-Up Shares” means shares of Class A Common Stock, shares of Class B Common Stock, shares of Class C Common Stock, shares of Class D Common Stock and shares of Class E Common Stock held by a Non-Electing Seller or Permitted Transferee thereof. For the avoidance of doubt, shares of Class A Common Stock, which prior to the Domestication were Class A ordinary shares, as well as any and all other shares of Common Stock held by any Person other than a Non-Electing Seller or a Permitted Transferee thereof, are not Lock-Up Shares and such shares are not subject to any Lock-Up Period under this Certificate of Incorporation.

(ll)    “Non-Electing Seller” means any Person that, in accordance with Article II of the BCA, (i) received Lock-Up Shares (as opposed to Blue Owl Holdings Common Units and Blue Owl Carry Common Units) as consideration thereunder and (ii) did not execute a counterpart to the Investor Rights Agreement agreeing to be party thereto.

(mm)     “Participating Shares” means (i) shares of Class A Common Stock, Class B Common Stock, and, solely prior to the automatic conversion thereof upon and as a result of the BCA Transaction, Class F Common Stock and (ii) shares of any other class or series of Common Stock or Preferred Stock to the extent that, in accordance with the terms thereof, such shares are entitled to participate with Class A Common Stock in, as applicable, (x) dividends or distributions paid by the Corporation, or (y) any liquidation, dissolution or winding up of the Corporation. Notwithstanding the foregoing, shares of Class C Common Stock and shares of Class D Common Stock, and shares of Class E Common Stock shall not be considered Participating Shares except, solely in the case of a liquidation, dissolution or winding up of the corporation, to the extent provided in Section 4.3(c)(ii) or (iii) as applicable.

(nn)    “Permitted Transfer” means any Transfer that is (i) made to a Permitted Transferee of the transferor upon prior written notice to the Corporation and any other Person to whom notice is required to be given under the Investor Rights Agreement, (ii) a transfer of shares of Class A Common Stock, Class B Common Stock, Class C Common Stock or Class D Common Stock to the Corporation in accordance with Section 5.1(b), (iii) a transfer of shares of Class E Common Stock to the Corporation in accordance with Section 4.3(i), (iv) made in accordance with the Forfeiture Agreement, (v) made in accordance with Article III of the Investor Rights Agreement (but without limiting the Lock-Up Period), (vi) made pursuant to any liquidation, merger, stock exchange or other similar transaction subsequent to the BCA Transaction which results in all of the Corporation’s stockholders exchanging or having the right to exchange their shares of Common Stock for cash, securities or other property or (vii) a Transfer that otherwise constitutes a Permitted Transfer under the Investor Rights Agreement.

(oo)    “Permitted Transferee” means: (A) with respect to any Person, (i) any Family Member of such Person, (ii) any Affiliate of such Person, (iii) any Affiliate of any Family Member of such Person, or (iv) if such Person is a natural person, (a) by virtue of laws of descent and distribution upon death of such individual or (b) in accordance with a qualified domestic relations order; and (B) with respect to any Qualified Stockholder, (i) the Persons referred to in clause (A) with respect to such Qualified Stockholder and (ii) any Qualified Transferee of such Qualified Stockholder.

 

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(pp)    “Person” has the meaning given to such term in the Investor Rights Agreement.

(qq)    “Qualified Entity” means, with respect to a Qualified Stockholder: (a) a Qualified Trust solely for the benefit of (i) such Qualified Stockholder, or (ii) one or more Family Members of such Qualified Stockholder; provided, that with respect to the shares held by such Qualified Trust only for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that one or more Qualified Individuals have Voting Control over the shares directly or indirectly held by such Qualified Trust; (b) any general partnership, limited partnership, limited liability company, corporation, public benefit corporation or other entity with respect to which Voting Control is held by or which is wholly owned, individually or collectively, by (i) such Qualified Stockholder, (ii) one or more Family Members of such Qualified Stockholder or (iii) any other Qualified Entity of such Qualified Stockholder; provided, that with respect to the shares held by such Person only for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that one or more of the Qualified Individuals have Voting Control over the shares directly or indirectly held by such entity; (c) any Charitable Trust validly created by a Qualified Stockholder; provided, that with respect to the shares held by such Charitable Trust only for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that one or more of the Qualified Individuals have Voting Control over the shares directly or indirectly held by such Charitable Trust; (d) a revocable living trust, which revocable living trust is itself both a Qualified Trust and a Qualified Stockholder, during the lifetime of the natural person grantor of such trust; provided, that with respect to the shares held by revocable living trust which trust is itself both a Qualified Trust and a Qualified Stockholder, only for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that one or more of the Qualified Individuals have Voting Control over the shares directly or indirectly held by such Qualified Trust; (e) any 501(c) Organization or Supporting Organization over which (i) such Qualified Stockholder, (ii) one or more Family Members of such Qualified Stockholder or (iii) any other Qualified Entity of such Qualified Stockholder, individually or collectively, control the appointment of a majority of all trustees, board members, or members of a similar governing body, as applicable, (f) in the case of ORC Feeder, ORC Partners, in each case, with respect to the shares held by such Person only for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that one or more of the Qualified Individuals have Voting Control over the shares directly or indirectly held by such entity, and (g) in the case of Dyal Capital SLP LP, any Dyal SLP Aggregator (as such term is defined in the Investor Rights Agreement), in each case, with respect to the shares held by such Person for so long as one or more of the Qualified Individuals directly or indirectly have voting power such that one or more of the Qualified Individuals have Voting Control over the shares directly or indirectly held by such entity.

(rr)    “Qualified Individual” means any of Doug Ostrover, Marc Lipschultz, Craig Packer, Alan Kirshenbaum, Michael Rees, Sean Ward or Andrew Laurino.

(ss)    “Qualified Stockholder” means (i) any Initial Qualified Stockholder, (ii) any Qualified Individual, or (iii) a Qualified Transferee of the foregoing.

(tt)    “Qualified Transfer” means any Transfer of a share of Common Stock:

(i)    by a Qualified Stockholder (or the estate of a deceased Qualified Stockholder) to (A) one or more Family Members of such Qualified Stockholder or (B) any Qualified Entity of such Qualified Stockholder;

 

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(ii)    by a Qualified Entity of a Qualified Stockholder to (A) such Qualified Stockholder or one or more Family Members of such Qualified Stockholder or (B) any other Qualified Entity of such Qualified Stockholder; or

(iii)    by a Qualified Stockholder that is a natural person or revocable living trust to a 501(c) Organization or a Supporting Organization, as well as any Transfer by a 501(c) Organization to a Supporting Organization of which such 501(c) Organization (x) is a supported organization (within the meaning of Section 509(f)(3) of the Internal Revenue Code (or any successor provision thereto)), and (y) has the power to appoint a majority of the board of directors, in each case solely so long as such 501(c) Organization or such Supporting Organization, as applicable, irrevocably elects, no later than the time such share of Class B Common Stock or Class D Common Stock is Transferred to it, that such share of Class B Common Stock or Class D Common Stock shall automatically be converted into Class A Common Stock or Class C Common Stock, respectively, upon the death of such Qualified Stockholder or the natural person grantor of such Qualified Stockholder.

(uu)    “Qualified Transferee” means a transferee of shares of Common Stock received in a Transfer that constitutes a Qualified Transfer.

(vv)    “Qualified Trust” means a bona fide trust where each trustee is (a) a Qualified Stockholder, (b) a Family Member of a Qualified Stockholder or (c) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies, accounting, legal or financial advisor, or bank trust departments.

(ww)    “Ratably” means, with respect to Participating Shares (determined pursuant to the definition of “Participating Shares”, as of the applicable time), on a per share basis. If, after the Effective Date, other terms are approved by the Corporation with respect to participation of any class or series of capital stock in residual distributions of the Corporation and are set forth in this Certificate of Incorporation or any certificate of designation with respect to Preferred Stock, “Ratably” shall automatically be adjusted to take account of such other terms.

(xx)    “Restricted Transfer” means any Transfer other than a Permitted Transfer.

(yy)    “Subsidiary” has the meaning given to such term in the Investor Rights Agreement.

(zz)    “Sunset Time” means 5:00 p.m. New York City time on the first date on which (x) the number of Economic Shares directly or indirectly Beneficially Owned by Qualified Individuals (including through one or more Qualified Transferees or Included Persons) who are none of a Disqualified Individual, a Transferee of a Disqualified Individual nor an Included Person is less than (y) 25% of the Economic Shares directly or indirectly Beneficially Owned by Initial Qualified Stockholders as of the Effective Date (assuming, in each case, (i) that immediately prior to such determination an Exchange of all then-outstanding Blue Owl Holdings Common Units and Blue Owl Carry Common Units by Qualified Stockholders was consummated and (ii) the share counts referenced in the immediately preceding clauses (x) and (y) are equitably adjusted for any stock split, stock dividend, recapitalization, reorganization, merger, amendment of this Certificate of Incorporation, scheme, arrangement or otherwise affecting the Economic Shares occurring after the Effective Date; provided, that, for the avoidance of doubt, the foregoing shall be calculated without regard to any outstanding Blue Owl Carry Seller Earnout Units or Blue Owl Holdings Seller Earnout Units, unless and until such units are earned in accordance with the terms of the BCA, the

 

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Blue Owl Holdings A&R LPA and the Blue Owl Carry A&R LPA). Notwithstanding the foregoing, any determination made pursuant to the preceding sentence shall not take into account, and shall exclude from consideration, 40% of the Economic Shares issued to ORC Feeder upon closing of the BCA Transaction (such shares being attributable to a party other than a Qualified Individual).

(aaa)    “Supporting Organization” means an entity that is exempt from taxation under Section 501(c)(3) or Section 501(c)(4) and described in Section 509(a)(3) of the Internal Revenue Code (or any successor provision thereto).

(bbb)    “Transfer” has the meaning given to such term in the Investor Rights Agreement. Notwithstanding the preceding sentence, for purposes of this Certification of Incorporation, no Exchange of Blue Owl Holdings Common Units or Blue Owl Carry Common Units for any shares of Common Stock of the Corporation not prohibited by the Blue Owl Holdings A&R LPA, the Blue Owl Carry A&R LPA, the Exchange Agreement or the Investor Rights Agreement or the conversion of any shares of any class or series of capital stock of the Corporation into another class or series of capital stock of the Corporation shall constitute a “Transfer” hereunder.

(ccc)    “Triggering Event” means:

(A)    with respect to any share of Series E-1 Common Stock, the earlier to occur of the following (but only if occurring on or prior to the Earnout Termination Date):

(1)    the Volume Weighted Average Share Price of a share of Class A Common Stock equals or exceeds $12.50 per share for any 20 consecutive trading days following the Effective Date; and

(2)    if the Corporation is consummating a merger, consolidation, tender offer, exchange offer or business combination or sale of all or substantially of its assets and the consideration payable per share of Class A Common Stock or per Blue Owl Unit (as applicable) in connection therewith equals or exceeds $12.50 per share of Class A Common Stock or per Blue Owl Unit (as applicable);

(B)    with respect to any share of Series E-2 Common Stock, the earlier to occur of the following (but only if occurring on or prior to the Earnout Termination Date):

(1)    the Volume Weighted Average Share Price of a share of Class A Common Stock equals or exceeds $15.00 per share for any 20 consecutive trading days following the Effective Date; and

(2)    if the Corporation is consummating a merger, consolidation, tender offer, exchange offer or business combination or sale of all or substantially of its assets and the consideration payable per share of Class A Common Stock or per Blue Owl Unit (as applicable) in connection therewith equals or exceeds $15.00 per share of Class A Common Stock or per Blue Owl Unit (as applicable); and

(C)    with respect to the foregoing clause (A) and (B), if the Corporation at any time combines or subdivides (by any stock split, stock dividend,

 

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recapitalization, reorganization, merger, amendment of this Certificate of Incorporation, amendment to the Blue Owl A&R LPAs, scheme, arrangement or otherwise or extraordinary dividend resulting from an asset sale or leverage recapitalization), each of the applicable per share prices in this definition of “Triggering Event” shall be equitably adjusted by the Corporation in good faith to take into account such stock split, stock dividend, recapitalization, reorganization, merger, amendment to this Certificate of Incorporation, amendment to the Blue Owl A&R LPAs, scheme, arrangement or extraordinary dividend or other applicable transaction.

(ddd)    “Unit Triggering Event” means a “Triggering Event,” as defined in the Blue Owl A&R LPAs (or if any difference between them, the Blue Owl Holdings A&R LPA).

(eee)    “Volume Weighted Average Share Price” has the meaning given to such term in the BCA.

(fff)    “Voting Control” (x) with respect to a share of Common Stock means the power, directly or indirectly (whether exclusive or, solely among Qualified Individuals, shared), to vote or direct the voting of such share by proxy, voting agreement or otherwise and (y) with respect to any Person, means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise and, in any event and without limiting the generality of the foregoing, any Person owning a majority of the voting power of the voting securities of another Person shall be deemed to have voting control of that Person.

ARTICLE XVI

INCORPORATOR

The incorporator of the Corporation is Tom Wasserman, whose mailing address is c/o HPS Investment Partners, LLC, 40 West 57th Street, 33rd Floor, New York, NY 10019.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned has executed this Certificate of Incorporation on this 19th day of May, 2021.

 

/s/ Tom Wasserman

Tom Wasserman
Sole Incorporator

Exhibit 3.3

AMENDED AND RESTATED

BY-LAWS

OF

BLUE OWL CAPITAL INC.

ARTICLE I

OFFICES

Section 1.1 Registered Office. The registered office of Blue Owl Capital Inc. (the “Corporation”) shall be located at either (a) the principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the Corporation’s registered agent in Delaware.

Section 1.2 Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.

ARTICLE II

STOCKHOLDERS

Section 2.1 Annual Meetings. The annual meeting of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other business as may properly be brought before such meeting shall be held on such date, and at such time and place, if any, within or without the State of Delaware, or by means of remote communications, including by webcast, pursuant to Section 2.12(c)(ii), as may be designated from time to time by the Board. The Board may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled.

Section 2.2 Special Meetings. Except as otherwise required by the General Corporation Law of the State of Delaware (the “DGCL”) or required or permitted by the certificate of incorporation of the Corporation (as amended, restated, modified or supplemented from time to time, the “Certificate of Incorporation”), and subject to the rights of the holders of any class or series of Preferred Stock (as defined in the Certificate of Incorporation), if any, special meetings of the stockholders of the Corporation may be called only by or at the direction of the Board, the Chairman of the Board or the Chief Executive Officer. Special meetings may be held either at a place, within or without the State of Delaware, or by means of remote communications, including by webcast, pursuant to Section 2.12(c)(ii), as the Board may determine. The Board may postpone, reschedule or cancel any special meeting of stockholders previously scheduled.

Section 2.3 Notice of Meetings. Except as otherwise provided by the DGCL, the Certificate of Incorporation or these By-Laws, notice of the date, time, place (if any), the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes of the meeting of stockholders shall be given not more than 60, nor less than ten, days previous thereto (unless a different time is specified by applicable law), to each stockholder entitled to vote at the meeting as of the record date for determining stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Without limiting the manner by which notices of meetings otherwise may be given effectively to stockholders, any such notice may be given by electronic transmission in the manner provided in Section 232 of the DGCL.


Section 2.4 Quorum; Adjournments. The holders of a majority in voting power of the capital stock of the Corporation issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided herein, by applicable law or by the Certificate of Incorporation; but if at any meeting of stockholders there shall be less than a quorum present, the chairman of the meeting or, by a majority in voting power thereof, the stockholders present (either in person or by proxy) may, to the extent permitted by law, adjourn the meeting from time to time without further notice, other than announcement at the meeting of the date, time and place, if any, and the means of remote communication, if any, by which stockholders may be deemed present in person and vote at such adjourned meeting, until a quorum shall be present or represented. Notwithstanding the foregoing, where a separate vote by a class or series or classes or series is required, a majority in voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter. At any adjourned meeting at which a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the original meeting. Notice need not be given of any adjourned meeting if the time, date and place, if any, and the means of remote communication, if any, by which stockholders may be deemed present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than 60 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date for notice of such adjourned meeting.

Section 2.5 Organization of Meetings. The Chairman of the Board, or in the absence of the Chairman of the Board, or at the Chairman of the Board’s discretion, the Chief Executive Officer, or in the Chief Executive Officer’s absence or at the Chief Executive Officer’s discretion, any officer of the Corporation, shall call all meetings of the stockholders to order and shall act as chairman of any such meetings. The Secretary of the Corporation or, in such officer’s absence, an Assistant Secretary of the Corporation, shall act as secretary of the meeting. If neither the Secretary nor an Assistant Secretary is present, the chairman of the meeting shall appoint a secretary of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Unless otherwise determined by the Board prior to the meeting, the chairman of the meeting shall determine the order of business and shall have the authority in his or her discretion to regulate the conduct of any such meeting, including, without limitation, convening the meeting and adjourning the meeting (whether or not a quorum is present), announcing the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote, imposing restrictions on the persons (other than stockholders of record of the Corporation or their duly appointed proxies) who may attend any such meeting, establishing procedures for the transaction of business at such meeting (including the dismissal of business not properly presented), maintaining order at the meeting and safety of those present, restricting entry to such meeting after the time fixed for commencement thereof and limiting the circumstances in which any person may make a statement or ask questions at any meeting of stockholders. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

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Section 2.6 Proxies.

(a) At all meetings of stockholders, any stockholder entitled to vote thereat shall be entitled to vote in person or by proxy, subject to applicable law. Without limiting the manner in which a stockholder may authorize another person or persons to act for the stockholder as proxy pursuant to the DGCL, the following shall constitute a valid means by which a stockholder may grant such authority: (i) a stockholder may execute a writing authorizing another person or persons to act for the stockholder as proxy, and execution of the writing may be accomplished by the stockholder or the stockholder’s authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; or (ii) a stockholder may authorize another person or persons to act for the stockholder as proxy by transmitting or authorizing by means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period; provided, that any such means of electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. If it is determined that such electronic transmissions are valid, the inspector or inspectors of stockholder votes or, if there are no such inspectors, such other persons making that determination shall specify the information upon which they relied.

(b) A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date.

(c) Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to the preceding paragraphs of this Section 2.6 (including any electronic transmission) may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

(d) Proxies shall be filed with the secretary of the meeting prior to or at the commencement of the meeting to which they relate.

Section 2.7 Voting. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall decide any question brought before such meeting, unless the question is one upon which by express provision of the Certificate of Incorporation, the Investor Rights Agreement (as defined in the Certificate of Incorporation), these By-Laws or the DGCL a different vote is required, in which case such express provision shall govern and control the decision of such question. Notwithstanding the foregoing, where a separate vote by a class or series or classes or series is required and a quorum is present, the affirmative vote of a majority of the votes cast by shares of such class or series or classes or series and entitled to vote on the subject matter shall be the act of such class or series or classes or series, unless the question is one upon which by express provision of the Certificate of Incorporation, the Investor Rights Agreement, these By-Laws or the DGCL a different vote is required, in which case such express provision shall govern and control the decision of such question.

 

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Section 2.8 Fixing Record Date.

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by applicable law, not be more than 60 nor less than ten days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change or conversion or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

(c) Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board, (i) when no prior action of the Board is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board is required by law, the record date for such purpose shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

Section 2.9 Consents in Lieu of Meeting. At any time when action by one or more classes or series of stockholders of the Corporation is permitted to be taken by written consent pursuant to the terms and limitations set forth in the Certificate of Incorporation and/or the Investor Rights Agreement (as applicable), the provisions of this section shall apply. All consents properly delivered in accordance with the Certificate of Incorporation, the Investor Rights Agreement (as applicable) and the DGCL shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the Corporation as required by the DGCL, written consents signed by the holders of a sufficient number of shares to take such corporate action are so delivered to the Corporation in accordance with the applicable provisions of the

 

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DGCL. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided in the applicable provisions of the DGCL. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the DGCL, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand, by certified or registered mail, return receipt requested, or by electronic transmission. If no record date has been fixed by the Board and prior action by the Board is required by the DGCL, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

Section 2.10 List of Stockholders Entitled to Vote. The Corporation shall prepare, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (i) on a reasonably accessible electronic network; provided, that the information required to gain access to such list is provided with the notice of the meeting; or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

Section 2.11 Inspectors. The Board, in advance of all meetings of the stockholders, may, and shall if required by applicable law, appoint one or more inspectors of stockholder votes, who may be employees or agents of the Corporation or stockholders or their proxies, but who shall not be directors of the Corporation or candidates for election as directors. In the event that one or more inspectors of stockholder votes previously designated by the Board fails to appear or act at the meeting of stockholders, the chairman of the meeting may appoint one or more inspectors of stockholder votes to fill such vacancy or vacancies. Inspectors of stockholder votes appointed to act at any meeting of the stockholders, before entering upon the discharge of their duties, shall take and sign an oath to faithfully execute the duties of inspector of stockholder votes with strict impartiality and according to the best of their ability and the oath so taken shall be subscribed by them. The inspector or inspectors so appointed or designated shall (i)

 

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ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by applicable law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law.

Section 2.12 Conduct of Meetings

(a) Annual Meetings of Stockholders.

(i) Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (A) as provided in the Investor Rights Agreement, (B) pursuant to the Corporation’s notice of meeting (or any supplement thereto) delivered pursuant to Section 2.3, (C) by or at the direction of the Board or any authorized committee thereof or (D) by any stockholder of the Corporation who is entitled to vote on such election or such other business at the meeting, who has complied with the notice procedures set forth in subparagraphs (ii) and (iii) of this Section 2.12(a) and who was a stockholder of record at the time such notice was delivered to the Secretary of the Corporation.

(ii) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (D) of Section 2.12(a)(i), the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation (even if such matter is already the subject of any notice to the stockholders or a public announcement from the Board), and, in the case of business other than nominations of persons for election to the Board, such other business must be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is scheduled for more than 30 days before, or more than 70 days following, such anniversary date, or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered not later than the tenth day following the day on which public announcement of the date of such meeting is first made. For purposes of the application of Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or any successor provision), the date for notice specified in this Section 2.12(a)(iii) shall be the earlier of the date calculated as hereinbefore provided or the date specified in paragraph (c)(1) of Rule 14a-4. For purposes of the first annual meeting of stockholders following the adoption of these By-Laws, the date of the preceding year’s annual meeting shall be deemed to be May 19 of the preceding calendar year. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. For the avoidance of doubt, a stockholder shall not be entitled to make additional or substitute nominations following the expiration of the time periods set forth in these By-Laws. Notwithstanding anything in this Section 2.12(a)(iii) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or

 

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specifying the size of the increased Board at least 100 calendar days prior to the first anniversary of the preceding year’s annual meeting of stockholders, then a stockholder’s notice required by this Section 2.12 shall be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the Secretary of the Corporation not later than the close of business on the tenth calendar day following the day on which such public announcement is first made by the Corporation.

(iii) Such stockholder’s notice shall set forth (A) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend these By-Laws, the language of the proposed amendment), the reasons for conducting such business at the meeting and any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such stockholder and the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act), if any, on whose behalf the proposal is made; (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (I) the name and address of such stockholder, as they appear on the Corporation’s books and records, and of such beneficial owner, (II) the class or series and number of shares of capital stock of the Corporation which are owned directly or indirectly, beneficially and of record by such stockholder and such beneficial owner, (III) a representation that the stockholder (aa) is a holder of record of the stock of the Corporation at the time of the giving of the notice, (bb) will be entitled to vote at such meeting and (cc) will appear in person or by proxy at the meeting to propose such business or nomination, (IV) a representation as to whether the stockholder or the beneficial owner, if any, will be or is part of a group which will (aa) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (bb) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination, (V) a certification regarding whether such stockholder and beneficial owner, if any, have complied with all applicable federal, state and other legal requirements in connection with the stockholder’s and/or beneficial owner’s acquisition of shares of capital stock or other securities of the Corporation and/or the stockholder’s and/or beneficial owner’s acts or omissions as a stockholder of the Corporation and (VI) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; (D) a description of any agreement, arrangement or understanding with respect to the nomination or proposal and/or the voting of shares of any class or series of stock of the Corporation between or among the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made, any of their respective affiliates or associates and/or any others acting in concert with any of the foregoing (collectively, “proponent persons”); and (E) a description of any agreement,

 

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arrangement or understanding (including without limitation any contract to purchase or sell, acquisition or grant of any option, right or warrant to purchase or sell, swap or other instrument) the intent or effect of which may be (I) to transfer to or from any proponent person, in whole or in part, any of the economic consequences of ownership of any security of the Corporation, (II) to increase or decrease the voting power of any proponent person with respect to shares of any class or series of stock of the Corporation and/or (III) to provide any proponent person, directly or indirectly, with the opportunity to profit or share in any profit derived from, or to otherwise benefit economically from, any increase or decrease in the value of any security of the Corporation. A stockholder providing notice of a proposed nomination for election to the Board or other business proposed to be brought before a meeting (whether given pursuant to this Section 2.12(a)(iii) or Section 2.12(b)) shall update and supplement such notice from time to time to the extent necessary so that the information provided or required to be provided in such notice shall be true and correct as of the record date for determining the stockholders entitled to notice of the meeting and as of the date that is 15 days prior to the meeting or any adjournment or postponement thereof; provided, that if the record date for determining the stockholders entitled to vote at the meeting is less than 15 days prior to the meeting or any adjournment or postponement thereof, the information shall be supplemented and updated as of such later date. Any such update and supplement shall be delivered in writing to the Secretary of the Corporation at the principal executive offices of the Corporation not later than five days after the record date for determining the stockholders entitled to notice of the meeting (in the case of any update or supplement required to be made as of the record date for determining the stockholders entitled to notice of the meeting), not later than ten days prior to the date for the meeting or any adjournment or postponement thereof (in the case of any update or supplement required to be made as of 15 days prior to the meeting or any adjournment or postponement thereof) and not later than five days after the record date for determining the stockholders entitled to vote at the meeting, but no later than the date prior to the meeting or any adjournment or postponement thereof (in the case of any update and supplement required to be made as of a date less than 15 days prior the date of the meeting or any adjournment or postponement thereof). The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation and to determine the independence of such director under the Exchange Act and rules and regulations thereunder and applicable stock exchange rules.

(A) The foregoing notice requirements of this Section 2.12(a)(iii) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Exchange Act, and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. Nothing in this Section 2.12(a)(iii) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

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(iv) Notwithstanding anything in the second sentence of Section 2.12(a)(iii)(A) to the contrary, in the event that the number of directors to be elected to the Board is increased, effective after the time period for which nominations would otherwise be due under Section 2.12(a)(ii), and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.12 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which a public announcement of such increase is first made by the Corporation.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2.3. At any time that the stockholders are not prohibited from filling vacancies or newly created directorships on the Board, nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board or a committee thereof, (ii) as provided in the Investor Rights Agreement or (iii) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is entitled to vote on such election at the meeting, who has complied with the notice procedures set forth in this Section 2.12 and who is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting if the stockholder’s notice as required by Section 2.12(a)(ii) is delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.

(c) General.

(i) (A) Only persons who are nominated in accordance with the procedures set forth in this Section 2.12 shall be eligible to be elected to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.12. Except as otherwise provided by law, the Certificate of Incorporation, the Investor Rights Agreement or these By-Laws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Section 2.12 and, if any proposed nomination or business is not in compliance with this Section 2.12, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.

(B) Notwithstanding the foregoing provisions of this Section 2.12, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.12, to be considered a qualified representative of a stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

 

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(ii) If authorized by the Board in its sole discretion, and subject to such rules, regulations and procedures as the Board may adopt, stockholders of the Corporation and proxyholders not physically present at a meeting of stockholders of the Corporation may, by means of remote communication participate in a meeting of stockholders of the Corporation and be deemed present in person and vote at a meeting of stockholders of the Corporation whether such meeting is to be held at a designated place or solely by means of remote communication; provided, however, that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder of the Corporation or proxyholder; (B) the Corporation shall implement reasonable measures to provide such stockholders of the Corporation and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders of the Corporation, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and (C) if any stockholder of the Corporation or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

(iii) For purposes of this Section 2.12, “public announcement” shall mean disclosure of the information to the public in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service, in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or otherwise disseminated in a manner constituting “public disclosure” under Regulation FD promulgated by the Securities and Exchange Commission.

(iv) No adjournment or postponement or notice of adjournment or postponement of any meeting shall be deemed to constitute a new notice (or extend any notice time period) of such meeting for purposes of this Section 2.12, and in order for any notification required to be delivered by a stockholder pursuant to this Section 2.12 to be timely, such notification must be delivered within the periods set forth above with respect to the originally scheduled meeting.

(v) Notwithstanding the foregoing provisions of this Section 2.12, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.12; provided, however, that, to the fullest extent permitted by applicable law, any references in these By-Laws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.12 (including clause (D) of Section 2.12(a)(i) and Section 2.12(b) hereof), and compliance with clause (D) of Section 2.12(a)(i) and Section 2.12(b) shall be the exclusive means for a stockholder to make nominations or submit other business. Nothing in this Section 2.12 shall apply to the right, if any, of the holders of any series of Preferred Stock, if any, to elect directors pursuant to any applicable provisions of the Certificate of Incorporation and/or the Investor Rights Agreement (as applicable).

 

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(vi) Notwithstanding anything to the contrary contained herein, for as long as the Investor Rights Agreement (as defined in the Certificate of Incorporation) remains in effect with respect to the Parties (as defined in the Certificate of Incorporation) (the “Investor Rights Agreement Parties”), the Investor Rights Agreement Parties (to the extent then subject to the Investor Rights Agreement) shall not be subject to the notice procedures set forth in Section 2.12(a)(ii), Section 2.12(a)(iii) or Section 2.12(b) with respect to any annual or special meeting of stockholders to the extent necessary to effect the transactions and rights set forth in the Investor Rights Agreement.

ARTICLE III

BOARD OF DIRECTORS

Section 3.1 Number; Election; Quorum; Voting. The Board shall consist, subject to the Certificate of Incorporation and the Investor Rights Agreement or any certificate of designation with respect to any series of Preferred Stock, of such number of directors as shall from time to time be fixed exclusively by resolution adopted by the Board. Directors shall (except as hereinafter provided for the filling of vacancies and newly created directorships, and except as otherwise expressly provided in the Certificate of Incorporation or the Investor Rights Agreement) be elected by the holders of a plurality of the votes cast by the holders of shares present in person or represented by proxy at the meeting and entitled to vote on the election of such directors in accordance with the terms of the Certificate of Incorporation and the Investor Rights Agreement, as applicable. Unless otherwise provided in the Investor Rights Agreement, a majority of the total number of directors then in office shall constitute a quorum for the transaction of business. Except as otherwise provided by law, these By-Laws, by the Certificate of Incorporation or by the Investor Rights Agreement, the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board. Directors need not be stockholders.

Section 3.2 Resignation; Removal. Any director may resign at any time upon notice given in writing or by electronic transmission to the Board, the Chairman of the Board, the Chief Executive Officer, the President or the Secretary of the Corporation. The resignation shall take effect at the time or the happening of any event specified therein, and if no time or event is specified, at the time of its receipt. The acceptance of a resignation shall not be necessary to make it effective unless otherwise expressly provided in the resignation. Subject to the Investor Rights Agreement, directors of the Corporation may be removed in the manner provided in the Certificate of Incorporation and applicable law.

Section 3.3 Vacancies. Subject to the Certificate of Incorporation and the Investor Rights Agreement, unless otherwise required by the DGCL or Section 3.5, any newly created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board (whether by death, resignation, removal (including pursuant to the terms of the Certificate of Incorporation), retirement, disqualification or otherwise) shall be filled only by a majority of the directors then in office, although less than a quorum, by any authorized committee of the Board or by a sole remaining director.

Section 3.4 Meetings of the Board. Meetings of the Board shall be held at such place, if any, within or without the State of Delaware as may from time to time be fixed by resolution of the Board or as may be specified in the notice of any meeting. Regular meetings of the Board shall be held at such times as may from time to time be fixed by resolution of the Board and special meetings may be held at any time upon the call of the Chairman of the Board, the Chief Executive Officer, or by a majority of the total number of directors then in office, by written notice, including facsimile, e-mail or other means of electronic transmission, duly served on or sent and delivered to each director in accordance with Section 11.2. Notice of each special meeting of the Board shall be given, as provided in Section 11.2, to each director: (a) at least 24 hours before the meeting, if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (b) at least

 

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two days before the meeting, if such notice is sent by a nationally recognized overnight delivery service; and (c) at least five days before the meeting, if such notice is sent through the United States mail. If the Secretary of the Corporation shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. The notice of any regular meeting need not specify the purposes thereof, but notice of any special meeting shall specify the purposes thereof. A meeting of the Board may be held without notice immediately after the annual meeting of stockholders at the same place, if any, at which such meeting is held. Notice need not be given of regular meetings of the Board held at times fixed by resolution of the Board. Notice of any meeting need not be given to any director who shall attend such meeting (except when the director attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened), or who shall waive notice thereof, before or after such meeting, in writing (including by electronic transmission).

Section 3.5 Preferred Stock Directors. Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the Corporation, if any, shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal, and other features of such directorships shall be governed by the terms of the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) and the Investor Rights Agreement applicable thereto. The number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the total number of directors fixed by the Board pursuant to the Certificate of Incorporation and these By-Laws. Except as otherwise expressly provided in the terms of such series, the number of directors that may be so elected by the holders of any such series of stock shall be elected for terms expiring at the next annual meeting of stockholders, and vacancies among directors so elected by the separate vote of the holders of any such series of Preferred Stock shall be filled by the affirmative vote of a majority of the remaining directors elected by such series, or, if there are no such remaining directors, by the holders of such series in the same manner in which such series initially elected a director.

Section 3.6 Committees. Subject to the Investor Rights Agreement, the Board may from time to time establish one or more committees of the Board to serve at the pleasure of the Board (including, but not limited to, an Executive Committee, an Audit Committee and a Compensation Committee), which shall be comprised of such members of the Board, and have such duties and be vested with such powers as the Board shall from time to time determine. Any director may belong to any number of committees of the Board. Subject to the Certificate of Incorporation and the Investor Rights Agreement, the Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member, subject to the Investor Rights Agreement. Subject to the Certificate of Incorporation and the Investor Rights Agreement, unless otherwise provided in the Certificate of Incorporation, these By-Laws or the resolution of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and may delegate to a subcommittee any or all of the powers and authority of the committee. Any such committee, to the extent provided in the resolution of the Board establishing such committee, subject to the Investor Rights Agreement, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or

 

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repealing any By-Law of the Corporation. Each committee of the Board may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board designating such committee or the Investor Rights Agreement. Unless otherwise provided in such a resolution or the Investor Rights Agreement, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum; and all matters shall be determined by a majority affirmative vote of the members present at a meeting of the committee at which a quorum is present. Unless otherwise provided in such a resolution or the Investor Rights Agreement, in the event that a member and that member’s alternate, if alternates are designated by the Board, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

Section 3.7 Consent in Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing (including by electronic transmission), and the writing or writings (including any electronic transmission or transmissions) are filed with the minutes of proceedings of the Board.

Section 3.8 Remote Meetings. The members of the Board or any committee thereof may participate in a meeting of such Board or committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.8 shall constitute presence in person at such a meeting.

Section 3.9 Compensation. The Board may establish policies for the compensation of directors and for the reimbursement of the expenses of directors, in each case, in connection with services provided by directors to the Corporation.

Section 3.10 Reliance on Books and Records . A member of the Board, or a member of any committee designated by the Board shall, in the performance of such person’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

ARTICLE IV

OFFICERS

Section 4.1 Officers. The Board shall elect officers of the Corporation, including a Chief Executive Officer, a President and a Secretary. The Board may also from time to time elect such other officers as it may deem proper or may delegate to any elected officer of the Corporation the power to appoint and remove any such other officers and to prescribe their respective terms of office, authorities and duties. Any Vice President may be designated Executive, Senior or Corporate, or may be given such other designation or combination of designations as the Board or the Chief Executive Officer may determine. Any two or more offices may be held by the same person. The Board may also elect or appoint a Chairman of the Board, who may or may not also be an officer of the Corporation. The Board may elect or appoint co-Chairmen of the Board, co-Presidents or co-Chief Executive Officers and, in such case, references in these By-Laws to the Chairman of the Board, the President or the Chief Executive Officer shall refer to either such co-Chairman of the Board, co-President or co-Chief Executive Officer, as the case may be.

 

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Section 4.2 Term; Removal. All officers of the Corporation elected by the Board shall hold office for such terms as may be determined by the Board or, except with respect to his or her own office, the Chief Executive Officer, or until their respective successors are chosen and qualified or until his or her earlier resignation or removal. Subject to the Investor Rights Agreement, any officer may be removed from office at any time either with or without cause by the Board, or, in the case of appointed officers, by the Chief Executive Officer or any elected officer upon whom such power of removal shall have been conferred by the Board.

Section 4.3 Powers. Each of the officers of the Corporation elected by the Board or appointed by an officer in accordance with these By-Laws shall have the powers and duties prescribed by applicable law, by these By-Laws or by the Board and, in the case of appointed officers, the powers and duties prescribed by the appointing officer, and, unless otherwise prescribed by these By-Laws or by the Board or such appointing officer, shall have such further powers and duties as ordinarily pertain to that office.

Section 4.4 Delegation. Unless otherwise provided in these By-Laws, in the absence or disability of any officer of the Corporation, the Board or the Chief Executive Officer may, during such period, delegate such officer’s powers and duties to any other officer or to any director and the person to whom such powers and duties are delegated shall, for the time being, hold such office. No delegation to officers of the Corporation or any committee of the Board shall limit, amend or waive any delegation by the Board to the Executive Committee of the Corporation in accordance with the Investor Rights Agreement.

ARTICLE V

INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

Section 5.1 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative or any other type whatsoever (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, member, manager, officer, employee, agent or trustee of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, member, manager, officer, employee, agent or trustee or in any other capacity while serving as a director, member, manager, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; except as provided in Section 5.3 with respect to proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.

Section 5.2 Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 5.1, an indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in appearing at, participating in or defending any such proceeding in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Article V (which shall be governed by Section 5.3)

 

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(hereinafter an “advancement of expenses”); provided, however, that, if (x) the DGCL requires or (y) in the case of an advance made in a proceeding brought to establish or enforce a right to indemnification or advancement, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made solely upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined after final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to indemnification under this Article V or otherwise.

Section 5.3 Right of Indemnitee to Bring Suit. If a claim under Section 5.1 or Section 5.2 is not paid in full by the Corporation within (a) 60 days after a written claim for indemnification has been received by the Corporation or (b) 20 days after a claim for an advancement of expenses has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or to obtain advancement of expenses, as applicable. To the fullest extent permitted by applicable law, if the indemnitee is successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense of the Corporation that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article V or otherwise shall be on the Corporation.

Section 5.4 Non-Exclusivity of Rights. The provision of indemnification to or the advancement of expenses and costs to any indemnitee under this Article V, or the entitlement of any indemnitee to indemnification or advancement of expenses and costs under this Article V, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses and costs to such indemnitee in any other way permitted by law or be deemed exclusive of, or invalidate, any right to which any indemnitee seeking indemnification or advancement of expenses and costs may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such indemnitee’s capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.

Section 5.5 Contract Rights. The rights conferred upon indemnitees in this Article V shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article V that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

 

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Section 5.6 Insurance. The Corporation shall purchase and maintain insurance (or be named on the insurance policy of an affiliate), at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise, as the Board shall determine in its sole discretion, against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 5.7 Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article V with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

ARTICLE VI

CORPORATE BOOKS

Section 6.1 Corporate Books. The books of the Corporation may be kept inside or outside of the State of Delaware at such place or places as the Board may from time to time determine.

ARTICLE VII

CHECKS, NOTES, PROXIES, ETC.

Section 7.1 Checks, Notes, Proxies, Etc. All checks and drafts on the Corporation’s bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers or agent or agents as shall be authorized from time to time by the Board, or such officer or officers who may be delegated such authority. Proxies to vote and consents with respect to securities of other corporations or other entities owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the Chairman of the Board, the Chief Executive Officer, or by such officers as the Chairman of the Board, the Chief Executive Officer or the Board may from time to time determine.

ARTICLE VIII

SHARES AND OTHER SECURITIES OF THE CORPORATION

Section 8.1 Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.

Section 8.2 Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by any two authorized officers of the Corporation, which authorized officers shall include, without limitation, the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Corporation. Any or all of the signatures on any certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.

 

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Section 8.3 Lost, Destroyed or Wrongfully Taken Certificates.

(a) If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.

(b) If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall, to the fullest extent permitted by applicable law, be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.

Section 8.4 Transfer of Stock.

(a) Transfers of record of shares of stock of the Corporation shall be made only upon the books administered by or on behalf of the Corporation, and only upon proper transfer instructions, including by electronic transmission, pursuant to the direction of the registered holder thereof, such person’s attorney lawfully constituted in writing, or from an individual presenting proper evidence of succession, assignment or authority to transfer the shares of stock; or, in the case of stock represented by certificate(s) upon delivery of a properly endorsed certificate(s) for a like number of shares or accompanied by a duly executed stock transfer power.

(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

Section 8.5 Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.

Section 8.6 Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.

 

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ARTICLE IX

FISCAL YEAR

Section 9.1 Fiscal Year. The fiscal year of the Corporation shall end on the Sunday of each calendar year that is closest to December 31, unless otherwise determined by resolution of the Board.

ARTICLE X

CORPORATE SEAL

Section 10.1 Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation. In lieu of the corporate seal, when so authorized by the Board or a duly empowered committee thereof, a facsimile thereof may be impressed or affixed or reproduced.

ARTICLE XI

GENERAL PROVISIONS

Section 11.1 Notice. Whenever notice is required to be given by law or under any provision of the Certificate of Incorporation or these By-Laws, notice of any meeting need not be given to any person who shall attend such meeting (except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened), or who shall waive notice thereof, before or after such meeting, in writing (including by electronic transmission).

Section 11.2 Means of Giving Notice. Except as otherwise set forth in any applicable law or any provision of the Certificate of Incorporation or these By-Laws, notice to any Director or stockholder of any meeting or any other matter under the Certificate of Incorporation or these By-laws shall be given by the following means:

(a) Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these By-Laws notice is required to be given to any director, such notice shall be given either (i) in writing and hand delivered, sent by mail, or sent by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (A) if given by hand delivery, orally in person, or by telephone, when actually received by the director; (B) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation; (C) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation; (D) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation; (E) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation; or (F) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation.

(b) Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process, including without limitation a facsimile telecommunication.

 

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(c) Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these By-Laws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.

(d) Exceptions to Notice Requirements.

(i) Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these By-Laws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

(ii) Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these By-Laws, to any stockholder to whom (x) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (y) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230(b) of the DGCL. The exception in subsection (x) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission. The exception in subsection (x) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any stockholder whose electronic mail address appears on the records of the Corporation and to whom notice by electronic transmission is not prohibited by Section 232 of the DGCL.

Section 11.3 Headings. Section headings in these By-Laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

 

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Section 11.4 Conflicts. In the event that any provision of these By-Laws is or becomes inconsistent with any provision of the Certificate of Incorporation or the DGCL, the provision of these By-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

ARTICLE XII

AMENDMENTS

Section 12.1 Amendments. Subject to the terms of the Investor Rights Agreement, these By-Laws may be made, amended, altered, changed, added to or repealed as set forth in the Certificate of Incorporation.

*    *    *    *

 

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Exhibit 4.1

AMENDED AND RESTATED

WARRANT AGREEMENT

between

BLUE OWL CAPITAL INC.

and

COMPUTERSHARE INC. and COMPUTERSHARE TRUST COMPANY, N.A.

Dated May 19, 2021

THIS AMENDED AND RESTATED WARRANT AGREEMENT (this “Agreement”), dated May 19, 2021, is by and among Blue Owl Capital Inc., a Delaware corporation (the “Company”), and Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, as warrant agent (collectively, the “Warrant Agent”).

WHEREAS, the Company (then known as Altimar Acquisition Corporation, a Cayman Islands exempted company (“Altimar”)) previously entered into the Warrant Agreement, dated October 22, 2020 (the “Original Agreement”), with Continental Stock Transfer & Trust Company; and

WHEREAS, pursuant to the Business Combination Agreement, dated as of December 23, 2020 (as may be amended, restated or otherwise modified from time to time, the “Business Combination Agreement”), by and among Altimar, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and Neuberger Berman Group LLC, the parties thereto consummated a business combination (the “Business Combination”), which included the domestication of Altimar in Delaware as “Blue Owl Capital Inc.” (the “Domestication”), in accordance with the terms and conditions of the Business Combination Agreement and applicable law; and

WHEREAS, as of immediately prior to the Domestication, Altimar had outstanding: (i) certain redeemable warrants (the “Public Warrants”) to purchase Class A ordinary shares of Altimar that were registered pursuant to Altimar’s initial public offering registration statement and offered by Altimar in its initial public offering of units of Altimar’s equity securities (the “Units”), each such unit comprised of one Class A ordinary share of Altimar and one-third of a Public Warrant, and (ii) 5,000,000 warrants to purchase Class A ordinary shares of Altimar that were issued in a private placement concurrently with Altimar’s initial public offering (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”); and

WHEREAS, the Private Placement Warrants and the Public Warrants automatically converted by operation of law into warrants to acquire shares of Class A common stock of the Company, and as a result of such conversion, the Private Placement Warrants bear the legend set forth in Exhibit B hereto; and


WHEREAS, at a moment in time after the effectiveness of the Domestication and before the closing of the Business Combination, each outstanding Unit separated into its component common stock and warrant; and

WHEREAS, each whole Warrant entitles the holder thereof to purchase one share of Class A common stock of the Company, par value $0.0001 per share (“Class A Share”), for $11.50 per share, subject to adjustment as described herein. Only whole Warrants are exercisable. A holder of the Public Warrants will not be able to exercise any fraction of a Warrant; and

WHEREAS, the Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-4, File No. 333-251866 and a proxy statement/prospectus (the “Registration Statement”), for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Public Warrants, the Private Placement Warrants and the Class A Shares issuable upon exercise of the Public Warrants and Private Placement Warrants; and

WHEREAS, in connection with the Business Combination, the Company and the Warrant Agent desire to amend and restate the Original Agreement to substitute the warrant agent hereunder; and

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent and the holders of the Warrants; and

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1.    Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions (and no implied terms and conditions) set forth in this Agreement.

 

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2.    Warrants.

2.1    Form of Warrant. Each Warrant shall initially be issued in registered form only.

2.2    Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a certificated Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

2.3    Registration.

2.3.1    Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants in book-entry form, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts with The Depository Trust Company (the “Depositary”) (such institution, with respect to a Warrant in its account, a “Participant”).

If the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant Certificates”) which shall be in the form annexed hereto as Exhibit A.

Physical certificates, if issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, General Counsel, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.

2.3.2    Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby, for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

2.4    [Reserved.]

2.5    Fractional Warrants. Other than in connection with the Domestication, the Company shall not issue fractional Warrants. If a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.

 

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2.6    Private Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that so long as they are held by Altimar Sponsor, LLC, a Delaware limited liability company (the “Altimar Sponsor”) or any of its Permitted Transferees (as defined below) the Private Placement Warrants: (i) may be exercised for cash or on a “cashless basis,” pursuant to subsection 3.3.1(c) hereof, (ii) may not be transferred, assigned or sold until thirty (30) days after the date of this Agreement (subject to any additional restrictions under the Investor Rights Agreement, dated as of the date hereof, by and among the Company and the other parties thereto (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof, the “Investor Rights Agreement”)), and (iii) shall not be redeemable by the Company; provided, however, that in the case of (ii), the Private Placement Warrants and any Class A Shares issued upon exercise of the Private Placement Warrants may be transferred by the holders thereof:

(a)    to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any direct or indirect members or partners of the Altimar Sponsor or their affiliates, any affiliates of the Altimar Sponsor, including to funds affiliated with HPS Investment Partners, LLC (“HPS”), and to direct or indirect members or partners of funds affiliated with HPS or any affiliates thereof, or any employees of such affiliates;

(b)    in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization;

(c)    in the case of an individual, by virtue of laws of descent and distribution upon death of the individual;

(d)    in the case of an individual, pursuant to a qualified domestic relations order;

(e)    [Reserved];

(f)    by virtue of the Altimar Sponsor’s organizational documents upon liquidation or dissolution of the Altimar Sponsor;

(g)    [Reserved];

(h)    [Reserved]; or

(i)    in the event of the Company’s completion of a liquidation, merger, share exchange or other similar transaction which results in all of the public shareholders having the right to exchange their Class A Shares for cash, securities or other property; provided, however, that, in the case of clauses (a) through (i), these permitted transferees (the “Permitted Transferees”) must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.

 

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3.    Terms and Exercise of Warrants.

3.1    Warrant Price. Each whole Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of Class A Shares stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price as used in this Agreement shall mean the price per share (including in cash or by payment of Warrants pursuant to a “cashless exercise,” to the extent permitted hereunder) described in the prior sentence at which Class A Shares may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than fifteen Business Days (as defined below) (unless otherwise required by the Commission, any national securities exchange on which the Warrants are listed or applicable law); provided that the Company shall provide at least three Business Days’ prior written notice of such reduction to Registered Holders of the Warrants; and provided further, that any such reduction shall be identical among all of the Warrants. For purposes of this Agreement, “Business Day” shall mean a day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are generally open for normal business.

3.2    Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) (A) commencing on the later of: (i) the date that is thirty (30) days after the date of this Agreement, and (ii) October 22, 2021, and (B) terminating at the earliest to occur of (x) 5:00 p.m., New York City time on the date that is five (5) years after the date of this Agreement, (y) the liquidation of the Company in accordance with the Company’s organizational documents, as amended from time to time and (z) other than with respect to the Private Placement Warrants then held by the Altimar Sponsor or its Permitted Transferees, 5:00 p.m., New York city time on the Redemption Date (as defined below) as provided in Section 6.3 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an effective registration statement or a valid exemption therefrom being available. Except with respect to the right to receive the Redemption Price (as defined below) (other than with respect to a Private Placement Warrant then held by the Altimar Sponsor or its Permitted Transferees) in the event of a redemption (as set forth in Section 6 hereof), each Warrant (other than a Private Placement Warrant then held by the Altimar Sponsor or its Permitted Transferees in the event of a redemption) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided that the Company shall provide at least twenty (20) days’ prior written notice of any such extension to Registered Holders of the Warrants and, provided further, that any such extension shall be identical in duration among all the Warrants.

3.3    Exercise of Warrants.

3.3.1    Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its office designated for such purpose (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Warrant represented by a book-entry, the Warrants to be exercised (the “Book-Entry Warrants”) on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”) any Class A Shares pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the

 

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case of a Book-Entry Warrant, properly delivered by the Participant in accordance with the Depositary’s procedures, and (iii) the payment in full of the Warrant Price for each Class A Share as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the Class A Shares and the issuance of such Class A Shares, as follows:

(a)    in lawful money of the United States, in good certified check or good bank draft payable to the order of the Warrant Agent;

(b)    [Reserved];

(c)    with respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Altimar Sponsor or a Permitted Transferee, by surrendering the Warrants for that number of Class A Shares equal to the quotient obtained by dividing (x) the product of the number of Class A Shares underlying the Warrants, multiplied by the excess of the “Sponsor Fair Market Value (as defined in this subsection 3.3.1(c)) less the Warrant Price by (y) the Sponsor Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Sponsor Fair Market Value shall mean the average last reported sale price of the Class A Shares for the ten (10) trading days ending on the third (3rd) trading day prior to the date on which notice of exercise of the Private Placement Warrant is sent to the Warrant Agent;

(d)    as provided in Section 6.2 hereof with respect to a Make-Whole Exercise; or

(e)    as provided in Section 7.4 hereof.

3.3.2    Issuance of Class A Shares on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of Class A Shares to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it on the register of members of the Company, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any Class A Shares pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Class A Shares underlying the Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4 or a valid exemption from registration is available. No Warrant shall be exercisable and the Company shall not be obligated to issue Class A Shares upon exercise of a Warrant unless the Class A Shares issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants. Subject to Section 4.6 of this Agreement, a Registered Holder of Warrants may exercise its Warrants only for a whole number of Class A Shares. The Company may require holders of Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4. If, by reason of any exercise of Warrants on a “cashless basis”, the holder of any

 

6


Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a Class A Share, the Company shall round down to the nearest whole number, the number of Class A Shares to be issued to such holder.

3.3.3    Valid Issuance. All Class A Shares issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.

3.3.4    Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for Class A Shares is issued and who is registered in the register of members of the Company shall for all purposes be deemed to have become the holder of record of such Class A Shares on the date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the register of members of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.

3.3.5    Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge (without inquiry, confirmation or investigation on the part of the Warrant Agent), would beneficially own in excess of 9.8% (the “Maximum Percentage”) of the Class A Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Class A Shares beneficially owned by such person and its affiliates shall include the number of Class A Shares issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Class A Shares that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred shares or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in determining the number of outstanding Class A Shares, the holder may rely on the number of outstanding Class A Shares as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by (a) the Company or (b) Computershare Inc. and Computershare Trust Company, N.A., as transfer agent (collectively, the “Transfer Agent”), setting forth the number of Class A Shares outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2)

 

7


Business Days, confirm orally and in writing to such holder the number of Class A Shares then outstanding. In any case, the number of issued and outstanding Class A Shares shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of issued and outstanding Class A Shares was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.

3.3.6    In connection with any exercise of Warrants on a “cashless basis” hereunder, the Company shall calculate and transmit to the Warrant Agent, and the Warrant Agent shall have no obligation under this Agreement to calculate, any formula for any exercises of Warrants on a “cashless basis”. The number of Class A Shares to be issued on such exercise will be determined by the Company (with written notice thereof to the Warrant Agent), and the Warrant Agent shall have no duty or obligation to investigate or confirm whether the Company’s determination of the number of Class A Shares to be issued on such exercise, pursuant to this Section 3.3.6, is accurate or correct.

4.    Adjustments.

4.1    Capitalizations.

4.1.1    Sub-Divisions. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of issued and outstanding Class A Shares is increased by a capitalization or share dividend of Class A Shares, or by a sub-division of Class A Shares or other similar event, then, on the effective date of such share capitalization, sub-division or similar event, the number of Class A Shares issuable on exercise of each Warrant shall be increased in proportion to such increase in the issued and outstanding Class A Shares. A rights offering made to all or substantially all holders of Class A Shares entitling holders to purchase Class A Shares at a price less than the “Historical Fair Market Value” (as defined below) shall be deemed a capitalization of a number of Class A Shares equal to the product of (i) the number of Class A Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Class A Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Class A Share paid in such rights offering divided by (y) the Historical Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Class A Shares, in determining the price payable for Class A Shares, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Historical Fair Market Value means the volume weighted average price of the Class A Shares during the ten (10) trading day period ending on the trading day prior to the first date on which the Class A Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights. No Class A Shares shall be issued at less than their par value.

4.1.2    Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, pays to all or substantially all of the holders of the Class A Shares a dividend or make a distribution in cash, securities or other assets on account of such Class A Shares (or other shares into which the Warrants are convertible), other than (a) as

 

8


described in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Class A Shares, or (d) in connection with the distribution of the Company’s assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Company’s board of directors (the “Board”), in good faith) of any securities or other assets paid on each Class A Share in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, “Ordinary Cash Dividends means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Class A Shares during the 365-day period ending on the date of declaration of such dividend or distribution to the extent it does not exceed $0.50 (which amount shall be adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of Class A Shares issuable on exercise of each Warrant).

4.2    Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of issued and outstanding Class A Shares is decreased by a consolidation, combination or reclassification of Class A Shares or other similar event, then, on the effective date of such consolidation, combination, reclassification or similar event, the number of Class A Shares issuable on exercise of each Warrant shall be decreased in proportion to such decrease in issued and outstanding Class A Shares.

4.3    Adjustments in Exercise Price. Whenever the number of Class A Shares purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of Class A Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Class A Shares so purchasable immediately thereafter.

4.4    [Reserved.]

4.5    Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding Class A Shares (other than a change under Section 4.1 or Section 4.2 hereof or that solely affects the par value of such Class A Shares), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the issued and outstanding Class A Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Class A Shares of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer,

 

9


that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”); provided, however, that (i) if the holders of the Class A Shares were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Class A Shares in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Class A Shares (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights held by shareholders of the Company if provided for in the Company’s organizational documents) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding Class A Shares, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A Shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided further, that if less than 70% of the consideration receivable by the holders of the Class A Shares in the applicable event is payable in the form of shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (assuming zero dividends) (“Bloomberg”). For purposes of calculating such amount, (i) Section 6 of this Agreement shall be taken into account, (ii) the price of each Class A Share shall be the volume weighted average price of the Class A Shares during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event, (iii) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event and (iv) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration means (i) if the consideration paid to holders of the Class A Shares consists exclusively of cash, the amount of such cash per Class A Share, and (ii) in all other cases, the volume weighted average price of the Class A Shares during the ten (10) trading day period ending on the trading day prior

 

10


to the effective date of the applicable event. If any reclassification or reorganization also results in a change in Class A Shares covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1, or Sections 4.2, 4.3 and this Section 4.5. The provisions of this Section 4.5 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event shall the Warrant Price be reduced to less than the par value per share issuable upon exercise of such Warrant.

4.6    Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. The Warrant Agent shall be fully protected in reasonably relying on any such notice and on any adjustment or statement therein contained and shall have no duty or liability with respect to, and shall not be deemed to have knowledge of, any adjustment or any such event unless and until it shall have received such a notice. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.

4.7    No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of Class A Shares to be issued to such holder.

4.8    Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

4.9    Other Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.

 

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5.    Transfer and Exchange of Warrants.

5.1    Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed by an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association and accompanied by appropriate instructions for transfer reasonably satisfactory to the Warrant Agent. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

5.2    Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or with respect to any Book-Entry Warrant, each Book-Entry Warrant may be transferred only in whole and only to the Depositary, to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.

5.3    Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book-entry position for one-third of a warrant.

5.4    Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.

5.5    Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign (manually, electronically or by facsimile form) and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

5.6    Transfer of Warrants. The Public Warrants and the Private Placement Warrants shall be freely transferred or exchanged , subject to the restrictions set forth in Section 2.6 hereof and the Investor Rights Agreement.

 

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6.    Redemption.

6.1    Redemption of Warrants for Cash. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.01 per Warrant, provided that (a) the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof) and (b) there is an effective registration statement covering the issuance of the Class A Shares issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3 below).

6.2    Redemption of Warrants for $0.10 or for Class A Shares. Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.10 per Warrant, provided that (i) the Reference Value equals or exceeds $10.00 per share (subject to adjustment in compliance with Section 4 hereof). During the 30-day Redemption Period in connection with a redemption pursuant to this Section 6.2, Registered Holders of the Warrants may elect to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1 and receive a number of Class A Shares determined by reference to the table below, based on the Redemption Date (calculated for purposes of the table as the period to expiration of the Warrants) and the “Redemption Fair Market Value” (as such term is defined in this Section 6.2) (a “Make-Whole Exercise”). Solely for purposes of this Section 6.2, the “Redemption Fair Market Value shall mean the volume weighted average price of the Class A Shares for the ten (10) trading days ending on the third trading day prior to the date on which notice of redemption pursuant to this Section 6.2 is sent to the Registered Holders. In connection with any redemption pursuant to this Section 6.2, the Company shall provide the Registered Holders with the Redemption Fair Market Value no later than one (1) Business Day after the ten (10) trading day period described above ends.

 

     Redemption Fair Market Value of Class A Shares (period to expiration
of warrants)
 
Redemption Date    10.00      11.00      12.00      13.00      14.00      15.00      16.00      17.00      18.00  

60 months

     0.261        0.280        0.297        0.311        0.324        0.337        0.348        0.358        0.361  

57 months

     0.257        0.277        0.294        0.310        0.324        0.337        0.348        0.358        0.361  

54 months

     0.252        0.272        0.291        0.307        0.322        0.335        0.347        0.357        0.361  

51 months

     0.246        0.268        0.287        0.304        0.320        0.333        0.346        0.357        0.361  

48 months

     0.241        0.263        0.283        0.301        0.317        0.332        0.344        0.356        0.361  

45 months

     0.235        0.258        0.279        0.298        0.315        0.330        0.343        0.356        0.361  

42 months

     0.228        0.252        0.274        0.294        0.312        0.328        0.342        0.355        0.361  

39 months

     0.221        0.246        0.269        0.290        0.309        0.325        0.340        0.354        0.361  

36 months

     0.213        0.239        0.263        0.285        0.305        0.323        0.339        0.353        0.361  

33 months

     0.205        0.232        0.257        0.280        0.301        0.320        0.337        0.352        0.361  

30 months

     0.196        0.224        0.250        0.274        0.297        0.316        0.335        0.351        0.361  

27 months

     0.185        0.214        0.242        0.268        0.291        0.313        0.332        0.350        0.361  

24 months

     0.173        0.204        0.233        0.260        0.285        0.308        0.329        0.348        0.361  

 

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     Redemption Fair Market Value of Class A Shares (period to expiration
of warrants)
 
Redemption Date    10.00      11.00      12.00      13.00      14.00      15.00      16.00      17.00      18.00  

21 months

     0.161        0.193        0.223        0.252        0.279        0.304        0.326        0.347        0.361  

18 months

     0.146        0.179        0.211        0.242        0.271        0.298        0.322        0.345        0.361  

15 months

     0.130        0.164        0.197        0.230        0.262        0.291        0.317        0.342        0.361  

12 months

     0.111        0.146        0.181        0.216        0.250        0.282        0.312        0.339        0.361  

9 months

     0.090        0.125        0.162        0.199        0.237        0.272        0.305        0.336        0.361  

6 months

     0.065        0.099        0.137        0.178        0.219        0.259        0.296        0.331        0.361  

3 months

     0.034        0.065        0.104        0.150        0.197        0.243        0.286        0.326        0.361  

0 months

     —          —          0.042        0.115        0.179        0.233        0.281        0.323        0.361  

The exact Redemption Fair Market Value and Redemption Date may not be set forth in the table above, in which case, if the Redemption Fair Market Value is between two values in the table or the Redemption Date is between two redemption dates in the table, the number of Class A Shares to be issued for each Warrant exercised in a Make-Whole Exercise shall be determined by a straight-line interpolation between the number of shares set forth for the higher and lower Redemption Fair Market Values and the earlier and later redemption dates, as applicable, based on a 365- or 366-day year, as applicable.

The share prices set forth in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant or the Warrant Price is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise of a Warrant is adjusted pursuant to Section 4 hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a Warrant as so adjusted. The number of shares in the table above shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a Warrant. If the Warrant Price of a warrant is adjusted pursuant to Section 4.1.2 hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment less the decrease in the Warrant Price pursuant to such Warrant Price adjustment. In no event shall the number of shares issued in connection with a Make-Whole Exercise exceed 0.361 Class A Shares per Warrant (subject to adjustment).

6.3    Date Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company elects to redeem the Warrants pursuant to Sections 6.1 or 6.2, the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (the “30-day Redemption Period”) to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice. As used in this Agreement, (a) “Redemption Price shall mean the price per Warrant at which any Warrants are redeemed pursuant to Sections 6.1 or 6.2 and (b) “Reference Value shall mean the last reported sales price of the Class A Shares on the trading day prior to the date on which we send the notice of redemption to the Registered Holder.

 

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6.4    Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with Section 6.2 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.3 hereof and prior to the Redemption Date. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.

6.5    Exclusion of Private Placement Warrants. The Company agrees that the redemption rights provided in Section 6.1 and Section 6.2 hereof shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to be held by the Altimar Sponsor or its Permitted Transferees. However, once such Private Placement Warrants are transferred (other than to Permitted Transferees in accordance with Section 2.6 hereof), the Company may redeem the Private Placement Warrants pursuant to Section 6.1 or 6.2 hereof, provided that the criteria for redemption are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private Placement Warrants prior to redemption pursuant to Section 6.4 hereof. Private Placement Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants under this Agreement, including for purposes of Section 9.8 hereof.

7.    Other Provisions Relating to Rights of Holders of Warrants.

7.1    No Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the appointment of directors of the Company or any other matter.

7.2    Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

7.3    Reservation of Class A Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued Class A Shares that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

7.4    Registration of Class A Shares; Cashless Exercise at Companys Option.

7.4.1    Registration of the Class A Shares. The Company shall use its commercially reasonable efforts to maintain the effectiveness of the Registration Statement, and a current prospectus relating thereto, until the expiration or redemption of the Warrants in accordance with the provisions of this Agreement.

 

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7.4.2    Cashless Exercise at Companys Option. If the Class A Shares are at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall (x) not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Class A Shares issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary, and (y) use its commercially reasonable efforts to register or qualify for sale the Class A Shares issuable upon exercise of the Public Warrant under applicable blue sky laws to the extent an exemption is not available.

8.    Concerning the Warrant Agent and Other Matters.

8.1    Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of Class A Shares upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.

8.2    Resignation, Consolidation, or Merger of Warrant Agent.

8.2.1    Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder (i) after giving sixty (60) days’ notice in writing to the Company or (ii) upon a material breach by the Company of its duties or obligations hereunder, which if reasonably curable, is not cured within thirty (30) days after written notice thereof. In the event the transfer agency relationship in effect between the Company and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned automatically and be discharged from its duties under this Agreement as of the effective date of such termination. If the Company elects to remove the Warrant Agent, the Company shall provide the Warrant Agent with at least thirty (30) days’ notice in writing of such removal. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation or other entity organized and existing under the laws of the State of New York, in good standing and having its principal office in the United States of America, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of

 

16


such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

8.2.2    Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Class A Shares not later than the effective date of any such appointment.

8.2.3    Merger or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party or the acquirer of all or substantially all of the assets of the Warrant Agent shall be the successor Warrant Agent under this Agreement without any further act.

8.3    Fees and Expenses of Warrant Agent.

8.3.1    Remuneration. The Company agrees to pay to the Warrant Agent reasonable compensation for all services rendered by it hereunder in accordance with a fee schedule to be mutually agreed upon and, from time to time, on demand of the Warrant Agent, to reimburse the Warrant Agent for all of its reasonable and documented third-party expenses, outside counsel fees and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder. The provisions provided for under this Section 8.3.1 shall survive the expiration of the Warrants and the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent.

8.3.2    Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

8.4    Liability of Warrant Agent.

8.4.1    Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, the President, the Chief Financial Officer, Chief Operating Officer, the General Counsel, the Secretary or the Chairman of the Board of the Company (collectively, the “Authorized Officers”) and delivered to the Warrant Agent. Such statement shall be full authorization and protection to the Warrant Agent and the Warrant Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in reasonable reliance in upon such statement.

 

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8.4.2    Indemnity; Liability. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct, fraud or bad faith (each as determined by a final non-appealable judgment of a court of competent jurisdiction). The Company also covenants and agrees to indemnify the Warrant Agent for, and to hold it harmless against, any and all loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, reasonable and documented third-party cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered by it, or which it may become subject, without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent (which gross negligence, bad faith, or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction), for any action taken, suffered, or omitted to be taken by the Warrant Agent in connection with the execution, acceptance, administration, exercise and performance of its duties under this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly. Notwithstanding anything in this Agreement to the contrary, any liability of the Warrant Agent under this Agreement will be, other than in the case of fraud, limited in the aggregate to the fees paid by the Company to the Warrant Agent during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought. Anything to the contrary notwithstanding in no event will the Warrant Agent be liable for special, punitive, indirect, incidental or consequential loss or damages of any kind whatsoever (including, without limitation, lost profits), even if the Warrant Agent has been advised of the likelihood of such loss or damages, and regardless of the form of action. The provisions provided for under this Section 8.4.2 shall survive the expiration of the Warrants and the termination of this Agreement and the resignation, replacement or removal of the Warrant Agent.

8.4.3    Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Class A Shares to be issued pursuant to this Agreement or any Warrant or as to whether any Class A Shares shall, when issued, be valid and fully paid and nonassessable.

8.5    Legal Counsel. The Warrant Agent may consult with legal counsel selected by it (who may be an employee or legal counsel of the Warrant Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent and the Warrant Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it and in reasonable reliance on such advice or opinion.

8.6    Reliance on Agreement and Warrant Certificates. The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Definitive Warrant Certificates (including in the case of Book-Entry Warrants, by notation in book entry accounts reflecting ownership), except as to its countersignature thereof, or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

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8.7    Freedom to Trade in Company Securities. The Warrant Agent and any stockholder, affiliate, member, director, officer, agent, representative or employee of the Warrant Agent may buy, sell or deal in any of the rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent or any such stockholder, affiliate, director, member, officer, agent, representative or employee from acting in any other capacity for the Company or for any other person or entity.

8.8    Reliance on Attorneys and Agents. The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Warrant Agent shall be answerable and accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents and for any loss to the Company, to the Registered Holders or any other person or entity resulting from any such act, omission, default, neglect or misconduct.

8.9    No Risk of Own Funds. No provision of this Agreement shall require the Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if it shall reasonably believe in good faith that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

8.10    Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the express terms and conditions herein set forth and among other things as set forth herein, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of Class A Shares through the exercise of the Warrants.

8.11    Authorized Company Officers. The Warrant Agent is hereby authorized and directed to accept written instructions with respect to the performance of its duties hereunder and certificates delivered pursuant to any provision hereof from any person reasonably believed in by the Warrant Agent to be any one of the Authorized Officers and such instructions shall provide full authorization and protection to the Warrant Agent, and the Warrant Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in accordance with the instructions of any such officer or for any delay in acting while waiting for such instructions.

9.    Miscellaneous Provisions.

9.1    Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

9.2    Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery, if sent by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if

 

19


otherwise, on the next Business Day, or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address or email address is filed in writing by the Company with the Warrant Agent), as follows:

Blue Owl Capital Inc.

399 Park Avenue

38th Floor

New York, NY 10022

Attention: Alan Kirshenbaum; Neena Reddy

Email: alan@owlrock.com; neena@owlrock.com

with a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP

300 North LaSalle

Chicago, IL 60654

Attention: Richard J. Campbell, P.C.; Thomas K. Laughlin, P.C.

Email: rcampbell@kirkland.com; thomas.laughlin@kirkland.com

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery, if sent by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address or email address is filed in writing by the Warrant Agent with the Company), as follows:

Computershare Trust Company, N.A.

150 Royall Street

Canton, MA 02021

Attention: Client Services

Email: Kathryn.Minyard@computershare.com

9.3    Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York. Subject to applicable law, the Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum for any such action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.

 

20


Any person or entity purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a court other than a court located within the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

9.4    Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person, corporation or other entity other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.

9.5    Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the United States of America, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.

9.6    Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

9.7    Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

9.8    Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder (i) for the purpose of (x) curing any ambiguity or to correct any mistake, including to conform the provisions hereof to the description of the terms of the Warrants and this Agreement set forth in the Registration Statement, or defective provision contained herein, (y) amending the definition of “Ordinary Cash Dividend” as contemplated by and in accordance with the second sentence of subsection 4.1.2 or (z) adding or changing any provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the rights of the Registered Holders under this Agreement and (ii) to provide for the delivery of Alternative Issuance pursuant to Section 4.5. All other modifications or amendments, including any modification or amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written consent of the Registered Holders of 50% of the then-outstanding Public Warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with respect to the Private Placement Warrants, 50% of the then-outstanding Private Placement Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without

 

21


the consent of the Registered Holders. No amendment to this Agreement shall be effective unless duly executed by the Warrant Agent. As a condition precedent to the Warrant Agent’s execution of any amendment to this Agreement, the Company shall deliver a certificate from an Authorized Officer which states that the proposed amendment is in compliance with the terms of this Section 9.8.

9.9    Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

Exhibit A — Form of Warrant Certificate

Exhibit B Legend — Private Placement Warrants

[Signature pages follow]

 

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

 

BLUE OWL CAPITAL INC.
By:  

/s/ Alan Kirshenbaum

Name:   Alan Kirshenbaum
Title:   Chief Financial Officer

[Signature Page to Amended and Restated Warrant Agreement]


COMPUTERSHARE INC.

COMPUTERSHARE TRUST COMPANY, N.A.,

as Warrant Agent

By:  

/s/ Collin Ekeogu

Name:   Collin Ekeogu
Title:   Manager, Corporate Actions

[Signature Page to Amended and Restated Warrant Agreement]


ACKNOWLEDGED AND AGREED:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

 

By:  

/s/ James F. Kiszka

Name:   James F. Kiszka
Title:   Vice President

[Signature Page to Amended and Restated Warrant Agreement]


EXHIBIT A

FORM OF WARRANT

[See attached.]

[Exhibit A to Amended and Restated Warrant Agreement]


[FACE]

Number

Warrants

THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO

THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR

IN THE WARRANT AGREEMENT DESCRIBED BELOW

Blue Owl Capital Inc.

Incorporated Under the Laws of the State of Delaware

CUSIP [●]

Warrant Certificate

This Warrant Certificate certifies that [    ], or registered assigns, is the registered holder of [    ] warrant(s) (the “Warrants” and each, a “Warrant”) to purchase shares of Class A common stock, $0.0001 par value (“Class A Shares”), of Blue Owl Capital Inc., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable Class A Shares as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Each whole Warrant is initially exercisable for one fully paid and non-assessable Class A Share. Fractional shares shall not be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a Class A Share, the Company shall, upon exercise, round down to the nearest whole number the number of Class A Shares to be issued to the Warrant holder. The number of Class A Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.

The initial Exercise Price per one Class A Share for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events as set forth in the Warrant Agreement.

Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth in the Warrant Agreement.

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York.

 

BLUE OWL CAPITAL INC.
By:  

 

Name:  

 

Title:   Authorized Signatory

COMPUTERSHARE INC.

COMPUTERSHARE TRUST COMPANY, N.A., AS WARRANT AGENT

By:  

 

Name:  
Title:  


[Form of Warrant Certificate]

[Reverse]

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive [    ] Class A Shares and are issued or to be issued pursuant to the Amended and Restated Warrant Agreement dated as of [    ], 2021 (as amended, the “Warrant Agreement”), duly executed and delivered by the Company to Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (collectively, the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.

Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the issuance of the Class A Shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the Class A Shares is current, except through “cashless exercise” as provided for in the Warrant Agreement.

The Warrant Agreement provides that upon the occurrence of certain events the number of Class A Shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a Class A Share, the Company shall, upon exercise, round down to the nearest whole number of Class A Shares to be issued to the holder of the Warrant.

Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.

The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.


Election to Purchase

(To Be Executed Upon Exercise of Warrant)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive [    ] Class A Shares and herewith tenders payment for such Class A Shares to the order of Blue Owl Capital Inc. (the “Company”) in the amount of $[    ] in accordance with the terms hereof. The undersigned requests that a certificate for such Class A Shares be registered in the name of [    ], whose address is [    ], and that such Class A Shares be delivered to [    ], whose address is [    ]. If said [    ] number of Class A Shares is less than all of the Class A Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such Class A Shares be registered in the name of [    ], whose address is [    ], and that such Warrant Certificate be delivered to [    ], whose address is [    ].

In the event that the Warrant has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise its Warrant pursuant to a Make-Whole Exercise, the number of Class A Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.

In the event that the Warrant is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement, the number of Class A Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) of the Warrant Agreement.

In the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of Class A Shares that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of Class A Shares that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Class A Shares. If said number of shares is less than all of the Class A Shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Class A Shares be registered in the name of [    ], whose address is [    ], and that such Warrant Certificate be delivered to [    ], whose address is [    ].

[Signature Page Follows]

Date: [            ], 20

 

(Signature)
(Address)
(Tax Identification Number)

 

Signature Guaranteed:                                                                              

 

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).


EXHIBIT B

LEGEND

SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE AMENDED AND RESTATED WARRANT AGREEMENT BY AND AMONG BLUE OWL CAPITAL INC., A DELAWARE CORPORATION FORMERLY KNOWN AS ALTIMAR ACQUISITION CORPORATION, AND COMPUTERSHARE TRUST COMPANY, N.A. THE SECURITIES REPRESENTED BY THIS CERTIFICATE: (I) MAY NOT BE SOLD OR TRANSFERRED PRIOR TO MAY 19, 2022 EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE AMENDED AND RESTATED WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS AND (II) MAY NOT BE EXERCISED UNTIL OCTOBER 22, 2021.

[Exhibit B to Amended and Restated Warrant Agreement]

Exhibit 10.1

TAX RECEIVABLE AGREEMENT

This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”), dated as of May 19, 2021, is hereby entered into by and among Blue Owl Capital, Inc., a Delaware corporation (“PubCo”), Blue Owl Capital GP LLC, a Delaware limited liability company (the “Corporation”), Blue Owl Capital Holdings LP, a Delaware limited partnership (“Manager OP”), Blue Owl Capital Carry LP, a Delaware limited partnership (“Carry OP”), and each of the Partners (as defined herein).

RECITALS

WHEREAS, the Partners hold Exchangeable Units and certain of the Partners have also held partnership interests in Opal Group or Diamond Holdings;

WHEREAS, the Opal Group Blockers hold, or have held, partnership interests in Opal Group;

WHEREAS, the Corporation is a wholly owned subsidiary of PubCo that will file a consolidated return with PubCo, is treated as a corporation for U.S. federal income tax purposes, and is the general partner of Manager OP and Carry OP;

WHEREAS, Exchangeable Units are exchangeable in certain circumstances for Class A shares of the Corporation (the “Class A Shares”), Class B shares of the Corporation (the “Class B Shares”), and/or cash pursuant to the Exchange Agreement;

WHEREAS, pursuant to the transactions described in or contemplated by that certain Business Combination Agreement, dated as of December 23, 2020, by and among PubCo, Owl Rock Capital Group LLC, a Delaware limited liability company, Owl Rock Capital Feeder LLC, a Delaware limited liability company, Owl Rock Capital Partners LP, a Delaware limited partnership, and Neuberger Berman Group LLC, a Delaware limited liability company (such agreement, the “Business Combination Agreement,” and such transactions collectively, the “De-SPAC Transaction”), (a) certain of the Partners will be treated for U.S. federal income tax purposes as selling all or a portion of their partnership interests (including FIC Units) in Opal Group, Diamond Holdings, Manager OP, and/or Carry OP, to the Corporation (the “Initial Sale”); (b) pursuant to one or more Opal Group Blocker Mergers, the Corporation will acquire, directly or indirectly, shares in certain of the Opal Group Blockers (the “Blocker Shareholders”); and (c) the Corporation expects in the future to acquire Exchangeable Units;

WHEREAS, certain Covered Subsidiaries, including Dyal Capital Holdings LLC (“Diamond Holdings”) and Opal Group, have had, or will have, in effect an election under section 754 of the Internal Revenue Code of 1986, as amended (the “Code”) for prior Taxable Years, and will have such an election in effect for the Taxable Year of the De-SPAC Date and for future Taxable Years;

WHEREAS, as a result of such elections and the Opal Group Blocker Mergers, the Corporation may be entitled to utilize (or otherwise be entitled to the benefits arising out of) the Existing Tax Assets;


WHEREAS, such election also has previously resulted, or is intended to result in, an adjustment to the tax basis of the assets owned by the Covered Subsidiaries as a result of the Initial Sale, or at the time of an exchange or redemption by a Partner of Exchangeable Units for Class A Shares, Class B Shares, and/or cash on or after the date hereof (each such exchange, an “Exchange,” such time of Exchange, the “Exchange Date,” and such assets whose tax basis is or was adjusted as a result of the Initial Sale, an Exchange, any FIC Distribution, or any other transaction that generated the Existing Tax Assets, as well as any asset whose tax basis is determined, in whole or in part, by reference to the adjusted basis of any such asset, the “Adjusted Assets”) by reason of such Initial Sale, Exchange, FIC Distribution, or other such transaction, and the receipt of payments under this Agreement;

WHEREAS, the income, gain, loss, expense, and other Tax items of (i) the Covered Subsidiaries allocable to the Corporation may be affected by the Basis Adjustments or Existing Tax Assets and (ii) the Corporation may be affected by the Imputed Interest;

WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the effect of the Basis Adjustments, Existing Tax Assets, and Imputed Interest (collectively, the “Tax Attributes”) on the actual liability for Taxes of the Corporation.

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the undersigned parties agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

AAA” is defined in Section 7.08 of this Agreement.

Adjusted Asset” is defined in the recitals of this Agreement.

Actual Tax Liability” means, with respect to any Taxable Year, the actual liability for U.S. federal, state and local income Taxes of (i) the Corporation and (ii) without duplication, any Covered Subsidiary, but only with respect to Taxes imposed on such Covered Subsidiary and allocable to the Corporation for such Taxable Year.

Advisory Firm” means any “big four” accounting firm or any law firm that is nationally recognized as being expert in Tax matters and that is agreed to by the Board.

Affiliate” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.

Agreed Rate” means LIBOR plus 100 basis points during any period for which such rate is published in accordance with the definition thereof.

 

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Agreement” is defined in the preamble of this Agreement.

Amended Schedule” is defined in Section 2.03(b) of this Agreement.

Applicable Partner” means any Partner to whom any portion of a Realized Tax Benefit is Attributable hereunder. For purposes of this Agreement, the parties intend that the FIC Unitholders shall be treated as the Applicable Partners with respect to any Realized Tax Benefits arising from any Existing FIC Tax Assets and the Blocker Shareholders shall be treated as the Applicable Partners with respect to any Realized Tax Benefits arising from any Existing Blocker Tax Assets.

Applicable Partnership” means either Manager OP or Carry OP, as applicable. Manager OP and Carry OP together are referred to as the “Applicable Partnerships”.

Applicable Partnership Agreement” means either the Manager OP Agreement or the Carry OP Agreement, as applicable. The Manager OP Agreement and the Carry OP Agreement together are referred to as the “Applicable Partnership Agreements”.

Attributable” means the portion of any Tax Attribute of the Corporation or a Covered Subsidiary that is attributable to a Partner and shall be determined by reference to the Tax Attributes under the following principles:

 

  (i)

Any Basis Adjustments shall be determined separately with respect to each Partner and are Attributable to each Partner in an amount equal to the total Basis Adjustments relating to (A) the Exchangeable Units exchanged by such Partner pursuant to an Exchange, or (B) the partnership interests (including partnership interests in Opal Group, Diamond Holdings, Manager OP, and/or Carry OP and including the sale of FIC Units) that were purchased from such Partner pursuant to the Initial Sale.

 

  (ii)

Any Existing FIC Tax Assets shall be determined separately with respect to each Partner and are Attributable to each Partner in an amount equal to the total Existing FIC Tax Assets relating to or resulting from all FIC Distributions made to (or made with respect to) such Partner.

 

  (iii)

Any Existing Blocker Tax Assets shall be determined separately with respect to each Partner and are Attributable to each Partner in an amount equal to the Existing Blocker Tax Assets relating to the stock or other equity securities of the applicable Opal Group Blocker acquired from such Partner via the applicable Opal Group Blocker Merger.

 

  (iv)

Any deduction to the Corporation with respect to a Taxable Year in respect of any payment (including amounts attributable to Imputed Interest) made under this Agreement is Attributable to the Applicable Partner that is required to include the Imputed Interest or other payment in income (without regard to whether such Partner is actually subject to Tax thereon).

Basis Adjustment” means the adjustment to the Tax basis of an Adjusted Asset as a result of the application of section 732 and 1012 of the Code (in situations where, as a result of one

 

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or more Exchanges, the Applicable Partnership becomes an entity that is disregarded as separate from its owner for tax purposes) or sections 704(c)(1)(B), 707, 734(b), 737(c)(2), 743(b), 754, 755 and 1012 of the Code (including in situations where, following the Initial Sale or any Exchange, the Applicable Partnership remains in existence as an entity for Tax purposes) and, in each case, comparable sections of state, local and non-U.S. Tax laws as a result of the Initial Sale or any Exchange and the payments made pursuant to this Agreement, other than a payment of Imputed Interest. Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from the Initial Sale or an Exchange shall be determined without regard to any Pre-Exchange Transaction and as if any such Pre-Exchange Transaction had not occurred; provided that this sentence shall not apply to any FIC Distribution or any Existing FIC Tax Assets and any Basis Adjustment shall take FIC Distributions and Existing FIC Tax Assets into account.

Basis Schedule” is defined in Section 2.01 of this Agreement.

Beneficial Owner” of a security means a Person who directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security. The terms “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.

Blended Rate” means, with respect to any Taxable Year, the sum of the apportionment-weighted effective rates of Tax imposed on the aggregate net income of the Corporation in each U.S. state or local jurisdiction in which the Corporation files Tax Returns for such Taxable Year, with the maximum effective rate in any state or local jurisdiction being equal to the product of (i) the apportionment factor on the income or franchise Corporation Return in such jurisdiction for such Taxable Year and (ii) the maximum applicable corporate income Tax rate in effect in such jurisdiction in such Taxable Year. As an illustration of the calculation of Blended Rate for a Taxable Year, if the Corporation solely files Tax Returns in State 1 and State 2 in a Taxable Year, the maximum applicable corporate income Tax rates in effect in such states in such Taxable Year are 6.5% and 5.5%, respectively, and the apportionment factors for such states in such Taxable Year are 60% and 40%, respectively, then the Blended Rate for such Taxable Year is equal to 6.10% (i.e., the sum of (a) 6.5% multiplied by 60%, plus (b) 5.5% multiplied by 40%).

Board” means the board of directors of the Corporation.

Business Day” means any day other than (i) a Saturday or a Sunday and (ii) a day on which banks in the State of Delaware are authorized or obligated by law, governmental decree, or executive order to be closed.

Carry OP” is defined in the recitals of this Agreement.

Carry OP Agreement” means the Amended and Restated Agreement of Limited Partnership of Carry OP, as such is from time to time amended or restated.

Change of Control” means the occurrence of any of the following events:

 

  (i)

any Person or any group of Persons acting together which would constitute a “group” for purposes of section 13(d) of the Securities and Exchange Act of 1934, or any successor provisions thereto, excluding the Permitted Owners or

 

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  a group consisting primarily (determined based on the ownership of economic interests in PubCo or the Corporation, as applicable, by such Permitted Owners relative to other holders) of Permitted Owners or any of their Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of securities of PubCo or the Corporation representing more than fifty percent (50%) of the combined voting power or economic value of PubCo’s or the Corporation’s then outstanding voting securities; or

 

  (ii)

the following individuals cease for any reason to constitute a majority of the number of directors of PubCo then serving: individuals who, on the De-SPAC Date, constitute the members of the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation) whose appointment or election by the Board or nomination for election by PubCo’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the De-SPAC Date or whose appointment, election or nomination for election was previously so approved or recommended by the requisite percentage of directors referred to in this clause (ii); or

 

  (iii)

there is consummated a merger or consolidation of PubCo or the Corporation or any direct or indirect subsidiary of PubCo or the Corporation with any other corporation or other entity, and, immediately after the consummation of such transaction, either (x) the members of the Board immediately prior to the transaction and other Persons approved in accordance with clause (ii) of this definition do not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of PubCo immediately prior to such transaction do not Beneficially Own, directly or indirectly, more than fifty percent (50%) of the economic interest and combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation;

 

  (iv)

the shareholders of PubCo or the Corporation approve a plan of complete liquidation or dissolution of PubCo or the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, of all or substantially all of PubCo’s or the Corporation’s assets, other than the sale or other disposition of all or substantially all of PubCo’s or the Corporation’s assets to an entity, at least fifty percent (50%) of economic interest and the combined voting power of the voting securities of which are Beneficially Owned by shareholders of PubCo in substantially the same proportions as their Beneficial Ownership of such securities of PubCo immediately prior to such sale.

Notwithstanding the foregoing, except with respect to clause (ii) and clause (iii)(x), above, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any

 

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transaction or series of integrated transactions immediately following which the record holders of the shares of PubCo immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of PubCo and the Corporation immediately following such transaction or series of transactions.

Class A Shares” is defined in the recitals of this Agreement.

Class B Shares” is defined in the recitals of this Agreement.

Code” is defined in the recitals of this Agreement.

Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

Corporate Entity” means any direct or indirect Subsidiary of PubCo or the Corporation which is classified as a corporation for U.S. federal income tax purposes.

Corporation” is defined in the preamble of this Agreement.

Corporation Return” means the U.S. federal Tax Return and/or state and/or local and/or non-U.S. Tax Return, as applicable, of the Corporation or PubCo filed with respect to Taxes of any Taxable Year.

Covered Subsidiaries” means the Applicable Partnerships and each of their Subsidiaries; provided that, Opal Carry Aggregator and any of its Subsidiaries shall be considered “Subsidiaries” of Carry OP for this purpose.

Cumulative Net Realized Tax Benefit” for a Taxable Year means the excess, if any, of the cumulative amount of Realized Tax Benefits for all Taxable Years of the Corporation, up to and including such Taxable Year, over the cumulative amount of Realized Tax Detriments for the same Taxable Years. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.

Default Rate” means the Agreed Rate plus 500 basis points.

Delaware Courts” is defined in Section 7.08(f) of this Agreement.

De-SPAC Transaction” is defined in the recitals of this Agreement.

De-SPAC Date” means the Closing Date (as defined in the Business Combination Agreement) of the De-SPAC Transaction or, for purposes of the definition of Change of Control, the date the first board of directors constituting the first board slate of PubCo was approved as part of closing of the De-SPAC Transaction.

Determination” has the meaning ascribed to such term in section 1313(a) of the Code or similar provision of state, local and non-U.S. tax law, as applicable, or any other event (including the execution of a Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.

 

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Dispute” is defined in Section 7.08(a) of this Agreement.

Diamond SLP” has the meaning given to such term in the Business Combination Agreement.

Early Termination Date” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

Early Termination Notice” is defined in Section 4.02 of this Agreement.

Early Termination Payment” is defined in Section 4.03(b) of this Agreement.

Early Termination Rate” means the lesser of (i) 6.5% and (ii) the Agreed Rate.

Early Termination Schedule” is defined in Section 4.02 of this Agreement.

Exchange” is defined in the recitals of this Agreement, and “Exchanged” and “Exchanging” shall have correlative meanings. For the avoidance of doubt, except as the context otherwise requires, and without duplication, the term “Exchange” shall include a sale of partnership interests pursuant to the “Initial Sale,” mutatis mutandis.

Exchange Agreement” shall have the meaning given to such term in the Business Combination Agreement.

Exchange Date” is defined in the recitals of this Agreement.

Exchange Payment” is defined in Section 5.01 of this Agreement.

Exchangeable Unit” means, collectively, and not separately, (i) one Common Unit in Manager OP, as defined in the Manager OP Agreement, (ii) one Common Unit in Carry OP, as defined in the Carry OP Agreement, and (iii) one Class C Share or Class D Share in PubCo, as defined in the Certificate of Incorporation of PubCo, as such is from time to time amended or restated. For the avoidance of doubt, except as the context otherwise requires, and without duplication, the term “Exchangeable Unit” shall include any partnership interests sold or deemed sold in the Initial Sale.

Excluded Assets” is defined in Section 7.11(b) of this Agreement.

Existing Group LLC Agreement” has the meaning given to such term in the Business Combination Agreement.

Existing Blocker Tax Assets” means any Tax basis in the Adjusted Assets as a result of the application of section 743(b) of the Code that is attributable to any Opal Group Blocker that is acquired pursuant to an Opal Group Blocker Merger. For the avoidance of doubt, Existing Blocker Tax Assets shall include any carryforwards, carrybacks or similar attributes that are attributable to the Tax items described in the previous sentence.

 

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Existing FIC Tax Assets” means any existing Tax basis in the Adjusted Assets as a result of the application of sections 704(c)(1)(B), 707, 734(b), 737(c)(2), 743(b), 754, 755 and 1012 of the Code attributable to any FIC Distribution. For the avoidance of doubt, Existing Tax Assets shall include any carryforwards, carrybacks or similar attributes that are attributable to the Tax items described in the previous sentence.

Existing Tax Assets” means, collectively, the Existing FIC Tax Assets and the Existing Blocker Tax Assets.

Expert” is defined in Section 7.09 of this Agreement.

FIC Distribution” means distributions of cash or other property by Opal Group to any FIC Unitholder in respect of its FIC Units, or in redemption of any FIC Units in connection with the De-SPAC Transaction or prior to the De-SPAC Transaction.

FIC Unitholder” means any Person that owns, or previously owned, any FIC Units.

FIC Unit” shall have the meaning given to such term in the Existing Group LLC Agreement.

Hypothetical Federal Tax Liability” means, with respect to any Taxable Year, the liability for U.S. federal income Taxes of (i) the Corporation and (ii) without duplication, any Covered Subsidiary, but only with respect to U.S. federal income Taxes imposed on such Covered Subsidiary and allocable to the Corporation, in each case calculated using the same methods, elections, conventions and similar practices used on the relevant Corporation Return (and/or the tax return of the Covered Subsidiary, as applicable), but (A) using the Non-Stepped Up Tax Basis instead of the tax basis reflecting the Basis Adjustments, (B) calculated without taking into account the Existing Tax Assets, (C) excluding any deduction or other Tax benefit attributable to Imputed Interest or attributable to making a payment pursuant to this Agreement, and (D) treating as a deduction the Hypothetical Other Tax Liability (rather than any amount for state, local, or non-U.S. tax liabilities).

Hypothetical Other Tax Liability” means, with respect to any Taxable Year, the product of (i) the U.S. federal taxable income determined in connection with calculating the Hypothetical Federal Tax Liability for such Taxable Year (determined without regard to clause (D) thereof) and (ii) the Blended Rate for such Taxable Year.

Hypothetical Tax Liability” means, with respect to any Taxable Year, the Hypothetical Federal Tax Liability for such Taxable Year, plus the Hypothetical Other Tax Liability for such Taxable Year.

Imputed Interest” means any interest imputed under section 1272, 1274 or 483 or other provision of the Code and any similar provision of state, local and non-U.S. tax law with respect to a Corporation’s payment obligations under this Agreement.

Initial Sale” is defined in the recitals of this Agreement.

IRS” means the United States Internal Revenue Service.

 

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LIBOR” means for each month (or portion thereof) during any period, an interest rate per annum equal to the rate per annum reported, on the date two Business Days prior to the first Business Day of such month, as published on the applicable Bloomberg screen page (or other commercially available source providing quotations of LIBOR ) for London interbank offered rates for U.S. dollar deposits for such month (or portion thereof); provided, that at no time shall LIBOR be less than 0%. If the Corporation and each Partner Representative have mutually made the determination that LIBOR is no longer a widely recognized benchmark rate for newly originated loans in the U.S. loan market in U.S. dollars, then the Corporation and each Partner Representative shall establish a replacement interest rate (the “Replacement Rate”), after giving due consideration to any evolving or then prevailing conventions in the U.S. loan market for loans in U.S. dollars for such alternative benchmark, and including any mathematical or other adjustments to such benchmark, including spread adjustments, giving due consideration to any evolving or then prevailing convention for similar loans in the U.S. loan market in U.S. dollars for such benchmark, which adjustment, method for calculating such adjustment and benchmark shall be published on an information service as mutually selected from time to time by the Corporation and each Partner Representative. The Replacement Rate shall, subject to the next two sentences, replace LIBOR for all purposes under this Agreement. In connection with the establishment and application of the Replacement Rate, this Agreement shall be amended, with the consent of the Corporation and each Partner Representative (which consent shall not be unreasonably withheld or delayed), as necessary or appropriate, in the reasonable judgment of the Corporation and each Partner Representative, to replace the definition of LIBOR and otherwise to effect the provisions of this definition. The Replacement Rate shall be applied in a manner consistent with market practice, as mutually determined by the Corporation and each Partner Representative.

Volume Weighted Average Share Price” means the volume-weighted average share price of the Class A Shares as displayed on PubCo’s page on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such trading day.

Material Objection Notice” is defined in Section 4.02 of this Agreement.

Net Tax Benefit” is defined in Section 3.01(b) of this Agreement.

Non-Stepped Up Tax Basis” means, with respect to any asset at any time, the tax basis that such asset would have had at such time if no Basis Adjustment had been made.

Objection Notice” is defined in Section 2.03(a) of this Agreement.

Opal Carry Aggregator” has the meaning given to such term in the Business Combination Agreement.

Opal Feeder” has the meaning given to such term in the Business Combination Agreement.

Opal Group” has the meaning given to such term in the Business Combination Agreement.

Opal Group Blocker” has the meaning given to such term in the Business Combination Agreement.

 

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Opal Group Blocker Merger” has the meaning given to such term in the Business Combination Agreement.

Partners” means (i) each party listed on Schedule I attached hereto (which, for the avoidance of doubt, shall include the Blocker Shareholders, Diamond SLP, Opal Feeder, and the other holders of Exchangeable Units), and (ii) each other Person who executes a joinder to this Agreement in the form attached hereto as Exhibit A pursuant to an assignment under Section 7.06 of this Agreement, and each is referred to herein as a “Partner”.

Partner Representative” means each of (a) Owl Rock Capital Partners, LP (or such other Affiliate of Owl Rock Capital Partners, LP as Owl Rock Capital Partners, LP may designate from time to time in a written notice delivered to Pubco) and (b) NBSH Blue Investments LLC (or such other Affiliate of NBSH Acquisition LLC as NBSH Acquisition LLC may designate from time to time in a written notice delivered to Pubco).

Payment Date” means any date on which a payment is required to be made pursuant to this Agreement.

Permitted Owners” means the Partners, the Partners’ family members, and trusts for the benefit of, and entities wholly owned by, a Partner and/or a Partner’s family members.

Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity, or other entity.

Pre-Exchange Transaction” means (i) any direct or indirect transfer (including upon the death of a Partner) of one or more Exchangeable Units or a distribution with respect to one or more Exchangeable Units (or of or with respect to interests in another partnership, which interests were exchanged for Exchangeable Units, including in connection with the transactions contemplated by the Business Combination Agreement, or interests in any partnership that directly or indirectly owns Exchangeable Units or an interest in any such other partnership) that occurs prior to the Initial Sale or an Exchange of such Exchangeable Units, as applicable, and to which section 734(b) or 743(b) of the Code applies or (ii) any other transaction contemplated by the Business Combination Agreement, including any sale or distribution of assets by Manager OP, Carry OP, any of their subsidiaries, or any of the Sellers (as defined in the Business Combination Agreement) or their affiliates pursuant to the Business Combination Agreement or otherwise in contemplation of the De-SPAC Transaction if section 1001, 704(c)(1)(B), 707, 734(b), 737, or 743(b) of the Code applies to such transaction. For the avoidance of doubt, a transaction that otherwise qualifies as a Pre-Exchange Transaction shall be treated as such with respect to an Applicable Partner even if such Partner did not participate in such transaction (e.g., if a distribution to a Person that is not the Applicable Partner gives rise to an adjustment under section 734(b), the “common basis” allocable to the Applicable Partner may be treated with respect to such Applicable Partners as arising from a Pre-Exchange Transaction).

Realized Tax Benefit” means, for a Taxable Year and for all Taxes collectively, the net excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability. If all or a portion of the Actual Tax Liability for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.

 

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Realized Tax Detriment” means, for a Taxable Year and for all Taxes collectively, the net excess, if any, of the Actual Tax Liability over the Hypothetical Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.

Reconciliation Dispute” is defined in Section 7.09 of this Agreement.

Reconciliation Procedures” means those procedures set forth in Section 7.09 of this Agreement.

Schedule” means any Basis Schedule, Tax Benefit Schedule, or Early Termination Schedule.

Senior Obligations” is defined in Section 5.01 of this Agreement.

Subsidiaries” means, with respect to any Person, as of any date of determination, any other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than 50% of the voting shares or other similar interests or the sole general partner interest or managing member or similar interest of such Person.

Tax Attribute” is defined in the recitals to this Agreement.

Tax Benefit Payment” is defined in Section 3.01(b) of this Agreement.

Tax Benefit Schedule” is defined in Section 2.02 of this Agreement.

Tax Return” means any return, declaration, report, or similar statement required to be filed with respect to Taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return, and declaration of estimated Tax.

Taxable Year” means a taxable year as defined in section 441(b) of the Code or comparable section of state, local or non-U.S. tax law, as applicable, (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made).

Taxes” means any and all U.S. federal, state, local, and non-U.S. taxes, assessments, or similar charges that are based on or measured with respect to net income or profits, whether on an exclusive or on an alternative basis, including any interest related to such Tax.

Taxing Authority” means any U.S., non-U.S., federal, national, state, county, or municipal or other local government, any subdivision, agency, commission, or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising Tax regulatory authority.

Treasury Regulations” means the final, temporary, and proposed regulations under the Code promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

 

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Valuation Assumptions” means the assumptions that (1) in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully utilize the deductions arising from the Basis Adjustments, Existing Tax Assets, and the Imputed Interest during such Taxable Year, (2) the U.S. federal income tax rates and state, local, and non-U.S. income tax rates for each such Taxable Year will be those specified for each such Taxable Year by the Code and other law as in effect on the date of the Early Termination Payment and the Blended Rate will be calculated based on such rates and the apportionment factors applicable in the most recently ended Taxable Year, except to the extent any change to such Tax rates for such Taxable Year have already been enacted into law, (3) any loss carryovers generated by the Basis Adjustments, Existing Tax Assets, or the Imputed Interest and available as of the date of the Early Termination Schedule will be utilized by the Corporation on a pro rata basis from the date of the Early Termination Schedule through (A) the scheduled expiration date of such loss carryovers or (B) if there is no such scheduled expiration, then the five-year anniversary of the date of the Early Termination Schedule, (4) any non-amortizable, non-depreciable assets are deemed to be disposed of on the earlier of the Early Termination Date or the fifteenth (15th) anniversary of the applicable Basis Adjustment or the date of the applicable FIC Distribution with respect to any Existing Tax Assets, as applicable; provided, that, for the avoidance of doubt, in the event of a Change of Control, such non-amortizable, non-depreciable assets shall be deemed disposed of at the time of sale (if applicable) of the relevant asset in the Change of Control (if earlier than the applicable fifteenth (15th) anniversary), and (5) if, at the Early Termination Date, there are Exchangeable Units that have not been Exchanged, then each such Exchangeable Unit shall be deemed to be Exchanged for the Volume Weighted Average Share Price of the Class A Shares and the amount of cash that would be transferred if the Exchange occurred on the Early Termination Date.

ARTICLE II

DETERMINATION OF REALIZED TAX BENEFIT

Section 2.01    Basis Schedule. Within 150 calendar days after the filing of the U.S. federal income tax return of the Corporation for each Taxable Year, the Corporation shall deliver to each Partner Representative (on behalf of each Applicable Partner) a schedule (the “Basis Schedule”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement, (i) the Non-Stepped Up Basis of the Adjusted Assets for such Taxable Year as of each applicable Exchange Date (or if applicable, the De-SPAC Date), (ii) the Basis Adjustments and Existing FIC Tax Assets with respect to the Adjusted Assets as a result of the Initial Sale, any Exchanges, and any FIC Distributions effected in such Taxable Year and all prior Taxable Years, calculated (a) in the aggregate and (b) solely with respect to the Initial Sale, any Exchanges, and any FIC Distributions by or with respect to the Applicable Partner, (iii) the Existing Blocker Tax Assets, (iv) the period or periods, if any, over which the Adjusted Assets are amortizable and/or depreciable, and (v) the period or periods, if any, over which each Basis Adjustment or Existing Tax Asset is amortizable and/or depreciable (which, for non-amortizable, non-depreciable assets shall be based on the Valuation Assumptions).

Section 2.02    Tax Benefit Schedule. Within 150 calendar days after the filing of the U.S. federal income tax return of the Corporation for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment, the Corporation shall provide to each Partner Representative (on behalf of each Applicable Partner) a schedule showing, in reasonable detail, the calculation of the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year (a “Tax Benefit Schedule”).

 

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Each Tax Benefit Schedule will become final as provided in Section 2.03(a) of this Agreement and may be amended as provided in Section 2.03(b) of this Agreement (subject to the procedures set forth in Section 2.03(a)).

Section 2.03    Procedures, Amendments.

(a)    Procedure. Every time the Corporation delivers to a Partner Representative an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.03(b), but excluding any Early Termination Schedule or amended Early Termination Schedule, the Corporation shall also (x) deliver to the Partner Representative schedules and work papers providing reasonable detail regarding the preparation of the Schedule and (y) allow the Partner Representative reasonable access (at no cost to the Partner Representative) to the appropriate representatives of the Corporation and the Advisory Firm in connection with a review of such Schedule. Without limiting the generality of the preceding sentence, the Corporation shall ensure that any Tax Benefit Schedule or Early Termination Schedule that is delivered to a Partner Representative, along with any supporting schedules and work papers, provides a reasonably detailed presentation of the calculation of the applicable Actual Tax Liability (i.e., the “with” calculation) and the Hypothetical Tax Liability (i.e., the “without” calculation) and identifies any material assumptions or operating procedures or principles that were used for purposes of such calculations. The applicable Schedule shall become final and binding on all parties unless, within thirty (30) calendar days after receiving a Basis Schedule or amendment thereto or within thirty (30) calendar days after receiving a Tax Benefit Schedule or amendment thereto, either Partner Representative provides the Corporation with notice of a material objection to such Schedule (“Objection Notice”) made in good faith. If the parties, for any reason, are unable to successfully resolve the issues raised in such Objection Notice within thirty (30) calendar days of receipt by the Corporation of such Objection Notice, the Corporation and the applicable Partner Representative(s) shall employ the reconciliation procedures as described in Section 7.09 of this Agreement (the “Reconciliation Procedures”).

(b)    Amended Schedule. The applicable Schedule for any Taxable Year shall be amended from time to time by the Corporation (i) in connection with a Determination affecting such Schedule, (ii) to correct material inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the Partner Representative or the correction of computational errors set forth in such Schedule, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a material change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or other tax item to such Taxable Year, (v) to reflect a material change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year, or (vi) to adjust the Basis Schedule to take into account payments made pursuant to this Agreement (such Schedule, an “Amended Schedule”). The Corporation shall provide an Amended Schedule to each Partner Representative within ninety (90) calendar days of the occurrence of an event referenced in clauses (i) through (vi) of the preceding sentence.

 

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ARTICLE III

TAX BENEFIT PAYMENTS

Section 3.01    Payments.

(a)    Within ten (10) business days of a Tax Benefit Schedule delivered to Partner Representative becoming final in accordance with Section 2.03(a), or earlier in the Corporation’s reasonable discretion, the Corporation shall pay to each Applicable Partner for such Taxable Year the Tax Benefit Payment determined pursuant to Section 3.01(b) with respect to such Applicable Partner. Each such Tax Benefit Payment shall be made by wire transfer of immediately available funds to a bank account of the Applicable Partner previously designated by such Partner to the Corporation. For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including, without limitation, estimated U.S. federal or state income tax payments.

(b)    A “Tax Benefit Payment” means, with respect to any Applicable Partner, an amount, not less than zero, equal to the sum of the Net Tax Benefit that is Attributable to such Applicable Partner and the Interest Amount. The “Net Tax Benefit for each Taxable Year shall be an amount equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year over the total amount of payments previously made under this Section 3.01, excluding payments attributable to the Interest Amount; provided, however, that, for the avoidance of doubt, no Partner shall be required to make a payment, or return all or any portion of any previously made Tax Benefit Payment (including any portion of any Early Termination Payment). The “Interest Amount” for a given Taxable Year shall equal the interest on the Net Tax Benefit for such Taxable Year calculated at the Agreed Rate from the due date (without extensions) for filing the Corporation Return with respect to Taxes for the most recently ended Taxable Year until the Payment Date. In the case of a Tax Benefit Payment made in respect of an Amended Schedule, the “Interest Amount” shall equal the interest on the Net Tax Benefit for such Taxable Year calculated at the Agreed Rate from the date of such Amended Schedule becoming final in accordance with Section 2.03(a) until the Payment Date. The Net Tax Benefit and the Interest Amount shall be determined separately with respect to the Initial Sale, each separate Exchange, and each FIC Distribution.

(c)    Applicable Principles. The parties agree that (i) the payments made pursuant to this Agreement in respect of Basis Adjustments (to the extent permitted by applicable law and other than amounts accounted for as Interest Amounts) are intended to be treated and shall be reported for all purposes, including Tax purposes, as additional contingent consideration to the Applicable Partners in connection with the Initial Sale or the applicable Exchange that has the effect of creating additional Basis Adjustments in the Taxable Year of payment, (ii) payments made pursuant to this Agreement in respect of Existing FIC Tax Assets (to the extent permitted by applicable law and other than amounts accounted for as Interest Amounts) are intended to be treated and shall be reported for all purposes, including Tax purposes, as additional contingent consideration to the FIC Unitholders in connection with the sale of FIC Units to the Corporation in connection with the transactions contemplated by the Business Combination Agreement that has the effect of creating additional Basis Adjustments in the Taxable Year of payment, (iii) any additional Basis Adjustments shall be incorporated into the calculation for the Taxable Year of the applicable payment and into the calculations for subsequent Taxable Years, as appropriate and (iv) the Actual Tax Liability for any Taxable Year shall take into account the deduction of the portion of the Tax Benefit Payment that

 

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must be accounted for as an Interest Amount under applicable law; provided, however, that such liability for Taxes and such taxable income shall be included in the Hypothetical Tax Liability and the Actual Tax Liability, subject to the adjustments and assumptions set forth in this Agreement and, to the extent any such amount is taken into account on an Amended Schedule, such amount shall adjust a Tax Benefit Payment, as applicable, in accordance with Section 2.03(b).

Section 3.02    No Duplicative Payments. It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement. It is also intended that the provisions of this Agreement will result in 85% of the Corporation’s Cumulative Net Realized Tax Benefit, and the Interest Amount thereon, being paid to the Applicable Partners pursuant to this Agreement. The provisions of this Agreement shall be construed in the appropriate manner so that these fundamental results are achieved.

Section 3.03    Pro Rata Payments. For the avoidance of doubt, to the extent (i) the Corporation’s deductions with respect to any Tax Attributes are limited in a particular Taxable Year (including as a result of the Corporation having insufficient taxable income to fully utilize such Tax Attributes) or (ii) the Corporation lacks sufficient funds to satisfy its obligations to make all Tax Benefit Payments due in a particular Taxable Year, the limitation on the deductions, or the Tax Benefit Payments that may be made, as the case may be, shall be taken into account or made for the Applicable Partner in the same proportion as Tax Benefit Payments would have been made absent the limitations set forth in clauses (i) and (ii) of this Section 3.03, as applicable.

Section 3.04    Payments Not Ascertainable. The undersigned parties hereby acknowledge and agree that the timing, amounts, and aggregate value of Tax Benefit Payments pursuant to this Agreement are not reasonably ascertainable. Notwithstanding the previous sentence, with respect to the Initial Sale or any Exchange by or with respect to any Partner, if such Partner notifies the Corporation in writing of a stated maximum selling price, then the amount of the consideration received in connection with the Initial Sale or such Exchange and the aggregate Tax Benefit Payments to such Partner in respect of the Initial Sale or such Exchange, other than amounts accounted for as interest under the Code, shall not exceed such stated maximum selling price.

ARTICLE IV

TERMINATION

Section 4.01    Early Termination and Breach of Agreement.

(a)    The Corporation may terminate this Agreement with respect to all Partners at any time by paying to all of the Partners the Early Termination Payment; provided, however, that this Agreement shall only terminate upon the receipt of the Early Termination Payment by all Partners, and provided, further, that the Corporation may withdraw any notice to execute its termination rights under this Section 4.01(a) prior to the time at which any Early Termination Payment has been paid. Upon payment of the Early Termination Payment by the Corporation, the Corporation shall not have any further payment obligations under this Agreement in respect of such Partners, other than for any (a) Tax Benefit Payment agreed to by the Corporation and any Partner as due and payable but unpaid as of the Early Termination Notice and (b) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Early Termination Notice (except to the extent that the amount described in clause (b) is included in the Early Termination Payment). For the

 

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avoidance of doubt, if an Exchange occurs after the Corporation provides the Early Termination Notice, then unless the Corporation withdraws such Early Termination Notice prior to full payment of the Early Termination Payment, the Corporation shall have no obligations under this Agreement with respect to such Exchange, and its only obligations under this Agreement in such case shall be its obligations to all Partners under Section 4.03(a).

(b)    In the event of a Change of Control, unless otherwise agreed in writing by both Partner Representatives, all payment obligations hereunder shall be accelerated and calculated as if an Early Termination Notice and an Early Termination Schedule had been delivered on the effective date of the Change of Control, using the Valuation Assumptions and by substituting, in each case, the term “the closing date of a Change of Control” for the term “Early Termination Date.” Such payment obligations shall include, but not be limited to, (i) payment of the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the effective date of a Change of Control, (ii) payment of any Tax Benefit Payment previously due and payable but unpaid as of the Early Termination Notice, and (iii) except to the extent included in the Early Termination Payment or if included as a payment under clause (ii) of this Section 4.01(b), payment of any Tax Benefit Payment due for any Taxable Year ending prior to, with or including the effective date of a Change of Control. Sections 4.02 and 4.03 shall apply to a Change of Control mutatis mutandis.

(c)    In the event that PubCo or the Corporation breaches any of its material obligations under this Agreement, whether as a result of failure to make any payment when due, failure to honor any other material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code or otherwise, and does not cure such breach within ninety (90) days of receipt of notice of such breach from such Partner, then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such breach and shall include, but not be limited to, (1) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of a breach, (2) any Tax Benefit Payment agreed to by the Corporation and any Partners as due and payable but unpaid as of the date of a breach, and (3) any Tax Benefit Payment due for the Taxable Year ending with or including the date of a breach. Notwithstanding the foregoing, in the event that PubCo or the Corporation breaches this Agreement and this Section 4.01(c) applies, the Partners shall be entitled to elect to receive the amounts set forth in clauses (1), (2), and (3), above or to seek specific performance of the terms hereof. The parties agree that the failure to make any payment due pursuant to this Agreement within three months of the date such payment is due shall be deemed to be a breach of a material obligation under this Agreement for all purposes of this Agreement, and that it will not be considered to be a breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three months of the date such payment is due. Notwithstanding anything in this Agreement to the contrary, it shall not be a breach of a material obligation under this Agreement if the Corporation fails to make any Tax Benefit Payment when due to the extent that the Corporation has insufficient funds, and cannot take commercially reasonable actions to obtain sufficient funds, to make such payment; provided that the interest provisions of Section 5.02 shall apply to such late payment unless the Corporation does not have sufficient funds to make such payment as a result of a limitation imposed by any Senior Obligations, in which case, Section 5.02 shall apply, but the Default Rate shall be replaced by the Agreed Rate; provided, further, that such payment obligation shall nonetheless accrue for the benefit of the Partners, and the Corporation shall make such payment at the first opportunity that it has sufficient funds and is otherwise able to make such payment.

 

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Section 4.02    Early Termination Notice. If the Corporation chooses to exercise its right of early termination under Section 4.01 above, the Corporation shall deliver to each Partner notice of such intention to exercise such right (“Early Termination Notice”) and a schedule (the “Early Termination Schedule”) specifying the Corporation’s intention to exercise such right and showing in reasonable detail the calculation of the Early Termination Payment. The applicable Early Termination Schedule shall become final and binding on all parties unless a Partner, within thirty (30) calendar days after receiving the Early Termination Schedule thereto, provides the Corporation with notice of a material objection to such Schedule made in good faith (“Material Objection Notice”). If the parties, for any reason, are unable to successfully resolve the issues raised in such notice within thirty (30) calendar days after receipt by the Corporation of the Material Objection Notice, the Corporation and the Partner delivering the Material Objection Notice shall employ the Reconciliation Procedures as described in Section 7.09 of this Agreement.

Section 4.03    Payment upon Early Termination.

(a)    Within three (3) calendar days after the Early Termination Schedule becomes final and binding between a Partner and the Corporation pursuant to Section 4.02 of this Agreement, the Corporation shall pay to the Partner an amount equal to the Early Termination Payment. Such payment shall be made by wire transfer of immediately available funds to a bank account designated by the Partner.

(b)    The “Early Termination Payment” for any Partner, as of the date of the delivery of an Early Termination Schedule, shall equal the present value, discounted at the Early Termination Rate as of such date, of all Tax Benefit Payments that would be required to be paid by the Corporation to the Partner beginning on the Early Termination Date and assuming that the Valuation Assumptions are applied.

ARTICLE V

SUBORDINATION AND LATE PAYMENTS

Section 5.01    Subordination. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the Corporation to a Partner or to all of the Partners under this Agreement (an “Exchange Payment”) shall rank subordinate and junior in right of payment to any principal, interest, or other amounts due and payable in respect of any obligations in respect of indebtedness for borrowed money of the Corporation (“Senior Obligations”) and shall rank pari passu with all current or future unsecured obligations of the Corporation that are not Senior Obligations. To the extent the Corporation incurs, creates or assumes any Senior Obligations after the date hereof, the Corporation shall make reasonable efforts to ensure that such indebtedness permits the amounts payable hereunder to be paid. The Corporation shall use commercially reasonable efforts not to enter into any agreement if a principal purpose of such agreement is to restrict in any material respect the amounts payable hereunder.

Section 5.02    Late Payments by the Corporation. The amount of all or any portion of any Exchange Payment not made to any Partner when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing on the date on which such Exchange Payment was due and payable.

 

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ARTICLE VI

NO DISPUTES; CONSISTENCY; COOPERATION

Section 6.01    Partner Participation in the Corporations and Applicable Partnerships Tax Matters. Except as otherwise provided herein or in the Business Combination Agreement or the Applicable Partnership Agreements, the Corporation shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporation and the Covered Subsidiaries, including without limitation the preparation, filing, or amending of any Tax Return and defending, contesting, or settling any issue pertaining to Taxes. Notwithstanding the foregoing, the Corporation shall notify each Partner Representative of, and keep each Partner Representative reasonably informed with respect to, the portion of any audit of the Corporation and the Covered Subsidiaries by a Taxing Authority the outcome of which is reasonably expected to affect the Partners’ rights and obligations under this Agreement, and shall provide to each Partner Representative reasonable opportunity to provide information and other input to the Corporation, the Covered Subsidiaries, and their respective advisors concerning the conduct of any such portion of such audit; provided, however, that the Corporation and the Covered Subsidiaries shall not be required to take any action that is inconsistent with any provision of the Business Combination Agreement or the Applicable Partnership Agreement; provided, further, that the Corporation shall not settle or fail to contest any issue pertaining to Taxes or Tax matters where such settlement or failure to contest would reasonably be expected to materially adversely affect the Partners’ rights and obligations under this Agreement without the written consent of each Partner Representative, such consent not to be unreasonably withheld, conditioned, or delayed.

Section 6.02    Consistency. Unless there is a Determination or the opinion of an Advisory Firm that is reasonably acceptable to the Corporation providing otherwise, the Corporation, the Covered Subsidiaries, and the Partners agree to report and cause to be reported for all purposes, including federal, state, local and non-U.S. Tax purposes and financial reporting purposes, all Tax-related items (including without limitation the Basis Adjustments, the Existing Tax Assets, and each Tax Benefit Payment) in a manner consistent with that specified in any Schedule required to be provided by or on behalf of the Corporation under this Agreement. Any Dispute concerning such advice shall be subject to the terms of Section 7.09. In the event that an Advisory Firm is replaced with another Advisory Firm, such replacement Advisory Firm shall perform its services under this Agreement using procedures and methodologies consistent with the previous Advisory Firm, unless otherwise required by law or unless the Corporation and the Partners agree to the use of other procedures and methodologies.

Section 6.03    Cooperation. The Partners shall each (or each Partner Representative, on behalf of the Partners, shall) (a) furnish to the Corporation in a timely manner such information, documents and other materials as the Corporation may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself available to the Corporation and its representatives to provide explanations of documents and materials and such other information as the Corporation or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and the Corporation shall reimburse each Partner (or each Partner Representative, as applicable) for any reasonable third-party costs and expenses incurred pursuant to this Section 6.03. The Corporation shall not, without the prior written

 

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consent of each Partner Representative, take any action that has the primary purpose of circumventing the achievement or attainment of any Tax Benefit Payment or Early Termination Payment under this Agreement.

ARTICLE VII

MISCELLANEOUS

Section 7.01    Notices. All notices, demands and other communications to be given or delivered under this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one Business Day following sending by reputable overnight express courier (charges prepaid) or (c) three days following mailing by certified or registered mail, postage prepaid and return receipt requested. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

if to PubCo or the Corporation, to:

the address and facsimile number set forth for PubCo in the Business Combination Agreement

if to the Manager OP, to:

the address and facsimile number set forth for the Manager OP in the Manager OP Agreement

if to the Carry OP, to:

the address and facsimile number set forth for the Carry OP in the Carry OP Agreement

if to any Partner, to:

the address and facsimile number set forth for such Partner in the records of the Applicable Partnership.

Any party may change its address or fax number by giving the other party written notice of its new address or fax number in the manner set forth above.

Section 7.02    Counterparts. This Agreement may be executed and delivered in one or more counterparts and by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No party to this Agreement shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a contract and each party to this Agreement forever waives any such defense.

 

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Section 7.03    Entire Agreement; No Third Party Beneficiaries. This Agreement, the Business Combination Agreement, the Exchange Agreement, the Manager OP Agreement and the Carry OP Agreement contain the entire agreement and understanding among the parties to this Agreement with respect to the subject matter of this Agreement and, thereof and supersede all prior and contemporaneous agreements, understandings and discussions, whether written or oral, relating to such subject matter in any way. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to in this Agreement. The parties to this Agreement and their respective counsel have reviewed and negotiated this Agreement as the joint agreement and understanding of the parties to this Agreement, and the language used in this Agreement shall be deemed to be the language chosen by the parties to this Agreement to express their mutual intent, and no rule of strict construction shall be applied against any Person. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 7.04    Governing Law. The laws of the State of Delaware shall govern (a) all Proceedings (as defined in the Business Combination Agreement), claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Section 7.05    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

Section 7.06    Successors; Assignment; Amendments; Waivers.

(a)    No Partner may assign this Agreement to any person without the prior written consent of the Corporation; provided, however, that (i) to the extent that a Partner effectively transfers Exchangeable Units after the date hereof in accordance with the terms of the Applicable Partnership Agreement, and any other agreements the Partners may have entered into with each other, or a Partner may have entered into with the Corporation and/or the Applicable Partnership, the transferring Partner shall assign to the transferee of such Exchangeable Units the transferring Partner’s rights under this Agreement with respect to such transferred Exchangeable Units, as long as such transferee has executed and delivered, or, in connection with such transfer, executes and delivers, a joinder to this Agreement, in the form attached hereto as Exhibit A, agreeing to become a “Partner” for all purposes of this Agreement, except as otherwise provided in such joinder, and (ii) once the

 

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Initial Sale or any Exchange has occurred, any and all payments that may become payable to a Partner pursuant to this Agreement with respect to such Initial Sale or such Exchange may be assigned to any Person or Persons, as long as any such Person has executed and delivered, or, in connection with such assignment, executes and delivers, a joinder to this Agreement, in the form attached hereto as Exhibit A, agreeing to be bound by Section 7.12 and acknowledging specifically Section 7.06(b). For the avoidance of doubt, to the extent a Partner or other Person transfers Exchangeable Units after the date hereof to a Partner as may be permitted by any agreement to which the Applicable Partnership is a party, the Partner receiving such Exchangeable Units shall have all rights under this Agreement with respect to such transferred Exchangeable Units as such Partner has under this Agreement with respect to the other Exchangeable Units held by such Partner.

(b)    Notwithstanding the foregoing provisions of this Section 7.06, no transferee described in clause (i) of Section 7.06(a) shall have the right to enforce the provisions of Section 2.03, 4.02, 6.01 or 6.02 of this Agreement, and no assignee described in clause (ii) of Section 7.06(a) shall have any rights under this Agreement except for the right to enforce its right to receive payments under this Agreement.

(c)    No provision of this Agreement may be amended unless such amendment is approved in writing by each of the Corporation, the Applicable Partnerships, and by Partners who would be entitled to receive at least two-thirds of the Early Termination Payments payable to all Partners hereunder if the Corporation had exercised its right of early termination on the date of the most recent Exchange (or if no Exchange has occurred, the date of the Initial Sale) prior to such amendment (excluding, for purposes of this sentence, all payments made to any Partner pursuant to this Agreement since the date of such most recent Exchange); provided that no such amendment shall be effective if such amendment will have a disproportionate adverse effect on the payments certain Partners will or may receive under this Agreement unless (i) such disproportionate effect is a result of tax laws imposed by government authorities in non-U.S. jurisdictions or (ii) all such Partners disproportionately affected consent in writing to such amendment. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

(d)    All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

Section 7.07    Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

Section 7.08    Submission to Jurisdiction; Dispute Resolution.

(a)    Any and all disputes, controversies or claims arising out of or relating to this Agreement which are not governed by Section 7.09 of this Agreement (each a “Dispute”) shall be submitted to mandatory, final and binding arbitration administered by the American Arbitration

 

21


Association (“AAA”) under its Commercial Arbitration Rules in effect at the time of filing of the demand for arbitration, subject to the provisions of this Section 7.08, pursuant to the Federal Arbitration Act, 9 U.S.C., Section 1 et seq. The place of arbitration shall be the State of Delaware.

(b)    There shall be one arbitrator who shall be agreed upon by the parties within twenty (20) days of receipt by the respondent of a copy of the demand for arbitration. If the parties do not agree upon an arbitrator within this time limit, such arbitrator shall be appointed by the AAA in accordance with the listing, striking and ranking procedure in the Rules, with each party being given a limited number of strikes, except for cause (including, without limitation, conflicts of interest). Any arbitrator appointed by the AAA shall be a retired judge or a practicing attorney with no less than fifteen years of experience with corporate and limited partnership matters or tax matters and an experienced arbitrator. Unless otherwise determined by the arbitrator, the costs of the arbitration and the arbitrator shall be borne by the Corporation and each party shall otherwise be responsible for its own costs and expenses (except as provided in clause (c) below or in the next sentence). If the arbitrator entirely adopts the position of the disputing Partner or Partnership Representative (as applicable), the Corporation shall reimburse the Partner or Partnership Representative (as applicable) for any reasonable and documented out-of-pocket costs and expenses in such proceeding, and if the arbitrator entirely adopts the Corporation’s position, whichever Partner or Partnership Representative (as applicable) that disputed the position shall reimburse the Corporation for any reasonable and documented out-of-pocket costs and expenses in such proceeding. In rendering an award, the arbitrator shall be required to follow the laws of the State of Delaware.

(c)    The arbitration shall be the sole and exclusive forum for resolution of the Dispute, and the award shall be in writing, state the reasons for the award, and be final and binding. Judgment thereon may be entered in any court of competent jurisdiction. The arbitrator shall not be permitted to award punitive, multiple or other non-compensatory damages. Any costs or fees (including attorneys’ fees and expenses) incident to enforcing the award shall be charged against the party resisting such enforcement.

(d)    The parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of it (including but not limited to any pleadings, briefs or other documents submitted or exchanged, any documents disclosed by one party to another, testimony or other oral submission and any awards or decisions) shall not be disclosed beyond the arbitrators, the AAA, the parties, their legal and professional advisors, and any person necessary for the conduct of the arbitration, except as may be required in judicial proceedings relating to the arbitration, or by law or regulatory or governmental authority.

(e)    Barring extraordinary circumstances (as determined in the sole discretion of the arbitrator), discovery shall be limited to pre-hearing disclosure of documents that each side will present in support of its case, and, in response to reasonable documents requests, non-privileged documents in the responding party’s possession or custody, not otherwise readily available to the party seeking the documents, and reasonably believed to exist, that may be relevant and material to the outcome of disputed issues and there shall be no depositions.

(f)    By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitrator shall have full authority

 

22


to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitrator’s orders to that effect. In any such judicial action: (i) each of the parties irrevocably and unconditionally consents to the exclusive jurisdiction and venue of the federal or state courts located in the State of Delaware (the “Delaware Courts”) for the purpose of any pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings, and to the non-exclusive jurisdiction of such courts for the enforcement of any judgment on any award; (ii) each of the parties irrevocably waives, to the fullest extent they may effectively do so, any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens or any right of objection to jurisdiction on account of its place of incorporation or domicile, which it may now or hereafter have to the bringing of any such action or proceeding in any Delaware Courts; (iii) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid; and (iv) each of the parties hereby irrevocably waives any and all right to trial by jury.

(g)    Any claim brought by a Partner must be brought in such party’s individual capacity and not as a plaintiff or class member in any purported class, collective or representative proceeding. No Partner shall be entitled to join or consolidate disputes by or against others in any arbitration, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity.

Section 7.09    Reconciliation. In the event that the Corporation and an Applicable Partner (or such Applicable Partner’s Partner Representative) are unable to resolve a disagreement with respect to the matters governed by Sections 2.03, 4.02, and 6.02 within the relevant period designated in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “Expert”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner in a nationally recognized accounting firm or a law firm with an emphasis on tax matters (other than the Advisory Firm), and the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with either the Corporation or the Applicable Partner (or such Applicable Partner’s Partner Representative) or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within fifteen (15) calendar days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter relating to the Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within thirty (30) calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before the date any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, such payment shall be paid on the date such payment would be due and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution. The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne by the Corporation; except as provided in the next sentence. The Corporation and each Applicable Partner (or such Applicable Partner’s Partner Representative) shall bear their own costs and expenses of such proceeding, unless the Applicable Partner (or such Applicable Partner’s Partner Representative) has a prevailing position that is more than ten percent (10%) of the

 

23


payment at issue, in which case the Corporation shall reimburse such Applicable Partner (or such Applicable Partner’s Partner Representative) for any reasonable out-of-pocket costs and expenses in such proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.09 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.09 shall be binding on the Corporation and the Applicable Partner (or such Applicable Partner’s Partner Representative) and may be entered and enforced in any court having jurisdiction.

Section 7.10    Withholding. The Corporation shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporation is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or non-U.S. tax law; provided, however, that the Corporation shall use commercially reasonable efforts to notify any applicable payee prior to the making of such deductions and withholding payments and shall reasonably cooperate with such payee to determine whether any such deductions or withholding payments (other than any deduction or withholding required by reason of such payee’s failure to comply with the last sentence of this Section 7.10) are required under applicable law and to obtain any available exemption or reduction of, or otherwise minimize to the extent permitted by applicable law, such deduction and withholding. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporation, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was made. Each payee shall promptly provide the Corporation or other applicable withholding agent with any applicable Tax forms and certifications (including IRS Form W-9 or the applicable version of IRS Form W-8) reasonably requested and shall promptly provide an update of any such Tax form or certificate previously delivered if the same has become incorrect or has expired.

Section 7.11    Admission of PubCo or the Corporation into a Consolidated Group; Transfers of Corporate Assets.

(a)    If PubCo or the Corporation becomes a member of an affiliated, consolidated, combined, or unitary group of corporations that files a consolidated, combined, or unitary income tax return pursuant to sections 1501 et seq. of the Code or any corresponding provisions of state, local or non-U.S. law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments, and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole. For the avoidance of doubt, as of the date hereof (and for purposes of this Section 7.11(a)), the Corporation shall be a member of the consolidated U.S. federal income Tax group of PubCo for purposes of sections 1501 et seq. of the Code, and PubCo shall not cause or permit the Corporation to be cease to be a member of such group prior to a Change of Control without the consent of both Partner Representatives.

(b)    Notwithstanding any other provision of this Agreement, if PubCo or the Corporation acquires one or more assets that, as of the De-SPAC Date or any Exchange Date, have not been contributed to Manager OP or Carry OP (other than the Corporation’s interests in the Applicable Partnerships) (such assets, “Excluded Assets”), then all Tax Benefit Payments due hereunder shall be computed as if such assets had been contributed to Manager OP or Carry OP, as applicable, on the date such assets were first acquired by PubCo or the Corporation, as applicable; provided, however, that if an Excluded Asset consists of stock in a corporation, then, for purposes of

 

24


this Section 7.11(b), such corporation (and any corporation Controlled by such corporation) shall be deemed to have contributed its assets to the Applicable Partnership on the date on which PubCo or the Corporation acquired stock of such corporation.

(c)    If any entity that is obligated to make an Exchange Payment hereunder transfers one or more assets to a corporation with which such entity does not file a consolidated, combined, or unitary tax return pursuant to section 1501 of the Code, or any corresponding provisions of state, local or non-U.S. Tax law, such entity, for purposes of calculating the amount of any Exchange Payment (e.g., calculating the gross income of the entity and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such contribution. The consideration deemed to be received by such entity shall be equal to the fair market value of the contributed asset (as reasonably determined by the governing body, or the Person responsible for management, of such entity acting in good faith), plus (i) the amount of debt to which such asset is subject, in the case of a contribution of an encumbered asset or (ii) the amount of debt allocated to such asset, in the case of a contribution of a partnership interest.

Section 7.12    [Reserved].

Section 7.13    Applicable Partnership Agreement. To the extent this Agreement imposes obligations upon an Applicable Partnership or a partner thereof, this Agreement shall be treated as part of the Applicable Partnership Agreement as described in section 761(c) of the Code and sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.

Section 7.14    Joinder. The Corporation hereby agrees that, to the extent it acquires a general partner interest, managing member interest or similar interest in any Person after the date hereof, it shall cause such Person to execute and deliver a joinder to this Agreement promptly upon acquisition of such interest, and such person shall be treated in the same manner as the Applicable Partnerships for all purposes of this Agreement. PubCo and the Corporation hereby agree to cause any Corporate Entity that acquires an interest in an Applicable Partnership (or any entity described in the foregoing sentence) to execute a joinder to this Agreement (to the extent such Person is not already a party hereto) promptly upon such acquisition, and such Corporate Entity shall be treated in the same manner as PubCo and the Corporation for all purposes of this Agreement. Each Applicable Partnership shall have the power and authority (but not the obligation) to permit any Person who becomes a limited partner in such Applicable Partnership to execute and deliver a joinder to this Agreement promptly upon acquisition of limited partnership interests in such Applicable Partnership by such Person, and such Person shall be treated as a “Partner” for all purposes of this Agreement.

Section 7.15    Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 7.16    Guarantee. PubCo hereby unconditionally, absolutely and irrevocably guarantees, as a principal and not as a surety, to each of the Partners the prompt and full performance and payment of the Corporation’s obligations, covenants, undertakings, and liabilities pursuant to this Agreement (the “Corporation Obligations”). Each Partner may seek remedies with respect to all Corporation Obligations directly from PubCo without first exhausting its remedies against the Corporation. PubCo waives presentment, demand and any other notice with respect to any of the Corporation Obligations and any defenses that PubCo may have with respect to any of the Corporation Obligations.

[Signature page follows]

 

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IN WITNESS WHEREOF, PubCo, the Corporation, the Applicable Partnerships, and the Partners have duly executed this Agreement as of the date first written above.

 

Blue Owl Capital Inc.
By:  

/s/ Tom Wasserman

Name:   Tom Wasserman
Title:   Chief Executive Officer
Blue Owl Capital GP LLC
By:  

/s/ Tom Wasserman

Name:   Tom Wasserman
Title:   Chief Executive Officer
Blue Owl Capital Holdings LP
By: Blue Owl Capital GP LLC
Its General Partner
By:  

/s/ Tom Wasserman

Name:   Tom Wasserman
Title:   Chief Executive Officer
Blue Owl Capital Carry LP
By: Blue Owl Capital GP LLC
Its General Partner
By:  

/s/ Tom Wasserman

Name:   Tom Wasserman
Title:   Chief Executive Officer
Dyal Capital SLP LP
By:  

/s/ Sean Ward

Name:   Sean Ward
Title:   Authorized Signatory

Signature Page to Tax Receivable Agreement


Dyal Capital SLP LP
By: NB Dyal Capital SLP GP, LLC
Its General Partner
By:  

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Authorized Signatory
NBSH Blue Investments, LLC
By:  

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Authorized Signatory
Owl Rock Capital Feeder LLC
By: Owl Rock Capital Partners LP
Its Managing Member
By: Owl Rock Capital Partners (GP) LLC
Its General Partner
By:  

/s/ Alan Kirshenbaum

Name:   Alan Kirshenbaum
Title:   Chief Operating Officer and
  Chief Financial Officer

Signature Page to Tax Receivable Agreement


CLASS A MEMBER

(in the case of any Electing Partner that is not a Blocker Representative)

– OR –

BLOCKER REPRESENTATIVE

(in the case of any Blocker making a Blocker Election):

 

    

    

    

    

Signature Page to Tax Receivable Agreement


Schedule I

[On file with the Company]

 

Sch. 1-1


Exhibit A

Form of Joinder

This Joinder Agreement (“Joinder Agreement”) is a joinder to the Tax Receivable Agreement, dated as of [●] (the “Agreement”), by and among Blue Owl Capital, Inc., a Delaware corporation (“PubCo”), Blue Owl Capital GP LLC, a Delaware limited liability company (the “Corporation”), Blue Owl Capital Holdings LP, a Delaware limited partnership (“Manager OP”), Blue Owl Capital Carry LP, a Delaware limited partnership (“Carry OP”), and each of the Partners (as defined therein) from time to time party thereto, as amended from time to time. Capitalized terms used but not defined in this Joinder Agreement shall have the meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflict-of-law principles that would cause the application of the laws of another jurisdiction. If there is a conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.

By signing and returning this Joinder Agreement to PubCo, the Corporation, Manager OP and Carry OP, the undersigned accepts and agrees to be bound by and subject to all of the terms and conditions of and a Partner contained in the Agreement, with all attendant rights, duties and obligations of a Partner thereunder. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by PubCo, the Corporation, Manager OP and Carry OP, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.

[Remainder of Page Intentionally Left Blank.]

 

A-1


IN WITNESS WHEREOF, the undersigned have caused this Joinder Agreement to be executed and delivered as of the date first set forth above.

 

[●]

 

Name:

[Title:]
Address for Notices:
Attention:

Signature Page to Tax Receivable Agreement

Exhibit 10.2

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (as Amended, this “Agreement”), dated as of May 19, 2021 (the “Effective Date”), is made by and among (a) Blue Owl Capital Inc., a Delaware corporation, formerly Altimar Acquisition Corporation, a Cayman Island exempted company (“PubCo”); (b) each of the Persons listed on the signature pages attached to this Agreement under the heading “ORC Sellers” (each, an “ORC Seller,” and collectively, the “ORC Sellers”), including (i) Owl Rock Capital Feeder, LLC, a Delaware limited liability company (“ORC Feeder”), (ii) Owl Rock Capital Partners LP, a Delaware limited partnership (“ORCP”), in its capacity as the ORC Principal Representative under this Agreement, and (iii) each of Doug Ostrover, Marc Lipschultz, Craig Packer and Alan Kirshenbaum (each, an “ORC Principal,” and collectively the “ORC Principals”); (c) each of the Persons listed on the signature pages attached to this Agreement under the heading “Dyal Sellers” (each, a “Dyal Seller,” and collectively, the “Dyal Sellers”), including (i) Neuberger Berman Group LLC, a Delaware limited liability company (“NB”), (ii) Dyal Capital SLP LP, a Delaware limited partnership (“Dyal SLP”), in its capacity as a Dyal Seller and in its capacity as the initial Dyal Principal Representative (as further defined below) under this Agreement, and (iii) each of Michael Rees, Sean Ward and Andrew Laurino (each, a “Dyal Principal,” and collectively the “Dyal Principals”); (d) Altimar Sponsor, LLC, a Delaware limited liability company (the “Sponsor”); and (e) each of Tom Wasserman, Vijay Sondhi, Roma Khanna, Rick Jelinek, Michael Vorhaus, Michael Rubenstein, Kevin Beebe, John Kim and Payne Brown (each, a “Sponsor Individual,” and collectively the “Sponsor Individuals,” and collectively with the Sponsor, each, a “Founder Holder,” and collectively, the “Founder Holders”). Each ORC Seller and each Dyal Seller may be referred to in this Agreement as a “Seller” and collectively as the “Sellers.” Each ORC Principal and each Dyal Principal may be referred to in this Agreement as a “Principal” and collectively as the “Principals.” Each of PubCo, the Sellers and the Founder Holders may be referred to in this Agreement as a “Party” and collectively as the “Parties”. Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings assigned to such terms in the BCA (as defined below).

RECITALS

WHEREAS, reference is made to the Business Combination Agreement, dated as of December 23, 2020, by and among PubCo, Owl Rock Capital Group LLC, a Delaware limited liability company (“ORC Group”), ORC Feeder, ORCP, and NB (as Amended, the “BCA”), in connection with the business combination (the “Business Combination”) set forth in the BCA;

WHEREAS, in accordance with the BCA, at the Closing, (a) the ORC Sellers collectively directly or indirectly (including by way of merger) contributed (i) the Opal Business to Blue Owl Capital Holdings LP, a Delaware limited partnership (“Blue Owl Holdings”) and to Blue Owl Capital Carry LP, a Delaware limited partnership (“Blue Owl Carry”), and received in exchange for such contribution cash, certain Blue Owl Holdings Common Units, certain Blue Owl Carry Common Units and/or certain Common Shares, as applicable, and (b) the Dyal Sellers collectively directly or indirectly (including by way of merger) contributed the Diamond Business to Blue Owl Holdings and Blue Owl Carry and received in exchange for such contribution cash, certain Blue Owl Holdings Common Units, certain Blue Owl Carry Common Units and/or certain Common Shares, as applicable;


WHEREAS, the Seller Earnout Shares and Seller Earnout Units will be earned by Sellers upon the satisfaction of the conditions set forth in the BCA;

WHEREAS, upon the consummation of the Business Combination, PubCo, Blue Owl Capital GP LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo (“Blue Owl GP”), the Sellers party thereto, and certain other parties thereto entered into, in each case dated as of the Effective Date, (x) the amended and restated limited partnership agreement of Blue Owl Holdings (as Amended, the “A&R Blue Owl Holdings LP Agreement”) and (y) the amended and restated limited partnership agreement of Blue Owl Carry (as Amended, the “A&R Blue Owl Carry LP Agreement”);

WHEREAS, holders of Blue Owl Holdings Common Units and Blue Owl Carry Common Units have the right to exchange a number of Blue Owl Holdings Common Units and Blue Owl Carry Common Units and cancel an equal number of Class C Shares or Class D Shares, as applicable, for Class A Shares or Class B Shares, as applicable, in the manner set forth in, and pursuant to the terms and conditions of, the Exchange Agreement, by and among PubCo, the Sellers party thereto, Blue Owl Holdings and Blue Owl Carry, dated as of the Effective Date (as Amended, the “Exchange Agreement”);

WHEREAS, in accordance with the Certificate of Incorporation, each outstanding share of Class F Common Stock, par value of $0.0001 per share, automatically converted into Class A Common Stock upon consummation of the Business Combination.

WHEREAS, PubCo, the Sponsor and the Sponsor Individuals entered into that certain Registration Rights Agreement, dated as of October 22, 2020 (the “Original RRA”);

WHEREAS, in connection with the execution of this Agreement, PubCo, the Sponsor and the Sponsor Individuals desire to terminate the Original RRA and replace it with this Agreement; and

WHEREAS, on the Effective Date, the Parties desire to set forth their agreement with respect to governance, registration rights and certain other matters, in each case in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, and intending to be legally bound, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1    Definitions. As used in this Agreement, the following terms shall have the following meanings:

A&R Blue Owl Carry LP Agreement” has the meaning set forth in the Recitals.

A&R Blue Owl Holdings LP Agreement” has the meaning set forth in the Recitals.

 

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Acceptance Notice” has the meaning given to such term in Section 2.3(f)(iii).

Action” has the meaning given to such term in Section 5.12(a).

Adverse Disclosure” means any public disclosure of material non-public information, which information PubCo has a bona fide business purpose (including confidentiality obligations) for not making such information public, and which disclosure, in the good faith determination of the Board, after consultation with counsel to PubCo, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any Prospectus and any preliminary Prospectus, in the light of the circumstances under which they were made) not misleading, and (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) PubCo has a bona fide business purpose for not making such information public.

Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member or otherwise. Notwithstanding the foregoing, (i) no Party shall be deemed an Affiliate of PubCo or any of its Subsidiaries for purposes of this Agreement, and (ii) no private fund (or similar vehicle) or business development company, or any other accounts, funds, vehicles or other client advised or sub-advised by any Party or any such Party’s Affiliates or any portfolio companies thereof shall be deemed to be an Affiliate of such Party (it being agreed that this Agreement shall not apply to, or be binding on, any Persons described in this clause (ii)).

Agreement” has the meaning set forth in the Preamble.

Allotment” means, as of any time of determination, the aggregate Economic Ownership Percentage of NB and its Permitted Transferees.

Amended” with respect to any agreement, certificate or other instrument means amended, restated, supplemented, amended and restated, waived or otherwise modified from time to time, directly or indirectly (including, in the case of a certificate of incorporation, bylaws, limited liability company agreement or limited partnership agreement, by way of merger), in accordance with the terms of such agreement, certificate or other instrument. “Amend,” “Amending” and “Amendment” shall have correlative meanings.

Automatic Shelf Registration Statement” has the meaning set forth in Rule 405 promulgated by the SEC pursuant to the Securities Act.

BCA” has the meaning set forth in the Recitals.

Beneficially Own” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

Blue Owl Carry” has the meaning set forth in the Recitals.

 

3


Blue Owl Carry Common Units” means Common Units (as defined in the A&R Blue Owl Carry LP Agreement) owned by one or more of the Sellers or any of their Permitted Transferees.

Blue Owl Holdings” has the meaning set forth in the Recitals.

Blue Owl Holdings Common Units” means Common Units (as defined in the A&R Blue Owl Holdings LP Agreement) owned by one or more of the Sellers or any of their Permitted Transferees.

Board” means the board of directors of PubCo.

Business Combination” has the meaning set forth in the Recitals.

Bylaws” means the Buyer Bylaws, as Amended.

Cause” has the meaning given to such term in Section 2.1(f)(ii) and Section 2.1(f)(iii), as applicable.

Certificate of Incorporation” means the Buyer Certificate of Incorporation, as Amended.

Class A Common Stock” means, the Class A common stock, par value $0.0001 per share, of PubCo, including (a) any shares of such Class A common stock issuable upon the exercise of any warrant or other right to acquire shares of such Class A common stock and (b) any Equity Securities of PubCo that are issued or distributed or may be issuable with respect to such Class A common stock by way of conversion, dividend, stock split or other distribution, consolidation, merger, exchange, reclassification, recapitalization or other similar transaction.

Class A Shares” means shares of the Class A Common Stock.

Class B Common Stock” means, the Class B common stock, par value $0.0001 per share, of PubCo, including (a) any shares of such Class B common stock issuable upon the exercise of any warrant or other right to acquire shares of such Class B common stock and (b) any Equity Securities of PubCo that are issued or distributed or may be issuable with respect to such Class B common stock by way of conversion, dividend, stock split or other distribution, consolidation, merger, exchange, reclassification, recapitalization or other similar transaction.

Class B Shares” means shares of the Class B Common Stock.

Class C Common Stock” means, the Class C common stock, par value $0.0001 per share, of PubCo, including (a) any shares of such Class C common stock issuable upon the exercise of any warrant or other right to acquire shares of such Class C common stock and (b) any Equity Securities of PubCo that are issued or distributed or may be issuable with respect to such Class C common stock by way of conversion, dividend, stock split or other distribution, consolidation, merger, exchange, reclassification, recapitalization or other similar transaction.

Class C Shares” means shares of the Class C Common Stock.

 

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Class D Common Stock” means, the Class D common stock, par value $0.0001 per share, of PubCo, including (a) any shares of such Class D common stock issuable upon the exercise of any warrant or other right to acquire shares of such Class D common stock and (b) any Equity Securities of PubCo that are issued or distributed or may be issuable with respect to such Class D common stock by way of conversion, dividend, stock split or other distribution, consolidation, merger, exchange, reclassification, recapitalization or other similar transaction.

Class D Shares” means shares of the Class D Common Stock.

Class E Common Stock” means, the Class E common stock, par value $0.0001 per share, of PubCo, including (a) any shares of such Class E common stock issuable upon the exercise of any warrant or other right to acquire shares of such Class E common stock and (b) any Equity Securities of PubCo that are issued or distributed or may be issuable with respect to such Class E common stock by way of conversion, dividend, stock split or other distribution, consolidation, merger, exchange, reclassification, recapitalization or other similar transaction. When used herein, Class E Common Stock consists of Series E-1 Common Stock and Series E-2 Common Stock.

Class E Shares” means shares of the Class E Common Stock.

Common Shares” means shares of Common Stock.

Common Stock” means the Class A Common Stock, the Class B Common Stock, the Class C Common Stock, the Class D Common Stock and the Class E Common Stock.

Confidential Information” has the meaning set forth in Section 2.5(d).

Controlled Company Eligible” has the meaning set forth in Section 2.1(b).

Demanding Holders” has the meaning set forth in Section 3.1(d)(i).

Director” has the meaning set forth in Section 2.1(a).

Dyal Director” has the meaning set forth in Section 2.1(a).

Dyal Principal Representative” means Dyal SLP, or such other Person who is identified as the replacement Dyal Principal Representative by the Dyal Principals giving prior written notice to PubCo. Notwithstanding the foregoing, (x) no Person shall be eligible to be the Dyal Principal Representative if such Person has previously committed Cause and (y) if any Person then-serving as the Dyal Principal Representative commits Cause, such Person shall be automatically removed as the Dyal Principal Representative subject to replacement by the Dyal Principals by written notice to PubCo.

Dyal Principals” has the meaning set forth in the Preamble.

Dyal Sellers” has the meaning set forth in the Preamble.

Dyal SLP” has the meaning set forth in the Preamble.

 

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Dyal SLP Aggregator” means one or more of the entities by which Registrable Securities (as defined below) are held on behalf of the limited partners of Dyal SLP, including Dyal SLP.

Dyal SLP Aggregator Subject Members” means the holders of equity interests of any Dyal SLP Aggregator to whom such Dyal SLP Aggregator distributes any Equity Securities of PubCo, and their Permitted Transferees.

EBITDA” means with respect to any Person, net income of such Person plus to the extent reducing such net income, interest expense, income taxes, depreciation expense and amortization expense, as adjusted for extraordinary or non-recurring items, in each case determined on a consolidated basis. The relevant component parts of EBITDA of PubCo shall be determined from PubCo’s financial statement.

Economic Ownership Percentage” means, as of any time of determination with respect to any Person, the percentage that the aggregate number of Economic Shares Beneficially Owned by such Person as of such time bears to the fully-diluted aggregate number of Economic Shares then issued and outstanding (assuming for this purpose that immediately prior to such determination an Exchange of all then-outstanding Blue Owl Holdings Units and Blue Owl Carry Units was consummated). For the avoidance of doubt, the Economic Ownership Percentage shall be calculated without regard to any outstanding Seller Earnout Units unless and until such units are earned in accordance with the terms of the BCA, the A&R Blue Owl Holdings LP Agreement and the A&R Blue Owl Carry LP Agreement.

Economic Shares” means the Class A Shares and the Class B Shares.

Effective Date” has the meaning set forth in the Preamble.

Equity Securities” means, with respect to any Person, all of the shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), restricted stock awards, restricted stock units, equity appreciation rights, phantom equity rights, profit participation and all of the other ownership or profit interests of such Person (including partnership or member interests therein), whether voting or nonvoting. When used in this Agreement with respect to PubCo, “Equity Securities” shall include the Common Stock, any Preferred Stock, Blue Owl Holdings Common Units and Blue Owl Carry Common Units.

Exchange” has the meaning given to such term in the Exchange Agreement.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto, as the same shall be in effect from time to time.

Exchange Agreement” has the meaning set forth in the Recitals.

Excluded Matters” has the meaning set forth in Section 2.4(a).

 

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Excluded Securities” means any Equity Securities issued by PubCo or any of its Subsidiaries: (a) as a result of any stock split or stock dividend of such Equity Securities; (b) by reason of a dividend or distribution on any Equity Securities; (c) upon the exercise, exchange or conversion of any securities (including options and warrants) exchangeable for (including pursuant to an Exchange) or convertible into any Equity Securities; (d) pursuant to a bona fide underwritten public offering for cash; (e) without limiting Section 2.3(a)(ii), in accordance with any employee equity incentive plan or, without limiting Section 2.3(b), constituting carried interest in or capital commitments to any private fund (or similar vehicle) sponsored by PubCo or any of its Subsidiaries; (f) to a third party that is not a Related Party (or, to the extent the portion issuable to Related Parties in connection with any such issuance because of a bona fide economic participation by such Related Party prior to such acquisition does not exceed 10%, to Related Parties and such Related Parties do not control such third party) as consideration in connection with an arm’s length acquisition of assets or Equity Securities; (g) to banks or other financial institutions that are not Related Parties in connection with any arm’s length debt financing transaction; (h) that are Specified Equity; (i) in the case of Equity Securities of a wholly owned Subsidiary of PubCo, to PubCo or another wholly owned Subsidiary of PubCo; (j) Class C Common Stock or Class D Common Stock issued to a holder of Seller Earnout Units upon the occurrence of a Triggering Event with respect thereto; or (k) restricted units for Class A Shares, and Class A Shares issued in respect thereof, issued in settlement of Opal Special Liabilities.

Executive Committee has the meaning set forth in Section 2.4(a).

Exercise Period” has the meaning set forth in Section 2.3(f)(iii).

Family Member,” with respect to any Person who is an individual, means;

(a)    such Person’s spouse, former spouse, ancestors and descendants (whether natural or adopted), parents and their descendants and any spouse of the foregoing persons (collectively, “relatives”);

(b)    any trust, family partnership or estate- or tax-planning vehicle the sole economic beneficiaries of which are such Person or such Person’s relatives;

(c)    the trustee, fiduciary, executor or personal representative of such Person with respect to any entity described in the immediately preceding clause (b); or

(d)    any limited partnership, limited liability company, corporation or other entity the governing instruments of which provide that such Person (or such Person’s relatives or executor) shall have the power to direct the management and policies of such entity and of which the sole owners of partnership interests, membership interests or any other equity interests are, and will remain, limited to such Person and such Person’s relatives.

FINRA” means the Financial Industry Regulatory Authority, Inc.

Form S-1 Shelf” has the meaning set forth in Section 3.1(a)(i).

Form S-3 Shelf” has the meaning set forth in Section 3.1(a)(i).

 

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Founder Holder” has the meaning set forth in the Preamble.

Holder” means any holder of Registrable Securities who is a Party to, or who succeeds to rights under, this Agreement pursuant to Section 5.1.

Holder Indemnitees” has the meaning set forth in Section 5.12(a).

Holder Information” has the meaning set forth in Section 3.10(b).

Indemnified Liabilities” has the meaning set forth in Section 5.12(a).

Independent Director” has the meaning set forth in Section 2.1(a).

Issuance Notice” has the meaning set forth in Section 2.3(f)(ii).

Key Individuals” means Doug Ostrover, Marc Lipschultz and Michael Rees.

Lock-Up Period” means:

(a)    with respect to any Lock-Up Shares held by any Qualified Stockholder:

(i)    with respect to any Lock-Up Shares of such Qualified Stockholder that are not Class E Shares, the period commencing on the Effective Date and continuing until the date that is 24 months following the Effective Date; and

(ii)    with respect to any Class E Shares of such Qualified Stockholder, the period commencing on the Effective Date and continuing until the later of (A) the occurrence of a Triggering Event for such Class E Shares (at which time such Class E Shares shall automatically be converted into Class A Shares in accordance with the Certificate of Incorporation) and (B) the date that is 24 months following the Effective Date;

(b)    with respect to any Lock-Up Shares held by the Founder Holders and any of their respective Permitted Transferees, the period commencing on the Effective Date and continuing until the date that is 12 months following the Effective Date; and

(c)    with respect to any Lock-Up Shares held by any Party other than those described in clause (a) or clause (b) above (including, for the avoidance of doubt, NB and its Permitted Transferees):

(i)    with respect to any Lock-Up Shares that are not Class E Shares, the period commencing on the Effective Date and continuing until the date that is 6 months following the Effective Date; and

(ii)    with respect to any Class E Shares, the period commencing on the Effective Date and continuing until the later of (A) the occurrence of a Triggering Event for such Class E Shares (at which time such Class E Shares shall automatically be converted into Class A Shares in accordance with the Certificate of Incorporation) and (B) the date that is 6 months following the Effective Date.

 

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Notwithstanding the foregoing, it is acknowledged and agreed that 40% of ORC Feeder is owned by fund entities of the Dyal Capital Partners IV vintage (“Dyal IV”) and it is intended that its indirect ownership interest in the Equity Securities of PubCo is, relative to the restrictions on Transfer hereunder, to be treated in the same manner as the other Lock-Up Shares referenced in this clause (c) and the Lock-Up Period applicable to 40% of the Lock-Up Shares held by ORC Feeder that are attributable to Dyal IV shall be the period described in this clause (c) and no transfer of such Lock-Up Shares in compliance with this clause (c) shall be deemed a violation hereof.

Lock-Up Shares” means (a) any Common Shares and (b) any other Equity Securities in PubCo held by the Holders, directly or indirectly, as of the Effective Date (or, for the avoidance of doubt, upon the Exchange).

Major Holder” means, as of any time of determination, any Holder that either (a) has an Economic Ownership Percentage of five percent or more or (b) has a Voting Power Percentage of five percent or more.

Maximum Number of Securities” has the meaning set forth in Section 3.1(e)(i).

Minimum Takedown Threshold” has the meaning set forth in Section 3.1(d)(iv).

Misstatement” means an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus, in the light of the circumstances under which they were made, not misleading.

NB” has the meaning set forth in the recitals.

NB Aggregator” means one or more entities by which NB holds Registrable Securities on behalf of its partners.

NB Aggregator Subject Members” means the holders of equity interests of any NB Aggregator to whom such NB Aggregator distributes any Equity Securities of PubCo and their Permitted Transferees.

NB Director” has the meaning set forth in Section 2.1(a).

NB First Ownership Threshold” has the meaning set forth in Section 2.1(c).

NB Retained Percentage” means, as of any time of determination, the percentage that (a) the aggregate number of Class A Shares Beneficially Owned by NB and its Permitted Transferees as of such time (assuming for this purpose that, immediately prior to such determination, an Exchange of all then-outstanding Blue Owl Holdings Units and Blue Owl Carry Units was consummated) bears to (b) the aggregate number of Class A Shares Beneficially Owned by NB and its Permitted Transferees as of immediately following the Closing (assuming for this purpose

 

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that, prior to the determination under this clause (b), in connection with the Closing an Exchange of all then-outstanding Blue Owl Holdings Units and Blue Owl Carry Units was consummated). For the avoidance of doubt, the NB Retained Percentage shall be calculated without regard to any outstanding Seller Earnout Units unless and until such units are earned in accordance with the terms of the BCA, the A&R Blue Owl Holdings LP Agreement and the A&R Blue Owl Carry LP Agreement, upon which time such units shall be deemed to have been outstanding as of immediately following the Closing.

NB Second Ownership Threshold” has the meaning set forth in Section 2.3(b).

Necessary Action” means, with respect to any Party and a specified result, all actions (to the extent such actions are not prohibited by applicable Law and within such Party’s control, and in the case of any action that requires a vote or other action on the part of the Board to the extent such action is consistent with fiduciary duties that PubCo’s directors may have in such capacity) necessary to cause such result, including (a) calling special meetings of stockholders, (b) voting or providing a written consent or proxy, if applicable in each case, with respect to Common Shares, (c) causing the adoption of stockholders’ resolutions and amendments to the Organizational Documents, (d) executing agreements and instruments, (e) making, or causing to be made, with Governmental Entities, all filings, registrations or similar actions that are required to achieve such result, and (f) nominating certain Persons for election to the Board in connection with the annual or special meeting of stockholders of PubCo.

Non-Reserved Carry” means up to 85% of the carried interest or fees in lieu thereof of any fund established or advised by Blue Owl Holdings or Blue Owl Carry.

Operating Budget” has the meaning set forth in Section 2.4(c)(iv).

ORC Director” has the meaning set forth in Section 2.1(a).

ORC Feeder” has the meaning set forth in the Preamble.

ORC Group” has the meaning set forth in the Recitals.

ORC Principal Representative” means ORCP, or such other Person who is identified as the replacement ORC Principal Representative by the ORC Principals by prior written notice to PubCo. Notwithstanding the foregoing, (x) no Person shall be eligible to be the ORC Principal Representative if such Person has previously committed Cause and (y) if any Person then-serving as the ORC Principal Representative commits Cause, such Person shall be automatically removed as the ORC Principal Representative subject to replacement by the ORC Principals by written notice to PubCo.

ORC Principals” has the meaning set forth in the Preamble.

ORC Sellers” has the meaning set forth in the Preamble.

ORCP” has the meaning set forth in the Preamble.

Organizational Documents” means the Certificate of Incorporation and the Bylaws.

 

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Original RRA” has the meaning set forth in the Recitals.

Party” has the meaning set forth in the Preamble.

Permitted Transfer” means any Transfer that is (a) a transfer of any Common Shares made to a Permitted Transferee of the transferor upon prior written notice to (1) PubCo and (2) (x) if the transferor is an ORC Seller, the Dyal Principal Representative, NB and the Sponsor, (y) if the transferor is a Dyal Seller, the ORC Principal Representative, NB and the Sponsor, or (z) if the transferor is the Sponsor, the ORC Principal Representative, the Dyal Principal Representative and NB, (b) a transfer of shares of Common Shares to the Corporation in accordance with Section 5.1(b) of the Certificate of Incorporation, (c) a transfer of Class E Shares to the Corporation in accordance with Section 4.3(i) of the Certificate of Incorporation (d) pursuant to a Registration Statement in accordance with Article III hereof, but only after expiration of the applicable Lock-Up Period or (e) made pursuant to any liquidation, merger, stock exchange or other similar transaction subsequent to the Business Combination which results in all of PubCo’s stockholders exchanging or having the right to exchange their Common Shares for cash, securities or other property.

Permitted Transferee” means (a) with respect to any Person, (i) any Family Member of such Person, (ii) any Affiliate of such Person, (iii) any Affiliate of any Family Member of such Person, or (iv) if such Person is a natural person, (A) by virtue of laws of descent and distribution upon death of such individual or (B) in accordance with a qualified domestic relations order, and (b) with respect to any Qualified Stockholder, (i) the Persons referred to in clause (a) with respect to such Qualified Stockholder and (ii) any Qualified Transferee of such Qualified Stockholder. Notwithstanding anything to the contrary herein, (x) Permitted Transferees of NB or any NB Aggregator shall be deemed to include NB Aggregator Subject Members and their Permitted Transferees, and (y) Permitted Transferees of Dyal SLP and Dyal SLP Aggregator shall be deemed to include Dyal SLP Aggregator Subject Members and their Permitted Transferees.

Person” means an individual, a sole proprietorship, a corporation, a partnership, limited liability company, a limited partnership, a joint venture, an association, a trust, or any other entity or organization, including a government or a political subdivision, agency or instrumentality thereof.

Piggyback Registration” has the meaning set forth in Section 3.2(a)(i).

Preemptive Securities” means any Equity Securities issued by PubCo or any of its Subsidiaries that are not Excluded Securities.

Preferred Shares” means any shares of Preferred Stock.

Preferred Stock” means any series of Preferred Stock of PubCo designated in accordance with Section 4.2(a) of the Certificate of Incorporation.

Principals” has the meaning set forth in the Preamble.

Promote Distributions” means any direct or indirect distributions, payments, allocations or accruals in respect of any carried interest, incentive fees, promoted interest, performance fee or

 

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similar rights of participation or profit-sharing (net of any applicable expenses, deductions or withholdings borne pro rata by all recipients of such Promote Distributions, as determined by PubCo and its applicable subsidiaries) with respect to the earnings, increases in net asset value, profits or gains generated in respect of (i) any PubCo Funds or their respective Subsidiaries or (ii) to the extent not constituting management, advisory, closing fees, investment banking fees, placement fees, commitment fees, breakup fees, litigation proceeds from transactions not consummated, monitoring fees, consulting fees, directors’ fees or similar fees to any of the foregoing or proceeds in respect of capital invested by and on behalf of Persons other than PubCo or its Subsidiaries, any other existing and future advisory clients of PubCo and its Subsidiaries, whether private credit strategies, technology strategy and business development companies and excluding, for these purposes, performance-based fees on business development companies (i.e., Part I/A).

Prospectus” means the prospectus included in any Registration Statement, all amendments (including post-effective amendments) and supplements to such prospectus, and all exhibits to and materials incorporated by reference in such prospectus.

PubCo” has the meaning set forth in the Preamble.

PubCo Funds” means any investment fund, limited partnership, limited liability company, corporation or other similar collective vehicle, separately managed account, fund-of-one, co-investment vehicle, acquisition vehicle (including special purpose acquisition vehicles) or similar contractual arrangement, whether in existence as of the date hereof or hereafter, in each case for which PubCo or any of its Subsidiaries, acts, directly or indirectly, as general partner, manager, managing member, or in a similar capacity.

Qualified Stockholder” has the meaning given to such term in the Certificate of Incorporation.

Qualified Transferee” has the meaning given to such term in the Certificate of Incorporation.

Registrable Securities” means at any time (a) any Economic Shares (including Economic Shares issuable upon an Exchange in accordance with the Exchange Agreement), (b) any Warrants or any Economic Shares issued or issuable upon the exercise thereof, and (c) any Equity Securities of PubCo or any Subsidiary of PubCo that may be issued or distributed or be issuable with respect to the securities referred to in clauses (a) or (b) by way of conversion, dividend, stock split or other distribution, merger, consolidation, exchange, recapitalization or reclassification or similar transaction, in each case held by a Holder, other than any security received pursuant to an incentive plan adopted by PubCo on or after the Effective Date. Notwithstanding the foregoing, any Equity Securities shall cease to be Registrable Securities to the extent (A) a Registration Statement with respect to the sale of such Registrable Securities has become effective under the Securities Act and such Registrable Securities have been sold, transferred, disposed of or exchanged in accordance with the plan of distribution set forth in such Registration Statement, (B) such Registrable Securities shall have ceased to be outstanding, (C) such Registrable Securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction, or (D) (i) for purposes of Article III of this Agreement, the Holder thereof, together

 

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with its, his or her Permitted Transferees, Beneficially Owns less than one percent of the Economic Shares that are outstanding at such time and (ii) such Economic Shares are eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to be provided by counsel to PubCo to such effect, addressed, delivered and acceptable to PubCo’s transfer agent and the affected Holder (which opinion may assume that such Holder (and any predecessor holder of such Economic Shares) is not, and has not been at any time during the 90 days immediately before the date of such opinion, an Affiliate of PubCo except with respect to any control determined to be established under this Agreement), as reasonably determined by PubCo, upon the advice of counsel to PubCo. For purposes hereof, other than with respect to options and other equity compensation awards, a Person shall be deemed a holder of Registrable Securities whenever such Person has the right to acquire such Registrable Securities (upon conversion or exchange or otherwise), whether or not such acquisition has actually been effected and whether or not presently exercisable. For the avoidance of doubt, holders of Blue Owl Holdings Common Units and Blue Owl Carry Common Units shall be deemed holders of Registrable Securities.

Registration” means a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement, prospectus or similar document in compliance with the requirements of the Securities Act, and such registration statement being declared effective by the SEC.

Registration Expenses” means the following expenses of a Registration pursuant to the terms of this Agreement (without duplication): (a) all SEC or securities exchange registration and filing fees (including fees with respect to filings required to be made with FINRA); (b) all fees and expenses of compliance with securities or blue sky Laws (including fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities); (c) all printing, messenger, telephone and delivery expenses; (d) all fees and disbursements of counsel for PubCo; (e) all fees and disbursements of all independent registered public accountants of PubCo incurred in connection with such Registration or Transfer, including the expenses of any special audits and/or comfort letters required or incident to such performance and compliance; (f) reasonable out-of-pocket fees and expenses of one (1) legal counsel selected by the majority of the Voting Power Percentages of the Holders participating in such Registration, and one (1) legal counsel selected by NB to the extent participating in such Registration; (g) the costs and expenses of PubCo relating to analyst and investor presentations or any “road show” undertaken in connection with the Registration and/or marketing of the Registrable Securities (including the expenses of the Special Holders); and (h) any other fees and disbursements customarily paid by the issuers of securities.

Registration Statement” means any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

Related Party” means PubCo or any of its Subsidiaries, any Principal, any Major Holder or any Affiliate or Permitted Transferee of the foregoing.

 

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Representatives” means, with respect to any Person, any of such Person’s officers, directors, managers, members, equityholders, employees, agents, attorneys, accountants, actuaries, consultants, or financial advisors or other Person acting on behalf of such Person.

Requesting Holder” means any Special Holder requesting piggyback rights pursuant to Section 3.2 with respect to an Underwritten Shelf Takedown.

Restricted Transfer” means any Transfer other than a Permitted Transfer.

SEC” means the United States Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended, and any successor thereto, as the same shall be in effect from time to time.

Sellers” has the meaning set forth in the Preamble.

Shelf” has the meaning set forth in Section 3.1(a)(i).

Shelf Registration” means a registration of securities pursuant to a Registration Statement filed with the SEC in accordance with and pursuant to Rule 415 promulgated under the Securities Act.

Shelf Takedown” means an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.

Special Executive Committee Approval” has the meaning set forth in Section 2.4(c).

Special Holder” means each of NB (acting on behalf of itself or on behalf of any NB Aggregator and any NB Aggregator Subject Members), the ORC Principals, the Dyal Principals, Dyal SLP and any other Dyal SLP Aggregator (acting on behalf of itself or on behalf of any Dyal Aggregator Subject Members).

Special Majority Board Approval” has the meaning set forth in Section 2.2.

Specified Equity” means any Equity Securities or contractual rights (including revenue and profit shares or participations) granted or issued by (i) any Subsidiary of PubCo, (ii) any PubCo Fund or (iii) any Subsidiary of Opal Employee Carry or Blue Opal Carry Sub (or, in each case, any successors thereto) to or for the benefit of any Person (other than, directly or indirectly, to a Key Individual or his Affiliates or (solely in the case of the immediately following clauses (a) and (c)) any employee, manager or officer of PubCo or any of its Subsidiaries or his or her Affiliates) (a) as a rebate or incentive to a third party investor that is not a Related Party making a capital commitment in any fund, business development company or account sponsored or managed by PubCo or any of its Subsidiaries, including a seed or foundation investor, (b) to new hires or reassigned employees who are primarily dedicated to a new business line not previously engaged in by PubCo or its Subsidiaries (and, with respect to any reassigned employees, for which a replacement hire is made for such Person’s former position within a reasonable period of time) (it being agreed that for the purposes of this clause (b), Specified Equity may not include Equity Securities or contractual rights issued or granted by Blue Owl Holdings or Blue Owl Carry, and

 

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shall be limited to Equity Securities or contractual rights issued or granted by the Subsidiary or Subsidiaries of Blue Owl Holdings or Blue Owl Carry engaging in the applicable new business line), or (c) to a third party that is not a Related Party in connection with a bona fide arm’s length joint venture or bona fide arm’s length arrangement with a third party service provider.

Sponsor” has the meaning set forth in the Preamble.

Sponsor Individual” has the meaning set forth in the Preamble.

Subject Investment” has the meaning set forth in Section 2.3(a)(v).

Subject Issuance” has the meaning set forth in Section 2.3(f)(ii).

Subject Target” has the meaning set forth in Section 2.3(e).

Subsequent Shelf Registration Statement” has the meaning set forth in Section 3.1(b)(i).

Subsidiary” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) Beneficially Owns, either directly or indirectly, at least 50% of (i) the total combined economic equity interests of such entity or (ii) the total combined voting power of all classes of voting securities of such entity (including by such Person’s direct or indirect control of the general partner, manager, managing member or similar governing body of such entity, as applicable); or (b) otherwise has the power to vote or to direct the voting of sufficient securities to elect a majority of the board of directors, board of managers or similar governing body of such entity, or otherwise control such entity. Notwithstanding the foregoing, for purposes of this Agreement, “Subsidiary” shall not include any private fund (or similar vehicle) or a business development company, or any other accounts, funds, vehicles or other client advised or sub-advised by such first Person or any portfolio companies thereof. The Parties acknowledge and agree that, as of the Closing, Blue Owl Holdings, Blue Owl Carry and their respective Subsidiaries are Subsidiaries of PubCo.

Transfer” means, when used as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition by the Transferor (whether by operation of law or otherwise) and, when used as a verb, the Transferor voluntarily or involuntarily, transfers, sells, pledges or hypothecates or otherwise disposes of (whether by operation of law or otherwise), including, in each case, (a) the establishment or increase of a put equivalent position or liquidation with respect to, or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security or (b) entry into any swap or other arrangement that transfers to another Person, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise. A Transfer shall be deemed to include any indirect voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition that is effectuated for the purpose of circumventing the restrictions on Transfer set forth in Article IV. The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.

Triggering Event” has the meaning given to such term in the Certificate of Incorporation.

 

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Underwriter” means any investment banker(s) and manager(s) appointed to administer the offering of any Registrable Securities as principal in an Underwritten Offering.

Underwritten Offering” means a Registration in which securities of PubCo are sold to an Underwriter for distribution to the public.

Underwritten Shelf Takedown” has the meaning set forth in Section 3.1(d)(i).

Vote Required Securities” means any Preemptive Securities that would require a vote of all or any of the holders of Common Shares or Preferred Shares in order to be issued by PubCo or any Subsidiary.

Voting Power Percentage” means, as of any time of determination with respect to any Person, the percentage that the voting power of the Equity Securities of PubCo Beneficially Owned by such Person bears as of such time to the voting power of all of the fully-diluted issued and outstanding Equity Securities of PubCo as of such time. Notwithstanding the foregoing, the “Voting Power Percentage” of any Person with respect to any specific matter to be approved by the owners of Equity Securities of PubCo shall be determined solely in reference to the Equity Securities entitled to vote on the matter in question.

Warrants” means the “Existing Buyer Public Warrants” as defined in the BCA.

Well-Known Seasoned Issuer” has the meaning set forth in Rule 405 promulgated by the SEC pursuant to the Securities Act.

Withdrawal Notice” has the meaning set forth in Section 3.1(f).

Section 1.2    Interpretive Provisions. For all purposes of this Agreement, except as otherwise provided in this Agreement or unless the context otherwise requires:

(a)    the singular shall include the plural, and the plural shall include the singular, unless the context clearly prohibits that construction;

(b)    references in this Agreement to any Law shall be deemed also to refer to such Law as Amended and all rules and regulations promulgated thereunder;

(c)    whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be immediately followed by the words “without limitation;”

(d)    the captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement;

(e)    pronouns of any gender or neuter shall include, as appropriate, the other pronoun forms;

 

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(f)    the word “or” shall be construed to mean “and/or” and the words “neither,” “nor,” “any,” “either” and “or” shall not be exclusive, unless the context clearly prohibits that construction; and

(g)    the phrase “to the extent” shall be construed to mean “the degree by which.”

ARTICLE II

GOVERNANCE

Section 2.1    Board of Directors.

(a)    Initial Composition of the Board. PubCo shall, and each of the Sellers and the Sponsor (severally, and not jointly) agrees with PubCo that he, she or it shall, take all Necessary Action to cause the Board to be comprised at Closing of nine directors (each, a “Director”), (v) three of whom have been nominated by the ORC Principal Representative (each, an “ORC Director”), initially Doug Ostrover, Marc Lipschultz and Craig W. Packer, (w) two of whom have been nominated by the Dyal Principal Representative (each, a “Dyal Director”), initially Michael Rees and Sean Ward, (x) one of whom has been nominated by NB, initially Andrew S. Komaroff, (the “NB Director”), and (y) three of whom meet the independence requirements of the New York Stock Exchange and have initially been nominated by majority vote of the Key Individuals (each, an “Independent Director”), initially Stacy Polley, Dana Weeks, and Claudia Holz; such foregoing Directors to be divided into three classes of Directors, with each class serving for staggered three year-terms as follows:

(i)    the “Class I Directors” shall include: one ORC Director (initially Sean Ward), one Dyal Director (initially Andrew S. Komaroff) and one Independent Director (initially Dana Weeks);

(ii)    the “Class II Directors” shall include: one ORC Director (initially Marc Lipschultz), one Dyal Director (initially Michael Rees) and one Independent Director (initially Claudia Holtz); and

(iii)    the “Class III Directors” shall include: one ORC Director (initially Doug Ostrover), one NB Director (initially Andrew S. Komaroff) and one Independent Director (initially Stacy Polley).

The initial term of the Class I Directors shall expire immediately following PubCo’s 2022 annual meeting of stockholders at which Directors are elected. The initial term of the Class II Directors shall expire immediately following PubCo’s 2023 annual meeting of stockholders at which Directors are elected. The initial term of the Class III Directors shall expire immediately following PubCo’s 2024 annual meeting of stockholders at which Directors are elected.

After the Closing, the total number of Directors and rights to designate individuals for nomination shall be determined in accordance with the Organizational Documents and this Agreement.

 

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(b)    Composition of the Board.

(i)    For so long as (A) the Principals and their Permitted Transferees, either individually or as a group (as such term is construed in accordance with the Exchange Act), have a Voting Power Percentage in respect of the Equity Securities of PubCo entitled to vote in the election of Directors of greater than 50% and (B) PubCo qualifies as a controlled company under applicable rules of the securities exchange on which PubCo’s Equity Securities are listed (clause (A) together with clause (B), “Controlled Company Eligible”), subject to Section 2.1(b)(ii), PubCo shall take all Necessary Action to include in the slate of nominees recommended by the Board for election as Directors at each applicable annual or special meeting of stockholders at which Directors are to be elected, (x) at any annual meeting following which the term of the Class I Directors is expiring, not less than one individual designated by the ORC Representative and not less than one individual designated by the Dyal Representative, (y) at any annual meeting following which the term of the Class II Directors is expiring, not less than one individual designated by the ORC Representative and not less than one individual designated by the Dyal Representative, and (z) at any annual meeting following which the term of the Class III Directors is expiring, not less than one individual designated by the ORC Representative.

(ii)    If, for any reason, the ORC Principal Representative is not entitled to designate such number of Directors as determined in accordance with Section 2.1(b), the Dyal Principal Representative is not entitled to designate such number of Directors as determined in accordance with Section 2.1(b), or PubCo is not entitled to nominate such number of Directors so designated by the ORC Principal Representative or the Dyal Principal Representative, as applicable, in each case without violating the applicable rules of the securities exchange on which PubCo’s Equity Securities are listed, the number of Directors that may be designated by the ORC Principal Representative and the Dyal Principal Representative shall be determined as follows:

(A)    For as long as PubCo remains Controlled Company Eligible, the total number of Directors that may be designated by the ORC Principal Representative and the Dyal Principal Representative (taken together) and nominated by PubCo shall be the maximum number as may be so designated and nominated by PubCo without causing such violation. To the extent that the total number of Directors determined in accordance with the prior sentence is less than five, (x) such total number shall be apportioned between the ORC Principal Representative and the Dyal Principal Representative proportionately in respect of the voting power of the Equity Securities of PubCo entitled to vote in the election of Directors Beneficially Owned by the ORC Principals (and their Permitted Transferees) and the Dyal Principals (and their Permitted Transferees), respectively, with any ties or rounding being determined in favor of the ORC Principal Representative, (y) the ORC Principal Representative and the Dyal Representatives shall take all Necessary Action to cause the appropriate

 

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number of ORC Directors or Dyal Directors, as applicable in order to apportion the total number and respective numbers between the ORC Principal Representative and the Dyal Principal Representative determined in accordance with the preceding sentence, to offer to tender their resignation at least 60 days prior to the expected date of PubCo’s next annual meeting of stockholders (which resignation, for the avoidance of doubt, may be made effective as of the last day of the term of such Director), and (z) the ORC Principal Representative and the Dyal Principal Representative shall designate such individuals for nomination to serve as Directors (and PubCo shall take all Necessary Action to include in the slate of nominees recommended by the Board for election as Directors at the next annual meeting of stockholders) as may be necessary to comply with the foregoing clause (x).

(B)    From and after such time as PubCo is no longer Controlled Company Eligible, the total number of Directors that may be designated by the ORC Principal Representative and the Dyal Principal Representative (taken together) and nominated by PubCo shall be a number of individuals that, if elected, will result in the such designated Directors representing as nearly as possible (with the number of designated Directors under this Section 2.1(b)(ii)(B) being rounded up to the nearest whole number) the same proportion of the total members of the Board as the Voting Power Percentage of the Principals and their Permitted Transferees with respect to the election of Directors. If this applies, such total number shall be apportioned between the ORC Principal Representative and the Dyal Principal Representative proportionately in respect of the relative Voting Power Percentages, with any ties or rounding being determined in favor of the ORC Principal Representative, (x) such total number shall be apportioned between the ORC Principal Representative and the Dyal Principal Representative proportionately in respect of the voting power of the Equity Securities of PubCo entitled to vote in the election of Directors Beneficially Owned by the ORC Principals (and their Permitted Transferees) and the Dyal Principals (and their Permitted Transferees), respectively, with any ties or rounding being determined in favor of the ORC Principal Representative, (y) the ORC Principal Representative and the Dyal Representatives shall take all Necessary Action to cause the appropriate number of ORC Directors or Dyal Directors, as applicable in order to apportion the total number and respective numbers between the ORC Principal Representative and the Dyal Principal Representative determined in accordance with the preceding sentence, to offer to tender their resignation at least 60 days prior to the expected date of PubCo’s next annual meeting of stockholders (which resignation, for the avoidance of doubt, may be made effective as of the last day of the term of such Director), and (z) the ORC Principal Representative and the Dyal Principal Representative shall designate such individuals for nomination to serve as Directors (and PubCo shall take all Necessary Action to include in the slate of nominees recommended by the Board for election as Directors at the next annual meeting of stockholders) as may be necessary to comply with the foregoing clause (x).

 

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(c)    NB Representation. Until the earlier of (i) two (2) years following the first date upon which the NB First Ownership Threshold is no longer satisfied and (ii) the first date upon which the NB Second Ownership Threshold is no longer satisfied, PubCo shall take all Necessary Action to include in the slate of nominees recommended by the Board for election as Directors at each applicable annual or special meeting of stockholders at which Class III Directors are to be elected one individual designated by NB. Each of the Dyal Principals and the ORC Principals agrees severally, and not jointly, solely with PubCo, that he shall and shall cause his Permitted Transferees to take all Necessary Action, including casting all votes to which such stockholder is entitled in respect of its shares of Common Stock or otherwise, whether at any annual or special meeting, by written consent or otherwise, so as to ensure that such individual designated by NB is elected to the Board as promptly as practicable. At any time during which NB is entitled to designate an individual for nomination to the Board in accordance with this Section 2.1(c), by written notice to PubCo, in lieu of such Board designee, NB may elect to appoint a non-voting observer to the Board, in which case the Parties will use commercially reasonable efforts to enter into an amendment to this Agreement or separate agreement setting forth the rights and obligations of NB and PubCo in respect of such observer, which shall be on customary terms and conditions (and shall include the right of such observer to receive non-privileged information regarding PubCo and its Affiliates, subject to confidentiality and non-use obligations, that would otherwise be available to a Board designee of NB pursuant to the terms of this Agreement). For purposes of this Agreement, the “NB First Ownership Threshold” will be satisfied if, as of any time of determination, both (x) the Allotment is 10% or more and (y) the NB Retained Percentage is at least 50%.

(d)    Key Individual Nominees. For so long as PubCo is Controlled Company Eligible, PubCo shall take all Necessary Action to include in the slate of nominees recommended by the Board for election as Directors at each applicable annual or special meeting of stockholders at which Directors are to be elected such number of nominees selected by a majority vote of the Key Individuals to fill seats then open for election after giving effect to the nomination rights of the other parties hereto such that after giving effect thereto there are then serving on the Board three (or such greater number of) individuals designated by majority vote of the Key Individuals, each of which such individuals must meet the independence requirements of the New York Stock Exchange or any other securities exchange on which the Equity Securities of PubCo are then listed.

(e)    Decrease in Directors. Upon any decrease in the number of Directors that the ORC Principal Representative, the Dyal Principal Representative or NB, as applicable, is entitled to designate for nomination to the Board under Section 2.1(b) or Section 2.1(c), as applicable, the ORC Principal Representative, the Dyal Principal Representative or NB, as applicable, shall take all Necessary Action to cause the appropriate number of ORC Directors, Dyal Directors or the NB Director, as applicable, to offer to tender their resignation at least 60 days prior to the expected date of PubCo’s next annual meeting of stockholders (which resignation, for the avoidance of doubt, may be made effective as of the last day of the term of such Director). Notwithstanding the foregoing, the Nominating

 

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and Corporate Governance Committee may, in its sole discretion, recommend for nomination any Director that has tendered his or her resignation in accordance with this Section 2.1(e).

(f)    Removal; Vacancies.

(i)    Each of the ORC Principal Representative, the Dyal Principal Representative or NB, as applicable, shall have the exclusive right to (a) subject to Section 2.1(f)(ii) and Section 2.1(f)(iii), request the removal of their nominees from the Board, and PubCo shall take all Necessary Action to cause the removal of any such nominee at the request of the applicable Party and (b) subject to Section 2.1(e), designate Directors for election to the Board to fill vacancies created by reason of death, removal or resignation of its nominees to the Board, and PubCo shall take all Necessary Action to cause any such vacancies created pursuant to clause (a) or (b) above to be filled by replacement Directors designated by the applicable Party as promptly as practicable after such designation (and in any event prior to the next meeting or action of the Board or any committee on which such nominee served).

(ii)    Notwithstanding Section 2.1(f)(i), any Director may be removed from the Board (and PubCo shall take all Necessary Action to cause the removal of any such Director) for Cause by majority vote of the other Directors. With respect to removal of a Director, “Cause” means (1) such Person’s indictment, pleading of nolo contendere or conviction by a final, non-appealable court order of a felony or a crime involving embezzlement or conversion of property, (2) such Person’s habitual drunkenness or substance abuse which materially interferes with such Person’s ability to discharge his or her duties, responsibilities and obligations under any agreement between such Person and PubCo or any of its Subsidiaries, (3) the material breach by such Person of any agreement between such Person and PubCo or any of its Subsidiaries or any written policy of PubCo and its Subsidiaries applicable to its Directors or senior employees that results in material harm to PubCo and its Subsidiaries or (4) commission of fraud, embezzlement or misappropriation of funds against PubCo or any of its Subsidiaries. In the case of clauses (2) and (3) above, in order for “Cause” to apply, the applicable Director must be given written notice from the Board of the matter giving rise to “Cause” and fail to cure such matter (to the extent capable of cure) within 30 days following such written notice.

(iii)    In the context of termination of membership on the Executive Committee or employment with PubCo and its Subsidiaries, Cause means (A) with respect to any Key Individual, as required by a final, non-appealable court order or the conviction of (or plea of no contest to) any felony by such Key Individual and (B) with respect to any Principal that is not a Key Individual following a determination by the Executive Committee in accordance with Section 2.4 that such Principal’s conduct reaches the level of “Cause” in any employment agreement or restrictive covenant agreement between such Principal and PubCo or any of its Subsidiaries, or if no such agreement exists, (1) such Person’s indictment, pleading of nolo contendere or conviction by a final, non-appealable court order of

 

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a felony or a crime involving embezzlement or conversion of property, (2) such Person’s habitual drunkenness or substance abuse which materially interferes with such Person’s ability to discharge his or her duties, responsibilities and obligations under any agreement between such Person and PubCo or any of its Subsidiaries, (3) the material breach by such Person of any agreement between such Person and PubCo or any of its Subsidiaries or any written policy of PubCo and its Subsidiaries applicable to its senior employees that results in material harm to PubCo and its Subsidiaries or (4) commission of fraud, embezzlement or misappropriation of funds against PubCo or any of its Subsidiaries. In the case of clauses (2) and (3) above, in order for “Cause” to apply, the applicable Principal must be given written notice from the Board of the matter giving rise to “Cause” and fail to cure such matter (to the extent capable of cure) within 30 days following such written notice.

(iv)    Notwithstanding anything to the contrary contained in this Section 2.1(f), no Party shall have the right to designate a replacement Director, and PubCo shall not be required to take any action to cause any vacancy to be filled by any such designee, to the extent that election or appointment of such designee to the Board would result in a number of Directors nominated or designated by such Party in excess of the number of Directors that such Party is then entitled to nominate for membership on the Board pursuant to this Agreement.

(v)    Vacancies created by an increase in the size of the Board, any nominations or appointments for any such vacancy, and any nomination rights with respect to a vacancy for which there is no replacement designation rights shall, in each case, be determined in accordance with the Organizational Documents.

(g)    Committees. In accordance with PubCo’s Organizational Documents and in addition to the Executive Committee, (i) the Board shall establish and maintain a committee of the Board for Audit, and (ii) the Board may from time to time by resolution establish and maintain other committees of the Board. Subject to applicable Laws and stock exchange rules, and subject to requisite independence requirements applicable to such committee (determined giving effect Section 2.1(i)), (i) for so long as PubCo is Controlled Company Eligible, (A) the ORC Principal Representative and the Dyal Principal Representative, collectively, shall have the right, and PubCo shall take all Necessary Action, to have a majority of the members of each such committee consist of Directors designated by the ORC Principal Representative and the Dyal Principal Representative and (B) each of the ORC Principal Representative and the Dyal Principal Representative shall have the right, and PubCo shall take all Necessary Action, to have at least one member of each such committee be a Director designated by the ORC Principal Representative or the Dyal Principal Representative, as applicable, and (ii) at any time when PubCo is not Controlled Company Eligible, each of the ORC Principal Representative and the Dyal Principal Representative shall have the right, and PubCo shall take all Necessary Action, to have at least one member of each such committee be a Director designated by the ORC Principal Representative or the Dyal Principal Representative, as applicable (to the extent the foregoing have the right as of any time of determination to designate any Directors).

 

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(h)    Independent Directors. PubCo has determined that the initial slate of Directors referenced in Section 2.1(a) includes the requisite number of individuals meeting the applicable independence requirements of the New York Stock Exchange, if any, but in any event no less than three (3) such individuals. From and after such initial slate is constituted, PubCo shall take all Necessary Action to ensure that the Board consists of the requisite number of Directors meeting the independence requirements of the New York Stock Exchange or any other securities exchange on which the Equity Securities of PubCo are then listed.

(i)    Controlled Company Exception. At all times in which PubCo is Controlled Company Eligible, except to the extent otherwise agreed in writing by the Key Individuals, PubCo shall take all Necessary Action to avail itself of all “controlled company” exemptions to the rules of the New York Stock Exchange or any other exchange on which the Equity Securities of PubCo are then listed and shall comply with all requirements under Law (including Item 407(a) of Regulation S-K) and all disclosure requirements to take such actions. Among other things, except to the extent otherwise agreed in writing by the Key Individuals, for so long as PubCo is Controlled Company Eligible, PubCo shall take all Necessary Action to exempt itself from each of (i) any requirement that a majority of the Board consist of independent Directors; (ii) any requirement that the Nominating and Governance Committee be composed entirely of independent Directors or have a written charter addressing the committee’s purpose and responsibilities; (iii) any requirement that the Compensation Committee be composed entirely of independent Directors with a written charter addressing the committee’s purpose and responsibilities; (iv) the requirement for an annual performance evaluation of the Nominating and Governance Committee and Compensation Committee; and (v) each other requirement that a “controlled company” is eligible to be exempted from under the rules of the New York Stock Exchange or any other exchange on which the Equity Securities of PubCo are then listed.

(j)    Reimbursement of Expenses. PubCo shall reimburse the Directors for all reasonable out-of-pocket expenses incurred in connection with their attendance at meetings of the Board and any committees thereof, including travel, lodging and meal expenses. In addition, the Independent Directors shall be eligible for customary compensation for their service as a Director and on any committees of the Board as established from time to time by the Compensation Committee of the Board.

(k)    Indemnification. For so long as any ORC Director, any Dyal Director or any NB Director serves as a Director, (i) PubCo shall provide such Director with the same expense reimbursement, benefits, indemnity, exculpation and other arrangements provided to the other Directors and (ii) PubCo shall not Amend or repeal any right to indemnification or exculpation covering or benefiting any such Director as and to the extent consistent with applicable Law, Article IX of the Certificate of Incorporation, Article V of the Bylaws and any indemnification agreements with Directors (whether such right is contained in the Organizational Documents or another document) (except to the extent such Amendment permits PubCo to provide broader indemnification or exculpation rights on a retroactive basis than permitted prior thereto).

 

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(l)    D&O Insurance. PubCo shall (i) purchase Directors’ and officers’ liability insurance in an amount and with terms and conditions determined by the Board to be reasonable and customary and (ii) for so long as any ORC Director, any Dyal Director or any NB Director serves as a Director, maintain such Directors’ and officers’ liability insurance coverage with respect to such Director (subject to the limitations of such coverage). Upon the removal or resignation of any ORC Director, any Dyal Director or any NB Director for any reason, PubCo shall take all actions reasonably necessary to continue to maintain such Directors’ and officers’ liability insurance coverage with respect to such Director for a period of not less than six years from any such event in respect of any act or omission of such Director occurring at or prior to such event.

Section 2.2    Certain Board Approvals. Without the approval of a majority of the Directors, including the approval of each of the Key Individuals then-serving as a Director (“Special Majority Board Approval”), PubCo agrees that it shall not, and shall cause each of its Subsidiaries not to:

(a)    Amend the Organizational Documents;

(b)    issue any Vote Required Securities or any other Equity Securities that would require the approval of the stockholders of PubCo under applicable rules of the New York Stock Exchange or any other securities exchange on which the Equity Securities of PubCo are then listed;

(c)    create any new employee equity incentive plan or Amend any existing employee equity incentive plan, including by increasing the number of Equity Securities available for issuance under any such employee equity incentive plan (for the avoidance of doubt, this Section 2.2(c) shall not prohibit or otherwise limit PubCo or its applicable Subsidiary’s ability to issue Specified Equity or issue Non-Reserved Carry);

(d)    making any dividends or other similar distributions in respect of Equity Securities in each case, other than (i) as solely between PubCo and a Subsidiary of PubCo or solely between Subsidiaries of PubCo, (ii) as required by or in accordance with (to the extent any dividend or other distribution is contemplated by) any definitive agreement to which PubCo or any of its Subsidiaries is party that was entered into prior to the date hereof, any arms’ length agreement with a third party that is not a Related Party or as approved by the Board (including tax distributions and other distributions in accordance with the A&R Blue Owl Holdings LP Agreement or the A&R Blue Owl Carry LP Agreement), (iii) in accordance with a dividend or distribution policy previously approved by the Board, or (iv) in the case of dividends or distributions from Blue Owl Holdings or Blue Owl Carry on a pro rata basis, or in the case of Subsidiaries of Blue Owl Holdings and Blue Owl Carry, to the extent Blue Owl Holdings or Blue Owl Carry (or a Subsidiary of either of them) receives no less than its pro rata share;

(e)    repurchasing Equity Securities of PubCo, Blue Owl GP or (other than in connection with an Exchange) Blue Owl Holdings or Blue Owl Carry;

 

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(f)    effect any acquisition or investment in assets or Equity Securities for aggregate consideration representing more than 5% of the equity market capitalization of PubCo (assuming all Blue Owl Holdings Units and Blue Owl Carry Units were Exchanged), determined as of the execution of the definitive agreement with respect thereto;

(g)    amend the Operating Budget for any calendar year once approved by the Executive Committee;

(h)    incur or guarantee any indebtedness for borrowed money that would result at the time of incurrence or guarantee in the aggregate indebtedness for borrowed money of PubCo and its Subsidiaries on a consolidated basis exceeding four times the trailing 12-month EBITDA as of immediately preceding the calendar quarter-end for which financial statements have been finalized;

(i)    effect any sale of assets of PubCo or any of its Subsidiaries (including Equity Securities in any such Subsidiary) with a value in excess of 5% of the equity market capitalization of PubCo (assuming all Blue Owl Holdings Units and Blue Owl Carry Units were Exchanged); or

(j)    effect (a) any merger or consolidation of, or other business combination involving, PubCo or any of its Subsidiaries, as a result of which the Principals would no longer collectively control 50% or more of voting power of the Equity Securities of the surviving or consolidated Person or (b) any sale of all or substantially all of the assets of PubCo and its Subsidiaries (on a consolidated basis).

For the avoidance of doubt, the approval or non-approval of any matter by the Board or by a Special Majority Board Approval shall in no way supersede or otherwise affect the approval rights of NB under Section 2.3.

Section 2.3    Certain Matters Relating to NB.

(a)    Until the first date upon which the NB First Ownership Threshold is no longer satisfied, without the prior written consent of NB, PubCo shall not, and shall cause each of its Subsidiaries not to:

(i)    Amend the Organizational Documents, the agreement of limited partnership of Blue Owl Holdings or Blue Owl Carry, or organizational documents of any non-fund Subsidiary thereof, in a manner that would have a disproportionate and adverse impact on NB in its capacity as a holder of any Equity Securities in PubCo, Blue Owl Holdings or Blue Owl Carry relative to the other holders of Common Stock or partnership interests of Blue Owl Holdings or Blue Owl Carry (or such Equity Securities of such non-fund Subsidiary);

(ii)    create any new employee equity incentive plan or Amend any existing employee equity incentive plan, including by increasing the number of Equity Securities available for issuance under any such employee equity incentive plan (for the avoidance of doubt, this Section 2.3(a)(ii) shall not prohibit or otherwise limit PubCo or its applicable Subsidiary’s ability to issue Specified Equity or issue Non-Reserved Carry);

 

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(iii)    make any dividends or other similar distributions in respect of Equity Securities in each case, other than (i) as solely between PubCo and a Subsidiary of PubCo or solely between Subsidiaries of PubCo, (ii) as required by or in accordance with (to the extent any dividend or other distribution is contemplated by) any definitive agreement to which PubCo or any of its Subsidiaries is party that was entered into prior to the date hereof, any arms’ length agreement with a third party that is not a Related Party or as approved by NB (including tax distributions and other distributions in accordance with the A&R Blue Owl Holdings LP Agreement or the A&R Blue Owl Carry LP Agreement), (iii) in accordance with a dividend or distribution policy previously approved by NB, or (iv) in the case of dividends or distributions from Blue Owl Holdings or Blue Owl Carry on a pro rata basis, or in the case of Subsidiaries of Blue Owl Holdings and Blue Owl Carry, to the extent Blue Owl Holdings or Blue Owl Carry (or a Subsidiary of either of them) receives no less than its pro rata share;

(iv)    repurchase Equity Securities of PubCo, Blue Owl GP or (other than in connection with an Exchange) Blue Owl Holdings or Blue Owl Carry;

(v)    subject to Section 2.3(e), effect any acquisition or investments in assets or Equity Securities for aggregate consideration in excess of the greater of (1) $2,000,000,000 and (2) 20% of the equity market capitalization of PubCo (assuming all Blue Owl Holdings Units and Blue Owl Carry Units were Exchanged) (a “Subject Investment”) determined as of the execution of a definitive agreement with respect to such Subject Investment;

(vi)    Amend in any manner to make less restrictive the non-competition, non-interference or non-solicitation covenants contained in the employment and restrictive covenant agreement entered into with respect to any Key Individual (and, if any Key Individual no longer occupies a leadership role, any functional replacement who assumes the final decision-making responsibilities of such Key Individual) or waive any such obligations (other than, for the sake of clarity, trade approvals or similar waivers in respect of securities and loan transactions);

(vii)    enter into or Amend (i) any material agreement or transaction between PubCo or any of its Subsidiaries, on the one hand, and any Principal or any of their respective Permitted Transferees, on the other hand, other than the exercise of any rights (without Amendment) contemplated by any definitive agreement to which PubCo or any of the Subsidiaries is party that was entered into after the Effective Date and previously approved by NB or set forth on Schedule 2.3(a)(vii), or (ii) any agreement that purports to bind NB or any of its Affiliates;

(viii)    subject to Section 2.3(g), enter into any new business line (A) at any time, that would subject NB or any of its Affiliates to any of the regulatory requirements described on Schedule 2.3(a)(viii) that it is not otherwise subject to

 

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or (B) during the three years following the Closing, that would subject NB or any of its Affiliates to new regulatory requirements that NB and its Affiliates would not otherwise be subject to, except, in the case of clause (B), where such obligations (x) are not materially adverse to NB or any of its Affiliates (after giving effect to any reasonable structuring alternatives that PubCo and NB shall cooperate in good faith to attempt to develop), (y) do not require any public disclosure of confidential information of NB (with it being agreed that disclosure to a Governmental Entity that is not disclosed or disclosable to the public (including after request) shall not be considered public disclosure) and (z) do not require NB to increase its regulatory capital to an amount greater than or equal to 1.25 multiplied by its regulatory capital as of immediately prior to the Business Combination provided that, for the avoidance of doubt, any regulatory requirement that becomes applicable to an existing business after PubCo or any of the Subsidiaries has entered into such business line shall not be subject to this Section 2.3(a)(viii); or

(ix)    during the three years following the Effective Date, effect (A) any merger or consolidation of, or other business combination or other transaction involving, PubCo or any of its Subsidiaries, as a result of which (1) the Principals would no longer collectively (I) control, directly or indirectly, 50% or more of voting power of the Equity Securities of the surviving or consolidated Person, or (II) hold, directly or indirectly, 50% of the number of Equity Securities (or as represented by the Equity Securities of the surviving entity into which such shares were converted pursuant to such merger or consolidation or other business combination) Beneficially Owned by the Principals as of immediately prior to such merger or consolidation or other business combination, (2) the stockholders of PubCo immediately prior to such merger, consolidation or other business combination or transaction (assuming for this purpose that immediately prior to such merger, consolidation or other business combination or transaction an Exchange of all then-outstanding Blue Owl Holdings Units and Blue Owl Carry Units was consummated) hold less than 50% of the Equity Securities of the surviving or consolidated Person or (3) NB would hold less than 50% of the number of Equity Securities (or as represented by the Equity Securities of the surviving entity into which such shares were converted pursuant to such merger or consolidation or other business combination) Beneficially Owned by NB as of immediately prior to such merger or consolidation or other business combination; or (B) any sale of all or substantially all of the assets of PubCo and its Subsidiaries (on a consolidated basis), in each case (x) at an aggregate price per Economic Share (assuming for this purpose that immediately prior to such determination an Exchange of all then-outstanding Blue Owl Holdings Units and Blue Owl Carry Units was consummated) (including giving effect to distributions at or promptly after consummation thereof) below $13.50 per share, as equitably adjusted for stock splits, stock dividends, stock combinations and recapitalizations affecting the Economic Shares after the Effective Date, or (y) in which all holders of Equity Securities in PubCo (including, for the avoidance of doubt, Blue Owl Holdings Common Units and Blue Owl Carry Common Units) are not entitled to participate. Notwithstanding the foregoing, this Section 2.3(a)(ix) shall not require the approval of NB to transfer or dispose of any Subsidiary unless required under clause (B) of this Section 2.3(a)(ix).

 

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(b)    Until the first date upon which the NB Second Ownership Threshold is no longer satisfied, without the prior written consent of NB, PubCo shall not and shall cause each of its Subsidiaries not to (i) pay cash compensation in any given calendar year to the Key Individuals (or, if any Key Individual no longer occupies a leadership role, any functional replacement who assumes the final decision-making responsibilities of such Key Individual with respect to overall budget and compensation decisions) in an aggregate amount exceeding four percent of management fee revenue (as determined in accordance with GAAP) of PubCo and its Subsidiaries (determined on a consolidated basis and including incentive fees and performance fees, in each case payable by any business development company) for such calendar year (as reasonably determined by PubCo’s Chief Financial Officer in good faith, based on the information available to such individual) (the “Compensation Cap”); provided that to the extent any Key Individual is receiving severance, garden leave or similar payments at any time prior to the tenth anniversary of the Closing while this provision is in effect (“Tail Payments”), (A) such Tail Payments shall, for the sake of clarity, be counted against the Compensation Cap and (B) the compensation payable to any functional replacement of a departed Key Individual, to the extent such functional replacement was an employee of PubCo or its Subsidiaries prior to commencing such new role, shall only be counted against the Compensation Cap to the extent such compensation exceeds the cash compensation paid by PubCo or its Subsidiaries to such functional replacement in the twelve (12)-month period prior to becoming such functional replacement or (ii) permit Blue Owl Carry’s direct or indirect aggregate share of carried interest in any private equity style fund sponsored by PubCo or any of its Subsidiaries, net of deduction for any rebates or carry participation awarded to bona fide third party investors in any such fund, being less than 15% of the total carried interest in such fund (e.g. if one or more third parties are granted an aggregate of 10% of such carried interest, PubCo’s share of the total carried interest will be not less than 15% of the remaining 90%). For purposes of this Agreement, the “NB Second Ownership Threshold” will be satisfied if, as of any time of determination, both (x) the Allotment is five percent or more and (y) the NB Retained Percentage is at least 25%.

(c)    Until the first date upon which the NB Second Ownership Threshold is no longer satisfied, in the event that PubCo or any of its Subsidiaries effects an acquisition of another business (whether directly or through an investment in assets or Equity Securities), that would reasonably be expected to have increased management fee revenue (as determined in accordance with Section 2.3(b)) of PubCo and its Subsidiaries by $1 billion or more if the amount earned by the acquired business had been earned by PubCo or any of its Subsidiaries during the trailing twelve (12)-month period, the management fee revenue resulting from such acquisition will only be included in management fee revenue for purposes of determining the Compensation Cap to the extent a determination is made by a majority of the Independent Directors as to what amount, if any, of such acquired management fee revenue should be included in determining the Compensation Cap.

(d)    During the five years following the Effective Date, without the prior written consent of NB, PubCo shall not, and shall cause each of its Subsidiaries not to, issue any

 

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Equity Securities (or other equity-based awards) that are dilutive to PubCo and/or such Subsidiaries to any Key Individual under any employee equity incentive plan, other than as part of (and pursuant to the terms of) a broad-based compensation program generally applicable to employees of PubCo or its Subsidiaries; provided further that the proportion of equity-based awards granted to any Key Individual relative to such Key Individual’s total cash compensation in respect of the relevant year shall not exceed the lesser of (i) the proportion of equity relative to total cash compensation generally applicable to other participants in such broad-based program and (ii) 20% of such cash compensation (assuming the Compensation Cap was fully utilized by the Key Individuals).

(e)    If, prior to the time that NB no longer has the right to consent to Subject Investments in accordance with Section 2.3(a) of this Agreement, PubCo or any of its Subsidiaries proposes in good faith to effect a Subject Investment from time to time, it shall inform the officer of NB that NB designates for this purpose from time to time in writing to PubCo of the identity of the target company or companies for such Subject Investment (each, a “Subject Target”). Upon being informed of a Subject Target, NB will promptly implement and maintain appropriate walls, confidentiality protections and conflict procedures such that any NB personnel involved in evaluating such Subject Target for NB’s own account (if any) are unaware of the material terms or progress of PubCo’s (or its applicable Subsidiary’s) proposal with respect to such Subject Target. If NB has expressly withheld its consent in writing or has been deemed to withhold its consent by not providing its consent to any Subject Investment by PubCo or its Subsidiaries within seven days of written notice from PubCo describing the material terms and conditions (including valuation) of the Subject Investment, then NB shall not be, either directly or indirectly, permitted to pursue the applicable Subject Target (and shall not expend any material effort towards evaluating such Subject Target or negotiate in any respects a transaction involving such Subject Target) until the earlier of (x) the date that is nine months following PubCo’s written notice to NB regarding the identity of the Subject Target and (y) the date that PubCo determines (in its sole discretion) not to further proceed with the evaluation or negotiation of the applicable Subject Investment, other than as a result of NB not providing its consent thereof. Notwithstanding the foregoing, if NB consents to any such Subject Investment and any of the material terms of the Subject Investment change in any material respect from the terms of the Subject Investment that formed the basis for NB’s consent thereof in a manner adverse to PubCo (including a higher valuation of the Subject Target), PubCo shall promptly provide written notice to NB of such changed terms, and NB’s consent shall again be required pursuant to Section 2.3(a)(v) and the terms and procedures of this Section 2.3(e) shall apply to such changed terms (and, for the avoidance of doubt, in the event of any such revisions to the proposed terms, NB shall not be deemed to withhold or provide its consent unless and until PubCo provides notice of such revised terms and NB withholds or provides consent to such revised terms, in each case, in accordance with the foregoing procedures). PubCo will use its commercially reasonable efforts to promptly inform NB in writing of (i) any determination in accordance with clause (y) of this Section 2.3(e) and (ii) any revisions in any material respect (including valuation) to the proposed terms of the Subject Investment.

 

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(f)    Preemptive Right.

(i)    Subject to the following sentence, PubCo (on its own behalf and on behalf of each of its Subsidiaries) grants to NB the right to purchase up to its Allotment of any Preemptive Securities that PubCo or any of its Subsidiaries may from time to time issue or sell to any Person in a primary issuance or sale. In the event PubCo or a Subsidiary offers or sells Preemptive Securities as a strip of multiple Equity Securities in combination with fixed proportions, the rights granted pursuant to this Section 2.3(f) shall be exercisable only as to the strip of all such Preemptive Securities, and not separately as to any component of such strip of Preemptive Securities.

(ii)    PubCo shall give written notice (an “Issuance Notice”) to NB of any proposed issuance or sale of Preemptive Securities within five Business Days following any meeting of the Board or governing body of the applicable Subsidiary at which any such issuance or sale (a “Subject Issuance”) is approved. The Issuance Notice shall set forth the material terms and conditions of the proposed issuance or sale.

(iii)    NB shall, for a period of 15 Business Days following the receipt of an Issuance Notice (the “Exercise Period”), have the right to elect to purchase up to its Allotment of the Preemptive Securities set forth in such Issuance Notice on the terms and conditions, including the purchase price, set forth in the Issuance Notice by delivering a written notice to PubCo (a “Acceptance Notice”). The delivery of an Acceptance Notice by NB shall be a binding and irrevocable offer by NB to purchase the Preemptive Securities described in the Acceptance Notice for cash, subject only to the closing of the Subject Issuance actually occurring. The failure of NB to deliver an Acceptance Notice by the end of the Exercise Period shall constitute a waiver of NB’s rights under this Section 2.3(f) with respect to the purchase of such Preemptive Securities.

(iv)    Following the expiration of the Exercise Period, PubCo or its applicable Subsidiary shall be free to complete the proposed issuance or sale of Preemptive Securities described in the applicable Issuance Notice on terms not materially less favorable to PubCo or its applicable Subsidiary than those set forth in the Issuance Notice. Any such issuance or sale must be closed on or before a deadline (which may be the occurrence of an event or date certain) for closing such issuance or sale set forth in the applicable Issuance Notice, not to exceed 180 days from the date the Issuance Notice was given; and for the avoidance of doubt, the price at which the Preemptive Securities are sold to the prospective purchaser seeking to purchase the applicable Preemptive Securities, or any other purchaser, must be at least equal to or higher than the purchase price described in the applicable Issuance Notice. In the event PubCo or its applicable Subsidiary has not sold such Preemptive Securities at or prior to such deadline, PubCo or its applicable Subsidiary shall not thereafter issue or sell any Preemptive Securities without first again offering such securities to NB in accordance with the procedures set forth in this Section 2.3(f).

 

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(v)    The closing of any purchase of Preemptive Securities by NB under this Section 2.3(f) shall be consummated at such location, date, and time as specified by PubCo. Each of PubCo or the Subsidiary, on the one hand, and NB, on the other hand, shall take all such other actions (including, without limitation, entering into additional agreements) as may be reasonably necessary to consummate the purchase and sale of the Preemptive Securities.

(vi)    Notwithstanding the foregoing provisions of this Section 2.3(f), in the event that the issuance by PubCo or any Subsidiary of Preemptive Securities to NB would require a vote of PubCo’s stockholders (whether because of applicable Law or rules of the stock exchange on which the Class A Shares are listed, or otherwise), the foregoing provisions of this Section 2.3(f) will not apply, and instead PubCo and NB will cooperate in good faith to the extent reasonably feasible to provide for the issuance of an alternative security to NB with substantially the same economic terms as the Preemptive Securities proposed to be issued but that would not require any vote of PubCo’s stockholders. Furthermore, in the event the Board determines in good faith there is a reasonable business need to consummate an issuance of Preemptive Securities without first complying with this Section 2.3(f), PubCo or the Subsidiary may issue or sell Preemptive Securities to one or more Persons without first complying with the terms of Section 2.3(f), so long as, as promptly as is reasonably practicable following such sale (and in any event within ten (10) Business Days of such sale), at PubCo’s or the Subsidiary’s election, (A) the purchasers of such Preemptive Securities shall offer to sell to NB the portion of such purchased Preemptive Securities that equals NB’s applicable Allotment or (B) PubCo or the Subsidiary shall offer to issue an incremental amount of Preemptive Securities to NB sufficient to constitute NB’s applicable Allotment had PubCo or the Subsidiary complied with Section 2.3(f) and (C) in each case, at a purchase price no more, and on terms no less favorable to NB, than those applicable to such purchasers, using a process substantially similar to that set forth in this Section 2.3(f).

(vii)    The rights of NB under this Section 2.3(f) shall terminate upon the first date that the NB First Ownership Threshold is no longer satisfied.

(g)    If PubCo or any of its Subsidiaries proposes to enter into any new business line prior to the date that the NB Second Ownership Threshold is no longer satisfied that would subject NB or any of its Affiliates to new regulatory requirements that NB and its Affiliates would not otherwise be subject to, PubCo and NB shall reasonably cooperate in good faith to reduce any additional regulatory burdens upon NB resulting from PubCo or its applicable Subsidiary entering into such new business line; provided that, for the avoidance of doubt, in no event shall NB or its Affiliates be required to agree to any restrictions on its business or incur any cost (other than de minimis fees and expenses). PubCo and each Holder (including NB) shall, and shall cause their respective controlled Affiliates and Subsidiaries to, cooperate in good faith with PubCo, the other Holders and their respective Subsidiaries (including Blue Owl Holdings and Blue Owl Carry), as applicable, in connection with the preparation of any regulatory filings required to be made by PubCo, such Holder or their respective Affiliates with any Governmental Entity for which information regarding PubCo, such Holder or any of their respective Affiliates is required.

 

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(h)    If at any time PubCo determines in good faith that the NB First Ownership Threshold or the NB Second Ownership Threshold, as applicable, is no longer satisfied, it shall, prior to taking an action that would otherwise require its approval or provide it with rights related to the same under this Agreement, deliver written notice to NB of such determination. If NB delivers a written notice to PubCo disputing such determination within 10 Business Days of its receipt of PubCo’s written notice, NB and PubCo shall endeavor in good faith to mutually determine whether the NB First Ownership Threshold or NB Second Ownership Threshold, as applicable, is no longer satisfied. If NB fails to so deliver a written notice, the NB First Ownership Threshold or NB Second Ownership Threshold, as applicable, will be deemed to be no longer satisfied for all purposes of this Agreement.

Section 2.4    Executive Committee.

(a)    Concurrent with the execution and delivery of this Agreement, the Board is establishing an executive committee of PubCo officers responsible for day-to-day management of PubCo and its Subsidiaries (the “Executive Committee”). The Board has delegated to the Executive Committee the oversight over and responsibility for the day-to-day management of PubCo and its Subsidiaries. Notwithstanding the foregoing, reserved from such delegation (to remain subject to the approval of the Board or a committee thereof) are (i) any matters that are required or recommended to be delegated to a committee of the Board under the rules of the New York Stock Exchange, (ii) the matters that require Special Majority Board Approval under Section 2.2, and (iii) the matters that require the approval of NB under Section 2.3(a) or Section 2.3(b) (collectively, the “Excluded Matters”).

(b)    The Executive Committee will initially have seven members and be comprised of each of the ORC Principals and each of the Dyal Principals. A member of the Executive Committee that is not a Key Individual may only be removed from the Executive Committee upon the earliest to occur of (x) the applicable Special Executive Committee Approval for removal (whether or not for Cause), (y) the later to occur of (1) the termination of such individual’s employment or consultant relationship with PubCo or its applicable Subsidiary or (2) the date upon which such individual no longer serves as a Director, or (z) such individual’s resignation from the Executive Committee. A member of the Executive Committee that is a Key Individual may only be removed from the Executive Committee upon the earliest to occur of (x) in the case of the commission of Cause by such Key Individual, the Special Executive Committee Approval for removal (determined without regard to the vote of such Key Individual), (y) the later to occur of (1) the termination of such individual’s employment or consultant relationship with PubCo or its applicable Subsidiary or (2) the date upon which such individual no longer serves as a Director, or (z) such individual’s resignation from the Executive Committee. In the event of such a removal, the remaining members of the Executive Committee shall endeavor in good faith to select a replacement for such individual from among the employees of PubCo

 

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and its Subsidiaries, and such a replacement shall become a member of the Executive Committee upon Special Executive Committee Approval.

(c)    The Executive Committee’s approval of any matter within its authority shall generally require a majority vote of the members of the Executive Committee. Notwithstanding the foregoing sentence, the Executive Committee may not approve any of the following matters without the vote of each Key Individual then-serving on the Executive Committee (“Special Executive Committee Approval”):

(i)    the removal of any member from the Executive Committee and appointment of any new member to the Executive Committee other than removal under the circumstances described in Section 2.4(b);

(ii)    without limiting and subject to Section 2.4(b), the hiring, termination and compensation of members of the Executive Committee, officers and other key employees of PubCo or any of its Subsidiaries, including the key terms of any employee equity incentive plan or other incentive compensation plan (including cash bonus plans);

(iii)    allocating carried interest with respect to any funds or accounts investing third party funds to investment professionals;

(iv)    approving annual operating budgets (each, an “Operating Budget”);

(v)    entering any new line of business not included in the Opal Business or the Diamond Business as of the Effective Date;

(vi)    commencement or settlement of any material litigation by PubCo or any of its Subsidiaries; and

(vii)    any other matter that is not an Excluded Matter and is outside the course of the day-to-day Opal Business or the Diamond Business.

(d)    Notwithstanding Section 2.4(c)(iv), if the Executive Committee has not approved an Operating Budget for any calendar year, PubCo and its Subsidiaries will be permitted to continue to operate consistent with the Operating Budget for the prior calendar year, plus a 5% overall increase for each line item included in such Operating Budget.

(e)    For the avoidance of doubt, the approval or non-approval of any matter by the Executive Committee shall in no way supersede or otherwise affect the approval rights of NB under Section 2.3.

Section 2.5    Information Rights.

(a)    Subject to Section 2.5(c), (i) PubCo shall provide NB such reports and information concerning the business and affairs of PubCo and its Subsidiaries as may reasonably be requested by NB from time to time, to the extent such reports and information are prepared in the ordinary course of business by PubCo or its Subsidiaries,

 

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and (ii) NB shall have the right, upon reasonable advance written notice to PubCo and at such times as may be mutually agreed, to consult with the chief financial officer of PubCo and other senior management of PubCo as the chief financial officer may designate with respect to the business and affairs of PubCo or its Subsidiaries.

(b)    In the event that the Board reasonably determines that any provision of information pursuant to this Section 2.5 would reasonably be expected to violate Law or a material agreement with a third party, or waive any legal privilege applicable to such information, such provision shall not be required; provided the Parties shall use commercially reasonable efforts to permit compliance with this Section 2.5 in a manner that avoids such harm or consequence; provided, further, that PubCo will use commercially reasonable efforts not to enter into agreements prohibiting the sharing of information with NB specifically, and provided, further, that in the event PubCo makes a determination that certain information should be kept confidential pursuant to this Section 2.5(b), PubCo shall, to the extent not prohibited by applicable law or material agreement or cause a waiver of legal privilege, provide NB with a written summary of the nature and substance thereof.

(c)    Notwithstanding the foregoing provisions of this Section 2.5, NB’s rights under Section 2.5(a) shall apply only if NB has an Economic Ownership Percentage of five percent or more.

(d)    NB agrees not to disclose any information obtained under this Section 2.5 (the “Confidential Information”) and shall use such information solely for purposes of evaluating or protecting its investment in PubCo and the Subsidiaries. NB further agrees to comply with all applicable securities laws with respect to any Confidential Information it obtains. Notwithstanding the foregoing, Confidential Information shall not include information that (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 2.5 by NB), (b) was available to NB or its Representatives on a non-confidential basis prior to its disclosure by PubCo or its Representatives, (c) is or has been independently developed or conceived by NB or its Representatives without the use of the Confidential Information or (d) is or becomes available to NB or its Representatives from a Person other than PubCo or its Representatives who is not known by NB to be otherwise bound by a confidentiality agreement with PubCo or any of its Representatives in respect of such information; provided, however, that NB may disclose Confidential Information (i) to its Affiliates and its and their Representatives, provided NB informs such Affiliate or Representative that such information is confidential and cause such Person to agree (for the benefit of PubCo) to maintain the confidentiality of such information; (ii) to the extent reasonably necessary in connection with the exercise of its rights under this Agreement; (iii) any prospective purchaser of any Equity Securities of PubCo from NB, if such prospective purchaser agrees to be bound by the provisions of this Section 2.5 or otherwise enters into a confidentiality agreement which is no less restrictive than this Section 2.5 and pursuant to which PubCo is a party or third party beneficiary; (iv) to the extent required in connection with any routine or periodic examination or similar process by any regulatory or self-regulatory body or authority not specifically directed at PubCo or the confidential information obtained from PubCo pursuant to the terms of this Agreement; or (v) as may otherwise be required by law, regulation, rule, court order or subpoena, provided that NB promptly notifies PubCo of such disclosure and takes

 

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reasonable steps (at PubCo’s sole cost and expense) to minimize the extent of any such required disclosure. PubCo understands and agrees that any NB Director (or observer in lieu thereof) may disclose information about PubCo and its Subsidiaries received by such NB Director (or observer in lieu thereof) to NB and its Affiliates and Representatives (such information being deemed to be “Confidential Information” subject to this Section 2.5), and that such disclosure shall not constitute a breach of or failure to comply with any fiduciary duties of the NB Director (if applicable), or this Agreement, the Certificate of Incorporation, the Bylaws or similar governance documents that are generally applicable to PubCo’s Directors or any other agreement to which NB or its Affiliates, on the one hand, or PubCo or its Affiliates, on the other hand, are party; provided that such director may not disclose any Excluded Opportunity (as defined in the Certificate of Incorporation) or Confidential Information, in each case, in a manner in which it reasonably would be expected to be used competitively by NB.

(e)    PubCo understands and acknowledges that (a) NB and its Affiliates may now or in the future engage in any business that may be competitive with the business of PubCo or its Subsidiaries, evaluate, invest in (directly or indirectly, including providing financing to) or do business with, competitors or potential competitors of PubCo or its Subsidiaries, and that the receipt of Confidential Information is not intended to and shall not restrict or preclude such activities, provided that NB does not use any Confidential Information in connection therewith. Further, PubCo understands and acknowledges that NB and its Affiliates may (x) have general knowledge with respect to the industry in which PubCo or its Subsidiaries operate and that additional general industry knowledge may be gained by NB from reviewing Confidential Information that cannot be separated from NB’s overall knowledge and (y) retain certain mental impressions of the Confidential Information (it being understood that a mental impression is what a person retains when such person has not intentionally memorized the information or retained notes or other aids to help retain such memory), and such general knowledge and mental impressions shall be permitted to be used in the ordinary course of NB’s business, including in connection with evaluating investment opportunities, trading securities in the public markets and participating in private investment transactions and is not intended to be limited by this Section 2.5. Accordingly, NB and PubCo will negotiate in good faith to establish procedures to limit the manner of providing information to NB in a manner reasonably intended to prevent competitive harm to PubCo or any of its Subsidiaries or violations of law (e.g., using “clean team” members).

(f)    Except as required by law (in which case NB shall be given an opportunity to review and comment on such disclosure), PubCo and its Subsidiaries shall not make any disclosure regarding NB or any of its Affiliates in any regulatory filing or public disclosure (including filings with the SEC) without the prior written consent of NB, which consent shall not be unreasonably withheld, conditioned or delayed, unless such disclosure is substantially consistent with previous public disclosure regarding NB and its Affiliates.

Section 2.6    Carry Entitlements. Without limiting Section 2.3(b), PubCo shall not (and shall cause its Subsidiaries, including Owl Rock Carry GP LLC and Owl Rock Performance Fee GP LLC not to) enter into any agreement or take (or fail to take) any other action, unless approved by majority of PubCo’s Independent Directors, that results in Blue Owl Holdings and/or Blue Owl

 

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Carry (and PubCo’s proportionate share thereof through its ownership of Blue Owl Holdings and Blue Owl Carry) receiving less than 15% of the Promote Distributions arising in respect of all of the existing and future PubCo Funds (other than the Existing Diamond Flagship Funds (as defined in the BCA), in each case with respect to the Existing Diamond Flagship Funds, including (i) any parallel, subsidiary and feeder vehicles related to such Existing Diamond Flagship Funds, (ii) any co-invest vehicles related to investments made by such Existing Diamond Flagship Funds (including the foregoing clause (i)) where Promote Distributions are earned and (iii) any secondary transaction related vehicles for such Existing Diamond Flagship Funds (including the foregoing clauses (i) and (ii))), in each case, net of any grants of Specified Equity (the “Carry Entitlements”), and for which any such grant of Specified Equity, for the avoidance of doubt, will dilute all holders (other than holders of Specified Equity but including any employee vehicles holdings the remaining 85% of the Promote Distributions), pro rata and not solely the 15% Carry Entitlement of Blue Owl Holdings and/or Blue Owl Carry. No separate approval of the Independent Directors is required pursuant to the foregoing sentence (x) in connection with incurrence of third party Indebtedness (or pledges and subsequent foreclosure in connection therewith), or (y) any arm’s length sales, to unaffiliated third parties, of Carry Entitlements for value that is otherwise received by Blue Owl Holdings and/or Blue Owl Carry, in each case, which such third parties do not include the Qualified Stockholders, their Affiliates or respective Permitted Transferees; provided, however, that for the avoidance of doubt, any action taken in connection with the matters set forth in the foregoing clauses (x) or (y) shall remain subject to any applicable approval of the Board to the extent required by applicable law. For the avoidance of doubt, in the event it is determined by PubCo or its applicable Subsidiaries not to charge carried interest, incentive fees, promoted interest, performance fee or similar fees in connection with a co-investment, fund-of-one or other vehicle, no Promote Distributions will be made in respect of such PubCo Funds. For purposes of this Section 2.6 only, the term “Specified Equity” shall be read disregarding clause (b) of the definition thereof and the references in such definition to any Subsidiary of PubCo shall be replaced with references to any Subsidiary of Blue Owl Holdings or Blue Owl Carry (or any successors thereto).

ARTICLE III

REGISTRATION RIGHTS

Section 3.1    Shelf Registration.

(a)    Filing.

(i)    PubCo shall file, within 45 days of the Effective Date or such other earlier date as it is required in accordance with any Subscription Agreements, a Registration Statement for a Shelf Registration on Form S-3 (the “Form S-3 Shelf”), or if PubCo is ineligible to use a Form S-3 Shelf, a Registration Statement for a Shelf Registration on Form S-1 (the “Form S-1 Shelf,” and together with the Form S-3 Shelf (and any Subsequent Shelf Registration Statement), each, a “Shelf”), in each case, covering the resale of all Registrable Securities (determined as of two Business Days prior to such filing) on a delayed or continuous basis. The Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder.

 

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(ii)    PubCo shall use its reasonable best efforts to cause the Shelf to become effective as soon as practicable after such filing, but no later than the earlier of (A) 60 calendar days after the filing thereof (or, in the event the SEC reviews and has written comments to the Registration Statement, the 90th calendar day following the filing thereof), (B) the tenth 10th Business Day after the date PubCo is notified (orally or in writing, whichever is earlier) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review, or (C) if the day determined under clause (A) or clause (B) falls on a Saturday, Sunday or other day that the SEC is closed for business, the next Business Day immediately following the day determined under clause (A) or clause (B) on which the SEC is open for business (the date determined under clause (A), (B) and (C), the “Effectiveness Deadline”). PubCo shall maintain a Shelf in accordance with the terms of this Agreement, and shall prepare and file with the SEC such amendments, including post-effective amendments, and supplements as may be necessary to keep such Shelf continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities.

(iii)    In the event PubCo files a Form S-1 Shelf, PubCo shall use its commercially reasonable efforts to convert the Form S-1 Shelf (and any Subsequent Shelf Registration Statement) to a Form S-3 Shelf as soon as practicable after PubCo is eligible to use Form S-3.

(b)    Subsequent Shelf Registration.

(i)    If any Shelf ceases to be effective under the Securities Act for any reason at any time while there are any Registrable Securities outstanding, PubCo shall use its reasonable best efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its reasonable best efforts to as promptly as is reasonably practicable, amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional Registration Statement as a Shelf Registration (a “Subsequent Shelf Registration Statement”) registering the resale of all outstanding Registrable Securities from time to time, and pursuant to any method or combination of methods legally available to, and requested by, any Holder whose Registrable Securities are included therein. Any such Subsequent Shelf Registration Statement shall be on Form S-3 to the extent that PubCo is eligible to use such form. Otherwise, such Subsequent Shelf Registration Statement shall be on another appropriate form.

(ii)    If a Subsequent Shelf Registration Statement is filed, PubCo shall use its reasonable best efforts to (i) cause such Subsequent Shelf Registration Statement to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration Statement shall be an Automatic Shelf Registration Statement if PubCo is a Well-Known Seasoned Issuer) and (ii) keep such Subsequent Shelf

 

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Registration Statement continuously effective, available for use to permit all Holders whose Registrable Securities are included therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities outstanding.

(c)    Additional Registrable Securities. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, PubCo, upon request of a Holder, shall promptly use its reasonable best efforts to cause the resale of such Registrable Securities to be covered by either, at PubCo’s option, any then available Shelf (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration Statement and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration Statement shall be subject to the terms of this Agreement.

(d)    Requests for Underwritten Shelf Takedowns.

(i)    At any time and from time to time after the Shelf has been declared effective by the SEC, each of the Special Holders (each Special Holder being in such case a “Demanding Holder”) may request to sell all or any portion of its Registrable Securities (or, (x) in the case of NB, Registrable Securities held by NB, the NB Aggregator and/or NB Aggregator Subject Members and (y) in the case of Dyal SLP, Registrable Securities held by Dyal SLP, any other Dyal SLP Aggregator and/or Dyal SLP Aggregator Subject Members) in an Underwritten Offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”).

(ii)    All requests for Underwritten Shelf Takedowns shall be made by giving written notice to PubCo, which notice shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. The Demanding Holders requesting such Underwritten Shelf Takedown shall have the right to select the Underwriters for such offering (which shall consist of one (1) or more reputable nationally or regionally recognized investment banks), such Underwriters to be subject to the prior written consent of PubCo, which consent shall not be unreasonably withheld, conditioned or delayed.

(iii)    Notwithstanding anything to the contrary contained in this Agreement, in no event shall any Special Holder or any Transferee thereof be entitled to request an Underwritten Shelf Takedown (and PubCo shall not be obligated to consummate any Underwritten Shelf Takedown with respect to any Special Holder or any Transferee thereof) during the Lock-Up Period applicable to such Person.

(iv)    PubCo shall only be obligated to effect an Underwritten Shelf Takedown if such offering (i) shall include securities with a total offering price (including piggyback securities and before deduction of underwriting discounts)

 

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reasonably expected to exceed, in the aggregate, $50 million (the “Minimum Takedown Threshold”) or (ii) shall be made with respect to all of the Registrable Securities of the Demanding Holder. Except as set forth in the preceding sentence (and subject to Section 3.1(d)(iii)), there shall be no limit to the number of Underwritten Shelf Takedowns that may be requested by any Special Holder.

(e)    Reduction of Underwritten Shelf Takedowns. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advise PubCo, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Common Shares or other Equity Securities that PubCo desires to sell and all other Common Shares or other Equity Securities, if any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggyback registration rights held by any other stockholders, exceeds the maximum dollar amount or maximum number of Equity Securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then PubCo shall include in such Underwritten Offering, as follows, at all times:

(i)    first, the Registrable Securities of the Demanding Holders, the Founder Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder, Founder Holder and Requesting Holder (if any) has requested be included in such Underwritten Shelf Takedown for itself or, in the case of NB, on behalf of itself, the NB Aggregator or any NB Aggregator Subject Members and in the case of Dyal SLP, on behalf of itself, the Dyal SLP Aggregator or any Dyal SLP Aggregator Subject Members) that can be sold without exceeding the Maximum Number of Securities;

(ii)    second, to the extent that the Maximum Number of Securities has not been reached under Section 3.1(e)(i), the Common Shares or other Equity Securities that PubCo desires to sell, which can be sold without exceeding the Maximum Number of Securities; and

(iii)    third, to the extent that the Maximum Number of Securities has not been reached under Section 3.1(e)(i) and Section 3.1(e)(ii), the Common Shares or other Equity Securities of any other Holder or any other Persons that PubCo is obligated to include in such Underwritten Offering pursuant to separate written contractual arrangements with such Persons and that can be sold without exceeding the Maximum Number of Securities.

(f)    Withdrawal. Any of the Demanding Holders initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to PubCo and the Underwriter or Underwriters (if any) of such Demanding Holder’s intention

 

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to withdraw from such Underwritten Shelf Takedown, prior to the pricing of such Underwritten Shelf Takedown by PubCo. Following the receipt of any Withdrawal Notice, PubCo shall promptly forward such Withdrawal Notice to any other Special Holders that had elected to participate in such Underwritten Shelf Takedown. If PubCo receives a Withdrawal Notice, a Special Holder not so withdrawing may elect to have PubCo continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied or if the Underwritten Shelf Takedown would be made with respect to all of the Registrable Securities of such Special Holder. Notwithstanding anything to the contrary contained in this Agreement, PubCo shall be responsible for the Registration Expenses incurred in connection with an Underwritten Shelf Takedown prior to delivery of a Withdrawal Notice under this Section 3.1(f).

(g)    Long-Form Demands. Upon the expiration of the Lock-Up Period applicable to such Person, and during such times as no Shelf is effective, each Special Holder may demand that PubCo file a Registration Statement on Form S-1 for the purpose of conducting an Underwritten Offering of any or all of such Special Holder’s Registrable Securities, which, in the case of such request, may include with respect to NB, the Registrable Securities held by NB Aggregator and any NB Aggregator Subject Members and with respect to Dyal SLP, the Dyal SLP Aggregator and any Dyal SLP Aggregator Subject Members. PubCo shall file such Registration Statement within 30 days of receipt of such demand and use its reasonable best efforts to cause the same to be declared effective within 60 days of filing. The provisions of Section 3.1(d), Section 3.1(e) and Section 3.1(f) shall apply to this Section 3.1(g) as if a demand under this Section 3.1(g) were an Underwritten Shelf Takedown.

Section 3.2    Piggyback Registration.

(a)    Piggyback Rights.

(i)    If PubCo or any Special Holder proposes to conduct a registered offering of, or if PubCo proposes to file a Registration Statement under the Securities Act with respect to an offering of, Equity Securities of PubCo or securities or other obligations exercisable or exchangeable for or convertible into Equity Securities of PubCo, for its own account or for the account of stockholders of PubCo (or by PubCo and by the stockholders of PubCo including an Underwritten Shelf Takedown pursuant to Section 3.1), other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to PubCo’s existing stockholders, (iii) for an offering of debt that is convertible into Equity Securities of PubCo, or (iv) for a dividend reinvestment plan, then PubCo shall give written notice of such proposed offering to all Holders as soon as practicable but not less than four calendar days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed

 

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managing Underwriter or Underwriters, if any and if known, in such offering, and (B) offer to all of the Holders the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing within three calendar days after receipt of such written notice (such registered offering, a “Piggyback Registration”).

(ii)    Subject to Section 3.2(b), PubCo shall cause all Registrable Securities requested by the Holders to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this Section 3.2(a) to be included in a Piggyback Registration on the same terms and conditions as any similar securities of PubCo included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder’s agreement to abide by the terms of Section 3.6 below.

(b)    Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration (other than an Underwritten Shelf Takedown), in good faith, advises PubCo and the Holders participating in the Piggyback Registration in writing that the dollar amount or number of Common Shares or other Equity Securities that PubCo desires to sell, taken together with (x) the Common Shares or other Equity Securities, if any, as to which Registration or a registered offering has been demanded pursuant to separate written contractual arrangements with Persons other than the Holders under this Agreement and (y) the Common Shares or other Equity Securities, if any, as to which registration has been requested pursuant to Section 3.2, exceeds the Maximum Number of Securities, then:

(i)    If the Registration is initiated and undertaken for PubCo’s account, PubCo shall include in any such Registration:

(A)    first, the Common Shares or other Equity Securities that PubCo desires to sell, which can be sold without exceeding the Maximum Number of Securities;

(B)    second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Special Holders, including NB on behalf of itself, and with respect to any Registrable Securities held by the NB Aggregator and any NB Aggregator Subject Members, and including Dyal SLP on behalf of itself, the Dyal SLP Aggregator and any Dyal SLP Aggregator Subject Members, and Founder Holders exercising their rights to register their Registrable Securities pursuant to Section 3.2(a) (pro rata based on the respective number of Registrable Securities that each Special Holder and Founder Holder has requested be included in such Registration for itself or, in the case of NB, with respect to Registrable Securities held by itself, the

 

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NB Aggregator and the NB Aggregator Subject Members and in the case of Dyal SLP, on behalf of itself, the Dyal SLP Aggregator and any Dyal SLP Aggregator Subject Members), which can be sold without exceeding the Maximum Number of Securities;

(C)    third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Registrable Securities of Holders that are not Special Holders or Founder Holders exercising their rights to register their Registrable Securities pursuant to Section 3.2(a) (pro rata based on the respective number of Registrable Securities that each such Holder has requested be included in such Registration), which can be sold without exceeding the Maximum Number of Securities; and

(D)    fourth, to the extent the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Common Shares or other Equity Securities, if any, as to which Registration has been requested pursuant to written contractual piggyback registration rights of other stockholders of PubCo, which can be sold without exceeding the Maximum Number of Securities;

(ii)    If the Registration is initiated and undertaken for the account of a Special Holder, PubCo shall include in any such Registration:

(A)    first, the Registrable Securities of Special Holders, including NB on behalf of itself, and with respect to any Registrable Securities held by the NB Aggregator and any NB Aggregator Subject Members, and including Dyal SLP on behalf of itself, the Dyal SLP Aggregator and any Dyal SLP Aggregator Subject Members, and Founder Holders exercising their rights to register their Registrable Securities pursuant to Section 3.2(a) (pro rata based on the respective number of Registrable Securities that each Special Holder and Founder Holder has requested be included in such Registration for itself or, in the case of NB, with respect to Registrable Securities held by itself, the NB Aggregator and the NB Aggregator Subject Members and in the case of Dyal SLP, on behalf of itself, the Dyal SLP Aggregator and any Dyal SLP Aggregator Subject Members), which can be sold without exceeding the Maximum Number of Securities;

(B)    second, the Common Shares or other Equity Securities that PubCo desires to sell, which can be sold without exceeding the Maximum Number of Securities;

(C)    third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Registrable Securities of Holders that are not Special Holders or Founder Holders exercising their rights to register their Registrable Securities pursuant to Section 3.2(a) (pro rata based on the respective number of

 

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Registrable Securities that each such Holder has requested be included in such Registration), which can be sold without exceeding the Maximum Number of Securities; and

(D)    fourth, to the extent the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Common Shares or other Equity Securities, if any, as to which Registration has been requested pursuant to written contractual piggyback registration rights of other stockholders of PubCo, which can be sold without exceeding the Maximum Number of Securities; or

(iii)    If the Registration is pursuant to a request by Persons other than the Special Holders, then PubCo shall include in any such Registration:

(A)    first, the Common Shares or other Equity Securities, if any, of such requesting Persons, other than the Special Holders, which can be sold without exceeding the Maximum Number of Securities;

(B)    second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Special Holders and Founder Holders exercising their rights to register their Registrable Securities pursuant to Section 3.2(a) (pro rata based on the respective number of Registrable Securities that each Special Holder and Founder Holder has requested be included in such Registration for itself or, in the case of NB, on behalf of itself, the NB Aggregator or any NB Aggregator Subject Members and in the case of Dyal SLP, on behalf of itself, the Dyal SLP Aggregator or any Dyal SLP Aggregator Subject Members) which can be sold without exceeding the Maximum Number of Securities;

(C)    third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Registrable Securities of Holders that are not Special Holders or Founder Holders exercising their rights to register their Registrable Securities pursuant to Section 3.2(a) (pro rata based on the respective number of Registrable Securities that each such Holder has requested be included in such Registration), which can be sold without exceeding the Maximum Number of Securities;

(D)    fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Common Shares or other Equity Securities that PubCo desires to sell, which can be sold without exceeding the Maximum Number of Securities; and

(E)    fifth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B), (C) and (D), the Common Shares or other Equity Securities, if any, for the account of other

 

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Persons that PubCo is obligated to register pursuant to separate written contractual piggyback registration rights of such Persons, which can be sold without exceeding the Maximum Number of Securities.

Notwithstanding anything to the contrary in this Section 3.2(b), in the event a Demanding Holder has submitted notice for a bona fide Underwritten Shelf Takedown and all sales pursuant to such Underwritten Shelf Takedown pursuant to Section 3.1 have not been effected in accordance with the applicable plan of distribution or submitted a Withdrawal Notice prior to such time that PubCo has given written notice of a Piggyback Registration to all Holders pursuant to Section 3.2, then any reduction in the number of Registrable Securities to be offered in such offering shall be determined in accordance with Section 3.1(e), instead of this Section 3.2(b).

(c)    Piggyback Registration Withdrawal. Any Holder shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to PubCo and the Underwriter or Underwriters (if any) of such Holder’s intention to withdraw from such Piggyback Registration prior to the pricing of the relevant offering pursuant to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the pricing of such transaction. PubCo (whether on its own good faith determination or as the result of a request for withdrawal by Persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the SEC in connection with a Piggyback Registration (which, in no circumstance, shall include the Shelf) at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary set forth in this Agreement, PubCo shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 3.2(c).

(d)    Exceptions to Piggyback Rights. Notwithstanding anything in this Agreement to the contrary, this Section 3.2 shall not apply for any Holder, prior to the expiration of the Lock-Up Period in respect of such Holder.

Section 3.3    Restriction on Transfer.

In connection with any Underwritten Offering of Equity Securities of PubCo, each Major Holder agrees that it shall not Transfer any Common Shares (other than those included in such offering pursuant to this Agreement) without the prior written consent of PubCo, during the seven calendar days prior (to the extent notice of such Underwritten Offering has been provided) to and the 90-day period beginning on the date of pricing of such offering, except in the event the Underwriter managing the offering otherwise agrees by written consent, and further agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each case on substantially the same terms and conditions as all such Holders). Notwithstanding the foregoing, a Holder shall not be subject to this Section 3.3 with respect to an Underwritten Offering unless each Major Holder and each of PubCo’s directors and executive officers have executed a lock-up agreement on terms at least as restrictive with respect to such Underwritten Offering as requested of the Holders.

 

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Section 3.4    General Procedures. In connection with effecting any Registration and/or Shelf Takedown, subject to applicable Law and any regulations promulgated by any securities exchange on which PubCo’s Equity Securities are then listed, each as interpreted by PubCo with the advice of its counsel, PubCo shall use its reasonable best efforts (except as set forth in Section 3.4(d)) to effect such Registration to permit the sale of the Registrable Securities included in such Registration in accordance with the intended plan of distribution thereof, and pursuant thereto PubCo shall, as expeditiously as possible:

(a)    prepare and file with the SEC as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or have ceased to be Registrable Securities;

(b)    prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by any Holder or as may be required by the rules, regulations or instructions applicable to the registration form used by PubCo or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

(c)    prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Special Holders of Registrable Securities included in such Registration, and such Special Holders’ legal counsel, if any, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters or the Special Holders of Registrable Securities included in such Registration or the legal counsel for any such Special Holders, if any, may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Special Holders;

(d)    prior to any public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” Laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification), (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of PubCo and (iii) do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions (notwithstanding the

 

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foregoing, PubCo shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject);

(e)    notify each participating Holder of Registrable Securities included in such Registration Statement, as soon as practicable after PubCo receives notice thereof, but in any event within one business day of such date, of the time when the Registration Statement has been declared effective and when any post-effective amendments and supplements thereto become effective;

(f)    furnish counsel for the Underwriter(s), if any, and, upon written request, for the Special Holders of Registrable Securities included in such Registration Statement with copies of any written comments from the SEC or any written request by the SEC for amendments or supplements to a Registration Statement or Prospectus;

(g)    cause all such Registrable Securities to be listed on each national securities exchange or automated quotation system on which similar securities issued by PubCo are then listed;

(h)    provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

(i)    advise each Holder of Registrable Securities covered by a Registration Statement, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

(j)    at least three calendar days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus furnish a draft thereof to each Special Holder of Registrable Securities included in such Registration Statement, or its counsel, if any (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference therein);

(k)    notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.7;

(l)    in the event of an Underwritten Offering or a sale of Registrable Securities facilitated by a financial institution pursuant to such Registration, permit Representatives of the Special Holders, the Underwriters or such other financial institutions facilitating such Underwritten Offering or sale, if any, and any attorney, consultant or accountant

 

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retained by such Special Holders, or Underwriter or financial institution to participate, at each such Person’s own expense except to the extent such expenses constitute Registration Expenses, in the preparation of the Registration Statement, and cause PubCo’s officers, directors and employees to supply all information reasonably requested by any such Representative, Underwriter, financial institution, attorney, consultant or accountant in connection with the Registration, in each case subject to the agreement by any such Person of confidentiality arrangements reasonably satisfactory to PubCo, prior to the release or disclosure of any such information;

(m)    obtain a “cold comfort” letter, and a bring-down thereof, from PubCo’s independent registered public accountants in the event of an Underwritten Offering or, if requested in writing in the event of a sale of Registrable Securities by a financial institution pursuant to such Registration, which the participating Special Holders may rely on, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter or financial institution, as the case may be, may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Special Holders and any Underwriters or financial institution;

(n)    on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion and negative assurances letter, dated such date, of counsel representing PubCo for the purposes of such Registration, addressed to the participating Special Holders, the placement agent or sales agent, if any, and the Underwriters, if any, and any financial institution facilitating a sale of Registrable Securities facilitated pursuant to such Registration, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating Special Holders, any Underwriters, placement agent, sales agent, or financial institution may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to the participating Special Holders and any Underwriters, placement agent, sales agent and financial institution;

(o)    in the event of any Underwritten Offering or a sale of Registrable Securities facilitated by a financial institution pursuant to such Registration, enter into and perform its obligations under an underwriting agreement or other purchase or sales agreement, in usual and customary form, with the managing Underwriter, placement agent, sales agent or financial institution of such offering or sale;

(p)    make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning within three months after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the SEC);

(q)    if an Underwritten Offering involves Registrable Securities with a total offering price (including piggyback securities and before deduction of underwriting discounts) reasonably expected to exceed, in the aggregate, $50 million, use its reasonable best efforts to make available senior executives of PubCo to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and

 

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(r)    otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested, by the participating Holders, in connection with such Registration.

Section 3.5    Registration Expenses. The Registration Expenses of all Registrations shall be borne by PubCo. It is acknowledged by the Holders that the Holders selling any Registrable Securities in an offering shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees and Underwriter marketing costs, in each case pro rata based on the number of Registrable Securities that such Holders have sold in such Registration.

Section 3.6    Requirements for Participating in Underwritten Offerings. Notwithstanding anything to the contrary contained in this Agreement, if any Holder does not provide PubCo with its requested Holder Information, PubCo may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if PubCo determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. No Person may participate in any Underwritten Offering of Equity Securities of PubCo pursuant to a Registration under this Agreement unless such Person (a) agrees to sell such Person’s Registrable Securities on the basis provided in any underwriting and other arrangements approved by PubCo in the case of an Underwritten Offering initiated by PubCo, and approved by the Demanding Holders in the case of an Underwritten Offering initiated by the Demanding Holders and (b) completes and executes all customary questionnaires, powers of attorney, custody agreements, indemnities, lock-up agreements, underwriting or other agreements and other customary documents as may be reasonably required under the terms of such underwriting, sales, distribution or placement arrangements. Subject to the minimum thresholds set forth in Section 3.1(d) and Section 3.4(q), the exclusion of a Holder’s Registrable Securities as a result of this Section 3.6 shall not affect the registration of the other Registrable Securities to be included in such Registration. Notwithstanding anything to the contrary contained in this Section 3.6, NB, the NB Aggregator, Dyal SLP and the Dyal SLP Aggregator shall not be required to sign any powers of attorney or custody aggreements.

Section 3.7    Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from PubCo that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (and PubCo covenants to prepare and file such supplement or amendment as soon as practicable after giving such notice), or until it is advised in writing by PubCo that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require PubCo to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to PubCo for reasons beyond PubCo’s control, PubCo may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than twice or an aggregate of 90 days in any 12-month period, determined in good faith by PubCo to be necessary

 

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for such purpose. In the event PubCo exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to such Registration in connection with any sale or offer to sell Registrable Securities. PubCo shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.7.

Section 3.8    Reporting Obligations. As long as any Holder shall own Registrable Securities, PubCo, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by PubCo after the Effective Date pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. Any documents publicly filed or furnished with the SEC pursuant to the Electronic Data Gathering, Analysis and Retrieval System shall be deemed to have been furnished to the Holders pursuant to this Section 3.8.

Section 3.9    Other Obligations. In connection with a Transfer of Registrable Securities exempt from Section 5 of the Securities Act or through any broker-dealer transactions described in the plan of distribution set forth within the Prospectus and pursuant to the Registration Statement of which such Prospectus forms a part, PubCo shall, subject to applicable Law, as interpreted by PubCo with the advice of counsel, and the receipt of any customary documentation required from the applicable Holders in connection therewith, (a) promptly instruct its transfer agent to remove any restrictive legends applicable to the Registrable Securities being Transferred and (b) cause its legal counsel to deliver the necessary legal opinions, if any, to the transfer agent in connection with the instruction under clause (a). In addition, PubCo shall cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with the aforementioned Transfers. Notwithstanding the foregoing, that PubCo shall have no obligation to participate in any “road shows” or assist with the preparation of any offering memoranda or related documentation with respect to any Transfer of Registrable Securities in any transaction that does not constitute an Underwritten Offering.

Section 3.10    Indemnification and Contribution.

(a)    PubCo agrees to indemnify and hold harmless each Holder, its officers, managers, directors, trustees, equityholders, beneficiaries, affiliates, agents and Representatives and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, losses, liabilities and expenses (including attorneys’ fees) (or actions in respect thereto) caused by, resulting from, arising out of or based upon (i) any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or similar document incident to any Registration, qualification, compliance or sale effected pursuant to this Article III or any amendment thereof or supplement thereto, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any violation or alleged violation by PubCo of the Securities Act or any other similar federal or state securities Laws, and will reimburse, as incurred, each such Holder, its officers, managers, directors, trustees, equityholders, beneficiaries, affiliates, agents and Representatives and each Person who controls such Holder (within the meaning of the Securities Act) for any legal and any other expenses reasonably incurred

 

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in connection with investigating or defending any such claim, loss, damage, liability or action. Notwithstanding the foregoing, PubCo will not be liable in any such case to the extent that any such claim, damage, loss, liability or expense are caused by or arises out of or is based on any untrue statement or omission made in reliance and in conformity with written information furnished to PubCo by or on behalf of such Holder expressly for use therein. PubCo shall indemnify the Underwriters, their officers and directors and each Person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing sentence with respect to the indemnification of each Holder.

(b)    In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to PubCo in writing such information and affidavits as PubCo reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by Law, such Holder shall severally (and not jointly), in proportion to their respective net proceeds received from the sale of Registrable Securities pursuant to such Registration Statement, indemnify and hold harmless PubCo, its directors, officers, employees, equityholders, affiliates and agents and each Person who controls PubCo (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees) (or actions in respect thereof) arising out of, resulting from or based on any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or similar document or any amendment thereof or supplement thereto, or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by or on behalf of such Holder expressly for use therein. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each Person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing sentence with respect to indemnification of PubCo.

(c)    Any Person entitled to indemnification under this Section 3.10 shall (i) give prompt written notice, after such Person has actual knowledge thereof, to the indemnifying party of any claim with respect to which such Person seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party (not be unreasonably withheld, conditioned or delayed) and the indemnified party may participate in such defense at the indemnifying party’s expense if representation of such indemnified party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to give prompt notice shall not impair any Person’s right to indemnification under this Agreement to the extent such failure has not materially prejudiced the indemnifying party in the defense of any such claim or any such litigation. An indemnifying party, in the defense of any such claim or litigation, without the consent of each indemnified party, may only consent to the entry of any judgment or enter into any settlement only if any sums payable in connection with such settlement are paid in full by the indemnifying party and such settlement (i) includes as a term thereof the giving by the claimant or plaintiff therein to such indemnified party of an

 

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unconditional release from all liability with respect to such claim or litigation and (ii) does not include any recovery (including any statement as to or an admission of fault, culpability or a failure to act by or on behalf of such indemnified party) other than monetary damages.

(d)    The indemnification provided under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, manager, director, Representative or controlling Person of such indemnified party and shall survive the Transfer of securities.

(e)    If the indemnification provided in this Section 3.10 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to in this Agreement, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. Notwithstanding the foregoing, the liability of any Holder under this Section 3.10(e) shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a Party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 3.10(a), 3.10(b) and 3.10(c), any legal or other fees, charges or expenses reasonably incurred by such Party in connection with any investigation or proceeding. The Parties agree that it would not be just and equitable if contribution pursuant to this Section 3.10(e) were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 3.10(e). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 3.10(e) from any Person who was not guilty of such fraudulent misrepresentation.

Section 3.11    Other Registration Rights. Other than the registration rights set forth in the Original RRA and in the Subscription Agreements, PubCo represents and warrants that no Person, other than a Holder of Registrable Securities pursuant to this Agreement, has any right to require PubCo to register any securities of PubCo for sale or to include such securities of PubCo in any Registration Statement filed by PubCo for the sale of securities for its own account or for the account of any other Person. Further, each of PubCo and the Founder Holders represents and warrants that this Agreement supersedes any other registration rights agreement or agreement (including the Original RRA), other than the Subscription Agreements.

 

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Section 3.12    Rule 144. With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act, PubCo covenants that it will (a) make available at all times information necessary to comply with Rule 144, if such Rule is available with respect to resales of the Registrable Securities under the Securities Act, and (b) take such further action as the Holders may reasonably request, all to the extent required from time to time to enable them to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (if available with respect to resales of the Registrable Securities), as such rule may be amended from time to time. Upon the request of any Holder, PubCo will deliver to such Holder a written statement as to whether PubCo has complied with such information requirements, and, if not, the specific reasons for non-compliance.

Section 3.13    Term. Article III shall terminate with respect to any Holder on the date that such Holder no longer holds any Registrable Securities. The provisions of Section 3.10 shall survive any such termination with respect to such Holder.

Section 3.14    Holder Information. Each Holder agrees, if requested in writing by PubCo, to represent to PubCo the total number of Registrable Securities held by such Holder in order for PubCo to make determinations under this Agreement, including for purposes of Section 3.12. Other than the Sellers and the Founder Holders, a Party who does not hold Registrable Securities as of the Effective Date and who acquires Registrable Securities after the Effective Date will not be a “Holder” until such Party gives PubCo a representation in writing of the number of Registrable Securities it holds.

Section 3.15    Termination of Original RRA. Upon the Closing, PubCo and each of the Founder Holders agree that the Original RRA and all of the respective rights and obligations of the parties thereunder are terminated in their entirety and shall be of no further force or effect.

Section 3.16    Distributions; Direct Ownership.

(a)    In the event that the Sponsor distributes all of its Registrable Securities to its members (or the members of the Sponsor otherwise hold any Registrable Securities directly), the members of the Sponsor shall be treated as the Sponsor under this Agreement. Notwithstanding the foregoing, such members of the Sponsor, taken as a whole, shall not be entitled to rights in excess of those conferred on the Sponsor, as if the Sponsor remained a single entity party to this Agreement.

(b)    Notwithstanding anything to the contrary contained in this Agreement, the NB Aggregator may distribute all or a portion of its Registrable Securities (or securities exchangeable, convertible or exercisable into Registrable Securities) to the NB Aggregator Subject Members after expiration of the Lock-Up Period applicable thereto and upon such distribution (or if the NB Aggregator Subject Members otherwise hold any Registrable Securities directly), such Registrable Securities held by NB Aggregator Subject Members, NB Aggregator and NB shall (subject to, following the expiration of the Initial Period, Section 10.31 of the Business Combination Agreement) be treated as held by NB, collectively, for purposes of determining the Allotment, NB’s Economic Ownership Percentage, whether the NB First Ownership Threshold or NB Second Ownership Threshold is satisfied and with respect to rights under Article III of this Agreement (including, for purposes of clause (D) of the definition of “Registrable Securities” which

 

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shall aggregate any such securities with all those held by NB, NB Aggregator or any other NB Aggregator Subject Member for purposes of making such determination), so long as, as to a given NB Aggregator Subject Member, such NB Aggregator Subject Member of the NB Aggregator or its Permitted Transferees is party to a shareholders or similar agreement with NB Aggregator or NB providing (i) for the exercise of rights on behalf of, and communications to, such distributee by NB or NB Aggregator, and (ii) that unless otherwise agreed by PubCo, for a period commencing the Closing Date and ending on the eighth (8th) anniversary of this Agreement (the “Initial Period”), such NB Aggregator Subject Member shall not Transfer any Registrable Securities other than in an offering pursuant to Section 3.1 or Section 3.2 or any other Permitted Transfer, provided, that any such NB Aggregator Subject Member not subject to such shareholders or similar agreement shall nonetheless be a “Holder” hereunder. Notwithstanding anything herein to the contrary, whether or not the ownership of Equity Securities by NB Aggregator and NB Aggregator Subject Members count towards whether any ownership threshold of NB has been satisfied, rights under Article II and Article V of this Agreement may only be exercised by NB.

(c)    Notwithstanding anything to the contrary contained in this Agreement, subject to the applicable Lock-Up Period, the Dyal SLP Aggregator may distribute all or a portion of its Registrable Securities to the Dyal SLP Aggregator Subject Members and upon such distribution (or if the Dyal SLP Aggregator Subject Members otherwise hold any Registrable Securities directly), the Dyal SLP Aggregator Subject Members, Dyal SLP Aggregator and Dyal SLP shall be treated as Dyal SLP under this Agreement, collectively. In any event, any rights conferred on Dyal SLP as a Special Holder under this Agreement shall only be exercised by Dyal SLP, on behalf of itself, the Dyal SLP Aggregator and any Dyal SLP Aggregator Subject Members. Notwithstanding the foregoing, such Dyal SLP Aggregator Subject Members, taken as a whole, shall not be entitled to rights in excess of those conferred on the Dyal SLP Aggregator, as if the Dyal SLP Aggregator remained a single entity party to this Agreement.

(d)    Notwithstanding the foregoing but subject to Section 4.2, no distribution for purposes of this Section 3.16 may occur prior to the conclusion of any Lock-Up Period applicable to the Sponsor, NB or Dyal SLP Aggregator, as applicable.

(e)    At any time after expiration of the Lock-Up Period applicable to the Lock-Up Shares held by ORC Feeder that are attributable to Dyal IV (as determined in accordance with the definition of Lock-Up Period) (the “Dyal IV Attributable Shares”), ORC Feeder may distribute, sell or Transfer all or any portion of the Dyal IV Attributable Shares, as long as consideration received in respect thereof is paid exclusively to Dyal IV. At the request of ORC Feeder, PubCo shall cooperate with respect to any such distribution, sale or Transfer, including by cooperating and taking reasonable actions with respect to any Tax planning related thereto.

Section 3.17    Adjustments. If there are any changes in the Equity Securities as a result of stock split, stock dividend, combination or reclassification, or through merger, consolidation, recapitalization or other similar event, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations under this Agreement shall continue with respect to the Equity Securities as so changed.

 

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ARTICLE IV

LOCK-UP

Section 4.1    Lock-Up.

(a)    Each Holder severally, and not jointly, agrees with PubCo that it shall not effect any Restricted Transfer of any Lock-Up Shares Beneficially Owned or otherwise held by such Party during the Lock-Up Period applicable to such Lock-Up Shares.

(b)    During the Lock-Up Period applicable to any Holder, any purported Transfer of Lock-Up Shares by such Holder other than in accordance with this Agreement shall be null and void, and PubCo shall refuse to recognize any such Transfer for any purpose.

(c)    Notwithstanding anything to the contrary in this Agreement, each Holder acknowledges and agrees that the Blue Owl Holdings Common Units, the Blue Owl Carry Common Units and the Common Shares, in each case, Beneficially Owned by such Person shall remain subject to any restrictions on Transfer under applicable securities Laws of any Governmental Entity, including all applicable holding periods under the Securities Act and other rules of the SEC.

Section 4.2    Permitted Transfers. Notwithstanding anything to the contrary contained in this Agreement, during the Lock-Up Period applicable to such Holder, each Holder may make Permitted Transfers (without the consent of PubCo) of any of such Holder’s Lock-Up Shares. For the avoidance of doubt, in connection with any Permitted Transfer of Lock-Up Shares, (x) the restrictions and obligations contained in Section 4.1 and this Section 4.2 will continue to apply to such Lock-Up Shares after any Transfer of such Lock-Up Shares, and (y) the Transferee of such Lock-Up Shares shall have no rights under this Agreement, unless, for the avoidance of doubt, such Transferee is a Permitted Transferee in accordance with this Agreement and complies with the following sentence. Any Transferee of Lock-Up Shares that is a Permitted Transferee of the Transferor shall be required, at the time of and as a condition to such Transfer, to become a party to this Agreement by executing and delivering a joinder in the form attached to this Agreement as Exhibit A, whereupon such Transferee will be treated as a Party (with the same rights and obligations as the Transferor, other than rights under this Agreement that may not be assigned in accordance with Article V hereof) for all purposes of this Agreement.

ARTICLE V

GENERAL PROVISIONS

Section 5.1    Assignment; Successors and Assigns; No Third Party Beneficiaries.

(a)    Except as otherwise permitted pursuant to this Agreement, no Party may assign such Party’s rights or obligations under this Agreement, in whole or in part, other than in compliance with this Section 5.1. Any such assignee may not again assign those rights, other than in accordance with this Section 5.1. Any attempted assignment of rights or obligations in violation of this Section 5.1 shall be null and void.

 

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(b)    Subject to Section 5.1(g), Section 5.1(i) and the following sentence, NB may not assign any of its rights or obligations under this Agreement without the prior written consent of PubCo. Notwithstanding the foregoing sentence, the NB Aggregator and the NB Aggregator Subject Members shall (to the extent any such NB Aggregator Subject Member holds Registrable Securities) each be considered a Holder for purposes of Article III without any further consent of PubCo. Notwithstanding anything to the contrary in this Agreement (including the foregoing sentence), NB’s rights under Section 2.1, Section 2.3 and Section 2.5 are personal to NB and may not be assigned to any Person.

(c)    Subject to Section 5.1(g), Section 5.1(h) and Section 5.1(i), the Dyal Principals (and the Dyal Principal Representative) may not assign any of their respective rights or obligations under this Agreement without the prior written consent of each of PubCo, the ORC Principal Representative, and for so long as the NB First Ownership Threshold is satisfied, NB. Notwithstanding the foregoing sentence, the Dyal SLP Aggregator and the Dyal SLP Aggregator Subject Members shall (to the extent any such Dyal SLP Aggregator Subject Member holds Registrable Securities) each be considered a Holder for purposes of Article III without any further consent of PubCo, the ORC Principal Representative or NB.

(d)    Subject to Section 5.1(g), Section 5.1(h) and Section 5.1(i), the ORC Principals (and the ORC Principal Representative) may not assign their respective rights or obligations under this Agreement without the prior written consent of each of PubCo, the Dyal Principal Representative, and for so long as the NB First Ownership Threshold is satisfied, NB. Notwithstanding the foregoing sentence, ORC Feeder and its members and ORCP and its partners shall (to the extent any such member or partner, as applicable, holds Registrable Securities) each be considered a Holder for purposes of Article III without any further consent of PubCo, the Dyal Principal Representative or NB.

(e)    Other than assignments in connection with a distribution in accordance with Section 3.16 but subject to Section 5.1(i), the Founder Holders may not assign their respective rights or obligations under this Agreement without the prior written consent of each of PubCo, a majority of the Key Individuals, and for so long as the NB First Ownership Threshold is satisfied, NB.

(f)    Except as provided in Section 5.1(i), no Seller (other than the Sellers specifically referred to in Section 5.1(b) through Section 5.1(e)) may assign any of its respective rights or obligations under this Agreement without the prior written consent of PubCo.

(g)    Notwithstanding anything to the contrary in this Agreement, in no event can any Party assign any of such Party’s rights under Section 2.1 and Section 2.2.

 

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(h)    Notwithstanding anything to the contrary in this Agreement, the rights of the Key Individuals (in their capacity as such) under this Agreement are personal and may not be assigned to any Person.

(i)    A Holder, in its capacity as such, may Transfer such Holder’s rights or obligations under this Agreement in connection with a Transfer of such Holder’s Registrable Securities, in whole or in part, to any such Holder’s Permitted Transferees.

(j)    Subject to Section 5.1(b) through Section 5.1(h), any Transferee of Registrable Securities (other than pursuant to an effective Registration Statement or a Rule 144 transaction or in a transaction whereby such Registrable Securities cease to be Registrable Securities) shall be required, at the time of and as a condition to such Transfer, to become a party to this Agreement by executing and delivering a joinder in the form attached to this Agreement as Exhibit A, whereupon such Transferee will be treated as a Party (with the same rights and obligations as the Transferor) for all purposes of this Agreement. No Transfer of Registrable Securities by a Holder shall be registered on PubCo’s books and records, and such Transfer of Registrable Securities shall be null and void and not otherwise effective, unless any such Transfer is made in accordance with the terms and conditions of this Agreement, and PubCo is authorized by all of the Holders to enter appropriate stop transfer notations on its transfer records to give effect to this Agreement.

(k)    All of the terms and provisions of this Agreement shall be binding upon the Parties and their respective successors, assigns, heirs and representatives, but shall inure to the benefit of and be enforceable by the successors, assigns, heirs and representatives of any Party only to the extent that they are permitted successors, assigns, heirs and representatives pursuant to the terms of this Agreement.

(l)    Nothing in this Agreement, express or implied, is intended to confer upon any Party, other than the Parties and their respective permitted successors, assigns, heirs and representatives, any rights or remedies under this Agreement or otherwise create any third party beneficiary to this Agreement.

Section 5.2    Termination. Except for Section 2.1(j), Section 2.1(k) and Section 2.1(l), Section 2.1 shall terminate automatically (without any action by any Party) as to the ORC Principals (and the ORC Principal Representative), the Dyal Principals (and the Dyal Principal Representative) and NB, as applicable, at such time at which such Party no longer has the right to designate an individual for nomination to the Board under this Agreement. Article III of this Agreement shall terminate as set forth in Section 3.13. The remainder of this Agreement shall terminate automatically (without any action by any Party) as to each Holder when such Holder ceases to Beneficially Own any Registrable Securities. Notwithstanding the foregoing, the provisions of Section 3.10 and Section 5.12 shall survive any termination of this Agreement with respect to any Holder.

Section 5.3    Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions of this Agreement, to the extent permitted by Law shall remain in full force and effect.

 

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Section 5.4    Entire Agreement; Amendments; No Waiver.

(a)    This Agreement, together with the Exhibit to this Agreement, the BCA, Certificate of Incorporation, the Bylaws, the A&R Blue Owl Holdings LP Agreement, the A&R Blue Owl Carry LP Agreement, the Exchange Agreement and all other Ancillary Agreements, constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and thereof and supersede all prior and contemporaneous agreements, understandings and discussions, whether oral or written, relating to such subject matter in any way and there are no warranties, representations or other agreements among the Parties in connection with such subject matter except as set forth in this Agreement and therein.

(b)    Subject to Section 5.4(c) and Section 5.4(d), no provision of this Agreement may be Amended in whole or in part at any time without the express written consent of PubCo, Holders with aggregate Voting Power Percentages constituting a majority of the aggregate Voting Power Percentages of all Holders and Holders with aggregate Economic Ownership Percentages constituting a majority of the aggregate Economic Ownership Percentages of all Holders. Notwithstanding anything to the contrary in this Agreement, the rights of PubCo set forth in Section 2.6 (and the definitions used therein) may not be Amended, assigned or waived in whole or in part at any time without the prior written consent of a majority of the Independent Directors.

(c)    Notwithstanding Section 5.4(b) but subject to Section 5.4(d), any Amendment of (i) any rights or obligations of any Party that are personal to such Party or specifically refer to such Party by name that would be materially adverse in any respect to such Party, or (ii) any rights or obligations of any Party that would be materially adverse in any respect to such Party in a manner disproportionate to the other Parties, shall require the prior written consent of such Party. Notwithstanding the foregoing, (x) with respect to any Amendment to the rights and obligations of (i) ORC Principals under this Agreement, such Amendment shall only be effective if the prior written consent of Doug Ostrover and Marc Lipschultz is received, (ii) Dyal Principals under this Agreement, such Amendment shall only be effective if the prior written consent of Michael Rees is received, or (iii) NB under this Agreement, such Amendment shall only be effective if the prior written consent of NB is received; and (y) with respect to any Amendment that would be materially adverse in any respect to (1) any Key Individual, such Amendment shall only be effective if the prior written consent of such Key Individual is received or (2) the Founder Holders, such Amendment shall only be effective if the prior written consent of the Sponsor is received.

(d)    The Amendment of any provision of this Agreement that has terminated (as determined in accordance with this Agreement) with respect to a Party shall not require the consent of such Party (and any Equity Securities owned by such Party shall be disregarded for purposes of calculating any percentages required in respect of such Amendment).

(e)    No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement shall be effective unless in writing and signed by the Party to be bound and then only to the specific purpose, extent and instance so provided. Notwithstanding the foregoing sentence, no waiver of any provision or default under, nor

 

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consent to any exception to, the terms and provisions of Article IV shall be effective unless in writing and signed by each of (i) PubCo, (ii) the ORC Principal Representative, (iii) the Dyal Principal Representative, (iv) NB, (v) the Sponsor, and (vi) a majority-in-voting interest of the Holders.

Section 5.5    Counterparts; Electronic Delivery. This Agreement and any other agreements, certificates, instruments and documents delivered pursuant to this Agreement may be executed and delivered in one or more counterparts and by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No Party shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a contract and each Party forever waives any such defense.

Section 5.6    Notices. All notices, demands and other communications to be given or delivered under this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one Business Day following sending by reputable overnight express courier (charges prepaid) or (c) three (3) calendar days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing pursuant to the provisions of this Section 5.6, notices, demands and other communications shall be sent to the addresses indicated on the signature pages hereto (in the case of PubCo or any other Party executing this Agreement as of the Effective Date) or, with respect to any Transferee executing a joinder following the Effective Date, on such joinder. Any notice, demand or other communication to NB Aggregator or any NB Aggregator Subject Members shall be deemed validly given if given to NB.

Section 5.7    Governing Law; Waiver of Jury Trial; Jurisdiction. The Law of the State of Delaware shall govern (a) all Proceedings, claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice of Law or conflict of Law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the Parties submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware,

 

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in any Proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the Proceeding shall be heard and determined in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 5.7, however, shall affect the right of any Party to serve legal process in any other manner permitted by Law or at equity. Each Party agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity.

Section 5.8    Specific Performance. Each Party agrees and acknowledges that it will be impossible to measure in money the damages that would be suffered if the Parties fail to comply with any of the obligations imposed on them by this Agreement and that, in the event of any such failure, an aggrieved Party will be irreparably damaged and will not have an adequate remedy at Law. Any such Party shall, therefore, be entitled (in addition to any other remedy to which such Party may be entitled at Law or in equity) to seek injunctive relief, including specific performance, to enforce such obligations, without the posting of any bond, and if any Proceeding should be brought in equity to enforce any of the provisions of this Agreement, none of the Parties shall raise the defense that there is an adequate remedy at Law.

Section 5.9    Subsequent Acquisition of Shares. Any Equity Securities of PubCo, Blue Owl Holdings or Blue Owl Carry acquired subsequent to the Effective Date by a Holder shall be subject to the terms and conditions of this Agreement and such shares shall be considered to be “Registrable Securities” as such term is used in this Agreement. Notwithstanding the foregoing, Equity Securities acquired under a Subscription Agreement on or prior to the Effective Date shall not be “Registrable Securities” for purposes of this Agreement. The rights and obligations of the Dyal Principals and the ORC Principals under Article IV of this Agreement shall apply with respect to each Person controlled, directly or indirectly, by such Dyal Principals or ORC Principals, either individually or collectively, and the Equity Securities of the Dyal Principals and ORC Principals in each such Person.

Section 5.10    Legends. Each of the Holders acknowledges that (i) no Transfer, hypothecation or assignment of any Registrable Securities Beneficially Owned by such Holder may be made except in compliance with applicable federal and state securities laws and (ii) PubCo shall (x) place customary restrictive legends on the certificates or book entries representing the Registrable Securities subject to this Agreement and (y) remove such restrictive legends at the time the applicable Transfer and other restrictions contemplated thereby are no longer applicable to the Registrable Securities represented by such certificates or book entries.

Section 5.11    No Third Party Liabilities. This Agreement may only be enforced against the named parties to this Agreement, and only with respect to obligations of such named parties under this Agreement. All claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to any of this Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), may be made only against the Persons that are expressly identified as parties to this Agreement, as applicable, and only with respect to obligations of such named parties under this Agreement; and no past, present or future direct or indirect director, officer, employee, incorporator, member, partner, stockholder, Affiliate, portfolio company in which any such Party or any of its investment fund Affiliates have made a

 

59


debt or equity investment (and vice versa), agent, attorney or representative of any Party to this Agreement (including any Person negotiating or executing this Agreement on behalf of a Party to this Agreement), unless a Party to this Agreement, shall have any liability or obligation with respect to this Agreement or with respect any claim or cause of action (whether in contract or tort) that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including a representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement).

Section 5.12    Indemnification; Exculpation.

(a)    PubCo will, and PubCo will cause each of its subsidiaries to, jointly and severally indemnify and hold the Holders and each of their respective direct and indirect partners, equityholders, members, managers, Affiliates, directors, officers, shareholders, fiduciaries, controlling Persons, employees, representatives and agents and each of the partners, equityholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents of each of the foregoing (collectively, the “Holder Indemnitees”) free and harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses) incurred by the Holder Indemnitees or any of them on or after the date of this Agreement (collectively, the “Indemnified Liabilities”), to the extent arising out of any third party action, cause of action, suit, litigation, investigation, inquiry, arbitration or claim (each, an “Action”) arising directly or indirectly out of, or in any way relating to, any Holder’s or its Affiliates’ ownership of Equity Securities of PubCo or control or ability to influence PubCo or any of its subsidiaries (other than any such Indemnified Liabilities (w) to the extent such Indemnified Liabilities are liabilities of any Holder Indemnitee or its Affiliates pursuant to any indemnification obligation of such Holder Indemnitee or its Affiliates to PubCo or its Affiliates (other than such Holder Indemnitee or its Affiliates), under the BCA and the Ancillary Agreements, (x) to the extent such Indemnified Liabilities arise out of any breach by such Holder Indemnitee or its Affiliates of this Agreement, the BCA (to the extent such Holder Indemnitee or such Affiliate is a party thereto), any agreement referenced or contemplated thereby to which such Holder Indemnitee or any of its Affiliates is a party, or any other agreement between such Holder Indemnitee or any of its Affiliates, on the one hand, and PubCo or any of its subsidiaries, on the other hand, in each case by such Holder Indemnitee or its Affiliates or other related Persons, or the breach of any fiduciary or other duty or obligation (whether arising by Law or contract) of such Holder Indemnitee or its Affiliates to (A) its direct or indirect equity holders, creditors or Affiliates or (B) PubCo, any of its subsidiaries or their respective equity holders, (y) to the extent such control or the ability to control PubCo or any of its subsidiaries derives from such Holder’s or its Affiliates’ capacity as an officer or director of PubCo or any of its subsidiaries, or (z) to the extent such Indemnified Liabilities are directly caused by such Person’s fraud, gross negligence or willful misconduct). Notwithstanding the foregoing, if and to the extent that the foregoing undertaking may be unavailable or unenforceable for any reason (other than by virtue of any exclusions herein), PubCo will, and will cause its subsidiaries to, make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law. For the purposes of this Section 5.12, none of the circumstances described in the limitations contained in the proviso in the

 

60


immediately preceding sentence shall be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Holder Indemnitee as to any previously advanced indemnity payments made by PubCo or any of its subsidiaries, then such payments shall be promptly repaid by such Holder Indemnitee to PubCo and its subsidiaries. The rights of any Holder Indemnitee to indemnification under this Agreement will be in addition to any other rights any such Person may have under any other agreement or instrument to which such Holder Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation or under the organizational or governing documents of PubCo or its subsidiaries.

(b)    PubCo will, and will cause each of its subsidiaries to, jointly and severally, reimburse any Holder Indemnitee for all reasonable costs and expenses (including reasonable attorneys’ fees and expenses and any other litigation-related expenses) as they are incurred by such Holder Indemnitee in connection with investigating, preparing, pursuing, defending or assisting in the defense of any Action for which the Holder Indemnitee would be entitled to indemnification under the terms of this Section 5.12, or any action or proceeding arising therefrom. PubCo or its subsidiaries, in the defense of any Action for which a Holder Indemnitee would be entitled to indemnification under the terms of this Section 5.12, may, without the consent of such Holder Indemnitee, consent to entry of any judgment or enter into any settlement if and only if the only penalty imposed in connection with such settlement is a monetary payment that will be paid in full by PubCo or its designated subsidiary and such settlement (i) includes as a term thereof the giving by the claimant or plaintiff therein to such Holder Indemnitee of an unconditional release from all liability with respect to such Action, (ii) does not impose any limitations (equitable or otherwise) on such Holder Indemnitee, and (iii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such Holder Indemnitee. No Holder Indemnitee shall settle, compromise or consent to any judgement in connection with any Action for which such Holder Indemnitee seeks indemnification under the terms of this Section 5.12, in each case without the written consent of Pubco.

(c)    Notwithstanding the foregoing provisions of this Section 5.12, each Holder agrees that, under the A&R Blue Owl Carry LP Agreement and the A&R Blue Owl Holdings LP Agreement, each of Blue Owl Carry and Blue Owl Holdings is an indemnitor of first resort with respect to indemnification of the Indemnified Liabilities for the Persons indemnified thereunder. Accordingly, each Holder acknowledges and agrees that, if such Holder is entitled to indemnification under the A&R Blue Owl Carry LP Agreement and the A&R Blue Owl Holdings LP Agreement, such indemnification obligations of Blue Owl Carry and Blue Owl Holdings are senior and prior to the obligations of PubCo hereunder.

(d)    In no event shall any Holder Indemnitee be liable to PubCo or any of its subsidiaries for any act, alleged act, omission or alleged omission that does not constitute gross negligence, willful misconduct or fraud of such Holder Indemnitee as determined by a final, nonappealable determination of a court of competent jurisdiction.

(e)    Notwithstanding anything to the contrary contained in this Agreement, for purposes of this Section 5.12, the term Holder Indemnitees shall not include any Holder or

 

61


its any of its partners, equityholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents or any of the partners, equityholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents of any of the foregoing who is an officer, director or employee of PubCo or any of its subsidiaries in such capacity as officer, director or employee. Such officers, directors and employees are or will be subject to separate indemnification in such capacity through this Agreement and/or the certificate of incorporation or organization, bylaws or limited partnership agreements and other instruments of PubCo and its subsidiaries.

(f)    The rights of any Holder Indemnitee to indemnification pursuant to this Section 5.12 will be in addition to any other rights any such Person may have under any other section of this Agreement or any other agreement or instrument to which such Holder Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation or under the certificate of limited partnership, limited partnership agreement, certificate of incorporation or bylaws (or equivalent governing documents) of PubCo or any of its subsidiaries.

[Signature Pages Follow]

 

62


IN WITNESS WHEREOF, each of the Parties has duly executed this Agreement as of the Effective Date.

 

PUBCO
BLUE OWL CAPITAL INC.
By:  

/s/ Tom Wasserman

  Name: Tom Wasserman
  Title:   Chief Executive Officer
Notice:   40 West 57th Street, 33rd Floor
  New York, NY 10019
  Attn: Tom Wasserman
  Email: tom.wasserman@hpspartners.com

[Signature Page to Investor Rights Agreement]


BLUE OWL CAPITAL GP LLC
By:  

/s/ Tom Wasserman

  Name: Tom Wasserman
  Title:   Chief Executive Officer
BLUE OWL CAPITAL HOLDINGS LP
By: Blue Owl Capital GP LLC
Its Sole Member
By:  

/s/ Tom Wasserman

  Name: Tom Wasserman
  Title:   Chief Executive Officer
BLUE OWL CAPITAL CARRY LP
By: Blue Owl Capital GP LLC
Its Sole Member
By:  

/s/ Tom Wasserman

  Name: Tom Wasserman
  Title:   Chief Executive Officer
Notice:   40 West 57th Street, 33rd Floor
  New York, NY 10019
  Attn: Tom Wasserman
  Email: tom.wasserman@hpspartners.com

[Signature Page to Investor Rights Agreement]


ORC SELLERS:
OWL ROCK CAPITAL FEEDER LLC
By: Owl Rock Capital Partners LP, its Managing Member
By: Owl Rock Capital Partner (GP) LLC, its General Partner

/s/ Alan Kirshenbaum

Name:   Alan Kirshenbaum
Title:   Chief Operating Officer
Notice:   c/o Owl Rock Capital Partners
  399 Park Avenue, Suite 3800
  New York, NY 10022
  Attn: Alan Kirshenbaum; Neena Reddy
  Email: alan@owlrock.com;
              neena@owlrock.com

 

[Signature Page to Investor Rights Agreement]


OWL ROCK CAPITAL PARTNERS LP,

in its capacity as the ORC Principal Representative

By: Owl Rock Capital Partners (GP) LLC

its General Partner

By:  

/s/ Alan Kirshenbaum

  Name:  Alan Kirshenbaum
  Title:    Chief Operating Officer
Notice:   c/o Owl Rock Capital Partners
  399 Park Avenue, Suite 3800
  New York, NY 10022
  Attn: Alan Kirshenbaum; Neena Reddy
  Email: alan@owlrock.com;
              neena@owlrock.com

 

[Signature Page to Investor Rights Agreement]


/s/ Doug Ostrover

Doug Ostrover

/s/ Marc Lipschultz

Marc Lipschultz

/s/ Craig Packer

Craig Packer

/s/ Alan Kirshenbaum

Alan Kirshenbaum
Notice:   c/o Owl Rock Capital Partners
  399 Park Avenue, Suite 3800
  New York, NY 10022
  Attn: Alan Kirshenbaum; Neena Reddy
  Email: alan@owlrock.com;
              neena@owlrock.com

 

[Signature Page to Investor Rights Agreement]


DYAL SELLERS:
NEUBERGER BERMAN GROUP LLC
By:  

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Chief of Staff
Notice:   c/o Neuberger Berman Group LLC
  1290 Avenue of the Americas
  New York, NY 10024
  Attn: Head of Corporate Development
  Email: jacques.lilly@nb.com;
              linda.sharaby@nb.com
DYAL CAPITAL SLP LP
By: Dyal Management GP LLC, its general partner
By:  

/s/ Michael Rees

Name:   Michael Rees
Title:   Authorized Signatory
Notice: c/o Dyal Management GP LLC
1290 Avenue of the Americas
New York, NY 10024
Attn: Michael Rees
Email: michael.rees@nb.com

 

[Signature Page to Investor Rights Agreement]


/s/ Michael Rees

Michael Rees

/s/ Sean Ward

Sean Ward

/s/ Laurino

Andrew Laurino
Notice:
NB AGGREGATOR
NBSH BLUE INVESTMENTS, LLC

/s/ Heather P. Zuckerman

Name: Heather P. Zuckerman
Title:   Authorized Signatory

 

[Signature Page to Investor Rights Agreement]


SPONSOR:
ALTIMAR SPONSOR, LLC
By:  

/s/ Tom Wasserman

  Name: Tom Wasserman
  Title: Chief Executive Officer
Notice:   c/o HPS Investment Partners, LLC
  40 West 57th Street, 33rd Floor
  New York, NY 10019
  Attn: Tom Wasserman
  Email: tom.wasserman@hpspartners.com

 

[Signature Page to Investor Rights Agreement]


SPONSOR INDIVIDUALS:

/s/ Tom Wasserman

Tom Wasserman

/s/ Vijay Sondhi

Vijay Sondhi

/s/ Roma Khanna

Roma Khanna

/s/ Rick Jelinek

Rick Jelinek

/s/ Michael Vorhaus

Michael Vorhaus

/s/ Michael Rubenstein

Michael Rubenstein

/s/ Kevin Beebe

Kevin Beebe

/s/ John Kim

John Kim

/s/ Payne Brown

Payne Brown

 

Notice:   c/o HPS Investment Partners, LLC
  40 West 57th Street, 33rd Floor
  New York, NY 10019
  Attn: Tom Wasserman
  Email: tom.wasserman@hpspartners.com

 

[Signature Page to Investor Rights Agreement]


CLASS A MEMBER

(in the case of any Electing Partner that is not a Blocker Representative)

– OR –

BLOCKER REPRESENTATIVE

(in the case of any Blocker making a Blocker Election):

 

    

    

    

    

[Signature Page to Investor Rights Agreement]


Exhibit A

Form of Joinder

This Joinder Agreement (“Joinder Agreement”) is a joinder to the Investor Rights Agreement, dated as of [●], 2021 (the “Agreement”), by and among Blue Owl Capital Inc., a Delaware corporation (“PubCo”), the ORC Sellers (as defined therein), the Dyal Sellers (as defined therein), Altimar Sponsor, LLC, a Delaware limited liability company, and the other parties thereto from time to time, as amended from time to time. Capitalized terms used but not defined in this Joinder Agreement shall have the meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflict-of-law principles that would cause the application of the laws of another jurisdiction. If there is a conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.

The undersigned hereby joins and enters into the Agreement having acquired Lock-Up Shares or Registrable Securities (as applicable). By signing and returning this Joinder Agreement to PubCo, the undersigned accepts and agrees to be bound by and subject to the terms and conditions of the Agreement, with all attendant rights, duties and obligations thereunder. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by PubCo, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.

[Remainder of Page Intentionally Left Blank.]


IN WITNESS WHEREOF, the undersigned have caused this Joinder Agreement to be executed and delivered as of the date first set forth above.

 

[●]

    

Name:
[Title:]
Address for Notices:
Attention:

Exhibit 10.3

 

 

 

 

 

BLUE OWL CAPITAL GP LLC

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

May 19, 2021

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

 

 

 


AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

BLUE OWL CAPITAL GP LLC

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Blue Owl Capital GP LLC (the “Company”) is entered into as of May 19, 2021, by and among the Company and Blue Owl Capital Inc., a Delaware corporation (f/k/a Altimar Acquisition Corporation, a Cayman Island exempted company) (the “Member”), and, solely with respect to Section 4.4 hereof, Blue Owl Capital Holdings LP, a Delaware limited partnership (“Blue Owl Holdings”) and Blue Owl Capital Carry LP, a Delaware limited partnership (“Blue Owl Carry” and, together with Blue Owl Holdings, the “Partnerships”).

WHEREAS, the Company was formed on January 14, 2021 by filing the Certificate (as defined below) with the Secretary of State of the State of Delaware;

WHEREAS, as of the date of this Agreement, the Company is the general partner of each of the Partnerships;

WHEREAS, the Company and the Member entered into that certain Limited Liability Company Agreement of the Company, dated as of January 14, 2021 (the “Original Agreement”); and

WHEREAS, the Company and the Member now desire to amend and restate the Original Agreement to read in its entirety as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

GENERAL PROVISIONS; DEFINITIONS

1.1    Formation. The Company has been organized as a Delaware limited liability company by the filing of a certificate of formation on January 14, 2021 (the “Certificate”) in accordance with the Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (as amended from time to time, the “Act”).

1.2    Name. The name of the Company will be “Blue Owl Capital GP LLC” or such other name or names as the Managing Member may from time to time designate.

1.3    Purpose. At any time prior to the Partnerships becoming wholly owned subsidiaries of the Company (if ever), the Company’s purpose shall be (i) the ownership, acquisition and disposition of equity interests of the Partnerships; (ii) the management of the business of the Partnerships; (iii) financing or refinancing of any type related to the Partnerships or their respective assets or activities; and (iv) such activities as are incidental thereto. From and after the time (if ever) that the Partnerships become wholly owned subsidiaries of the Company, the Company’s purpose shall be to carry on any activities which may lawfully be carried on by a limited liability company organized pursuant to the Act.

 

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1.4    Registered Office; Registered Agent; Place of Business. The registered office of the Company required by the Act to be maintained in the State of Delaware shall be the office of the initial registered agent named in the Certificate, or such other office (which need not be a place of business of the Company) as the Managing Member may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Delaware shall be the initial registered agent named in the Certificate, or such other Person or Persons as the Managing Member may designate from time to time in the manner provided by law. The Company will maintain an office and principal place of business at such place or places inside or outside the State of Delaware as the Managing Member may designate from time to time, and all business and activities of the Company shall be deemed to have occurred at its principal office.

1.5    Member; Membership Interests. The name and the mailing address of the Member and the limited liability company interests in the Company (the “Membership Interests”) held by the Member are identified on Schedule I attached hereto. The Membership Interests shall be uncertificated.

1.6    Capital Contributions. The Member shall not be required to make capital contributions to the Company.

1.7    Liability of Member. Except as otherwise required by applicable law and as explicitly set forth in this Agreement, the Member shall not have any personal liability whatsoever in such Member’s capacity as a member (or Managing Member), whether to the Company, to the creditors of the Company or to any other third party, for the debts, commitments or any other obligations or Liabilities of the Company or for any losses of the Company.

1.8    Term. The Company shall continue until dissolved and terminated in accordance with Article VI.

1.9    Definitions. For purposes of this Agreement:

Act” shall have the meaning given to such term in Section 1.1.

Action” shall have the meaning given to such term in Section 4.3(a).

Affiliate” shall have the meaning given to such term in the Blue Owl LPAs (or if any differences between them, the Blue Owl Holdings LPA).

Agreement” shall have the meaning given to such term in the Preamble.

“Allocation Percentage” shall have the meaning given to such term in the Exchange Agreement.

BCA” means that certain Business Combination Agreement, dated as of December 23, 2020, by and among the Member, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP, Neuberger Berman Group LLC, and the other parties thereto, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Blue Owl Carry” shall have the meaning given to such term in the Preamble.

 

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Blue Owl Carry LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Carry, dated on or about the date of this Agreement, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Blue Owl Holdings” shall have the meaning given to such term in the Preamble.

Blue Owl Holdings LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Holdings, dated on or about the date of this Agreement, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Blue Owl LPAs” means the Blue Owl Holdings LPA and the Blue Owl Carry LPA, collectively.

Blue Owl Operating Group Entities” means Blue Owl Holdings and Blue Owl Carry, collectively.

Business Day” shall have the meaning given to such term in the Blue Owl LPAs (or if any differences between them, the Blue Owl Holdings LPA).

Cash Exchange Election” shall have the meaning given to such term in the Exchange Agreement.

Certificate” shall have the meaning given to such term in Section 1.1.

Code” shall have the meaning given to such term in the Blue Owl LPAs (or if any differences between them, the Blue Owl Holdings LPA).

Company” means Blue Owl Capital GP LLC, a Delaware limited liability company formed pursuant to the Certificate and governed by this Agreement.

Exchange” shall have the meaning given to such term in the Exchange Agreement.

Exchange Agreement” means the Exchange Agreement, dated on or about the date of this Agreement, by and among the Member, the Company, Blue Owl Holdings, Blue Owl Carry and certain other Persons party thereto, as the same may be amended, modified supplemented or waived from time to time.

Exchange Committee” shall have the meaning given to such term in Section 3.3(a).

Executive Committee” shall have the meaning given to such term in the Investor Rights Agreement.

Governing Documents” shall have the meaning given to such term in the BCA.

Indemnitee” means, (a) with respect to the Member: (i) the Member, in its capacity as a member of the Company and as the Managing Member, (ii) each of the Member’s Affiliates and the Member’s or its Affiliates’ direct and indirect officers, directors, liquidators, partners, shareholders, equityholders, members, managers, fiduciaries, controlling Persons and employees, in their capacity as such, and (iii) any representatives, agents or employees of any Person identified in clauses (i)-(ii) of this clause (a); (b) each current or former employee, Officer or member of any management or advisory board

 

- 3 -


or committee of the Company (including the Exchange Committee), in their capacity as such; (c) without duplication of the foregoing clause (b), each current or former member of the PubCo Board (as applicable), in such Person’s capacity as such (or as a member of a committee thereof); and (d) any other third party who the Managing Member, reasonably and in good faith, designates as an Indemnitee in a written resolution.

Independent Director” shall have the meaning given to such term in the Investor Rights Agreement.

Investor Rights Agreement” means the Investor Rights Agreement, dated on or about the date of this Agreement, by and among the Member, Blue Owl Holdings, Blue Owl Carry and certain other Persons party thereto, as the same may be amended, modified, supplemented or waived from time to time.

Joint Indemnifiable Claim” shall have the meaning given to such term in the Blue Owl Holdings LPA.

Liabilities” shall have the meaning given to such term in Section 4.3(a).

Managing Member” shall have the meaning given to such term in Section 3.1.

Member” shall have the meaning given to such term in the Preamble.

Membership Interests” shall have the meaning given to such term in Section 1.5.

Officers” shall have the meaning given to such term in Section 3.2(b).

Partnerships” shall have the meaning given to such term in the Preamble.

Person” shall have the meaning given to such term in the BCA.

Proceeding” has the meaning given to such term in the Investor Rights Agreement.

PubCo Board” means the board of directors of the Member.

PubCo Charter” means the Amended and Restated Certificate of Incorporation of the Member, as the same may be amended, restated, modified, supplemented or replaced from time to time.

PubCo Governing Documents” means Governing Documents of PubCo (including the PubCo Charter) and the Investor Rights Agreement, collectively.

Subsidiary” shall have the meaning given to such term in the Blue Owl LPAs (or if any differences between them, the Blue Owl Holdings LPA).

Transfer” has the meaning given to such term in the Investor Rights Agreement and the terms “Transferee,” “Transferor,” “Transferred” and other forms of the word “Transfer” shall have the correlative meanings.

 

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ARTICLE II

DISTRIBUTIONS

2.1    Distributions. Distributions of cash or other assets of the Company shall be made to the Member at such times and in such amounts as the Managing Member may determine. Notwithstanding any other provisions of this Agreement, neither the Company, nor the Managing Member on behalf of the Company, shall be required to make a distribution to the Member on account of its interest in the Company if such distribution would violate the Act or other applicable law.

ARTICLE III

MANAGEMENT

3.1    Management Authority. The business and affairs of the Company shall be managed by or under the direction of its sole Member (the “Managing Member”). Subject to (x) any other agreement to which the Company may be bound (including, as of the date of this Agreement, the Blue Owl LPAs and the Exchange Agreement), and (y) as otherwise set forth in this Agreement: (a) the Managing Member shall have the sole right to manage the business of the Company and shall have all powers and rights necessary, appropriate or advisable to effectuate and carry out the purposes and business of the Company; and (b) all matters of the Company shall be determined by the Managing Member. Any action required or permitted to be taken by the Managing Member at a meeting may be taken without a meeting in a writing executed by the Managing Member. The Managing Member may adopt such other procedures governing the conduct of business of the Company as it shall deem appropriate.

3.2    Delegation of Authority; Officers.

(a)    The Managing Member may, from time to time, delegate to one or more Persons (including any Officer or other authorized Person) such authority and duties as the Managing Member may deem advisable; provided, that no Person shall be delegated the power to take any action that would violate the express terms of this Agreement or any PubCo Governing Document. Any delegation pursuant to this Section 3.2 may be revoked at any time by the Managing Member.

(b)    Without limitation of the foregoing, the Managing Member may, from time to time as it deems advisable, select natural persons and designate them as officers of the Company (the “Officers”) and assign titles (including, without limitation, President, Chief Executive Officer, Chief Financial Officer, President, Treasurer and Secretary) to any such person. Unless the Managing Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Each Officer shall have the authority to bind the Company in the ordinary course of business. Any delegation pursuant to this Section 3.2(b) may be revoked at any time by the Managing Member. An Officer may be removed with or without cause at any time by the Managing Member. Each Officer shall serve until the earlier of his or her death, resignation or removal. The officers of the Company as of the date of this Agreement are: Douglas Ostrover (Chief Executive Officer); Marc Lipschultz (Co-President); Michael Rees (Co-President); Alan Kirshenbaum (Chief Financial Officer); Craig Packer (Senior Managing Director); Sean Ward (Senior Managing Director); Andrew Laurino (Senior Managing Director); Andrew Polland (Chief Operating Officer); Neena Reddy (General Counsel and Secretary); and Junot Foradada (Chief Accounting Officer).

 

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3.3    Exchange Committee.

(a)    Concurrent with the execution and delivery of this Agreement, the Managing Member is establishing an exchange committee of the Company (the “Exchange Committee”), which shall be responsible for determining, and is vested with the power and authority by the Managing Member to determine (and only such power and authority), whether to exercise the Cash Exchange Election (on behalf of the Blue Owl Operating Group Entities) with respect to any Exchange, pursuant to and in accordance with the Exchange Agreement.

(b)    The Exchange Committee shall at all times be comprised of, and only of, the Persons who are then-serving as Independent Directors.

(c)    The Exchange Committee’s determination as to whether to exercise the Cash Exchange Election (on behalf of the Blue Owl Operating Group Entities) with respect to any Exchange shall require a majority vote of the members of the Exchange Committee.

3.4    Non-Contravention. Notwithstanding anything to the contrary herein, the Managing Member shall not be permitted hereunder to override any rights, protections or requirements of the Member, the PubCo Board, the Executive Committee and any applicable stockholders of the Member pursuant to the terms and conditions of the PubCo Governing Documents.

ARTICLE IV

EXCULPATION AND INDEMNIFICATION

4.1    Exculpation; Duties.

(a)    Except as otherwise provided by the Act, the debts, expenses, obligations and Liabilities of the Company, whether arising in contact, tort or otherwise, shall be solely the debts, expenses, obligations and Liabilities of the Company, and no Member shall be obligated personally for any such debt, expense, obligation or Liability of the Company solely by reason of being a Member. All Persons dealing with the Company shall have recourse solely to the Company for the payment of the debts, expenses, obligations or Liabilities of the Company.

(b)    Subject to the conditions and limitations set forth in this Agreement, to the greatest extent permitted under applicable law, no Indemnitee shall be liable, in damages or otherwise, to the Company or to the Member for any losses sustained or Liabilities incurred as a result of any act or omission of such Indemnitee, except that such Indemnitee shall not be exculpated from or entitled to indemnification under this Agreement for any such loss, damage or claim incurred by reason of such Indemnitee’s fraud, willful misconduct, or knowing violation of the Law or willful violation of this Agreement by the Indemnitee, in each case, as established by a final judgment of a court of competent jurisdiction.

(c)    An Indemnitee acting under this Agreement shall not be liable to the Company or to any other Indemnitee for such Person’s good-faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and Liabilities of such Persons otherwise existing at law or in equity, are agreed by the Managing Member to replace fully and completely such other duties and Liabilities of such Persons. No Member (including the Managing Member) or Officer, in its capacity as a Member (or Managing Member, as applicable) or Officer, shall owe any duty (including fiduciary duty) to the Company or any Member (all such duties being eliminated by this Agreement to the greatest extent possible).

 

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(d)    The Managing Member and the Officers may consult with legal counsel, accountants and financial or other advisors, and any act or omission suffered or taken by the Managing Member or an Officer on behalf of the Company or in furtherance of the interests of the Company in good faith in reliance upon and in accordance with the advice of such counsel, accountants or financial or other advisors will be full justification for any such act or omission, and the Managing Member or such Officer will be fully protected in so acting or omitting to act so long as such counsel or accountants or financial or other advisors were selected with reasonable care.

4.2    Other Business Opportunities.

(a)    Except with respect to any corporate opportunity expressly offered or presented to any Indemnitee solely in his or her capacity as a director or officer of, through his or her service to, or pursuant to a contract with, the Managing Member, the Company or its Subsidiaries (an “Excluded Opportunity”), and subject to any applicable limitations in the PubCo Governing Documents and any agreements entered into by an Indemnitee with the Managing Member, the Company, the Blue Owl Operating Group Entities or a Subsidiary of the foregoing (including any employment agreement), to the fullest extent permitted by applicable law, any Indemnitee shall have the right to engage in businesses of every type and description and other activities for profit, and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by the Company or any of its Subsidiaries, independently or with others, including business interests and activities in direct competition with the business and activities of the Company or any of its Subsidiaries, with no obligation to offer the Company or its Subsidiaries the right to participate therein. Nothing in this Agreement, including (without limitation) the foregoing sentence, shall be deemed to supersede any other agreement to which any Indemnitee may be a party or the rights of any other party thereto restricting such Indemnitee’s ability to have certain business interests or engage in certain business activities or ventures. To the fullest extent permitted by applicable law, but subject to the immediately preceding sentence, neither the Company nor any of its Subsidiaries shall have any rights in any business interests, activities or ventures of any Indemnitee that are not Excluded Opportunities, and the Company waives and renounces any interest or expectancy therein.

(b)    Except with respect to any Excluded Opportunity, and subject to any applicable limitations in the PubCo Governing Documents and any agreements entered into by an Indemnitee with the Managing Member, the Company, the Blue Owl Operating Group Entities or a Subsidiary of the foregoing (including any employment agreement), to the fullest extent permitted by applicable law: (i) the engagement in competitive activities by an Indemnitee in accordance with the provisions of this Section 4.2 is deemed approved by the Company, the Member and all Persons acquiring any Membership Interest; (ii) it shall not be a breach of any Indemnitee’s duties or any other obligation of any type whatsoever of any Indemnitee if an Indemnitee engages in, or directs to another Person, any such business interests or activities in preference to or to the exclusion of the Company or any of its Subsidiaries; and (iii) no Indemnitee shall be liable to the Company, the Member or any other Person who acquires any Membership Interest, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to the Company or any of its Subsidiaries.

(c)    In addition to and without limiting the foregoing provisions of this Section 4.2, and without limiting any separate agreement entered into by an Indemnitee with the Managing Member, the Company or its Subsidiaries (including any employment agreement), a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Company or any of its Subsidiaries if it is a business opportunity that (i) the Company and its Subsidiaries are neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the business of the Company and its Subsidiaries or is of no practical advantage to the Company and its Subsidiaries, (iii) is one in which

 

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the Company and its Subsidiaries have no interest or reasonable expectancy, or (iv) is one presented to any account for the benefit of an Indemnitee or an Affiliate of Indemnitee (other than the Partnership or any of its Subsidiaries) over which such Indemnitee has no direct or indirect influence or control, including, but not limited to, a blind trust. To the fullest extent permitted by applicable law, but without limiting any separate agreement entered into by an Indemnitee with the Managing Member, the Company, a Blue Owl Operating Entity Carry or a Subsidiary of the foregoing (including any employment agreement), no Indemnitee shall (x) have any duty to present business opportunities that are not Excluded Opportunities to the Company or any of its Subsidiaries or (y) be liable to the Company, the Member or any other Person who acquires any Membership Interest, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to the Company or any of its Subsidiaries.

4.3    Right to Indemnification.

(a)    The Company shall indemnify and hold harmless each Indemnitee (and such Person’s heirs, successors, assigns, executors or administrators) to the full extent permitted by law from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorney’s fees and other legal fees and expenses), judgments, fines, settlements and other amounts of any nature whatsoever, known or unknown, liquid or illiquid (collectively, “Liabilities”) arising from any and any threatened, pending or completed claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, and whether formal or informal, including appeals (“Actions”), in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of any act performed or omitted to be performed by such Indemnitee on behalf of the Company or by reason of the fact that the Indemnitee is or was serving as an Officer or manager, trustee, employee, representative or agent of the Company (or other applicable capacity set forth in the definition of “Indemnitee”) if (i) the Indemnitee acted in good faith, within the scope of such Indemnitee’s authority, and in a manner it believed to be in, or not contrary to, the best interests of the Company, (ii) the Action was not initiated by the Indemnitee (other than an action to enforce such Indemnitee’s rights to indemnification or advance of expenses under this Section 4.3), (iii) the Indemnitee has not been established by a final judgment of a court of competent jurisdiction to be liable to the Company, and (iv) such action or inaction did not constitute fraud, gross negligence, willful misconduct, or a knowing violation of the law or willful violation of this Agreement by the Indemnitee, in each case, as established by a final judgment of a court of competent jurisdiction.

(b)    Expenses incurred by an Indemnitee in (i) defending or (ii) appearing as a witness in (when such Indemnitee is not named as a defendant or respondent) any Action, subject to this Section 4.3 shall be advanced by the Company prior to the final disposition of such Action upon receipt by the Company of a written commitment by or on behalf of the Indemnitee to repay such amount if it shall be determined that such Indemnitee is not entitled to be indemnified as authorized in this Section 4.3.

(c)    The right to indemnification and advancement of expenses provided by this Agreement shall not be exclusive of, and shall not affect, any other rights to which an Indemnitee or any other Person may be entitled under any agreement, as determined by the Managing Member, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns, executors and administrators of the Indemnitee unless otherwise provided in a written agreement with such Indemnitee or in the writing pursuant to which such Indemnitee is indemnified.

(d)    To the fullest extent permitted by applicable law, the Company shall purchase and maintain insurance (or be a named insured on the insurance policy of any Affiliate), to the extent and in such amounts as the Managing Member shall deem reasonable, on behalf of any of the Indemnitees and

 

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such other Persons as the Managing Member shall determine, against any Liability that may be asserted against or expenses that may be incurred by such Person in connection with the Company’s activities, regardless of whether the Company would have the power to indemnify such Person against such Liability under the provisions of this Agreement.

(e)    An Indemnitee shall not be denied indemnification in whole or in part under this Section 4.3 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement and such Indemnitee is entitled to indemnification pursuant to Section 4.3(a).

(f)    The provisions of this Section 4.3 are for the benefit of the Indemnitees, their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 4.3 or any provision of this Agreement shall be prospective only and shall not in any way affect the limitations on the Company’s liability to any Indemnitee under this Section 4.3 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

4.4    Source; Limitation. To the extent any Liability for which an Indemnitee is entitled to indemnification pursuant to this Article IV is a Joint Indemnifiable Claim, Blue Owl Holdings shall be fully and primarily responsible for the payment of such as the indemnitor of first resort, pursuant to and in accordance with the Blue Owl Holdings LPA. Notwithstanding the foregoing, to the extent the Managing Member reasonably determines in good faith that both of the Partnerships are reasonably capable of doing so, each Partnership shall each be responsible for their respective Allocation Percentage of any Jointly Indemnifiable Claim for which the Partnerships both have liability to an Indemnitee under Section 6.6 of the Blue Owl LPAs. Any indemnification obligations of the Company arising under this Article IV shall be satisfied only to the extent of assets of the Company, and no Member or Affiliate of any Member shall have any personal liability on account thereof.

4.5    Effect on Other Agreements and Members Obligations. This Article IV shall not in any way affect, limit or modify the Managing Member’s obligations under this Agreement or any Officer’s or employee’s liabilities or obligations under any employment agreement, consulting agreement, confidentiality agreement, non-competition agreement, non-solicitation agreement or any other agreement with the Managing Member, the Company or any of its Subsidiaries or Affiliates.

4.6    Savings Clause. If this Article IV or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Officer or any other Person indemnified pursuant to this Article IV to the fullest extent permitted by any applicable portion of this Article IV that shall not have been invalidated and to the fullest extent permitted by applicable law.

ARTICLE V

TRANSFERS AND MEMBER RIGHTS

5.1    Transfer of Membership Interests.

(a)    Subject to any restrictions or limitations under or consents or approvals required by the Blue Owl LPAs or the PubCo Governing Documents (as applicable), the Member may Transfer or otherwise dispose of, whether voluntarily or involuntarily or by operation of law, all or any portion of its

 

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Membership Interests or its rights hereunder. If the Member Transfers any of its interest in the Company pursuant to this Section 5.1, the Transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement and such other documents and instruments as the Managing Member determines to be necessary or appropriate. If the Member Transfers all of its interests in the Company, such admission shall be deemed effective immediately, and immediately following such admission, the Transferor Member shall cease to be a member of the Company. Upon any such Transfer, the Managing Member shall amend Schedule I without the further vote, act or consent of any other person to reflect such new Person as a Member.

(b)    Notwithstanding anything in this Article V to the contrary, no Transfer of Membership Interests shall be permitted, and no Transferee of Membership Interests shall be admitted to the Company as a Member if, in the opinion of the Managing Member, such Transfer or admission alone or in conjunction with one or more other Transfers or admissions could or could reasonably be expected to (i) result in a violation of applicable legal requirements, including securities laws, (ii) be an event which would constitute a violation or breach (or, with the giving of notice or passage of time, would constitute a violation or breach) of any law, regulation, ordinance, agreement or instrument by which the Company, or any of its properties or assets, is bound or (iii) require the Company to register under the Investment Company Act of 1940, as amended.

5.2    Additional Members. Subject to any restrictions or limitations under or any consents or approvals required by the Blue Owl LPAs or the PubCo Governing Documents (as applicable), the Managing Member shall have the sole right to admit additional Members upon such terms and conditions and at such time or times as the Managing Member shall in its sole discretion determine. In order to be admitted as a member of the Company, such Person shall deliver to the Company an instrument signifying its agreement to be bound by the terms and conditions of this Agreement and such other documents and instruments as the Managing Member determines to be necessary or appropriate. Upon admission, the Managing Member shall amend Schedule I without the further vote, act or consent of any other Person to reflect such new Person as a Member.

ARTICLE VI

DURATION

6.1    Duration. Subject to Section 6.2 of this Agreement, the Company shall be dissolved and its affairs wound up and terminated upon the first to occur of the following:

(a)    the determination of the Managing Member to dissolve the Company; or

(b)    the entry of a decree of judicial dissolution under Section 18-802 of the Act.

No other event (including an event described in Section 18-801(4) of the Act) will cause the Company to dissolve. Except as otherwise set forth in this Article VI, the Member intends for the Company to have perpetual existence.

6.2    Continuation of the Company. The withdrawal of Blue Owl Capital Inc. as the Member shall not dissolve the Company if, within 90 days after the occurrence of such withdrawal, a new Member is admitted to the Company pursuant to Article V and the business of the Company is continued by the agreement of such new Member.

6.3    Winding Up. Upon dissolution of the Company, the Company shall be liquidated in an orderly manner. The Managing Member shall be the “Liquidator” pursuant to this Agreement and shall

 

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proceed to wind up the affairs of the Company and make final distributions as provided herein and in the Act. The costs of liquidation shall be borne as a Company expense. The steps to be accomplished by the Liquidator are as follows:

(a)    first, the Liquidator shall satisfy all of the Company’s debts and other Liabilities to creditors, other than the Member (whether by payment or the reasonable provision for payment thereof);

(b)    second, the Liquidator shall satisfy all of the Company’s debts and other Liabilities to the Member (whether by payment or the reasonable provision for payment thereof); and

(c)    third, thereafter, all remaining assets shall be distributed to the Member.

6.4    Termination. The Company shall terminate when all of the assets of the Company, after payment of or due provision for all debts, Liabilities and other obligations of the Company, shall have been distributed to the Member in the manner provided for in this Article VI, and the Certificate shall have been canceled in the manner required by the Act.

ARTICLE VII

BOOKS OF ACCOUNT; RECORDS; TAX CLASSIFICATION

7.1    Books. The Managing Member will maintain or cause to be maintained, on behalf of the Company, books of account of the Company’s affairs at the Company’s principal office or, subject to applicable provisions of the Act, at such other place as the Managing Member may from time to time determine.

7.2    Fiscal Year. The fiscal year of the Company (the “Fiscal Year”) shall be the calendar year, or, in the case of the first and last Fiscal Years of the Company, the fraction thereof commencing on the date of this Agreement or ending on the date on which the winding-up of the Company is completed, as the case may be, unless otherwise determined by the Managing Member and permitted under the Code.

7.3    U.S. Tax Classification. It is intended that the Company be treated as an association taxable as a corporation for U.S. federal income tax purposes at all times from the date of its formation. The Company shall file (and the Managing Member shall cause the Company to file, as applicable) a valid U.S. entity classification election under U.S. Treasury Regulations Section 301.7701-3(c) electing to treat the Company as an association taxable as a corporation for U.S. federal income tax purposes effective as of the date of its formation and neither the Managing Member nor the Company shall take any action inconsistent with such treatment, whether on any tax return, in any tax audit or similar examination, or otherwise. The Managing Member shall cause the Company to be a member of the consolidated U.S. federal income tax group of the Parent for purposes of Sections 1501 et seq. of the U.S. Internal Revenue Code of 1986, as amended.

ARTICLE VIII

MISCELLANEOUS

8.1    Amendments. This Agreement may be amended or modified and any provision hereof may be waived only by the Managing Member.

8.2    Successors. Except as otherwise provided herein, this Agreement will inure to the benefit of and be binding upon the Member and its respective legal representatives, heirs, successors and assigns.

 

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8.3    Governing Law; Waiver of Jury Trial; Jurisdiction. The law of the State of Delaware shall govern (a) all Proceedings, claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the parties to this Agreement submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware, or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the Proceeding shall be heard and determined in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 8.3, however, shall affect the right of any party to this Agreement to serve legal process in any other manner permitted by law or at equity. Each party to this Agreement agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

8.4    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

8.5    Notices. Any notice, consent, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next business day, (b) one business day following sending by reputable overnight express courier (charges prepaid) or (c) three days following mailing by certified or registered mail, postage prepaid and return receipt requested, in each case to the addresses or telecopy numbers as have been supplied in writing to the Company.

8.6    Complete Agreement; Construction. This Agreement, the Blue Owl LPAs and the Exchange Agreement (as applicable) constitute the entire agreement between the parties to this Agreement pertaining to the subject matter of this Agreement, and fully supersede all other agreements concerning the subject matter hereof previously entered into among any of the parties, including the Original Agreement. Descriptive headings are for convenience only and will not control or affect the meaning or construction of any provision of this Agreement. Except to the extent that the context otherwise requires: (a) each term stated in either the singular or the plural shall include the singular and the plural; (b) pronouns stated in

 

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either the masculine, feminine or the neuter gender shall include the masculine, the feminine and the neuter; (c) all references to Articles and Sections refer to articles and sections of this Agreement; (d) all references to “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation”; (e) the word “or” is not exclusive; (f) any reference to a “day” or a “Business Day” shall mean the whole of such day, being the period of 24 hours running from midnight to midnight; and (g) any reference to any statute or statutory provision shall be construed as a reference to the same as it may have been or may from time to time be amended, extended, re-enacted or consolidated and to all statutory instruments or orders made under it.

8.7    Binding Effect. This Agreement shall be binding on and inure to the benefit of the Member, its heirs, executors, administrators, successors and all other Persons hereafter holding, having or receiving Membership Interests.

8.8    Counterparts. This Agreement may be executed in any number of multiple counterparts, each of which shall be deemed to be an original copy, and all of which shall constitute one agreement, binding on all parties to this Agreement.

8.9    Partition; Appraisal Rights. The Member waives, until termination of the Company, any and all rights that it may have to maintain an action for partition of the Company’s property. Section 18-210 of the Act (entitled “Contractual Appraisal Rights”) shall not apply or be incorporated into this Agreement, and the Member hereby expressly waives all rights under Section 18-210 of the Act.

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Amended and Restated Limited Liability Company Agreement as of the date first written above.

 

THE COMPANY
BLUE OWL CAPITAL GP LLC

By: Blue Owl Capital Inc.

its sole member

By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Its:     Chief Executive Officer

 

Signature Page to Amended & Restated LLC Agreement of Blue Owl Capital GP LLC


MEMBER
BLUE OWL CAPITAL INC.
By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title:     Chief Executive Officer

 

Signature Page to Amended & Restated LLC Agreement of Blue Owl Capital GP LLC


AGREED AND ACCEPTED
(with respect to Section 4.4)
BLUE OWL CAPITAL HOLDINGS LP

By: Blue Owl Capital GP LLC

its General Partner

By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer
BLUE OWL CAPITAL CARRY LP

By: Blue Owl Capital GP LLC

its General Partner

By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer

 

Signature Page to Amended & Restated LLC Agreement of Blue Owl Capital GP LLC


Schedule I

Members

 

Member

  

Membership Interest

Blue Owl Capital Inc.

(f/k/a Altimar Acquisition Corporation)

 

399 Park Avenue, 38th Floor

New York, NY 10022

Attention: Neena Reddy, General Counsel and Secretary

Email: neena@owlrock.com

   100%

 

Schedule I to Amended & Restated LLC Agreement of Blue Owl Capital GP LLC

Exhibit 10.4

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

BLUE OWL CAPITAL HOLDINGS LP

a Delaware limited partnership

Dated as of May 19, 2021

 

 

THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH SECURITIES 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 AGREEMENT OF LIMITED PARTNERSHIP IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.


TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINED TERMS

     1  

Section 1.1

   Definitions      1  

Section 1.2

   Interpretation      16  

ARTICLE II GENERAL PROVISIONS

     16  

Section 2.1

   Formation      16  

Section 2.2

   Name      16  

Section 2.3

   Principal Place of Business; Other Places of Business      17  

Section 2.4

   Designated Agent for Service of Process      17  

Section 2.5

   Term      17  

Section 2.6

   No Concerted Action      17  

Section 2.7

   Business Purpose      17  

Section 2.8

   Powers      17  

Section 2.9

   Certificates; Filings      17  

Section 2.10

   Representations and Warranties by the Partners      18  

Section 2.11

   References to Certain Equity Securities      19  

ARTICLE III CLASSES OF PARTNERSHIP INTERESTS; CAPITAL CONTRIBUTIONS

     20  

Section 3.1

   Classes of Partnership Interests; Capital Contributions of the Partners      20  

Section 3.2

   Issuances of Additional Partnership Interests      20  

Section 3.3

   Additional Funds and Capital Contributions      21  

Section 3.4

   Issuances; Repurchases and Redemptions; Recapitalizations      22  

Section 3.5

   No Interest; No Return      26  

Section 3.6

   Capital Accounts      26  

Section 3.7

   Certain Preemptive Rights of the NB Partners      27  

Section 3.8

   Adjustments      28  

ARTICLE IV DISTRIBUTIONS

     28  

Section 4.1

   Distributions Generally      28  

Section 4.2

   Tax Distributions      28  

Section 4.3

   Distributions in Kind      29  

Section 4.4

   Distributions to Reflect Additional Partnership Units      29  

Section 4.5

   Restricted Distributions      29  

Section 4.6

   Use of Distributions      29  

Section 4.7

   Seller Earnout Units (Distributions)      29  

ARTICLE V ALLOCATIONS

     30  

Section 5.1

   General Allocations      30  

Section 5.2

   Additional Allocation Provisions      30  

Section 5.3

   Tax Allocations      32  

Section 5.4

   Other Allocation Rules      32  

Section 5.5

   Seller Earnout Units (Allocations)      33  

 

i


ARTICLE VI OPERATIONS

     33  

Section 6.1

   Management      33  

Section 6.2

   Compensation and Advances      36  

Section 6.3

   Outside Activities      37  

Section 6.4

   Transactions with Affiliates      39  

Section 6.5

   Liability of Partners; Fiduciary and Other Duties; Indemnification      39  

Section 6.6

   Indemnification      41  

Section 6.7

   Certain NB Consent Rights      43  

ARTICLE VII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     44  

Section 7.1

   Return of Capital      44  

Section 7.2

   Rights of Limited Partners Relating to the Partnership      44  

ARTICLE VIII BOOKS AND RECORDS

     45  

Section 8.1

   Books and Records      45  

Section 8.2

   Inspection      45  

ARTICLE IX TAX MATTERS

     45  

Section 9.1

   Preparation of Tax Returns      45  

Section 9.2

   Tax Elections      45  

Section 9.3

   Partnership Representative      46  

Section 9.4

   Withholding Tax Indemnification      48  

Section 9.5

   Subject Liabilities      48  

Section 9.6

   FIC Distribution      49  

Section 9.7

   Exchange Agreement      49  

Section 9.8

   Intended Tax Treatment      49  

ARTICLE X PARTNER TRANSFERS AND WITHDRAWALS

     49  

Section 10.1

   Transfer      49  

Section 10.2

   Transfer of General Partner’s Partnership Interest      49  

Section 10.3

   Limited Partners’ Rights to Transfer      50  

Section 10.4

   Substituted Limited Partners      52  

Section 10.5

   Assignees      53  

Section 10.6

   General Provisions      53  

ARTICLE XI ADMISSION OF PARTNERS

     55  

Section 11.1

   Admission of Successor General Partner      55  

Section 11.2

   Partners; Admission of Additional Limited Partners      55  

Section 11.3

   Limit on Number of Partners      56  

Section 11.4

   Admission      56  

ARTICLE XII DISSOLUTION, LIQUIDATION AND TERMINATION

     56  

Section 12.1

   No Dissolution      56  

Section 12.2

   Events Causing Dissolution      57  

Section 12.3

   Distribution upon Dissolution      57  

 

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Section 12.4

   Rights of Holders      58  

Section 12.5

   Termination      58  

Section 12.6

   Reasonable Time for Winding-Up      58  

ARTICLE XIII AMENDMENTS; MEETINGS

     59  

Section 13.1

   Amendments      59  

Section 13.2

   Procedures for Meetings and Actions of the Partners      59  

ARTICLE XIV EXCHANGE RIGHTS

     61  

Section 14.1

   Exchanges (Generally)      61  

Section 14.2

   Lock-Up Periods (Exchanges)      61  

Section 14.3

   Subject to Exchange Agreement      61  

ARTICLE XV MISCELLANEOUS

     61  

Section 15.1

   Partnership Counsel      61  

Section 15.2

   Appointment of General Partner as Attorney-in-Fact      62  

Section 15.3

   Governing Law; Waiver of Jury Trial; Jurisdiction      62  

Section 15.4

   Accounting and Fiscal Year      63  

Section 15.5

   Entire Agreement      63  

Section 15.6

   Further Assurances      63  

Section 15.7

   Notices      63  

Section 15.8

   Construction      64  

Section 15.9

   Binding Effect      64  

Section 15.10

   Severability      64  

Section 15.11

   Confidentiality      64  

Section 15.12

   Consent to Use of Name      67  

Section 15.13

   Consent by Spouse      67  

Section 15.14

   Counterparts      68  

Section 15.15

   Survival      68  

Section 15.16

   Anti-Money Laundering Representations and Undertakings      68  

Section 15.17

   Relationship to Blue Owl Carry      68  

Section 15.18

   Distributions in Kind by NB Partners.      68  

Schedule I: Equity Ownership

Schedule II: Protected Partners

Exhibit A: Capital Contributions

Exhibit B: Consent by Spouse

Exhibit C: Anti-Money Laundering Representations and Undertakings

 

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AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF BLUE OWL CAPITAL HOLDINGS LP

This Amended and Restated Agreement of Limited Partnership of Blue Owl Capital Holdings LP (the “Partnership”), dated as of May 19, 2021 (the “Effective Date”), is entered into by and among Blue Owl Capital Inc., a Delaware corporation (“PubCo”), and Blue Owl Capital GP LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo (in its capacity as the General Partner, the “General Partner”), and the Limited Partners (as defined in this Agreement).

WHEREAS, the Partnership was formed as a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq. (as it may be amended from time to time, and any successor to such statute, the “Act”), by the filing of a Certificate of Limited Partnership of the Partnership in the Office of the Secretary of State of the State of Delaware on January 14, 2021 (the “Formation Date”);

WHEREAS, in connection with a series of transactions effected pursuant to the Business Combination Agreement, dated as of December 23, 2020, by and among, PubCo, and the other parties thereto (as may be amended, restated, amended and restated, modified, supplemented or waived from time to time in accordance with its terms, the “BCA”) (i) the General Partner was admitted to the Partnership as the “General Partner” and (ii) the Predecessor General Partner withdrew from the Partnership as general partner; and

WHEREAS, the General Partner (in its capacity as the General Partner) and the other parties to this Agreement now desire to amend and restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties to this Agreement, intending to be legally bound, agree as follows:

ARTICLE I

DEFINED TERMS

Section 1.1    Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement:

Additional Limited Partner” means a Person who is admitted to the Partnership as a Limited Partner pursuant to the Act and Section 11.2, who is shown as such on the books and records of the Partnership, and who has not ceased to be a Limited Partner in accordance with the Act and under this Agreement.

Adjusted Capital Account Deficit” means the deficit balance, if any, in such Partner’s Capital Account at the end of any Fiscal Year or other taxable period, with the following adjustments:

(a)    credit to such Capital Account any amount that such Partner is obligated to restore under Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such year in Partnership Minimum Gain and Partner Minimum Gain; and


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

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

Affiliate” has the meaning given to such term in the Investor Rights Agreement, provided, however, that notwithstanding clause (i) of such definition in the Investor Rights Agreement, the General Partner shall be deemed an Affiliate of PubCo for purposes of this Agreement.

Agreement” means this Amended and Restated Agreement of Limited Partnership of Blue Owl Capital Holdings LP, together with the Schedules and Exhibits to this Agreement, as now or hereafter amended, restated, modified, supplemented or replaced.

Allocation Percentage” has the meaning given to such term in the Exchange Agreement.

Assets” means any assets and property of the Partnership, and “Asset” means any one such asset or property.

Assignee” means a Person to whom a Partnership Interest has been Transferred, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 10.5.

Assumed Tax Liability” means, with respect to a Partner for a taxable period to which an applicable Tax Distribution under Section 4.2 relates, an amount equal to the United States federal, state and local income taxes (including applicable estimated taxes) that the General Partner reasonably estimates would be payable by such Partner with respect to such taxable period, (i) assuming such Partner earned solely the items of income, gain, deduction, loss, and/or credit allocated to such Partner by the Partnership for such taxable period, (ii) assuming that such Partner is subject to tax at the Assumed Tax Rate, and (iii) computed without regard to any increases to the tax basis in the Partnership pursuant to Code Sections 734(b) or 743(b). In the case of PubCo, such Assumed Tax Liability shall also be computed without regard to any other step-up in basis for which PubCo is required to make payments under the Tax Receivable Agreement. In addition, for the avoidance of doubt, any item of income, gain, loss, or credit earned (or that would be treated as earned based on an interim closing of the books) by the Partnership prior to the Closing shall be disregarded for purposes of calculating any Partner’s Assumed Tax Liability.

Assumed Tax Rate” means the highest combined maximum marginal United States federal, state and local income tax rate ((w) taking into account the tax on net investment income under Code Section 1411 and the self-employment taxes set forth in Code Section 1401, as applicable, (x) not taking into account any deduction under Code Section 199A or any similar state or local Law, (y) taking into account the character (e.g., capital gains or losses, dividends, ordinary income, etc.) of the applicable items of income, and (z) taking into account the deductibility of state and local taxes to the extent applicable), applicable to (A) an individual residing in New York City or (B) a corporation doing business in New York City (whichever results in the application of a higher state and local income rate) during each applicable Fiscal Quarter with respect to such taxable income as determined by the General Partner in good faith.

 

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Available Cash” means cash of the Partnership and its subsidiaries minus reasonable reserves for non-discretionary liabilities, costs, and expenses plus amounts that the Partnership or its subsidiaries may borrow on commercially reasonably terms. The General Partner shall use its reasonable best efforts to ensure that the Partnership has sufficient Available Cash to make the full amount of distributions described in Section 4.2 (determined without regard to the limitations in clauses (i), (ii), and (iii) of the first sentence thereof).

Bankruptcy” means, with respect to any Person, the occurrence of any event specified in Section 17-402(a)(4) or (5) of the Act with respect to such Person, and the term “Bankrupt” has a meanings correlative to the foregoing.

BBA Rules” means Code Sections 6221 through 6241, together with Regulations and any guidance issued thereunder or successor provisions and any similar provision of state or local tax Laws.

Blue Owl Carry” means Blue Owl Capital Carry LP, a Delaware limited partnership and Affiliate of the Partnership.

Blue Owl Unit” has the meaning given to such term in the BCA.

Board” means the Board of Directors of PubCo.

Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in New York, New York.

Capital Account” means, with respect to any Partner, the capital account maintained by the General Partner for such Partner on the Partnership’s books and records in accordance with Section 3.6.

Capital Contribution” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any Contributed Asset (other than money) that such Partner contributes to the Partnership or is deemed to contribute pursuant to Article III. Each Partner that is receiving GP Units or Common Units pursuant to the BCA shall be deemed to have made Capital Contributions to the Partnership equal to (a) the Partnership’s Allocation Percentages as of the Effective Date multiplied by (b) the number of Partnership Units issued to such Partner under the BCA, multiplied by (c) $10. Exhibit A to this Agreement shall be updated to reflect the preceding sentence, and set forth the Capital Contributions of each Partner as the “Closing Date Capital Account Balance” of such Partner, to be set forth next to such Partner’s name thereon.

Carry GP Units” means a “GP Unit” as defined in the Carry LPA.

Carry LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Carry, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

 

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Carry Units” means a “Common Unit” as defined in the Carry LPA.

Certificate” means the Certificate of Limited Partnership executed and filed in the Office of the Secretary of State of the State of Delaware (and any and all amendments thereto and restatements thereof) on behalf of the Partnership pursuant to the Act.

Class A Share” means a share of “Class A Common Stock” as defined in the PubCo Charter.

Class B Share” means a share of “Class B Common Stock” as defined in the PubCo Charter.

Class C Share” means a share of “Class C Common Stock” as defined in the PubCo Charter.

Class D Share” means a share of “Class D Common Stock” as defined in the PubCo Charter.

Class E Share” means a share of “Class E Common Stock” as defined in the PubCo Charter.

Closing” has the meaning given to such term in the BCA.

Closing Date” has the meaning given to such term in the BCA.

Code” means the United States Internal Revenue Code of 1986, as amended and in effect from time to time or any successor statute thereto.

Common Unit” means a fractional share of the Partnership Interests of all Limited Partners issued pursuant to Sections 3.1 and 3.2.

Contributed Asset” means each Asset or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership.

control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member, by contract or otherwise.

De Minimis” means an amount small enough as to make not accounting for it commercially reasonable or accounting for it administratively impractical, in each case as reasonably determined in good faith by the General Partner.

Debt” means, as to any Person, as of any date of determination: (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (b) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (c) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such

 

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Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (d) obligations of such Person as lessee under capital leases.

Depreciation” means, for each Fiscal Year or other applicable period, an amount equal to the federal income tax depreciation, amortization or other cost recovery deduction allowable under United States federal income tax principles with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or period, Depreciation shall be in an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis. Notwithstanding the foregoing sentence, if the federal income tax depreciation, amortization or other cost recovery deduction for such year or period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

Diamond Business” has the meaning given to such term in the BCA.

Diamond Partner” means Dyal Capital SLP LP, and any Permitted Transferee of such Person(s) who is Transferred Partnership Interests.

Direct Exchange” has the meaning given to such term in the Exchange Agreement.

Earnout Termination Date” means the date that is the fifth anniversary of the Effective Date.

Equity Securities” means, with respect to any Person, all of the shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock or preferred interests or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), restricted stock awards, restricted stock units, equity appreciation rights, phantom equity rights, profit participation and all of the other ownership or profit interests of such Person (including partnership or member interests therein), whether voting or nonvoting.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

Excess Tax Advance” has the meaning set forth in Section 9.4(a).

Exchange” means an Exchange as defined in, and effected in accordance with, the Exchange Agreement.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.

 

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Exchange Agreement” means the Exchange Agreement, dated on or about the Effective Date, by and among PubCo, the Partnership, Blue Owl Carry and certain other Persons party thereto, as the same may be amended, modified, supplemented or waived from time to time.

Exchanged Securities” has the meaning given to such term in the Exchange Agreement.

Exchanging Partner” has the meaning given to such term in the Exchange Agreement.

Executive Committee” has the meaning given to such term in the Investor Rights Agreement.

FIC Distribution” has the meaning given to such term in the Tax Receivable Agreement.

Fiscal Year” has the meaning set forth in Section 15.4.

General Partner” means Blue Owl Capital GP LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo, and/or any additional or successor General Partner(s) designated as such pursuant to the Act and this Agreement, and, in each case, that has not ceased to be a general partner pursuant to the Act and this Agreement, in such Person’s capacity as a general partner or Partner (as the context requires) of the Partnership.

GP Unit” means a unit representing a general partner interest in the Partnership and designated in the Register as a GP Unit, as subdivided, reclassified or otherwise modified from time to time in accordance with this Agreement.

Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(i)    The initial Gross Asset Value of any asset contributed (or deemed contributed) by a Partner to the Partnership shall be the gross fair market value of such asset as determined by the General Partner using such reasonable method of valuation as it may adopt.

(ii)    The Gross Asset Values of all Partnership assets immediately prior to the occurrence of any event described below (x) may, except in the case of subsection (ii)(3) and subsection (ii)(6), if determined by the General Partner that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership, and (y) shall, in the case of subsection (ii)(3) and subsection (ii)(6), be adjusted to equal their respective gross fair market values (taking Code section 7701(g) into account), using such reasonable method of valuation as it may adopt, as of the following times:

(1)    the acquisition of an additional interest in the Partnership (including acquisitions pursuant to Section 3.2 or contributions or deemed contributions by the General Partner pursuant to Section 3.2) by a new or existing Partner in exchange for more than a De Minimis Capital Contribution, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

 

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(2)    the distribution by the Partnership to a Partner of more than a De Minimis amount of Partnership property as consideration for an interest in the Partnership if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(3)    the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);

(4)    the acquisition of an interest in the Partnership by any new or existing Partner upon the exercise of a non-compensatory option in accordance with Regulations Section 1.704-1(b)(2)(iv)(s);

(5)    at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2. If any non-compensatory options are outstanding upon the occurrence of an event described in this subsection (ii) (other than, if applicable, non-compensatory options being exercised that give rise to the occurrence of such event), the Partnership shall adjust the Gross Asset Values of its properties in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2); and

(6)    immediately after the closing of the transactions contemplated by the BCA on the Closing Date.

(iii)    The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution as determined by the General Partner using such reasonable method of valuation as it may adopt.

(iv)    The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code section 734(b) or Code section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m). Notwithstanding the foregoing, Gross Asset Values shall not be adjusted pursuant to this subsection (iv) to the extent that the General Partner reasonably determines that an adjustment pursuant to subsection (ii) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (iv).

(v)    If the Gross Asset Value of a Partnership asset has been adjusted pursuant to subsection (ii) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.

Holder” means either (a) a Partner or (b) an Assignee that owns a Partnership Unit.

Incapacity” means, (a) as to any Partner who is an individual, death, total physical disability or entry by a court of competent jurisdiction adjudicating such Partner incompetent to manage his or her person or his or her estate; (b) as to any Partner that is a corporation or limited liability company, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (c) as to any Partner that is a partnership, the dissolution and

 

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commencement of winding up of the partnership; (d) as to any Partner that is an estate, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (e) as to any trustee of a trust that is a Partner, the termination of the trust (but not the substitution of a new trustee); or (f) as to any Partner, the Bankruptcy of such Partner.

Indemnitee” means, (a) with respect to each current or former Partner (including the Limited Partners and the General Partner): (i) such Partner, in its capacity as a Partner and (ii) each of such Partner’s Affiliates and such Partner’s or its Affiliates’ direct and indirect officers, directors, liquidators, partners, shareholders, equityholders, members, managers, fiduciaries, controlling Persons and employees, in their capacity as such; (b) each current or former employee, officer or member of any management or advisory board or committee of the Partnership, in their capacity as such; (c) each current or former member of the Board and of the board of directors of the General Partner (as applicable), in such Person’s capacity as such (or as a member of a committee thereof); (d) each current or former Partnership Representative, each current or former “designated individual” of the Partnership for purposes of the BBA Rules, the Original Limited Partner Representative and the NB Partner Representative, in their respective capacities as such; and (e) any other third party who the General Partner, reasonably and in good faith, designates as an Indemnitee in a written resolution.

Independent Director” has the meaning given to such term in the Investor Rights Agreement.

Investor Rights Agreement” means that certain Investor Rights Agreement, dated on or about the Effective Date, by and among PubCo and certain other Persons party thereto, as the same may be amended, modified, supplemented or waived from time to time.

IRS” means the United States Internal Revenue Service.

Law” has the meaning given to such term in the BCA.

Limited Partner” means each of the Original Limited Partners and any other Person that is, from time to time, admitted to the Partnership as a limited partner pursuant to the Act and this Agreement, and any Substituted Limited Partner or Additional Limited Partner, each shown as such in the books and records of the Partnership, in each case, that has not ceased to be a limited partner of the Partnership pursuant to the Act and this Agreement, in such Person’s capacity as a limited partner of the Partnership.

Lock-Up Period” means:

(a)    with respect to any Common Unit held by any Qualified Unitholder:

(i)    with respect to any Common Units held by such Qualified Unitholder that are not Seller Earnout Units, the period commencing on the Closing Date and continuing until the date that is 24 months following the Closing Date; and

(ii)    with respect to any Seller Earnout Units held by such Qualified Unitholder, the period commencing upon the Closing Date and continuing until the later of (A) the occurrence of a Triggering Event for such Seller Earnout Units and (B) the date that is 24 months following the Closing Date;

 

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(b)    with respect to any Common Units held as of Closing by any Seller (or any Permitted Transferee of any Seller) other than a Qualified Unitholder (including, for the avoidance of doubt, NB Partners and their respective Permitted Transferees who are not Permitted Transferees of a Qualified Unitholder):

(i)    with respect to any Common Units held by such Seller, except with respect to any Seller Earnout Units, the period commencing on the Closing Date and continuing until the date that is six months following the Closing Date; and

(ii)    with respect to any Seller Earnout Units held by such Seller, the period commencing upon the Closing Date and continuing until the later of (A) the occurrence of a Triggering Event for such Seller Earnout Units and (B) the date that is six months following the Closing Date;

Majority in Interest of the Limited Partners” means, as of any time of determination, (a) Limited Partners holding Class C Shares and Class D Shares representing 50% or more of the voting interest in PubCo held by the Limited Partners in respect of Class C Shares and Class D Shares (excluding, for the avoidance of doubt, any voting interest held by any Limited Partner in respect of any Class A Shares or Class B Shares held by such Limited Partner), (b) Limited Partners holding a majority of the Common Units held by all Limited Partners, and (c) the Original Limited Partner Representative.

Midco Indebtedness” means indebtedness incurred by Opal Capital Holdings LLC pursuant to a Credit and Guaranty Agreement, dated as of October 25, 2019, between Opal Capital Holdings LLC and Diamond Finance Investors (US Unlevered) LP (among others), as may be amended, restated or refinanced from time to time.

NB” has the meaning given to such term in the Investor Rights Agreement.

NB Aggregator Subject Members” has the meaning given to such term in the Investor Rights Agreement.

NB First Ownership Threshold” has the meaning given to such term in the Investor Rights Agreement.

NB Partner Representative” means Neuberger Berman Group LLC.

NB Partners” means NBSH Blue Investments, LLC, NBSH Blue Liquidating, LLC and Neuberger Berman Group LLC, collectively, and any Permitted Transferee of such Person who is Transferred Partnership Interests.

NB Relevant Audit” has the meaning set forth in Section 9.3(d).

NB Second Ownership Threshold” has the meaning given to such term in the Investor Rights Agreement.

 

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Net Income” or “Net Loss” means, for each Fiscal Year or other taxable period of the Partnership, an amount equal to the Partnership’s taxable income or loss for such year or other taxable period, determined in accordance with Code section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

(i)    Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of “Net Income” or “Net Loss” shall be added to (or subtracted from, as the case may be) such taxable income (or loss);

(ii)    Any expenditure of the Partnership described in Code Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of “Net Income” or “Net Loss,” shall be subtracted from (or added to, as the case may be) such taxable income (or loss);

(iii)    In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subsection (ii) or subsection (iii) of the definition of “Gross Asset Value,” the amount of such adjustment (i.e., the hypothetical gain or loss from the revaluation of the Partnership asset) shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;

(iv)    Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(v)    In lieu of the depreciation, amortization and other cost recovery deductions that would otherwise be taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year; and

(vi)    To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss.

Notwithstanding any other provision of this definition of “Net Income” or “Net Loss,” any item that is specially allocated pursuant to Section 5.2 shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Section 5.2 shall be determined by applying rules analogous to those set forth in this definition of “Net Income” or “Net Loss.”

 

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Non-Participating Seller Earnout Units” means, as of the time of determination, Seller Earnout Units that are not Participating Seller Earnout Units.

Nonrecourse Deductions” has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

Nonrecourse Liability” has the meaning set forth in Regulations Section 1.752-1(a)(2).

Opal Business” has the meaning given to such term in the BCA.

ORC Partner” means Opal Capital Feeder LLC, a Delaware limited liability company, and any Permitted Transferee of such Person(s) who is Transferred Partnership Interests.

Original Limited Partner” means any Person that is a Limited Partner as of the Closing and any of their respective Permitted Transferees that become Limited Partners from time to time in accordance with this Agreement, but does not include any other Assignee or other transferee of any Partnership Interest of any Original Limited Partner succeeding to all or any part of such Partnership Interest.

Original Limited Partner Representative” means the ORC Partner or such other Person as may be appointed from time to time by a Majority in Interest of the Limited Partners.

Participating Seller Earnout Units” means, as of the time of determination, Seller Earnout Units for which a Triggering Event has occurred at or prior to such time. For the avoidance of doubt: (i) a Series E-1 Seller Earnout Unit shall be a Participating Seller Earnout Unit upon and following a Triggering Event described in clause (a) of the definition of Triggering Event and (ii) a Series E-2 Seller Earnout Unit shall be a Participating Seller Earnout Unit upon and following a Triggering Event described in clause (b) of the definition of Triggering Event.

Partner” means the General Partner or a Limited Partner, and “Partners” means the General Partner and the Limited Partners (collectively).

Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

Partner Nonrecourse Debt” has the meaning set forth in Regulations Section 1.704-2(b)(4).

Partner Nonrecourse Deductions” has the meaning set forth in Regulations Section 1.704-2(i)(1) and 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(1) and 1.704-2(i)(2).

Partnership” means Blue Owl Capital Holdings LP, the limited partnership formed and continued under the Act and pursuant to this Agreement, and any successor thereto.

 

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Partnership Employee” means an employee of the Partnership or an employee of a Subsidiary of the Partnership, if any.

Partnership Interest” means an ownership interest in the Partnership held by either a Limited Partner or the General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. There may be one or more classes or series of Partnership Interests. A Partnership Interest may be expressed as a number of Common Units, GP Units or other Partnership Units.

Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(b)(2) and is computed in accordance with Regulations Section 1.704-2(d).

Partnership Record Date” means the record date established by the General Partner for the purpose of determining the Partners entitled to notice of or to vote at any meeting of Partners or to consent to any matter, or to receive any distribution or the allotment of any other rights, or in order to make a determination of Partners for any other proper purpose, which, in the case of a record date fixed for the determination of Partners entitled to receive any distribution, shall (unless otherwise determined by the General Partner) be the same as the record date established by PubCo for a distribution to its stockholders of some or all of its portion of such distribution.

Partnership Representative” means the “partnership representative” for purposes of the BBA, or similar role under the provisions of state, local and non-U.S. tax law.

Partnership Unit” means a Common Unit, a GP Unit or any other fractional share of the Partnership Interests that the General Partner has authorized pursuant to Section 3.1 or Section 3.2 or Section 3.3.

Percentage Interest” means, with respect to each Partner, as to any class or series of Partnership Interests, the fraction, expressed as a percentage, the numerator of which is the aggregate number of Partnership Units of such class or series held by such Partner and the denominator of which is the total number of Partnership Units of such class or series held by all Partners. If not otherwise specified, “Percentage Interest” shall be deemed to refer to Common Units and GP Units, treated as a single class for such purpose.

Permitted Transfer” means any Transfer that is: (a) a transfer of any Partnership Interest made to a Permitted Transferee of the transferor upon prior written notice to (i) the Partnership and (ii) (x) if the transferor is the ORC Partner, the Diamond Partner and the NB Partner Representative or (y) if the transferor is an NB Partner or the Diamond Partner, the ORC Partner; or (b) made pursuant to any liquidation, merger, stock exchange or other similar transaction following the Effective Date which results in all of the Partnership’s Partners exchange or having the right to exchange their Partnership Interests for cash, securities or other property. Notwithstanding the foregoing, a “Permitted Transfer” shall be deemed to have not occurred for purposes of this Agreement, if there occurs any act or circumstance subsequent to such Transfer that causes such transfer to not be a Permitted Transfer, or the transferee not to be a Permitted Transferee.

 

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Permitted Transferee” has the meaning given such term in the Investor Rights Agreement (with references to “Qualified Stockholder” replaced with “Qualified Unitholder” and with references to “NB Aggregators” replaced with “NB Partners”).

Person” has the meaning given to such term in the Investor Rights Agreement.

Proceedings” has the meaning given to such term in the BCA.

Protected Partner” means each Person listed on Schedule II, and any Person who acquired Protected Units from another Protected Partner in a transaction in which such Person’s adjusted basis in such Protected Units, as determined for U.S. federal income tax purposes, is determined, in whole or in part, by reference to the adjusted basis of the other Protected Partner in such Protected Units.

Protected Units” means the Partnership Units held, directly or indirectly, by the Protected Partner.

PubCo Bylaws” means the Bylaws of PubCo, as the same may be amended, restated, modified, supplemented or replaced from time to time.

PubCo Charter” means the Amended and Restated Certificate of Incorporation of PubCo, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Qualified Unitholder” means any Limited Partner that is a Qualified Stockholder (as defined in the PubCo Charter).

Regulations” means one or more United States Treasury Regulations promulgated under Code, whether such regulations are in proposed, temporary or final form, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

Replacement Indebtedness” means any liability that is treated as a liability of the Partnership for U.S. federal income tax purposes that replaces or refinances either (i) the Midco Indebtedness or (ii) the Revolver Indebtedness, and with respect to which all of the following requirements are met: (a) the assets of the Opal Business (but not the Diamond Business) are subject to such liability (as determined for U.S. federal income tax purposes) within the meaning of Regulations Section 1.752-3(a)(2), and (b) such liability is not treated, in whole or in part, as a “recourse liability” (as defined in Regulations Section 1.752-1(a)(1)) of the Partnership for U.S. federal income tax purposes.

Reserve Amount” has the meaning set forth in Section 4.7.

Revolver Indebtedness” means indebtedness incurred by Owl Rock Capital Advisors LLC or Owl Rock Technology Advisors LLC, pursuant to one or more Loan and Security Agreements, with East West Bank as lender, including the Amended and Restated Loan and Security Agreement, dated as of February 20, 2020, the Loan and Security Agreement, dated as of February 22, 2019, as each may be amended, restated or refinanced from time to time.

SEC” means the Securities and Exchange Commission.

 

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Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Seller” has the meaning given to such term in the BCA.

Seller Earnout Units” means the “Seller Earnout Units,” as defined in and issued pursuant to Section 2.17 of the BCA, of which (a) 99,999,924 are hereby designated as “Series E-1 Seller Earnout Units” and (b) 99,999,924 are hereby designated as “Series E-2 Seller Earnout Units”. The Seller Earnout Units (including the number of Series E-1 Seller Earnout Units and of Series E-2 Seller Earnout Units) issued and outstanding as of the Closing Date are held by the Holders thereof as set forth on Schedule I attached to this Agreement.

Series E-1 Seller Earnout Units” has the meaning set forth in the definition of “Seller Earnout Units”.

Series E-2 Seller Earnout Units” has the meaning set forth in the definition of “Seller Earnout Units”.

Subject Liability” means (a) the Midco Indebtedness and the Revolver Indebtedness and (b) any Replacement Indebtedness.

Subsidiary” has the meaning given to such term in the Investor Rights Agreement. For the avoidance of doubt, the “Diamond Funds” and the “Opal Funds” (as each is defined in the BCA) shall not be “Subsidiaries” of the Partnership for purposes of this Agreement.

Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 10.4.

Tax Distribution” has the meaning set forth in Section 4.2.

Tax Distribution Date” means, with respect to each calendar year, (a) April 10, June 10, September 10, and December 10 of such calendar year, which shall be adjusted by the General Partner as reasonably necessary to take into account changes in estimated tax payment due dates for U.S. federal income taxes under applicable Law, and (b) in the event that the General Partner determines (which determination shall be made prior to the date specified in this clause (b)) that the Tax Distributions made in respect of estimated taxes as described in clause (a) were insufficient to pay each Holder’s Assumed Tax Liability for the entirety of such year, April 10 of the following year (for purposes of making a Tax Distribution of the shortfall).

Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the Effective Date, by and among PubCo, the Partnership, Blue Owl Carry and the other parties thereto, as the same may be amended, modified, supplemented or waived from time to time.

Transfer” has the meaning given to such term in the Investor Rights Agreement. Notwithstanding the foregoing: (a) any Exchange of Common Units, or acquisition of Exchanged Securities by PubCo pursuant to the Exchange Agreement shall not constitute a “Transfer” for purposes of this Agreement; (b) any transfer of Seller Earnout Units to the Partnership pursuant to Section 3.1(c) shall not constitute a “Transfer” for purposes of this Agreement; and (c) the pledge

 

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(in and of itself) of Partnership Interest by a Partner that creates a mere security interest in such Partnership Interest pursuant to a bona fide loan or indebtedness transaction for so long as such Partner continues to exercise control over such pledged Partnership Interest shall not be considered a “Transfer” for purposes of this Agreement, but a foreclosure on such Partnership Interest or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action independently qualifies as a Permitted Transfer at such time.

Triggering Event” means:

(a)    with respect to any Series E-1 Seller Earnout Unit, the earlier to occur of the following (but only if occurring on or prior to the Earnout Termination Date):

(i)    the Volume Weighted Average Share Price of a Class A Share equals or exceeds $12.50 per share for any 20 consecutive trading days following the Effective Date; and

(ii)    if the Partnership or PubCo is consummating a merger, consolidation, tender offer, exchange offer or business combination or sale of all or substantially of its assets and the consideration payable per Class A Share or per Blue Owl Unit (as applicable) in connection therewith equals or exceeds $12.50 per Class A Share or per Blue Owl Unit (as applicable); and

(b)    with respect to any Series E-2 Seller Earnout Unit, the earlier to occur of the following (but only if occurring on or prior to the Earnout Termination Date):

(i)    the Volume Weighted Average Share Price of a share of Class A Common Stock equals or exceeds $15.00 per share for any 20 consecutive trading days following the Effective Date; and

(ii)    if the Partnership or PubCo is consummating a merger, consolidation, tender offer, exchange offer or business combination or sale of all or substantially of its assets and the consideration payable per share of Class A Common Stock or per Blue Owl Unit (as applicable) in connection therewith equals or exceeds $15.00 per Class A Share or per Blue Owl Unit (as applicable).

Notwithstanding the foregoing, and without limitation of Section 3.8 of this Agreement, if PubCo or the Partnership at any time combines or subdivides (by any equity split, dividend, recapitalization, reorganization, merger, amendment of the PubCo Charter, amendment to this Agreement, scheme, arrangement or otherwise or extraordinary dividend resulting from an asset sale or leveraged recapitalization), each of the applicable per share prices in the foregoing definition of “Triggering Event” shall be equitably adjusted to take into account such equity split, dividend, recapitalization, reorganization, merger, amendment of the PubCo Charter, amendment of this Agreement, scheme, arrangement or extraordinary dividend or other applicable transaction.

Volume Weighted Average Share Price” has the meaning given to such term in the BCA.

 

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Warrants” has the meaning given to such term in the Investor Rights Agreement.

Section 1.2    Interpretation. In this Agreement and in the Schedules and Exhibits to this Agreement, except to the extent that the context otherwise requires:

(a)    the headings are for convenience of reference only and shall not affect the interpretation of this Agreement;

(b)    defined terms include the plural as well as the singular and vice versa;

(c)    words importing gender include all genders;

(d)    a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been or may from time to time be amended, extended, re-enacted or consolidated and to all statutory instruments or orders made under it;

(e)    any reference to a “day” or a “Business Day” shall mean the whole of such day, being the period of 24 hours running from midnight to midnight;

(f)    references to Articles, Sections, subsections, clauses and Exhibits are references to Articles, Sections, subsections, clauses and Exhibits to, this Agreement;

(g)    the word “or” is not exclusive, and has the meaning represented by the phrase “and/or,” unless the context clearly prohibits that construction;

(h)    references to “dollar” or “$” refer to United States dollars;

(i)    the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation”; and

(j)    unless otherwise specified, references to any party to this Agreement or any other document or agreement shall include its successors and permitted assigns.

ARTICLE II

GENERAL PROVISIONS

Section 2.1    Formation. The Partnership is a limited partnership previously formed and continued pursuant to the provisions of the Act and upon the terms and subject to the conditions set forth in this Agreement. Except as expressly provided in this Agreement to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Certificate, and all actions taken or to be taken by any person who executed and filed or who executes and files, after the Effective Date, the Certificate are adopted and ratified, or authorized, as the case may be.

Section 2.2    Name. The name of the Partnership is “Blue Owl Capital Holdings LP”. The Partnership may also conduct business at the same time and from time to time under one or more fictitious names if the General Partner determines that such is in the best interests of the Partnership. The General Partner may change the name of the Partnership, from time to time, in accordance with applicable Law.

 

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Section 2.3    Principal Place of Business; Other Places of Business. The principal business office of the Partnership is located at 399 Park Avenue, 38th floor, New York, New York 10022, or such other place within or outside the State of Delaware as the General Partner may from time to time designate. The Partnership may maintain offices and places of business at such other place or places within or outside the State of Delaware as the General Partner deems advisable.

Section 2.4    Designated Agent for Service of Process. So long as required by the Act, the Partnership shall continuously maintain a registered office and a designated and duly qualified agent for service of process on the Partnership in the State of Delaware. As of the Effective Date, the address of the registered office of the Partnership in the State of Delaware is c/o Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The Partnership’s registered agent for service of process at such address is The Corporation Trust Company.

Section 2.5    Term. The term of the Partnership commenced on the Formation Date and such term shall continue until the Partnership is dissolved in accordance with the Act or this Agreement. Notwithstanding the dissolution of the Partnership, the existence of the Partnership shall continue until termination pursuant to this Agreement or as otherwise provided in the Act.

Section 2.6    No Concerted Action. Each Partner acknowledges and agrees that, except as expressly provided in this Agreement, in performing its obligations or exercising its rights under this Agreement, it is acting independently and is not acting in concert with, on behalf of, as agent for, or as joint venturer of, any other Partner. Other than in respect of the Partnership, nothing contained in this Agreement shall be construed as creating a corporation, association, joint stock company, business trust, organized group of persons, whether incorporated or not, among or involving any Partner or its Affiliates, and nothing in this Agreement shall be construed as creating or requiring any continuing relationship or commitment as between such parties other than as specifically set forth in this Agreement.

Section 2.7    Business Purpose. The Partnership may carry on any lawful business, purpose or activity in which a limited partnership may be engaged under applicable Law (including the Act).

Section 2.8    Powers. Subject to the limitations set forth in this Agreement, the Partnership will possess and may exercise all of the powers and privileges granted to it by the Act, by any other applicable Law or this Agreement, together with all powers incidental thereto, so far as such powers are necessary or convenient to the conduct, promotion or attainment of the purpose of the Partnership set forth in Section 2.7.

Section 2.9    Certificates; Filings. The Certificate was previously filed on behalf of the Partnership, in the Office of the Secretary of State of the State of Delaware as required by the Act. The General Partner may execute and file any duly authorized amendments to the Certificate from time to time in a form prescribed by the Act. The General Partner shall also cause to be made, on behalf of the Partnership, such additional filings and recordings as the General Partner shall deem

 

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necessary or advisable. If requested by the General Partner, the Limited Partners shall promptly execute all certificates and other documents consistent with the terms of this Agreement necessary for the General Partner to accomplish all filing, recording, publishing and other acts as may be appropriate to comply with all requirements for (a) the formation and operation of a limited partnership under the Laws of the State of Delaware, (b) if the General Partner deems it advisable, the operation of the Partnership as a limited partnership, or partnership in which the Limited Partners have limited liability, in all jurisdictions where the Partnership proposes to operate and (c) all other filings required to be made by the Partnership.

Section 2.10    Representations and Warranties by the Partners.

(a)    Each Partner that is an individual (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants to each other Partner that: (i) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any material agreement by which such Partner or any of such Partner’s property is bound, or any statute, regulation, order or other Law to which such Partner is subject; and (ii) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

(b)    Each Partner that is not an individual (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants to each other Partner that: (i) all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including that of its general partner(s), committee(s), trustee(s), beneficiaries, directors and/or stockholder(s) (as the case may be) as required; (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its partnership or operating agreement, trust agreement, charter or bylaws (as the case may be), any material agreement by which such Partner or any of such Partner’s properties or any of its partners, members, beneficiaries, trustees or stockholders (as the case may be) is or are bound, or any statute, regulation, order or other Law to which such Partner or any of its partners, members, trustees, beneficiaries or stockholders (as the case may be) is or are subject; and (iii) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

(c)    Each Partner (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or Substituted Limited Partner) represents and warrants that it is an “accredited investor,” as such term is defined in Rule 501(a) promulgated pursuant to the Securities Act and represents, warrants and agrees that it has acquired and continues to hold its interest in the Partnership for its own account, for investment purposes only, and not with a view toward, or for sale in connection with, any distribution thereof, or with any present intention of distributing or selling at any particular time or under any predetermined circumstances, in each case, in violation of the federal securities Laws, any applicable foreign or state securities Laws or any other applicable Law. Each Partner further represents and warrants that: (i) it is aware of and understands that the Partnership Units held by such Partner are not registered under the Securities Act, any United States state securities Laws or any other applicable foreign Law and may not be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other

 

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provision of applicable United States federal, United States state, or other Law or pursuant to an applicable exemption therefrom; (ii) that the Partnership shall have no obligation to take any action that may be necessary to make available any exemption from registration under the Securities Act; (iii) there is no established market for the Partnership Units and no market (public or otherwise) for the Partnership Units will develop in the foreseeable future; (iv) such Partner has no rights to require that the Partnership Units be registered under the Securities Act or the securities Laws of various states, and the Partner will not be able to avail itself of the provisions of Rule 144 adopted by the Securities and Exchange Commission under the Securities Act; and (v) such Partner is aware that the acquisition of Partnership Interests involves substantial risk, and that it can bear the economic risk in its investment (which such Partner acknowledges may be for an indefinite period) and such Partner has such knowledge and experience in financial or business matters that such Partner is capable of evaluating the merits and risks of its investment in Partnership Interests.

(d)    The representations and warranties contained in Sections 2.10(a), 2.10(b) and 2.10(c) shall survive the execution and delivery of this Agreement by each Partner (and, in the case of an Additional Limited Partner or a Substituted Limited Partner, the admission of such Additional Limited Partner or Substituted Limited Partner as a Limited Partner in the Partnership) and the dissolution, liquidation and termination of the Partnership.

(e)    Each Partner (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or Substituted Limited Partner) acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including financial and descriptive information and documentation, that may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied.

(f)    Notwithstanding the foregoing, the General Partner may permit the modification of any of the representations and warranties contained in Sections 2.10(a), 2.10(b) and 2.10(c) as applicable to any Partner that is not an Original Limited Partner (including any Additional Limited Partner or Substituted Limited Partner or any transferee of either) provided that such representations and warranties, as modified, shall be set forth in either a separate writing addressed to the Partnership and the General Partner.

Section 2.11    References to Certain Equity Securities. Each reference to a Class A Share, Class B Share, Class C Share, Class D Share, Class E Share, Common Unit, GP Unit, other Partnership Unit, other Partnership Interest, Carry GP Unit or Carry Unit shall be deemed to include a reference to each Equity Security received in respect thereof in connection with any combination of equity interests, recapitalization, merger, consolidation, or other reorganization, or by way of interest split, interest dividend or other distribution. For the avoidance of doubt, restrictions applicable to the Common Units (as set forth in this Agreement) or Carry Units (as set forth in the Carry LPA) and Class C Shares and Class D Shares (as set forth in the PubCo Charter) shall not apply to Class A Shares or Class B Shares received in respect thereof in connection with an Exchange (or Direct Exchange).

 

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ARTICLE III

CLASSES OF PARTNERSHIP INTERESTS; CAPITAL CONTRIBUTIONS

Section 3.1    Classes of Partnership Interests; Capital Contributions of the Partners.

(a)    Each Partner’s relative rights, privileges, preferences, restrictions and obligations with respect to the Partnership are represented by such Partner’s Partnership Interests. There shall initially be two classes of Partnership Interests: Common Units, which shall be issued to and held by the Limited Partners, and GP Units, which shall be issued to and held by the General Partner only. An unlimited number of Common Units are authorized for issuance, and an unlimited number of GP Units are authorized for issuance. Schedule I to this Agreement shall be updated after the Closing to reflect the transactions consummated on the Closing Date, and the Partnership Interests held by the Partners as of such time.

(b)    Each Original Limited Partner and the General Partner has heretofore and concurrently with the consummation of the transactions contemplated by the BCA is making or is deemed to make Capital Contributions to the Partnership. Except as provided by Law or in Section 3.2, Section 3.3 or Section 9.4, the Partners shall have no obligation or, except with the prior written consent of the General Partner, right to make any other Capital Contributions or any loans to the Partnership. The General Partner shall cause to be maintained in the principal business office of the Partnership, or such other place as may be determined by the General Partner, the books and records of the Partnership, which shall include, among other things, a register containing the name, address, and number of Partnership Units of each Partner, and such other information as the General Partner may deem necessary or desirable (the “Register”). The Register shall not be deemed part of this Agreement. The General Partner shall from time to time update the Register as necessary to accurately reflect the information therein, including as a result of any sales, exchanges (including Exchanges and Direct Exchanges) or other Transfers, or any redemptions, issuances or similar events involving Partnership Units. Any reference in this Agreement to the Register shall be deemed a reference to the Register as then in effect from time to time. Subject to the terms of this Agreement, the General Partner may take any action authorized under this Agreement in respect of the Register without any need to obtain the consent of any other Partner. No action of any Limited Partner shall be required to amend or update the Register. Except as required by applicable Law, no Limited Partner shall be entitled to receive a copy of the information set forth in the Register relating to any Partner other than itself.

(c)    Notwithstanding anything to the contrary in this Agreement, in the event there has not been a Triggering Event with respect to any Seller Earnout Unit as of the Earnout Termination Date, each such Seller Earnout Unit shall, automatically and without further action on the part of the Partnership of any Holder of Partnership Interests, be transferred to the Partnership and cancelled for no consideration, effective as of the Earnout Termination Date.

Section 3.2    Issuances of Additional Partnership Interests. On the terms and subject to the conditions of this Agreement (including Section 3.4 and Section 3.7):

(a)    General. The General Partner is authorized to cause the Partnership to issue additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose, at any time or from time to time, to the Partners or to other Persons, and to admit such Persons as

 

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Additional Limited Partners, for such consideration and on such terms and subject to such conditions as shall be established by the General Partner, without the approval of any Limited Partner or any other Person. Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue Partnership Units (i) upon the conversion, redemption or exchange of any Debt, Partnership Units, or other securities issued by the Partnership, (ii) for less than fair market value, (iii) for no consideration, (iv) in connection with any merger of any other Person into the Partnership, or (v) upon the contribution of property or assets to the Partnership. A Partnership Interest of any class or series other than a Common Unit or a GP Unit shall not entitle the holder thereof to vote on, or consent to, any matter. Upon the issuance of any additional Partnership Interest, the General Partner shall amend the Register and the books and records of the Partnership as appropriate to reflect such issuance.

(b)    No Preemptive Rights. Except as expressly provided in this Agreement (including Section 3.7), no Person, including any Holder, shall have any preemptive, preferential, participation or similar right or rights to subscribe for or acquire any Partnership Interest.

Section 3.3    Additional Funds and Capital Contributions.

(a)    General. The General Partner may, at any time and from time to time, determine that the Partnership requires additional funds (“Additional Funds”) for the acquisition or development of additional Assets, for the redemption of Partnership Units, for the payment of Tax Distributions or for such other purposes as the General Partner may determine. Additional Funds may be obtained by the Partnership, at the election of the General Partner, in any manner provided in, and in accordance with, the terms of this Section 3.3 without the approval of any Limited Partner or any other Person.

(b)    Loans by Third Parties. The General Partner, on behalf of the Partnership, may obtain any Additional Funds by causing the Partnership to incur Debt to any Person (other than, except as contemplated in Section 3.3(c), the General Partner or PubCo or any other Subsidiary of PubCo that is not the Partnership or any of its Subsidiaries or Blue Owl Carry or any of its Subsidiaries) upon such terms as the General Partner determines appropriate, including making such Debt convertible, redeemable or exchangeable for Partnership Units. The Partnership shall not incur any such Debt if any Partner (other than the General Partner in its capacity as such) would be personally liable for the repayment of such Debt (unless such Partner otherwise agrees).

(c)    General Partner and PubCo Loans. At any time prior to the Partnership becoming a wholly owned subsidiary of PubCo, the net proceeds of any Debt incurred by or on behalf of the General Partner, PubCo or any other Subsidiary of PubCo (other than the Partnership and its Subsidiaries or Blue Owl Carry and its Subsidiaries) shall be loaned to the Partnership and Blue Owl Carry in accordance with their respective Allocation Percentages, to the extent not prohibited by Law, on substantially the same terms and conditions (including interest rate, repayment schedule, and conversion, redemption, repurchase and exchange rights) as such Debt. The Partnership shall not incur any such Debt if any Partner (other than the General Partner in its capacity as such) would be personally liable for the repayment of such Debt (unless such Partner otherwise agrees).

 

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Section 3.4    Issuances; Repurchases and Redemptions; Recapitalizations.

(a)    Issuances by PubCo.

(i)    Subject to Section 3.4(a)(ii), Article XIV, the Exchange Agreement and the Investor Rights Agreement, if, at any time after the Closing Date, PubCo sells or issues Class A Shares, Class B Shares or any other Equity Securities of PubCo (other than Class C Shares or Class D Shares (it being understood and agreed that no Class E Shares shall be issued after the Closing Date)):

(A)    the Partnership shall concurrently issue to the General Partner an equal number of GP Units (if PubCo issues Class A Shares or Class B Shares), or an equal number of such other Equity Security of the Partnership corresponding to the Equity Securities issued by PubCo (if PubCo issues Equity Securities other than Class A Shares or Class B Shares), and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo so issued (adjusted for any taxes owed by PubCo on the receipt of such distribution);

(B)    the General Partner will cause Blue Owl Carry to concurrently issue to the General Partner an equal number of Carry GP Units (if PubCo issues Class A Shares or Class B Shares), or an equal number of such other Equity Security of Blue Owl Carry corresponding to the Equity Securities issued by PubCo (if PubCo issues Equity Securities other than Class A Shares or Class B Shares), and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo so issued (adjusted for any taxes owed by PubCo on the receipt of such distribution), pursuant to and in accordance with Section 3.4(a) of the Carry LPA; and

(C)    PubCo shall concurrently contribute to the General Partner, which shall concurrently contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Carry, its Allocation Percentage of, the net proceeds or other property received by PubCo, if any, for such Class A Share, Class B Share or other Equity Security.

(ii)    Notwithstanding anything to the contrary contained in Section 3.4(a)(i) or Section 3.4(a)(iii), this Section 3.4(a) shall not apply to: (x) the issuance and distribution to holders of Class A Shares, Class B Shares or other Equity Securities of PubCo of rights to purchase Equity Securities of PubCo under a “poison pill” or similar shareholder rights plan (and upon exchange of Common Units for Class A Shares or Class B Shares, such Class A Shares or Class B Shares will be issued together with a corresponding right under such plan); or (y) the issuance under PubCo’s employee benefit plans of any warrants, options, stock appreciation right, restricted stock, restricted stock units, performance based award or other rights to acquire Equity Securities of PubCo, but shall in each of the foregoing cases apply to the issuance of Equity

 

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Securities of PubCo in connection with the exercise or settlement of such warrants, options, stock appreciation right, restricted stock units, performance based awards or the vesting of restricted stock (including as set forth in Section 3.4(a)(iii) below, as applicable).

(iii)    In the event any outstanding Equity Security of PubCo is exercised or otherwise converted or subject to vesting and, as a result, any Class A Shares, Class B Shares or other Equity Securities of PubCo are issued (including as a result of the exercise of Warrants):

(A)    the corresponding Equity Security outstanding at the Partnership and at Blue Owl Carry, if any, shall be similarly exercised or otherwise converted or subject to vesting, if applicable;

(B)    an equivalent number of (x) GP Units or equivalent Equity Securities of the Partnership and (y) Carry GP Units or equivalent Equity Securities of Blue Owl Carry shall be issued to the General Partner as required by Section 3.4(a)(i); and

(C)    PubCo shall concurrently contribute to the General Partner, which shall concurrently contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Carry, its Allocation Percentage of, the net proceeds (if any) received by PubCo from any such exercise or conversion.

(b)    New Partnership Issuances. Except pursuant to the Exchange Agreement:

(i)    the Partnership may not issue any additional GP Units or other Partnership Units to PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless substantially simultaneously therewith (A) Blue Owl Carry issues an equal number of Carry GP Units or Carry Units (as applicable) to PubCo or such Subsidiary and (B) PubCo or such Subsidiary issues or transfers an equal number of newly-issued Class A Shares or Class B Shares of PubCo (or relevant Equity Security of such Subsidiary) to another Person or Persons and PubCo or such Subsidiary contributes such proceeds to the Partnership and Blue Owl Carry (in accordance with their respective Allocation Percentages);

(ii)    the Partnership may not issue any other Equity Securities of the Partnership to PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless substantially simultaneously therewith (A) Blue Owl Carry issues an equal number of Equity Securities (with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership) to PubCo or such Subsidiary and (B) PubCo or such Subsidiary issues or transfers, to another Person, an equal number of newly-issued shares of Equity Securities of PubCo or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership and PubCo or such Subsidiary contributes such proceeds to the Partnership and Blue Owl Carry (in accordance with their respective Allocation Percentages); and

(iii)    the Partnership may not issue any Equity Securities of the Partnership to any Person other than PubCo or any of its Subsidiaries unless substantially

 

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simultaneously therewith Blue Owl Carry issues an equal number of Equity Securities (with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership) to such Person.

(c)    Repurchases and Redemptions.

(i)    Neither PubCo nor any of its Subsidiaries (including the General Partner, but other than the Partnership, Blue Owl Carry and their respective Subsidiaries) may redeem, repurchase or otherwise acquire:

(A)    Class A Shares or Class B Shares pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) unless substantially simultaneously therewith (x) the Partnership redeems, repurchases or otherwise acquires from the General Partner an equal number of GP Units for a price per GP Unit equal to the Partnership’s Allocation Percentage of the price per Class A Share or Class B Share (if any, and as applicable); and (y) Blue Owl Carry redeems, repurchases or otherwise acquires from the General Partner an equal number of Carry GP Units for a price per Carry GP Unit equal to Blue Owl Carry’s Allocation Percentage of the price per Class A Share or Class B Share (if any, and as applicable); or

(B)    any other Equity Securities of PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) unless substantially simultaneously therewith (x) the Partnership redeems, repurchases or otherwise acquires from the General Partner an equal number of the corresponding class or series of Equity Securities of the Partnership with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo or such Subsidiary for a price per Equity Security of the Partnership equal to the Partnership’s Allocation Percentage of the price per Equity Security of PubCo or such Subsidiary (if any); and (y) Blue Owl Carry redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of the corresponding class or series of Equity Securities of Blue Owl Carry with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo or such Subsidiary for a price per Equity Security of Blue Owl Carry equal to Blue Owl Carry’s Allocation Percentage of the price per Equity Security of PubCo or such Subsidiary (if any).

 

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(ii)    The Partnership may not redeem, repurchase or otherwise acquire:

(A)    any GP Units from PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless: (I) substantially simultaneously therewith (x) Blue Owl Carry redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of Carry GP Units from PubCo or such Subsidiary, and (y) PubCo or such Subsidiary redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of Class A Shares or Class B Shares; and (II) the price per GP Unit and the price per Carry GP Unit shall be the Partnership’s and Blue Owl Carry’s respective Allocation Percentage of the price per Class A Share or Class B Share (as applicable); or

(B)    any other Partnership Units of the Partnership from PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless: (I) substantially simultaneously therewith (x) Blue Owl Carry redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of other Equity Securities of Blue Owl Carry from PubCo or such Subsidiary of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo or such Subsidiary and (y) PubCo or such Subsidiary redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of Equity Securities of PubCo or such Subsidiary of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Partnership Units of PubCo or such Subsidiary; and (II) the price per other Partnership Units of the Partnership and the price per other Equity Security of Blue Owl Carry shall be the Partnership’s and Blue Owl Carry’s respective Allocation Percentage of the price per other Equity Security of PubCo or such Subsidiary.

(d)    Equity Subdivisions and Combinations. Except in accordance with the Exchange Agreement:

(i)    The Partnership shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Partnership Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding (A) related class or series of Equity Security of PubCo (which, in the case of the GP Units, shall be the Class A Shares) and (B) related class or series of Equity Security of Blue Owl Carry, with corresponding changes made with respect to any other exchangeable or convertible Equity Securities of the Partnership, Blue Owl Carry and PubCo.

 

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(ii)    (A) PubCo shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of any class or series of Equity Security of PubCo, and (B) the General Partner will cause Blue Owl Carry not to in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of any class or series of Equity Security of Blue Owl Carry, in each case, unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Partnership Units or other related class or series of Equity Security of the Partnership (which, in the case of the Class A Shares, shall be the GP Units), with corresponding changes made with respect to any applicable exchangeable or convertible Equity Securities of the Partnership, Blue Owl Carry and PubCo.

(e)    General Authority. For the avoidance of doubt, but subject to Section 3.1, Section 3.2, Section 6.7 and this Section 3.4, the Partnership, Blue Owl Carry, PubCo and the General Partner shall be permitted, without the consent of any other Partner, to undertake all actions, including an issuance, redemption, reclassification, distribution, division or recapitalization, with respect to the Common Units and GP Units as the General Partner reasonably determines in good faith is necessary to maintain at all times a one-to-one-to-one ratio among: (i) on the one hand, (A) the number of GP Units owned by PubCo, directly or indirectly (including through the General Partner), (B) the number of outstanding Class A Shares and Class B Shares, and (C) the number of outstanding Carry GP Units owned by PubCo, directly or indirectly (including through the General Partner); and (ii) on the other hand, (A) the number of outstanding Class C Shares and Class D Shares held by any Person, (B) the number of Common Units held by such Person and (C) the number of outstanding Carry Units held by such Person disregarding, for purposes of maintaining the one-to-one-to-one ratios in clause (i), (x) warrants, options, stock appreciation rights, restricted stock, restricted stock units, performance based awards or other rights to acquire Equity Securities of PubCo issued under any employee benefit plan involving the issuance of any Equity Securities that are convertible into or exercisable or exchangeable for Class A Shares or Class B Shares, (y) treasury stock, or (z) preferred stock or other debt or Equity Securities (including warrants, options or rights) issued by PubCo that are convertible into or exercisable or exchangeable for Class A Shares or Class B Shares (but in each case, prior to such conversion, exercise or exchange, and shall, for the avoidance of doubt, apply to the issuance of Equity Securities of PubCo in connection with the exercise, vesting or settlement of such preferred stock, other debt or Equity Securities) (except to the extent the net proceeds from any such convertible preferred securities or any other Equity Securities entitled to distributions, dividends or other payments prior to conversion, including any purchase price payable upon conversion thereof, has been contributed by PubCo to the equity capital of the Partnership).

Section 3.5    No Interest; No Return. No Partner shall be entitled to interest on its Capital Contribution or on such Partner’s Capital Account. Except as provided in this Agreement or by applicable Law, no Partner shall have any right to demand or receive the return of its Capital Contribution from the Partnership.

Section 3.6    Capital Accounts.

(a)    A Capital Account shall be maintained by the General Partner for each Partner in accordance with the provisions of Regulations Section 1.704-1(b)(2)(iv) and, to the

 

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extent consistent with such Regulations, the other provisions of this Agreement. Each Partner’s Capital Account balance as of the Effective Date shall be equal to the amount of its respective “Closing Date Capital Account Balance” set forth opposite such Partner’s name on Exhibit A, which balances shall reflect a revaluation of the Partnership’s assets in accordance with clause (ii)(6) of the definition of Gross Asset Value. Thereafter, each Partner’s Capital Account shall be (A) increased by (i) allocations to such Partner of Net Income pursuant to Section 5.1 and any other items of income or gain allocated to such Partner pursuant to Section 5.2, (ii) the amount of cash or the initial Gross Asset Value of any asset (net of any Liabilities assumed by the Partnership and any Liabilities to which the asset is subject) contributed to the Partnership by such Partner, and (iii) any other increases allowed or required by Regulations Section 1.704-1(b)(2)(iv), and (B) decreased by (i) allocations to such Partner of Net Losses pursuant to Section 5.1 and any other items of deduction or loss allocated to such Partner pursuant to the provisions of Section 5.2, (ii) the amount of any cash or the Gross Asset Value of any asset (net of any Liabilities assumed by the Partner and any Liabilities to which the asset is subject) distributed to such Partner, and (iii) any other decreases allowed or required by Regulations Section 1.704-1(b)(2)(iv).

(b)    In the event of a Transfer of Partnership Units made in accordance with this Agreement, the Capital Account of the Transferor that is attributable to the transferred Partnership Units shall carry over to the Transferee Partner in accordance with the provisions of Regulations Section 1.704-1(b)(2)(iv)(l).

(c)    This Section 3.6 and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the Regulations promulgated under Code Section 704(b), including Regulations Section 1.704-1(b)(2)(iv), and shall be interpreted and applied in a manner consistent with such Regulations.

Section 3.7    Certain Preemptive Rights of the NB Partners. Notwithstanding anything to the contrary in this Article III, but subject to Section 3.7(c):

(a)    Exercises of PubCo Preemptive Rights. If NB is issued Equity Securities of PubCo in connection with NB’s exercise of its preemptive rights set forth in Section 2.3(f) of the Investor Rights Agreement, PubCo shall concurrently contribute to the General Partner, which shall concurrently contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Carry, its Allocation Percentage of, the net proceeds or other property received by PubCo, if any, for such Equity Securities, in exchange for a corresponding number of related GP Units, Carry GP Units or other Equity Securities, as applicable of the Partnership and Blue Owl Carry as determined in accordance with Section 3.4(a).

(b)    Partnership Issuances to Third Parties.

(i)    Except as mutually agreed between the NB Partner Representative and the General Partner, until the first date upon which the NB First Ownership Threshold is no longer satisfied, without duplication of the rights of the NB Partners under Section 2.3(f) of the Investor Rights Agreement, the NB Partners shall have preemptive rights with respect to Equity Securities of the Partnership and any Subsidiaries of the Partnership to be issued to any Person other than PubCo or any of its Subsidiaries (other than the Partnership, Blue Owl Carry and its

 

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Subsidiaries) which must be exercised with respect to the same number of Equity Securities in the Partnership and Blue Owl Carry with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights, and shall otherwise be the same as the preemptive rights of NB set forth in Section 2.3(f) of the Investor Rights Agreement with respect to Equity Securities of PubCo (including the applicable procedures, exceptions and conditions set forth therein), and such Section 2.3(f) of the Investor Rights Agreement shall apply mutatis mutandis to such Equity Securities of the Partnership (and is incorporated in this Agreement by reference).

(ii)    Substantially simultaneously with any issuance of Equity Securities of the Partnership to the NB Partners pursuant to their exercise of the preemptive rights set forth in Section 3.7(b)(i) (which shall be at the election of the NB Partner Representative): (A) Blue Owl Carry shall issue an equal number of Equity Securities (with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership) to the NB Partners (in the aggregate); and (B) the NB Partners shall collectively contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Carry, its Allocation Percentage of, the aggregate consideration payable for such Equity Securities.

(c)    Notwithstanding anything in this Section 3.7 to the contrary, the NB Partners shall not have any preemptive rights with respect to, and the foregoing provisions of this Section 3.7 shall not apply to the issuance of, (i) Excluded Securities (as defined in the Investor Rights Agreement) or (ii) Equity Securities of the Partnership issued pursuant to Section 3.4 solely to maintain the one-to-one-to-one ratio contemplated by Section 3.4(e).

(d)    Notwithstanding anything in this Agreement to the contrary, the NB Partners’ rights under this Section 3.7 are personal to the NB Partners and may not be assigned to any Person.

Section 3.8    Adjustments. If there are any changes as a result of any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Partnership Units, then appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations under this Agreement shall continue with respect to the Partnership Units as so changed.

ARTICLE IV

DISTRIBUTIONS

Section 4.1    Distributions Generally. Subject to Section 4.5 and Section 4.7, the General Partner may cause the Partnership to distribute all or any portion of available cash of the Partnership to the Holders of Partnership Units in accordance with their respective Percentage Interests of Partnership Units on the Partnership Record Date with respect to such distribution.

Section 4.2    Tax Distributions. Prior to making distributions pursuant to Section 4.1, on or prior to each Tax Distribution Date, the Partnership shall be required to, subject only to (i) Section 4.5, (ii) Available Cash and (iii) the terms and conditions of any applicable Debt

 

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arrangements (and the General Partner will use commercially reasonable efforts not to enter into Debt arrangements the terms and conditions of which restrict or prohibit the making of customary tax distributions to the Partners), make pro rata distributions of cash to the Holders of Partnership Units (in accordance with their respective Percentage Interests of Partnership Units), including Seller Earnout Units, in an amount sufficient to ensure that each such Holder receives a distribution at least equal to such Holder’s Assumed Tax Liability, if any, with respect to the relevant taxable period to which the distribution relates (“Tax Distributions”). Notwithstanding the foregoing, distributions pursuant to this Section 4.2, if any, shall be made to the Partners only to the extent all previous distributions to the Partners pursuant to Section 4.1 with respect to the taxable period are less than the distributions the Partners otherwise would have been entitled to receive with respect to such taxable period pursuant to this Section 4.2. For the avoidance of doubt, if for any reason the Partnership on any Tax Distribution Date does not make the full amount of distributions required under this Section 4.2 (determined without regard to the limitations in clauses (i), (ii), and (iii) of the first sentence in this Section 4.2), the amount of Tax Distributions required on the succeeding Tax Distribution Date will be increased by such shortfall until the full amount of required Tax Distributions have been made.

Section 4.3    Distributions in Kind. Subject to of the Exchange Agreement and Article XIV, no Holder may demand to receive property other than cash as provided in this Agreement. The General Partner may cause the Partnership to make a distribution in kind of Partnership assets to the Holders, and such assets shall be distributed in such a fashion as to ensure that the fair market value is distributed and allocated in accordance with this Article IV, Article V and Article IX.

Section 4.4    Distributions to Reflect Additional Partnership Units. In the event that the Partnership issues additional Partnership Units pursuant to the provisions of Article III, the General Partner is authorized to make such revisions to this Article IV and to Article V as it determines are necessary or desirable to reflect the issuance of such additional Partnership Units, including making preferential distributions in respect of such additional Partnership Units.

Section 4.5    Restricted Distributions. Notwithstanding any provision to the contrary contained in this Agreement, neither the Partnership nor the General Partner, on behalf of the Partnership, shall make a distribution to any Holder if such distribution would violate the Act or other applicable Law.

Section 4.6    Use of Distributions. PubCo and its Subsidiaries shall use distributions received from and other cash of the Partnership for payment of taxes, liabilities or expenses of PubCo or such Subsidiary, for the payment of dividends to its shareholders or for other general corporate purposes, in each case in accordance with a budget approved by, or otherwise approved by, the Executive Committee and in accordance with the terms and conditions of the Investor Rights Agreement. PubCo or such Subsidiary may not use such distributions or other cash of the Partnership to acquire any Partnership Interests or to buyback shares of PubCo’s capital stock, except in accordance with Section 3.4.

Section 4.7    Seller Earnout Units (Distributions). Notwithstanding anything in this Article IV to the contrary, for all purposes of this Article IV, if, as of any date for distribution with respect to Partnership Units (other than Tax Distributions, which shall be paid to all Seller Earnout Units), any Seller Earnout Units remain issued and outstanding, then (a) the Partnership shall pay

 

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a distribution with respect to each Participating Seller Earnout Unit (if any) that is equal to the amount of the distribution paid in respect of a Common Unit on such distribution date and (b) the Partnership shall reserve an amount with respect to each Non-Participating Seller Earnout Unit (if any) that is equal to the amount of the distribution paid in respect of a Common Unit on such distribution date (together with any prior reserved amounts with respect to such Seller Earnout Unit, a “Reserve Amount”). If a Triggering Event occurs with respect to a Seller Earnout Unit that has a Reserve Amount at the time of such Triggering Event, the Partnership shall establish a record date for payment of a distribution to the holder of such Seller Earnout Unit with respect to which the Triggering Event has occurred and, subject to Section 4.5, pay a distribution with respect to each such Seller Earnout Unit equal to the cumulative Reserve Amount with respect to such Seller Earnout Unit. If a Triggering Event does not occur with respect to any Seller Earnout Unit prior to the Earnout Termination Date, the cumulative Reserve Amount with respect to such Seller Earnout Unit shall be released back to the Partnership without further liability of the Partnership.

ARTICLE V

ALLOCATIONS

Section 5.1    General Allocations. After giving effect to the allocations under Section 5.2, and subject to Section 5.2 and Section 5.4, Net Income and Net Loss (and, to the extent reasonably determined by the General Partner to be necessary and appropriate to achieve the resulting Capital Account balances described below, any allocable items of income, gain, loss, deduction or credit includable in the computation of Net Income and Net Loss) for each Fiscal Year or other taxable period shall be allocated among the Partners during such Fiscal Year or other taxable period in a manner such that, after giving effect to all distributions through the end of such Fiscal Year or other taxable period, the Capital Account balance of each Partner, immediately after making such allocation, is, as nearly as possible, equal to (a) the amount such Partner would receive pursuant to Section 12.3 if all assets of the Partnership on hand at the end of such Fiscal Year or other taxable period were sold for cash equal to their Gross Asset Values, all liabilities of the Partnership were satisfied in cash in accordance with their terms (limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability), and all remaining or resulting cash was distributed, in accordance with Section 12.3 to the Partners immediately after making such allocation, minus (b) such Partner’s share of Partnership Minimum Gain and Partner Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Partner is treated as obligated to contribute to the Partnership, computed immediately after the hypothetical sale of assets.

Section 5.2    Additional Allocation Provisions

Notwithstanding the foregoing provisions of this Article V:

(a)    Regulatory Allocations.

(i)    Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding the provisions of Section 5.1, or any other provision of this Article V, if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Holder shall be specially allocated items of Partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Holder’s share

 

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of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g)(2). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.2(a)(i) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii)    Partner Nonrecourse Debt Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(i)(4) or in Section 5.2(a)(i), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Holder who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt (determined in accordance with Regulations Section 1.704-2(i)(5)) as of the beginning of the Fiscal Year shall be specially allocated items of Partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Holder’s respective share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt. A Holder’s share of the net decrease in Partner Minimum Gain shall be determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to this Section 5.2(a)(ii) shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.2(a)(ii) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

(iii)    Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Holders in accordance with their respective Percentage Interests. Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Holder(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i).

(iv)    Qualified Income Offset. If any Holder unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of such Holder as quickly as possible. Notwithstanding the foregoing sentence, an allocation pursuant to this Section 5.2(a)(iv) shall be made if and only to the extent that such Holder would have an Adjusted Capital Account Deficit after all other allocations provided in this Article V have been tentatively made as if this Section 5.2(a)(iv) were not in the Agreement. It is intended that this Section 5.2(a)(iv) comply with the qualified income offset requirement in Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(v)    Curative Allocations. The allocations set forth in Sections 5.2(a)(i), 5.2(a)(ii), 5.2(a)(iii) and 5.2(a)(iv), (the “Regulatory Allocations) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Section 5.1, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Holders

 

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of Partnership Interests so that to the extent possible without violating the requirements giving rise to the Regulatory Allocations, the net amount of such allocations of other items and the Regulatory Allocations to each Holder of a Partnership Interest shall be equal to the net amount that would have been allocated to each such Holder if the Regulatory Allocations had not occurred.

(b)    Allocation of Excess Nonrecourse Liabilities. Except as provided in Section 9.5, for purposes of determining a Holder’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), each Holder’s respective interest in Partnership profits shall be equal to such Holder’s Percentage Interest with respect to Common Units and/or GP Units.

Section 5.3    Tax Allocations.

(a)    In General. Except as otherwise provided in this Section 5.3, for income tax purposes under the Code and the Regulations each Partnership item of income, gain, loss and deduction (collectively, “Tax Items”) shall be allocated among the Holders in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 5.1 and Section 5.2.

(b)    Section 704(c) Allocations. Notwithstanding Section 5.3(a), Tax Items with respect to an Asset that is contributed to the Partnership with a Gross Asset Value that varies from its basis in the hands of the contributing Partner immediately preceding the date of contribution shall be allocated among the Holders for income tax purposes pursuant to Regulations promulgated under Code Section 704(c) so as to take into account such variation. The Partnership shall account for such variation under the traditional method as described in Regulations Section 1.704-3(b). In the event that the Gross Asset Value of any partnership asset is adjusted pursuant to subsection (b) of the definition of “Gross Asset Value” (provided in Section 1.1), subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Code Section 704(c) and the applicable Regulations and using the traditional method as described in Regulations Section 1.704-3(b). For the avoidance of doubt and without limiting the foregoing, the traditional method as described in Regulations Section 1.704-3(b) shall be applied with respect to each asset contributed (or deemed contributed) or otherwise owned by the Partnership on the Closing Date. If, as a result of an exercise of a non-compensatory option to acquire an interest in the Partnership, a Capital Account reallocation is required under Regulations Sections 1.704-1(b)(2)(iv)(s)(3), the Partnership shall make corrective allocations pursuant to Regulations Section 1.704-1(b)(4)(x). If, pursuant to Section 5.2(a)(i), the General Partner causes a Capital Account reallocation in accordance with principles similar to those set forth in Regulations Section 1.704-1(b)(2)(iv)(s)(3), the General Partner shall make corrective allocations in accordance with principles similar to those set forth in Regulations Section 1.704-1(b)(4)(x).

Section 5.4    Other Allocation Rules. With regard to the General Partner’s acquisition of the GP Units pursuant to the BCA, Net Income and Net Loss shall be allocated to the Partners of the Partnership so as to take into account the varying interests of the Partners in the Partnership using an “interim closing of the books” method in a manner that complies with the provisions of Code Section 706 and the Regulations thereunder. If during any Fiscal Year there is any other change in any Partner’s ownership of Partnership Units in the Partnership, the General Partner

 

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shall take into account the varying interests of the Partners in the Partnership using an “interim closing of the books” method in a manner that complies with the provisions of Code Section 706 and the Regulations thereunder. Notwithstanding the foregoing sentence, such allocations may instead be made in another manner that complies with the provisions of Code Section 706 and the Regulations thereunder and that is selected by the General Partner.

Section 5.5    Seller Earnout Units (Allocations). The parties to this Agreement intend that, for U.S. federal income tax purposes, and for purposes of the tax, allocation, and Capital Account provisions of this Agreement (i) no Partner shall be treated as having taxable income or gain as a result of holding any Seller Earnout Unit at the time a Triggering Event has occurred with respect such Seller Earnout Unit, (ii) prior to the time any Seller Earnout Unit is forfeited to the Partnership in accordance with Section 3.1(c), such Seller Earnout Unit shall be treated as (and shall receive allocations as if they were) outstanding and not subject to forfeiture for U.S. federal income tax purposes, and (iii) if any Seller Earnout Unit is forfeited for failing to achieve a Triggering Event prior to the Earnout Termination Date, the parties to this Agreement intend and agree to treat such forfeiture as an adjustment to the transaction consideration pursuant to the BCA and the Partnership shall (x) make corresponding adjustments to the initial Capital Accounts of the Partners as necessary or appropriate and (y) prepare and file all tax returns consistent therewith unless otherwise required by a “determination” within the meaning of Code Section 1313.

ARTICLE VI

OPERATIONS

Section 6.1    Management. Subject to the terms of this Agreement (including Section 6.7):

(a)    The General Partner shall have full, exclusive and complete discretion to manage and control the business and affairs of the Partnership, to make all decisions affecting the business and affairs of the Partnership and to do or cause to be done any and all acts, at the expense of the Partnership, as it deems necessary or appropriate to accomplish the purposes and direct the affairs of the Partnership. The General Partner shall have the exclusive power and authority to bind the Partnership, except and to the extent that such power is expressly delegated in writing to any other Person by the General Partner, and such delegation shall not cause the General Partner to cease to be a Partner or the General Partner of the Partnership. The General Partner shall be an agent of the Partnership’s business, and the actions of the General Partner taken in such capacity and in accordance with this Agreement shall bind the Partnership. The General Partner shall at all times be a Partner of the Partnership. The General Partner shall constitute a “general partner” under the Act. No Limited Partner or Assignee (other than in its separate capacity as the General Partner, any of its Affiliates or any member, officer or employee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any member, officer or employee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement. The General Partner may not withdraw or be removed from the Partnership except as set forth in Section 10.2.

 

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(b)    The determination as to any of the following matters, made by or at the direction of the General Partner consistent with the Act and this Agreement, shall be final and conclusive and shall be binding upon the Partnership and every Limited Partner: (i) the amount of assets at any time available for distribution or the redemption of Common Units and GP Units; (ii) the amount and timing of any distribution (subject to the requirements of Section 4.2 related to Tax Distributions); (iii) any determination as to Exchanged Securities that is not inconsistent with the provisions of the Exchange Agreement; (iv) the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created, or whether or not the foregoing shall have been paid or discharged); (v) the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Partnership; (vi) any matter relating to the acquisition, holding and disposition of any assets by the Partnership; or (vii) any other matter relating to the business and affairs of the Partnership or required or permitted by applicable Law, this Agreement or otherwise to be determined by the General Partner.

(c)    The General Partner may also, from time to time, appoint such officers and establish such management and/or advisory boards or committees of the Partnership as the General Partner deems necessary or advisable, each of which shall have such powers, authority and responsibilities as are delegated in writing by the General Partner from time to time, provided that in no event shall the General Partner be absolved of its fiduciary duties pursuant to Section 6.5(c) by virtue of any appointment. Each such officer and/or board or committee member shall serve at the pleasure of the General Partner.

(d)    Except as otherwise expressly provided in this Agreement (including Section 6.7, as applicable) or required by any non-waivable provision of the Act or other applicable Law, no Partner other than the General Partner shall (i) have any right to vote on or consent to any other matter, act, decision or document involving the Partnership or its business, or (ii) take part in the day-to-day management, or the operation or control, of the business and affairs of the Partnership. Without limiting the generality of the foregoing, but subject to Section 6.7 (as applicable), the General Partner may cause the Partnership, without the consent or approval of any other Partner, to enter into any of the following in one or a series of related transactions: (A) any merger, (B) any acquisition, (C) any consolidation, (D) any sale, lease, division or other transfer or conveyance of assets, (E) any recapitalization or reorganization of outstanding securities, (F) any merger, sale, lease, spin-off, exchange, transfer or other disposition of a subsidiary, division or other business, (G) any issuance of debt or Equity Securities (subject to any limitations expressly provided for in this Agreement) or (H) any incurrence of indebtedness. Except to the extent expressly delegated in writing by the General Partner, no Limited Partner or Person other than the General Partner shall be an agent for the Partnership or have any right, power or authority to transact any business in the name of the Partnership or to act for or on behalf of or to bind the Partnership.

(e)    Only the General Partner may commence a voluntary case on behalf of, or an involuntary case against, the Partnership under a chapter of Title 11 U.S.C. by the filing of a “petition” (as defined in 11 U.S.C. 101(42)) with the United States Bankruptcy Court. Any such petition filed by any other Partner, to the fullest extent permitted by applicable Law, shall be deemed an unauthorized and bad faith filing and all parties to this Agreement shall use their best efforts to cause such petition to be dismissed.

 

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(f)    It is anticipated that the General Partner’s primary business activities shall be focused on the operation of the Partnership, Blue Owl Carry and their respective Subsidiaries. Subject to the foregoing, the Partners acknowledge and agree that, subject to the terms of any other employment, consulting or similar arrangements or engagement with the Partnership, the General Partner, or any Affiliate of either of them: (i) any Limited Partner and its Affiliates may engage or invest in any other business, activity or opportunity of any nature, independently or with others; (ii) neither the Partnership nor any Partner (in its capacity as such) shall have any right to participate in any manner in such engagement or investment, or the profits or income earned or derived therefrom; and (iii) the pursuit of such activities by any such Partner shall not be deemed in violation of breach of this Agreement or any obligation or duty owed by such Partner to the Partnership or the other Partners.

(g)    Subject to Section 6.1(h), the General Partner shall have the power, without the consent of the Partners or the consent or approval of any Limited Partner, to amend this Agreement as may be required to facilitate or implement any of the following purposes:

(i)    to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;

(ii)    to reflect the admission, substitution or withdrawal of Partners, the Transfer of any Partnership Interest or the termination of the Partnership in accordance with this Agreement, and to amend the Register in connection with such admission, substitution, withdrawal or Transfer;

(iii)    to reflect a change that is of an inconsequential nature, or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with applicable Law or with other provisions of this Agreement;

(iv)    to satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state Law;

(v)    to modify either or both of the manner in which items of Net Income or Net Loss are allocated pursuant to Article V or the manner in which Capital Accounts are adjusted, computed, or maintained (but in each case only to the extent set forth in the definition of “Capital Account” or Section 4.4 or as contemplated by the Code or the Regulations);

(vi)    to reflect the issuance of additional Partnership Interests in accordance with Article III and

(vii)    to set forth or amend the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of any additional Partnership Units issued pursuant to Article III.

 

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(viii)    to reflect any other modification to this Agreement as is reasonably necessary for the business or operations of the Partnership and which does not violate Section 6.1(h) or Section 6.7, and does not adversely affect any Limited Partner in any material respect.

(h)    Notwithstanding Article XIII, this Agreement shall not be amended, and no action may be taken by the General Partner, without the consent of each Partner adversely affected thereby (if any), if such amendment or action would: (i) convert a Limited Partner into a general partner of the Partnership (except as a result of the Limited Partner becoming the General Partner pursuant to Section 11.1 of this Agreement); (ii) modify the limited liability of a Limited Partner or increase the obligation of a Limited Partner to make a Capital Contribution to the Partnership; (iii) adversely alter the rights of any Partner to receive the distributions to which such Partner is entitled pursuant to Article IV or Section 12.3(a)(iii), or alter the allocations specified in Article V (except, in any case, as permitted pursuant to Sections 3.2 and 4.4); (iv) would convert the Partnership into a corporation; or (v) amend Section 6.3(b) or this Section 6.1(h). Notwithstanding the foregoing sentence, with respect to the foregoing clause (iii) and (iv), the consent of any individual Partner adversely affected shall not be required for any amendment or action that affects all Partners holding the same class or series of Partnership Units on a uniform or pro rata basis, if approved by a Majority in Interest of the Limited Partners. Further, no amendment may alter the restrictions on the General Partner’s authority set forth in the preceding sentence of this Section 6.1(h) without the consent so specified in such preceding sentence. Any such amendment or action consented to by any Partner shall be effective as to that Partner, notwithstanding the absence of such consent by any other Partner.

(i)    Notwithstanding anything to the contrary in this Agreement, the rights and authority of the General Partner under this Agreement are derivative of the governance and control rights of PubCo, and the General Partner shall not be permitted under this Agreement to override any rights, protections or requirements of PubCo, the Board, the Executive Committee and any applicable stockholders of PubCo pursuant to the terms and conditions of the PubCo Charter, the Investor Rights Agreement, or any other law, rule regulation or agreement binding upon it.

Section 6.2    Compensation and Advances.

(a)    The General Partner shall not receive any fees from the Partnership for its services in administering the Partnership, except as otherwise provided in this Agreement (including the provisions of Articles IV and V regarding distributions, payments and allocations to which it may be entitled in its capacity as the General Partner).

(b)    From time to time and for so long as PubCo owns no other Person or businesses (other than the General Partner, the Partnership, Blue Owl Carry or any of their Subsidiaries), the Partnership shall be liable for, and shall reimburse the General Partner and PubCo, on a monthly basis, or such other basis as the General Partner may determine, for sums to the extent expended by PubCo or the General Partner (and specifically excluding sums paid directly by the Partnership or any of its Subsidiaries) in connection with the Partnership’s business, including: (i) costs and expenses relating to the ownership of interests in and management and operation of, or for the benefit of, the Partnership; (ii) compensation of officers and employees of the General Partner, PubCo or the Partnership; (iii) director fees and expenses; (iv) all costs and expenses of PubCo being a public company, including costs of filings with the SEC, tax returns,

 

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reports and other distributions to its stockholders; and (v) other costs and expenses incidental to their existence or related to the foregoing matters. For the avoidance of doubt, in no event shall the expenses payable pursuant to this Section 6.2(b) include any tax liability of PubCo or the General Partner. Such reimbursements shall be in addition to any reimbursement of the General Partner as a result of indemnification pursuant to Section 6.6.

(c)    To the extent practicable, Partnership expenses shall be billed directly to and paid by the Partnership and, if and to the extent any reimbursements to the General Partner, PubCo or any of their respective Affiliates by the Partnership pursuant to this Section 6.2, constitute gross income (as opposed to a repayment of advances made by such Person on behalf of the Partnership), such amounts shall be treated as “guaranteed payments” to PubCo within the meaning of Code Section 707(c) (unless otherwise required by the Code and the Regulations) and shall not be treated as distributions for purposes of computing the Limited Partners’ Capital Accounts.

Section 6.3    Outside Activities.

(a)    Neither the General Partner nor PubCo shall directly or indirectly enter into or conduct any business, other than in connection with and to the extent permitted by this Agreement: (i) the ownership, acquisition and disposition of Partnership Interests, Carry GP Units and Carry Units; (ii) with respect to the General Partner, the management of the business of the Partnership and Blue Owl Carry; (iii) with respect to PubCo, its operation as a reporting company with a class (or classes) of securities registered under the Exchange Act; (iv) with respect to PubCo, the offering, sale, syndication, private placement or public offering of stock, bonds, securities or other interests; (v) financing or refinancing of any type related to the Partnership or Blue Owl Carry or their respective assets or activities; and (vi) such activities as are incidental thereto. Nothing contained in this Agreement shall be deemed to prohibit (x) the General Partner from executing guarantees of Partnership debt for which it would otherwise be liable in its capacity as General Partner or (y) the actions and operations permitted by the Carry LPA with respect to the parties thereto. PubCo and its Subsidiaries (including the General Partner) may, subject to the limitations of this Agreement (including Section 3.4) and the Carry LPA (as applicable) acquire Partnership Interests, Carry Units and Carry GP Units, and shall be entitled to exercise all rights of a Partner relating to such Partnership Interests, Carry Units and Carry GP Units (pursuant to and in accordance with the Carry LPA). At any time prior to the Partnership becoming a wholly-owned Subsidiary of PubCo, (A) PubCo shall own, directly or indirectly, 100% of the Equity Securities of the General Partner and (B) the General Partner shall hold no property or assets other than (x) Equity Securities in the Partnership and Blue Owl Carry, and their respective Subsidiaries, and (y) any property or assets incidental to the business contemplated by the first sentence of this Section 6.3(a).

(b)    Except with respect to any corporate opportunity expressly offered or presented to any Indemnitee solely in his or her capacity as a director or officer of, through his or her service to, or pursuant to a contract with, the Partnership and its Subsidiaries (an “Excluded Opportunity”), and subject to any agreements entered into pursuant to Section 6.4 and any other agreements entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Carry or a Subsidiary of the foregoing (including any employment agreement), to the fullest extent permitted by applicable Law, any Indemnitee shall have the right to engage in businesses

 

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of every type and description and other activities for profit, and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by the Partnership or any of its Subsidiaries, independently or with others, including business interests and activities in direct competition with the business and activities of the Partnership or any of its Subsidiaries, with no obligation to offer the Partnership or its Subsidiaries the right to participate therein. Nothing in this Agreement, including (without limitation) the foregoing sentence, shall be deemed to supersede any other agreement to which any Indemnitee may be a party or the rights of any other party thereto restricting such Indemnitee’s ability to have certain business interests or engage in certain business activities or ventures. To the fullest extent permitted by applicable Law, but subject to the immediately preceding sentence, neither the Partnership nor any of its Subsidiaries shall have any rights in any business interests, activities or ventures of any Indemnitee that are not Excluded Opportunities, and the Partnership waives and renounces any interest or expectancy therein.

(c)    Except with respect to Excluded Opportunities, and subject to any agreements entered into pursuant to Section 6.4 and any other agreements entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Carry or a Subsidiary of the foregoing (including any employment agreement), to the fullest extent permitted by applicable Law: (i) the engagement in competitive activities by an Indemnitee in accordance with the provisions of this Section 6.3 is deemed approved by the Partnership, all Partners and all Persons acquiring any Partnership Interest; (ii) it shall not be a breach of any Indemnitee’s duties or any other obligation of any type whatsoever of any Indemnitee if an Indemnitee engages in, or directs to another Person, any such business interests or activities in preference to or to the exclusion of the Partnership or any of its Subsidiaries; and (iii) no Indemnitee shall be liable to the Partnership, any Partner or any other Person who acquires any Partnership Interest, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person, or does not communicate such opportunity or information to the Partnership or any of its Subsidiaries.

(d)    In addition to and without limiting the foregoing provisions of this Section 6.3, but without limiting any separate agreement entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Carry or a Subsidiary of the foregoing (including any employment agreement), a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Partnership or any of its Subsidiaries if it is a business opportunity that (i) the Partnership and its Subsidiaries are neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the business of the Partnership and its Subsidiaries or is of no practical advantage to the Partnership and its Subsidiaries, (iii) is one in which the Partnership and its Subsidiaries have no interest or reasonable expectancy, or (iv) is one presented to any account for the benefit of an Indemnitee or an Affiliate of Indemnitee (other than the Partnership or any of its Subsidiaries) over which such Indemnitee has no direct or indirect influence or control, including, but not limited to, a blind trust. To the fullest extent permitted by applicable law, but without limiting any separate agreement entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Carry or a Subsidiary of the foregoing (including any employment agreement), no Indemnitee shall (x) have any duty to present business opportunities that are not Excluded Opportunities to the Partnership or any of its Subsidiaries or (y) be liable to the Partnership, any Partner or any other Person who acquires any Partnership Interest, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to the Partnership or any of its Subsidiaries.

 

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(e)    For avoidance of doubt, the foregoing paragraphs of this Section 6.3 are intended to renounce with respect to the Indemnitees, to the fullest extent permitted by the Act, any interest or expectancy of the Partnership or any of its Subsidiaries in, or in being offered an opportunity to participate in, any business opportunities that are not Excluded Opportunities, and this Section 6.3 shall be construed to effect such renunciation to the fullest extent permitted by the Act.

(f)    Any Indemnitee may, directly or indirectly, (i) acquire Partnership Interests, and options, rights, warrants and appreciation rights relating to Partnership Interests and (ii) except as otherwise expressly provided in this Agreement, exercise all rights of a Partner relating to such Partnership Interest, options, rights, warrants and appreciation rights.

(g)    To the fullest extent permitted by applicable Law, any Person purchasing or otherwise acquiring any Partnership Interest shall be deemed to have notice of and to have consented to the provisions of this Section 6.3.

Section 6.4    Transactions with Affiliates.

(a)    The Partnership may lend funds to PubCo and its Subsidiaries (excluding for this purpose Subsidiaries of the Partnership, Blue Owl Carry and Subsidiaries of Blue Owl Carry), and such Persons may borrow funds from the Partnership, on terms and conditions no less favorable to the Partnership in the aggregate than would be available from unaffiliated third parties as reasonably determined by the General Partner in good faith solely for the purpose of acquiring assets that will be contributed to the Partnership for Partnership Units.

(b)    Except as provided in Section 6.3, the Partnership may transfer assets to joint ventures, limited liability companies, partnerships, corporations, business trusts or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable Law.

(c)    The General Partner and its Affiliates may sell, transfer or convey any property to the Partnership, directly or indirectly, on terms and conditions no less favorable to the Partnership in the aggregate than would be available from unaffiliated third parties as reasonably determined by the General Partner in good faith.

(d)    The General Partner or PubCo may propose and adopt on behalf of the Partnership Employee benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, PubCo, Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the General Partner, PubCo, the Partnership or any of the Partnership’s Subsidiaries.

Section 6.5    Liability of Partners; Fiduciary and Other Duties; Indemnification.

(a)    Except as otherwise provided by the Act, the debts, expenses, obligations and liabilities of the Partnership, whether arising in contact, tort or otherwise, shall be solely the

 

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debts, expenses, obligations and liabilities of the Partnership, and no Partner (including the General Partner) shall be obligated personally for any such debt, expense, obligation, or liability of the Partnership solely by reason of being a Partner. All Persons dealing with the Partnership shall have recourse solely to the Partnership for the payment of the debts, expenses, obligations or liabilities of the Partnership.

(b)    Subject to the conditions and limitations set forth in this Agreement, to the greatest extent permitted under applicable Law, no Indemnitee shall be liable, in damages or otherwise, to the Partnership or to any Partner for any losses sustained or liabilities incurred as a result of any act or omission of such Indemnitee, except that such Indemnitee shall not be exculpated from or entitled to indemnification under this Agreement for any such loss, damage or claim incurred by reason of such Indemnitee’s fraud, willful misconduct, or knowing violation of the Law or willful violation of this Agreement by the Indemnitee, in each case, as established by a final judgment of a court of competent jurisdiction.

(c)    An Indemnitee acting under this Agreement shall not be liable to the Partnership or to any other Indemnitee for such Person’s good-faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of such Persons otherwise existing at law or in equity, are agreed by the Partners to replace fully and completely such other duties and liabilities of such Persons. Notwithstanding any other provision of this Agreement or otherwise applicable provision of law or equity, but subject to the two immediately succeeding sentences, whenever in this Agreement an Indemnitee is permitted or required to make a decision or take an action (i) in its “sole discretion” or “discretion” or under a similar grant of authority or latitude, or if no standard is expressed, in making such decisions, such Person shall be entitled to take into account its own interests so long as it takes into account the interests of the Partners as a whole or (ii) in its “good faith” or under another expressed standard, such Person shall act under such express standard and shall not be subject to any other or different standards. Notwithstanding the foregoing, with respect to any or all actions, omissions or decisions of the General Partner, the General Partner acknowledges that it will owe to the Limited Partners the same fiduciary duties as it would owe to the stockholders of a Delaware corporation if it were a member of the board of directors of such a corporation and the Limited Partners were stockholders of such corporation. For the avoidance of doubt, the fiduciary duties described in the foregoing sentence shall not be limited by the fact that the General Partner shall be permitted to take certain actions in its sole or reasonable discretion pursuant to the terms of this Agreement, the Exchange Agreement or any agreement entered into in connection herewith or therewith (it being expressly agreed by the General Partner that the use of such discretion shall be consistently applied on a non-discriminatory basis to holders of Partnership Interests within any given class or series thereof). No Limited Partner, in its capacity as a Limited Partner, shall owe any duty (including fiduciary duty) to the Partnership or any of its Partners (all such duties being eliminated by this Agreement to the greatest extent possible).

(d)    The General Partner may consult with legal counsel, accountants and financial or other advisors, and any act or omission suffered or taken by the General Partner on behalf of the Partnership or in furtherance of the interests of the Partnership in good faith in reliance upon and in accordance with the advice of such counsel, accountants or financial or other advisors will be full justification for any such act or omission, and the General Partner will be fully protected in so acting or omitting to act so long as such counsel or accountants or financial or other advisors were selected with reasonable care.

 

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Section 6.6    Indemnification.

(a)    The Partnership shall indemnify and hold harmless each Indemnitee (and such Person’s heirs, successors, assigns, executors or administrators) to the full extent permitted by law from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorney’s fees and other legal fees and expenses), judgments, fines, settlements and other amounts of any nature whatsoever, known or unknown, liquid or illiquid (collectively, “Liabilities”) arising from any threatened, pending or completed claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, and whether formal or informal, including appeals (“Actions”), in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of any act performed or omitted to be performed by such Indemnitee on behalf of the Partnership or by reason of the fact that the Indemnitee is or was serving as an officer, director or partner of the Partnership (or other applicable capacity set forth in the definition of “Indemnitee”) if (i) the Indemnitee acted in good faith, within the scope of such Indemnitee’s authority, and in a manner it believed to be in, or not contrary to, the best interests of the Partnership, (ii) the Action was not initiated by the Indemnitee (other than an action to enforce such Indemnitee’s rights to indemnification or advance of expenses under this Section 6.6), (iii) the Indemnitee has not been established by a final judgment of a court of competent jurisdiction to be liable to the Partnership, and (iv) such action or inaction did not constitute fraud, gross negligence, willful misconduct, or a knowing violation of the Law or willful violation of this Agreement by the Indemnitee, in each case, as established by a final judgment of a court of competent jurisdiction.

(b)    Expenses incurred by an Indemnitee in (i) defending or (ii) appearing as a witness in (when such Indemnitee is not named as a defendant or respondent) any Action, subject to this Section 6.6 shall be advanced by the Partnership prior to the final disposition of such Action upon receipt by the Partnership of a written commitment by or on behalf of the Indemnitee to repay such amount if it shall be determined that such Indemnitee is not entitled to be indemnified as authorized in this Section 6.6.

(c)    Any indemnification obligations of the Partnership arising under this Section 6.6 shall be satisfied to the extent of any Partnership assets only and no Limited Partner or Affiliate of any Limited Partner shall have any personal liability on account thereof.

(d)    The right to indemnification and advancement of expenses provided by this Agreement shall not be exclusive of, and shall not affect, any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns, executors and administrators of the Indemnitee unless otherwise provided in a written agreement with such Indemnitee or in the writing pursuant to which such Indemnitee is indemnified.

(e)    The Partnership shall, and to the extent applicable shall cause its Subsidiaries to, be fully and primarily responsible for the payment to any Indemnitee in respect of

 

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Liabilities in connection with any Jointly Indemnifiable Claims (as defined below), as the indemnitor of first resort with respect thereto, pursuant to and in accordance with (as applicable) the terms of (i) this Agreement (ii), any other agreements entered into by an Indemnitee with the Partnership, Blue Owl Carry or a Subsidiary of the foregoing pursuant to which such Indemnitee is indemnified, (iii) applicable Law and/or (iv) the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Subsidiary of the Partnership ((i) through (iv) collectively, the “Indemnification Sources”), irrespective of any right of recovery such Indemnitee (or its Affiliates) may have from any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, including PubCo (other than the insurer under and pursuant to an insurance policy of PubCo or any of its Subsidiaries) from whom such Indemnitee may be entitled to indemnification with respect to which, in whole or in part, PubCo or any of its Subsidiaries (other than the Partnership and its Subsidiaries) may also have an indemnification obligation (collectively, the “Indemnitee-Related Entities”). Under no circumstance shall the Partnership or any of its Subsidiaries be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery any Indemnitee may have from the Indemnitee-Related Entities shall reduce or otherwise alter the rights of such Indemnitee or the obligations of the Partnership or any of its Subsidiaries under the Indemnification Sources. In the event that any of the Indemnitee-Related Entities shall make any payment to any Indemnitee in respect of indemnification with respect to any Jointly Indemnifiable Claim, (x) the Partnership shall, and to the extent applicable shall cause its Subsidiaries to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (y) to the extent not previously and fully reimbursed by the Partnership and/or any of its Subsidiaries pursuant to the foregoing clause (x), the Indemnitee-Related Entity making such payment shall be subrogated to the extent of the outstanding balance of such payment to all of the rights of recovery of the Indemnitee against the Partnership and/or any of its Subsidiaries, as applicable, and (z) such Indemnitee shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the Indemnitee-Related Entities effectively to bring suit to enforce such rights. Each of the parties to this Agreement agree that each of the Indemnitee-Related Entities shall be third-party beneficiaries with respect to this Section 6.6(c), entitled to enforce this Section 6.6(c) as though each such Indemnitee-Related Entity were a party to this Agreement. The Partnership shall cause each of its Subsidiaries to perform the terms and obligations of this Section 6.6(c) as though each such Subsidiary were a party to this Agreement. For purposes of this Section 6.6(c), the term “Jointly Indemnifiable Claims” shall be broadly construed and shall include any Liabilities for which any Indemnitee shall be entitled to indemnification from both (1) the Partnership and/or any of its Subsidiaries pursuant to the Indemnification Sources, on the one hand, and (2) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and such Indemnitee (or its Affiliates) pursuant to which such Holder Indemnitee is indemnified, applicable Law and/or the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Indemnitee-Related Entity, on the other hand. Notwithstanding the foregoing, to the extent the General Partner reasonably determines in good faith that the they are both reasonably capable of doing so, the Partnership and Blue Owl Carry shall each be responsible for

 

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their respective Allocation Percentage of any Jointly Indemnifiable Claim for which the Partnership and Blue Owl Carry both have Liability to an Indemnitee under this Section 6.6 and Section 6.6 of the Carry LPA.

(f)    To the fullest extent permitted by applicable Law, the Partnership shall purchase and maintain insurance (or be the named insured on the insurance policy of any Affiliate), to the extent and in such amounts as the General Partner shall deem reasonable, on behalf of any of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(g)    An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.6 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement and such Indemnitee is entitled to indemnification pursuant to Section 6.6(a).

(h)    The provisions of this Section 6.6 are for the benefit of the Indemnitees, their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 6.6 or any provision of this Agreement shall be prospective only and shall not in any way affect the limitations on the Partnership’s liability to any Indemnitee under this Section 6.6 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted. Each of the parties to this Agreement agree that each Indemnitee shall be a third-party beneficiary with respect to this Section 6.6, entitled to enforce this Section 6.6 as though each such Indemnitee were a party to this Agreement.

(i)    Notwithstanding anything to the contrary in this Agreement, the indemnification rights and obligations set forth in this Agreement shall not apply to any breaches of fiduciary duties set forth in Section 6.5(c), to the extent (and only to the extent) that it has been finally determined by a court of competent jurisdiction that, respectively, a director of a Delaware corporation would be prohibited by the Laws of the State of Delaware from being indemnified with respect to such matter or a Delaware corporation is prohibited by the Laws of the State of Delaware from indemnifying a member of its board of directors with respect to such matter.

Section 6.7    Certain NB Consent Rights.

(a)    Notwithstanding anything to the contrary in this Article VI or elsewhere in this Agreement:

(i)    until the first date upon which the NB First Ownership Threshold is no longer satisfied, the Partnership shall not (and the General Partner shall not, and shall cause the Partnership and its Subsidiaries not to) take or omit to take any action for which the consent of NB would be required pursuant to Section 2.3(a) of the Investor Rights Agreement, unless NB gives its consent pursuant thereto; and

 

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(ii)    until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the Partnership shall not (and the General Partner shall not, and shall cause the Partnership and its Subsidiaries not to) take or omit to take any action for which the consent of NB would be required pursuant to Section 2.3(b) of the Investor Rights Agreement, unless NB gives its consent pursuant thereto.

(b)    Notwithstanding anything in this Agreement to the contrary, NB’s rights under this Section 6.7 are personal to NB and may not be assigned to any Person (other than to another NB Partner).

ARTICLE VII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 7.1    Return of Capital. Except pursuant to the rights of Exchange set forth in the Exchange Agreement and Article XIV, no Limited Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon dissolution of the Partnership as provided in this Agreement. Except to the extent provided in Article IV or Article V or otherwise expressly provided in this Agreement, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions or as to profits, losses or distributions.

Section 7.2    Rights of Limited Partners Relating to the Partnership.

(a)    In addition to other rights provided by this Agreement or by the Act, (the General Partner shall deliver to each Limited Partner a copy of any information mailed to all of the common stockholders of PubCo as soon as practicable after such mailing, unless such Limited Partner is entitled to receive such information pursuant to the Investor Rights Agreement, PubCo Charter or PubCo Bylaws.

(b)    Notwithstanding any other provision of this Section 7.2, but subject to Section 7.2(c), the General Partner may keep confidential from the Limited Partners (or any of them), for such period of time as the General Partner determines to be reasonable, any information that (i) the General Partner reasonably, and in good faith, believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership, (ii) would jeopardize or waive privilege or work product doctrine or (iii) the Partnership or the General Partner is required by Law or by agreement to keep confidential.

(c)    Notwithstanding anything in this Section 7.2 to the contrary, the information rights of NB are governed by the terms and provisions of Section 2.5 of the Investor Rights Agreement. To the extent there is any inconsistency or conflict between the terms and provisions of this Section 7.2, solely with respect to NB, and the terms and provisions of Section 2.5 of the Investor Rights Agreement, the terms and provisions of Section 2.5 of the Investor Rights Agreement shall control.

 

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ARTICLE VIII

BOOKS AND RECORDS

Section 8.1    Books and Records. At all times during the continuance of the Partnership, the Partnership shall prepare and maintain separate books of account for the Partnership for financial reporting purposes, on an accrual basis, in accordance with United States generally accepted accounting principles, consistently applied. The Partnership shall keep at its principal office the following:

(a)    a current list of the full name and the last known street address of each Partner;

(b)    a copy of the Certificate and this Agreement and all amendments thereto; and

(c)    copies of the Partnership’s federal, state and local income tax returns and reports, if any, for the three most recent years.

Section 8.2    Inspection. Subject to Section 15.11 Limited Partners (personally or through an authorized representative) may, for purposes reasonably related to their respective Partnership Interests, examine and copy (at their own cost and expense) items described in Section 8.1(b) at all reasonable business hours upon reasonable prior notice. The access provided in the foregoing sentence shall not apply to the Register, which shall be subject to Section 3.1(b).

ARTICLE IX

TAX MATTERS

Section 9.1    Preparation of Tax Returns. The General Partner shall arrange for the preparation and timely filing of all returns with respect to Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable effort to furnish, within 90 days of the close of each taxable year, an estimate of the tax information reasonably required by the Holders (including a draft Schedule K-1 or other schedule or statement providing estimated taxable income) for federal and state income tax and any other tax reporting purposes and, by August 15 of each taxable year, such final information (including a final Schedule K-1). In addition, the General Partner shall, at the requesting Holder’s expense for reasonable, incremental out-of-pocket expenses, provide such other information that is reasonably available to it and that any Holder may reasonably request to enable it to determine and comply with its tax paying and reporting obligations, or to obtain refunds of or exemptions from taxes that would otherwise be borne by such Holder with respect to its interests in the Partnership. For the avoidance of doubt, nothing in this Section 9.1 shall require the Partnership to provide information that tracks the interest in the Partnership for a Person who holds a direct or indirect interest in a Holder (it being understood that the reporting in this section shall properly reflect the status of any Holder that is a disregarded entity for applicable tax purposes).

Section 9.2    Tax Elections. The General Partner shall file (or cause to be filed) an election pursuant to Code Section 754 (and any corresponding provision for state and local income tax purposes) for the Partnership for the tax year including the Closing Date and shall maintain

 

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and keep such election in effect at all times (and, if applicable, the General Partner and the Partnership shall cause any Subsidiary of the Partnership to file and maintain such an election). Except as otherwise provided in this Agreement, the General Partner shall determine whether to make any other available election pursuant to the Code; provided that, the General Partner shall consult in good faith with the NB Partner Representative prior to making, changing, or revoking any material tax election or method of tax accounting or modifying the manner in which Capital Accounts (or allocations thereto) or allocations for tax purposes are determined, in each case if such actions would reasonably be expected to have a material and disproportionate adverse effect on the NB Partners or their direct or indirect owners (not taking into account the tax characteristics or tax attributes of such direct or indirect owners) and their respective Permitted Transferees.

Section 9.3    Partnership Representative.

(a)    The General Partner is designated as the Partnership Representative. In addition, the General Partner is authorized to designate or remove any other Person selected by General Partner as the Partnership Representative. All actions taken by the Partnership Representative pursuant to this Section 9.3 shall be subject to the overall oversight and authority of the Board. For each Fiscal Year in which the Partnership Representative is an entity, the Partnership shall appoint the “designated individual” identified by the Partnership Representative and approved by the Board to act on its behalf in accordance with the applicable Regulations or analogous provisions of state or local Law. Each Partner expressly consents to such designations and agrees to take, and that the General Partner is authorized to take (or cause the Partnership to take), such other actions as may be necessary or advisable pursuant to Regulations or other IRS or Treasury guidance or state or local Law to cause such designations or evidence such Partner’s consent to such designations.

(b)    Subject to this Section 9.3, the Partnership Representative shall have the sole authority to act on behalf of the Partnership in connection with, make all relevant decisions regarding application of, and to exercise the rights and powers provided for in the BBA Rules, including making any elections under the BBA Rules or any decisions to settle, compromise, challenge, litigate or otherwise alter the defense of any Action, audit or examination before the IRS or any other tax authority (each, an “Audit”), and to expend Partnership funds for professional services and other expenses reasonably incurred in connection therewith. Notwithstanding any provision to the contrary in this Agreement, the Partnership Representative shall be permitted make an election under Section 6226 of the BBA Rules (and any similar provision of state, local and non-U.S. tax Law) with respect to any Audit.

(c)    Without limiting the foregoing, the Partnership Representative shall give prompt written notice to the Original Limited Partner Representative of the commencement of any Audit of the Partnership or any of its Subsidiaries (a “Specified Audit”). The Partnership Representative shall: (i) keep the Original Limited Partner Representative reasonably informed of the material developments and status of any such Specified Audit; (ii) permit the Original Limited Partner Representative (or its designees) to participate (including using separate counsel), in each case at the Original Limited Partners’, as applicable, sole cost and expense, in any such Specified Audit; and (iii) promptly notify the Original Limited Partner Representative of receipt of a notice of a final partnership adjustment (or equivalent under applicable Laws) or a final decision of a court or IRS Appeals panel (or equivalent body under applicable Laws) with respect to such

 

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Specified Audit. The Partnership Representative or the Partnership shall promptly provide the Original Limited Partner Representative with copies of all material correspondence between the Partnership Representative or the Partnership (as applicable) and any governmental authority in connection with such Specified Audit, and shall give the Original Limited Partner Representative a reasonable opportunity to review and comment on any material correspondence, submission (including settlement or compromise offers) or filing in connection with any such Specified Audit. Additionally, the Partnership Representative shall not (and the Partnership shall not (and shall not authorize the Partnership Representative to)) settle, compromise or abandon any Specified Audit in a manner that would reasonably be expected to have a disproportionately adverse (compared to the General Partner) or materially adverse effect on the Original Limited Partners without the Original Limited Partner Representative’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned).

(d)    The Partnership representative shall give prompt written notice to the NB Partner Representative of the commencement of any material U.S. federal or state tax Audit of the Partnership or any of its Subsidiaries or any Audit of the Partnership or any of its Subsidiaries that would reasonably be expected to have a disproportionate and material adverse effect on the NB Partners (a “NB Relevant Audit”). The Partnership Representative shall keep the NB Partner Representative reasonably informed of the material developments and status of any such NB Specified Audit. The Partnership Representative or the Partnership shall promptly provide the NB Partner Representative with copies of all material correspondence between the Partnership Representative or the Partnership (as applicable) and any governmental authority in connection with such NB Relevant Audit, and shall give the NB Partner Representative a reasonable opportunity to review and comment on any material correspondence, submission (including settlement or compromise offers) or filing in connection with any such NB Relevant Audit. Additionally, the Partnership Representative shall not (and the Partnership shall not (and shall not authorize the Partnership Representative to)) settle, compromise or abandon any NB Relevant Audit in a manner that would reasonably be expected to have a disproportionate and material adverse effect on the NB Partners without the NB Partner Representative’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned). Notwithstanding the foregoing, the rights of the NB Partner Representative under this Section 9.3(d) shall terminate upon the first date the NB Second Ownership Threshold is no longer satisfied.

(e)    Notwithstanding anything to the contrary contained in this Agreement, in the event of any conflict between Section 11.1 of the BCA and this Agreement, Section 11.1 of the BCA shall control. The Partnership, the Partnership Representative, the General Partner, and the Partners acknowledge and agree to the foregoing sentence and expressly agree to be bound by the terms of Section 11.1 of the BCA.

(f)    This Section 9.3 shall be interpreted to apply to Partners and former Partners, and shall survive the Transfer of a Partner’s Partnership Units and the termination, dissolution, liquidation and winding up of the Partnership and, for this purpose to the extent not prohibited by applicable Law, the Partnership shall be treated as continuing in existence.

 

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Section 9.4    Withholding Tax Indemnification

(a) If the Partnership or any other Person in which the Partnership holds an interest is required by Law to withhold or to make tax payments on behalf of or with respect to any Partner, or the Partnership is subjected to tax itself (including any amounts withheld from amounts directly or indirectly payable to the Partnership or to any other Person in which the Partnership holds an interest) by reason of the status of any Partner as such or that is specifically attributable to a Partner (including federal, state, local or foreign withholding or nonresident income taxes, personal property, unincorporated business or other taxes, the amount of any taxes arising under the BBA Rules, the amount of any taxes imposed under Code Section 1446(f), and any interest, penalties, additions to tax, and expenses related to any such amounts) (“Tax Advances”), the General Partner may cause the Partnership to withhold such amounts and cause the Partnership to make such tax payments as so required, and each Partner authorizes the Partnership to do so. For all purposes of this Agreement, such Partner shall be treated as having received the amount of the distribution, if applicable, that is equal to the Tax Advance at the time of such Tax Advance. Notwithstanding the foregoing, each Tax Advance shall be repaid by reducing the amount of the current or next succeeding distribution pursuant to Section 4.1; provided, that, to the extent that the aggregate amount of Tax Advances for any period made on behalf of a Partner exceeds the actual distributions that would have otherwise been made to such Partner pursuant to Section 4.1 following such Tax Advances, then such Partner shall indemnify and hold harmless the Partnership for the entire amount of such excess (which has not offset distributions pursuant to this Section 9.4) (an “Excess Tax Advance”); provided, that any Excess Tax Advance with respect to any Partner shall be required to be repaid by such Partner in full prior to or in connection with any Transfer or Exchange of Partnership Units held by such Partner. For the avoidance of doubt, any income taxes, penalties, additions to tax and interest payable, and any taxes, penalties and interest payable under the BBA Rules, by the Partnership or any fiscally transparent entity in which the Partnership owns an interest shall be treated as specifically attributable to the Partners and shall be treated as a Tax Advance with respect to the Partners such that the burden of (or any diminution in distributable proceeds resulting from) any such amounts is borne by those Partners to whom such amounts are specifically attributable (whether as a result of their status, actions, inactions or otherwise), in each case as reasonably determined by the General Partner.

(b)    This Section 9.4 shall be interpreted to apply to Partners and former Partners and shall survive the Transfer or Exchange of a Partner’s Partnership Units (and shall not burden any such Transferred Partnership Units, any Partnership Units that were the subject of an Exchange or the transferee of such Partnership Units) and the termination, dissolution, liquidation and winding up of the Partnership and, for this purpose to the extent not prohibited by applicable Law, the Partnership shall be treated as continuing in existence.

Section 9.5    Subject Liabilities.

(a)    For purposes of determining a Partner’s share of any Subject Liability under Regulations Section 1.752-3, the Partnership shall adopt the “additional method” described in Regulations Section 1.752-3(a)(3) to the maximum extent permitted by law (as reasonably determined by the General Partner), first with respect to each Protected Partner and amount listed on Schedule II.

 

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(b)    No Partner, nor any of its Affiliates, nor any Person related to a Partner within the meaning of Regulations Section 1.752-4(b) shall (other than PubCo, Blue Owl Carry, or their respective Affiliates): (i) enter into a guarantee (or any arrangement treated in a similar manner for purposes of Code Section 752 and the Regulations thereunder) all or any portion of any Subject Liability; (ii) acquire an interest in all or any portion Subject Liability (or take any action that would be treated for U.S. federal income tax purposes as an acquisition of an interest in any Subject Liability); or (iii) otherwise take any action which would cause all or any portion of a Subject Liability to be treated as a “recourse liability” (as defined in Treasury Regulation Section 1.752-1(a)(1)) with respect to such Partner.

Section 9.6    FIC Distribution. The parties to this Agreement agree that the FIC Distribution gave rise to an adjustment to the tax basis of certain property of Opal Capital Group LLC or its successor in interest pursuant to Code Section 734. To the extent such adjustment is allocated to depreciable or amortizable property, then to the extent permitted by law the parties agree to treat such basis adjustment as a separate item of property for purposes of Code Sections 168 and 197, as applicable, that is not “Section 704(c) property” as defined in Regulations Section 1.704-3(a)(3)(i).

Section 9.7    Exchange Agreement. The Exchange Agreement, to the extent it imposes an obligation on the Partnership or defines rights of the Partners with respect to the Partnership, shall be treated as part of the partnership agreement of the Partnership as described in Code Section 761(c) and Regulations Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c).

Section 9.8    Intended Tax Treatment. The parties acknowledge the Intended Tax Treatment (as defined in the BCA) set forth in Section 12.5 of the BCA and the provisions of this Agreement (including allocation and capital account provisions) shall be interpreted and applied consistently with such treatment.

ARTICLE X

PARTNER TRANSFERS AND WITHDRAWALS

Section 10.1    Transfer.

(a)    No part of the interest of a Partner shall be subject to the claims of any creditor, to any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement.

(b)    No Partnership Interest shall be Transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article X. Any Transfer or purported Transfer of a Partnership Interest not made in accordance with this Article X shall be null and void ab initio.

Section 10.2    Transfer of General Partners Partnership Interest. The General Partner may not (i) Transfer any GP Units, (ii) voluntarily withdraw as the general partner of the Partnership, or (iii) be removed from the Partnership, in each case, without the consent of PubCo, a Majority in Interest of the Limited Partners and, until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the NB Partner Representative. Notwithstanding the foregoing

 

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sentence, the approval of a Majority in Interest of the Limited Partners, PubCo and the NB Partner Representative shall not be required if the successor General Partner is PubCo or a wholly-owned Subsidiary thereof. In the event of the General Partner’s removal, a Majority in Interest of the Limited Partners may appoint a new general partner to be the General Partner under this Agreement, which shall be PubCo or a wholly-owned Subsidiary thereof unless PubCo provides its prior written consent (including the approval of a majority of the Independent Directors of the Board). Notwithstanding anything to the contrary in this Agreement, the General Partner may only voluntarily withdraw as the general partner of the Partnership, be removed or be replaced as the general partner of the Partnership, or otherwise be removed from the Partnership, in each case, with the prior written consent of PubCo (and if the replacement General Partner is not PubCo or a wholly-owned Subsidiary of PubCo, including the approval of a majority of the Independent Directors of the Board).

Section 10.3    Limited Partners Rights to Transfer.

(a)    Transfers; Generally.

(i)    Except as otherwise agreed to in writing between the General Partner and the applicable Limited Partner and reflected in the books and records of the Partnership, no Limited Partner or Assignee thereof may Transfer (including in accordance with the Exchange Agreement) all or any portion of its Partnership Interests or other interest in the Partnership (or beneficial interest therein) without the prior consent of the General Partner, which consent may be given or withheld, or made subject to such conditions (including the receipt of such legal opinions and other documents that the General Partner may require) as are determined by the General Partner, in each case in the General Partner’s sole discretion, and which consent may be in the form of a plan or program entered into or approved by the General Partner, in its sole discretion. Notwithstanding anything to the contrary, in no event may the General Partner waive or modify the Lock-Up Period applicable to any Qualified Unitholder without the prior written consent of (x) a majority of the Independent Directors of the Board and (y) until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the NB Partner Representative. Any such determination in the General Partner’s discretion in respect of Partnership Interests shall be final and binding. Any purported Transfer of Partnership Interests that is not in accordance with, or subsequently violates, this Agreement shall be, to the fullest extent permitted by law, null and void.

(ii)    Notwithstanding clause (i) above but subject to Section 10.3(c), each Limited Partner may Transfer Common Units in Exchanges pursuant to, and in accordance with, the Exchange Agreement. The General Partner may adopt or promulgate policies from time to time (including policies requiring the use of designated administrators or brokers) applicable to Exchanges without the consent of any Limited Partner that are consistent with the terms of this Agreement or the Exchange Agreement.

(iii)    Notwithstanding anything otherwise to the contrary in this Agreement, but subject to Section 10.3(c)(ii) and Section 10.6, a Limited Partner may transfer all or a portion of its Partnership Interests to any of its Permitted Transferees in a transfer that the General Partner determines in good faith complies with the requirements of Regulation. 1.7704-1(e) or otherwise does not create a material risk of the Partnership being treated as a “publicly

 

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traded partnership” within the meaning of Section 7704 of the Code; provided, that for the avoidance of doubt, any further Transfer by the Permitted Transferee may only be made to another Permitted Transferee of the original transferring Limited Partner and in accordance with this Agreement.

(b)    Further Restrictions.

(i)    Notwithstanding any contrary provision in this Agreement, the General Partner may impose such vesting requirements, forfeiture provisions, Transfer restrictions, minimum retained ownership requirements or other similar provisions with respect to any Partnership Interests that are outstanding as of the Effective Date or are created thereafter, with the written consent of the holder of such Partnership Interests.

(ii)    Notwithstanding any contrary provision in this Agreement, in no event may any Transfer of a Partnership Interest be made by any Limited Partner or Assignee if:

(A)    such Transfer is made to any Person who lacks the legal right, power or capacity to own such Partnership Interest;

(B)    such Transfer would require the registration of any Partnership Interests (including the Partnership Interest so Transferred) under any applicable U.S. federal or state securities Laws (including the Securities Act or the Exchange Act) or other non-U.S. securities Laws (including Canadian provincial or territorial securities laws) or would constitute a non-exempt distribution pursuant to applicable provincial or state securities Laws;

(C)    such Transfer would cause (A) all or any portion of the assets of the Partnership to (1) constitute “plan assets” (under ERISA, the Code or any applicable similar Law) of any existing or contemplated Limited Partner, or (2) be subject to the provisions of ERISA, Code Section 4975 or any applicable similar Law, or (B) the General Partner to become a fiduciary with respect to any existing or contemplated Limited Partner, pursuant to ERISA, any applicable similar Law, or otherwise;

(D)    to the extent requested by the General Partner, the Partnership does not receive customary legal opinions and written instruments (including copies of any instruments of Transfer and such Assignee’s consent to be bound by this Agreement as an Assignee) that are in a form satisfactory to the General Partner, as reasonably determined in good faith by the General Partner;

(E)    such Transfer would violate, or cause PubCo, the Partnership or any of their respective Affiliates to violate, any applicable Law of any jurisdiction; or

 

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(F)    the General Partner shall reasonably determine in good faith that such Transfer (provided, for this purpose a transaction described in the clause (c) of the final sentence of the definition of “Transfer” will be considered to be a Transfer if the General Partner reasonably determines such transaction could reasonably be expected to be treated as a transfer for U.S. federal income tax purposes) would pose a material risk that the Partnership would be a “publicly traded partnership” as defined in Code Section 7704.

In addition, notwithstanding any contrary provision in this Agreement, to the extent the General Partner shall determine that interests in the Partnership do not meet the requirements of Regulations Section 1.7704-1(h), the General Partner may impose such restrictions on the Transfer (provided, for this purpose a transaction described in the clause (c) of the final sentence of the definition of “Transfer” will be considered to be a Transfer if the General Partner reasonably determines such transaction could reasonably be expected to be treated as a transfer for U.S. federal income tax purposes) of Partnership Interests or other interests in the Partnership as the General Partner may reasonably determine in good faith to be necessary or advisable so that the Partnership is not treated as a publicly traded partnership taxable as a corporation under Code Section 7704.

(c)    Seller Transfers.

(i)    Notwithstanding anything to the contrary in this Agreement, in no event shall any Limited Partner that is a Seller (or a Permitted Transferee of any Seller) effect any Transfer or make a public announcement of any intention to effect any Transfer of any Partnership Interests (including any Seller Earnout Units) during the Lock-Up Period applicable to such Partnership Interests, in each case other than a Transfer to a Permitted Transferee made in accordance with Section 10.3(a)(iii).

(ii)    For the avoidance of doubt, a Seller Earnout Unit is not Transferable (except to a Permitted Transferee and in such event, solely in accordance with Section 10.3(a)(iii)) until a Triggering Event has occurred with respect to such Seller Earnout Unit (as determined in accordance with the definition of “Triggering Event” herein), and any purported Transfer (except to a Permitted Transferee and in such event, solely in accordance with Section 10.3(a)(iii)) of any Seller Earnout Units by any Holder thereof prior to a Triggering Event occurring with respect to such Seller Earnout Units shall be null and void, and the Partnership shall refuse to recognize any such Transfer for any purpose.

Section 10.4    Substituted Limited Partners.

(a)    No Limited Partner shall have the right to substitute a transferee other than a Permitted Transferee as a Limited Partner in its place (and, for the avoidance of doubt, such Permitted Transferee shall be a Substituted Limited Partner under this Agreement). A transferee (other than a Permitted Transferee) of the interest of a Limited Partner may be admitted as a Substituted Limited Partner only with the consent of the General Partner. The failure or refusal by the General Partner to permit a transferee of any such interests to become a Substituted Limited Partner in accordance with the previous sentence shall not give rise to any cause of action against

 

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the Partnership or the General Partner. Subject to the foregoing, an Assignee shall not be admitted as a Substituted Limited Partner until and unless it furnishes to the General Partner (i) evidence of acceptance, in form and substance reasonably satisfactory to the General Partner, of all the terms, conditions and applicable obligations of this Agreement, the Investor Rights Agreement and the Exchange Agreement, (ii) a counterpart signature page to this Agreement, the Investor Rights Agreement and the Exchange Agreement (or a joinder thereto) executed by such Assignee, (iii) a Consent by Spouse (if applicable) and (iv) such other documents and instruments as the General Partner may reasonably require to effect such Assignee’s admission as a Substituted Limited Partner and (v) the transfer to the applicable Assignee includes a corresponding Transfer of the applicable Limited Partner’s Carry Units.

(b)    Concurrently with, and as evidence of, the admission of a Substituted Limited Partner, the General Partner shall amend the Register and the books and records of the Partnership to reflect the name, address and number of Partnership Units of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and number of Partnership Units of the predecessor of such Substituted Limited Partner.

(c)    A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article X shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement.

Section 10.5    Assignees. If the General Partner’s consent is required for the admission of any transferee in a Transfer made in accordance with Section 10.3 as a Substituted Limited Partner, as described in Section 10.4, and the General Partner withholds such consent, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses and other items of income, gain, loss, deduction and credit of the Partnership attributable to the Partnership Units assigned to such transferee and the rights to Transfer the Partnership Units provided in this Article X, but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement (other than as expressly provided in the Exchange Agreement with respect to a Limited Partner that becomes an Exchanging Partner), and shall not be entitled to effect a consent or vote with respect to such Partnership Units on any matter presented to the Limited Partners for approval (such right to consent or vote, to the extent provided in this Agreement or under the Act, fully remaining with the transferor Limited Partner). In the event that any such Assignee desires to make a further assignment of any such Partnership Units, such Assignee shall be subject to all the provisions of this Article X to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units.

Section 10.6    General Provisions.

(a)    No Limited Partner may withdraw from the Partnership other than: (i) as a result of a permitted Transfer of all of such Limited Partner’s Partnership Interest in accordance with this Article X with respect to which the transferee becomes a Substituted Limited Partner; (ii) pursuant to the Exchange (including a Direct Exchange) of all of its Partnership Interest pursuant to the Exchange Agreement and Article XIV; or (iii) as a result of the acquisition of all of such Limited Partner’s Partnership Interest by PubCo or its Subsidiaries, whether or not pursuant to the Exchange Agreement.

 

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(b)    Any Limited Partner who shall Transfer all of its Partnership Units in a Transfer (i) permitted pursuant to this Article X where such transferee was admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of its rights to effect an Exchange of all of its Partnership Units pursuant to the Exchange Agreement and Article XIV or (iii) to PubCo or its Subsidiaries, whether or not pursuant to Article XIV, in each case, shall cease to be a Limited Partner.

(c)    If any Partnership Unit is Transferred in compliance with the provisions of this Article X, or is redeemed or Exchanged by the Partnership or PubCo (including by Direct Exchange) pursuant to the Exchange Agreement, on any day other than the first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items of income, gain, loss, deduction and credit attributable to such Partnership Unit for such Fiscal Year shall be allocated to the transferor Partner or the Exchanging Partner (as the case may be) and, in the case of a Transfer or assignment other than an Exchange, to the transferee Partner, by taking into account their varying interests during the Fiscal Year in accordance with Code section 706(d), using the “interim closing of the books” method or another permissible method or methods selected by the General Partner. Solely for purposes of making such allocations, unless otherwise reasonably determined by the General Partner in good faith, each of such items for the calendar quarter in which a Transfer occurs shall be allocated to the transferee Partner and none of such items for the calendar quarter in which a Transfer or an Exchange occurs shall be allocated to the transferor Partner, or the Exchanging Partner (as the case may be) if such Transfer occurs on or before the 45th day of the quarter, otherwise such items shall be allocated to the transferor. All distributions attributable to such Partnership Unit with respect to which the Partnership Record Date is before the date of such Transfer, assignment or Exchange shall be made to the transferor Partner or the Exchanging Partner (as the case may be) and, in the case of a Transfer other than an Exchange, all distributions thereafter attributable to such Partnership Unit shall be made to the transferee Partner.

(d)    In addition to any other restrictions on Transfer contained in this Agreement, in no event may any Transfer or assignment of a Partnership Interest by any Partner (including any Exchange, any acquisition of Partnership Units by PubCo or any other acquisition of Partnership Units by the Partnership) be made (i) of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (ii) if the General Partner determines, based on the advice of counsel, that such Transfer would create a material risk that any portion of the assets of the Partnership would constitute assets of any employee benefit plan pursuant to Department of Labor Regulations section 2510.2-101; (iii) if such Transfer subjects the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisers Act of 1940 or ERISA, each as amended; or (iv) if such Transfer is of one or more Common Units, unless such transferor also Transfers an equal number of Carry Units and Class C Shares or Class D Shares (as applicable) to the applicable transferee.

(e)    Transfers pursuant to this Article X, other than Permitted Transfers (which may be made at any time), may only be made on the first day of a fiscal quarter of the Partnership, unless the General Partner otherwise agrees.

 

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(f)    In the event any Transfer is permitted pursuant to this Article X, the transferring parties shall demonstrate to the satisfaction of the General Partner either that no withholding is required in connection with such Transfer under applicable U.S. federal, state, local or non-U.S. law (including under Code Sections 1445 or 1446) or that any amounts required to be withheld in connection with such Transfer under applicable U.S. federal, state, local or non-U.S. law (including under Code Section 1446, other than by reason of Code Section 1446(f)(4)) have been so withheld and will be paid over the appropriate governmental authority. The General Partner and the Partnership shall reasonably cooperate upon the reasonable request and at the expense of the Transferor and/or Transferee to provide such certifications or other information that it is legally permitted to provide with respect to the Partnership to the extent necessary to reduce or eliminate any such withholding.

ARTICLE XI

ADMISSION OF PARTNERS

Section 11.1    Admission of Successor General Partner. A successor to all or a portion of the General Partner’s Partnership Interest pursuant to Section 10.2 who the General Partner has designated to become a successor General Partner shall be admitted to the Partnership as the General Partner, effective immediately upon the Transfer of such Partnership Interest to it. Upon any such Transfer and the admission of any such transferee as a successor General Partner in accordance with this Section 11.1, the transferor General Partner shall be relieved of its obligations under this Agreement and shall cease to be a general partner of the Partnership without any separate consent of the Partners or any Partner. Any such successor General Partner shall carry on the business of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission. In the event that the General Partner withdraws from the Partnership, or transfers its entire Partnership Interest, in violation of this Agreement, or otherwise dissolves or terminates or ceases to be the general partner of the Partnership and a Majority in Interest of the Limited Partners, with, until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the consent of the NB Partner Representative, may elect to continue the Partnership by selecting a successor General Partner.

Section 11.2    Partners; Admission of Additional Limited Partners.

(a)    A Person (other than a then-existing Partner) who makes a Capital Contribution to the Partnership in exchange for Partnership Units and in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance, in form and substance satisfactory to the General Partner, of all of the terms and conditions of this Agreement, including the power of attorney granted in Section 15.1, (ii) a counterpart signature page to this Agreement executed by such Person, (iii) a Consent by Spouse (as applicable) and (iv) such other documents or instruments as may be required by the General Partner in order to effect such Person’s admission as an Additional Limited Partner. Concurrently with, and as evidence of, the admission of an Additional Limited Partner, the General Partner shall amend the Register and the books and records of the Partnership to reflect the name, address, number and type of Partnership Units of such Additional Limited Partner.

 

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(b)    Notwithstanding anything to the contrary in this Section 11.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the consent of the General Partner to such admission and the satisfaction of all the conditions set forth in Section 11.2(a).

(c)    If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items of income, gain, loss, deduction and credit allocable among Holders for such Fiscal Year shall be allocated among such Additional Limited Partner and all other Holders by taking into account their varying interests during the Fiscal Year in accordance with Code section 706(d), using the “interim closing of the books” method or another permissible method or methods selected by the General Partner. Solely for purposes of making such allocations, each of such items for the calendar quarter in which an admission of any Additional Limited Partner occurs shall be allocated among all the Holders including such Additional Limited Partner, in accordance with the principles described in Section 10.6(c). All distributions with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees other than the Additional Limited Partner, and all distributions thereafter shall be made to all the Partners and Assignees including such Additional Limited Partner.

Section 11.3    Limit on Number of Partners. Unless otherwise permitted by the General Partner, no Person shall be admitted to the Partnership as an Additional Limited Partner if the effect of such admission would be to either cause the Partnership to have a number of Partners (including as Partners for this purpose those Persons indirectly owning an interest in the Partnership through another partnership, a limited liability company, a subchapter S corporation or a grantor trust) that would cause the Partnership to become a reporting company under the Exchange Act.

Section 11.4    Admission. A Person shall be admitted to the Partnership as a Limited Partner of the Partnership or a general partner of the Partnership only upon strict compliance, and not upon substantial compliance, with the requirements set forth in this Agreement for admission to the Partnership as a Limited Partner or a General Partner.

ARTICLE XII

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 12.1    No Dissolution. The Partnership shall not be dissolved by the admission of additional Partners in accordance with the terms of this Agreement. The Partnership may be dissolved, liquidated and terminated only pursuant to the provisions of this Article XII, and the Partners irrevocably waive any and all other rights they may have to cause a dissolution of the Partnership or a sale or partition of any or all of the Partnership assets.

 

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Section 12.2    Events Causing Dissolution. The Partnership shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following events (each, a “Liquidating Event”):

(a)    the sale of all or substantially all of the Partnership’s assets;

(b)    at any time there are no Limited Partners of the Partnership, unless the business of the Partnership is continued in accordance with the Act;

(c)    an election to dissolve the Partnership made by the General Partner, with the consent of a Majority in Interest of the Limited Partners and, until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the NB Partner Representative; or

(d)    the entry of a decree of judicial dissolution under Section 17-802 of the Act.

Section 12.3    Distribution upon Dissolution.

(a)    Upon the occurrence of a Liquidating Event, the General Partner (or, in the event that there is no remaining General Partner or the General Partner has dissolved, become Bankrupt or ceased to operate, any Person elected by a Majority in Interest of the Limited Partners with the consent of PubCo (the General Partner or such other Person being referred to in this Agreement as the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and property, and the Partnership’s property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the Liquidator, include shares of stock in PubCo) shall be applied and distributed in the following order:

(i)    first, to the satisfaction of all of the Partnership’s debts and liabilities to creditors, including Partners who are creditors (other than with respect to liabilities owed to Partners in satisfaction of liabilities for distributions), whether by payment or the making of reasonable provision for payment thereof;

(ii)    second, to the satisfaction of all of the Partnership’s liabilities to the Partners in satisfaction of liabilities for distributions, whether by payment or the making of reasonable provision for payment thereof; and

(iii)    the balance, if any, to the Holders in accordance with Section 4.1. The Liquidator shall not receive any additional compensation for any services performed pursuant to this Article XII.

(b)    Notwithstanding the provisions of Section 12.3(a) that require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership, the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Holders, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Holders as creditors) and/or distribute to the Holders, in lieu of cash, as tenants in common and in accordance with the provisions of Section 12.3(a), undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Holders, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any

 

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agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.

(c)    No Partner shall be personally liable for a deficit Capital Account balance of that Partner, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Partnership assets. In the sole and absolute discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Holders pursuant to this Article XII may be:

(i)    distributed to a trust established for the benefit of the General Partner and the Holders for the purpose of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership and/or Partnership activities; the assets of any such trust shall be distributed to the Holders, from time to time, in the reasonable discretion of the Liquidator, in the same proportions and amounts as would otherwise have been distributed to the Holders pursuant to this Agreement; or

(ii)    withheld or escrowed to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership. Any such withheld or escrowed amounts shall be distributed to the Holders in the manner and order of priority set forth in Section 12.3(a) as soon as practicable.

Section 12.4    Rights of Holders. Except as otherwise provided in this Agreement, (a) each Holder shall look solely to the assets of the Partnership for the return of its Capital Contribution, (b) no Holder shall have the right or power to demand or receive property other than cash from the Partnership and (c) no Holder shall have priority over any other Holder as to the return of its Capital Contributions, distributions or allocations.

Section 12.5    Termination. The Partnership shall terminate when all of the assets of the Partnership, after payment of or due provision for all debts, liabilities and obligations of the Partnership, shall have been distributed to the holders of Partnership Units in the manner provided for in this Article XII, and the Certificate shall have been cancelled in the manner required by the Act.

Section 12.6    Reasonable Time for Winding-Up. A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 12.3, in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between and among the Partners during the period of liquidation.

 

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ARTICLE XIII

AMENDMENTS; MEETINGS

Section 13.1    Amendments.

(a)    Except as otherwise required or permitted by this Agreement (including Section 6.1), amendments, modifications and restatements of this Agreement must be approved by the consent of the General Partner and a Majority in Interest of the Limited Partners.

(b)    Notwithstanding Section 13.1(a):

(i)    no modification, amendment or restatement of any provision of this Agreement that materially and adversely affects the rights or obligations under this Agreement of any Holder of a class or series of Equity Securities of the Partnership, in its capacity as such, without similarly affecting the rights or obligations under this Agreement of all Holders of such class or series of Equity Securities of the Partnership shall be effective against such Holder unless approved in writing by such Holder;

(ii)    any amendment, modification or restatement of Section 10.2, Section 11.1, Section 12.3 and this Section 13.1 shall also require the consent of PubCo;

(iii)    any amendment, modification or restatement of Section 3.7, Section 6.7, Section 7.2(c), Section 9.1, Section 9.2, Section 9.3, Section 10.2, Section 10.3, Section 11.1, Section 12.2, this Section 13.1, Section 15.11(h), Section 15.17(b) and Section 15.18, shall also require the consent of the NB Partner Representative, for so long as the NB Partners or the NB Partner Representative has rights thereunder; and

(iv)    any amendment of the second sentence of Section 10.2 and the second sentence of Section 10.3(a)(i) shall also require the consent of a majority of the Independent Directors of the Board.

(v)    In addition to (and not in limitation of) the foregoing, until the first date upon which the NB First Ownership Threshold is no longer satisfied, no amendment, modification or restatement may be made to this Agreement that is disproportionately adverse to the rights of the NB Partners (in their capacity as holders of PubCo equity securities or Partnership Interests under this Agreement) as compared to the rights of any other Holder, without the consent of the NB Partner Representative.

(c)    Upon obtaining any such consent required under Section 13.1(a) or Section 13.1(b), or any other consent required by this Agreement, and without further action or execution by any other Person, including any Limited Partner, (i) any amendment to this Agreement may be implemented and reflected in a writing executed solely by the General Partner, and (ii) the Limited Partners shall be deemed a party to and bound by such amendment of this Agreement. Within 30 days after the effectiveness of any amendment to this Agreement that does not receive the consent of all Partners, the General Partner shall deliver a copy of such amendment to all Partners that did not consent to such amendment.

Section 13.2    Procedures for Meetings and Actions of the Partners.

(a)    No meetings of the Limited Partners are required to be held. Meetings of the Partners may be called only by the General Partner. The call of any meeting by the General Partner shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners entitled to act at the meeting not less than ten days nor more than 90 days

 

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prior to the date of such meeting. Partners may vote in person or by proxy at such meeting, in each case, by telephone or video conference call. Unless approval by a different number or proportion of the Partners is required by this Agreement, the affirmative vote of a Majority in Interest of the Limited Partners shall be sufficient to approve any proposal at a meeting of the Partners. Whenever the consent of any Partners is permitted or required under this Agreement, such consent may be given at a meeting of Partners or in accordance with the procedure prescribed in Section 13.2(b).

(b)    Any action requiring the consent of any Partner or a group of Partners pursuant to this Agreement, or that is required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a consent in writing or by electronic transmission setting forth the action so taken or consented to is given by Partners whose affirmative vote would be sufficient to approve such action or provide such consent at a meeting of the Partners. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as the affirmative vote of such Partners at a meeting of the Partners. Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified. For purposes of obtaining a consent in writing or by electronic transmission, the General Partner may require a response within a reasonable specified time, but not less than 15 days of receipt of notice, and failure to respond in such time period shall constitute a consent that is consistent with the General Partner’s recommendation with respect to the proposal. An action shall become effective at such time as requisite consents are received, even if prior to such specified time.

(c)    Each Partner entitled to act at a meeting of Partners may authorize any Person or Persons to act for it by proxy on all matters in which a Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Each proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy (or there is receipt of a proxy authorizing a later date). Every proxy shall be revocable at the pleasure of the Partner executing it, such revocation to be effective upon the Partnership’s receipt of written notice of such revocation from the Partner executing such proxy, unless such proxy states that it is irrevocable and is coupled with an interest.

(d)    The General Partner may set, in advance, a record date for the purpose of determining the Partners (i) entitled to consent to any action, (ii) entitled to receive notice of or vote at any meeting of the Partners or (iii) in order to make a determination of Partners for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of the Partners, not less than ten days, before the date on which the meeting is to be held. If no record date is fixed, the record date for the determination of Partners entitled to notice of or to vote at a meeting of the Partners shall be at the close of business on the day on which the notice of the meeting is sent, and the record date for any other determination of Partners shall be the effective date of such Partner action, distribution or other event. When a determination of the Partners entitled to vote at any meeting of the Partners has been made as provided in this section, such determination shall apply to any adjournment thereof.

(e)    Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the

 

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meeting as the General Partner or such other Person deems appropriate in its sole and absolute discretion. Without limitation, meetings of Partners may be conducted in the same manner as meetings of PubCo’s stockholders and may be held at the same time as, and as part of, the meetings of PubCo’s stockholders.

ARTICLE XIV

EXCHANGE RIGHTS

Section 14.1    Exchanges (Generally). Upon an Exchange by any Limited Partner of Common Units for Class A Shares or Class B Shares pursuant to the Exchange Agreement (including in connection with a Direct Exchange), as of the effective date of such Exchange, the Partnership shall comply with the applicable provisions of the Exchange Agreement.

Section 14.2    Lock-Up Periods (Exchanges). Common Units subject to a Lock-Up Period may not be Exchanged (including by way of a Direct Exchange), and in no event shall the Partnership or PubCo effect an Exchange (including a Direct Exchange) of such Common Units, unless and until the expiration of the applicable Lock-Up Period.

Section 14.3    Subject to Exchange Agreement. To the extent of any conflict between this Article XIV and the Exchange Agreement, the terms of the Exchange Agreement shall control and prevail.

ARTICLE XV

MISCELLANEOUS

Section 15.1    Partnership Counsel. THE PARTNERSHIP, THE GENERAL PARTNER, THE ORIGINAL LIMITED PARTNERS AND EACH OF THEIR RESPECTIVE SUBSIDIARIES AND AFFILIATES MAY BE REPRESENTED BY THE SAME COUNSEL (COUNSEL THAT REPRESENTS THE PARTNERSHIP, “PARTNERSHIP COUNSEL”). THE ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS WHO PERFORM SERVICES FOR THE PARTNERSHIP MAY ALSO PERFORM SERVICES FOR THE GENERAL PARTNER, THE ORIGINAL LIMITED PARTNERS AND EACH OF THEIR RESPECTIVE SUBSIDIARIES AND AFFILIATES. THE GENERAL PARTNER MAY, WITHOUT THE CONSENT OF THE LIMITED PARTNERS, EXECUTE ON BEHALF OF THE PARTNERSHIP ANY CONSENT TO THE REPRESENTATION OF THE PARTNERSHIP THAT COUNSEL MAY REQUEST PURSUANT TO THE NEW YORK RULES OF PROFESSIONAL CONDUCT OR SIMILAR RULES IN ANY OTHER JURISDICTION. EACH PARTNER ACKNOWLEDGES THAT PARTNERSHIP COUNSEL DOES NOT REPRESENT ANY LIMITED PARTNER IN ITS CAPACITY AS SUCH IN THE ABSENCE OF A CLEAR AND EXPLICIT WRITTEN AGREEMENT TO SUCH EFFECT BETWEEN SUCH LIMITED PARTNER AND PARTNERSHIP COUNSEL (AND THEN ONLY TO THE EXTENT SPECIALLY SET FORTH IN SUCH AGREEMENT), AND THAT IN ABSENCE OF ANY SUCH AGREEMENT PARTNERSHIP COUNSEL SHALL OWE NO DUTIES TO EACH LIMITED PARTNER. EACH LIMITED PARTNER FURTHER ACKNOWLEDGES THAT, WHETHER OR NOT PARTNERSHIP COUNSEL HAS IN THE PAST REPRESENTED OR IS CURRENTLY REPRESENTING SUCH LIMITED PARTNER WITH RESPECT TO OTHER MATTERS, PARTNERSHIP COUNSEL HAS NOT REPRESENTED THE INTERESTS OF ANY LIMITED PARTNER IN THE PREPARATION AND/OR NEGOTIATION OF THIS AGREEMENT.

 

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Section 15.2    Appointment of General Partner as Attorney-in-Fact.

(a)    Each Limited Partner, including each Additional Limited Partner and Substituted Limited Partner that are Limited Partners, irrevocably makes, constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices the following documents as may be necessary or appropriate to carry out the provisions of this Agreement in accordance with its terms:

(i)    All certificates and other instruments and all amendments thereto, which the General Partner deems appropriate to form, qualify, continue or otherwise operate the Partnership as a limited partnership (or other entity in which the Partners will have limited liability comparable to that provided in the Act), in the jurisdictions in which the Partnership may conduct business or in which such formation, qualification or continuation is, in the opinion of the General Partner, necessary or desirable to protect the limited liability of the Partners, including all fictitious or assumed name certificates required or permitted (in light of the Partnership’s activities) to be filed on behalf of the Partnership in accordance with the terms of this Agreement.

(ii)    This Agreement and all amendments to this Agreement adopted in accordance with the terms of this Agreement, and all instruments which the General Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of this Agreement.

(iii)    All conveyances of Partnership assets, and other instruments which the General Partner reasonably deems necessary in order to complete a dissolution and termination of the Partnership pursuant to this Agreement.

(b)    The appointment by all Limited Partners of the General Partner as attorney-in-fact shall be deemed to be a power coupled with an interest, in recognition of the fact that each of the Limited Partners and Assignees under this Agreement will be relying upon the power of the General Partner to act as contemplated by this Agreement in any filing and other action by it on behalf of the Partnership, shall survive the Incapacity of any Person giving such power, and the Transfer or assignment of all or any portion of such Person’s Partnership Interest, and shall not be affected by the subsequent Incapacity of the principal. In the event of the assignment by a Limited Partner of all of its Partnership Interest, the foregoing power of attorney of an assignor Limited Partner shall survive such assignment only until such time as the Assignee shall have been admitted to the Partnership as a Substituted Limited Partner and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.

Section 15.3    Governing Law; Waiver of Jury Trial; Jurisdiction. The Law of the State of Delaware shall govern (a) all Proceedings, claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of

 

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the obligations imposed by this Agreement, in each case without giving effect to any choice of Law or conflict of Law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the parties to this Agreement submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the Proceeding shall be heard and determined in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 15.3, however, shall affect the right of any party to this Agreement to serve legal process in any other manner permitted by Law or at equity. Each party to this Agreement agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity.

Section 15.4    Accounting and Fiscal Year. Subject to Code Section 448, the books of the Partnership shall be kept on such method of accounting for tax and financial reporting purposes as may be determined by the General Partner. The fiscal year of the Partnership (the “Fiscal Year”) shall be the calendar year, or, in the case of the first and last Fiscal Years of the Partnership, the fraction thereof commencing on the Effective Date or ending on the date on which the winding-up of the Partnership is completed, as the case may be, unless otherwise determined by the General Partner and permitted under the Code.

Section 15.5    Entire Agreement. This Agreement, the Carry LPA, the Tax Receivables Agreement, the Investor Rights Agreement, the Exchange Agreement and the BCA (as applicable) constitutes the entire agreement between the parties to this Agreement pertaining to the subject matter of this Agreement, and fully supersede any and all prior or contemporaneous agreements or understandings between the parties to this Agreement pertaining to the subject matter of this Agreement, including the Original Agreement.

Section 15.6    Further Assurances. Each of the parties to this Agreement does covenant and agree on behalf of itself, its successors, and its assigns, without further consideration, to use commercially reasonable efforts to prepare, execute, acknowledge, file, record, publish, and deliver such other instruments, documents and statements, and to take such other action as may be required by Law or reasonably necessary to effectively carry out the purposes of this Agreement.

Section 15.7    Notices. Any notice, consent, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon

 

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presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next business day, (b) one business day following sending by reputable overnight express courier (charges prepaid) or (c) three days following mailing by certified or registered mail, postage prepaid and return receipt requested to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 15.7):

(a)    if to the Partnership or the General Partner, to Blue Owl Capital Inc. 399 Park Avenue 38th Floor New York, NY 10022; Attention: Neena Reddy, General Counsel and Secretary; Phone: (212) 651-4702; Email: neena@owlrock.com;

(b)    or to such other address as the Partnership may from time to time specify by notice to the Partners; and

(c)    if to any Limited Partner, to such Limited Partner at the address set forth in the records of the Partnership.

Section 15.8    Construction. The parties to this Agreement and their respective counsel have reviewed and negotiated this Agreement as the joint agreement and understanding of the parties to this Agreement, and the language used in this Agreement shall be deemed to be the language chosen by the parties to this Agreement to express their mutual intent, and no rule of strict construction shall be applied against any Person.

Section 15.9    Binding Effect. Except as otherwise expressly provided in this Agreement, this Agreement shall be binding on and inure to the benefit of the Partners, their heirs, executors, administrators, successors and all other Persons hereafter holding, having or receiving an interest in the Partnership, whether as Assignees, Substituted Limited Partners or otherwise.

Section 15.10    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable Law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

Section 15.11    Confidentiality. A Limited Partner’s rights to access or receive any information about the Partnership or its business are conditioned on such Limited Partner’s willingness and ability to assure that the Partnership information will be used solely by such Limited Partner for purposes reasonably related to such Limited Partner’s interest as a Limited Partner, and that, to such Limited Partner’s knowledge, such Partnership information will not become publicly available as a result of such Limited Partner’s rights to access or receive such Partnership information. Each Limited Partner acknowledges that the Partnership creates and will be in possession of confidential information, the improper use or disclosure of which could have

 

64


a material adverse effect upon the Partnership and its Subsidiaries. Each Limited Partner further acknowledges and agrees that certain Partnership information may constitute a valuable trade secret (as defined by Law) of the Partnership and agrees to maintain any Partnership information provided to it in the strictest confidence. Accordingly, without limiting the generality of the foregoing:

(a)    Notwithstanding Article VIII, the General Partner shall have the right to keep confidential from the Limited Partners (and their respective agents and attorneys) for such period of time as the General Partner deems reasonable, any information: (i) that the General Partner believes to be in the nature of trade secrets (on advice of counsel); (ii) the General Partner believes would jeopardize or waive privilege or work product doctrine; or (iii) which the General Partner (or its Affiliates, employees, officers, directors, members, partners or personnel) is required by Law or by agreement with a third party to keep confidential. The General Partner shall make available to a Limited Partner, upon reasonable request, information required by such Limited Partner to comply with applicable Laws, rules and regulations, as well as any requests from any federal or state regulatory body having jurisdiction over such Limited Partner (as determined in such Limited Partner’s sole discretion); however, in no event shall the General Partner be required to disclose to any Limited Partner the identity of, or any account details relating to, any other Partner unless it is required to do so by Law applicable to it, as determined by a court of competent jurisdiction.

(b)    Except as permitted by this Section 15.11 or as required by applicable Law, each party to this Agreement agrees that the provisions of this Agreement, all of the information and documents described in Article VIII, all understandings, agreements and other arrangements between and among the parties (or any of them), and all other non-public information received from, or otherwise relating to, the Partnership or any of its Subsidiaries, any Limited Partners, the General Partner and/or their respective Affiliates shall be confidential, and shall not disclose or otherwise release to any other Person (other than another party to this Agreement) such matters, unless required by Law.

(c)    The confidentiality obligations of the parties under this Section 15.11 shall not apply: (i) to the disclosure by (A) the General Partner of information to the Limited Partners, (B) a Limited Partner of information to the other Limited Partners, or (C) the General Partner or a Limited Partner of information to the General Partner’s or such Limited Partner’s Affiliates, partners, officers, agents, board members, trustees, attorneys, auditors, employees, prospective transferees permitted under this Agreement, financial advisors and other professional advisors (in the case of this clause (C) solely if such prospective transferees and other Persons agree to hold confidential such information substantially in accordance with this Section 15.11 or are otherwise bound by a duty of confidentiality to such Partner) solely on a need-to-know basis, which Persons shall be bound by this Section 15.11 as if they were Limited Partners; (ii) to information already known to the general public at the time of disclosure or that became known prior to such disclosure through no act or omission by any Limited Partner in breach of this Agreement or any Person acting on behalf of any of the foregoing; (iii) to information received from a source, to the knowledge of the receiving party, not bound by a duty of confidentiality to the Partnership or any of its Subsidiaries, any Partner or any Affiliate of any of the foregoing; (iv) to any party to the extent that the disclosure by such party of information otherwise determined to be confidential is required or requested by applicable Law (foreign or domestic) or legal process (including pursuant

 

65


to an arbitration proceeding), or by any federal, state, local or foreign regulatory body with jurisdiction over such party (including, for the avoidance of doubt, communications initiated by any Limited Partner with any regulatory or supervisory authority regarding good faith concerns about potential violations of law or regulation); (v) to disclosures made in connection with any lawsuit initiated to enforce any rights granted under this Agreement; (vi) disclosure of information to the extent necessary for a Limited Partner to prepare and file tax returns, to respond to any inquiries regarding the same from any taxing authority or to prosecute or defend any action, proceeding or audit by any taxing authority with respect to such returns; or (vii) to the disclosure of confidential information to rating agencies to the extent such disclosure is required by such rating agencies. Prior to disclosing any information under any of the circumstances described in this Section 15.12(c), a party shall, to the extent permitted by applicable Law, notify the General Partner thereof, which notice shall include the basis upon which such party believes the information is required to be disclosed. Notwithstanding the foregoing or anything to the contrary in this Agreement, in no event shall this Section 15.11(c) permit any Limited Partner to disclose the identity of, or any account details relating to, any other Partner without the prior written consent of the General Partner (which may be given or withheld in the General Partner’s sole discretion), unless such disclosure is required under applicable Law.

(d)    To the extent that a Limited Partner is subject to the United States Freedom of Information Act or any similar public disclosure or public records act statutes: (i) such Limited Partner acknowledges the General Partner’s and the Partnership’s position that the information intended to be protected by the provisions of Sections 15.11(a) and 15.11(b) constitutes or includes sensitive financial data, proprietary data, commercial and financial information and/or trade secrets that are being provided to and/or entered into with the Limited Partner with the specific understanding that such documents and information will remain confidential; (ii) the General Partner advises each such Limited Partner that the documents and information intended to be protected by the provisions of Sections 15.11(a) and 15.11(b) would not be supplied to such Limited Partner without an understanding that such documents and information will be held and treated by such Limited Partner as confidential information; and (iii) to the extent that such Limited Partner is nevertheless required to disclose any such confidential information, (A) such Limited Partner shall, unless prohibited by Law, give the General Partner prior notice of any such required disclosure and (B) such Limited Partner shall in any event maintain the confidentiality of the Partnership’s information (including this Agreement) to at least the same extent as, and in a manner no less favorable to the Partnership and the General Partner than the manner in which, it maintains the confidentiality of comparable information in respect of any other private investment vehicles in which such Limited Partner invests (whether such vehicles are focused on private investments, public investments or otherwise). Notwithstanding the foregoing or anything to the contrary in this Agreement, in no event shall this Section 15.11(d) permit any Limited Partner to disclose the identity of, or any account details relating to, any other Partner, without the prior written consent of the General Partner (which may be given or withheld in the General Partner’s sole discretion) unless such disclosure is required under applicable Law.

(e)    The Partnership and the General Partner shall be entitled to enforce the obligations of each Limited Partner under this Section 15.11 to maintain the confidentiality of the information described in this Agreement. The remedies provided for in this Section 15.11 are in addition to and not in limitation of any other right or remedy of the Partnership or the General Partner provided by Law or equity, this Agreement or any other agreement entered into by or

 

66


among one or more of the Limited Partners and/or the Partnership. Each Limited Partner expressly acknowledges that the remedy at law for damages resulting from a breach of this Section 15.11 may be inadequate, and that the Partnership and the General Partner shall be entitled to institute an action for specific performance of a Limited Partner’s obligations under this Agreement. The General Partner shall be entitled to consider the different circumstances of different Limited Partners with respect to the restrictions and obligations imposed on Limited Partners under this Agreement to the full extent permitted by Law, and, to the full extent permitted by Law, the General Partner may, in its good faith discretion, waive or modify such restrictions and obligations with respect to a Limited Partner without waiving or modifying such restrictions and obligations for other Limited Partners.

(f)    In addition, to the full extent permitted by Law, each Limited Partner agrees to indemnify the Partnership and each Indemnitee against any claim, demand, controversy, dispute, cost, loss, damage, expense (including reasonable and out-of-pocket attorneys’ fees), judgment and/or liability incurred by or imposed upon the Partnership or any such Indemnitee in connection with any action, suit or proceeding (including any proceeding before any administrative or legislative body or agency) that is finally determined by such governing body, to which the Partnership or any such Indemnitee may be made a party or otherwise involved or with which the Partnership or any such Indemnitee shall be threatened, by reason of the Limited Partner’s obligations (or breach thereof) set forth in this Section 15.11.

(g)    Notwithstanding any other provision of this Agreement (including this Section 15.11), PubCo may disclose any confidential information otherwise subject to the confidentiality obligations of this Section 15.11 to any federal, state, local or foreign regulatory or self-regulatory body or any securities exchange or listing authority to the extent required or requested by such body, exchange or authority, or as necessary and appropriate in connection with filings, or as otherwise required by Law. Notwithstanding the foregoing sentence, in no event shall PubCo disclose the identity of, or any account details relating to, any Limited Partner without the prior written consent of such Limited Partner (which may be given or withheld in such Limited Partner’s sole discretion), unless such disclosure is required under applicable Law.

(h)    Notwithstanding anything in this Section 15.11 to the contrary, the information rights of NB and the restrictions on disclosure and use related thereto are governed by the terms and provisions of Section 2.5 of the Investor Rights Agreement. To the extent there is any inconsistency or conflict between the terms and provisions of this Section 15.11, solely with respect to NB, and the terms and provisions of Section 2.5 of the Investor Rights Agreement, the terms and provisions of Section 2.5 of the Investor Rights Agreement shall control.

Section 15.12    Consent to Use of Name. Each Partner consents to the use and inclusion of its name in the Partnership’s books and records.

Section 15.13    Consent by Spouse. Each Limited Partner who is a natural person and is married (and not formally separated with an agreed-upon division of assets) and is subject to the community property laws of any state shall deliver a duly executed Consent by Spouse, in the form prescribed in Exhibit B attached to this Agreement (a “Consent by Spouse”), and at the time of execution of this Agreement. Each such Limited Partner shall also have such Consent by Spouse executed by any spouse married to him or her at any time subsequent thereto while such natural

 

67


person is a Limited Partner. Each Limited Partner agrees and acknowledges that compliance with the requirements of this Section 15.13 by each other Limited Partner constitutes an essential part of the consideration for his or her execution of this Agreement.

Section 15.14    Counterparts. This Agreement may be executed in any number of multiple counterparts, each of which shall be deemed to be an original copy, and all of which shall constitute one agreement, binding on all parties to this Agreement.

Section 15.15    Survival. The provisions of Sections 6.5, 6.6, 9.3, 9.4, 15.1, 15.2, 15.3, 15.5, 15.6, 15.7, 15.8, 15.10, 15.11, 15.12 and 15.13 (and this Section 15.15) (and any other provisions in this Agreement necessary for the effectiveness of the foregoing sections) shall survive the termination of the Partnership and/or the termination of this Agreement.

Section 15.16    Anti-Money Laundering Representations and Undertakings. Each Partner acknowledges that it has read the representations and undertakings contained on Exhibit C attached to this Agreement and confirms they are true and correct.

Section 15.17    Relationship to Blue Owl Carry.

(a)    The General Partner shall cause the Partnership to fulfill its obligations, covenants and agreements set forth in the Carry LPA.

(b)    Notwithstanding anything to the contrary in this Agreement, upon the earlier of (i) Blue Owl Carry ceasing to be an Affiliate of the Partnership and (ii) the dissolution, winding up or termination of Blue Owl Carry, the General Partner shall have the right and authority (with the consent of the NB Partner Representative and the Original Limited Partner Representative) to amend this Agreement (including Section 3.4) to remove all references to Blue Owl Carry, Carry GP Units, Carry Units and the Carry LPA, and/or to otherwise reasonably reflect the relationship between the Partnership and Blue Owl Carry (if any).

Section 15.18    Distributions in Kind by NB Partners. The provisions of Section 3.16(b) of the Investor Rights Agreement are incorporated herein mutatis-mutandis, except that references in such Section to “NB Aggregators” and “Registrable Securities” shall instead refer to “NB Partners” and “Common Units.”

[Intentionally left blank; signature pages follow.]

 

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

 

BLUE OWL CAPITAL GP LLC

/s/ Tom Wasserman                                    

Name: Tom Wasserman

Title:   Chief Executive Officer

BLUE OWL CAPITAL INC.

/s/ Tom Wasserman                                    

Name: Tom Wasserman

Title:   Chief Executive Officer

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP


BLUE OWL BLOCKER MERGER SUB 1 LLC

By: Blue Owl Capital GP LLC

Its Sole Member

/s/ Tom Wasserman                                    

Name: Tom Wasserman

Title:   Chief Executive Officer

BLUE OWL BLOCKER MERGER SUB 2 LLC

By: Blue Owl Capital GP LLC

Its Sole Member

/s/ Tom Wasserman                                    

Name: Tom Wasserman

Title:   Chief Executive Officer

BLUE OWL BLOCKER MERGER SUB 3 LLC

By: Blue Owl Capital GP LLC

Its Sole Member

/s/ Tom Wasserman                                    

Name: Tom Wasserman

Title:   Chief Executive Officer

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP


OWL ROCK CAPITAL FEEDER LLC
By: Owl Rock Capital Partners LP
its Managing Member
By: Owl Rock Capital Partner (GP) LLC,
its General Partner

/s/ Alan Kirshenbaum

Name: Alan Kirshenbaum
Title:   Chief Operating Officer and
  Chief Financial Officer
DIAMOND CAPITAL SLP LP
By NB DYAL CAPITAL SLP GP LLC,
its general partner

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Authorized Signatory

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP


NBSH BLUE INVESTMENTS, LLC

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Authorized Signatory
NEUBERGER BERMAN GROUP LLC

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Chief of Staff

NEUBERGER BERMAN GROUP LLP, in its capacity as the NB PARTNER

REPRESENTATIVE

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Chief of Staff

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP


CLASS A MEMBER

(in the case of any Electing Partner that is not a Blocker Representative)

– OR –

 

BLOCKER REPRESENTATIVE

(in the case of any Blocker making a Blocker Election):

  
  

 

  

 

  

 

  

 

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP


ACCEPTED AND AGREED:

BLUE OWL CAPITAL CARRY LP

/s/ Tom Wasserman                             

Name: Tom Wasserman

Title:   Chief Executive Officer

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Holdings LP


SCHEDULE I: OWNERSHIP

(as of the Closing Date)

[ON FILE WITH THE COMPANY]

 

Schedule I


SCHEDULE II: PROTECTED PARTNERS

[ON FILE WITH THE COMPANY]

 

Schedule I


EXHIBIT A: CAPITAL CONTRIBUTIONS

[ON FILE WITH THE COMPANY]

 

A-1


EXHIBIT B: CONSENT BY SPOUSE

I acknowledge that I have read the Amended and Restated Agreement of Limited Partnership, effective as of [●] (as may be amended, restated, amended and restated, modified or otherwise supplemented or waived from time to time, the “Partnership Agreement”) of Blue Owl Capital Holdings LP (the “Partnership”) and that I know its contents. I am aware that by its provisions, my spouse agrees to sell, convert, dispose of, or otherwise transfer his or her interest in the Partnership, including any property or other interest that I have or acquire therein, under certain circumstances. I consent to such sale, conversion, disposition or other transfer; and approve of the provisions of the Partnership Agreement and any action hereafter taken by my spouse thereunder with respect to his or her interest, and I agree to be bound thereby.

I further agree that in the event of my death or a dissolution of marriage or legal separation, my spouse shall have the absolute right to have my interest, if any, in the Partnership set apart to him or her, whether through a will, a trust, a property settlement agreement or by decree of court, or otherwise, and that if he or she be required by the terms of such will, trust, settlement or decree, or otherwise, to compensate me for said interest, that the price shall be an amount equal to: (i) the then-current balance of the Capital Account relating to said interest; multiplied by (ii) my percentage of ownership in such interest (all without regard to the effect of any vesting provisions in the Partnership Agreement related thereto).

This consent, including its existence, validity, construction, and operating effect, and the rights of each of the parties to this Consent by Spouse, shall be governed by and construed in accordance with the laws of the [ ]* without regard to otherwise governing principles of choice of law or conflicts of law.

 

Dated:  

 

   
NAME:  

 

   

 

*

Insert jurisdiction of residence of Partner and Spouse.

 

B-1


EXHIBIT C: ANTI-MONEY LAUNDERING REPRESENTATIONS AND UNDERTAKINGS

Each Partner makes the following representations, warranties and covenants as of the Effective Date, and for so long as each such Partner holds any Partnership Interest thereafter:

(a)    The monies used to fund the Partner’s acquisition of an interest in the Partnership, and the monies that have been or will be used to make Capital Contributions, have not been, and will not in any case be, derived from or related to any activity that would be illegal in any Relevant Jurisdiction (“Illegal Activity”). In addition, the proceeds from the Partner’s investment in the Partnership will not be used to finance any Illegal Activities. To the best of the Partner’s knowledge, no contribution or payment, in and of itself, by any Partner to the Partnership will directly or indirectly cause the Partnership or its Affiliates to be in violation of applicable anti-money laundering, terrorist financing, or sanctions laws, regulations or government guidance, including but not limited to the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and the Bank Secrecy Act’s implementing regulations (collectively, “BSA laws and regulations”); the economic and financial sanctions and trade embargoes administered or enforced by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) or the U.S. Department of State; or applicable anti-money laundering and terrorist financing laws, regulations or government guidance or the economic and financial sanctions and trade embargoes of any Relevant Jurisdiction. “Relevant Jurisdiction” means the United States or the Partner’s place of organization or principal place of business.

(b)    Neither a Partner nor any person or entity controlled by or controlling the Partner, excluding such persons or entities that are shareholders of the Partner or any person or entity controlled by or controlling the Partner in the event the Partner or any person or entity controlled by or controlling the Partner is a public company traded on a recognized securities exchange:

(i)    appears on sanctions-related list of designated persons maintained by OFAC (including the Specially Designated Nationals and Blocked Persons List maintained by OFAC), the U.S. Department of State, or any governmental authority of any Relevant Jurisdiction, each as amended from time to time;

(ii)    is a person or entity resident in or, if an entity, organized or chartered under the laws of a jurisdiction that (a) has been designated by the Secretary of the United States Department of the Treasury as warranting special measures due to money laundering concerns or (b) has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the United States is a member, if the United States has concurred in such designation, (c) any territory subject to comprehensive sanctions administered and enforced by OFAC, the U.S. Department of State, or any governmental authority of any Relevant Jurisdiction (at the time of this Agreement, Cuba, Iran, Syria, North Korea, and Crimea);

(iii)    is otherwise subject to economic or financial sanctions or trade embargoes administered and enforced by OFAC, the U.S. Department of State, or any governmental authority of any Relevant Jurisdiction;

 

C-1


(iv)    unless disclosed to the Partnership, is a Senior Foreign Political Figure, which is defined as a current or former senior official in the executive, legislative, administrative, military, or judicial branches of a foreign government (whether elected or not); a senior official of a major foreign political party; a senior executive of a foreign government-owned commercial enterprise; a corporation, business, or other entity that has been formed by, or for the benefit of, such an individual; or the parent, sibling, spouse, child, in-law or close associate of such an individual; or

(v)    is a foreign shell bank, defined as a foreign bank that does not have a physical presence in any country unless the foreign bank is an Affiliate of a depository institution, credit union, or foreign bank that maintains a physical presence in the United States or a foreign country and is subject to the supervision by a banking authority in the country regulating the affiliated depository institution, credit union or foreign bank.

(c)    The Partners understand that the Partnership (and/or its Affiliates) may be subject to certain legal requirements that require verification of the source of funds paid to the Partnership by the Partners, as well as the Partners’ identity and that of any associated persons. The Partners agree that it will provide such materials as may from time to time be reasonably requested by the Partnership or the General Partner for such purposes. In addition, the Partners agree to provide to the Partnership and its Affiliates any additional information regarding itself and any person or entity controlled by or controlling the Partner, excluding such persons or entities that are shareholders of the Partner or any person or entity controlled by or controlling the Partner in the event the Partner or any person or entity controlled by or controlling the Partner is a public company traded on a recognized securities exchange, that may be deemed necessary to ensure compliance with all applicable laws concerning money laundering and terrorist financing, as well as trade and economic sanctions. The Partnership may take such actions as the General Partner may reasonably determine if this information is not provided or on the basis of information that is provided.

(d)    All evidence of identity and related information concerning each Partner and any person controlling or controlled by the Partner, excluding such persons or entities that are shareholders of the Partner or any person or entity controlled by or controlling the Partner in the event the Partner or any person or entity controlled by or controlling the Partner is a public company traded on a recognized securities exchange, that is provided to the Partnership is and will be true, accurate and complete. Each Partner will promptly notify the Partnership and the General Partner if any of the representations in this section cease to be true and accurate.

(e)    The General Partner may segregate and/or redeem a Partner’s investment in the Partnership, prohibit future investments or Capital Contributions, or take other appropriate action if the General Partner determines that the continued participation of any Partner could materially adversely affect the Partnership or if the action is necessary in order for the Partnership to comply with applicable laws, regulations, orders, directives or special measures. The Partners further understand that the Partnership and the General Partner (and any of their Affiliates) may release confidential information about each such Partner and, if applicable, any of its direct or indirect beneficial owners, to proper authorities if, in their sole and absolute discretion, they determine that such release is in the interest of any of the foregoing in light of applicable laws and regulations. The General Partner will take such steps as it determines are necessary to comply with applicable laws, regulations, orders, directives and special measures.

 

C-2

Exhibit 10.5

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

BLUE OWL CAPITAL CARRY LP

a Delaware limited partnership

Dated as of May 19, 2021

 

 

THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH SECURITIES 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 AGREEMENT OF LIMITED PARTNERSHIP IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.


TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINED TERMS

     1  

Section 1.1

   Definitions      1  

Section 1.2

   Interpretation      16  
ARTICLE II GENERAL PROVISIONS      16  

Section 2.1

   Formation      17  

Section 2.2

   Name      17  

Section 2.3

   Principal Place of Business; Other Places of Business      17  

Section 2.4

   Designated Agent for Service of Process      17  

Section 2.5

   Term      17  

Section 2.6

   No Concerted Action      17  

Section 2.7

   Business Purpose      17  

Section 2.8

   Powers      17  

Section 2.9

   Certificates; Filings      17  

Section 2.10

   Representations and Warranties by the Partners      18  

Section 2.11

   References to Certain Equity Securities      19  
ARTICLE III CLASSES OF PARTNERSHIP INTERESTS; CAPITAL CONTRIBUTIONS      20  

Section 3.1

   Classes of Partnership Interests; Capital Contributions of the Partners      20  

Section 3.2

   Issuances of Additional Partnership Interests      21  

Section 3.3

   Additional Funds and Capital Contributions      21  

Section 3.4

   Issuances; Repurchases and Redemptions; Recapitalizations      22  

Section 3.5

   No Interest; No Return      27  

Section 3.6

   Capital Accounts      27  

Section 3.7

   Certain Preemptive Rights of the NB Partners      27  

Section 3.8

   Adjustments      28  
ARTICLE IV DISTRIBUTIONS      29  

Section 4.1

   Distributions Generally      29  

Section 4.2

   Tax Distributions      29  

Section 4.3

   Distributions in Kind      29  

Section 4.4

   Distributions to Reflect Additional Partnership Units      29  

Section 4.5

   Restricted Distributions      29  

Section 4.6

   Use of Distributions      29  

Section 4.7

   Seller Earnout Units (Distributions)      30  
ARTICLE V ALLOCATIONS      30  

Section 5.1

   General Allocations      30  

Section 5.2

   Additional Allocation Provisions      31  

Section 5.3

   Tax Allocations      32  

Section 5.4

   Other Allocation Rules      33  

Section 5.5

   Seller Earnout Units (Allocations)      33  

 

i


ARTICLE VI OPERATIONS      33  

Section 6.1

   Management      33  

Section 6.2

   Compensation and Advances      36  

Section 6.3

   Outside Activities      37  

Section 6.4

   Transactions with Affiliates      39  

Section 6.5

   Liability of Partners; Fiduciary and Other Duties; Indemnification      40  

Section 6.6

   Indemnification      41  

Section 6.7

   Certain NB Consent Rights      43  
ARTICLE VII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS      43  

Section 7.1

   Return of Capital      43  

Section 7.2

   Rights of Limited Partners Relating to the Partnership      43  
ARTICLE VIII BOOKS AND RECORDS      44  

Section 8.1

   Books and Records      44  

Section 8.2

   Inspection      44  
ARTICLE IX TAX MATTERS      44  

Section 9.1

   Preparation of Tax Returns      44  

Section 9.2

   Tax Elections      45  

Section 9.3

   Partnership Representative      45  

Section 9.4

   Withholding Tax Indemnification      47  

Section 9.5

   Subject Liabilities      48  

Section 9.6

   FIC Distribution      48  

Section 9.7

   Exchange Agreement      48  

Section 9.8

   Intended Tax Treatment      48  
ARTICLE X PARTNER TRANSFERS AND WITHDRAWALS      48  

Section 10.1

   Transfer      48  

Section 10.2

   Transfer of General Partner’s Partnership Interest      49  

Section 10.3

   Limited Partners’ Rights to Transfer      49  

Section 10.4

   Substituted Limited Partners      52  

Section 10.5

   Assignees      52  

Section 10.6

   General Provisions      53  
ARTICLE XI ADMISSION OF PARTNERS      54  

Section 11.1

   Admission of Successor General Partner      54  

Section 11.2

   Partners; Admission of Additional Limited Partners      55  

Section 11.3

   Limit on Number of Partners      55  

Section 11.4

   Admission      55  
ARTICLE XII DISSOLUTION, LIQUIDATION AND TERMINATION      56  

Section 12.1

   No Dissolution      56  

Section 12.2

   Events Causing Dissolution      56  

Section 12.3

   Distribution upon Dissolution      56  

 

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Section 12.4

   Rights of Holders      57  

Section 12.5

   Termination      57  

Section 12.6

   Reasonable Time for Winding-Up      58  
ARTICLE XIII AMENDMENTS; MEETINGS      58  

Section 13.1

   Amendments      58  

Section 13.2

   Procedures for Meetings and Actions of the Partners      59  
ARTICLE XIV EXCHANGE RIGHTS      60  

Section 14.1

   Exchanges (Generally)      60  

Section 14.2

   Lock-Up Periods (Exchanges)      60  

Section 14.3

   Subject to Exchange Agreement      60  
ARTICLE XV MISCELLANEOUS      60  

Section 15.1

   Partnership Counsel      61  

Section 15.2

   Appointment of General Partner as Attorney-in-Fact      61  

Section 15.3

   Governing Law; Waiver of Jury Trial; Jurisdiction      62  

Section 15.4

   Accounting and Fiscal Year      62  

Section 15.5

   Entire Agreement      63  

Section 15.6

   Further Assurances      63  

Section 15.7

   Notices      63  

Section 15.8

   Construction      63  

Section 15.9

   Binding Effect      63  

Section 15.10

   Severability      63  

Section 15.11

   Confidentiality      64  

Section 15.12

   Consent to Use of Name      67  

Section 15.13

   Consent by Spouse      67  

Section 15.14

   Counterparts      67  

Section 15.15

   Survival      67  

Section 15.16

   Anti-Money Laundering Representations and Undertakings      67  

Section 15.17

   Relationship to Blue Owl Holdings      67  

Section 15.18

   Distributions in Kind by NB Partners      67  

 

Schedule I: Equity Ownership

     

Schedule II: Protected Partners

     

Exhibit A: Capital Contributions

     

Exhibit B: Consent by Spouse

     

Exhibit C: Anti-Money Laundering Representations and Undertakings

     

 

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AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF BLUE OWL CAPITAL CARRY LP

This Amended and Restated Agreement of Limited Partnership of Blue Owl Capital Carry LP (the “Partnership”), dated as of May 19, 2021 (the “Effective Date”), is entered into by and among Blue Owl Capital Inc., a Delaware corporation (“PubCo”), and Blue Owl Capital GP LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo (in its capacity as the General Partner, the “General Partner”), and the Limited Partners (as defined in this Agreement).

WHEREAS, the Partnership was formed as a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq. (as it may be amended from time to time, and any successor to such statute, the “Act”), by the filing of a Certificate of Limited Partnership of the Partnership in the Office of the Secretary of State of the State of Delaware on January 14, 2021 (the “Formation Date”);

WHEREAS, in connection with a series of transactions effected pursuant to the Business Combination Agreement, dated as of December 23, by and among, PubCo, and the other parties thereto (as may be amended, restated, amended and restated, modified, supplemented or waived from time to time in accordance with its terms, the “BCA”) (i) the General Partner was admitted to the Partnership as the “General Partner” and (ii) the Predecessor General Partner withdrew from the Partnership as general partner; and

WHEREAS, the General Partner (in its capacity as the General Partner) and the other parties to this Agreement now desire to amend and restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties to this Agreement, intending to be legally bound, agree as follows:

ARTICLE I

DEFINED TERMS

Section 1.1    Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement:

Additional Limited Partner” means a Person who is admitted to the Partnership as a Limited Partner pursuant to the Act and Section 11.2, who is shown as such on the books and records of the Partnership, and who has not ceased to be a Limited Partner in accordance with the Act and under this Agreement.

Adjusted Capital Account Deficit” means the deficit balance, if any, in such Partner’s Capital Account at the end of any Fiscal Year or other taxable period, with the following adjustments:

(a)    credit to such Capital Account any amount that such Partner is obligated to restore under Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such year in Partnership Minimum Gain and Partner Minimum Gain; and


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

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

Affiliate” has the meaning given to such term in the Investor Rights Agreement, provided, however, that notwithstanding clause (i) of such definition in the Investor Rights Agreement, the General Partner shall be deemed an Affiliate of PubCo for purposes of this Agreement.

Agreement” means this Amended and Restated Agreement of Limited Partnership of Blue Owl Capital Carry LP, together with the Schedules and Exhibits to this Agreement, as now or hereafter amended, restated, modified, supplemented or replaced.

Allocation Percentage” has the meaning given to such term in the Exchange Agreement.

Assets” means any assets and property of the Partnership, and “Asset” means any one such asset or property.

Assignee” means a Person to whom a Partnership Interest has been Transferred, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 10.5.

Assumed Tax Liability” means, with respect to a Partner for a taxable period to which an applicable Tax Distribution under Section 4.2 relates, an amount equal to the United States federal, state and local income taxes (including applicable estimated taxes) that the General Partner reasonably estimates would be payable by such Partner with respect to such taxable period, (i) assuming such Partner earned solely the items of income, gain, deduction, loss, and/or credit allocated to such Partner by the Partnership for such taxable period, (ii) assuming that such Partner is subject to tax at the Assumed Tax Rate, and (iii) computed without regard to any increases to the tax basis in the Partnership pursuant to Code Sections 734(b) or 743(b). In the case of PubCo, such Assumed Tax Liability shall also be computed without regard to any other step-up in basis for which PubCo is required to make payments under the Tax Receivable Agreement. In addition, for the avoidance of doubt, any item of income, gain, loss, or credit earned (or that would be treated as earned based on an interim closing of the books) by the Partnership prior to the Closing shall be disregarded for purposes of calculating any Partner’s Assumed Tax Liability.

Assumed Tax Rate” means the highest combined maximum marginal United States federal, state and local income tax rate ((w) taking into account the tax on net investment income under Code Section 1411 and the self-employment taxes set forth in Code Section 1401, as applicable, (x) not taking into account any deduction under Code Section 199A or any similar state or local Law, (y) taking into account the character (e.g., capital gains or losses, dividends, ordinary income, etc.) of the applicable items of income, and (z) taking into account the deductibility of state and local taxes to the extent applicable), applicable to (A) an individual residing in New York City or (B) a corporation doing business in New York City (whichever results in the application of a higher state and local income rate) during each applicable Fiscal Quarter with respect to such taxable income as determined by the General Partner in good faith.

 

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Available Cash” means cash of the Partnership and its subsidiaries minus reasonable reserves for non-discretionary liabilities, costs, and expenses plus amounts that the Partnership or its subsidiaries may borrow on commercially reasonably terms. The General Partner shall use its reasonable best efforts to ensure that the Partnership has sufficient Available Cash to make the full amount of distributions described in Section 4.2 (determined without regard to the limitations in clauses (i), (ii), and (iii) of the first sentence thereof).

Bankruptcy” means, with respect to any Person, the occurrence of any event specified in Section 17-402(a)(4) or (5) of the Act with respect to such Person, and the term “Bankrupt” has a meanings correlative to the foregoing.

BBA Rules” means Code Sections 6221 through 6241, together with Regulations and any guidance issued thereunder or successor provisions and any similar provision of state or local tax Laws.

Blue Owl Holdings” means Blue Owl Capital Holdings LP, a Delaware limited partnership and Affiliate of the Partnership.

Blue Owl Unit” has the meaning given to such term in the BCA.

Board” means the Board of Directors of PubCo.

Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in New York, New York.

Capital Account” means, with respect to any Partner, the capital account maintained by the General Partner for such Partner on the Partnership’s books and records in accordance with Section 3.6.

Capital Contribution” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any Contributed Asset (other than money) that such Partner contributes to the Partnership or is deemed to contribute pursuant to Article III. Each Partner that is receiving GP Units or Common Units pursuant to the BCA shall be deemed to have made Capital Contributions to the Partnership equal to (a) the Partnership’s Allocation Percentages as of the Effective Date multiplied by (b) the number of Partnership Units issued to such Partner under the BCA, multiplied by (c) $10. Exhibit A to this Agreement shall be updated to reflect the preceding sentence, and set forth the Capital Contributions of each Partner as the “Closing Date Capital Account Balance” of such Partner, to be set forth next to such Partner’s name thereon.

Certificate” means the Certificate of Limited Partnership executed and filed in the Office of the Secretary of State of the State of Delaware (and any and all amendments thereto and restatements thereof) on behalf of the Partnership pursuant to the Act.

 

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Class A Share” means a share of “Class A Common Stock” as defined in the PubCo Charter.

Class B Share” means a share of “Class B Common Stock” as defined in the PubCo Charter.

Class C Share” means a share of “Class C Common Stock” as defined in the PubCo Charter.

Class D Share” means a share of “Class D Common Stock” as defined in the PubCo Charter.

Class E Share” means a share of “Class E Common Stock” as defined in the PubCo Charter.

Closing” has the meaning given to such term in the BCA.

Closing Date” has the meaning given to such term in the BCA.

Code” means the United States Internal Revenue Code of 1986, as amended and in effect from time to time or any successor statute thereto.

Common Unit” means a fractional share of the Partnership Interests of all Limited Partners issued pursuant to Sections 3.1 and 3.2.

Contributed Asset” means each Asset or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership.

control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member, by contract or otherwise.

De Minimis” means an amount small enough as to make not accounting for it commercially reasonable or accounting for it administratively impractical, in each case as reasonably determined in good faith by the General Partner.

Debt” means, as to any Person, as of any date of determination: (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (b) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (c) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (d) obligations of such Person as lessee under capital leases.

Depreciation” means, for each Fiscal Year or other applicable period, an amount equal to the federal income tax depreciation, amortization or other cost recovery deduction allowable

 

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under United States federal income tax principles with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or period, Depreciation shall be in an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis. Notwithstanding the foregoing sentence, if the federal income tax depreciation, amortization or other cost recovery deduction for such year or period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

Diamond Business” has the meaning given to such term in the BCA.

Diamond Partner” means Dyal Capital SLP LP, and any Permitted Transferee of such Person(s) who is Transferred Partnership Interests.

Direct Exchange” has the meaning given to such term in the Exchange Agreement.

Earnout Termination Date” means the date that is the fifth anniversary of the Effective Date.

Equity Securities” means, with respect to any Person, all of the shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock or preferred interests or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), restricted stock awards, restricted stock units, equity appreciation rights, phantom equity rights, profit participation and all of the other ownership or profit interests of such Person (including partnership or member interests therein), whether voting or nonvoting.

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

Excess Tax Advance” has the meaning set forth in Section 9.4(a).

Exchange” means an Exchange as defined in, and effected in accordance with, the Exchange Agreement.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC promulgated thereunder.

Exchange Agreement” means the Exchange Agreement, dated on or about the Effective Date, by and among PubCo, the Partnership, Blue Owl Holdings and certain other Persons party thereto, as the same may be amended, modified, supplemented or waived from time to time.

Exchanged Securities” has the meaning given to such term in the Exchange Agreement.

Exchanging Partner” has the meaning given to such term in the Exchange Agreement.

 

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Executive Committee” has the meaning given to such term in the Investor Rights Agreement.

FIC Distribution” has the meaning given to such term in the Tax Receivable Agreement.

Fiscal Year” has the meaning set forth in Section 15.4.

General Partner” means Blue Owl Capital GP LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo, and/or any additional or successor General Partner(s) designated as such pursuant to the Act and this Agreement, and, in each case, that has not ceased to be a general partner pursuant to the Act and this Agreement, in such Person’s capacity as a general partner or Partner (as the context requires) of the Partnership.

GP Unit” means a unit representing a general partner interest in the Partnership and designated in the Register as a GP Unit, as subdivided, reclassified or otherwise modified from time to time in accordance with this Agreement.

Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(i)    The initial Gross Asset Value of any asset contributed (or deemed contributed) by a Partner to the Partnership shall be the gross fair market value of such asset as determined by the General Partner using such reasonable method of valuation as it may adopt.

(ii)    The Gross Asset Values of all Partnership assets immediately prior to the occurrence of any event described below (x) may, except in the case of subsection (ii)(3) and subsection (ii)(6), if determined by the General Partner that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership, and (y) shall, in the case of subsection (ii)(3) and subsection (ii)(6), be adjusted to equal their respective gross fair market values (taking Code section 7701(g) into account), using such reasonable method of valuation as it may adopt, as of the following times:

(1)    the acquisition of an additional interest in the Partnership (including acquisitions pursuant to Section 3.2 or contributions or deemed contributions by the General Partner pursuant to Section 3.2) by a new or existing Partner in exchange for more than a De Minimis Capital Contribution, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(2)    the distribution by the Partnership to a Partner of more than a De Minimis amount of Partnership property as consideration for an interest in the Partnership if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(3)    the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);

 

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(4)    the acquisition of an interest in the Partnership by any new or existing Partner upon the exercise of a non-compensatory option in accordance with Regulations Section 1.704-1(b)(2)(iv)(s);

(5)    at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2. If any non-compensatory options are outstanding upon the occurrence of an event described in this subsection (ii) (other than, if applicable, non-compensatory options being exercised that give rise to the occurrence of such event), the Partnership shall adjust the Gross Asset Values of its properties in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2); and

(6)    immediately after the closing of the transactions contemplated by the BCA on the Closing Date.

(iii)    The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution as determined by the General Partner using such reasonable method of valuation as it may adopt.

(iv)    The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code section 734(b) or Code section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m). Notwithstanding the foregoing, Gross Asset Values shall not be adjusted pursuant to this subsection (iv) to the extent that the General Partner reasonably determines that an adjustment pursuant to subsection (ii) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (iv).

(v)    If the Gross Asset Value of a Partnership asset has been adjusted pursuant to subsection (ii) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.

Holder” means either (a) a Partner or (b) an Assignee that owns a Partnership Unit.

Holdings GP Units” means a “GP Unit” as defined in the Holdings LPA.

Holdings LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Holdings, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Holdings Units” means a “Common Unit” as defined in the Holdings LPA.

Incapacity” means, (a) as to any Partner who is an individual, death, total physical disability or entry by a court of competent jurisdiction adjudicating such Partner incompetent to manage his or her person or his or her estate; (b) as to any Partner that is a corporation or limited liability company, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (c) as to any Partner that is a partnership, the dissolution and

 

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commencement of winding up of the partnership; (d) as to any Partner that is an estate, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (e) as to any trustee of a trust that is a Partner, the termination of the trust (but not the substitution of a new trustee); or (f) as to any Partner, the Bankruptcy of such Partner.

Indemnitee” means, (a) with respect to each current or former Partner (including the Limited Partners and the General Partner): (i) such Partner, in its capacity as a Partner and (ii) each of such Partner’s Affiliates and such Partner’s or its Affiliates’ direct and indirect officers, directors, liquidators, partners, shareholders, equityholders, members, managers, fiduciaries, controlling Persons and employees, in their capacity as such; (b) each current or former employee, officer or member of any management or advisory board or committee of the Partnership, in their capacity as such; (c) each current or former member of the Board and of the board of directors of the General Partner (as applicable), in such Person’s capacity as such (or as a member of a committee thereof); (d) each current or former Partnership Representative, each current or former “designated individual” of the Partnership for purposes of the BBA Rules, the Original Limited Partner Representative and the NB Partner Representative, in their respective capacities as such; and (e) any other third party who the General Partner, reasonably and in good faith, designates as an Indemnitee in a written resolution.

Independent Director” has the meaning given to such term in the Investor Rights Agreement.

Investor Rights Agreement” means that certain Investor Rights Agreement, dated on or about the Effective Date, by and among PubCo and certain other Persons party thereto, as the same may be amended, modified, supplemented or waived from time to time.

IRS” means the United States Internal Revenue Service.

Jointly Indemnifiable Claim” shall have the meaning given to such term in the Holdings LPA.

Law” has the meaning given to such term in the BCA.

Limited Partner” means each of the Original Limited Partners and any other Person that is, from time to time, admitted to the Partnership as a limited partner pursuant to the Act and this Agreement, and any Substituted Limited Partner or Additional Limited Partner, each shown as such in the books and records of the Partnership, in each case, that has not ceased to be a limited partner of the Partnership pursuant to the Act and this Agreement, in such Person’s capacity as a limited partner of the Partnership.

Lock-Up Period” means:

(a)    with respect to any Common Unit held by any Qualified Unitholder:

(i)    with respect to any Common Units held by such Qualified Unitholder that are not Seller Earnout Units, the period commencing on the Closing Date and continuing until the date that is 24 months following the Closing Date; and

 

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(ii)    with respect to any Seller Earnout Units held by such Qualified Unitholder, the period commencing upon the Closing Date and continuing until the later of (A) the occurrence of a Triggering Event for such Seller Earnout Units and (B) the date that is 24 months following the Closing Date;

(b)    with respect to any Common Units held as of Closing by any Seller (or any Permitted Transferee of any Seller) other than a Qualified Unitholder (including, for the avoidance of doubt, NB Partners and their respective Permitted Transferees who are not Permitted Transferees of a Qualified Unitholder):

(i)    with respect to any Common Units held by such Seller, except with respect to any Seller Earnout Units, the period commencing on the Closing Date and continuing until the date that is six months following the Closing Date; and

(ii)    with respect to any Seller Earnout Units held by such Seller, the period commencing upon the Closing Date and continuing until the later of (A) the occurrence of a Triggering Event for such Seller Earnout Units and (B) the date that is six months following the Closing Date;

Majority in Interest of the Limited Partners” means, as of any time of determination, (a) Limited Partners holding Class C Shares and Class D Shares representing 50% or more of the voting interest in PubCo held by the Limited Partners in respect of Class C Shares and Class D Shares (excluding, for the avoidance of doubt, any voting interest held by any Limited Partner in respect of any Class A Shares or Class B Shares held by such Limited Partner), (b) Limited Partners holding a majority of the Common Units held by all Limited Partners, and (c) the Original Limited Partner Representative.

Midco Indebtedness” means indebtedness incurred by Opal Capital Holdings LLC pursuant to a Credit and Guaranty Agreement, dated as of October 25, 2019, between Opal Capital Holdings LLC and Diamond Finance Investors (US Unlevered) LP (among others), as may be amended, restated or refinanced from time to time.

NB” has the meaning given to such term in the Investor Rights Agreement.

NB Aggregator Subject Members” has the meaning given to such term in the Investor Rights Agreement.

NB First Ownership Threshold” has the meaning given to such term in the Investor Rights Agreement.

NB Partner Representative” means Neuberger Berman Group LLC.

NB Partners” means NBSH Blue Investments, LLC, NBSH Blue Liquidating, LLC and Neuberger Berman Group LLC, collectively, and any Permitted Transferee of such Person who is Transferred Partnership Interests.

NB Relevant Audit” has the meaning set forth in Section 9.3(d).

 

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NB Second Ownership Threshold” has the meaning given to such term in the Investor Rights Agreement.

Net Income” or “Net Loss” means, for each Fiscal Year or other taxable period of the Partnership, an amount equal to the Partnership’s taxable income or loss for such year or other taxable period, determined in accordance with Code section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

(i)    Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of “Net Income” or “Net Loss” shall be added to (or subtracted from, as the case may be) such taxable income (or loss);

(ii)    Any expenditure of the Partnership described in Code Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of “Net Income” or “Net Loss,” shall be subtracted from (or added to, as the case may be) such taxable income (or loss);

(iii)    In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subsection (ii) or subsection (iii) of the definition of “Gross Asset Value,” the amount of such adjustment (i.e., the hypothetical gain or loss from the revaluation of the Partnership asset) shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;

(iv)    Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(v)    In lieu of the depreciation, amortization and other cost recovery deductions that would otherwise be taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year; and

(vi)    To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss.

Notwithstanding any other provision of this definition of “Net Income” or “Net Loss,” any item that is specially allocated pursuant to Section 5.2 shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Section 5.2 shall be determined by applying rules analogous to those set forth in this definition of “Net Income” or “Net Loss.”

 

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Non-Participating Seller Earnout Units” means, as of the time of determination, Seller Earnout Units that are not Participating Seller Earnout Units.

Nonrecourse Deductions” has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

Nonrecourse Liability” has the meaning set forth in Regulations Section 1.752-1(a)(2).

Opal Business” has the meaning given to such term in the BCA.

ORC Partner” means Opal Capital Feeder LLC, a Delaware limited liability company, and any Permitted Transferee of such Person(s) who is Transferred Partnership Interests.

Original Limited Partner” means any Person that is a Limited Partner as of the Closing and any of their respective Permitted Transferees that become Limited Partners from time to time in accordance with this Agreement, but does not include any other Assignee or other transferee of any Partnership Interest of any Original Limited Partner succeeding to all or any part of such Partnership Interest.

Original Limited Partner Representative” means the ORC Partner or such other Person as may be appointed from time to time by a Majority in Interest of the Limited Partners.

Participating Seller Earnout Units” means, as of the time of determination, Seller Earnout Units for which a Triggering Event has occurred at or prior to such time. For the avoidance of doubt: (i) a Series E-1 Seller Earnout Unit shall be a Participating Seller Earnout Unit upon and following a Triggering Event described in clause (a) of the definition of Triggering Event and (ii) a Series E-2 Seller Earnout Unit shall be a Participating Seller Earnout Unit upon and following a Triggering Event described in clause (b) of the definition of Triggering Event.

Partner” means the General Partner or a Limited Partner, and “Partners” means the General Partner and the Limited Partners (collectively).

Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

Partner Nonrecourse Debt” has the meaning set forth in Regulations Section 1.704-2(b)(4).

Partner Nonrecourse Deductions” has the meaning set forth in Regulations Section 1.704-2(i)(1) and 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(1) and 1.704-2(i)(2).

 

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Partnership” means Blue Owl Capital Carry LP, the limited partnership formed and continued under the Act and pursuant to this Agreement, and any successor thereto.

Partnership Employee” means an employee of the Partnership or an employee of a Subsidiary of the Partnership, if any.

Partnership Interest” means an ownership interest in the Partnership held by either a Limited Partner or the General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. There may be one or more classes or series of Partnership Interests. A Partnership Interest may be expressed as a number of Common Units, GP Units or other Partnership Units.

Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(b)(2) and is computed in accordance with Regulations Section 1.704-2(d).

Partnership Record Date” means the record date established by the General Partner for the purpose of determining the Partners entitled to notice of or to vote at any meeting of Partners or to consent to any matter, or to receive any distribution or the allotment of any other rights, or in order to make a determination of Partners for any other proper purpose, which, in the case of a record date fixed for the determination of Partners entitled to receive any distribution, shall (unless otherwise determined by the General Partner) be the same as the record date established by PubCo for a distribution to its stockholders of some or all of its portion of such distribution.

Partnership Representative” means the “partnership representative” for purposes of the BBA, or similar role under the provisions of state, local and non-U.S. tax law.

Partnership Unit” means a Common Unit, a GP Unit or any other fractional share of the Partnership Interests that the General Partner has authorized pursuant to Section 3.1 or Section 3.2 or Section 3.3.

Percentage Interest” means, with respect to each Partner, as to any class or series of Partnership Interests, the fraction, expressed as a percentage, the numerator of which is the aggregate number of Partnership Units of such class or series held by such Partner and the denominator of which is the total number of Partnership Units of such class or series held by all Partners. If not otherwise specified, “Percentage Interest” shall be deemed to refer to Common Units and GP Units, treated as a single class for such purpose.

Permitted Transfer” means any Transfer that is: (a) a transfer of any Partnership Interest made to a Permitted Transferee of the transferor upon prior written notice to (i) the Partnership and (ii) (x) if the transferor is the ORC Partner, the Diamond Partner and the NB Partner Representative or (y) if the transferor is an NB Partner or the Diamond Partner, the ORC Partner; or (b) made pursuant to any liquidation, merger, stock exchange or other similar transaction following the Effective Date which results in all of the Partnership’s Partners exchange or having the right to exchange their Partnership Interests for cash, securities or other property. Notwithstanding the foregoing, a “Permitted Transfer” shall be deemed to have not occurred for purposes of this Agreement, if there occurs any act or circumstance subsequent to such Transfer that causes such transfer to not be a Permitted Transfer, or the transferee not to be a Permitted Transferee.

 

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Permitted Transferee” has the meaning given such term in the Investor Rights Agreement (with references to “Qualified Stockholder” replaced with “Qualified Unitholder” and with references to “NB Aggregators” replaced with “NB Partners”).

Person” has the meaning given to such term in the Investor Rights Agreement.

Proceedings” has the meaning given to such term in the BCA.

Protected Partner” means each Person listed on Schedule II, and any Person who acquired Protected Units from another Protected Partner in a transaction in which such Person’s adjusted basis in such Protected Units, as determined for U.S. federal income tax purposes, is determined, in whole or in part, by reference to the adjusted basis of the other Protected Partner in such Protected Units.

Protected Units” means the Partnership Units held, directly or indirectly, by the Protected Partner.

PubCo Bylaws” means the Bylaws of PubCo, as the same may be amended, restated, modified, supplemented or replaced from time to time.

PubCo Charter” means the Amended and Restated Certificate of Incorporation of PubCo, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Qualified Unitholder” means any Limited Partner that is a Qualified Stockholder (as defined in the PubCo Charter).

Regulations” means one or more United States Treasury Regulations promulgated under Code, whether such regulations are in proposed, temporary or final form, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

Replacement Indebtedness” means any liability that is treated as a liability of the Partnership for U.S. federal income tax purposes that replaces or refinances either (i) the Midco Indebtedness or (ii) the Revolver Indebtedness, and with respect to which all of the following requirements are met: (a) the assets of the Opal Business (but not the Diamond Business) are subject to such liability (as determined for U.S. federal income tax purposes) within the meaning of Regulations Section 1.752-3(a)(2), and (b) such liability is not treated, in whole or in part, as a “recourse liability” (as defined in Regulations Section 1.752-1(a)(1)) of the Partnership for U.S. federal income tax purposes.

Reserve Amount” has the meaning set forth in Section 4.7.

Revolver Indebtedness” means indebtedness incurred by Owl Rock Capital Advisors LLC or Owl Rock Technology Advisors LLC, pursuant to one or more Loan and Security Agreements, with East West Bank as lender, including the Amended and Restated Loan and Security Agreement, dated as of February 20, 2020, the Loan and Security Agreement, dated as of February 22, 2019, as each may be amended, restated or refinanced from time to time.

 

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SEC” means the Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Seller” has the meaning given to such term in the BCA.

Seller Earnout Units” means the “Seller Earnout Units,” as defined in and issued pursuant to Section 2.17 of the BCA, of which (a) 99,999,924 are hereby designated as “Series E-1 Seller Earnout Units” and (b) 99,999,924 are hereby designated as “Series E-2 Seller Earnout Units”. The Seller Earnout Units (including the number of Series E-1 Seller Earnout Units and of Series E-2 Seller Earnout Units) issued and outstanding as of the Closing Date are held by the Holders thereof as set forth on Schedule I attached to this Agreement.

Series E-1 Seller Earnout Units” has the meaning set forth in the definition of “Seller Earnout Units”.

Series E-2 Seller Earnout Units” has the meaning set forth in the definition of “Seller Earnout Units”.

Subject Liability” means (a) the Midco Indebtedness and the Revolver Indebtedness and (b) any Replacement Indebtedness.

Subsidiary” has the meaning given to such term in the Investor Rights Agreement. For the avoidance of doubt, the “Diamond Funds” and the “Opal Funds” (as each is defined in the BCA) shall not be “Subsidiaries” of the Partnership for purposes of this Agreement.

Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 10.4.

Tax Distribution” has the meaning set forth in Section 4.2.

Tax Distribution Date” means, with respect to each calendar year, (a) April 10, June 10, September 10, and December 10 of such calendar year, which shall be adjusted by the General Partner as reasonably necessary to take into account changes in estimated tax payment due dates for U.S. federal income taxes under applicable Law, and (b) in the event that the General Partner determines (which determination shall be made prior to the date specified in this clause (b)) that the Tax Distributions made in respect of estimated taxes as described in clause (a) were insufficient to pay each Holder’s Assumed Tax Liability for the entirety of such year, April 10 of the following year (for purposes of making a Tax Distribution of the shortfall).

Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of the Effective Date, by and among PubCo, the Partnership, Blue Owl Holdings and the other parties thereto, as the same may be amended, modified, supplemented or waived from time to time.

 

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Transfer” has the meaning given to such term in the Investor Rights Agreement. Notwithstanding the foregoing: (a) any Exchange of Common Units, or acquisition of Exchanged Securities by PubCo pursuant to the Exchange Agreement shall not constitute a “Transfer” for purposes of this Agreement; (b) any transfer of Seller Earnout Units to the Partnership pursuant to Section 3.1(c) shall not constitute a “Transfer” for purposes of this Agreement; and (c) the pledge (in and of itself) of Partnership Interest by a Partner that creates a mere security interest in such Partnership Interest pursuant to a bona fide loan or indebtedness transaction for so long as such Partner continues to exercise control over such pledged Partnership Interest shall not be considered a “Transfer” for purposes of this Agreement, but a foreclosure on such Partnership Interest or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action independently qualifies as a Permitted Transfer at such time.

Triggering Event” means:

(a)    with respect to any Series E-1 Seller Earnout Unit, the earlier to occur of the following (but only if occurring on or prior to the Earnout Termination Date):

(i)    the Volume Weighted Average Share Price of a Class A Share equals or exceeds $12.50 per share for any 20 consecutive trading days following the Effective Date; and

(ii)    if the Partnership or PubCo is consummating a merger, consolidation, tender offer, exchange offer or business combination or sale of all or substantially of its assets and the consideration payable per Class A Share or per Blue Owl Unit (as applicable) in connection therewith equals or exceeds $12.50 per Class A Share or per Blue Owl Unit (as applicable); and

(b)    with respect to any Series E-2 Seller Earnout Unit, the earlier to occur of the following (but only if occurring on or prior to the Earnout Termination Date):

(i)    the Volume Weighted Average Share Price of a share of Class A Common Stock equals or exceeds $15.00 per share for any 20 consecutive trading days following the Effective Date; and

(ii)    if the Partnership or PubCo is consummating a merger, consolidation, tender offer, exchange offer or business combination or sale of all or substantially of its assets and the consideration payable per share of Class A Common Stock or per Blue Owl Unit (as applicable) in connection therewith equals or exceeds $15.00 per Class A Share or per Blue Owl Unit (as applicable).

Notwithstanding the foregoing, and without limitation of Section 3.8 of this Agreement, if PubCo or the Partnership at any time combines or subdivides (by any equity split, dividend, recapitalization, reorganization, merger, amendment of the PubCo Charter, amendment to this Agreement, scheme, arrangement or otherwise or extraordinary dividend resulting from an asset sale or leveraged recapitalization), each of the applicable per share prices in the foregoing definition of “Triggering Event” shall be equitably adjusted to take into account such equity split, dividend, recapitalization, reorganization, merger, amendment of the PubCo Charter, amendment of this Agreement, scheme, arrangement or extraordinary dividend or other applicable transaction.

 

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Volume Weighted Average Share Price” has the meaning given to such term in the BCA.

Warrants” has the meaning given to such term in the Investor Rights Agreement.

Section 1.2    Interpretation. In this Agreement and in the Schedules and Exhibits to this Agreement, except to the extent that the context otherwise requires:

(a)    the headings are for convenience of reference only and shall not affect the interpretation of this Agreement;

(b)    defined terms include the plural as well as the singular and vice versa;

(c)    words importing gender include all genders;

(d)    a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been or may from time to time be amended, extended, re-enacted or consolidated and to all statutory instruments or orders made under it;

(e)    any reference to a “day” or a “Business Day” shall mean the whole of such day, being the period of 24 hours running from midnight to midnight;

(f)    references to Articles, Sections, subsections, clauses and Exhibits are references to Articles, Sections, subsections, clauses and Exhibits to, this Agreement;

(g)    the word “or” is not exclusive, and has the meaning represented by the phrase “and/or,” unless the context clearly prohibits that construction;

(h)    references to “dollar” or “$” refer to United States dollars;

(i)    the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation”; and

(j)    unless otherwise specified, references to any party to this Agreement or any other document or agreement shall include its successors and permitted assigns.

ARTICLE II

GENERAL PROVISIONS

Section 2.1    Formation. The Partnership is a limited partnership previously formed and continued pursuant to the provisions of the Act and upon the terms and subject to the conditions set forth in this Agreement. Except as expressly provided in this Agreement to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Certificate, and all actions taken or to be taken by any person who executed and filed or who executes and files, after the Effective Date, the Certificate are adopted and ratified, or authorized, as the case may be.

 

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Section 2.2    Name. The name of the Partnership is “Blue Owl Capital Carry LP”. The Partnership may also conduct business at the same time and from time to time under one or more fictitious names if the General Partner determines that such is in the best interests of the Partnership. The General Partner may change the name of the Partnership, from time to time, in accordance with applicable Law.

Section 2.3    Principal Place of Business; Other Places of Business. The principal business office of the Partnership is located at 399 Park Avenue, 38th floor, New York, New York 10022, or such other place within or outside the State of Delaware as the General Partner may from time to time designate. The Partnership may maintain offices and places of business at such other place or places within or outside the State of Delaware as the General Partner deems advisable.

Section 2.4    Designated Agent for Service of Process. So long as required by the Act, the Partnership shall continuously maintain a registered office and a designated and duly qualified agent for service of process on the Partnership in the State of Delaware. As of the Effective Date, the address of the registered office of the Partnership in the State of Delaware is c/o Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The Partnership’s registered agent for service of process at such address is The Corporation Trust Company.

Section 2.5    Term. The term of the Partnership commenced on the Formation Date and such term shall continue until the Partnership is dissolved in accordance with the Act or this Agreement. Notwithstanding the dissolution of the Partnership, the existence of the Partnership shall continue until termination pursuant to this Agreement or as otherwise provided in the Act.

Section 2.6    No Concerted Action. Each Partner acknowledges and agrees that, except as expressly provided in this Agreement, in performing its obligations or exercising its rights under this Agreement, it is acting independently and is not acting in concert with, on behalf of, as agent for, or as joint venturer of, any other Partner. Other than in respect of the Partnership, nothing contained in this Agreement shall be construed as creating a corporation, association, joint stock company, business trust, organized group of persons, whether incorporated or not, among or involving any Partner or its Affiliates, and nothing in this Agreement shall be construed as creating or requiring any continuing relationship or commitment as between such parties other than as specifically set forth in this Agreement.

Section 2.7    Business Purpose. The Partnership may carry on any lawful business, purpose or activity in which a limited partnership may be engaged under applicable Law (including the Act).

Section 2.8    Powers. Subject to the limitations set forth in this Agreement, the Partnership will possess and may exercise all of the powers and privileges granted to it by the Act, by any other applicable Law or this Agreement, together with all powers incidental thereto, so far as such powers are necessary or convenient to the conduct, promotion or attainment of the purpose of the Partnership set forth in Section 2.7.

Section 2.9    Certificates; Filings. The Certificate was previously filed on behalf of the Partnership, in the Office of the Secretary of State of the State of Delaware as required by the Act.

 

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The General Partner may execute and file any duly authorized amendments to the Certificate from time to time in a form prescribed by the Act. The General Partner shall also cause to be made, on behalf of the Partnership, such additional filings and recordings as the General Partner shall deem necessary or advisable. If requested by the General Partner, the Limited Partners shall promptly execute all certificates and other documents consistent with the terms of this Agreement necessary for the General Partner to accomplish all filing, recording, publishing and other acts as may be appropriate to comply with all requirements for (a) the formation and operation of a limited partnership under the Laws of the State of Delaware, (b) if the General Partner deems it advisable, the operation of the Partnership as a limited partnership, or partnership in which the Limited Partners have limited liability, in all jurisdictions where the Partnership proposes to operate and (c) all other filings required to be made by the Partnership.

Section 2.10    Representations and Warranties by the Partners.

(a)    Each Partner that is an individual (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants to each other Partner that: (i) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any material agreement by which such Partner or any of such Partner’s property is bound, or any statute, regulation, order or other Law to which such Partner is subject; and (ii) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

(b)    Each Partner that is not an individual (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants to each other Partner that: (i) all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including that of its general partner(s), committee(s), trustee(s), beneficiaries, directors and/or stockholder(s) (as the case may be) as required; (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its partnership or operating agreement, trust agreement, charter or bylaws (as the case may be), any material agreement by which such Partner or any of such Partner’s properties or any of its partners, members, beneficiaries, trustees or stockholders (as the case may be) is or are bound, or any statute, regulation, order or other Law to which such Partner or any of its partners, members, trustees, beneficiaries or stockholders (as the case may be) is or are subject; and (iii) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

(c)    Each Partner (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or Substituted Limited Partner) represents and warrants that it is an “accredited investor,” as such term is defined in Rule 501(a) promulgated pursuant to the Securities Act and represents, warrants and agrees that it has acquired and continues to hold its interest in the Partnership for its own account, for investment purposes only, and not with a view toward, or for sale in connection with, any distribution thereof, or with any present intention of distributing or selling at any particular time or under any predetermined circumstances, in each case, in violation of the federal securities Laws, any applicable foreign or state securities Laws or any other applicable Law. Each Partner further represents and warrants that: (i) it is aware of and understands that the Partnership Units held by

 

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such Partner are not registered under the Securities Act, any United States state securities Laws or any other applicable foreign Law and may not be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provision of applicable United States federal, United States state, or other Law or pursuant to an applicable exemption therefrom; (ii) that the Partnership shall have no obligation to take any action that may be necessary to make available any exemption from registration under the Securities Act; (iii) there is no established market for the Partnership Units and no market (public or otherwise) for the Partnership Units will develop in the foreseeable future; (iv) such Partner has no rights to require that the Partnership Units be registered under the Securities Act or the securities Laws of various states, and the Partner will not be able to avail itself of the provisions of Rule 144 adopted by the Securities and Exchange Commission under the Securities Act; and (v) such Partner is aware that the acquisition of Partnership Interests involves substantial risk, and that it can bear the economic risk in its investment (which such Partner acknowledges may be for an indefinite period) and such Partner has such knowledge and experience in financial or business matters that such Partner is capable of evaluating the merits and risks of its investment in Partnership Interests.

(d)    The representations and warranties contained in Sections 2.10(a), 2.10(b) and 2.10(c) shall survive the execution and delivery of this Agreement by each Partner (and, in the case of an Additional Limited Partner or a Substituted Limited Partner, the admission of such Additional Limited Partner or Substituted Limited Partner as a Limited Partner in the Partnership) and the dissolution, liquidation and termination of the Partnership.

(e)    Each Partner (including each Additional Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or Substituted Limited Partner) acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including financial and descriptive information and documentation, that may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied.

(f)    Notwithstanding the foregoing, the General Partner may permit the modification of any of the representations and warranties contained in Sections 2.10(a), 2.10(b) and 2.10(c) as applicable to any Partner that is not an Original Limited Partner (including any Additional Limited Partner or Substituted Limited Partner or any transferee of either) provided that such representations and warranties, as modified, shall be set forth in either a separate writing addressed to the Partnership and the General Partner.

Section 2.11    References to Certain Equity Securities. Each reference to a Class A Share, Class B Share, Class C Share, Class D Share, Class E Share, Common Unit, GP Unit, other Partnership Unit, other Partnership Interest, Holdings GP Unit or Holdings Unit shall be deemed to include a reference to each Equity Security received in respect thereof in connection with any combination of equity interests, recapitalization, merger, consolidation, or other reorganization, or by way of interest split, interest dividend or other distribution. For the avoidance of doubt, restrictions applicable to the Common Units (as set forth in this Agreement) or Holdings Units (as set forth in the Holdings LPA) and Class C Shares and Class D Shares (as set forth in the PubCo Charter) shall not apply to Class A Shares or Class B Shares received in respect thereof in connection with an Exchange (or Direct Exchange).

 

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ARTICLE III

CLASSES OF PARTNERSHIP INTERESTS; CAPITAL CONTRIBUTIONS

Section 3.1    Classes of Partnership Interests; Capital Contributions of the Partners.

(a)    Each Partner’s relative rights, privileges, preferences, restrictions and obligations with respect to the Partnership are represented by such Partner’s Partnership Interests. There shall initially be two classes of Partnership Interests: Common Units, which shall be issued to and held by the Limited Partners, and GP Units, which shall be issued to and held by the General Partner only. An unlimited number of Common Units are authorized for issuance, and an unlimited number of GP Units are authorized for issuance. Schedule I to this Agreement shall be updated after the Closing to reflect the transactions consummated on the Closing Date, and the Partnership Interests held by the Partners as of such time.

(b)    Each Original Limited Partner and the General Partner has heretofore and concurrently with the consummation of the transactions contemplated by the BCA is making or is deemed to make Capital Contributions to the Partnership. Except as provided by Law or in Section 3.2, Section 3.3 or Section 9.4, the Partners shall have no obligation or, except with the prior written consent of the General Partner, right to make any other Capital Contributions or any loans to the Partnership. The General Partner shall cause to be maintained in the principal business office of the Partnership, or such other place as may be determined by the General Partner, the books and records of the Partnership, which shall include, among other things, a register containing the name, address, and number of Partnership Units of each Partner, and such other information as the General Partner may deem necessary or desirable (the “Register”). The Register shall not be deemed part of this Agreement. The General Partner shall from time to time update the Register as necessary to accurately reflect the information therein, including as a result of any sales, exchanges (including Exchanges and Direct Exchanges) or other Transfers, or any redemptions, issuances or similar events involving Partnership Units. Any reference in this Agreement to the Register shall be deemed a reference to the Register as then in effect from time to time. Subject to the terms of this Agreement, the General Partner may take any action authorized under this Agreement in respect of the Register without any need to obtain the consent of any other Partner. No action of any Limited Partner shall be required to amend or update the Register. Except as required by applicable Law, no Limited Partner shall be entitled to receive a copy of the information set forth in the Register relating to any Partner other than itself.

(c)    Notwithstanding anything to the contrary in this Agreement, in the event there has not been a Triggering Event with respect to any Seller Earnout Unit as of the Earnout Termination Date, each such Seller Earnout Unit shall, automatically and without further action on the part of the Partnership of any Holder of Partnership Interests, be transferred to the Partnership and cancelled for no consideration, effective as of the Earnout Termination Date.

 

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Section 3.2    Issuances of Additional Partnership Interests. On the terms and subject to the conditions of this Agreement (including Section 3.4 and Section 3.7):

(a)    General. The General Partner is authorized to cause the Partnership to issue additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose, at any time or from time to time, to the Partners or to other Persons, and to admit such Persons as Additional Limited Partners, for such consideration and on such terms and subject to such conditions as shall be established by the General Partner, without the approval of any Limited Partner or any other Person. Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue Partnership Units (i) upon the conversion, redemption or exchange of any Debt, Partnership Units, or other securities issued by the Partnership, (ii) for less than fair market value, (iii) for no consideration, (iv) in connection with any merger of any other Person into the Partnership, or (v) upon the contribution of property or assets to the Partnership. A Partnership Interest of any class or series other than a Common Unit or a GP Unit shall not entitle the holder thereof to vote on, or consent to, any matter. Upon the issuance of any additional Partnership Interest, the General Partner shall amend the Register and the books and records of the Partnership as appropriate to reflect such issuance.

(b)    No Preemptive Rights. Except as expressly provided in this Agreement (including Section 3.7), no Person, including any Holder, shall have any preemptive, preferential, participation or similar right or rights to subscribe for or acquire any Partnership Interest.

Section 3.3    Additional Funds and Capital Contributions.

(a)    General. The General Partner may, at any time and from time to time, determine that the Partnership requires additional funds (“Additional Funds”) for the acquisition or development of additional Assets, for the redemption of Partnership Units, for the payment of Tax Distributions or for such other purposes as the General Partner may determine. Additional Funds may be obtained by the Partnership, at the election of the General Partner, in any manner provided in, and in accordance with, the terms of this Section 3.3 without the approval of any Limited Partner or any other Person.

(b)    Loans by Third Parties. The General Partner, on behalf of the Partnership, may obtain any Additional Funds by causing the Partnership to incur Debt to any Person (other than, except as contemplated in Section 3.3(c), the General Partner or PubCo or any other Subsidiary of PubCo that is not the Partnership or any of its Subsidiaries or Blue Owl Holdings or any of its Subsidiaries) upon such terms as the General Partner determines appropriate, including making such Debt convertible, redeemable or exchangeable for Partnership Units. The Partnership shall not incur any such Debt if any Partner (other than the General Partner in its capacity as such) would be personally liable for the repayment of such Debt (unless such Partner otherwise agrees).

(c)    General Partner and PubCo Loans. At any time prior to the Partnership becoming a wholly owned subsidiary of PubCo, the net proceeds of any Debt incurred by or on behalf of the General Partner, PubCo or any other Subsidiary of PubCo (other than the Partnership and its Subsidiaries or Blue Owl Holdings and its Subsidiaries) shall be loaned to the Partnership and Blue Owl Holdings in accordance with their respective Allocation Percentages, to the extent not prohibited by Law, on substantially the same terms and conditions (including interest rate, repayment schedule, and conversion, redemption, repurchase and exchange rights) as such Debt. The Partnership shall not incur any such Debt if any Partner (other than the General Partner in its capacity as such) would be personally liable for the repayment of such Debt (unless such Partner otherwise agrees).

 

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Section 3.4    Issuances; Repurchases and Redemptions; Recapitalizations.

(a)    Issuances by PubCo.

(i)    Subject to Section 3.4(a)(ii), Article XIV, the Exchange Agreement and the Investor Rights Agreement, if, at any time after the Closing Date, PubCo sells or issues Class A Shares, Class B Shares or any other Equity Securities of PubCo (other than Class C Shares or Class D Shares (it being understood and agreed that no Class E Shares shall be issued after the Closing Date)):

(A)    the Partnership shall concurrently issue to the General Partner an equal number of GP Units (if PubCo issues Class A Shares or Class B Shares), or an equal number of such other Equity Security of the Partnership corresponding to the Equity Securities issued by PubCo (if PubCo issues Equity Securities other than Class A Shares or Class B Shares), and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo so issued (adjusted for any taxes owed by PubCo on the receipt of such distribution);

(B)    the General Partner will cause Blue Owl Holdings to concurrently issue to the General Partner an equal number of Holdings GP Units (if PubCo issues Class A Shares or Class B Shares), or an equal number of such other Equity Security of Blue Owl Holdings corresponding to the Equity Securities issued by PubCo (if PubCo issues Equity Securities other than Class A Shares or Class B Shares), and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo so issued (adjusted for any taxes owed by PubCo on the receipt of such distribution), pursuant to and in accordance with Section 3.4(a) of the Holdings LPA; and

(C)    PubCo shall concurrently contribute to the General Partner, which shall concurrently contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Holdings, its Allocation Percentage of, the net proceeds or other property received by PubCo, if any, for such Class A Share, Class B Share or other Equity Security.

(ii)    Notwithstanding anything to the contrary contained in Section 3.4(a)(i) or Section 3.4(a)(iii), this Section 3.4(a) shall not apply to: (x) the issuance and distribution to holders of Class A Shares, Class B Shares or other Equity Securities of PubCo of rights to purchase Equity Securities of PubCo under a “poison pill” or similar shareholder rights plan (and upon exchange of Common Units for Class A Shares or Class B Shares, such Class A Shares or Class B Shares will be issued together with a corresponding right under such plan); or

 

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(y) the issuance under PubCo’s employee benefit plans of any warrants, options, stock appreciation right, restricted stock, restricted stock units, performance based award or other rights to acquire Equity Securities of PubCo, but shall in each of the foregoing cases apply to the issuance of Equity Securities of PubCo in connection with the exercise or settlement of such warrants, options, stock appreciation right, restricted stock units, performance based awards or the vesting of restricted stock (including as set forth in Section 3.4(a)(iii) below, as applicable).

(iii)    In the event any outstanding Equity Security of PubCo is exercised or otherwise converted or subject to vesting and, as a result, any Class A Shares, Class B Shares or other Equity Securities of PubCo are issued (including as a result of the exercise of Warrants):

(A)    the corresponding Equity Security outstanding at the Partnership and at Blue Owl Holdings, if any, shall be similarly exercised or otherwise converted or subject to vesting, if applicable;

(B)    an equivalent number of (x) GP Units or equivalent Equity Securities of the Partnership and (y) Holdings GP Units or equivalent Equity Securities of Blue Owl Holdings shall be issued to the General Partner as required by Section 3.4(a)(i); and

(C)    PubCo shall concurrently contribute to the General Partner, which shall concurrently contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Holdings, its Allocation Percentage of, the net proceeds (if any) received by PubCo from any such exercise or conversion.

(b)    New Partnership Issuances. Except pursuant to the Exchange Agreement:

(i)    the Partnership may not issue any additional GP Units or other Partnership Units to PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless substantially simultaneously therewith (A) Blue Owl Holdings issues an equal number of Holdings GP Units or Holdings Units (as applicable) to PubCo or such Subsidiary and (B) PubCo or such Subsidiary issues or transfers an equal number of newly-issued Class A Shares or Class B Shares of PubCo (or relevant Equity Security of such Subsidiary) to another Person or Persons and PubCo or such Subsidiary contributes such proceeds to the Partnership and Blue Owl Holdings (in accordance with their respective Allocation Percentages);

(ii)    the Partnership may not issue any other Equity Securities of the Partnership to PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless substantially simultaneously therewith (A) Blue Owl Holdings issues an equal number of Equity Securities (with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership) to PubCo or such Subsidiary and (B) PubCo or such Subsidiary issues or transfers, to another Person, an equal number of newly-issued shares of Equity Securities of PubCo or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership and PubCo or such Subsidiary contributes such proceeds to the Partnership and Blue Owl Holdings (in accordance with their respective Allocation Percentages); and

 

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(iii)    the Partnership may not issue any Equity Securities of the Partnership to any Person other than PubCo or any of its Subsidiaries unless substantially simultaneously therewith Blue Owl Holdings issues an equal number of Equity Securities (with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership) to such Person.

(c)    Repurchases and Redemptions.

(i)    Neither PubCo nor any of its Subsidiaries (including the General Partner, but other than the Partnership, Blue Owl Holdings and their respective Subsidiaries) may redeem, repurchase or otherwise acquire:

(A)    Class A Shares or Class B Shares pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) unless substantially simultaneously therewith (x) the Partnership redeems, repurchases or otherwise acquires from the General Partner an equal number of GP Units for a price per GP Unit equal to the Partnership’s Allocation Percentage of the price per Class A Share or Class B Share (if any, and as applicable); and (y) Blue Owl Holdings redeems, repurchases or otherwise acquires from the General Partner an equal number of Holdings GP Units for a price per Holdings GP Unit equal to Blue Owl Holdings’ Allocation Percentage of the price per Class A Share or Class B Share (if any, and as applicable); or

(B)    any other Equity Securities of PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) unless substantially simultaneously therewith (x) the Partnership redeems, repurchases or otherwise acquires from the General Partner an equal number of the corresponding class or series of Equity Securities of the Partnership with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo or such Subsidiary for a price per Equity Security of the Partnership equal to the Partnership’s Allocation Percentage of the price per Equity Security of PubCo or such Subsidiary (if any); and (y) Blue Owl Holdings redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of the corresponding class or series of Equity Securities of Blue Owl Holdings with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo or such Subsidiary for a price per Equity Security of Blue Owl Holdings equal to Blue Owl Holdings’ Allocation Percentage of the price per Equity Security of PubCo or such Subsidiary (if any).

 

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(ii)    The Partnership may not redeem, repurchase or otherwise acquire:

(A)    any GP Units from PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless: (I) substantially simultaneously therewith (x) Blue Owl Holdings redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of Holdings GP Units from PubCo or such Subsidiary, and (y) PubCo or such Subsidiary redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of Class A Shares or Class B Shares; and (II) the price per GP Unit and the price per Holdings GP Unit shall be the Partnership’s and Blue Owl Holdings’ respective Allocation Percentage of the price per Class A Share or Class B Share (as applicable); or

(B)    any other Partnership Units of the Partnership from PubCo or any of its Subsidiaries (including the General Partner, but other than the Partnership and its Subsidiaries) unless: (I) substantially simultaneously therewith (x) Blue Owl Holdings redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of other Equity Securities of Blue Owl Holdings from PubCo or such Subsidiary of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo or such Subsidiary and (y) PubCo or such Subsidiary redeems, repurchases or otherwise acquires pursuant to a Board approved repurchase plan or program (or otherwise in connection with a transaction approved by the Board) an equal number of Equity Securities of PubCo or such Subsidiary of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Partnership Units of PubCo or such Subsidiary; and (II) the price per other Partnership Units of the Partnership and the price per other Equity Security of Blue Owl Holdings shall be the Partnership’s and Blue Owl Holdings’ respective Allocation Percentage of the price per other Equity Security of PubCo or such Subsidiary.

 

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(d)    Equity Subdivisions and Combinations. Except in accordance with the Exchange Agreement:

(i)    The Partnership shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Partnership Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding (A) related class or series of Equity Security of PubCo (which, in the case of the GP Units, shall be the Class A Shares) and (B) related class or series of Equity Security of Blue Owl Holdings, with corresponding changes made with respect to any other exchangeable or convertible Equity Securities of the Partnership, Blue Owl Holdings and PubCo.

(ii)    (A) PubCo shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of any class or series of Equity Security of PubCo, and (B) the General Partner will cause Blue Owl Holdings not to in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of any class or series of Equity Security of Blue Owl Holdings, in each case, unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Partnership Units or other related class or series of Equity Security of the Partnership (which, in the case of the Class A Shares, shall be the GP Units), with corresponding changes made with respect to any applicable exchangeable or convertible Equity Securities of the Partnership, Blue Owl Holdings and PubCo.

(e)    General Authority. For the avoidance of doubt, but subject to Section 3.1, Section 3.2, Section 6.7 and this Section 3.4, the Partnership, Blue Owl Holdings, PubCo and the General Partner shall be permitted, without the consent of any other Partner, to undertake all actions, including an issuance, redemption, reclassification, distribution, division or recapitalization, with respect to the Common Units and GP Units as the General Partner reasonably determines in good faith is necessary to maintain at all times a one-to-one-to-one ratio among: (i) on the one hand, (A) the number of GP Units owned by PubCo, directly or indirectly (including through the General Partner), (B) the number of outstanding Class A Shares and Class B Shares, and (C) the number of outstanding Holdings GP Units owned by PubCo, directly or indirectly (including through the General Partner); and (ii) on the other hand, (A) the number of outstanding Class C Shares and Class D Shares held by any Person, (B) the number of Common Units held by such Person and (C) the number of outstanding Holdings Units held by such Person disregarding, for purposes of maintaining the one-to-one-to-one ratios in clause (i), (x) warrants, options, stock appreciation rights, restricted stock, restricted stock units, performance based awards or other rights to acquire Equity Securities of PubCo issued under any employee benefit plan involving the issuance of any Equity Securities that are convertible into or exercisable or exchangeable for Class A Shares or Class B Shares, (y) treasury stock, or (z) preferred stock or other debt or Equity Securities (including warrants, options or rights) issued by PubCo that are convertible into or exercisable or exchangeable for Class A Shares or Class B Shares (but in each case, prior to such conversion, exercise or exchange, and shall, for the avoidance of doubt, apply to the issuance of Equity Securities of PubCo in connection with the exercise, vesting or settlement of such preferred stock, other debt or Equity Securities) (except to the extent the net proceeds from any such convertible preferred securities or any other Equity Securities entitled to distributions, dividends or other payments prior to conversion, including any purchase price payable upon conversion thereof, has been contributed by PubCo to the equity capital of the Partnership).

 

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Section 3.5    No Interest; No Return. No Partner shall be entitled to interest on its Capital Contribution or on such Partner’s Capital Account. Except as provided in this Agreement or by applicable Law, no Partner shall have any right to demand or receive the return of its Capital Contribution from the Partnership.

Section 3.6    Capital Accounts.

(a)    A Capital Account shall be maintained by the General Partner for each Partner in accordance with the provisions of Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such Regulations, the other provisions of this Agreement. Each Partner’s Capital Account balance as of the Effective Date shall be equal to the amount of its respective “Closing Date Capital Account Balance” set forth opposite such Partner’s name on Exhibit A, which balances shall reflect a revaluation of the Partnership’s assets in accordance with clause (ii)(6) of the definition of Gross Asset Value. Thereafter, each Partner’s Capital Account shall be (A) increased by (i) allocations to such Partner of Net Income pursuant to Section 5.1 and any other items of income or gain allocated to such Partner pursuant to Section 5.2, (ii) the amount of cash or the initial Gross Asset Value of any asset (net of any Liabilities assumed by the Partnership and any Liabilities to which the asset is subject) contributed to the Partnership by such Partner, and (iii) any other increases allowed or required by Regulations Section 1.704-1(b)(2)(iv), and (B) decreased by (i) allocations to such Partner of Net Losses pursuant to Section 5.1 and any other items of deduction or loss allocated to such Partner pursuant to the provisions of Section 5.2, (ii) the amount of any cash or the Gross Asset Value of any asset (net of any Liabilities assumed by the Partner and any Liabilities to which the asset is subject) distributed to such Partner, and (iii) any other decreases allowed or required by Regulations Section 1.704-1(b)(2)(iv).

(b)    In the event of a Transfer of Partnership Units made in accordance with this Agreement, the Capital Account of the Transferor that is attributable to the transferred Partnership Units shall carry over to the Transferee Partner in accordance with the provisions of Regulations Section 1.704-1(b)(2)(iv)(l).

(c)    This Section 3.6 and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the Regulations promulgated under Code Section 704(b), including Regulations Section 1.704-1(b)(2)(iv), and shall be interpreted and applied in a manner consistent with such Regulations.

Section 3.7    Certain Preemptive Rights of the NB Partners. Notwithstanding anything to the contrary in this Article III, but subject to
Section 3.7(c):

(a)    Exercises of PubCo Preemptive Rights. If NB is issued Equity Securities of PubCo in connection with NB’s exercise of its preemptive rights set forth in Section 2.3(f) of the Investor Rights Agreement, PubCo shall concurrently contribute to the General Partner, which shall concurrently contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Holdings, its Allocation Percentage of, the net proceeds or other property received by PubCo, if any, for such Equity Securities, in exchange for a corresponding number of related GP Units, Holdings GP Units or other Equity Securities, as applicable of the Partnership and Blue Owl Holdings as determined in accordance with Section 3.4(a).

 

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(b)    Partnership Issuances to Third Parties.

(i)    Except as mutually agreed between the NB Partner Representative and the General Partner, until the first date upon which the NB First Ownership Threshold is no longer satisfied, without duplication of the rights of the NB Partners under Section 2.3(f) of the Investor Rights Agreement, the NB Partners shall have preemptive rights with respect to Equity Securities of the Partnership and any Subsidiaries of the Partnership to be issued to any Person other than PubCo or any of its Subsidiaries (other than the Partnership, Blue Owl Holdings and its Subsidiaries) which must be exercised with respect to the same number of Equity Securities in the Partnership and Blue Owl Holdings with the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights, and shall otherwise be the same as the preemptive rights of NB set forth in Section 2.3(f) of the Investor Rights Agreement with respect to Equity Securities of PubCo (including the applicable procedures, exceptions and conditions set forth therein), and such Section 2.3(f) of the Investor Rights Agreement shall apply mutatis mutandis to such Equity Securities of the Partnership (and is incorporated in this Agreement by reference).

(ii)    Substantially simultaneously with any issuance of Equity Securities of the Partnership to the NB Partners pursuant to their exercise of the preemptive rights set forth in Section 3.7(b)(i) (which shall be at the election of the NB Partner Representative): (A) Blue Owl Holdings shall issue an equal number of Equity Securities (with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Partnership) to the NB Partners (in the aggregate); and (B) the NB Partners shall collectively contribute to (x) the Partnership, its Allocation Percentage of, and (y) Blue Owl Holdings, its Allocation Percentage of, the aggregate consideration payable for such Equity Securities.

(c)    Notwithstanding anything in this Section 3.7 to the contrary, the NB Partners shall not have any preemptive rights with respect to, and the foregoing provisions of this Section 3.7 shall not apply to the issuance of, (i) Excluded Securities (as defined in the Investor Rights Agreement) or (ii) Equity Securities of the Partnership issued pursuant to Section 3.4 solely to maintain the one-to-one-to-one ratio contemplated by Section 3.4(e).

(d)    Notwithstanding anything in this Agreement to the contrary, the NB Partners’ rights under this Section 3.7 are personal to the NB Partners and may not be assigned to any Person.

Section 3.8    Adjustments. If there are any changes as a result of any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Partnership Units, then appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations under this Agreement shall continue with respect to the Partnership Units as so changed.

 

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ARTICLE IV

DISTRIBUTIONS

Section 4.1    Distributions Generally. Subject to Section 4.5 and Section 4.7, the General Partner may cause the Partnership to distribute all or any portion of available cash of the Partnership to the Holders of Partnership Units in accordance with their respective Percentage Interests of Partnership Units on the Partnership Record Date with respect to such distribution.

Section 4.2    Tax Distributions. Prior to making distributions pursuant to Section 4.1, on or prior to each Tax Distribution Date, the Partnership shall be required to, subject only to (i) Section 4.5, (ii) Available Cash and (iii) the terms and conditions of any applicable Debt arrangements (and the General Partner will use commercially reasonable efforts not to enter into Debt arrangements the terms and conditions of which restrict or prohibit the making of customary tax distributions to the Partners), make pro rata distributions of cash to the Holders of Partnership Units (in accordance with their respective Percentage Interests of Partnership Units), including Seller Earnout Units, in an amount sufficient to ensure that each such Holder receives a distribution at least equal to such Holder’s Assumed Tax Liability, if any, with respect to the relevant taxable period to which the distribution relates (“Tax Distributions”). Notwithstanding the foregoing, distributions pursuant to this Section 4.2, if any, shall be made to the Partners only to the extent all previous distributions to the Partners pursuant to Section 4.1 with respect to the taxable period are less than the distributions the Partners otherwise would have been entitled to receive with respect to such taxable period pursuant to this Section 4.2. For the avoidance of doubt, if for any reason the Partnership on any Tax Distribution Date does not make the full amount of distributions required under this Section 4.2 (determined without regard to the limitations in clauses (i), (ii), and (iii) of the first sentence in this Section 4.2), the amount of Tax Distributions required on the succeeding Tax Distribution Date will be increased by such shortfall until the full amount of required Tax Distributions have been made.

Section 4.3    Distributions in Kind. Subject to of the Exchange Agreement and Article XIV, no Holder may demand to receive property other than cash as provided in this Agreement. The General Partner may cause the Partnership to make a distribution in kind of Partnership assets to the Holders, and such assets shall be distributed in such a fashion as to ensure that the fair market value is distributed and allocated in accordance with this Article IV, Article V and Article IX.

Section 4.4    Distributions to Reflect Additional Partnership Units. In the event that the Partnership issues additional Partnership Units pursuant to the provisions of Article III, the General Partner is authorized to make such revisions to this Article IV and to Article V as it determines are necessary or desirable to reflect the issuance of such additional Partnership Units, including making preferential distributions in respect of such additional Partnership Units.

Section 4.5    Restricted Distributions. Notwithstanding any provision to the contrary contained in this Agreement, neither the Partnership nor the General Partner, on behalf of the Partnership, shall make a distribution to any Holder if such distribution would violate the Act or other applicable Law.

Section 4.6    Use of Distributions. PubCo and its Subsidiaries shall use distributions received from and other cash of the Partnership for payment of taxes, liabilities or expenses of

 

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PubCo or such Subsidiary, for the payment of dividends to its shareholders or for other general corporate purposes, in each case in accordance with a budget approved by, or otherwise approved by, the Executive Committee and in accordance with the terms and conditions of the Investor Rights Agreement. PubCo or such Subsidiary may not use such distributions or other cash of the Partnership to acquire any Partnership Interests or to buyback shares of PubCo’s capital stock, except in accordance with Section 3.4.

Section 4.7    Seller Earnout Units (Distributions). Notwithstanding anything in this Article IV to the contrary, for all purposes of this Article IV, if, as of any date for distribution with respect to Partnership Units (other than Tax Distributions, which shall be paid to all Seller Earnout Units), any Seller Earnout Units remain issued and outstanding, then (a) the Partnership shall pay a distribution with respect to each Participating Seller Earnout Unit (if any) that is equal to the amount of the distribution paid in respect of a Common Unit on such distribution date and (b) the Partnership shall reserve an amount with respect to each Non-Participating Seller Earnout Unit (if any) that is equal to the amount of the distribution paid in respect of a Common Unit on such distribution date (together with any prior reserved amounts with respect to such Seller Earnout Unit, a “Reserve Amount”). If a Triggering Event occurs with respect to a Seller Earnout Unit that has a Reserve Amount at the time of such Triggering Event, the Partnership shall establish a record date for payment of a distribution to the holder of such Seller Earnout Unit with respect to which the Triggering Event has occurred and, subject to Section 4.5, pay a distribution with respect to each such Seller Earnout Unit equal to the cumulative Reserve Amount with respect to such Seller Earnout Unit. If a Triggering Event does not occur with respect to any Seller Earnout Unit prior to the Earnout Termination Date, the cumulative Reserve Amount with respect to such Seller Earnout Unit shall be released back to the Partnership without further liability of the Partnership.

ARTICLE V

ALLOCATIONS

Section 5.1    General Allocations. After giving effect to the allocations under Section 5.2, and subject to Section 5.2 and Section 5.4, Net Income and Net Loss (and, to the extent reasonably determined by the General Partner to be necessary and appropriate to achieve the resulting Capital Account balances described below, any allocable items of income, gain, loss, deduction or credit includable in the computation of Net Income and Net Loss) for each Fiscal Year or other taxable period shall be allocated among the Partners during such Fiscal Year or other taxable period in a manner such that, after giving effect to all distributions through the end of such Fiscal Year or other taxable period, the Capital Account balance of each Partner, immediately after making such allocation, is, as nearly as possible, equal to (a) the amount such Partner would receive pursuant to Section 12.3 if all assets of the Partnership on hand at the end of such Fiscal Year or other taxable period were sold for cash equal to their Gross Asset Values, all liabilities of the Partnership were satisfied in cash in accordance with their terms (limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability), and all remaining or resulting cash was distributed, in accordance with Section 12.3 to the Partners immediately after making such allocation, minus (b) such Partner’s share of Partnership Minimum Gain and Partner Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Partner is treated as obligated to contribute to the Partnership, computed immediately after the hypothetical sale of assets.

 

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Section 5.2    Additional Allocation Provisions

Notwithstanding the foregoing provisions of this Article V:

(a)    Regulatory Allocations.

(i)    Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding the provisions of Section 5.1, or any other provision of this Article V, if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Holder shall be specially allocated items of Partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Holder’s share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g)(2). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.2(a)(i) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii)    Partner Nonrecourse Debt Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(i)(4) or in Section 5.2(a)(i), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Holder who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt (determined in accordance with Regulations Section 1.704-2(i)(5)) as of the beginning of the Fiscal Year shall be specially allocated items of Partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Holder’s respective share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt. A Holder’s share of the net decrease in Partner Minimum Gain shall be determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to this Section 5.2(a)(ii) shall be made in proportion to the respective amounts required to be allocated to each Holder pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.2(a)(ii) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

(iii)    Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Holders in accordance with their respective Percentage Interests. Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Holder(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i).

(iv)    Qualified Income Offset. If any Holder unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of such Holder as quickly as possible. Notwithstanding the foregoing sentence, an allocation pursuant to this Section 5.2(a)(iv)

 

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shall be made if and only to the extent that such Holder would have an Adjusted Capital Account Deficit after all other allocations provided in this Article V have been tentatively made as if this Section 5.2(a)(iv) were not in the Agreement. It is intended that this Section 5.2(a)(iv) comply with the qualified income offset requirement in Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(v)    Curative Allocations. The allocations set forth in Sections 5.2(a)(i), 5.2(a)(ii), 5.2(a)(iii) and 5.2(a)(iv), (the “Regulatory Allocations) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Section 5.1, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Holders of Partnership Interests so that to the extent possible without violating the requirements giving rise to the Regulatory Allocations, the net amount of such allocations of other items and the Regulatory Allocations to each Holder of a Partnership Interest shall be equal to the net amount that would have been allocated to each such Holder if the Regulatory Allocations had not occurred.

(b)    Allocation of Excess Nonrecourse Liabilities. Except as provided in Section 9.5, for purposes of determining a Holder’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), each Holder’s respective interest in Partnership profits shall be equal to such Holder’s Percentage Interest with respect to Common Units and/or GP Units.

Section 5.3    Tax Allocations.

(a)    In General. Except as otherwise provided in this Section 5.3, for income tax purposes under the Code and the Regulations each Partnership item of income, gain, loss and deduction (collectively, “Tax Items”) shall be allocated among the Holders in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 5.1 and Section 5.2.

(b)    Section 704(c) Allocations. Notwithstanding Section 5.3(a), Tax Items with respect to an Asset that is contributed to the Partnership with a Gross Asset Value that varies from its basis in the hands of the contributing Partner immediately preceding the date of contribution shall be allocated among the Holders for income tax purposes pursuant to Regulations promulgated under Code Section 704(c) so as to take into account such variation. The Partnership shall account for such variation under the traditional method as described in Regulations Section 1.704-3(b). In the event that the Gross Asset Value of any partnership asset is adjusted pursuant to subsection (b) of the definition of “Gross Asset Value” (provided in Section 1.1), subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Code Section 704(c) and the applicable Regulations and using the traditional method as described in Regulations Section 1.704-3(b). For the avoidance of doubt and without limiting the foregoing, the traditional method as described in Regulations Section 1.704-3(b) shall be applied with respect to each asset contributed (or deemed contributed) or otherwise owned by the Partnership on the Closing Date. If, as a result of an exercise of a non-compensatory option to acquire an interest in the Partnership, a Capital Account reallocation is required under Regulations Sections 1.704-1(b)(2)(iv)(s)(3), the Partnership shall make corrective allocations pursuant to Regulations Section 1.704-1(b)(4)(x). If,

 

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pursuant to Section 5.2(a)(i), the General Partner causes a Capital Account reallocation in accordance with principles similar to those set forth in Regulations Section 1.704-1(b)(2)(iv)(s)(3), the General Partner shall make corrective allocations in accordance with principles similar to those set forth in Regulations Section 1.704-1(b)(4)(x).

Section 5.4    Other Allocation Rules. With regard to the General Partner’s acquisition of the GP Units pursuant to the BCA, Net Income and Net Loss shall be allocated to the Partners of the Partnership so as to take into account the varying interests of the Partners in the Partnership using an “interim closing of the books” method in a manner that complies with the provisions of Code Section 706 and the Regulations thereunder. If during any Fiscal Year there is any other change in any Partner’s ownership of Partnership Units in the Partnership, the General Partner shall take into account the varying interests of the Partners in the Partnership using an “interim closing of the books” method in a manner that complies with the provisions of Code Section 706 and the Regulations thereunder. Notwithstanding the foregoing sentence, such allocations may instead be made in another manner that complies with the provisions of Code Section 706 and the Regulations thereunder and that is selected by the General Partner.

Section 5.5    Seller Earnout Units (Allocations). The parties to this Agreement intend that, for U.S. federal income tax purposes, and for purposes of the tax, allocation, and Capital Account provisions of this Agreement (i) no Partner shall be treated as having taxable income or gain as a result of holding any Seller Earnout Unit at the time a Triggering Event has occurred with respect such Seller Earnout Unit, (ii) prior to the time any Seller Earnout Unit is forfeited to the Partnership in accordance with Section 3.1(c), such Seller Earnout Unit shall be treated as (and shall receive allocations as if they were) outstanding and not subject to forfeiture for U.S. federal income tax purposes, and (iii) if any Seller Earnout Unit is forfeited for failing to achieve a Triggering Event prior to the Earnout Termination Date, the parties to this Agreement intend and agree to treat such forfeiture as an adjustment to the transaction consideration pursuant to the BCA and the Partnership shall (x) make corresponding adjustments to the initial Capital Accounts of the Partners as necessary or appropriate and (y) prepare and file all tax returns consistent therewith unless otherwise required by a “determination” within the meaning of Code Section 1313.

ARTICLE VI

OPERATIONS

Section 6.1    Management. Subject to the terms of this Agreement (including Section 6.7):

(a)    The General Partner shall have full, exclusive and complete discretion to manage and control the business and affairs of the Partnership, to make all decisions affecting the business and affairs of the Partnership and to do or cause to be done any and all acts, at the expense of the Partnership, as it deems necessary or appropriate to accomplish the purposes and direct the affairs of the Partnership. The General Partner shall have the exclusive power and authority to bind the Partnership, except and to the extent that such power is expressly delegated in writing to any other Person by the General Partner, and such delegation shall not cause the General Partner to cease to be a Partner or the General Partner of the Partnership. The General Partner shall be an agent of the Partnership’s business, and the actions of the General Partner taken in such capacity and in accordance with this Agreement shall bind the Partnership. The General Partner shall at all

 

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times be a Partner of the Partnership. The General Partner shall constitute a “general partner” under the Act. No Limited Partner or Assignee (other than in its separate capacity as the General Partner, any of its Affiliates or any member, officer or employee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any member, officer or employee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement. The General Partner may not withdraw or be removed from the Partnership except as set forth in Section 10.2.

(b)    The determination as to any of the following matters, made by or at the direction of the General Partner consistent with the Act and this Agreement, shall be final and conclusive and shall be binding upon the Partnership and every Limited Partner: (i) the amount of assets at any time available for distribution or the redemption of Common Units and GP Units; (ii) the amount and timing of any distribution (subject to the requirements of Section 4.2 related to Tax Distributions); (iii) any determination as to Exchanged Securities that is not inconsistent with the provisions of the Exchange Agreement; (iv) the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created, or whether or not the foregoing shall have been paid or discharged); (v) the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Partnership; (vi) any matter relating to the acquisition, holding and disposition of any assets by the Partnership; or (vii) any other matter relating to the business and affairs of the Partnership or required or permitted by applicable Law, this Agreement or otherwise to be determined by the General Partner.

(c)    The General Partner may also, from time to time, appoint such officers and establish such management and/or advisory boards or committees of the Partnership as the General Partner deems necessary or advisable, each of which shall have such powers, authority and responsibilities as are delegated in writing by the General Partner from time to time, provided that in no event shall the General Partner be absolved of its fiduciary duties pursuant to Section 6.5(c) by virtue of any appointment. Each such officer and/or board or committee member shall serve at the pleasure of the General Partner.

(d)    Except as otherwise expressly provided in this Agreement (including Section 6.7, as applicable) or required by any non-waivable provision of the Act or other applicable Law, no Partner other than the General Partner shall (i) have any right to vote on or consent to any other matter, act, decision or document involving the Partnership or its business, or (ii) take part in the day-to-day management, or the operation or control, of the business and affairs of the Partnership. Without limiting the generality of the foregoing, but subject to Section 6.7 (as applicable), the General Partner may cause the Partnership, without the consent or approval of any other Partner, to enter into any of the following in one or a series of related transactions: (A) any merger, (B) any acquisition, (C) any consolidation, (D) any sale, lease, division or other transfer or conveyance of assets, (E) any recapitalization or reorganization of outstanding securities, (F) any merger, sale, lease, spin-off, exchange, transfer or other disposition of a subsidiary, division

 

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or other business, (G) any issuance of debt or Equity Securities (subject to any limitations expressly provided for in this Agreement) or (H) any incurrence of indebtedness. Except to the extent expressly delegated in writing by the General Partner, no Limited Partner or Person other than the General Partner shall be an agent for the Partnership or have any right, power or authority to transact any business in the name of the Partnership or to act for or on behalf of or to bind the Partnership.

(e)    Only the General Partner may commence a voluntary case on behalf of, or an involuntary case against, the Partnership under a chapter of Title 11 U.S.C. by the filing of a “petition” (as defined in 11 U.S.C. 101(42)) with the United States Bankruptcy Court. Any such petition filed by any other Partner, to the fullest extent permitted by applicable Law, shall be deemed an unauthorized and bad faith filing and all parties to this Agreement shall use their best efforts to cause such petition to be dismissed.

(f)    It is anticipated that the General Partner’s primary business activities shall be focused on the operation of the Partnership, Blue Owl Holdings and their respective Subsidiaries. Subject to the foregoing, the Partners acknowledge and agree that, subject to the terms of any other employment, consulting or similar arrangements or engagement with the Partnership, the General Partner, or any Affiliate of either of them: (i) any Limited Partner and its Affiliates may engage or invest in any other business, activity or opportunity of any nature, independently or with others; (ii) neither the Partnership nor any Partner (in its capacity as such) shall have any right to participate in any manner in such engagement or investment, or the profits or income earned or derived therefrom; and (iii) the pursuit of such activities by any such Partner shall not be deemed in violation of breach of this Agreement or any obligation or duty owed by such Partner to the Partnership or the other Partners.

(g)    Subject to Section 6.1(h), the General Partner shall have the power, without the consent of the Partners or the consent or approval of any Limited Partner, to amend this Agreement as may be required to facilitate or implement any of the following purposes:

(i)    to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;

(ii)    to reflect the admission, substitution or withdrawal of Partners, the Transfer of any Partnership Interest or the termination of the Partnership in accordance with this Agreement, and to amend the Register in connection with such admission, substitution, withdrawal or Transfer;

(iii)    to reflect a change that is of an inconsequential nature, or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with applicable Law or with other provisions of this Agreement;

(iv)    to satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state Law;

 

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(v)    to modify either or both of the manner in which items of Net Income or Net Loss are allocated pursuant to Article V or the manner in which Capital Accounts are adjusted, computed, or maintained (but in each case only to the extent set forth in the definition of “Capital Account” or Section 4.4 or as contemplated by the Code or the Regulations);

(vi)    to reflect the issuance of additional Partnership Interests in accordance with Article III and

(vii)    to set forth or amend the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of any additional Partnership Units issued pursuant to Article III.

(viii)    to reflect any other modification to this Agreement as is reasonably necessary for the business or operations of the Partnership and which does not violate Section 6.1(h) or Section 6.7, and does not adversely affect any Limited Partner in any material respect.

(h)    Notwithstanding Article XIII, this Agreement shall not be amended, and no action may be taken by the General Partner, without the consent of each Partner adversely affected thereby (if any), if such amendment or action would: (i) convert a Limited Partner into a general partner of the Partnership (except as a result of the Limited Partner becoming the General Partner pursuant to Section 11.1 of this Agreement); (ii) modify the limited liability of a Limited Partner or increase the obligation of a Limited Partner to make a Capital Contribution to the Partnership; (iii) adversely alter the rights of any Partner to receive the distributions to which such Partner is entitled pursuant to Article IV or Section 12.3(a)(iii), or alter the allocations specified in Article V (except, in any case, as permitted pursuant to Sections 3.2 and 4.4); (iv) would convert the Partnership into a corporation; or (v) amend Section 6.3(b) or this Section 6.1(h). Notwithstanding the foregoing sentence, with respect to the foregoing clause (iii) and (iv), the consent of any individual Partner adversely affected shall not be required for any amendment or action that affects all Partners holding the same class or series of Partnership Units on a uniform or pro rata basis, if approved by a Majority in Interest of the Limited Partners. Further, no amendment may alter the restrictions on the General Partner’s authority set forth in the preceding sentence of this Section 6.1(h) without the consent so specified in such preceding sentence. Any such amendment or action consented to by any Partner shall be effective as to that Partner, notwithstanding the absence of such consent by any other Partner.

(i)    Notwithstanding anything to the contrary in this Agreement, the rights and authority of the General Partner under this Agreement are derivative of the governance and control rights of PubCo, and the General Partner shall not be permitted under this Agreement to override any rights, protections or requirements of PubCo, the Board, the Executive Committee and any applicable stockholders of PubCo pursuant to the terms and conditions of the PubCo Charter, the Investor Rights Agreement, or any other law, rule regulation or agreement binding upon it.

Section 6.2    Compensation and Advances.

(a)    The General Partner shall not receive any fees from the Partnership for its services in administering the Partnership, except as otherwise provided in this Agreement (including the provisions of Articles IV and V regarding distributions, payments and allocations to which it may be entitled in its capacity as the General Partner).

 

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(b)    From time to time and for so long as PubCo owns no other Person or businesses (other than the General Partner, the Partnership, Blue Owl Holdings or any of their Subsidiaries), the Partnership shall be liable for, and shall reimburse the General Partner and PubCo, on a monthly basis, or such other basis as the General Partner may determine, for sums to the extent expended by PubCo or the General Partner (and specifically excluding sums paid directly by the Partnership or any of its Subsidiaries) in connection with the Partnership’s business, including: (i) costs and expenses relating to the ownership of interests in and management and operation of, or for the benefit of, the Partnership; (ii) compensation of officers and employees of the General Partner, PubCo or the Partnership; (iii) director fees and expenses; (iv) all costs and expenses of PubCo being a public company, including costs of filings with the SEC, tax returns, reports and other distributions to its stockholders; and (v) other costs and expenses incidental to their existence or related to the foregoing matters. For the avoidance of doubt, in no event shall the expenses payable pursuant to this Section 6.2(b) include any tax liability of PubCo or the General Partner. Such reimbursements shall be in addition to any reimbursement of the General Partner as a result of indemnification pursuant to Section 6.6.

(c)    To the extent practicable, Partnership expenses shall be billed directly to and paid by the Partnership and, if and to the extent any reimbursements to the General Partner, PubCo or any of their respective Affiliates by the Partnership pursuant to this Section 6.2, constitute gross income (as opposed to a repayment of advances made by such Person on behalf of the Partnership), such amounts shall be treated as “guaranteed payments” to PubCo within the meaning of Code Section 707(c) (unless otherwise required by the Code and the Regulations) and shall not be treated as distributions for purposes of computing the Limited Partners’ Capital Accounts.

Section 6.3    Outside Activities.

(a)    Neither the General Partner nor PubCo shall directly or indirectly enter into or conduct any business, other than in connection with and to the extent permitted by this Agreement: (i) the ownership, acquisition and disposition of Partnership Interests, Holdings GP Units and Holdings Units; (ii) with respect to the General Partner, the management of the business of the Partnership and Blue Owl Holdings; (iii) with respect to PubCo, its operation as a reporting company with a class (or classes) of securities registered under the Exchange Act; (iv) with respect to PubCo, the offering, sale, syndication, private placement or public offering of stock, bonds, securities or other interests; (v) financing or refinancing of any type related to the Partnership or Blue Owl Holdings or their respective assets or activities; and (vi) such activities as are incidental thereto. Nothing contained in this Agreement shall be deemed to prohibit (x) the General Partner from executing guarantees of Partnership debt for which it would otherwise be liable in its capacity as General Partner or (y) the actions and operations permitted by the Holdings LPA with respect to the parties thereto. PubCo and its Subsidiaries (including the General Partner) may, subject to the limitations of this Agreement (including Section 3.4) and the Holdings LPA (as applicable) acquire Partnership Interests, Holdings Units and Holdings GP Units, and shall be entitled to exercise all rights of a Partner relating to such Partnership Interests, Holdings Units and Holdings GP Units (pursuant to and in accordance with the Holdings LPA). At any time prior to the

 

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Partnership becoming a wholly-owned Subsidiary of PubCo, (A) PubCo shall own, directly or indirectly, 100% of the Equity Securities of the General Partner and (B) the General Partner shall hold no property or assets other than (x) Equity Securities in the Partnership and Blue Owl Holdings, and their respective Subsidiaries, and (y) any property or assets incidental to the business contemplated by the first sentence of this Section 6.3(a).

(b)    Except with respect to any corporate opportunity expressly offered or presented to any Indemnitee solely in his or her capacity as a director or officer of, through his or her service to, or pursuant to a contract with, the Partnership and its Subsidiaries (an “Excluded Opportunity”), and subject to any agreements entered into pursuant to Section 6.4 and any other agreements entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Holdings or a Subsidiary of the foregoing (including any employment agreement), to the fullest extent permitted by applicable Law, any Indemnitee shall have the right to engage in businesses of every type and description and other activities for profit, and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by the Partnership or any of its Subsidiaries, independently or with others, including business interests and activities in direct competition with the business and activities of the Partnership or any of its Subsidiaries, with no obligation to offer the Partnership or its Subsidiaries the right to participate therein. Nothing in this Agreement, including (without limitation) the foregoing sentence, shall be deemed to supersede any other agreement to which any Indemnitee may be a party or the rights of any other party thereto restricting such Indemnitee’s ability to have certain business interests or engage in certain business activities or ventures. To the fullest extent permitted by applicable Law, but subject to the immediately preceding sentence, neither the Partnership nor any of its Subsidiaries shall have any rights in any business interests, activities or ventures of any Indemnitee that are not Excluded Opportunities, and the Partnership waives and renounces any interest or expectancy therein.

(c)    Except with respect to Excluded Opportunities, and subject to any agreements entered into pursuant to Section 6.4 and any other agreements entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Holdings or a Subsidiary of the foregoing (including any employment agreement), to the fullest extent permitted by applicable Law: (i) the engagement in competitive activities by an Indemnitee in accordance with the provisions of this Section 6.3 is deemed approved by the Partnership, all Partners and all Persons acquiring any Partnership Interest; (ii) it shall not be a breach of any Indemnitee’s duties or any other obligation of any type whatsoever of any Indemnitee if an Indemnitee engages in, or directs to another Person, any such business interests or activities in preference to or to the exclusion of the Partnership or any of its Subsidiaries; and (iii) no Indemnitee shall be liable to the Partnership, any Partner or any other Person who acquires any Partnership Interest, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person, or does not communicate such opportunity or information to the Partnership or any of its Subsidiaries.

(d)    In addition to and without limiting the foregoing provisions of this Section 6.3, but without limiting any separate agreement entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Holdings or a Subsidiary of the foregoing (including any employment agreement), a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Partnership or any of its Subsidiaries if it is a business opportunity

 

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that (i) the Partnership and its Subsidiaries are neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the business of the Partnership and its Subsidiaries or is of no practical advantage to the Partnership and its Subsidiaries, (iii) is one in which the Partnership and its Subsidiaries have no interest or reasonable expectancy, or (iv) is one presented to any account for the benefit of an Indemnitee or an Affiliate of Indemnitee (other than the Partnership or any of its Subsidiaries) over which such Indemnitee has no direct or indirect influence or control, including, but not limited to, a blind trust. To the fullest extent permitted by applicable law, but without limiting any separate agreement entered into by an Indemnitee with the General Partner, PubCo, the Partnership, Blue Owl Holdings or a Subsidiary of the foregoing (including any employment agreement), no Indemnitee shall (x) have any duty to present business opportunities that are not Excluded Opportunities to the Partnership or any of its Subsidiaries or (y) be liable to the Partnership, any Partner or any other Person who acquires any Partnership Interest, by reason of the fact that such Indemnitee pursues or acquires a business opportunity that is not an Excluded Opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to the Partnership or any of its Subsidiaries.

(e)    For avoidance of doubt, the foregoing paragraphs of this Section 6.3 are intended to renounce with respect to the Indemnitees, to the fullest extent permitted by the Act, any interest or expectancy of the Partnership or any of its Subsidiaries in, or in being offered an opportunity to participate in, any business opportunities that are not Excluded Opportunities, and this Section 6.3 shall be construed to effect such renunciation to the fullest extent permitted by the Act.

(f)    Any Indemnitee may, directly or indirectly, (i) acquire Partnership Interests, and options, rights, warrants and appreciation rights relating to Partnership Interests and (ii) except as otherwise expressly provided in this Agreement, exercise all rights of a Partner relating to such Partnership Interest, options, rights, warrants and appreciation rights.

(g)    To the fullest extent permitted by applicable Law, any Person purchasing or otherwise acquiring any Partnership Interest shall be deemed to have notice of and to have consented to the provisions of this Section 6.3.

Section 6.4    Transactions with Affiliates.

(a)    The Partnership may lend funds to PubCo and its Subsidiaries (excluding for this purpose Subsidiaries of the Partnership, Blue Owl Holdings and Subsidiaries of Blue Owl Holdings), and such Persons may borrow funds from the Partnership, on terms and conditions no less favorable to the Partnership in the aggregate than would be available from unaffiliated third parties as reasonably determined by the General Partner in good faith solely for the purpose of acquiring assets that will be contributed to the Partnership for Partnership Units.

(b)    Except as provided in Section 6.3, the Partnership may transfer assets to joint ventures, limited liability companies, partnerships, corporations, business trusts or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable Law.

 

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(c)    The General Partner and its Affiliates may sell, transfer or convey any property to the Partnership, directly or indirectly, on terms and conditions no less favorable to the Partnership in the aggregate than would be available from unaffiliated third parties as reasonably determined by the General Partner in good faith.

(d)    The General Partner or PubCo may propose and adopt on behalf of the Partnership Employee benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, PubCo, Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the General Partner, PubCo, the Partnership or any of the Partnership’s Subsidiaries.

Section 6.5    Liability of Partners; Fiduciary and Other Duties; Indemnification.

(a)    Except as otherwise provided by the Act, the debts, expenses, obligations and liabilities of the Partnership, whether arising in contact, tort or otherwise, shall be solely the debts, expenses, obligations and liabilities of the Partnership, and no Partner (including the General Partner) shall be obligated personally for any such debt, expense, obligation, or liability of the Partnership solely by reason of being a Partner. All Persons dealing with the Partnership shall have recourse solely to the Partnership for the payment of the debts, expenses, obligations or liabilities of the Partnership.

(b)    Subject to the conditions and limitations set forth in this Agreement, to the greatest extent permitted under applicable Law, no Indemnitee shall be liable, in damages or otherwise, to the Partnership or to any Partner for any losses sustained or liabilities incurred as a result of any act or omission of such Indemnitee, except that such Indemnitee shall not be exculpated from or entitled to indemnification under this Agreement for any such loss, damage or claim incurred by reason of such Indemnitee’s fraud, willful misconduct, or knowing violation of the Law or willful violation of this Agreement by the Indemnitee, in each case, as established by a final judgment of a court of competent jurisdiction.

(c)    An Indemnitee acting under this Agreement shall not be liable to the Partnership or to any other Indemnitee for such Person’s good-faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of such Persons otherwise existing at law or in equity, are agreed by the Partners to replace fully and completely such other duties and liabilities of such Persons. Notwithstanding any other provision of this Agreement or otherwise applicable provision of law or equity, but subject to the two immediately succeeding sentences, whenever in this Agreement an Indemnitee is permitted or required to make a decision or take an action (i) in its “sole discretion” or “discretion” or under a similar grant of authority or latitude, or if no standard is expressed, in making such decisions, such Person shall be entitled to take into account its own interests so long as it takes into account the interests of the Partners as a whole or (ii) in its “good faith” or under another expressed standard, such Person shall act under such express standard and shall not be subject to any other or different standards. Notwithstanding the foregoing, with respect to any or all actions, omissions or decisions of the General Partner, the General Partner acknowledges that it will owe to the Limited Partners the same fiduciary duties as it would owe to the stockholders of a Delaware corporation if it were a member of the board of directors of such a corporation and the Limited Partners were stockholders of such corporation. For the avoidance of

 

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doubt, the fiduciary duties described in the foregoing sentence shall not be limited by the fact that the General Partner shall be permitted to take certain actions in its sole or reasonable discretion pursuant to the terms of this Agreement, the Exchange Agreement or any agreement entered into in connection herewith or therewith (it being expressly agreed by the General Partner that the use of such discretion shall be consistently applied on a non-discriminatory basis to holders of Partnership Interests within any given class or series thereof). No Limited Partner, in its capacity as a Limited Partner, shall owe any duty (including fiduciary duty) to the Partnership or any of its Partners (all such duties being eliminated by this Agreement to the greatest extent possible).

(d)    The General Partner may consult with legal counsel, accountants and financial or other advisors, and any act or omission suffered or taken by the General Partner on behalf of the Partnership or in furtherance of the interests of the Partnership in good faith in reliance upon and in accordance with the advice of such counsel, accountants or financial or other advisors will be full justification for any such act or omission, and the General Partner will be fully protected in so acting or omitting to act so long as such counsel or accountants or financial or other advisors were selected with reasonable care.

Section 6.6    Indemnification.

(a)    The Partnership shall indemnify and hold harmless each Indemnitee (and such Person’s heirs, successors, assigns, executors or administrators) to the full extent permitted by law from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorney’s fees and other legal fees and expenses), judgments, fines, settlements and other amounts of any nature whatsoever, known or unknown, liquid or illiquid (collectively, “Liabilities”) arising from any threatened, pending or completed claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, and whether formal or informal, including appeals (“Actions”), in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of any act performed or omitted to be performed by such Indemnitee on behalf of the Partnership or by reason of the fact that the Indemnitee is or was serving as an officer, director or partner of the Partnership (or other applicable capacity set forth in the definition of “Indemnitee”) if (i) the Indemnitee acted in good faith, within the scope of such Indemnitee’s authority, and in a manner it believed to be in, or not contrary to, the best interests of the Partnership, (ii) the Action was not initiated by the Indemnitee (other than an action to enforce such Indemnitee’s rights to indemnification or advance of expenses under this Section 6.6), (iii) the Indemnitee has not been established by a final judgment of a court of competent jurisdiction to be liable to the Partnership, and (iv) such action or inaction did not constitute fraud, gross negligence, willful misconduct, or a knowing violation of the Law or willful violation of this Agreement by the Indemnitee, in each case, as established by a final judgment of a court of competent jurisdiction.

(b)    Expenses incurred by an Indemnitee in (i) defending or (ii) appearing as a witness in (when such Indemnitee is not named as a defendant or respondent) any Action, subject to this Section 6.6 shall be advanced by the Partnership prior to the final disposition of such Action upon receipt by the Partnership of a written commitment by or on behalf of the Indemnitee to repay such amount if it shall be determined that such Indemnitee is not entitled to be indemnified as authorized in this Section 6.6.

 

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(c)    To the extent any Liability for which an Indemnitee is entitled to indemnification pursuant to this Section 6.6 is a Jointly Indemnifiable Claim. Blue Owl Holdings shall be fully and primarily responsible for the payment of such as the indemnitor of first resort, pursuant to and in accordance with the Holdings LPA. Notwithstanding the foregoing to the extent the General Partner reasonably determines in good faith that they both are reasonably capable of doing so, the Partnership and Blue Owl Holdings shall each be responsible for their respective Allocation Percentage of any Jointly Indemnifiable Claim for which the Partnership and Blue Owl Holdings both have Liability to an Indemnitee under this Section 6.6 and Section Section 6.6 of the Holdings LPA. Any indemnification obligations of the Partnership arising under this Section 6.6 shall be satisfied to the extent of any Partnership assets only and no Limited Partner or Affiliate of any Limited Partner shall have any personal liability on account thereof.

(d)    The right to indemnification and advancement of expenses provided by this Agreement shall not be exclusive of, and shall not affect, any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns, executors and administrators of the Indemnitee unless otherwise provided in a written agreement with such Indemnitee or in the writing pursuant to which such Indemnitee is indemnified.

(e)    To the fullest extent permitted by applicable Law, the Partnership shall purchase and maintain insurance (or be the named insured on the insurance policy of any Affiliate), to the extent and in such amounts as the General Partner shall deem reasonable, on behalf of any of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(f)    An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.6 solely because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement and such Indemnitee is entitled to indemnification pursuant to Section 6.6(a).

(g)    The provisions of this Section 6.6 are for the benefit of the Indemnitees, their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 6.6 or any provision of this Agreement shall be prospective only and shall not in any way affect the limitations on the Partnership’s liability to any Indemnitee under this Section 6.6 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted. Each of the parties to this Agreement agree that each Indemnitee shall be a third-party beneficiary with respect to this Section 6.6, entitled to enforce this Section 6.6 as though each such Indemnitee were a party to this Agreement.

(h)    Notwithstanding anything to the contrary in this Agreement, the indemnification rights and obligations set forth in this Agreement shall not apply to any breaches

 

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of fiduciary duties set forth in Section 6.5(c), to the extent (and only to the extent) that it has been finally determined by a court of competent jurisdiction that, respectively, a director of a Delaware corporation would be prohibited by the Laws of the State of Delaware from being indemnified with respect to such matter or a Delaware corporation is prohibited by the Laws of the State of Delaware from indemnifying a member of its board of directors with respect to such matter.

Section 6.7    Certain NB Consent Rights.

(a)    Notwithstanding anything to the contrary in this Article VI or elsewhere in this Agreement:

(i)    until the first date upon which the NB First Ownership Threshold is no longer satisfied, the Partnership shall not (and the General Partner shall not, and shall cause the Partnership and its Subsidiaries not to) take or omit to take any action for which the consent of NB would be required pursuant to Section 2.3(a) of the Investor Rights Agreement, unless NB gives its consent pursuant thereto; and

(ii)    until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the Partnership shall not (and the General Partner shall not, and shall cause the Partnership and its Subsidiaries not to) take or omit to take any action for which the consent of NB would be required pursuant to Section 2.3(b) of the Investor Rights Agreement, unless NB gives its consent pursuant thereto.

(b)    Notwithstanding anything in this Agreement to the contrary, NB’s rights under this Section 6.7 are personal to NB and may not be assigned to any Person (other than to another NB Partner).

ARTICLE VII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 7.1    Return of Capital. Except pursuant to the rights of Exchange set forth in the Exchange Agreement and Article XIV, no Limited Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon dissolution of the Partnership as provided in this Agreement. Except to the extent provided in Article IV or Article V or otherwise expressly provided in this Agreement, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions or as to profits, losses or distributions.

Section 7.2    Rights of Limited Partners Relating to the Partnership.

(a)    In addition to other rights provided by this Agreement or by the Act, (the General Partner shall deliver to each Limited Partner a copy of any information mailed to all of the common stockholders of PubCo as soon as practicable after such mailing, unless such Limited Partner is entitled to receive such information pursuant to the Investor Rights Agreement, PubCo Charter or PubCo Bylaws.

(b)    Notwithstanding any other provision of this Section 7.2, but subject to Section 7.2(c), the General Partner may keep confidential from the Limited Partners (or any of

 

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them), for such period of time as the General Partner determines to be reasonable, any information that (i) the General Partner reasonably, and in good faith, believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership, (ii) would jeopardize or waive privilege or work product doctrine or (iii) the Partnership or the General Partner is required by Law or by agreement to keep confidential.

(c)    Notwithstanding anything in this Section 7.2 to the contrary, the information rights of NB are governed by the terms and provisions of Section 2.5 of the Investor Rights Agreement. To the extent there is any inconsistency or conflict between the terms and provisions of this Section 7.2, solely with respect to NB, and the terms and provisions of Section 2.5 of the Investor Rights Agreement, the terms and provisions of Section 2.5 of the Investor Rights Agreement shall control.

ARTICLE VIII

BOOKS AND RECORDS

Section 8.1    Books and Records. At all times during the continuance of the Partnership, the Partnership shall prepare and maintain separate books of account for the Partnership for financial reporting purposes, on an accrual basis, in accordance with United States generally accepted accounting principles, consistently applied. The Partnership shall keep at its principal office the following:

(a)    a current list of the full name and the last known street address of each Partner;

(b)    a copy of the Certificate and this Agreement and all amendments thereto; and

(c)    copies of the Partnership’s federal, state and local income tax returns and reports, if any, for the three most recent years.

Section 8.2    Inspection. Subject to Section 15.11 Limited Partners (personally or through an authorized representative) may, for purposes reasonably related to their respective Partnership Interests, examine and copy (at their own cost and expense) items described in Section 8.1(b) at all reasonable business hours upon reasonable prior notice. The access provided in the foregoing sentence shall not apply to the Register, which shall be subject to Section 3.1(b).

ARTICLE IX

TAX MATTERS

Section 9.1    Preparation of Tax Returns. The General Partner shall arrange for the preparation and timely filing of all returns with respect to Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable effort to furnish, within 90 days of the close of each taxable year, an estimate of the tax information reasonably required by the Holders (including a draft Schedule K-1 or other schedule or statement providing estimated taxable income) for federal and state income tax and any other tax reporting purposes and, by August 15 of each taxable year, such final

 

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information (including a final Schedule K-1). In addition, the General Partner shall, at the requesting Holder’s expense for reasonable, incremental out-of-pocket expenses, provide such other information that is reasonably available to it and that any Holder may reasonably request to enable it to determine and comply with its tax paying and reporting obligations, or to obtain refunds of or exemptions from taxes that would otherwise be borne by such Holder with respect to its interests in the Partnership. For the avoidance of doubt, nothing in this Section 9.1 shall require the Partnership to provide information that tracks the interest in the Partnership for a Person who holds a direct or indirect interest in a Holder (it being understood that the reporting in this section shall properly reflect the status of any Holder that is a disregarded entity for applicable tax purposes).

Section 9.2    Tax Elections. The General Partner shall file (or cause to be filed) an election pursuant to Code Section 754 (and any corresponding provision for state and local income tax purposes) for the Partnership for the tax year including the Closing Date and shall maintain and keep such election in effect at all times (and, if applicable, the General Partner and the Partnership shall cause any Subsidiary of the Partnership to file and maintain such an election). Except as otherwise provided in this Agreement, the General Partner shall determine whether to make any other available election pursuant to the Code; provided that, the General Partner shall consult in good faith with the NB Partner Representative prior to making, changing, or revoking any material tax election or method of tax accounting or modifying the manner in which Capital Accounts (or allocations thereto) or allocations for tax purposes are determined, in each case if such actions would reasonably be expected to have a material and disproportionate adverse effect on the NB Partners or their direct or indirect owners (not taking into account the tax characteristics or tax attributes of such direct or indirect owners) and their respective Permitted Transferees.

Section 9.3    Partnership Representative.

(a)    The General Partner is designated as the Partnership Representative. In addition, the General Partner is authorized to designate or remove any other Person selected by General Partner as the Partnership Representative. All actions taken by the Partnership Representative pursuant to this Section 9.3 shall be subject to the overall oversight and authority of the Board. For each Fiscal Year in which the Partnership Representative is an entity, the Partnership shall appoint the “designated individual” identified by the Partnership Representative and approved by the Board to act on its behalf in accordance with the applicable Regulations or analogous provisions of state or local Law. Each Partner expressly consents to such designations and agrees to take, and that the General Partner is authorized to take (or cause the Partnership to take), such other actions as may be necessary or advisable pursuant to Regulations or other IRS or Treasury guidance or state or local Law to cause such designations or evidence such Partner’s consent to such designations.

(b)    Subject to this Section 9.3, the Partnership Representative shall have the sole authority to act on behalf of the Partnership in connection with, make all relevant decisions regarding application of, and to exercise the rights and powers provided for in the BBA Rules, including making any elections under the BBA Rules or any decisions to settle, compromise, challenge, litigate or otherwise alter the defense of any Action, audit or examination before the IRS or any other tax authority (each, an “Audit”), and to expend Partnership funds for professional services and other expenses reasonably incurred in connection therewith. Notwithstanding any

 

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provision to the contrary in this Agreement, the Partnership Representative shall be permitted make an election under Section 6226 of the BBA Rules (and any similar provision of state, local and non-U.S. tax Law) with respect to any Audit.

(c)    Without limiting the foregoing, the Partnership Representative shall give prompt written notice to the Original Limited Partner Representative of the commencement of any Audit of the Partnership or any of its Subsidiaries (a “Specified Audit”). The Partnership Representative shall: (i) keep the Original Limited Partner Representative reasonably informed of the material developments and status of any such Specified Audit; (ii) permit the Original Limited Partner Representative (or its designees) to participate (including using separate counsel), in each case at the Original Limited Partners’, as applicable, sole cost and expense, in any such Specified Audit; and (iii) promptly notify the Original Limited Partner Representative of receipt of a notice of a final partnership adjustment (or equivalent under applicable Laws) or a final decision of a court or IRS Appeals panel (or equivalent body under applicable Laws) with respect to such Specified Audit. The Partnership Representative or the Partnership shall promptly provide the Original Limited Partner Representative with copies of all material correspondence between the Partnership Representative or the Partnership (as applicable) and any governmental authority in connection with such Specified Audit, and shall give the Original Limited Partner Representative a reasonable opportunity to review and comment on any material correspondence, submission (including settlement or compromise offers) or filing in connection with any such Specified Audit. Additionally, the Partnership Representative shall not (and the Partnership shall not (and shall not authorize the Partnership Representative to)) settle, compromise or abandon any Specified Audit in a manner that would reasonably be expected to have a disproportionately adverse (compared to the General Partner) or materially adverse effect on the Original Limited Partners without the Original Limited Partner Representative’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned).

(d)    The Partnership representative shall give prompt written notice to the NB Partner Representative of the commencement of any material U.S. federal or state tax Audit of the Partnership or any of its Subsidiaries or any Audit of the Partnership or any of its Subsidiaries that would reasonably be expected to have a disproportionate and material adverse effect on the NB Partners (a “NB Relevant Audit”). The Partnership Representative shall keep the NB Partner Representative reasonably informed of the material developments and status of any such NB Specified Audit. The Partnership Representative or the Partnership shall promptly provide the NB Partner Representative with copies of all material correspondence between the Partnership Representative or the Partnership (as applicable) and any governmental authority in connection with such NB Relevant Audit, and shall give the NB Partner Representative a reasonable opportunity to review and comment on any material correspondence, submission (including settlement or compromise offers) or filing in connection with any such NB Relevant Audit. Additionally, the Partnership Representative shall not (and the Partnership shall not (and shall not authorize the Partnership Representative to)) settle, compromise or abandon any NB Relevant Audit in a manner that would reasonably be expected to have a disproportionate and material adverse effect on the NB Partners without the NB Partner Representative’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned). Notwithstanding the foregoing, the rights of the NB Partner Representative under this Section 9.3(d) shall terminate upon the first date the NB Second Ownership Threshold is no longer satisfied.

 

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(e)    Notwithstanding anything to the contrary contained in this Agreement, in the event of any conflict between Section 11.1 of the BCA and this Agreement, Section 11.1 of the BCA shall control. The Partnership, the Partnership Representative, the General Partner, and the Partners acknowledge and agree to the foregoing sentence and expressly agree to be bound by the terms of Section 11.1 of the BCA.

(f)    This Section 9.3 shall be interpreted to apply to Partners and former Partners, and shall survive the Transfer of a Partner’s Partnership Units and the termination, dissolution, liquidation and winding up of the Partnership and, for this purpose to the extent not prohibited by applicable Law, the Partnership shall be treated as continuing in existence.

Section 9.4    Withholding Tax Indemnification

(a)    If the Partnership or any other Person in which the Partnership holds an interest is required by Law to withhold or to make tax payments on behalf of or with respect to any Partner, or the Partnership is subjected to tax itself (including any amounts withheld from amounts directly or indirectly payable to the Partnership or to any other Person in which the Partnership holds an interest) by reason of the status of any Partner as such or that is specifically attributable to a Partner (including federal, state, local or foreign withholding or nonresident income taxes, personal property, unincorporated business or other taxes, the amount of any taxes arising under the BBA Rules, the amount of any taxes imposed under Code Section 1446(f), and any interest, penalties, additions to tax, and expenses related to any such amounts) (“Tax Advances”), the General Partner may cause the Partnership to withhold such amounts and cause the Partnership to make such tax payments as so required, and each Partner authorizes the Partnership to do so. For all purposes of this Agreement, such Partner shall be treated as having received the amount of the distribution, if applicable, that is equal to the Tax Advance at the time of such Tax Advance. Notwithstanding the foregoing, each Tax Advance shall be repaid by reducing the amount of the current or next succeeding distribution pursuant to Section 4.1; provided, that, to the extent that the aggregate amount of Tax Advances for any period made on behalf of a Partner exceeds the actual distributions that would have otherwise been made to such Partner pursuant to Section 4.1 following such Tax Advances, then such Partner shall indemnify and hold harmless the Partnership for the entire amount of such excess (which has not offset distributions pursuant to this Section 9.4) (an “Excess Tax Advance”); provided, that any Excess Tax Advance with respect to any Partner shall be required to be repaid by such Partner in full prior to or in connection with any Transfer or Exchange of Partnership Units held by such Partner. For the avoidance of doubt, any income taxes, penalties, additions to tax and interest payable, and any taxes, penalties and interest payable under the BBA Rules, by the Partnership or any fiscally transparent entity in which the Partnership owns an interest shall be treated as specifically attributable to the Partners and shall be treated as a Tax Advance with respect to the Partners such that the burden of (or any diminution in distributable proceeds resulting from) any such amounts is borne by those Partners to whom such amounts are specifically attributable (whether as a result of their status, actions, inactions or otherwise), in each case as reasonably determined by the General Partner.

(b)    This Section 9.4 shall be interpreted to apply to Partners and former Partners and shall survive the Transfer or Exchange of a Partner’s Partnership Units (and shall not burden any such Transferred Partnership Units, any Partnership Units that were the subject of an Exchange

 

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or the transferee of such Partnership Units) and the termination, dissolution, liquidation and winding up of the Partnership and, for this purpose to the extent not prohibited by applicable Law, the Partnership shall be treated as continuing in existence.

Section 9.5    Subject Liabilities.

(a)    For purposes of determining a Partner’s share of any Subject Liability under Regulations Section 1.752-3, the Partnership shall adopt the “additional method” described in Regulations Section 1.752-3(a)(3) to the maximum extent permitted by law (as reasonably determined by the General Partner), first with respect to each Protected Partner and amount listed on Schedule II.

(b)    No Partner, nor any of its Affiliates, nor any Person related to a Partner within the meaning of Regulations Section 1.752-4(b) shall (other than PubCo, Blue Owl Holdings, or their respective Affiliates): (i) enter into a guarantee (or any arrangement treated in a similar manner for purposes of Code Section 752 and the Regulations thereunder) all or any portion of any Subject Liability; (ii) acquire an interest in all or any portion Subject Liability (or take any action that would be treated for U.S. federal income tax purposes as an acquisition of an interest in any Subject Liability); or (iii) otherwise take any action which would cause all or any portion of a Subject Liability to be treated as a “recourse liability” (as defined in Treasury Regulation Section 1.752-1(a)(1)) with respect to such Partner.

Section 9.6    FIC Distribution. The parties to this Agreement agree that the FIC Distribution gave rise to an adjustment to the tax basis of certain property of Opal Capital Group LLC or its successor in interest pursuant to Code Section 734. To the extent such adjustment is allocated to depreciable or amortizable property, then to the extent permitted by law the parties agree to treat such basis adjustment as a separate item of property for purposes of Code Sections 168 and 197, as applicable, that is not “Section 704(c) property” as defined in Regulations Section 1.704-3(a)(3)(i).

Section 9.7    Exchange Agreement. The Exchange Agreement, to the extent it imposes an obligation on the Partnership or defines rights of the Partners with respect to the Partnership, shall be treated as part of the partnership agreement of the Partnership as described in Code Section 761(c) and Regulations Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c).

Section 9.8    Intended Tax Treatment. The parties acknowledge the Intended Tax Treatment (as defined in the BCA) set forth in Section 12.5 of the BCA and the provisions of this Agreement (including allocation and capital account provisions) shall be interpreted and applied consistently with such treatment.

ARTICLE X

PARTNER TRANSFERS AND WITHDRAWALS

Section 10.1    Transfer.

(a)    No part of the interest of a Partner shall be subject to the claims of any creditor, to any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement.

 

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(b)    No Partnership Interest shall be Transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article X. Any Transfer or purported Transfer of a Partnership Interest not made in accordance with this Article X shall be null and void ab initio.

Section 10.2    Transfer of General Partners Partnership Interest. The General Partner may not (i) Transfer any GP Units, (ii) voluntarily withdraw as the general partner of the Partnership, or (iii) be removed from the Partnership, in each case, without the consent of PubCo, a Majority in Interest of the Limited Partners and, until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the NB Partner Representative. Notwithstanding the foregoing sentence, the approval of a Majority in Interest of the Limited Partners, PubCo and the NB Partner Representative shall not be required if the successor General Partner is PubCo or a wholly-owned Subsidiary thereof. In the event of the General Partner’s removal, a Majority in Interest of the Limited Partners may appoint a new general partner to be the General Partner under this Agreement, which shall be PubCo or a wholly-owned Subsidiary thereof unless PubCo provides its prior written consent (including the approval of a majority of the Independent Directors of the Board). Notwithstanding anything to the contrary in this Agreement, the General Partner may only voluntarily withdraw as the general partner of the Partnership, be removed or be replaced as the general partner of the Partnership, or otherwise be removed from the Partnership, in each case, with the prior written consent of PubCo (and if the replacement General Partner is not PubCo or a wholly-owned Subsidiary of PubCo, including the approval of a majority of the Independent Directors of the Board).

Section 10.3    Limited Partners Rights to Transfer.

(a)    Transfers; Generally.

(i)    Except as otherwise agreed to in writing between the General Partner and the applicable Limited Partner and reflected in the books and records of the Partnership, no Limited Partner or Assignee thereof may Transfer (including in accordance with the Exchange Agreement) all or any portion of its Partnership Interests or other interest in the Partnership (or beneficial interest therein) without the prior consent of the General Partner, which consent may be given or withheld, or made subject to such conditions (including the receipt of such legal opinions and other documents that the General Partner may require) as are determined by the General Partner, in each case in the General Partner’s sole discretion, and which consent may be in the form of a plan or program entered into or approved by the General Partner, in its sole discretion. Notwithstanding anything to the contrary, in no event may the General Partner waive or modify the Lock-Up Period applicable to any Qualified Unitholder without the prior written consent of (x) a majority of the Independent Directors of the Board and (y) until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the NB Partner Representative. Any such determination in the General Partner’s discretion in respect of Partnership Interests shall be final and binding. Any purported Transfer of Partnership Interests that is not in accordance with, or subsequently violates, this Agreement shall be, to the fullest extent permitted by law, null and void.

 

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(ii)    Notwithstanding clause (i) above but subject to Section 10.3(c), each Limited Partner may Transfer Common Units in Exchanges pursuant to, and in accordance with, the Exchange Agreement. The General Partner may adopt or promulgate policies from time to time (including policies requiring the use of designated administrators or brokers) applicable to Exchanges without the consent of any Limited Partner that are consistent with the terms of this Agreement or the Exchange Agreement.

(iii)    Notwithstanding anything otherwise to the contrary in this Agreement, but subject to Section 10.3(c)(ii) and Section 10.6, a Limited Partner may transfer all or a portion of its Partnership Interests to any of its Permitted Transferees in a transfer that the General Partner determines in good faith complies with the requirements of Regulation. 1.7704-1(e) or otherwise does not create a material risk of the Partnership being treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code; provided, that for the avoidance of doubt, any further Transfer by the Permitted Transferee may only be made to another Permitted Transferee of the original transferring Limited Partner and in accordance with this Agreement.

(b)    Further Restrictions.

(i)    Notwithstanding any contrary provision in this Agreement, the General Partner may impose such vesting requirements, forfeiture provisions, Transfer restrictions, minimum retained ownership requirements or other similar provisions with respect to any Partnership Interests that are outstanding as of the Effective Date or are created thereafter, with the written consent of the holder of such Partnership Interests.

(ii)    Notwithstanding any contrary provision in this Agreement, in no event may any Transfer of a Partnership Interest be made by any Limited Partner or Assignee if:

(A)    such Transfer is made to any Person who lacks the legal right, power or capacity to own such Partnership Interest;

(B)    such Transfer would require the registration of any Partnership Interests (including the Partnership Interest so Transferred) under any applicable U.S. federal or state securities Laws (including the Securities Act or the Exchange Act) or other non-U.S. securities Laws (including Canadian provincial or territorial securities laws) or would constitute a non-exempt distribution pursuant to applicable provincial or state securities Laws;

(C)    such Transfer would cause (A) all or any portion of the assets of the Partnership to (1) constitute “plan assets” (under ERISA, the Code or any applicable similar Law) of any existing or contemplated Limited Partner, or (2) be subject to the provisions of ERISA, Code Section 4975 or any applicable similar Law, or (B) the General Partner to become a fiduciary with respect to any existing or contemplated Limited Partner, pursuant to ERISA, any applicable similar Law, or otherwise;

 

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(D)    to the extent requested by the General Partner, the Partnership does not receive customary legal opinions and written instruments (including copies of any instruments of Transfer and such Assignee’s consent to be bound by this Agreement as an Assignee) that are in a form satisfactory to the General Partner, as reasonably determined in good faith by the General Partner;

(E)    such Transfer would violate, or cause PubCo, the Partnership or any of their respective Affiliates to violate, any applicable Law of any jurisdiction; or

(F)    the General Partner shall reasonably determine in good faith that such Transfer (provided, for this purpose a transaction described in the clause (c) of the final sentence of the definition of “Transfer” will be considered to be a Transfer if the General Partner reasonably determines such transaction could reasonably be expected to be treated as a transfer for U.S. federal income tax purposes) would pose a material risk that the Partnership would be a “publicly traded partnership” as defined in Code Section 7704.

In addition, notwithstanding any contrary provision in this Agreement, to the extent the General Partner shall determine that interests in the Partnership do not meet the requirements of Regulations Section 1.7704-1(h), the General Partner may impose such restrictions on the Transfer (provided, for this purpose a transaction described in the clause (c) of the final sentence of the definition of “Transfer” will be considered to be a Transfer if the General Partner reasonably determines such transaction could reasonably be expected to be treated as a transfer for U.S. federal income tax purposes) of Partnership Interests or other interests in the Partnership as the General Partner may reasonably determine in good faith to be necessary or advisable so that the Partnership is not treated as a publicly traded partnership taxable as a corporation under Code Section 7704.

(c)    Seller Transfers.

(i)    Notwithstanding anything to the contrary in this Agreement, in no event shall any Limited Partner that is a Seller (or a Permitted Transferee of any Seller) effect any Transfer or make a public announcement of any intention to effect any Transfer of any Partnership Interests (including any Seller Earnout Units) during the Lock-Up Period applicable to such Partnership Interests, in each case other than a Transfer to a Permitted Transferee made in accordance with Section 10.3(a)(iii).

(ii)    For the avoidance of doubt, a Seller Earnout Unit is not Transferable (except to a Permitted Transferee and in such event, solely in accordance with Section 10.3(a)(iii)) until a Triggering Event has occurred with respect to such Seller Earnout Unit (as determined in accordance with the definition of “Triggering Event” herein), and any purported Transfer (except

 

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to a Permitted Transferee and in such event, solely in accordance with Section 10.3(a)(iii)) of any Seller Earnout Units by any Holder thereof prior to a Triggering Event occurring with respect to such Seller Earnout Units shall be null and void, and the Partnership shall refuse to recognize any such Transfer for any purpose.

Section 10.4    Substituted Limited Partners.

(a)    No Limited Partner shall have the right to substitute a transferee other than a Permitted Transferee as a Limited Partner in its place (and, for the avoidance of doubt, such Permitted Transferee shall be a Substituted Limited Partner under this Agreement). A transferee (other than a Permitted Transferee) of the interest of a Limited Partner may be admitted as a Substituted Limited Partner only with the consent of the General Partner. The failure or refusal by the General Partner to permit a transferee of any such interests to become a Substituted Limited Partner in accordance with the previous sentence shall not give rise to any cause of action against the Partnership or the General Partner. Subject to the foregoing, an Assignee shall not be admitted as a Substituted Limited Partner until and unless it furnishes to the General Partner (i) evidence of acceptance, in form and substance reasonably satisfactory to the General Partner, of all the terms, conditions and applicable obligations of this Agreement, the Investor Rights Agreement and the Exchange Agreement, (ii) a counterpart signature page to this Agreement, the Investor Rights Agreement and the Exchange Agreement (or a joinder thereto) executed by such Assignee, (iii) a Consent by Spouse (if applicable) and (iv) such other documents and instruments as the General Partner may reasonably require to effect such Assignee’s admission as a Substituted Limited Partner and (v) the transfer to the applicable Assignee includes a corresponding Transfer of the applicable Limited Partner’s Holdings Units.

(b)    Concurrently with, and as evidence of, the admission of a Substituted Limited Partner, the General Partner shall amend the Register and the books and records of the Partnership to reflect the name, address and number of Partnership Units of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and number of Partnership Units of the predecessor of such Substituted Limited Partner.

(c)    A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article X shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement.

Section 10.5    Assignees. If the General Partner’s consent is required for the admission of any transferee in a Transfer made in accordance with Section 10.3 as a Substituted Limited Partner, as described in Section 10.4, and the General Partner withholds such consent, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses and other items of income, gain, loss, deduction and credit of the Partnership attributable to the Partnership Units assigned to such transferee and the rights to Transfer the Partnership Units provided in this Article X, but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement (other than as expressly provided in the Exchange Agreement with respect to a Limited Partner that becomes an Exchanging Partner), and shall not be entitled to effect a consent or vote with respect to such Partnership Units on any matter presented to the Limited Partners for approval

 

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(such right to consent or vote, to the extent provided in this Agreement or under the Act, fully remaining with the transferor Limited Partner). In the event that any such Assignee desires to make a further assignment of any such Partnership Units, such Assignee shall be subject to all the provisions of this Article X to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units.

Section 10.6    General Provisions.

(a)    No Limited Partner may withdraw from the Partnership other than: (i) as a result of a permitted Transfer of all of such Limited Partner’s Partnership Interest in accordance with this Article X with respect to which the transferee becomes a Substituted Limited Partner; (ii) pursuant to the Exchange (including a Direct Exchange) of all of its Partnership Interest pursuant to the Exchange Agreement and Article XIV; or (iii) as a result of the acquisition of all of such Limited Partner’s Partnership Interest by PubCo or its Subsidiaries, whether or not pursuant to the Exchange Agreement.

(b)    Any Limited Partner who shall Transfer all of its Partnership Units in a Transfer (i) permitted pursuant to this Article X where such transferee was admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of its rights to effect an Exchange of all of its Partnership Units pursuant to the Exchange Agreement and Article XIV or (iii) to PubCo or its Subsidiaries, whether or not pursuant to Article XIV, in each case, shall cease to be a Limited Partner.

(c)    If any Partnership Unit is Transferred in compliance with the provisions of this Article X, or is redeemed or Exchanged by the Partnership or PubCo (including by Direct Exchange) pursuant to the Exchange Agreement, on any day other than the first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items of income, gain, loss, deduction and credit attributable to such Partnership Unit for such Fiscal Year shall be allocated to the transferor Partner or the Exchanging Partner (as the case may be) and, in the case of a Transfer or assignment other than an Exchange, to the transferee Partner, by taking into account their varying interests during the Fiscal Year in accordance with Code section 706(d), using the “interim closing of the books” method or another permissible method or methods selected by the General Partner. Solely for purposes of making such allocations, unless otherwise reasonably determined by the General Partner in good faith, each of such items for the calendar quarter in which a Transfer occurs shall be allocated to the transferee Partner and none of such items for the calendar quarter in which a Transfer or an Exchange occurs shall be allocated to the transferor Partner, or the Exchanging Partner (as the case may be) if such Transfer occurs on or before the 45th day of the quarter, otherwise such items shall be allocated to the transferor. All distributions attributable to such Partnership Unit with respect to which the Partnership Record Date is before the date of such Transfer, assignment or Exchange shall be made to the transferor Partner or the Exchanging Partner (as the case may be) and, in the case of a Transfer other than an Exchange, all distributions thereafter attributable to such Partnership Unit shall be made to the transferee Partner.

(d)    In addition to any other restrictions on Transfer contained in this Agreement, in no event may any Transfer or assignment of a Partnership Interest by any Partner (including any Exchange, any acquisition of Partnership Units by PubCo or any other acquisition of Partnership Units by the Partnership) be made (i) of any component portion of a Partnership

 

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Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (ii) if the General Partner determines, based on the advice of counsel, that such Transfer would create a material risk that any portion of the assets of the Partnership would constitute assets of any employee benefit plan pursuant to Department of Labor Regulations section 2510.2-101; (iii) if such Transfer subjects the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisers Act of 1940 or ERISA, each as amended; or (iv) if such Transfer is of one or more Common Units, unless such transferor also Transfers an equal number of Holdings Units and Class C Shares or Class D Shares (as applicable) to the applicable transferee.

(e)    Transfers pursuant to this Article X, other than Permitted Transfers (which may be made at any time), may only be made on the first day of a fiscal quarter of the Partnership, unless the General Partner otherwise agrees.

(f)    In the event any Transfer is permitted pursuant to this Article X, the transferring parties shall demonstrate to the satisfaction of the General Partner either that no withholding is required in connection with such Transfer under applicable U.S. federal, state, local or non-U.S. law (including under Code Sections 1445 or 1446) or that any amounts required to be withheld in connection with such Transfer under applicable U.S. federal, state, local or non-U.S. law (including under Code Section 1446, other than by reason of Code Section 1446(f)(4)) have been so withheld and will be paid over the appropriate governmental authority. The General Partner and the Partnership shall reasonably cooperate upon the reasonable request and at the expense of the Transferor and/or Transferee to provide such certifications or other information that it is legally permitted to provide with respect to the Partnership to the extent necessary to reduce or eliminate any such withholding.

ARTICLE XI

ADMISSION OF PARTNERS

Section 11.1    Admission of Successor General Partner. A successor to all or a portion of the General Partner’s Partnership Interest pursuant to Section 10.2 who the General Partner has designated to become a successor General Partner shall be admitted to the Partnership as the General Partner, effective immediately upon the Transfer of such Partnership Interest to it. Upon any such Transfer and the admission of any such transferee as a successor General Partner in accordance with this Section 11.1, the transferor General Partner shall be relieved of its obligations under this Agreement and shall cease to be a general partner of the Partnership without any separate consent of the Partners or any Partner. Any such successor General Partner shall carry on the business of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission. In the event that the General Partner withdraws from the Partnership, or transfers its entire Partnership Interest, in violation of this Agreement, or otherwise dissolves or terminates or ceases to be the general partner of the Partnership and a Majority in Interest of the Limited Partners, with, until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the consent of the NB Partner Representative, may elect to continue the Partnership by selecting a successor General Partner.

 

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Section 11.2    Partners; Admission of Additional Limited Partners.

(a)    A Person (other than a then-existing Partner) who makes a Capital Contribution to the Partnership in exchange for Partnership Units and in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance, in form and substance satisfactory to the General Partner, of all of the terms and conditions of this Agreement, including the power of attorney granted in Section 15.1, (ii) a counterpart signature page to this Agreement executed by such Person, (iii) a Consent by Spouse (as applicable) and (iv) such other documents or instruments as may be required by the General Partner in order to effect such Person’s admission as an Additional Limited Partner. Concurrently with, and as evidence of, the admission of an Additional Limited Partner, the General Partner shall amend the Register and the books and records of the Partnership to reflect the name, address, number and type of Partnership Units of such Additional Limited Partner.

(b)    Notwithstanding anything to the contrary in this Section 11.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the consent of the General Partner to such admission and the satisfaction of all the conditions set forth in Section 11.2(a).

(c)    If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items of income, gain, loss, deduction and credit allocable among Holders for such Fiscal Year shall be allocated among such Additional Limited Partner and all other Holders by taking into account their varying interests during the Fiscal Year in accordance with Code section 706(d), using the “interim closing of the books” method or another permissible method or methods selected by the General Partner. Solely for purposes of making such allocations, each of such items for the calendar quarter in which an admission of any Additional Limited Partner occurs shall be allocated among all the Holders including such Additional Limited Partner, in accordance with the principles described in Section 10.6(c). All distributions with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees other than the Additional Limited Partner, and all distributions thereafter shall be made to all the Partners and Assignees including such Additional Limited Partner.

Section 11.3    Limit on Number of Partners. Unless otherwise permitted by the General Partner, no Person shall be admitted to the Partnership as an Additional Limited Partner if the effect of such admission would be to either cause the Partnership to have a number of Partners (including as Partners for this purpose those Persons indirectly owning an interest in the Partnership through another partnership, a limited liability company, a subchapter S corporation or a grantor trust) that would cause the Partnership to become a reporting company under the Exchange Act.

Section 11.4    Admission. A Person shall be admitted to the Partnership as a Limited Partner of the Partnership or a general partner of the Partnership only upon strict compliance, and not upon substantial compliance, with the requirements set forth in this Agreement for admission to the Partnership as a Limited Partner or a General Partner.

 

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ARTICLE XII

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 12.1    No Dissolution. The Partnership shall not be dissolved by the admission of additional Partners in accordance with the terms of this Agreement. The Partnership may be dissolved, liquidated and terminated only pursuant to the provisions of this Article XII, and the Partners irrevocably waive any and all other rights they may have to cause a dissolution of the Partnership or a sale or partition of any or all of the Partnership assets.

Section 12.2    Events Causing Dissolution. The Partnership shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following events (each, a “Liquidating Event”):

(a)    the sale of all or substantially all of the Partnership’s assets;

(b)    at any time there are no Limited Partners of the Partnership, unless the business of the Partnership is continued in accordance with the Act;

(c)    an election to dissolve the Partnership made by the General Partner, with the consent of a Majority in Interest of the Limited Partners and, until the first date upon which the NB Second Ownership Threshold is no longer satisfied, the NB Partner Representative; or

(d)    the entry of a decree of judicial dissolution under Section 17-802 of the Act.

Section 12.3    Distribution upon Dissolution.

(a)    Upon the occurrence of a Liquidating Event, the General Partner (or, in the event that there is no remaining General Partner or the General Partner has dissolved, become Bankrupt or ceased to operate, any Person elected by a Majority in Interest of the Limited Partners with the consent of PubCo (the General Partner or such other Person being referred to in this Agreement as the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and property, and the Partnership’s property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the Liquidator, include shares of stock in PubCo) shall be applied and distributed in the following order:

(i)    first, to the satisfaction of all of the Partnership’s debts and liabilities to creditors, including Partners who are creditors (other than with respect to liabilities owed to Partners in satisfaction of liabilities for distributions), whether by payment or the making of reasonable provision for payment thereof;

(ii)    second, to the satisfaction of all of the Partnership’s liabilities to the Partners in satisfaction of liabilities for distributions, whether by payment or the making of reasonable provision for payment thereof; and

 

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(iii)    the balance, if any, to the Holders in accordance with Section 4.1. The Liquidator shall not receive any additional compensation for any services performed pursuant to this Article XII.

(b)    Notwithstanding the provisions of Section 12.3(a) that require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership, the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Holders, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Holders as creditors) and/or distribute to the Holders, in lieu of cash, as tenants in common and in accordance with the provisions of Section 12.3(a), undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Holders, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.

(c)    No Partner shall be personally liable for a deficit Capital Account balance of that Partner, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Partnership assets. In the sole and absolute discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the Holders pursuant to this Article XII may be:

(i)    distributed to a trust established for the benefit of the General Partner and the Holders for the purpose of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership and/or Partnership activities; the assets of any such trust shall be distributed to the Holders, from time to time, in the reasonable discretion of the Liquidator, in the same proportions and amounts as would otherwise have been distributed to the Holders pursuant to this Agreement; or

(ii)    withheld or escrowed to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership. Any such withheld or escrowed amounts shall be distributed to the Holders in the manner and order of priority set forth in Section 12.3(a) as soon as practicable.

Section 12.4    Rights of Holders. Except as otherwise provided in this Agreement, (a) each Holder shall look solely to the assets of the Partnership for the return of its Capital Contribution, (b) no Holder shall have the right or power to demand or receive property other than cash from the Partnership and (c) no Holder shall have priority over any other Holder as to the return of its Capital Contributions, distributions or allocations.

Section 12.5    Termination. The Partnership shall terminate when all of the assets of the Partnership, after payment of or due provision for all debts, liabilities and obligations of the

 

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Partnership, shall have been distributed to the holders of Partnership Units in the manner provided for in this Article XII, and the Certificate shall have been cancelled in the manner required by the Act.

Section 12.6    Reasonable Time for Winding-Up. A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 12.3, in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between and among the Partners during the period of liquidation.

ARTICLE XIII

AMENDMENTS; MEETINGS

Section 13.1    Amendments.

(a)    Except as otherwise required or permitted by this Agreement (including Section 6.1), amendments, modifications and restatements of this Agreement must be approved by the consent of the General Partner and a Majority in Interest of the Limited Partners.

(b)    Notwithstanding Section 13.1(a):

(i)    no modification, amendment or restatement of any provision of this Agreement that materially and adversely affects the rights or obligations under this Agreement of any Holder of a class or series of Equity Securities of the Partnership, in its capacity as such, without similarly affecting the rights or obligations under this Agreement of all Holders of such class or series of Equity Securities of the Partnership shall be effective against such Holder unless approved in writing by such Holder;

(ii)    any amendment, modification or restatement of Section 10.2, Section 11.1, Section 12.3 and this Section 13.1 shall also require the consent of PubCo;

(iii)    any amendment, modification or restatement of Section 3.7, Section 6.7, Section 7.2(c), Section 9.1, Section 9.2, Section 9.3, Section 10.2, Section 10.3, Section 11.1, Section 12.2, this Section 13.1, Section 15.11(h), Section 15.17(b) and Section 15.18, shall also require the consent of the NB Partner Representative, for so long as the NB Partners or the NB Partner Representative has rights thereunder; and

(iv)    any amendment of the second sentence of Section 10.2 and the second sentence of Section 10.3(a)(i) shall also require the consent of a majority of the Independent Directors of the Board.

(v)    In addition to (and not in limitation of) the foregoing, until the first date upon which the NB First Ownership Threshold is no longer satisfied, no amendment, modification or restatement may be made to this Agreement that is disproportionately adverse to the rights of the NB Partners (in their capacity as holders of PubCo equity securities or Partnership Interests under this Agreement) as compared to the rights of any other Holder, without the consent of the NB Partner Representative.

 

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(c)    Upon obtaining any such consent required under Section 13.1(a) or Section 13.1(b), or any other consent required by this Agreement, and without further action or execution by any other Person, including any Limited Partner, (i) any amendment to this Agreement may be implemented and reflected in a writing executed solely by the General Partner, and (ii) the Limited Partners shall be deemed a party to and bound by such amendment of this Agreement. Within 30 days after the effectiveness of any amendment to this Agreement that does not receive the consent of all Partners, the General Partner shall deliver a copy of such amendment to all Partners that did not consent to such amendment.

Section 13.2    Procedures for Meetings and Actions of the Partners.

(a)    No meetings of the Limited Partners are required to be held. Meetings of the Partners may be called only by the General Partner. The call of any meeting by the General Partner shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners entitled to act at the meeting not less than ten days nor more than 90 days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting, in each case, by telephone or video conference call. Unless approval by a different number or proportion of the Partners is required by this Agreement, the affirmative vote of a Majority in Interest of the Limited Partners shall be sufficient to approve any proposal at a meeting of the Partners. Whenever the consent of any Partners is permitted or required under this Agreement, such consent may be given at a meeting of Partners or in accordance with the procedure prescribed in Section 13.2(b).

(b)    Any action requiring the consent of any Partner or a group of Partners pursuant to this Agreement, or that is required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a consent in writing or by electronic transmission setting forth the action so taken or consented to is given by Partners whose affirmative vote would be sufficient to approve such action or provide such consent at a meeting of the Partners. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as the affirmative vote of such Partners at a meeting of the Partners. Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified. For purposes of obtaining a consent in writing or by electronic transmission, the General Partner may require a response within a reasonable specified time, but not less than 15 days of receipt of notice, and failure to respond in such time period shall constitute a consent that is consistent with the General Partner’s recommendation with respect to the proposal. An action shall become effective at such time as requisite consents are received, even if prior to such specified time.

(c)    Each Partner entitled to act at a meeting of Partners may authorize any Person or Persons to act for it by proxy on all matters in which a Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Each proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy (or there is receipt of a proxy authorizing a later date). Every proxy shall be revocable at the pleasure of the Partner executing it, such revocation to be effective upon the Partnership’s receipt of written notice of such revocation from the Partner executing such proxy, unless such proxy states that it is irrevocable and is coupled with an interest.

 

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(d)    The General Partner may set, in advance, a record date for the purpose of determining the Partners (i) entitled to consent to any action, (ii) entitled to receive notice of or vote at any meeting of the Partners or (iii) in order to make a determination of Partners for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of the Partners, not less than ten days, before the date on which the meeting is to be held. If no record date is fixed, the record date for the determination of Partners entitled to notice of or to vote at a meeting of the Partners shall be at the close of business on the day on which the notice of the meeting is sent, and the record date for any other determination of Partners shall be the effective date of such Partner action, distribution or other event. When a determination of the Partners entitled to vote at any meeting of the Partners has been made as provided in this section, such determination shall apply to any adjournment thereof.

(e)    Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate in its sole and absolute discretion. Without limitation, meetings of Partners may be conducted in the same manner as meetings of PubCo’s stockholders and may be held at the same time as, and as part of, the meetings of PubCo’s stockholders.

ARTICLE XIV

EXCHANGE RIGHTS

Section 14.1    Exchanges (Generally). Upon an Exchange by any Limited Partner of Common Units for Class A Shares or Class B Shares pursuant to the Exchange Agreement (including in connection with a Direct Exchange), as of the effective date of such Exchange, the Partnership shall comply with the applicable provisions of the Exchange Agreement.

Section 14.2    Lock-Up Periods (Exchanges). Common Units subject to a Lock-Up Period may not be Exchanged (including by way of a Direct Exchange), and in no event shall the Partnership or PubCo effect an Exchange (including a Direct Exchange) of such Common Units, unless and until the expiration of the applicable Lock-Up Period.

Section 14.3    Subject to Exchange Agreement. To the extent of any conflict between this Article XIV and the Exchange Agreement, the terms of the Exchange Agreement shall control and prevail.

ARTICLE XV

MISCELLANEOUS

Section 15.1    Partnership Counsel. THE PARTNERSHIP, THE GENERAL PARTNER, THE ORIGINAL LIMITED PARTNERS AND EACH OF THEIR RESPECTIVE SUBSIDIARIES AND AFFILIATES MAY BE REPRESENTED BY THE SAME COUNSEL (COUNSEL THAT REPRESENTS THE PARTNERSHIP, “PARTNERSHIP COUNSEL”). THE ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS WHO PERFORM SERVICES FOR THE PARTNERSHIP MAY ALSO PERFORM SERVICES FOR THE GENERAL PARTNER, THE ORIGINAL LIMITED PARTNERS AND EACH OF THEIR RESPECTIVE

 

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SUBSIDIARIES AND AFFILIATES. THE GENERAL PARTNER MAY, WITHOUT THE CONSENT OF THE LIMITED PARTNERS, EXECUTE ON BEHALF OF THE PARTNERSHIP ANY CONSENT TO THE REPRESENTATION OF THE PARTNERSHIP THAT COUNSEL MAY REQUEST PURSUANT TO THE NEW YORK RULES OF PROFESSIONAL CONDUCT OR SIMILAR RULES IN ANY OTHER JURISDICTION. EACH PARTNER ACKNOWLEDGES THAT PARTNERSHIP COUNSEL DOES NOT REPRESENT ANY LIMITED PARTNER IN ITS CAPACITY AS SUCH IN THE ABSENCE OF A CLEAR AND EXPLICIT WRITTEN AGREEMENT TO SUCH EFFECT BETWEEN SUCH LIMITED PARTNER AND PARTNERSHIP COUNSEL (AND THEN ONLY TO THE EXTENT SPECIALLY SET FORTH IN SUCH AGREEMENT), AND THAT IN ABSENCE OF ANY SUCH AGREEMENT PARTNERSHIP COUNSEL SHALL OWE NO DUTIES TO EACH LIMITED PARTNER. EACH LIMITED PARTNER FURTHER ACKNOWLEDGES THAT, WHETHER OR NOT PARTNERSHIP COUNSEL HAS IN THE PAST REPRESENTED OR IS CURRENTLY REPRESENTING SUCH LIMITED PARTNER WITH RESPECT TO OTHER MATTERS, PARTNERSHIP COUNSEL HAS NOT REPRESENTED THE INTERESTS OF ANY LIMITED PARTNER IN THE PREPARATION AND/OR NEGOTIATION OF THIS AGREEMENT.

Section 15.2    Appointment of General Partner as Attorney-in-Fact.

(a)    Each Limited Partner, including each Additional Limited Partner and Substituted Limited Partner that are Limited Partners, irrevocably makes, constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices the following documents as may be necessary or appropriate to carry out the provisions of this Agreement in accordance with its terms:

(i)    All certificates and other instruments and all amendments thereto, which the General Partner deems appropriate to form, qualify, continue or otherwise operate the Partnership as a limited partnership (or other entity in which the Partners will have limited liability comparable to that provided in the Act), in the jurisdictions in which the Partnership may conduct business or in which such formation, qualification or continuation is, in the opinion of the General Partner, necessary or desirable to protect the limited liability of the Partners, including all fictitious or assumed name certificates required or permitted (in light of the Partnership’s activities) to be filed on behalf of the Partnership in accordance with the terms of this Agreement.

(ii)    This Agreement and all amendments to this Agreement adopted in accordance with the terms of this Agreement, and all instruments which the General Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of this Agreement.

(iii)    All conveyances of Partnership assets, and other instruments which the General Partner reasonably deems necessary in order to complete a dissolution and termination of the Partnership pursuant to this Agreement.

 

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(b)    The appointment by all Limited Partners of the General Partner as attorney-in-fact shall be deemed to be a power coupled with an interest, in recognition of the fact that each of the Limited Partners and Assignees under this Agreement will be relying upon the power of the General Partner to act as contemplated by this Agreement in any filing and other action by it on behalf of the Partnership, shall survive the Incapacity of any Person giving such power, and the Transfer or assignment of all or any portion of such Person’s Partnership Interest, and shall not be affected by the subsequent Incapacity of the principal. In the event of the assignment by a Limited Partner of all of its Partnership Interest, the foregoing power of attorney of an assignor Limited Partner shall survive such assignment only until such time as the Assignee shall have been admitted to the Partnership as a Substituted Limited Partner and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.

Section 15.3    Governing Law; Waiver of Jury Trial; Jurisdiction. The Law of the State of Delaware shall govern (a) all Proceedings, claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice of Law or conflict of Law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the parties to this Agreement submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the Proceeding shall be heard and determined in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 15.3, however, shall affect the right of any party to this Agreement to serve legal process in any other manner permitted by Law or at equity. Each party to this Agreement agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity.

Section 15.4    Accounting and Fiscal Year. Subject to Code Section 448, the books of the Partnership shall be kept on such method of accounting for tax and financial reporting purposes as may be determined by the General Partner. The fiscal year of the Partnership (the “Fiscal Year”) shall be the calendar year, or, in the case of the first and last Fiscal Years of the Partnership, the fraction thereof commencing on the Effective Date or ending on the date on which the winding-up of the Partnership is completed, as the case may be, unless otherwise determined by the General Partner and permitted under the Code.

 

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Section 15.5    Entire Agreement. This Agreement, the Holdings LPA, the Tax Receivables Agreement, the Investor Rights Agreement, the Exchange Agreement and the BCA (as applicable) constitutes the entire agreement between the parties to this Agreement pertaining to the subject matter of this Agreement, and fully supersede any and all prior or contemporaneous agreements or understandings between the parties to this Agreement pertaining to the subject matter of this Agreement, including the Original Agreement.

Section 15.6    Further Assurances. Each of the parties to this Agreement does covenant and agree on behalf of itself, its successors, and its assigns, without further consideration, to use commercially reasonable efforts to prepare, execute, acknowledge, file, record, publish, and deliver such other instruments, documents and statements, and to take such other action as may be required by Law or reasonably necessary to effectively carry out the purposes of this Agreement.

Section 15.7    Notices. Any notice, consent, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next business day, (b) one business day following sending by reputable overnight express courier (charges prepaid) or (c) three days following mailing by certified or registered mail, postage prepaid and return receipt requested to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 15.7):

(a)    if to the Partnership or the General Partner, to Blue Owl Capital Inc. 399 Park Avenue 38th Floor New York, NY 10022; Attention: Neena Reddy, General Counsel and Secretary; Phone: (212) 651-4702; Email: neena@owlrock.com;

(b)    or to such other address as the Partnership may from time to time specify by notice to the Partners; and

(c)    if to any Limited Partner, to such Limited Partner at the address set forth in the records of the Partnership.

Section 15.8    Construction. The parties to this Agreement and their respective counsel have reviewed and negotiated this Agreement as the joint agreement and understanding of the parties to this Agreement, and the language used in this Agreement shall be deemed to be the language chosen by the parties to this Agreement to express their mutual intent, and no rule of strict construction shall be applied against any Person.

Section 15.9    Binding Effect. Except as otherwise expressly provided in this Agreement, this Agreement shall be binding on and inure to the benefit of the Partners, their heirs, executors, administrators, successors and all other Persons hereafter holding, having or receiving an interest in the Partnership, whether as Assignees, Substituted Limited Partners or otherwise.

Section 15.10    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable Law in any respect

 

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by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

Section 15.11    Confidentiality. A Limited Partner’s rights to access or receive any information about the Partnership or its business are conditioned on such Limited Partner’s willingness and ability to assure that the Partnership information will be used solely by such Limited Partner for purposes reasonably related to such Limited Partner’s interest as a Limited Partner, and that, to such Limited Partner’s knowledge, such Partnership information will not become publicly available as a result of such Limited Partner’s rights to access or receive such Partnership information. Each Limited Partner acknowledges that the Partnership creates and will be in possession of confidential information, the improper use or disclosure of which could have a material adverse effect upon the Partnership and its Subsidiaries. Each Limited Partner further acknowledges and agrees that certain Partnership information may constitute a valuable trade secret (as defined by Law) of the Partnership and agrees to maintain any Partnership information provided to it in the strictest confidence. Accordingly, without limiting the generality of the foregoing:

(a)    Notwithstanding Article VIII, the General Partner shall have the right to keep confidential from the Limited Partners (and their respective agents and attorneys) for such period of time as the General Partner deems reasonable, any information: (i) that the General Partner believes to be in the nature of trade secrets (on advice of counsel); (ii) the General Partner believes would jeopardize or waive privilege or work product doctrine; or (iii) which the General Partner (or its Affiliates, employees, officers, directors, members, partners or personnel) is required by Law or by agreement with a third party to keep confidential. The General Partner shall make available to a Limited Partner, upon reasonable request, information required by such Limited Partner to comply with applicable Laws, rules and regulations, as well as any requests from any federal or state regulatory body having jurisdiction over such Limited Partner (as determined in such Limited Partner’s sole discretion); however, in no event shall the General Partner be required to disclose to any Limited Partner the identity of, or any account details relating to, any other Partner unless it is required to do so by Law applicable to it, as determined by a court of competent jurisdiction.

(b)    Except as permitted by this Section 15.11 or as required by applicable Law, each party to this Agreement agrees that the provisions of this Agreement, all of the information and documents described in Article VIII, all understandings, agreements and other arrangements between and among the parties (or any of them), and all other non-public information received from, or otherwise relating to, the Partnership or any of its Subsidiaries, any Limited Partners, the General Partner and/or their respective Affiliates shall be confidential, and shall not disclose or otherwise release to any other Person (other than another party to this Agreement) such matters, unless required by Law.

(c)    The confidentiality obligations of the parties under this Section 15.11 shall not apply: (i) to the disclosure by (A) the General Partner of information to the Limited Partners,

 

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(B) a Limited Partner of information to the other Limited Partners, or (C) the General Partner or a Limited Partner of information to the General Partner’s or such Limited Partner’s Affiliates, partners, officers, agents, board members, trustees, attorneys, auditors, employees, prospective transferees permitted under this Agreement, financial advisors and other professional advisors (in the case of this clause (C) solely if such prospective transferees and other Persons agree to hold confidential such information substantially in accordance with this Section 15.11 or are otherwise bound by a duty of confidentiality to such Partner) solely on a need-to-know basis, which Persons shall be bound by this Section 15.11 as if they were Limited Partners; (ii) to information already known to the general public at the time of disclosure or that became known prior to such disclosure through no act or omission by any Limited Partner in breach of this Agreement or any Person acting on behalf of any of the foregoing; (iii) to information received from a source, to the knowledge of the receiving party, not bound by a duty of confidentiality to the Partnership or any of its Subsidiaries, any Partner or any Affiliate of any of the foregoing; (iv) to any party to the extent that the disclosure by such party of information otherwise determined to be confidential is required or requested by applicable Law (foreign or domestic) or legal process (including pursuant to an arbitration proceeding), or by any federal, state, local or foreign regulatory body with jurisdiction over such party (including, for the avoidance of doubt, communications initiated by any Limited Partner with any regulatory or supervisory authority regarding good faith concerns about potential violations of law or regulation); (v) to disclosures made in connection with any lawsuit initiated to enforce any rights granted under this Agreement; (vi) disclosure of information to the extent necessary for a Limited Partner to prepare and file tax returns, to respond to any inquiries regarding the same from any taxing authority or to prosecute or defend any action, proceeding or audit by any taxing authority with respect to such returns; or (vii) to the disclosure of confidential information to rating agencies to the extent such disclosure is required by such rating agencies. Prior to disclosing any information under any of the circumstances described in this Section 15.12(c), a party shall, to the extent permitted by applicable Law, notify the General Partner thereof, which notice shall include the basis upon which such party believes the information is required to be disclosed. Notwithstanding the foregoing or anything to the contrary in this Agreement, in no event shall this Section 15.11(c) permit any Limited Partner to disclose the identity of, or any account details relating to, any other Partner without the prior written consent of the General Partner (which may be given or withheld in the General Partner’s sole discretion), unless such disclosure is required under applicable Law.

(d)    To the extent that a Limited Partner is subject to the United States Freedom of Information Act or any similar public disclosure or public records act statutes: (i) such Limited Partner acknowledges the General Partner’s and the Partnership’s position that the information intended to be protected by the provisions of Sections 15.11(a) and 15.11(b) constitutes or includes sensitive financial data, proprietary data, commercial and financial information and/or trade secrets that are being provided to and/or entered into with the Limited Partner with the specific understanding that such documents and information will remain confidential; (ii) the General Partner advises each such Limited Partner that the documents and information intended to be protected by the provisions of Sections 15.11(a) and 15.11(b) would not be supplied to such Limited Partner without an understanding that such documents and information will be held and treated by such Limited Partner as confidential information; and (iii) to the extent that such Limited Partner is nevertheless required to disclose any such confidential information, (A) such Limited Partner shall, unless prohibited by Law, give the General Partner prior notice of any such required disclosure and (B) such Limited Partner shall in any event maintain the confidentiality of the

 

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Partnership’s information (including this Agreement) to at least the same extent as, and in a manner no less favorable to the Partnership and the General Partner than the manner in which, it maintains the confidentiality of comparable information in respect of any other private investment vehicles in which such Limited Partner invests (whether such vehicles are focused on private investments, public investments or otherwise). Notwithstanding the foregoing or anything to the contrary in this Agreement, in no event shall this Section 15.11(d) permit any Limited Partner to disclose the identity of, or any account details relating to, any other Partner, without the prior written consent of the General Partner (which may be given or withheld in the General Partner’s sole discretion) unless such disclosure is required under applicable Law.

(e)    The Partnership and the General Partner shall be entitled to enforce the obligations of each Limited Partner under this Section 15.11 to maintain the confidentiality of the information described in this Agreement. The remedies provided for in this Section 15.11 are in addition to and not in limitation of any other right or remedy of the Partnership or the General Partner provided by Law or equity, this Agreement or any other agreement entered into by or among one or more of the Limited Partners and/or the Partnership. Each Limited Partner expressly acknowledges that the remedy at law for damages resulting from a breach of this Section 15.11 may be inadequate, and that the Partnership and the General Partner shall be entitled to institute an action for specific performance of a Limited Partner’s obligations under this Agreement. The General Partner shall be entitled to consider the different circumstances of different Limited Partners with respect to the restrictions and obligations imposed on Limited Partners under this Agreement to the full extent permitted by Law, and, to the full extent permitted by Law, the General Partner may, in its good faith discretion, waive or modify such restrictions and obligations with respect to a Limited Partner without waiving or modifying such restrictions and obligations for other Limited Partners.

(f)    In addition, to the full extent permitted by Law, each Limited Partner agrees to indemnify the Partnership and each Indemnitee against any claim, demand, controversy, dispute, cost, loss, damage, expense (including reasonable and out-of-pocket attorneys’ fees), judgment and/or liability incurred by or imposed upon the Partnership or any such Indemnitee in connection with any action, suit or proceeding (including any proceeding before any administrative or legislative body or agency) that is finally determined by such governing body, to which the Partnership or any such Indemnitee may be made a party or otherwise involved or with which the Partnership or any such Indemnitee shall be threatened, by reason of the Limited Partner’s obligations (or breach thereof) set forth in this Section 15.11.

(g)    Notwithstanding any other provision of this Agreement (including this Section 15.11), PubCo may disclose any confidential information otherwise subject to the confidentiality obligations of this Section 15.11 to any federal, state, local or foreign regulatory or self-regulatory body or any securities exchange or listing authority to the extent required or requested by such body, exchange or authority, or as necessary and appropriate in connection with filings, or as otherwise required by Law. Notwithstanding the foregoing sentence, in no event shall PubCo disclose the identity of, or any account details relating to, any Limited Partner without the prior written consent of such Limited Partner (which may be given or withheld in such Limited Partner’s sole discretion), unless such disclosure is required under applicable Law.

 

66


(h)    Notwithstanding anything in this Section 15.11 to the contrary, the information rights of NB and the restrictions on disclosure and use related thereto are governed by the terms and provisions of Section 2.5 of the Investor Rights Agreement. To the extent there is any inconsistency or conflict between the terms and provisions of this Section 15.11, solely with respect to NB, and the terms and provisions of Section 2.5 of the Investor Rights Agreement, the terms and provisions of Section 2.5 of the Investor Rights Agreement shall control.

Section 15.12    Consent to Use of Name. Each Partner consents to the use and inclusion of its name in the Partnership’s books and records.

Section 15.13    Consent by Spouse. Each Limited Partner who is a natural person and is married (and not formally separated with an agreed-upon division of assets) and is subject to the community property laws of any state shall deliver a duly executed Consent by Spouse, in the form prescribed in Exhibit B attached to this Agreement (a “Consent by Spouse”), and at the time of execution of this Agreement. Each such Limited Partner shall also have such Consent by Spouse executed by any spouse married to him or her at any time subsequent thereto while such natural person is a Limited Partner. Each Limited Partner agrees and acknowledges that compliance with the requirements of this Section 15.13 by each other Limited Partner constitutes an essential part of the consideration for his or her execution of this Agreement.

Section 15.14    Counterparts. This Agreement may be executed in any number of multiple counterparts, each of which shall be deemed to be an original copy, and all of which shall constitute one agreement, binding on all parties to this Agreement.

Section 15.15    Survival. The provisions of Sections 6.5, 6.6, 9.3, 9.4, 15.1, 15.2, 15.3, 15.5, 15.6, 15.7, 15.8, 15.10, 15.11, 15.12 and 15.13 (and this Section 15.15) (and any other provisions in this Agreement necessary for the effectiveness of the foregoing sections) shall survive the termination of the Partnership and/or the termination of this Agreement.

Section 15.16    Anti-Money Laundering Representations and Undertakings. Each Partner acknowledges that it has read the representations and undertakings contained on Exhibit C attached to this Agreement and confirms they are true and correct.

Section 15.17    Relationship to Blue Owl Holdings.

(a)    The General Partner shall cause the Partnership to fulfill its obligations, covenants and agreements set forth in the Holdings LPA.

(b)    Notwithstanding anything to the contrary in this Agreement, upon the earlier of (i) Blue Owl Holdings ceasing to be an Affiliate of the Partnership and (ii) the dissolution, winding up or termination of Blue Owl Holdings, the General Partner shall have the right and authority (with the consent of the NB Partner Representative and the Original Limited Partner Representative) to amend this Agreement (including Section 3.4) to remove all references to Blue Owl Holdings, Holdings GP Units, Holdings Units and the Holdings LPA, and/or to otherwise reasonably reflect the relationship between the Partnership and Blue Owl Holdings (if any).

Section 15.18    Distributions in Kind by NB Partners. The provisions of Section 3.16(b) of the Investor Rights Agreement are incorporated herein mutatis-mutandis, except that references in such Section to “NB Aggregators” and “Registrable Securities” shall instead refer to “NB Partners” and “Common Units.”

[Intentionally left blank; signature pages follow.]

 

67


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

 

BLUE OWL CAPITAL GP LLC

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer
BLUE OWL CAPITAL INC.

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP


BLUE OWL BLOCKER MERGER SUB 1 LLC
By: Blue Owl Capital GP LLC
Its Sole Member

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer
BLUE OWL BLOCKER MERGER SUB 2 LLC
By: Blue Owl Capital GP LLC
Its Sole Member

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer
BLUE OWL BLOCKER MERGER SUB 3 LLC
By: Blue Owl Capital GP LLC
Its Sole Member

/s/ Tom Wasserman

Name: Tom Wasserman
Title:   Chief Executive Officer

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP


OWL ROCK CAPITAL FEEDER LLC

By: Owl Rock Capital Partners LP

its Managing Member

By: Owl Rock Capital Partner (GP) LLC,

its General Partner

/s/ Alan Kirshenbaum

Name: Alan Kirshenbaum
Title:   Chief Operating Officer and
            Chief Financial Officer
DIAMOND CAPITAL SLP LP

By NB DYAL CAPITAL SLP GP LLC,

its general partner

/s/ Heather P. Zuckerman

Name: Heather P. Zuckerman
Title: Authorized Signatory

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP


NBSH BLUE INVESTMENTS, LLC

/s/ Heather P. Zuckerman

Name: Heather P. Zuckerman
Title: Authorized Signatory
NEUBERGER BERMAN GROUP LLC

/s/ Heather P. Zuckerman

Name: Heather P. Zuckerman
Title: Chief of Staff

NEUBERGER BERMAN GROUP LLP, in its

capacity as the NB PARTNER REPRESENTATIVE

/s/ Heather P. Zuckerman

Name: Heather P. Zuckerman
Title: Chief of Staff

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP


CLASS A MEMBER

(in the case of any Electing Partner that is not a Blocker Representative)

– OR –

BLOCKER REPRESENTATIVE

(in the case of any Blocker making a Blocker Election):

 

 

 

 

 

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP


ACCEPTED AND AGREED:

BLUE OWL CAPITAL HOLDINGS LP

/s/ Tom Wasserman                        

Name: Tom Wasserman

Title:   Chief Executive Officer

Signature Page to Amended and Restated Limited Partnership Agreement of Blue Owl Capital Carry LP


SCHEDULE I: OWNERSHIP

(as of the Closing Date)

[ON FILE WITH THE COMPANY]

 

Schedule I


SCHEDULE II: PROTECTED PARTNERS

[ON FILE WITH THE COMPANY]

 

Schedule II


EXHIBIT A: CAPITAL CONTRIBUTIONS

[ON FILE WITH THE COMPANY]

 

Schedule I


EXHIBIT B: CONSENT BY SPOUSE

I acknowledge that I have read the Amended and Restated Agreement of Limited Partnership, effective as of [●] (as may be amended, restated, amended and restated, modified or otherwise supplemented or waived from time to time, the “Partnership Agreement”) of Blue Owl Capital Carry LP (the “Partnership”) and that I know its contents. I am aware that by its provisions, my spouse agrees to sell, convert, dispose of, or otherwise transfer his or her interest in the Partnership, including any property or other interest that I have or acquire therein, under certain circumstances. I consent to such sale, conversion, disposition or other transfer; and approve of the provisions of the Partnership Agreement and any action hereafter taken by my spouse thereunder with respect to his or her interest, and I agree to be bound thereby.

I further agree that in the event of my death or a dissolution of marriage or legal separation, my spouse shall have the absolute right to have my interest, if any, in the Partnership set apart to him or her, whether through a will, a trust, a property settlement agreement or by decree of court, or otherwise, and that if he or she be required by the terms of such will, trust, settlement or decree, or otherwise, to compensate me for said interest, that the price shall be an amount equal to: (i) the then-current balance of the Capital Account relating to said interest; multiplied by (ii) my percentage of ownership in such interest (all without regard to the effect of any vesting provisions in the Partnership Agreement related thereto).

This consent, including its existence, validity, construction, and operating effect, and the rights of each of the parties to this Consent by Spouse, shall be governed by and construed in accordance with the laws of the [    ]* without regard to otherwise governing principles of choice of law or conflicts of law.

Dated:                                                     

NAME:                                                   

 

*

Insert jurisdiction of residence of Partner and Spouse.

 

B-1


EXHIBIT C: ANTI-MONEY LAUNDERING REPRESENTATIONS AND UNDERTAKINGS

Each Partner makes the following representations, warranties and covenants as of the Effective Date, and for so long as each such Partner holds any Partnership Interest thereafter:

(a)    The monies used to fund the Partner’s acquisition of an interest in the Partnership, and the monies that have been or will be used to make Capital Contributions, have not been, and will not in any case be, derived from or related to any activity that would be illegal in any Relevant Jurisdiction (“Illegal Activity”). In addition, the proceeds from the Partner’s investment in the Partnership will not be used to finance any Illegal Activities. To the best of the Partner’s knowledge, no contribution or payment, in and of itself, by any Partner to the Partnership will directly or indirectly cause the Partnership or its Affiliates to be in violation of applicable anti-money laundering, terrorist financing, or sanctions laws, regulations or government guidance, including but not limited to the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and the Bank Secrecy Act’s implementing regulations (collectively, “BSA laws and regulations”); the economic and financial sanctions and trade embargoes administered or enforced by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) or the U.S. Department of State; or applicable anti-money laundering and terrorist financing laws, regulations or government guidance or the economic and financial sanctions and trade embargoes of any Relevant Jurisdiction. “Relevant Jurisdiction” means the United States or the Partner’s place of organization or principal place of business.

(b)    Neither a Partner nor any person or entity controlled by or controlling the Partner, excluding such persons or entities that are shareholders of the Partner or any person or entity controlled by or controlling the Partner in the event the Partner or any person or entity controlled by or controlling the Partner is a public company traded on a recognized securities exchange:

(i)    appears on sanctions-related list of designated persons maintained by OFAC (including the Specially Designated Nationals and Blocked Persons List maintained by OFAC), the U.S. Department of State, or any governmental authority of any Relevant Jurisdiction, each as amended from time to time;

(ii)    is a person or entity resident in or, if an entity, organized or chartered under the laws of a jurisdiction that (a) has been designated by the Secretary of the United States Department of the Treasury as warranting special measures due to money laundering concerns or (b) has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the United States is a member, if the United States has concurred in such designation, (c) any territory subject to comprehensive sanctions administered and enforced by OFAC, the U.S. Department of State, or any governmental authority of any Relevant Jurisdiction (at the time of this Agreement, Cuba, Iran, Syria, North Korea, and Crimea);

(iii)    is otherwise subject to economic or financial sanctions or trade embargoes administered and enforced by OFAC, the U.S. Department of State, or any governmental authority of any Relevant Jurisdiction;

 

C-1


(iv)    unless disclosed to the Partnership, is a Senior Foreign Political Figure, which is defined as a current or former senior official in the executive, legislative, administrative, military, or judicial branches of a foreign government (whether elected or not); a senior official of a major foreign political party; a senior executive of a foreign government-owned commercial enterprise; a corporation, business, or other entity that has been formed by, or for the benefit of, such an individual; or the parent, sibling, spouse, child, in-law or close associate of such an individual; or

(v)    is a foreign shell bank, defined as a foreign bank that does not have a physical presence in any country unless the foreign bank is an Affiliate of a depository institution, credit union, or foreign bank that maintains a physical presence in the United States or a foreign country and is subject to the supervision by a banking authority in the country regulating the affiliated depository institution, credit union or foreign bank.

(c)    The Partners understand that the Partnership (and/or its Affiliates) may be subject to certain legal requirements that require verification of the source of funds paid to the Partnership by the Partners, as well as the Partners’ identity and that of any associated persons. The Partners agree that it will provide such materials as may from time to time be reasonably requested by the Partnership or the General Partner for such purposes. In addition, the Partners agree to provide to the Partnership and its Affiliates any additional information regarding itself and any person or entity controlled by or controlling the Partner, excluding such persons or entities that are shareholders of the Partner or any person or entity controlled by or controlling the Partner in the event the Partner or any person or entity controlled by or controlling the Partner is a public company traded on a recognized securities exchange, that may be deemed necessary to ensure compliance with all applicable laws concerning money laundering and terrorist financing, as well as trade and economic sanctions. The Partnership may take such actions as the General Partner may reasonably determine if this information is not provided or on the basis of information that is provided.

(d)    All evidence of identity and related information concerning each Partner and any person controlling or controlled by the Partner, excluding such persons or entities that are shareholders of the Partner or any person or entity controlled by or controlling the Partner in the event the Partner or any person or entity controlled by or controlling the Partner is a public company traded on a recognized securities exchange, that is provided to the Partnership is and will be true, accurate and complete. Each Partner will promptly notify the Partnership and the General Partner if any of the representations in this section cease to be true and accurate.

(e)    The General Partner may segregate and/or redeem a Partner’s investment in the Partnership, prohibit future investments or Capital Contributions, or take other appropriate action if the General Partner determines that the continued participation of any Partner could materially adversely affect the Partnership or if the action is necessary in order for the Partnership to comply with applicable laws, regulations, orders, directives or special measures. The Partners further understand that the Partnership and the General Partner (and any of their Affiliates) may release confidential information about each such Partner and, if applicable, any of its direct or indirect beneficial owners, to proper authorities if, in their sole and absolute discretion, they determine that such release is in the interest of any of the foregoing in light of applicable laws and regulations. The General Partner will take such steps as it determines are necessary to comply with applicable laws, regulations, orders, directives and special measures.

 

C-2

Exhibit 10.6

BLUE OWL CAPITAL, INC.

2021 OMNIBUS EQUITY INCENTIVE PLAN

Section 1.    Purpose of Plan.

The purpose of the Blue Owl Capital, Inc. 2021 Omnibus Equity Incentive Plan (the “Plan”) is to provide an additional incentive to selected employees, directors and other service providers of the Company and its Subsidiaries or Affiliates (as hereinafter defined), whose contributions are integral to the growth and success of the Company’s business, in order to strengthen the commitment of such persons to the Company and its Subsidiaries and Affiliates, motivate such persons to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated persons whose efforts shall result in the long-term growth and profitability of the Company. In furtherance of these objectives, the Plan provides for the grant of Options, Share Appreciation Rights, Awards of Restricted Shares, Restricted Share Units, Performance Shares, unrestricted Shares, Blue Owl Operating Group Awards, Other Share-Based Awards and any combination of the foregoing.

Section 2.    Definitions.

For purposes of the Plan, the following terms shall be defined as set forth below:

(a)    “Administrator” means the Board or, if and to the extent the Board does not administer the Plan, the Committee, in accordance with Section 3 hereof.

(b)    “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person in question. As used herein, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, no private fund (or similar vehicle) or business development company, nor any other account, fund, vehicle or other client advised or sub-advised by any Person or any such Person’s Affiliate or any portfolio company thereof shall be deemed to be an Affiliate of such Person (it being agreed that this Plan shall not apply to, or be binding on, any Persons described in this sentence).

(c)    “Applicable Law” means any applicable law, including, without limitation: (i) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; and (ii) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign.

(d)    “Award” means, individually or collectively, any Option, Share Appreciation Right, Restricted Share, Restricted Share Unit, Performance Share, unrestricted Share, Blue Owl Operating Group Award or Other Share-Based Award granted under the Plan.

(e)    “Award Agreement” means any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.

(f)    A “Beneficial Owner” of a security is a Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security. The term “Beneficially Own” shall have a correlative meaning.

 

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(g)    “Blue Owl Carry” means Blue Owl Capital Carry LP, a Delaware limited partnership.

(h)    “Blue Owl Carry LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Carry, dated as of May 19, 2021 (as the same may be amended or otherwise modified from time to time).

(i)    “Blue Owl Carry Unit” means a “Common Unit” as defined in the Blue Owl Carry LPA.

(j)    “Blue Owl Common Unit Award” means an award described in Section 10(a).

(k)    “Blue Owl Holdings” means Blue Owl Capital Holdings LP, a Delaware limited partnership.

(l)    “Blue Owl Holdings LPA” means the Amended and Restated Limited Partnership Agreement of Blue Owl Holdings, dated as of May 19, 2021 (as the same may be amended or otherwise modified from time to time).

(m)    “Blue Owl Holdings Unit” means a “Common Unit” as defined in the Blue Owl Holdings LPA.

(n)    “Blue Owl Incentive Unit” means an award described in Section 10(b).

(o)    “Blue Owl LPAs” means the Blue Owl Carry LPA and the Blue Owl Holdings LPA, collectively.

(p)    “Blue Owl Operating Group Award” means any award described in Article X.

(q)    “Blue Owl Operating Group Unit” means one Blue Owl Carry Unit and one Blue Owl Holdings Unit, collectively.

(r)    “Blue Owl Partnerships” means Blue Owl Carry and Blue Owl Holdings, collectively.

(s)    “Board” means the Board of Directors of the Company or any committee or subcommittee thereof that has been delegated, to the fullest extent permitted by law, the full power and authority of the Board of Directors of the Company.

(t)     Cause” means, unless otherwise provided in an applicable Award Agreement: (i) “cause” as defined in the employment agreement, offer letter, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award; and (ii) in the case where there is no such agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award (or where there is such an agreement in effect, but it does not define “cause” (or words of like import)), the Participant’s Termination of Service due to any of the Participant’s: (1) indictment for, conviction of, or plea of guilty or no contest or similar plea with respect to, any felony or any crime of moral turpitude; (2) intentional violation of law in connection with any transaction involving the purchase, sale, loan or other disposition

 

2


of, or the rendering of investment advice with respect to, any security, futures or forward contract, insurance contract, debt instrument, financial instrument or currency; (3) dishonesty, bad faith, gross negligence, willful misconduct, fraud or willful or reckless disregard of duties in connection with the performance of any services on behalf of the Company or any of its Affiliates or the Participant’s engagement in conduct which is injurious to the Company or any of its Affiliates, monetarily, reputationally or otherwise; (4) intentional failure to comply with any reasonable directive by a supervisor in connection with the performance of any services on behalf of the Company or any of its Affiliates; (5) breach of any material provision of an Award Agreement or any other agreement between the Participant and the Company or any of its Affiliates; (6) material violation of any written policies adopted by the Company or any of its Affiliates governing the conduct of persons performing services on behalf of the Company or such Affiliate or the Participant’s non-adherence to policies and procedures or other applicable compliance manuals of the Company or any of its Affiliates; (7) taking of, or omission to take, any action that has caused or substantially contributed to a significant deterioration in the business or reputation of the Company or any of its Affiliates, or that was otherwise materially disruptive to the business or affairs of the Company or any of its Affiliates; (8) failure to devote a significant portion of time to performing services as an agent of the Company without the prior written consent of the Company, other than by reason of the Participant’s death or Disability; (9) obtainment of any improper personal benefit as a result of a breach by the Participant of any covenant or agreement (including, without limitation, a breach by the Participant of the Company’s code of ethics or any Company policy); or (10) suspension or other disciplinary action against the Participant by an applicable regulatory authority; provided, however, that if a failure, breach, violation or action or omission described in any of clauses (4) to (8) is capable of being cured, the Participant has failed to do so after being given notice and a reasonable opportunity to cure, a determined in the Board’s discretion. As used in this definition, “material” means “more than de minimis.”

(u)    “Change in Capitalization” means any (i) merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event (including, without limitation, a Change in Control), (ii) distribution (whether in the form of cash, shares or other property), share split or reverse share split, (iii) combination or exchange of shares, (iv) other change in structure or (v) declaration of a distribution, which the Administrator determines, in its sole discretion, affects the Shares such that an adjustment pursuant to Section 5 hereof is appropriate.

(v)    “Change in Control” shall have the meaning given in an Award Agreement or, if none, shall be deemed to occur if, following the Effective Date, and excluding the transaction pursuant to which the Company becomes a separate public corporation for the first time:

(i)    a Person (other than an Excluded Person) acquires, in any single transaction or series of related transactions, more than fifty percent (50%) of the combined voting power of the outstanding securities of the Company, other than pursuant to a transaction described in clause (iv) below that is not considered to be a Change in Control pursuant to such clause (iv); or

(ii)    Continuing Directors shall, at any time, cease to constitute a majority of the Board; or

(iii)    the consummation of the sale or other disposition, in any single transaction or series of related transactions, of assets representing more than seventy-five percent (75%) of all of the assets of the Company and its Subsidiaries (on a consolidated basis); or

(iv)    there is consummated a merger, consolidation or share exchange of the Company with any other entity, or the issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct

 

3


or indirect Subsidiary), other than (A) a merger, consolidation or share exchange which would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation, or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share exchange, in substantially the same proportions as immediately before the relevant transaction, or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after the Effective Date pursuant to express authorization by the Board) representing fifty percent (50%) or more of either the then-outstanding Shares or the combined voting power of the Company’s then-outstanding voting securities.

For purposes of this Plan, (I) the term “Continuing Director” means a member of the Board who either (x) was a member of the Board on the Effective Date or (y) subsequently became a Director of the Board and whose election, or nomination for election, was approved by a vote of at least two-thirds (2/3) of the Continuing Director then in office (excluding, however, a Director whose election, or nomination for election, occurred as the result of an actual or threatened proxy contest); (II) the term “Excluded Person” means (w) the Company or its Subsidiaries, (x) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or its Subsidiaries, including, for the avoidance of doubt, one or more employee stock ownership plans, (y) an underwriter temporarily holding securities pursuant to an offering of such securities or (z) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of Shares; and (III) with respect to any Blue Owl Operating Group Award, the term “Company” shall be replaced with “Blue Owl Partnerships.”

Notwithstanding any other provision of this Plan to the contrary, with respect to an Award that constitutes “nonqualified deferred compensation” subject to the provisions of Code Section 409A, an event shall not be considered to be a Change of Control under this Plan for purposes of triggering payment of such Award, unless such event is also a “change in ownership,” a “change in 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 Code Section 409A, and the Administrator may include such amended definition in the Award Agreement issued with respect to such Award.

(w)    “Class A Shares” means the shares of Class A common stock of the Company and, in each case, any equity securities issued or issuable in exchange for or with respect to such Class A Shares (i) by way of a distribution, split or combination of shares or (ii) in connection with a reclassification, recapitalization, merger, consolidation or other reorganization. For the avoidance of doubt, “Class A Shares” shall not include Blue Owl Operating Group Units.

(x)    “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

(y)    “Committee” means the Board or any committee or subcommittee of the Board that is delegated the power and authority of the Board or committee, as applicable, to administer the Plan from time to time. Unless otherwise determined by the Board, the Committee shall be composed entirely of individuals who meet the qualifications of a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and any other qualifications required by the applicable stock exchange on which

 

4


the Class A Shares are listed. If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee. Except as otherwise provided in the Governing Documents, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or by unanimous written consent of the Committee’s members.

(z)    “Company” means Blue Owl Capital Inc., a Delaware corporation, and any successors thereto or any continuation thereof.

(aa)    “Company Group” means the Company and each of its direct and indirect Subsidiaries.

(bb)    “Consultant” means a consultant or advisor who is a natural person, engaged to render bona fide services to the Company or any Subsidiary or Affiliate thereof.

(cc)    “Disabled” shall have the meaning provided under Section 409A(a)(2)(C) of the Code.

(dd)    “Eligible Recipient” means an employee, director, partner, Consultant or any other individual engaged by the Company or any Subsidiary or Affiliate thereof, who has been selected as an eligible participant by the Administrator (and in respect of whom any reference to “employment” shall be interpreted as including a reference to the Eligible Recipient’s engagement by the Company or any Subsidiary or Affiliate thereof, in any capacity).

(ee)    “Exchange Act” means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder.

(ff)    “Exercise Price” means the per share price (if any) at which a holder of an Award granted hereunder may purchase the Shares issuable upon exercise of such Award.

(gg)    “Fair Market Value” means, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder with respect to the Class A Shares, as of the applicable date and except as provided below, (i) the last sales price reported for the Class A Shares on the principal national securities exchange in the United States on which it is then traded, or (ii) if the Class A Shares not traded, listed or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market Value in whatever manner it considers appropriate, taking into account the requirements of Section 409A of the Code. For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Administrator or, if not a day on which the applicable market is open, the next day that it is open.

(hh)    “Fund” means any pooled investment vehicle or similar entity sponsored or managed (directly or indirectly) by the Company or any of its Subsidiaries.

(ii)    “Governing Documents” means the certificate of incorporation and bylaws of the Company, as in effect from time to time.

(jj)    “Investment” means any investment (or similar term describing the results of the deployment of capital), as defined in the governing document of any Fund managed (directly or indirectly) by the Company or any of its Subsidiaries.

 

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(kk)    “Investor Rights Agreement” means that certain Investor Rights Agreement, by and among the Company and the other parties specified therein.

(ll)    “ISO” means any Option intended to be, and designated as, an “incentive stock option” within the meaning of Code Section 422.

(mm)     Non-Employee Director means a director or member of the Board who is not an employee of the Company.

(nn)    “NQSO” means any Option that is not designated, or does not qualify, as an ISO.

(oo)    “Option” means an option to purchase Class A Shares granted pursuant to Section 7 hereof.

(pp)    “Other Share-Based Awards” means a right or other interest granted to a Participant under the Plan that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, including, but not limited to, restricted units, distribution equivalent rights or performance units, each of which may be subject to the attainment of performance goals or a period of continued employment or other terms or conditions as permitted under the Plan.

(qq)    “Participant” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority in Section 3 below, to receive an Award, and upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.

(rr)    “Performance Shares” means Class A Shares that are subject to restrictions based upon the attainment of specified performance objectives granted pursuant to Section 9 below.

(ss)    “Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, limited partnership, estate, trust, business association, organization, governmental entity or other entity.

(tt)    “Plan” means this Blue Owl Capital, Inc. 2021 Omnibus Equity Incentive Plan, as the same may be amended, modified or supplemented from time to time.

(uu)    “Portfolio Company” means any Person in which any Fund owns an Investment.

(vv)    “Restricted Share Units” means the right to receive Class A Shares at the end of a specified period, or upon specified dates, granted pursuant to Section 9 below.

(ww)    “Restricted Shares” means Class A Shares subject to certain restrictions granted pursuant to Section 9 below.

(xx)    “SEC” means the United States Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

(yy)    “Section 409A” means Section 409A of the Code and U.S. Department of Treasury regulations and interpretative guidance issued thereunder.

(zz)    “Securities Act” means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder.

 

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(aaa)    “Shares” means the Company’s Class A Shares (as specified in the applicable Award Agreement) reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, consolidation or other reorganization) security or Blue Owl Operating Group Units, as applicable. For the avoidance of doubt, one Blue Owl Carry Unit and one Blue Owl Holdings Unit shall collectively constitute one “Share” for purposes hereof.

(bbb)    “Share Appreciation Right” means the right pursuant to an Award granted under Section 8 below to receive an amount equal to the excess, if any, of (i) the aggregate Fair Market Value, as of the date such Share Appreciation Right or portion thereof is surrendered, of the Class A Shares covered by such right or such portion thereof, over (ii) the aggregate Exercise Price of such right or such portion thereof.

(ccc)    “Subsidiary” means, with respect to any Person, as of any date of determination, any other Person as to which such Person owns or otherwise controls, directly or indirectly, more than 50% of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest of such Person.

(ddd)    “Ten Percent Shareholder” means a Person owning stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company Group.

(eee)    “Termination of Service means the termination of the applicable Participant’s employment with, or performance of services for, the Company and its Affiliates. Unless otherwise determined by the Administrator, (i) if a Participant’s employment with the Company and its Affiliates terminates, but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity, such change in status shall not be deemed a Termination of Service with the Company and its Affiliates; and (ii) a Participant employed by, or performing services for, an Affiliate that ceases to be an Affiliate shall be deemed to have incurred a Termination of Service, provided the Participant does not immediately thereafter become an employee or Consultant of the Company or another Affiliate. Notwithstanding the foregoing provisions of this definition, with respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, a Participant shall not be considered to have experienced a Termination of Service, unless the Participant has experienced a “separation from service” within the meaning of Section 409A of the Code.

Section 3.    Administration.

(a)    The Plan shall be administered by the Administrator and shall be administered in accordance with the requirements of, to the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3”).

(b)    Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board and subject to the terms of the Investor Rights Agreement, shall have the power and authority, without limitation, to:

(1)    select those Eligible Recipients who shall be Participants;

(2)    determine whether and to what extent Options, Share Appreciation Rights, Awards of Restricted Shares, Restricted Share Units, Performance Shares, unrestricted Shares, Blue Owl Operating Group Awards, Other Share-Based Awards or a combination of any of the foregoing are to be granted hereunder to Participants, provided that only employees of the Company Group may receive grants of ISOs;

 

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(3)    determine the number of Shares to be covered by each Award granted hereunder;

(4)    determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all Awards and Award Agreements (including, but not limited to, (i) the restrictions applicable to Awards and the conditions under which restrictions applicable to such Awards shall lapse, (ii) the performance goals and periods applicable to Awards of Performance Shares, (iii) the Exercise Price, if any, of Awards, (iv) the vesting schedule (and, for unit Awards, Share issuance schedule) applicable to Awards, (v) the terms upon which Awards may be forfeited, (vi) the number of Shares subject to Awards, (vii) any amendments or modifications to the terms and conditions of outstanding Awards, including, but not limited to, reducing the Exercise Price of such Awards, extending the exercise period of such Awards and accelerating the vesting schedule of such Awards and (viii) any “black out” periods applicable to the exercise of Awards);

(5)    determine the fair market value with respect to any Award;

(6)    determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting a Termination of Service for purposes of Options granted under the Plan;

(7)    adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable;

(8)    construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and authorities either specifically granted under the Plan or necessary and advisable in the administration of the Plan;

(9)    delegate its authority, in whole or in part, under this Section 3 to two or more individuals (who may or may not be members of the Board), subject to the requirements of applicable law or any stock exchange on which the Shares are listed;

(10)    determine whether to require a Participant, as a condition of receiving any Award, to not sell or otherwise dispose of Shares acquired pursuant to the exercise or vesting of an Award for a period of time as determined by the Administrator, in its sole discretion, following the date of the acquisition of such Award or Shares; and

(11)    determine at any time whether, to what extent and under what circumstances and by what method or methods (including in the form of cash or other property) Awards may be settled by the Company or any of its Subsidiaries or Affiliates. In the event of such determination, references to the Company shall be deemed to be references to the applicable Subsidiary or Affiliate thereof for purposes of the Plan, as appropriate.

(c)    All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including the Company and the Participants. No member of the Board or the Committee, nor any officer or employee of the Company or any Subsidiary or Affiliate thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission, determination or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company and of any Subsidiary or Affiliate thereof acting on their behalf shall, to the maximum extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, omission, determination or interpretation.

 

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Section 4.    Shares Reserved for Issuance Under the Plan.

(a)    Subject to Section 5 hereof, the aggregate number of Shares that may be issued or delivered with respect to Awards granted under the Plan shall not exceed 101,230,522 Shares, which number is subject to adjustment as provided herein (the “Share Limit”), all of which may be issued pursuant to the exercise of ISOs. Any Blue Owl Operating Group Units granted under the Plan shall, without duplication, (i) reduce the number of Shares that may be issued or used for reference purposes or with respect to which Awards may be granted under the Plan on a one-for-one basis (i.e., each Blue Owl Operating Group Unit shall be treated as one Class A Share), and (ii) shall be delivered, if applicable, in accordance with the Blue Owl LPAs. Any Award under the Plan settled in cash shall not be counted against the Share Limit. Notwithstanding anything to the contrary contained herein, Shares subject to an Award under the Plan shall again be made available for issuance or delivery under the Plan if such Shares are (A) tendered in payment of an Option, (B) delivered or withheld by the Company to satisfy any tax withholding obligation or (C) subject to an Award that expires or is canceled, forfeited, surrendered, exchanged or terminated without issuance of the full number of Shares to which the Award related, provided that Shares recredited to the Share Limit pursuant to clauses (A) and (B) may not be issued pursuant to ISOs. Shares issued under the Plan may be, in whole or in part, authorized but unissued Shares, or Shares that shall have been or may be reacquired by the Company or an Affiliate or Subsidiary thereof in the open market, in private transactions or otherwise.

(b)    The maximum number of Shares subject to Awards granted during a single fiscal year to any Non-Employee Director, taken together with any cash fees paid to that Non-Employee Director during the fiscal year and the value of awards granted to the Non-Employee Director under any other equity compensation plan of the Company during the fiscal year, shall not exceed a total value of $400,000 (calculating the value of any Awards based on the grant date fair value for financial reporting purposes).

Section 5.    Equitable Adjustments.

(a)    In the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made, in each case, in the manner to be determined by the Administrator, in its sole discretion, in (i) the aggregate number of Shares reserved for issuance under the Plan and the maximum number of Shares that may be subject to Awards granted to any Participant in any calendar or fiscal year, (ii) the kind, number and Exercise Price subject to outstanding Options and Share Appreciation Rights granted under the Plan, (iii) the kind, number and purchase price of Shares subject to outstanding Awards of Restricted Shares, Restricted Share Units, Performance Shares, unrestricted Shares, Blue Owl Operating Group Awards or Other Share-Based Awards granted under the Plan, and (iv) annual Award limits or other value determinations or the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or vesting criteria with respect thereto) applicable to Shares subject to outstanding Awards; provided, however, that any fractional Shares resulting from the adjustment shall be eliminated. Equitable substitutions or adjustments shall also be made if the Administrator determines in its sole discretion that such adjustment is necessary in order to avoid an adverse impact on the value of any outstanding Award granted hereunder.

(b)    Without limiting the generality of the foregoing, in connection with a Change in Capitalization (other than a Change in Control), the Administrator shall take such action as is necessary to adjust the outstanding Awards to reflect the Change in Capitalization, including, but not limited to, (i) the substitution or assumption of Awards (or awards of an acquiring company), acceleration of the exercisability of, lapse of restrictions on or termination of Awards, or a period of time (which shall not be

 

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required to be more than ten (10) days) for Participants to exercise outstanding Awards prior to the occurrence of such event (and any such Award not so exercised shall terminate upon the occurrence of such event), and (ii) subject to any limitations or reductions as may be necessary to comply with Section 409A of the Code, cancellation of any one or more outstanding Awards and payment to the holders of such Awards that are vested as of such cancellation (including, without limitation, any Awards that would vest as a result of the occurrence of such event, but for such cancellation, or for which vesting is accelerated by the Administrator in connection with such event) an amount equal to the value of such Awards, if any, as determined by the Administrator (which value, if applicable, may be based upon the price per Share received or to be received by other shareholders of the Company in such event), including, without limitation, in the case of an outstanding Option or Share Appreciation Right, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the Shares subject to such Option or Share Appreciation Right over the aggregate Exercise Price of such Option or Share Appreciation Right (it being understood that, in such event, any Option or Share Appreciation Right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a Share subject thereto may be canceled and terminated without any payment or consideration therefor), or, in the case of Restricted Shares, Restricted Share Units, Blue Owl Operating Group Awards or Other Share-Based Awards that are not vested as of such cancellation, a cash payment or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Restricted Share, Restricted Share Units, Blue Owl Operating Group Awards or Other Share-Based Awards prior to cancellation, or the underlying Shares in respect thereof. Payments pursuant to the foregoing Section 5(b)(ii) shall be made in cash or, in the sole discretion of the Administrator, in the form of such other consideration necessary for a Participant to receive property, cash or securities (or combination thereof) as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction, the holder of the number of Shares covered by the Award at such time (less any applicable Exercise Price). Notwithstanding the foregoing, no such adjustment shall cause any Award that is subject to Section 409A to fail to comply with the requirements of such section, provided that under no circumstances shall the Company, the Administrator or any Affiliate or agent thereof have any liability to any Participant or associated Person as a result of any such failure. In connection with a Change in Control, the Administrator may take any of the foregoing actions. The Administrator’s determinations pursuant to this Section 5 shall be final, binding and conclusive.

(c)    Notwithstanding the foregoing, no adjustment may be authorized pursuant to this Section 5 with respect to ISOs to the extent that such authority would cause this Plan to violate Code Section 422(b), unless otherwise determined by the Administrator.

Section 6.    Eligibility.

The Administrator may, from time to time, select from among all Eligible Recipients those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall be consistent with the requirements of the Plan. No Eligible Recipient shall have any right to be granted an Award pursuant to the Plan.

Section 7.    Options.

(a)    General. Each Participant who is granted an Option shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its discretion, which Award Agreement shall set forth, among other things, whether the Option is an ISO (which is intended to meet the requirements of Code Section 422) or an NQSO (which does not meet and is not intended to meet the requirements of Code Section 422), the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option granted thereunder. In all other respects, the terms of any Option intended to qualify as an ISO must comply with the provisions of Code Section 422.

 

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If an Option that is intended to be an ISO fails to qualify as such, for any reason, the Option shall automatically be treated as an NQSO to the extent of such failure. The provisions of each Option need not be the same with respect to each Participant. More than one Option may be granted to the same Participant and be outstanding concurrently hereunder. Options granted under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement.

(b)    Exercise Price. The Exercise Price of Class A Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant, provided that the Exercise Price of any Option shall not be less than 100% of the Fair Market Value of the Class A Shares on the date of grant unless the Participant is not subject to Section 409A or the Option is otherwise designed to be compliant with Section 409A, provided, further, that the Exercise Price of any ISO granted to a Ten Percent Shareholder shall not be less than 110% of the Fair Market Value of the Class A Shares on the date of grant.

(c)    Option Term. The maximum term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten (10) years after the date such Option is granted, and, in the case of an ISO granted to a Ten Percent Shareholder, no more than five (5) years after the date such ISO is granted. Each Option’s term is subject to earlier expiration pursuant to the applicable provisions in the Plan and the Award Agreement. Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate.

(d)    Exercisability. Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of pre-established corporate performance goals, as shall be determined by the Administrator in the applicable Award Agreement. The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion. Notwithstanding anything to the contrary contained herein, an Option may not be exercised for a fraction of a Class A Share.

(e)    Method of Exercise. Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number of Class A Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Class A Shares so purchased in cash or its equivalent, as determined by the Administrator. As determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Class A Shares otherwise issuable upon exercise), (ii) in the form of unrestricted Class A Shares already owned by the Participant, which, (A) in the case of unrestricted Class A Shares acquired upon exercise of an Option, have been held by the Participant for such period as may be established from time to time by the Administrator in order to avoid adverse accounting treatment under applicable accounting principles, and (B) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Class A Shares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Administrator and permitted by applicable law or (iv) any combination of the foregoing.

(f)    Rights as Shareholder. A Participant shall have no rights to distributions or any other rights of a shareholder with respect to the Class A Shares subject to an Option until the Participant has given written notice of exercise, has paid in full for such Class A Shares, has satisfied the requirements of Section 14 hereof and, if requested, has given the representation described in paragraph (b) of Section 15 hereof or in the applicable Award Agreement.

 

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(g)    Transfers of Options. Except as otherwise determined by the Administrator, no Option granted under the Plan shall be transferable by a Participant other than by will or by the laws of descent and distribution. Unless otherwise determined by the Administrator in accordance with the provisions of the immediately preceding sentence, an Option may be exercised, during the lifetime of the Participant, only by the Participant or, during the period the Participant is under a legal disability, by the Participant’s guardian or legal representative. The Administrator may, in its sole discretion, subject to applicable law, permit the gratuitous transfer during a Participant’s lifetime of an Option, (i) by gift to a member of the Participant’s immediate family, (ii) by transfer by instrument to a trust for the benefit of such immediate family members or (iii) to a partnership or limited liability company in which such family members are the only partners or members; provided, however, that, in addition to such other terms and conditions as the Administrator may determine in connection with any such transfer, no transferee may further assign, sell, hypothecate or otherwise transfer the transferred Option, in whole or in part, other than by will or by operation of the laws of descent and distribution. Each permitted transferee shall agree to be bound by the provisions of this Plan and the applicable Award Agreement.

(h)    ISO Limitations. To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Class A Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year, under this Plan and/or any other stock option plan of the Company or any Subsidiary, exceeds $100,000, such Options shall be treated as NQSOs. In addition, if a Participant does not remain employed by the Company Group or its Affiliates at all times from the time the Option is granted until three (3) months prior to the date of exercise (or such other period as required by applicable law), such Option shall be treated as an NQSO. Should any provision of this Plan not be necessary in order for an Option to qualify as an ISO, or should any additional provisions be required, the Administrator may amend this Plan (and, for the avoidance of doubt, any Award Agreement) accordingly, without the necessity of obtaining the approval of the shareholders of the Company.

(i)    Termination of Service.

(1)    Unless the applicable Award Agreement provides otherwise, in the event that the Participant experiences a Termination of Service for any reason other than (i) by the Company for Cause or (ii) due to the Participant’s death or Disability, (A) Options granted to such Participant, to the extent that they are exercisable at the time of such termination, shall remain exercisable until the date that is ninety (90) days after such Termination of Service, on which date they shall expire; and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. The ninety (90)-day period described in this Section 7(i)(1) shall be extended to one (1) year after the date of such termination in the event of the Participant’s death during such ninety (90)-day period. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

(2)    Unless the applicable Award Agreement provides otherwise, in the event that the Participant experiences a Termination of Service due to the Participant’s death or Disability, (A) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is one (1) year after such termination, on which date they shall expire; and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

 

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(3)    In the event that the Participant experiences a Termination of Service by the Company for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination.

Section 8.    Share Appreciation Rights.

(a)    General. Share Appreciation Rights may be granted either alone (“Standalone Rights”) or in conjunction with all or part of any other Award granted under the Plan (“Tandem Rights”). Tandem Rights may be granted either at or after the time of the grant of such Award. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Share Appreciation Rights shall be made, the number of Class A Shares to be awarded, the price per Class A Share and all other conditions of Share Appreciation Rights. Notwithstanding the foregoing, no Tandem Right may be granted for more Class A Shares than are subject to the Award to which it relates and (unless the Participant is not subject to Section 409A or the Share Appreciation Right is otherwise designed to be compliant with Section 409A) any Share Appreciation Right must be granted with an Exercise Price not less than the Fair Market Value of such Class A Shares on the date of grant. The provisions of Share Appreciation Rights need not be the same with respect to each Participant. Share Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement.

(b)    Awards. The prospective recipient of a Share Appreciation Right shall not have any rights with respect to such Award, unless and until such recipient has executed an Award Agreement and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Participants who are granted Share Appreciation Rights shall have no rights as shareholders of the Company with respect to the grant or exercise of such rights.

(c)    Exercisability.

(1)    Share Appreciation Rights that are Standalone Rights (“Standalone Share Appreciation Rights”) shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator at or after grant.

(2)    Share Appreciation Rights that are Tandem Rights (“Tandem Share Appreciation Rights”) shall be exercisable only at such time or times and to the extent that the Awards to which they relate shall be exercisable in accordance with the provisions of Section 7 above and this Section 8.

(d)    Payment Upon Exercise.

(1)    Upon the exercise of a Standalone Share Appreciation Right, the Participant shall be entitled to receive up to, but not more than, that number of Class A Shares equal in value to the excess of the Fair Market Value of a Class A Share as of the date of exercise over the price per Class A Share specified in the Standalone Share Appreciation Right, multiplied by the number of Class A Shares in respect of which the Standalone Share Appreciation Right is being exercised, with the Administrator having the right to determine the form of payment.

(2)    A Tandem Right may be exercised by a Participant by surrendering the applicable portion of the related Award. Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Class A Shares equal in value to the

 

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excess of the Fair Market Value of a Class A Share as of the date of exercise over the Exercise Price specified for the related Award (which price shall be no less than 100% of the Fair Market Value of such Class A Share on the date of grant unless the Participant is not subject to Section 409A or the Tandem Right is otherwise designed to be compliant with Section 409A) multiplied by the number of Class A Shares in respect of which the Tandem Share Appreciation Right is being exercised, with the Administrator having the right to determine the form of payment. Awards that have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Tandem Rights have been so exercised.

(3)    Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Share Appreciation Right in cash (or in any combination of Class A Shares and cash).

(e)    Non-Transferability.

(1)    Standalone Share Appreciation Rights shall be transferable only when and to the extent that an Option would be transferable under Section 7 of the Plan.

(2)    Tandem Share Appreciation Rights shall be transferable only when and to the extent that the underlying Award would be transferable, if it were an Option, under Section 7 of the Plan.

(f)    Termination of Service.

(1)    In the event a Participant who has been granted one or more Standalone Share Appreciation Rights incurs a Termination of Service, such rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator at or after grant.

(2)    In the event a Participant who has been granted one or more Tandem Share Appreciation Rights incurs a Termination of Service, such rights shall be exercisable at such time or times and subject to such terms and conditions as set forth in the Award Agreement for the Award to which the Tandem Share Appreciation Right relates.

(g)    Term.

(1)    The term of each Standalone Share Appreciation Right shall be fixed by the Administrator, but no Standalone Share Appreciation Right shall be exercisable more than ten (10) years after the date such right is granted.

(2)    The term of each Tandem Share Appreciation Right shall be the term of the Award to which it relates, but no Tandem Share Appreciation Right shall be exercisable more than ten (10) years after the date such right is granted.

Section 9.    Restricted Shares, Restricted Share Units and Performance Shares.

(a)    General. Awards of Restricted Shares, Restricted Share Units or Performance Shares may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, Awards of Restricted Shares, Restricted Share Units or Performance Shares shall be made; the number of Class A Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares, Restricted

 

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Share Units or Performance Shares; the “Restricted Period” (as defined in the applicable Award Agreement), if any, applicable to Awards of Restricted Shares or Restricted Share Units; the performance objectives or criteria applicable to Awards of Restricted Shares, Restricted Share Units or Performance Shares; and all other conditions of Awards of Restricted Shares, Restricted Share Units and Performance Shares. The Administrator may also condition the grant of the award of Restricted Shares, Restricted Share Units or Performance Shares upon the exercise of Options, or upon such other criteria as the Administrator may determine, in its sole discretion. Unless the applicable Award Agreement provides otherwise, if the restrictions, performance objectives and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Shares, Restricted Share Units or Performance Shares. The provisions of Awards of Restricted Shares, Restricted Share Units or Performance Shares need not be the same with respect to each Participant.

(b)    Awards and Certificates. The prospective recipient of Awards of Restricted Shares, Restricted Share Units or Performance Shares shall not have any rights with respect to any such Award, unless and until such recipient has executed an Award Agreement and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Except as otherwise provided below in this Section 9, (i) each Participant who is granted an Award of Restricted Shares or Performance Shares shall be issued a certificate in respect of such Restricted Shares or Performance Shares (or such other appropriate evidence of ownership, including book entry, as determined by the Administrator), and (ii) such certificate (or other evidence of ownership) shall be registered in the name of the Participant, and, if appropriate, shall bear a legend referring to the terms, conditions and restrictions applicable to any such Award.

(1)    The Company may require that any certificates evidencing Restricted Shares or Performance Shares granted hereunder be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Award of Restricted Shares or Performance Shares, the Participant shall have delivered a power of attorney, endorsed in blank, relating to the Class A Shares covered by such Award.

(2)    With respect to Awards of Restricted Share Units, at such times as are indicated in the applicable Award Agreement, certificates (or such other appropriate evidence of ownership, including book entry, as determined by the Administrator) in respect of such Restricted Share Units shall be delivered to the Participant, or his legal representative, in a number equal to the number of Class A Shares the Participant is entitled to be issued pursuant to the terms of the Award Agreement.

(c)    Restrictions and Conditions. Awards of Restricted Shares, Restricted Share Units and Performance Shares granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or thereafter:

(1)    Subject to the provisions of the Plan and except as otherwise provided in the Award Agreement governing any such Award, during such period as may be set by the Administrator commencing on the date of grant, the Participant shall not be permitted to sell, transfer, pledge or assign Restricted Shares, Restricted Share Units or Performance Shares awarded under the Plan; provided, however, that the Administrator may, in its sole discretion, provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain performance related goals, the Participant’s Termination of Service and the Participant’s death or Disability.

 

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(2)    Except as otherwise provided in the applicable Award Agreement, the Participant shall generally not have the rights of a shareholder with respect to Class A Shares subject to Awards of Restricted Share Units until such Class A Shares are issued in accordance with the terms of the Award Agreement. Except as may be provided in the applicable Award Agreement, the Participant shall generally have the rights of a shareholder of the Company with respect to Restricted Shares or Performance Shares; provided, however, that unless otherwise provided in the Award Agreement, the Participant shall not have rights to any distributions declared on unvested Restricted Shares or Performance Shares.

(3)    The rights of a Participant, upon termination during the Restricted Period of employment or service as a director or Consultant to the Company, or to any Subsidiary or Affiliate thereof, in respect of Awards of Restricted Shares, Restricted Share Units or Performance Shares granted to such Participant, shall be set forth in the Award Agreement or another authorized written instrument and subject to the Plan.

Section 10.    Blue Owl Operating Group Awards.

(a)    Blue Owl Common Unit Awards. Blue Owl Common Unit Awards shall be awards designed as either fully vested or restricted Blue Owl Operating Group Units. The Committee is authorized to grant Blue Owl Common Unit Awards to Eligible Recipients under the terms and conditions determined by the Committee in its discretion, subject to any restrictions on Blue Owl Operating Group Units generally within the Blue Owl LPAs.

(b)    Blue Owl Incentive Units. A Blue Owl Incentive Unit shall be designed as a “profits interest” within the meaning of Internal Revenue Service Revenue Procedures 93-27 and 2001-43. Each Blue Owl Incentive Unit will entitle the holder thereof to receive distributions from the Blue Owl Partnerships in accordance with the terms of the Blue Owl LPAs. The Committee will establish the terms and conditions applicable to the Blue Owl Incentive Units, including vesting or service requirements, subject to any terms or restrictions in the Blue Owl LPAs.

(c)    Blue Owl Operating Group Awards Generally. The Committee is authorized, subject to limitations under applicable law, to grant other types of equity-based, equity-related or cash-based Awards valued in whole or in part by reference to, or otherwise calculated by reference to or based on, Blue Owl Operating Group Units, in such amounts and subject to such terms and conditions as the Committee may determine (which shall be “Blue Owl Operating Group Awards” for purposes hereof). Blue Owl Operating Group Awards may entail the transfer of Class A Shares or Blue Owl Operating Group Units to Award recipients. Blue Owl Operating Group Awards may be in the same form as Awards that are permitted to be granted under the Plan generally with respect to Class A Shares (with the exception of ISOs), with all references to Class A Shares replaced with references to the Blue Owl Operating Group Units and all other definitions modified, if necessary for the context, to reflect the Blue Owl Partnerships rather than the Company. In addition to any Award Agreement governing a Blue Owl Operating Group Award, the Committee may require that a recipient of a Blue Owl Operating Group Award execute additional documentation to become a partner of the Blue Owl Partnerships, subject to the terms and requirements of the Blue Owl LPAs. Blue Owl Incentive Units and Blue Owl Common Unit Awards described above will be deemed to be “Blue Owl Operating Group Awards” for purposes of the Plan. Notwithstanding anything to the contrary within the Plan or in any Award Agreement that governs a Blue Owl Operating Group Award, the terms and conditions of all Blue Owl Operating Group Awards shall be designed to comply with the Blue Owl LPAs, and to the extent that there is any inconsistency with the Blue Owl LPAs within the Plan or the Award Agreement governing any Blue Owl Operating Group Award, the terms of the Blue Owl LPAs (as applicable) shall control.

 

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(d)    Transfers. Notwithstanding anything to the contrary in this Plan, all transfers of Blue Owl Operating Group Units shall also be subject to the restrictions contained in the Blue Owl LPAs (as applicable).

Section 11.    Other Share-Based Awards.

(a)    The Administrator is authorized to grant Awards to Participants in the form of Other Share-Based Awards, as deemed by the Administrator to be consistent with the purposes of the Plan and as evidenced by an Award Agreement, including, but not limited to, Awards of restricted units and unrestricted Shares and Awards that are valued in whole or in part by reference to Shares, including Awards valued by reference to book value, fair value or performance of an Affiliate or Subsidiary, or other interests, including distribution equivalent rights and performance units of any of the foregoing. Other Share-Based Awards may be granted as free-standing Awards or in tandem with other Awards under the Plan. The Administrator shall determine the terms and conditions of such Awards, consistent with the terms of the Plan, at the date of grant or thereafter, including any performance goals and performance periods. Shares or other securities or property delivered pursuant to an Award in the nature of a purchase right granted under this Section 10 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, Shares, other Awards, notes or other property, as the Administrator shall determine, subject to any required corporate action. The Administrator may, in its sole discretion, settle such Other Share-Based Awards for cash or other property as appropriate. The provisions of Other Share-Based Awards need not be the same with respect to each Participant.

(b)    Subject to the provisions of the Plan and except as otherwise provided in the Award Agreement governing any such Award, during such period as may be set by the Administrator commencing on the date of grant, the Participant shall not be permitted to sell, transfer, pledge or assign any Other Share-Based Awards awarded under the Plan; provided, however, that the Administrator may, in its sole discretion, provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain performance-related goals, the Participant’s Termination of Service or the Participant’s death or Disability.

Section 12.    Amendment and Termination; Clawback.

Subject to the terms of the Investor Rights Agreement, the Board may amend, alter or terminate the Plan, but, subject to Sections 5 and 18 of the Plan, no amendment, alteration or termination shall be made that would materially impair the rights of a Participant under any Award theretofore granted without the Participant’s consent. Unless the Board determines otherwise, the Board shall obtain approval of the Company’s shareholders for any amendment that would require such approval in order to satisfy the requirements of any rules of the stock exchange on which the Class A Shares are listed or other law, in each case, to the extent applicable. The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Sections 5 and 18, no such amendment shall materially impair the rights of any Participant without his or her consent. Notwithstanding the foregoing, a Participant’s consent shall not be required to the extent the Administrator, in its sole discretion, determines that an amendment, alteration or termination of the Plan or an Award is required or advisable (a) in order for the Company, the Plan or the Award to satisfy any law or regulation, to meet the requirements of any accounting standard or to correct an administrative error, or to reflect or give effect to a change in law, or (b) to ensure compliance with the Exchange Act or another applicable law, or any rules or regulations promulgated thereunder. Any Awards granted pursuant to this Plan, and any Shares issued or cash paid pursuant to an Award, shall be subject to any recoupment or clawback policy that is adopted by, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to, the Company from time to time.

 

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Section 13.    Unfunded Status of Plan.

The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.

Section 14.    Withholding Taxes.

Each Participant shall, no later than the date as of which the value of an Award first becomes subject to tax for U.S. federal, state or local income or other tax purposes and/or for any non-U.S. tax purposes, pay to the Company or any of its Subsidiaries or Affiliates (as determined by the Administrator), or make arrangements satisfactory to the Administrator regarding payment of, any taxes of any kind required by law to be withheld or accounted for by the Company or any of its Subsidiaries or Affiliates with respect to the Award. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company or its Subsidiaries or Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. Whenever cash is to be paid pursuant to an Award granted hereunder, the Company or its Subsidiaries or Affiliates shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements (or local taxes required to be accounted for by the Company or its Subsidiaries or Affiliates) related thereto. Whenever Shares are to be delivered pursuant to an Award or taxes otherwise become due with respect to an Award, the Company shall have the right to require the Participant to remit to the Company or its Subsidiaries or Affiliates in cash an amount sufficient to satisfy any federal, state and local withholding tax requirements (or local taxes required to be accounted for by the Company or its Subsidiaries or Affiliates) related thereto. In addition, the Company or its Subsidiaries or Affiliates, may elect to satisfy the foregoing requirement by withholding from delivery Shares having a value equal to not more than the amount of tax permitted to be withheld or paid without triggering liability accounting or other adverse accounting treatment under applicable accounting standards (or, with the approval of the Administrator, (i) such method may be elected by a Participant who is not subject to Section 17, or (ii) a Participant may deliver already owned unrestricted Shares). Such shares shall be valued at their fair market value on the date that the amount of tax to be withheld or paid is determined. Solely for this purpose, fractional share amounts shall be settled in cash. Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an Award. The Company, its Subsidiaries or Affiliates may also use any other method or procedure of obtaining the necessary payment or proceeds, as permitted by law, to satisfy their withholding or other tax obligations with respect to any Option or other Award and the Participant shall comply with any reasonable requests made by the Company, its Subsidiaries or Affiliates to complete and execute documentation necessary to implement such method or procedure.

Section 15.    General Provisions.

(a)    Compliance with Law. Shares shall not be issued pursuant to the exercise of any Award granted hereunder unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant rules and provisions of law, including, without limitation, the Securities Act, the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the requirements of any stock exchange upon which the Shares may then be listed, and the requirements for the treatment intended by the Company under applicable accounting rules, and shall be further subject to the approval of the Administrator with respect to such compliance. The Company shall be under no obligation to register the Shares pursuant to the Securities Act or any other federal or state securities laws. Any disposition of Shares received pursuant to an Award shall be subject to compliance with the foregoing rules, requirements and laws, as determined by the Administrator.

 

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(b)    Legending and Other Considerations. The Administrator may require each Person acquiring Shares to represent to and agree with the Company in writing that such Person is acquiring the Shares without a view to distribution thereof. The certificates for such Shares may include any legend that the Administrator deems appropriate to reflect any restrictions on transfer which the Administrator determines, in its sole discretion, arise under applicable securities laws or are otherwise applicable. All certificates for Shares delivered under the Plan shall be subject to such stop-transfer orders and other restrictions as the Administrator may deem advisable under the rules, regulations, and other requirements of the SEC, any stock exchange upon which the Shares may then be listed, and any applicable federal or state securities law, and the Administrator may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.

(c)    Lock-Up Agreements. The Administrator may require a Participant receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to enter into a shareholder agreement or “lock-up” agreement in such form as the Board or the Committee shall determine is necessary or desirable to further the Company’s interests.

(d)    No Right to Continued Service. The adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with the Company or any Subsidiary or Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or any Subsidiary or Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time.

(e)    Governing Law; Venue; Waiver of Jury Trial. The Plan and all Awards shall be governed by, interpreted under, and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choices of laws, of the State of Delaware applicable to agreements made and to be performed wholly within the State of Delaware. The agreed venue and method for resolving disputes relating to an Award Agreement or the Plan shall be as set forth in the applicable Award Agreement, or in the absence of such provision, as applies to disputes relating to or arising out of the Participant’s service with the Company and its Affiliates, including the termination thereof. Unless otherwise specifically provided by explicit reference to the jury waiver provision in this Section 15(e) in an applicable Award Agreement, each Participant, TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT THE PARTICIPANT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THE PLAN OR ANY AWARD AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREES THAT ANY OF THE COMPANY OR ANY OF ITS AFFILIATES OR THE PARTICIPANT MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE COMPANY AND ITS AFFILIATES, ON THE ONE HAND, AND THE PARTICIPANT, ON THE OTHER HAND, IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THE PLAN OR ANY AWARD AGREEMENT, AND THAT ANY SUCH PROCEEDING WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

(f)    Certain Changes in Employment Status. Subject to the terms of this Plan, unless otherwise specifically provided in the applicable Award Agreement or otherwise, an Award (including an Option) shall be affected, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status of a Participant, in the sole discretion of the Administrator. The Administrator shall follow applicable written policies (if any) of the Company, its Subsidiaries or Affiliates, including such rules, guidelines and practices as may be adopted pursuant to Section 3 hereof, as they may be in effect from time to time, with regard to such matters.

 

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(g)    Notices. All notices, requests, consents and other communications with respect to the Plan or any Award Agreement to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by facsimile (provided a copy is thereafter promptly delivered as provided in this Section 15(g)) or by a nationally recognized overnight courier. If to the Company, such notice shall be sent to Blue Owl Capital Inc., Attention: General Counsel, 399 Park Avenue, 38th Floor New York, NY 10022. If to a Participant, such notice shall be delivered by hand or sent to the last home address of such Participant on file with the Company.

(h)    Regional Variation. The Administrator reserves the right to authorize the establishment of, and to grant Awards pursuant to, annexes, sub-plans or other supplementary documentation as the Administrator deems appropriate in light of local laws, rules and customs.

(i)    Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to any Award by electronic means or to request the Participant’s consent to participate in the Plan by electronic means. Each Participant, by accepting an Award, thereby consents to receive such documents by electronic delivery and, if requested, to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

(j)    Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 17 of the Exchange Act so that Participants subject to Section 17 will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 17 of the Exchange Act, and will not be subject to short-swing liability under Section 17 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 15(j), such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.

(k)    Severability. If any provision of the Plan or an Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.

(l)    Headings. The headings in the Plan and any Award Agreement are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof or thereof.

Section 16.    Effective Date.

The Plan shall become effective on May 19, 2021 (the “Effective Date”), which is the date of its adoption by the Board, subject to the approval of the plan by the shareholders of the Company in accordance with the requirements of the laws of the State of Delaware.

Section 17.    Term of Plan.

No Award shall be granted pursuant to the Plan on or after the tenth (10th) anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date. Subject to the terms of the Investor Rights Agreement, the Board may suspend or terminate the Plan at any earlier date pursuant to Section 12 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

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Section 18.    Section 409A.

To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that, following the Effective Date, the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section. The Company shall have no liability to any Eligible Recipient, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Administrator or the Company, and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Eligible Recipients and not with the Company. Notwithstanding anything to the contrary in this Plan or any Award Agreement, if a Participant is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment or the provision of any benefit that is considered “nonqualified deferred compensation” under Section 409A of the Code payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Participant and (ii) the date of the Participant’s death, solely to the extent required under Section 409A of the Code. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 18 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Participant in a lump sum, and all remaining payments and benefits due under this Plan or any Award Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

Section 19.    Set-Off.

Unless otherwise expressly provided in an agreement between a Participant and the Company or an Affiliate, to the extent permitted by Section 409A, the Company or any Affiliate, as applicable, shall have the right to offset against any amount owed to a Participant any amounts that are due by such Participant to the Company or any Affiliate but unpaid.

Section 20.    Data Privacy.

(a)    For Participants who reside in the European Union or are associated with an Affiliate established in the European Union, the Company processes personal data in association with such Participants’ participation in the Plan as described in the European Union privacy notice in effect under the Plan from time to time, which notice is available upon request from the Company’s human capital department.

 

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(b)    For other Participants, and to the extent permitted by law, as a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 20 by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan. This paragraph (b) applies to such other Participants. The Company and its Affiliates may hold certain personal information about a Participant, including, but not limited to, the Participant’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), any shares of stock held in the Company or any of its Affiliates, details of all Awards, in each case, for the purpose of implementing, managing and administering the Plan and Awards (the “Data”). To the extent permitted by law, the Company and its Affiliates may transfer the Data among themselves as necessary for the purpose of implementation, administration and management of a Participant’s participation in the Plan, and the Company and its Affiliates may each further transfer the Data to any third parties assisting the Company and its Affiliates in the implementation, administration and management of the Plan. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. To the extent permitted by law, through acceptance of an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or any of its Affiliates or the Participant may elect to deposit any Shares. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human capital representative. The Company may cancel the Participant’s ability to participate in the Plan and, in the Administrator’s sole discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws his or her consents as described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participants may contact the Company’s human capital department.

[END OF PLAN]

 

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Exhibit 10.7

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”), dated as of May 19, 2021 (the “Effective Date”), among Blue Owl Capital Inc., a Delaware corporation, Blue Owl Capital Holdings LP, a Delaware limited partnership (“Blue Owl Holdings”), Blue Owl Capital Carry LP, a Delaware limited partnership (“Blue Owl Carry”), Blue Owl Capital GP LLC, a Delaware limited liability company and wholly owned subsidiary of PubCo (and any successor General Partner of Blue Owl Holdings and Blue Owl Carry designated in accordance with the applicable A&R Blue Owl Operating Agreements (as defined below), the “General Partner”)), and each Blue Owl Limited Partner (as defined below) from time to time party to this Agreement.

WHEREAS, the parties to this Agreement desire to provide for the exchange of certain Blue Owl Units (as defined below), and corresponding surrender for cancellation of Class C Shares (as defined below) or Class D Shares (as defined below), as applicable, for Class A Shares (as defined below) or Class B Shares (as defined below), on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, the right to exchange Blue Owl Units set forth in Section 2.1 below, once exercised, represents a several, and not a joint and several, obligation of the Blue Owl Operating Group Entities (as defined below), on a pro rata basis, and no Blue Owl Operating Group Entity shall have any obligation or right to acquire Blue Owl Units issued by another Blue Owl Operating Group Entity.

NOW, THEREFORE, the parties to this Agreement agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement:

A&R Blue Owl Carry LP Agreement” means the Amended and Restated Limited Partnership Agreement of Blue Owl Carry, dated on or about the Effective Date, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

A&R Blue Owl Holdings LP Agreement” means the Amended and Restated Limited Partnership Agreement of Blue Owl Holdings, dated on or about the Effective Date, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

A&R Blue Owl Operating Agreements” means, collectively, the A&R Blue Owl Holdings LP Agreement and the A&R Blue Owl Carry LP Agreement.

Agreement” has the meaning set forth in the preamble of this Agreement.

 

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Allocation Percentage” means, with respect to each of Blue Owl Holdings and Blue Owl Carry, a percentage equal to the (a) fair market value of the net assets and operations of such entity (together with its consolidated Subsidiaries), as applicable, divided by (b) the aggregate fair market value of the net assets and operations of the Blue Owl Holdings and Blue Owl Carry (together with their respective consolidated Subsidiaries), collectively. For purposes of this definition, “fair market value” shall mean the value that would be obtained in an arms-length transaction between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to buy or sell, respectively, and without regard to the particular circumstances of the buyer or seller, in each case, as reasonably determined by the General Partner in good faith as of the applicable date of determination. As of the Effective Date, the Allocation Percentage of (i) Blue Owl Holdings is 99.92% and (ii) Blue Owl Carry is 0.08%.

Appraiser FMV” means the fair market value of any Class A Share as determined by an independent appraiser mutually agreed upon by the General Partner and the relevant Exchanging Partner, whose determination shall be final and binding for those purposes for which Appraiser FMV is used in this Agreement. Appraiser FMV shall mean the value that would be obtained in an arms-length transaction between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to buy or sell, respectively, and without regard to the particular circumstances of the buyer or seller, and shall be determined without regard to any discounts for minority interest, illiquidity or other discounts. The cost of any independent appraisal in connection with the determination of Appraiser FMV in accordance with this Agreement shall be borne by the Blue Owl Operating Group Entities in accordance with their respective Allocation Percentages.

BCA” means the Business Combination Agreement, dated as of December 23, 2020, by and among PubCo, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP, Neuberger Berman Group LLC, and the other parties thereto, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Block Exchange Notice” has the meaning set forth in Section 2.1(b).

Blue Owl Carry” has the meaning set forth in the preamble of this Agreement.

Blue Owl Carry Common Unit” means a “Common Unit” as defined in, and issued under, the A&R Blue Owl Carry LP Agreement.

Blue Owl Carry GP Unit” means a “GP Unit” as defined in, and issued under, the A&R Blue Owl Carry LP Agreement.

Blue Owl Holdings” has the meaning set forth in the preamble of this Agreement.

Blue Owl Holdings Common Unit” means a “Common Unit” as defined in, and issued under, the A&R Blue Owl Holdings LP Agreement.

Blue Owl Holdings GP Unit” means a “GP Unit” as defined in, and issued under, the A&R Blue Owl Holdings LP Agreement.

 

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Blue Owl Limited Partner” means, subject to the following sentence, each Person that is, as of the date of determination, a limited partner of each of the Blue Owl Operating Group Entities pursuant to the terms of the A&R Blue Owl Operating Agreements (as applicable). Notwithstanding the foregoing, none of PubCo, the General Partner, nor any other direct or indirect subsidiary of PubCo shall be a “Blue Owl Limited Partner” for purposes of this Agreement.

Blue Owl Operating Group Entities” means, collectively, Blue Owl Holdings and Blue Owl Carry.

Blue Owl Unit” means, collectively, one Blue Owl Holdings Common Unit and one Blue Owl Carry Common Unit.

Business Day” has the meaning set forth in the BCA

Cash Exchange Class A Five Day VWAP” means the arithmetic average of the VWAP for each of the five consecutive Trading Days ending on the Trading Day prior to the applicable Exchange Date. By way of example, assuming for purposes of this example that none of the days in the relevant period that are Business Days are not Trading Days, then if the Exchange Date is a Friday, the Cash Exchange Class A Five Day VWAP for such Exchange Date will be the arithmetic average of the VWAP for the five consecutive Trading Day Period beginning on and including the Friday of the previous week and ending on and including the Thursday of the week of such Exchange Date.

Cash Exchange Payment” means, with respect to a particular Exchange for which the Exchange Committee has elected (on behalf of the Blue Owl Operating Group Entities) to make a Cash Exchange Payment in accordance with Section 2.1(d):

(a) if the Class A Shares trade on a National Securities Exchange or automated or electronic quotation system, an amount of cash equal to the product of (x) the number of Class A Shares or Class B Shares (as applicable) that would have been received by the Blue Owl Limited Partner in the Exchange for the portion of the Blue Owl Units subject to the Cash Exchange Election if no Cash Exchange Election had been made and (y) the Cash Exchange Class A Five Day VWAP; or

(b) if the Class A Shares are not then traded on a National Securities Exchange or automated or electronic quotation system, as applicable, an amount of cash equal to the product of (x) the number of Class A Shares or Class B Shares (as applicable) that would have been received by the Blue Owl Limited Partner in the Exchange for the portion of the Blue Owl Units subject to the Cash Exchange Election if no Cash Exchange Election had been made and (y) the Appraiser FMV of one Class A Share.

Class A Share” means a share of “Class A Common Stock” as defined in the PubCo Charter.

Class B Share” means a share of “Class B Common Stock” as defined in the PubCo Charter.

Class C Share” means a share of “Class C Common Stock” as defined in the PubCo Charter.

 

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Class D Share” means a share of “Class D Common Stock” as defined in the PubCo Charter.

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

Direct Exchange” has the meaning set forth in Section 2.1(g).

Exchange” means the exchange by the Blue Owl Operating Group Entities of one or more Blue Owl Units held by a Blue Owl Limited Partner (together with the surrender for cancellation of Class C Shares or Class D Shares held by such Blue Owl Limited Partner, as applicable) for the Exchange Payment in accordance with this Agreement. Any references to an Exchange in this Agreement, the PubCo Charter, any A&R Blue Owl Operating Agreement, the Tax Receivable Agreement, or any other agreement or document that references an “Exchange” as defined in the Exchange Agreement shall, unless specifically provided otherwise herein or therein, include a Direct Exchange or a Block Exchange where appropriate.

Exchange Committee” has the meaning given to such term in the Amended and Restated Limited Liability Company Agreement of the General Partner, dated on or about the Effective Date, together with the Schedules and Exhibits thereto, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Exchange Date” means any Quarterly Exchange Date or any date of a Block Exchange.

Exchange Notice” has the meaning set forth in Section 2.1(c).

Exchange Payment” means, with respect to any Exchange, the Stock Exchange Payment and/or the Cash Exchange Payment, as applicable.

Exchange Rate” means the number of Class A Shares or Class B Shares (as applicable) for which a Blue Owl Unit, together with a Class C Share or Class D Share (as applicable), is entitled to be exchanged in accordance with this Agreement. On the Effective Date, the Exchange Rate shall be 1-for-1, which Exchange Rate shall be subject to modification only as provided in Section 2.8.

Exchange Threshold” has the meaning set forth in Section 2.4(a) of this Agreement.

Exchanged Securities” means, with respect to an Exchange, collectively, (a) the Blue Owl Units being exchanged pursuant to a relevant Exchange Notice, and (b) a number of Class C Shares or Class D Shares (as applicable) being surrendered and cancelled equal to the number of such Blue Owl Units. For the avoidance of doubt, (i) one Blue Owl Unit and (ii) one Class C Share or Class D Share (as applicable) so being exchanged and cancelled shall collectively be an “Exchanged Security.”

Exchanging Partner” means any Blue Owl Limited Partner holding Blue Owl Units that are subject to an Exchange.

General Partner” has the meaning set forth in the preamble of this Agreement.

 

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HSR Act” has the meaning given to such term in the BCA.

Insider Trading Policy” means any insider trading policy of PubCo applicable to directors and executive officers, as such insider trading policy may be adopted, amended, supplemented or restated from time to time, in accordance with the PubCo Charter, the Bylaws of PubCo and the Investor Rights Agreement (as applicable).

Investor Rights Agreement” means the Investor Rights Agreement, dated on or about the Effective Date, by and among PubCo, Blue Owl Holdings, Blue Owl Carry and certain other Persons party thereto, as the same may be amended, modified, supplemented or waived from time to time.

Liens” has the meaning given to such term in the BCA.

Minimum Exchange Amount” means a number of Blue Owl Units held by an Exchanging Partner equal to the lesser of (x) 10,000 Blue Owl Units and (y) all of the Blue Owl Units then held by the applicable Exchanging Partner.

National Securities Exchange” means a securities exchange that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934, as amended.

Partnership Record Date” means the record date established by the General Partner for the purpose of determining the Blue Owl Limited Partners entitled to receive any distribution from a Blue Owl Operating Group Entity, which shall (unless otherwise reasonably determined by the General Partner in good faith) be the same as any record date established by PubCo for a distribution to its stockholders of some or all of its portion of such distribution.

Permitted Transferee” has the meaning set forth in Section 3.1.

Person” has the meaning given to such term in the BCA.

Proceeding” has the meaning given to such term in the BCA.

PubCo” means Blue Owl Capital Inc., a Delaware corporation.

PubCo Charter” means the Amended and Restated Certificate of Incorporation of PubCo, as the same may be amended, restated, modified, supplemented or replaced from time to time.

Quarter” means, unless the context requires otherwise, a fiscal quarter of PubCo.

Quarterly Exchange Date” means, for each Quarter, unless such Quarterly Exchange Date is delayed pursuant to Section 2.2(d), the date that is the latest to occur of: (a) the sixth Business Day after the date on which PubCo makes a public news release of its quarterly earnings for the prior Quarter; (b) the first day of such Quarter on which directors and executive officers of PubCo are permitted to trade under the Insider Trading Policy; or (c) such other date within such Quarter as the General Partner shall determine in its reasonable discretion.

 

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Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Seller Earnout Units” has the meaning given to such term in the BCA.

Stock Exchange Payment” means, with respect to the portion of an Exchange for which (x) a Cash Exchange Notice is not delivered by the Exchange Committee or (y) a Direct Exchange Election Notice electing to effect a Cash Exchange Payment is not delivered by PubCo, a number of Class A Shares or Class B Shares (as applicable) equal to the product of (a) the number of Exchanged Securities so exchanged multiplied by (b) the Exchange Rate. With respect to any Exchanged Security that includes: (i) a Class C Share, the Stock Exchange Payment for such Exchanged Security shall be in the form of Class A Shares; or (ii) a Class D Share, the Stock Exchange Payment for such Exchanged Security shall be in the form of Class B Shares.

Subsidiary” of any Person means any entity (a) of which 50% or more of the outstanding share capital, voting securities or other voting equity interests are owned, directly or indirectly, by such Person, (b) of which such Person is entitled to elect, directly or indirectly, at least 50% of the board of directors (or managers) or similar governing body of such entity or (c) if such entity is a limited partnership or limited liability company, of which such Person or one of its Subsidiaries is a general partner or managing member or has the power to direct the policies, management or affairs. Notwithstanding the foregoing, for purposes of this Agreement, “Subsidiary” shall not include any private fund (or similar vehicle) or a business development company, or any other accounts, funds, vehicles or other client advised or sub-advised by such first Person. For the avoidance of doubt, the “Diamond Funds” and the “Opal Funds” (as each is defined in the BCA) shall not be “Subsidiaries” of Blue Owl Holdings or Blue Owl Carry for purposes of this Agreement.

Tax Receivable Agreement” has the meaning set forth in the BCA.

Trading Day” means a day on which the New York Stock Exchange or such other principal United States securities exchange on which the Class A Shares are listed, quoted or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire day).

Treasury Regulations” means the U.S. Treasury regulations promulgated under the Code.

VWAP” means the volume-weighted average share price of a Class A Share, as displayed on PubCo’s page on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on the applicable trading day.

1.2 Interpretation. In this Agreement and in the Exhibits to this Agreement, except to the extent that the context otherwise requires: (a) the headings are for convenience of reference only and shall not affect the interpretation of this Agreement; (b) defined terms include the plural as well as the singular and vice versa; (c) words importing gender include all genders; (d) a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been or may from time to time be amended, extended, re-enacted or consolidated and to all statutory instruments or orders made under it; (e) any reference to a “day” or a “Business Day” shall mean the whole of such day, being the period of 24 hours running from midnight to midnight;

 

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(f) references to Articles, Sections, subsections, clauses and Exhibits are references to Articles, Sections, subsections, clauses and Exhibits to, this Agreement; (g) the word “or” is not exclusive, and has the meaning represented by the phrase “and/or,” unless the context clearly prohibits that construction; (i) the words “including” and “include” and other words of similar import shall be deemed to be followed by the phrase “without limitation”; (j) the word “extent” in the phrase “to the extent” (or similar phrases) shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; and (k) unless otherwise specified, references to any party to this Agreement or any other document or agreement shall include its successors and permitted assigns.

ARTICLE II

EXCHANGE OF BLUE OWL UNITS

2.1 Exchange Procedures.

(a) On the terms and subject to the provisions of this Agreement, and to the provisions of the A&R Blue Owl Operating Agreements, the Investor Rights Agreement and the PubCo Charter (including any “Lock-Up Period” set forth in any of them), each Blue Owl Limited Partner shall be entitled, on any Quarterly Exchange Date, to surrender Blue Owl Units to the Blue Owl Operating Group Entities in exchange for the delivery by such Blue Owl Operating Group Entities of the Stock Exchange Payment. Any Exchange under this Section 2.1(a) must be with respect to a number of Blue Owl Units at least equal to the Minimum Exchange Amount.

(b) Without limitation of Section 2.1(a), on the terms and subject to the provisions of this Agreement, and to the provisions of the A&R Blue Owl Operating Agreements, the Investor Rights Agreement and the PubCo Charter (including any “Lock-Up Period” set forth in any of them), each Blue Owl Limited Partner shall be entitled, at any time and from time to time from and after the Effective Date, to surrender Blue Owl Units to the Blue Owl Operating Group Entities in exchange for the delivery by such Blue Owl Operating Group Entities of the Stock Exchange Payment so long as the number of Blue Owl Units surrendered by such Blue Owl Limited Partner (and any related persons (within the meaning of Code Sections 267(b) or 707(b)(i)) pursuant to this sentence during any 30 calendar day-period represents, in the aggregate, greater than 2% of total interests in partnership capital or profits in each Blue Owl Operating Group Entity (determined by the General Partner reasonably in good faith, and in a manner consistent with the requirements for a “block transfer” within the meaning of Treasury Regulations Section 1.7704-1(e)(2)). An Exchange consummated pursuant to this Section 2.1(b) is referred to in this Agreement as a “Block Exchange”. For the avoidance of doubt, a Block Exchange shall not be subject to the Exchange Notice and other requirements of Section 2.1(c) or Section 2.1(f), below, but instead the Blue Owl Limited Partner shall exercise its right to effect a Block Exchange by delivering to the General Partner a written notice (the “Block Exchange Notice”) specifying a future Exchange Date; provided, that, such notice may be contingent (including as to the timing and date of such Block Exchange) upon the consummation of a purchase by another Person of the Class A Shares or Class B Shares (as applicable) for which the Blue Owl Units are exchangeable (whether in a tender or exchange offer, an underwritten offering, or otherwise) or the effectiveness of a registration statement under the Securities Act; provided, further, that an Exchange Date may not be earlier than the fifth Business Day, or later than a date that is ninety (90) days, following

 

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the delivery of the Block Exchange Notice. In the event any contingency set out in such Block Exchange Notice remains unsatisfied on the ninetieth day after the delivery of the Block Exchange Notice, such Block Exchange Notice shall be deemed to have been withdrawn by the Blue Owl Limited Partner. The exchanging Blue Owl Limited Partner may amend the Block Exchange Notice at any time prior to the Exchange Date by delivery of a written notice of amendment to the General Partner; provided, that, the Exchange Date may not be earlier than on the fifth business day following delivery of such notice of amendment to the General Partner; provided, further, that such amendment notice may not change, as the case may be, the future date or the period for satisfaction of the contingency referred to in this Section 2.1(b) beyond ninety (90) days of the date of the initial Block Exchange Notice. A Blue Owl Limited Partner may withdraw a Block Exchange Notice at any time prior to the Exchange Date by delivery of a written notice to the General Partner, in which event such Exchange Notice shall be null and void. Any Exchange pursuant to this Section 2.1(b) must be with respect to a number of Blue Owl Units at least equal to the Minimum Exchange Amount.

(c) At least 75 calendar days prior to each Quarterly Exchange Date, PubCo will provide notice thereof (which notice may be signed in accordance with the last sentence of Section 3.3) to each Blue Owl Limited Partner eligible to Exchange Blue Owl Units, together with the surrender for cancellation of Class C Shares or Class D Shares (as applicable), for Class A Shares or Class B Shares (as applicable) on such Quarterly Exchange Date. A Blue Owl Limited Partner may exercise the right to exchange Blue Owl Units by providing a written notice of exchange at least 60 calendar days prior to the applicable Quarterly Exchange Date or within such shorter period of time as may be agreed by the General Partner in its sole discretion (the “Exchange Notice”). The Exchange Notice shall be provided to the General Partner (on behalf of the Blue Owl Operating Group Entities) substantially in the form of Exhibit A to this Agreement.

(d) On or prior to the date that is one Business Day prior to an applicable Exchange Date, the Exchange Committee may elect (on behalf of the Blue Owl Operating Group Entities), to the extent PubCo and/or the General Partner have available cash (or shall have available cash immediately prior to the applicable Exchange) from the proceeds of a permanent equity offering, to settle all or a portion of an Exchange in cash in an amount equal to the Cash Exchange Payment (the “Cash Exchange Election”), in lieu of the Stock Exchange Payment, exercisable by the Exchange Committee (or its designee) by giving written notice of such election to the Exchanging Partner on or prior to the date that is one Business Day prior to the applicable Exchange Date (such notice, the “Cash Exchange Notice”). The Cash Exchange Notice shall set forth the portion of the Blue Owl Units, together with Class C Shares or Class D Shares (as applicable), which will be exchanged or surrendered and cancelled (as applicable) for cash in lieu of Class A Shares or Class B Shares (as applicable). Any portion of the Exchange not settled for a Cash Exchange Payment shall be settled for a Stock Exchange Payment. The Exchange Committee’s election (on behalf of the Blue Owl Operating Group Entities) to settle all or a portion of an Exchange in cash need not be uniform and may be made selectively among Blue Owl Limited Partners, whether or not such Blue Owl Limited Partners are similarly situated.

 

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(e) The General Partner may adopt reasonable procedures, guidelines, and practices consistent with the terms and conditions of this Agreement for communicating the Quarterly Exchange Date, the implementation of the Exchange provisions set forth in this Article II, including procedures for the giving of an Exchange Notice and for a Block Exchange. None of such procedures shall be adopted with a principal purpose of restricting or otherwise impairing in any material respect the Blue Owl Limited Partners’ rights to consummate Exchanges. Except as expressly provided in Section 2.1(f), a Blue Owl Limited Partner may not revoke an Exchange Notice delivered in accordance with Section 2.1(c), without the consent of the General Partner, which consent may be provided or withheld, or made subject to such conditions, limitations or restrictions, as reasonably determined by the General Partner in good faith.

(f) Notwithstanding anything to the contrary in the foregoing, if the average of the mean between high and low trading prices on the relevant National Securities Exchange for the two Trading Days immediately preceding the fourth Trading Day prior to the Quarterly Exchange Date is at least 15%, or such smaller percentage as the General Partner may determine from time to time, below the average of the mean between the high and low trading prices on the applicable National Securities Exchange for the two Trading Days immediately preceding the date an Exchange Notice is delivered in respect of such Quarterly Exchange Date, the applicable Blue Owl Limited Partner may irrevocably revoke any such notice in writing before the applicable Quarterly Exchange Date. No Blue Owl Limited Partner may make more than one such revocation with respect to any Quarterly Exchange Date that is within a 12-month period of the Quarterly Exchange Date with respect to which such revocation was made, and a Blue Owl Limited Partner that makes any such revocation in respect of a Quarterly Exchange Date may not exercise the right to Exchange Blue Owl Units pursuant to Section 2.1(a) in respect of the following Quarterly Exchange Date.

(g) Notwithstanding anything to the contrary in this Section 2.1, PubCo may, in its sole and absolute discretion, elect to effect an Exchange (subject to the terms of this Article II) through a direct exchange of the Exchanged Securities by the Exchanging Partner to PubCo for the Exchange Payment (a “Direct Exchange”). Any such election shall not relieve the Blue Owl Operating Group Entities of their obligation arising with respect to such applicable Exchange Notice. PubCo may, at any time prior to an Exchange Date, deliver written notice (a “Direct Exchange Notice”) to the General Partner and the Exchanging Partner setting forth its election to exercise its right to consummate a Direct Exchange if, and only if, such election does not prejudice the ability of the parties to consummate an Exchange or Direct Exchange on the Exchange Date, as determined by PubCo in good faith. A Direct Exchange Notice may be revoked by PubCo at any time if, and only if, any such revocation does not prejudice the ability of the parties to consummate an Exchange on the Exchange Date, as determined by PubCo in good faith. The right to consummate a Direct Exchange in all events shall be exercisable for all the Exchanged Securities that would otherwise have been subject to an Exchange. Except as otherwise provided in this Section 2.1(g), a Direct Exchange shall be consummated pursuant to the same timeframe and in the same manner (including the same form of Exchange Payment) as the relevant Exchange would have been consummated if PubCo had not delivered a Direct Exchange Notice. For the avoidance of doubt, whether or not all or any portion of an Exchange Payment will be in the form of a Cash Exchange Payment shall be determined by the Exchange Committee (on behalf of the Blue Owl Operating Group Entities), and PubCo shall effect a Direct Exchange in the form(s) of Exchange Payment(s) as is consistent with this Agreement and the Exchange Committee’s election (if any); provided, that any Cash Exchange Payment may only be paid with the proceeds of a permanent equity offering.

 

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(h) Notwithstanding anything to the contrary in this Agreement, upon the occurrence of a Liquidating Event (as defined in the A&R Blue Owl Operating Agreements) with respect to any Blue Owl Operating Group Entity, each Blue Owl Limited Partner shall be entitled, on the terms and subject to the conditions of this Agreement, to elect to Exchange Blue Owl Units, together with the surrender for cancellation of Class C Shares or Class D Shares (as applicable), for Class A Shares or Class B Shares (as applicable). Any such Exchange pursuant to this Section 2.1(h) shall be effective immediately prior to the effectiveness of the applicable Liquidating Event (and, for the avoidance of doubt, shall not be effective if such Liquidating Event is not effective).

(i) Each Blue Owl Operating Group Entity shall be responsible for its respective Allocation Percentage of any Exchange Payment, and no Blue Owl Operating Group Entity shall have any obligation to (i) acquire any Blue Owl Units issued by another Blue Owl Operating Group Entity or (ii) make or assume any Exchange Payment owed by another Blue Owl Operating Group Entity.

2.2 Exchange Payment.

(a) Any Exchange shall be consummated on the applicable Exchange Date (to be effective immediately prior to the close of business on such Exchange Date).

(b) On the Exchange Date, in the case of an Exchange that is not a Direct Exchange:

(i) PubCo shall contribute to the General Partner, and the General Partner shall contribute to Blue Owl Holdings and Blue Owl Carry (each, in accordance with their respective Allocation Percentages), for their collective delivery to the Exchanging Partner, (x) the Stock Exchange Payment with respect to any Exchanged Securities not subject to a Cash Exchange Notice and (y) the Cash Exchange Payment with respect to any Exchanged Securities subject to a Cash Exchange Notice;

(ii) the Exchanging Partner shall transfer and surrender (A) Blue Owl Holdings Common Units being exchanged to Blue Owl Holdings, (B) Blue Owl Carry Common Units being exchanged to Blue Owl Carry and (C) Class C Shares and/or Class D Shares being surrendered to PubCo, and PubCo shall cancel the surrendered Class C Shares and/or Class D Shares (as applicable);

(iii) (A) Blue Owl Holdings shall issue to the General Partner a number of Blue Owl Holdings GP Units equal to the number of Blue Owl Holdings Common Units surrendered pursuant to Section 2.2(b)(ii), and (B) Blue Owl Carry shall issue to the General Partner a number of Blue Owl Carry GP Units equal to the number of Blue Owl Carry Common Units surrendered pursuant to Section 2.2(b)(ii);

(iv) Blue Owl Holdings shall (A) cancel the redeemed Blue Owl Holdings Common Units that were a part of the Exchanged Securities held by the Exchanging Partner and (B) transfer to the Exchanging Partner its Allocation Percentage of the Cash Exchange Payment and/or the Stock Exchange Payment; and

 

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(v) Blue Owl Carry shall (A) cancel the redeemed Blue Owl Common Carry Units that were a part of the Exchanged Securities held by the Exchanging Partner and (B) transfer to the Exchanging Partner its Allocation Percentage of the Cash Exchange Payment and/or the Stock Exchange Payment, as applicable.

(c) On the applicable Exchange Date, in the case of a Direct Exchange:

(i) PubCo shall contribute to the General Partner, and the General Partner shall deliver to the Exchanging Partner, (x) the Stock Exchange Payment with respect to any Exchanged Securities not subject to a Cash Exchange Notice and (y) the Cash Exchange Payment with respect to any Exchanged Securities subject to a Cash Exchange Notice;

(ii) the Exchanging Partner shall transfer and surrender (A) Blue Owl Holdings Common Units being exchanged to Blue Owl Holdings, and Blue Owl Holdings shall cancel the surrendered Blue Owl Holdings Common Units, (B) Blue Owl Carry Common Units being exchanged to Blue Owl Carry, and Blue Owl Carry shall cancel the surrendered Blue Owl Carry Common Units, and (C) Class C Shares and/or Class D Shares being surrendered to PubCo, and PubCo shall cancel the surrendered Class C Shares and/or Class D Shares (as applicable); and

(iii) (A) Blue Owl Holdings shall issue to the General Partner a number of Blue Owl Holdings GP Units equal to the number of Blue Owl Holdings Common Units surrendered pursuant to Section 2.2(c)(ii), and (B) Blue Owl Carry shall issue to the General Partner a number of Blue Owl Carry GP Units equal to the number of Blue Owl Carry Common Units surrendered pursuant to Section 2.2(c)(ii).

(d) Notwithstanding anything to the contrary contained in this Agreement, if, in connection with an Exchange a filing is required under the HSR Act, then the Exchange Date with respect to all Exchanged Securities shall be delayed until the earlier of such time as (i) the required filing under the HSR Act has been made and the waiting period applicable to such Exchange under the HSR Act shall have expired or been terminated and (ii) such filing is no longer required (such earlier time, the “HSR Termination”). Any such such delayed Exchange shall be effected promptly after such HSR Termination. Each of the parties to this Agreement, including PubCo, agree to promptly take or cause to be taken all actions required to make such filing under the HSR Act, and such other filings, notices, consents and/or approvals that may be required by applicable Law to effect such Exchange, and the filing fees for such filings shall be paid by the Blue Owl Group Operating Entities.

2.3 Taxes; Expenses. Except as otherwise provided in this Agreement, the Blue Owl Operating Group Entities, on the one hand, and each Exchanging Partner, on the other hand, shall bear their own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that the Blue Owl Operating Group Entities shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any such Exchange.

 

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2.4 Limitations on Exchanges.

(a) The General Partner may impose additional limitations and restrictions on Exchanges (including limiting Exchanges or creating priority procedures for Exchanges) to the extent it reasonably determines in good faith that such limitations and restrictions are necessary to avoid: (i) contravention of applicable law, agreements of PubCo, or the Insider Trading Policy and any other written policies related to unlawful or inappropriate trading generally applicable to its directors, board observers, officers or other personnel; (ii) the breach of any debt agreement or other material contract of any Blue Owl Group Operating Entity or PubCo; or (iii) any Blue Owl Operating Group Entity being classified as a “publicly traded partnership” within the meaning of Section 7704 of the Code. For purposes of Section 7704 of the Code, each Blue Owl Operating Group Entity and the General Partner shall assume that PubCo is treated as a single partner within the meaning of Treasury Regulations Section 1.7704-1(h) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), unless otherwise required by applicable law. For the avoidance of doubt, the General Partner may, if reasonably necessary to preserve the application of Treasury Regulations Section 1.7704-1(f), limit aggregate Exchanges in any taxable year to 10% of percentage interests in the capital or profits of the Blue Owl Operating Group Entities (disregarding transfers described in Treasury Regulations Section 1.7704-1(e)) (the “Exchange Threshold”). If, in connection with any Exchange pursuant to Section 2.1(a) in which the General Partner has received Exchange Notices from Blue Owl Limited Partners delivered in accordance with Section 2.1(c) covering a number of Blue Owl Units that, together with all other Exchanges in the same taxable year, would exceed the Exchange Threshold for that taxable year and the General Partner intends to impose the limitation on aggregate Exchanges pursuant to the immediately preceding sentence, then the General Partner shall promptly notify the Blue Owl Limited Partners of such fact and the number of Blue Owl Units to be exchanged on the applicable Quarterly Exchange Date shall be allocated proportionately among the Blue Owl Limited Partners that validly delivered Exchange Notices in respect of such Quarterly Exchange Date based on the number of Common Units owned by each such Blue Owl Limited Partner that are not then subject to the Lock-Up Period. Notwithstanding the foregoing, PubCo and the General Partner shall not enter into any agreement if a principal purpose of such agreement is to restrict or otherwise impair in any material respect the Blue Owl Limited Partners’ rights to consummate Exchanges.

(b) No Seller Earnout Unit shall be Exchanged (including by way of a Direct Exchange), and in no event shall the parties to this Agreement effect an Exchange (including a Direct Exchange) of any such Seller Earnout Unit, in each case, unless and until such Seller Earnout Unit has had a Triggering Event (as defined in and determined in accordance with the BCA).

2.5 Class A Shares and Class B Shares to be Issued.

(a) PubCo and the Blue Owl Operating Group Entities covenant that all Class A Shares or Class B Shares (as applicable) issued upon an Exchange will be validly issued, fully paid and non-assessable, and shall be transferred free and clear of any Liens, other than restrictions provided in the PubCo Charter and the Investor Rights Agreement or pursuant to the Securities Act or any applicable foreign or state securities laws. PubCo shall at all times keep available, solely for the purpose of issuance upon an Exchange, out of its authorized but unissued Class A Shares and Class B Shares (as applicable), such number of Class A Shares and Class B Shares (as applicable) that shall be issuable upon the Exchange of all outstanding Blue Owl Units. Nothing contained in this Agreement shall be construed to preclude PubCo from satisfying its obligations with respect to an Exchange by delivery of Class A Shares or Class B Shares (as applicable) that are held in treasury of PubCo.

 

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(b) Except as otherwise provided in the Investor Rights Agreement, PubCo and the Blue Owl Operating Group Entities covenant and agree that, if a registration statement under the Securities Act is effective and available for Class A Shares or Class B Shares (as applicable) to be delivered with respect to any Exchange, Class A Shares or Class B Shares (as applicable) that have been registered under the Securities Act shall be delivered in respect of such Exchange. If any Exchange in accordance with this Agreement is to be effected at a time when any required registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the exchanging Blue Owl Limited Partners requesting such Exchange, PubCo and the Blue Owl Operating Group Entities shall use commercially reasonable efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration requirements. PubCo shall use commercially reasonable efforts to list the Class A Shares required to be delivered upon Exchange prior to such delivery upon each National Securities Exchange or inter-dealer quotation system upon which the outstanding Class A Shares may be listed or traded at the time of such delivery.

(c) Class A Shares or Class B Shares (as applicable) issued upon an Exchange may contain such legends regarding restrictions under the Securities Act or any applicable state securities laws as PubCo in good faith determines (based on advice of counsel) to be necessary or advisable in order to ensure compliance with such laws.

2.6 Distribution Rights. No Exchange shall impair the right of any Exchanging Partner to receive any distributions payable in respect of (a) the Blue Owl Units exchanged pursuant to any Exchange in respect of a Partnership Record Date that occurs prior to the Exchange Date for such Exchange or (b) the Class A Shares or Class B Shares (as applicable) received in pursuant to any Exchange in respect of a dividend or other distribution record date established by the Board of Directors of PubCo that occurs prior to the Exchange Date for such Exchange, but following the Partnership Record Date referred to in the foregoing clause (a). Notwithstanding the foregoing sentence, no Exchanging Partner shall be entitled to receive, with respect to distributions or dividends made in respect of such Partnership Record Date, distributions or dividends both on Blue Owl Units redeemed by the Blue Owl Operating Group Entities from such Exchanging Partner and on Class A Shares or Class B Shares (as applicable) received by such Exchanging Partner in such Exchange.

2.7 Tax Matters.

(a) In connection with any Exchange, the Exchanging Partner shall, to the extent it is legally entitled to deliver such form, deliver to the General Partner or PubCo (as applicable) a certificate, dated on the applicable Exchange Date, in a form reasonably acceptable to the General Partner or PubCo (as applicable), certifying as to such Exchanging Partner’s taxpayer identification number and that such Exchanging Partner is a not a foreign person for purposes of Section 1445 and Section 1446(f) of the Code (which certificate may be an Internal Revenue Service Form W-9 if then sufficient for such purposes under applicable law) (such certificate a “Non-Foreign Person Certificate”). If an Exchanging Partner is unable to provide a Non-Foreign Person Certificate in connection with an Exchange, then (i) such Exchanging Partner shall provide a certificate substantially in the form described in Treasury Regulations Section 1.1446(f)-2(c)(2)(ii)(B) or (ii) the Blue Owl Operating Group Entities shall deliver a certificate substantially in the form described in Treasury Regulations Section 1.1446(f)-2(c)(2)(ii)(C), in

 

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each case setting forth the liabilities of the Blue Owl Operating Group Entities allocated to the Blue Owl Units subject to the Exchange under Section 752 of the Code, and the Blue Owl Operating Group Entities or PubCo, as applicable, shall be permitted to withhold 10% of the amount realized by such Exchanging Partner in respect of such Exchange as provided in Section 1446(f) of the Code and any Treasury Regulations promulgated thereunder (including Proposed Treasury Regulations) and consistent with the certificate provided pursuant to clause (i) or (ii) of this sentence, as applicable. Without limiting the foregoing, Blue Owl Operating Group Entities shall reasonably cooperate upon the reasonable request and at the expense of the Exchanging Partner to provide such certifications or other information that the Blue Owl Operating Group Entities are legally permitted to provide to the extent necessary to reduce or eliminate any withholding with respect to an Exchange (including the certificate described in Treasury Regulations Section 1.1445-11T(d)(2)).

(b) For U.S. federal (and applicable state and local) income tax purposes, each of the Exchanging Partner, the Blue Owl Operating Group Entities, the General Partner and PubCo agree to treat each Exchange (and, for the avoidance of doubt, each Direct Exchange) as a taxable sale under Section 1001 of the Code by the Exchanging Partner of Exchanged Securities to the General Partner for (i) the payment by the General Partner of the Exchange Payment, and (ii) corresponding payments under the Tax Receivable Agreement, and no party shall take a contrary position on any income tax return, amendment thereof, or communication with a taxing authority. Within 30 days following the Exchange Date, the General Partner shall deliver a notification to each Blue Owl Operating Group Entity in accordance with Treasury Regulations Section 1.743-1(k)(2).

(c) To the extent this Agreement imposes an obligation upon a particular Blue Owl Operating Group Entity or defines rights of the Exchanging Partners with respect to a particular Blue Owl Operating Group Entity, this Agreement shall be treated as part of the relevant A&R Blue Owl Operating Agreements as described in Section 761(c) of the Code and Treasury Regulations Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c).

2.8 Splits, Distributions and Reclassifications. The Exchange Rate shall be adjusted accordingly as reasonably determined in good faith by the General Partner if there is: (a) any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the Blue Owl Units that is not accompanied by an identical subdivision or combination of the Class A Shares and the Class B Shares; or (b) any subdivision (by any stock split, stock distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or

 

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otherwise) of the Class A Shares or Class B Shares that is not accompanied by an identical subdivision or combination of the Blue Owl Units. If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Shares or the Class B Shares are converted or changed into another security, securities or other property, then upon any Exchange, an Exchanging Partner shall be entitled to receive the amount of such security, securities or other property that such Exchanging Partner would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. This Section 2.8 is intended to preserve the intended economic effect of this Article II and to put each Blue Owl Limited Partner in the same economic position, to the greatest extent possible, with respect to Exchanges (including Direct Exchanges) as if such reclassification, reorganization, recapitalization or other similar transaction had not occurred and shall be interpreted in a manner consistent with such intent.

2.9 Representations and Warranties. In connection with any Exchange, upon the acceptance of the Class A Shares, the Class B Shares or an amount of cash equal to the Cash Exchange Payment (as applicable), the Exchanging Partner shall represent and warrant that: (i) the Exchanging Partner is the record and beneficial owner of the number of Exchanged Securities the Exchanging Partner is electing to Exchange, (ii) the Exchanging Partner has the authority to exchange the Exchanged Securities the Exchanging Partner is electing to Exchange and (iii) such Exchanged Securities are not subject to any Liens or restrictions on transfer (other than restrictions imposed by this Agreement, the PubCo Charter, the Investor Rights Agreement and applicable law, including pursuant to the Securities Act or any applicable foreign or state securities laws). In connection with any Block Exchange, the General Partner shall also be entitled to obtain reasonable and customary representations and warranties from the Exchanging Partner in order to ensure compliance with Treasury Regulations Section 1.7704-1(e)(2).

ARTICLE III

GENERAL PROVISIONS

3.1 Additional Blue Owl Limited Partners. If a Blue Owl Limited Partner validly transfers any or all of such holder’s Blue Owl Units to another Person in a transaction in accordance with, and not in contravention of, the A&R Blue Owl Operating Agreements, the Investor Rights Agreement and any other applicable agreement or agreements with PubCo or any of its Subsidiaries to which a transferring Blue Owl Limited Partner may be party, then such transferee (each, a “Permitted Transferee”) shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B to this Agreement, whereupon such Permitted Transferee shall become a Blue Owl Limited Partner under this Agreement. If the Blue Owl Operating Group Entities issue Blue Owl Units in the future in accordance with, and not in contravention of, the A&R Blue Owl Operating Agreements, the Blue Owl Operating Group Entities shall be entitled, in their sole discretion, to make any holder of such Blue Owl Units a Blue Owl Limited Partner under this Agreement through such holder’s execution and delivery of a joinder to this Agreement, substantially in the form of Exhibit B to this Agreement.

3.2 Amendment.

(a) The provisions of this Agreement may be amended by the affirmative vote or written consent of the Blue Owl Operating Group Entities, PubCo, and holders of a Majority in Interest of the Limited Partners (as such term is defined in the A&R Blue Owl Operating Agreements). Notwithstanding the foregoing, in the event that one, but not both, of the Blue Owl Operating Group Entities is dissolved, liquidated or terminated (whether pursuant to its A&R Blue Owl Operating Agreement, by judicial decree or otherwise), the General Partner shall (with the

 

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consent of the NB Partner Representative and the Original Limited Partner Representative (as such terms are defined in the A&R Blue Owl Operating Agreements)) amend this Agreement to reflect the same substantive terms with respect to and among the remaining Blue Owl Operating Group Entity and the other parties to this Agreement.

(b) Notwithstanding Section 3.2(a), no modification, amendment or restatement of any provision of this Agreement that materially and adversely affects the rights or obligations under this Agreement of any Holder of a class or series of Equity Securities (as such terms are defined in the A&R Blue Owl Operating Agreements) of Blue Owl Holdings or Blue Owl Carry, in its capacity as such, without similarly affecting the rights or obligations under this Agreement of all Holders of such class or series of Equity Securities of Blue Owl Holdings and Blue Owl Carry, shall be effective against such Holder unless approved in writing by such Holder.

(c) Each Blue Owl Limited Partner expressly consents and agrees that, whenever in this Agreement it is specified that an action may be taken upon the affirmative vote or written consent of less than all of the Blue Owl Limited Partners, such action may be so taken upon the concurrence of less than all of the Blue Owl Limited Partners and each Blue Owl Limited Partner shall be bound by the results of such action so long as such action is taken in accordance with, and not in contravention of, the express terms of this Agreement.

3.3 Addresses and Notices

(a) All notices, demands and other communications to be given or delivered under this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one Business Day following sending by reputable overnight express courier (charges prepaid) or (c) three days following mailing by certified or registered mail, postage prepaid and return receipt requested to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 3.3):

(b) if to PubCo, to:

Blue Owl Capital Inc.

399 Park Avenue, 39th Floor

New York, NY 10022

Attention: Neena Reddy, General Counsel and Secretary

Electronic Mail: neena@owlrock.com

(c) if to any Blue Owl Group Operating Entity or the General Partner, to:

c/o Blue Owl Capital GP LLC

Blue Owl Capital Inc.

399 Park Avenue, 39th Floor

New York, NY 10022

Attention: Neena Reddy, General Counsel and Secretary

Electronic Mail: neena@owlrock.com

(d) if to any Blue Owl Limited Partner, at the address set forth in the records of the Blue Owl Group Operating Entities.

 

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Notwithstanding the foregoing, any waiver of a Quarterly Exchange Date and other recurring notices may be posted to PubCo’s website as a manner to communicate to the Blue Owl Limited Partners.

3.4 Further Action. The parties to this Agreement shall take, or cause to be taken, all appropriate action (including executing and delivering any documents, certificates, instruments and other papers that are necessary or appropriate for the consummation of the transactions contemplated by this Agreement), and do, or cause to be done, and assist and cooperate with the other parties to this Agreement in doing, all things necessary to achieve the purposes of this Agreement, in each case, as may be requested by PubCo, the General Partner or any Blue Owl Operating Group Entity.

3.5 Successors and Assigns. Subject to Section 3.1, this Agreement shall be binding upon and shall inure to the benefit of the parties to this Agreement, their respective permitted assigns, heirs and personal representatives, and any estate, trust, partnership or limited liability company or other similar entity of which any such Person is a trustee, partner, member or similar party which is or becomes a party to this Agreement.

3.6 Governing Law; Waiver of Jury Trial; Jurisdiction. The laws of the State of Delaware shall govern (a) all Proceedings, claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS AGREEMENT. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the parties to this Agreement submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the Proceeding shall be heard and determined in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 3.6, however, shall affect the right of any party to this Agreement to serve legal process in any other manner permitted by law or at equity. Each party to this Agreement agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

 

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3.7 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

3.8 Entire Agreement. This Agreement, the Investor Rights Agreement, the PubCo Charter and the A&R Blue Owl Operating Agreements contain the entire agreement and understanding among the parties to this Agreement with respect to the subject matter of this Agreement and, thereof and supersede all prior and contemporaneous agreements, understandings and discussions, whether written or oral, relating to such subject matter in any way. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to in this Agreement. The parties to this Agreement and their respective counsel have reviewed and negotiated this Agreement as the joint agreement and understanding of the parties to this Agreement, and the language used in this Agreement shall be deemed to be the language chosen by the parties to this Agreement to express their mutual intent, and no rule of strict construction shall be applied against any Person.

3.9 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

3.10 Counterparts. This Agreement may be executed and delivered in any number of counterparts (including by facsimile or electronic transmission), each of which shall be an original and all of which together shall constitute a single instrument.

3.11 Independent Nature of Blue Owl Limited Partners’ Rights and Obligations. The obligations of each Blue Owl Limited Partner under this Agreement are several and not joint with the obligations of any other Blue Owl Limited Partner, and no Blue Owl Limited Partner shall be responsible in any way for the performance of the obligations of any other Blue Owl Limited Partner under this Agreement. The decision of each Blue Owl Limited Partner to enter into this Agreement has been made by such Blue Owl Limited Partner independently of any other Blue Owl Limited Partner. Nothing contained in this Agreement, and no action taken by any Blue Owl Limited Partner pursuant this Agreement, shall be deemed to constitute the Blue Owl Limited Partners as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Blue Owl Limited Partners are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement, and PubCo (on behalf of itself and the General Partner) acknowledges that the Blue Owl Limited Partners are not acting in concert or as a group, and PubCo shall not (and shall cause the General Partner not to) assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement.

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered as of the date first set forth above.

 

BLUE OWL CAPITAL INC.
By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title: Chief Executive Officer
BLUE OWL CAPITAL HOLDINGS LP
By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title: Chief Executive Officer
BLUE OWL CAPITAL CARRY LP
By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title: Chief Executive Officer
BLUE OWL CAPITAL GP LLC
By:  

/s/ Tom Wasserman

Name: Tom Wasserman
Title: Chief Executive Officer

Signature Page to Exchange Agreement


CLASS A MEMBER

(in the case of any Electing Partner that is not a Blocker Representative)

– OR –

 

BLOCKER REPRESENTATIVE

(in the case of any Blocker making a Blocker Election):

  
                                                                                     
                                                                                     
                                                                                     
                                                                                     

Signature Page to Exchange Agreement


EXHIBIT A

[FORM OF]

NOTICE OF EXCHANGE

Blue Owl Capital Holdings LP

Blue Owl Capital Carry LP

[•]

Attention:

Fax:

Electronic Mail:

Reference is hereby made to the Exchange Agreement, dated as of [•] (the “Exchange Agreement”), by and among Blue Owl Capital Inc., a Delaware corporation, Blue Owl Capital Holdings LP, a Delaware limited partnership, Blue Owl Capital Carry LP, a Delaware limited partnership, and each Blue Owl Limited Partner (as defined in the Exchange Agreement) from time to time party to the Exchange Agreement, as amended from time to time. Capitalized terms used but not defined in this Notice of Exchange shall have the meanings given to them in the Exchange Agreement.

The undersigned Blue Owl Limited Partner desires to exchange the number of Blue Owl Units set forth below in the form of an Exchange to be issued in its name as set forth below.

Legal Name of Blue Owl Limited Partner:

Address:

Number of Blue Owl Units to be exchanged:

The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Notice of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Notice of Exchange has been duly executed and delivered by the undersigned; (iii) the Blue Owl Units subject to this Notice of Exchange will be transferred to the Blue Owl Operating Group Entities free and clear of any Liens, other than restrictions provided in the A&R Blue Owl Operating Agreements or the Investor Rights Agreement or pursuant to the Securities Act or any applicable foreign or state securities laws; (iv) the tender and surrender of the Blue Owl Units for Exchange as provided herein complies with all conditions and requirements for redemption and exchange of Blue Owl Units set forth in the Exchange Agreement and the A&R Blue Owl Operating Agreements; and (v) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Blue Owl Units subject to this Notice of Exchange is required to be obtained by the undersigned for the transfer of such Blue Owl Units to the Blue Owl Operating Group Entities.


The undersigned hereby irrevocably constitutes and appoints any officer of each Blue Owl Operating Group Entity and the General Partner as the attorney of the undersigned, with full power of substitution and re-substitution in the premises, to do any and all things and to take any and all actions that may be necessary to exchange the Blue Owl Units subject to this Notice of Exchange on the books of the Blue Owl Operating Group Entities for Class A Shares or Class B Shares (as applicable) on the books of PubCo.

*    *    *    *

 

A-2


IN WITNESS WHEREOF, the undersigned have caused this Notice of Exchange to be executed and delivered as of the date first set forth above.

 

[]

 

Name:
Title:

 

A-3


EXHIBIT B

[FORM OF]

JOINDER AGREEMENT

This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement, dated as of [•], 2020 (the “Agreement”), by and among Blue Owl Capital Inc., a Delaware corporation, Blue Owl Capital Holdings LP, a Delaware limited partnership, Blue Owl Capital Carry LP, a Delaware limited partnership, and each Blue Owl Limited Partner (as defined in the Agreement) from time to time party to the Agreement, as amended from time to time. Capitalized terms used but not defined in this Joinder Agreement shall have the meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflict-of-law principles that would cause the application of the laws of another jurisdiction. If there is a conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.

The undersigned hereby joins and enters into the Agreement having acquired Blue Owl Units in the Blue Owl Operating Group Entities. By signing and returning this Joinder Agreement to PubCo, the General Partner and the Blue Owl Operating Group Entities, the undersigned accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Blue Owl Limited Partner contained in the Agreement, with all attendant rights, duties and obligations of a Blue Owl Limited Partner thereunder. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by PubCo and by the Blue Owl Operating Group Entities, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.

[Remainder of Page Intentionally Left Blank.]

 

B-1


IN WITNESS WHEREOF, the undersigned have caused this Joinder Agreement to be executed and delivered as of the date first set forth above.

 

[]

 

Name:
[Title:]
Address for Notices:
Attention:

 

B-2

Exhibit 10.8

FORM OF INDEMNIFICATION AGREEMENT

This INDEMNIFICATION AGREEMENT (this “Agreement”) is dated as of                      among Blue Owl Capital Inc., a Delaware corporation (the “Indemnitor”) and the indemnitee named on the signature pages hereto (“Indemnitee”).

WHEREAS, at the request of the Indemnitor, Indemnitee has been asked to serve as a director or an officer of the Indemnitor or in another capacity with the Indemnitor or any of its affiliates, including as a director, officer, employee or agent, and may, therefore, be subjected to claims, suits or proceedings arising as a result of his or her services to and activities on behalf of the Indemnitor and its subsidiaries and affiliates;

WHEREAS, as an inducement to Indemnitee to serve in such capacity(ies), the Indemnitor has agreed to indemnify Indemnitee and to advance expenses and costs incurred by Indemnitee in connection with, arising out of or relating to any such claims, suits or proceedings, to the maximum extent permitted by law; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and the advancement of expenses.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the parties do hereby covenant and agree as follows:

Section 1. Indemnification.

To the fullest extent (whether partial or complete) permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law, including Section 145 of the Delaware General Corporation Law (as it may be amended, the “DGCL”) (but, in the case of any such amendment to the DGCL, only to the extent such amendment permits the Indemnitor to provide broader indemnification rights than the law permitted the Indemnitor to provide before such amendment):

(a) The Indemnitor shall indemnify, defend, protect and hold harmless Indemnitee if Indemnitee was or is made or is threatened to be made a party to, or is otherwise involved in, as a witness or otherwise, any threatened, pending or completed action, suit or proceeding (brought by or in the right of the Indemnitor or otherwise), including any appeal therefrom, (i) by reason of the fact that Indemnitee is or was or has agreed to serve as, or has been appointed as, a director, officer, employee or agent (which, for purposes of this Agreement, shall include a trustee, fiduciary, attorney, advisor, consultant, member, shareholder, representative, partner or manager or similar capacity) of the Indemnitor, in each case whether prior to, on or subsequent to the date of this Agreement, or by reason of any action alleged to have been taken or omitted to be taken by Indemnitee in such capacity, whether prior to, on or subsequent to the date of this Agreement, or (ii) by reason of the fact that Indemnitee is or was serving or has agreed to serve at the request of, or is or was or has been appointed by, the Indemnitor or any of its controlled affiliates as a director, officer, employee or agent of another non-Indemnitor corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or other enterprise or entity (each such non-Indemnitor entity, a “Primary Obligor”), in each case whether prior to, on or subsequent to the date of this Agreement, or by reason of any action alleged to have been taken or omitted to be taken by Indemnitee in such capacity. The Indemnitor agrees that as to any indemnification of an Indemnitee of the type identified in clause (i) of this Section 1(a), the Indemnitor shall serve as the indemnitor of first resort with respect to any request for indemnification or advancement of expenses made pursuant to this Agreement; provided, however, that Indemnitor shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and only to the extent that Indemnitee has otherwise actually received such

 

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payment under any insurance policy, contract, agreement or otherwise. The indemnification of an Indemnitee of the type identified in clause (ii) of this Section 1(a) shall be secondary to any and all indemnification to which such person is entitled from (x) the relevant Primary Obligor (including any payment made to such person under any insurance policy issued to or for the benefit of such Primary Obligor or the Indemnitee), and (y) the relevant Fund (if applicable) (including any payment made to such person under any insurance policy issued to or for the benefit of such Fund or the Indemnitee) (clauses (x) and (y) together, the “Primary Indemnification”), and will only be paid to the extent the Primary Indemnification is not paid or does not provide coverage (e.g., a self-insured retention amount under an insurance policy). No such Primary Obligor or Fund shall be entitled to contribution or indemnification from or subrogation against the Indemnitor. If, notwithstanding the foregoing, the Indemnitor makes an indemnification payment or advance expenses to such an Indemnitee pursuant to this Agreement, the Indemnitor shall be subrogated to the extent of such payment to all of the rights of such Indemnitee against the relevant Primary Obligor or Fund (if applicable) or under any insurance policy issued to or for the benefit of such Indemnitor, Primary Obligor, Fund or the Indemnitee; provided that the foregoing shall not in and of itself extinguish any unpaid or unsatisfied rights Indemnitee has against any third party or the Indemnitor.

(b) The indemnification provided by this Section 1 shall, to the fullest extent permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law, be from and against any and all losses, claims, damages, demands, deficiencies, liabilities, costs and expenses (including attorneys’ fees), judgments, fines, penalties, interest and amounts paid in settlement or otherwise, including associated tax liabilities in respect of any of the foregoing (collectively “Losses”), in connection with, arising out of or related to any such action, suit or proceeding, including any appeals.

Section 2. Advance Payment of Expenses. To the fullest extent (whether partial or complete) permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law, including Section 145 of the DGCL, expenses (including attorneys’ fees) incurred by Indemnitee in appearing at, participating in or defending any action, suit or proceeding or in connection with an enforcement action as contemplated by Section 3(e), shall be paid by the Indemnitor in advance of the final disposition of such action, suit or proceeding and in all events within 45 days after receipt by the Indemnitor of a statement or statements from Indemnitee requesting such advance or advances from time to time (which shall include invoices received by the Indemnitee in connection with such expenses, but in the case of invoices for legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law or court rules may be omitted), whether prior to or after final disposition of any action, suit or proceeding. The Indemnitee hereby undertakes to repay any amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled under this Agreement to be indemnified by the Indemnitor in respect thereof. Such undertaking shall be unsecured and accepted without reference to the financial ability of the Indemnitee to make repayment and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. No other form of undertaking shall be required of Indemnitee other than the execution of this Agreement. Any rights to advancement under this Section 2 shall be subject to Section 3(b) and shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 6(a).

Section 3. Procedure for Indemnification; Notification and Defense of Claim.

(a) Indemnitee shall notify the Indemnitor in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement hereunder as soon as reasonably practicable following receipt by Indemnitee of written notice thereof or Indemnitee’s otherwise becoming aware thereof. The written notification to Indemnitor shall include a description of the nature of the action, suit or proceeding and the facts underlying such action, suit or proceeding, in each case to the extent known by

 

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Indemnitee. The failure to promptly notify the Indemnitor of the commencement of the action, suit or proceeding, or of Indemnitee’s request for indemnification, will not relieve the Indemnitor from any liability that it may have to Indemnitee hereunder, except and solely to the extent the Indemnitor is actually and materially prejudiced in its defense of such action, suit or proceeding as a result of such failure. Notwithstanding the foregoing, such omission will not relieve Indemnitor from any liability that it may have to Indemnitee other than under this Agreement (except to the extent provided by the terms of the agreement, arrangement or understanding giving rise to such other liability). In order to exercise his or her indemnification rights hereunder, an Indemnitee shall submit to the Indemnitor a written request therefor including such documentation and information as is reasonably available to or known by Indemnitee and is reasonably necessary to enable the Indemnitor to determine whether and to what extent Indemnitee is entitled to indemnification hereunder.

(b) With respect to any action, suit or proceeding of which the Indemnitor is so notified as provided in this Agreement, the Indemnitor shall, subject to the last two sentences of this paragraph, be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so; provided, however, that the Indemnitor shall not be entitled to assume the defense of any such action, suit or proceeding without the written consent of Indemnitee if there has been a Change in Control or if Indemnitee shall have reasonably concluded (in accordance with the last sentence of this subsection (b)) that there may be a conflict of interest between the Indemnitor and Indemnitee with respect to such action, suit or proceeding. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Indemnitor, the Indemnitor will not be liable to Indemnitee under this Agreement for any subsequently-incurred fees of separate counsel engaged by Indemnitee with respect to the same action, suit or proceeding unless the employment of separate counsel by Indemnitee has been previously authorized in writing by the Indemnitor. Notwithstanding the foregoing, if Indemnitee, based on the advice of his or her counsel, shall have reasonably concluded (with written notice being given to the Indemnitor setting forth the basis for such conclusion) that, in the conduct of any such defense, there is or is reasonably likely to be a conflict of interest or position between the Indemnitor and Indemnitee with respect to a significant issue, then the Indemnitor will not be entitled, without the written consent of Indemnitee, to assume such defense. In addition, the Indemnitor will not be entitled, without the written consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Indemnitor.

(c) To the fullest extent permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law, including Section 145 of the DGCL, the Indemnitor’s assumption of the defense of an action, suit or proceeding in accordance with paragraph 3(b) will constitute an irrevocable acknowledgement by the Indemnitors that any and all Losses in respect of any of the foregoing, including any appeals therefrom, are indemnifiable by the Indemnitor under Section 1 of this Agreement (including, to the fullest extent permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law, that the Indemnitee has met all applicable standards of conduct).

(d) The determination whether to grant Indemnitee’s indemnification request shall be made in accordance with applicable law and shall be made promptly and in any event within 60 days following the later of (x) the Indemnitor’s receipt of a request for indemnification in accordance with Section 3(a) and (y) the final disposition of any action, suit or proceeding for which indemnification is sought hereunder. If the Indemnitor determines that Indemnitee is entitled to such indemnification or, as contemplated by paragraph 3(c) the Indemnitor has acknowledged such entitlement, the Indemnitor will make payment to Indemnitee of the indemnifiable amount within 10 days after making such determination. If the Indemnitor is not deemed to have so acknowledged such entitlement or the Indemnitor’s determination of whether to grant Indemnitee’s indemnification request shall not have been made within such applicable 60 day period, the requisite determination of entitlement to indemnification shall, subject to Section 6, nonetheless be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a

 

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misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(e)

(i) In the event that (1) the Indemnitor determines in accordance with this Section 3 that Indemnitee is not entitled to indemnification under this Agreement, (2) the Indemnitor denies a request for indemnification, in whole or in part, or fails to respond or make a determination of entitlement to indemnification within the applicable 60-day period as described above, (3) payment of indemnification is not made within 10 days after a determination has been made that Indemnitee is entitled to indemnification, (4) advancement of expenses is not timely made in accordance with Section 2, or (5) the Indemnitor or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication in any court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses.

(ii) Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration in New York, New York before one arbitrator, conducted by the Judicial Arbitration and Mediation Services/Endispute, Inc. (“JAMS”), or its successor. Disputes shall be resolved in accordance with the Federal Arbitration Act, 9 U.S.C. §§1-16, and JAMS’ Comprehensive Arbitration Rules and Procedures then in effect. The arbitrator will have the same, but no greater, remedial authority than would a court of law and shall issue a written decision including the arbitrator’s essential findings and conclusions and a statement of the award. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 3(e); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 3(g).

(iii) Indemnitee’s expenses (including attorneys’ fees) incurred in connection with determining Indemnitee’s right to indemnification or advancement of expenses, in whole or in part, in any such proceeding or arbitration or otherwise shall also be indemnified by the Indemnitor to the fullest extent permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law (whether such efforts are successful or unsuccessful).

(f) Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request therefor in accordance with Section 3 of this Agreement. The Indemnitor shall have the burden of proof in overcoming such presumption, and such presumption shall be used as a basis for a determination of entitlement to indemnification and advancement of expenses unless the Indemnitors overcome such presumption and establish that Indemnitee is not so entitled. No determination by the Indemnitor (including by directors or any independent counsel) that the Indemnitee has not satisfied any applicable standard of conduct shall be a defense to any claim by the Indemnitee for indemnification or reimbursement or advance payment of expenses by the Indemnitor hereunder or create a presumption that the Indemnitee has not met any applicable standard of conduct. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Indemnitee has not met any applicable standard of conduct.

 

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(g) If Indemnitee is entitled under any provision of this Agreement to indemnification by the Indemnitors for some portion of his or her Losses but not the total amount thereof, the Indemnitor shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

Section 4. Insurance and Subrogation.

(a) The Indemnitor may purchase or otherwise obtain coverage under a policy or policies of insurance, providing Indemnitee with coverage, subject to the terms and conditions of such policy or policies, for any liability asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf by reason of the fact that Indemnitee is or was or has agreed to serve as, or is or was or has been appointed as, a director, officer, employee or agent of the Indemnitor or its affiliates, or is or was serving or has agreed to serve at the request of the Indemnitor or its affiliates as a director, officer, employee or agent of, or is or was or has agreed to otherwise be associated with, any Primary Obligor or arising out of Indemnitee’s status as such, whether or not the Indemnitor would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. To the extent that the Indemnitor maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Indemnitor or of any its affiliates, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If the Indemnitor has such insurance in effect at the time the Indemnitor receives from Indemnitee any notice of any matter with respect to which Indemnitee intends to seek indemnification or advancement hereunder, the Indemnitor shall give prompt notice thereof to the insurers in accordance with the procedures set forth in the policy or policies. The Indemnitor shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy or policies.

(b) In the event of any payment by the Indemnitor under this Agreement, the Indemnitor shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy; provided that the foregoing shall not in and of itself extinguish any unpaid or unsatisfied rights Indemnitee has against any third party or the Indemnitor. Indemnitee shall execute all papers required and take all action necessary to secure such rights, in each case reasonably requested by the Indemnitor, including execution of such documents as are necessary to enable the Indemnitor to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Indemnitor shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

(c) The Indemnitor shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines and amounts paid in settlement, and excise taxes with respect to an employee benefit plan or penalties) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.

Section 5. Certain Definitions. For purposes of this Agreement, the following definitions shall apply:

(a) The term “action, suit or proceeding” shall be broadly construed and shall include the investigation (formal or informal), preparation, prosecution, defense, settlement, arbitration, mediation and appeal of, and the giving of testimony or responding to discovery requests in, any threatened, pending or completed investigation, inquiry, audit, claim, action, suit, arbitration, alternative dispute resolution mechanism, hearing or other proceeding or claim of any kind, whether civil, criminal, administrative, regulatory, legislative, investigative or otherwise, and whether or not formal or informal.

 

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(b) The term “by reason of the fact that Indemnitee is or was or has agreed to serve as a director, officer, employee or agent of the Indemnitor, or while serving as a director or officer of Indemnitor, is or was serving or has agreed to serve at the request of the Indemnitor as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise or entity” (or any words of similar effect) shall be broadly construed and shall include any actual or alleged act or omission to act. The Indemnitor hereby agrees that any service, act or omission by Indemnitee respecting the investing activities of the Indemnitor or one or more Funds or their respective affiliates is at the request and direction of and on behalf of the Indemnitor or one or more of the Funds or their respective affiliates.

(c) For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if, after the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than (a) any “Qualified Stockholder” (as defined in the Indemnitor’s certificate of incorporation) or (b) a trustee or other fiduciary holding securities under an employee benefit plan of the Indemnitor or a corporation owned directly or indirectly by the stockholders of the Indemnitor in substantially the same proportions as their ownership of stock of the Indemnitor, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Indemnitor representing 20% or more of the total voting power represent by the Indemnitor’s then outstanding Voting Securities, (ii) individuals who on the date of this Agreement are members of the Indemnitor’s Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Indemnitor’s Board (provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall be considered as a member of the Incumbent Board), or (iii) the Indemnitor consummates a merger or consolidation of the Indemnitor with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Indemnitor outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Indemnitor or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Indemnitor approve a plan of complete liquidation of the Indemnitor or an agreement for the sale or disposition by the Indemnitor of (in one transaction or a series of transactions) all or substantially all of the Indemnitor’s assets.

(d) The term “expenses” shall be broadly construed and shall include all direct and indirect costs of any type or nature whatsoever (including all attorneys’ fees, retainers, court costs, fees of experts and other professionals, witness fees, travel expenses, duplicating, printing and binding costs, telephone charges, postage, delivery service fees, facsimile transmission charges, secretarial services, any federal, state, local or foreign taxes imposed on Indemnitee as a result of actual or deemed receipt of any payments under this Agreement, appeal bonds, all other disbursements and other out-of-pocket costs of the types customarily incurred in connection with, or as a result of, prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a deponent or a witness, or otherwise participating in any action, suit or proceeding and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise compensated by the Indemnitor or any third party), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of an action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder.

(e) “enterprise” shall mean the Indemnitor and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Indemnitor as a director, officer, employee, agent or fiduciary.

 

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(f) “Fund” shall mean any fund, investment vehicle or account whose investments are managed or advised by an Indemnitor or any of its affiliates.

(g) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include all direct and indirect payments of any type or nature whatsoever (including all penalties and amounts required to be forfeited or reimbursed to the Indemnitor), as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan.

(h) The term “Voting Securities” shall mean any securities of the Indemnitor that vote generally in the election of directors.

Section 6. Limitation on Indemnification. Notwithstanding any other provision herein to the contrary, the Indemnitor shall not be obligated pursuant to this Agreement:

(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to any action, suit or proceeding (or part thereof) initiated by Indemnitee, except with respect to any compulsory counterclaim brought by Indemnitee or an action, suit or proceeding brought to establish or enforce a right to indemnification, advancement of expenses or contribution under this Agreement (which shall be governed by the provisions of Section 12 of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the board of directors of the Indemnitor.

(b) Section 16(b) Matters. To indemnify Indemnitee on account of any action, suit or proceeding in which Indemnitee agrees to or is liable for disgorgement of profits made from the purchase or sale by Indemnitee of securities pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended.

(c) Indemnification Prohibited by Law. If it has been determined by a final (not interlocutory) judgment or other adjudication of a court or arbitrator or administrative body of competent jurisdiction as to which there is no further right or option of appeal or the time within which an appeal must be filed has expired without such filing that indemnification on account of Indemnitee’s conduct is prohibited by applicable law.

Section 7. Certain Settlement Provisions. Notwithstanding any other provision herein to the contrary, provided there has been no Change in Control, the Indemnitor shall have no obligation to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action, suit or proceeding without the Indemnitor’s prior written consent. The Indemnitor shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent. The Indemnitor shall not settle any action, suit or proceeding in which Indemnitee is subject to liability with the Indemnitor (or would be if such Indemnitee is joined in such action, suit or proceeding) without Indemnitee’s written consent unless such settlement includes a complete and unconditional release of the Indemnitee from all liability on any claims that are the subject matter of such action, suit or proceeding; provided, however, that Indemnitee will not unreasonably withhold his or her consent to any proposed settlement. Neither the Indemnitor nor Indemnitee will unreasonably withhold his, her, its or their consent to any proposed settlement.

Section 8. Savings Clause. If any provision or provisions (or portion thereof) of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Indemnitor shall nevertheless indemnify, defend, protect and hold harmless Indemnitee if Indemnitee was or is made or is threatened to be made a party or is otherwise involved in any threatened, pending or completed action, suit or proceeding (brought by or in the right of any of the Indemnitors or otherwise), (i) by reason of the fact that Indemnitee is or was or has agreed to serve as, or has been appointed as, a director, officer, employee

 

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or agent of the Indemnitor or its affiliates, in each case whether prior to, on or subsequent to the date of this Agreement, or by reason of any action alleged to have been taken or omitted to be taken by Indemnitee in such capacity, whether prior to, on or subsequent to the date of this Agreement, or (ii) by reason of the fact that Indemnitee is or was serving or has agreed to serve at the request of, or is or was or has been appointed by, the Indemnitor or any of its affiliates as a director, officer, employee or agent of a Primary Obligor, in each case whether prior to, on or subsequent to the date of this Agreement, or by reason of any action alleged to have been taken or omitted to be taken by Indemnitee in such capacity from and against any and all Losses in connection with, arising out of or related to such action, suit or proceeding, to the fullest extent (whether partial or complete) permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law.

Section 9. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Indemnitor shall, to the fullest extent (whether partial or complete) permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and applicable law, contribute to the payment of all of Indemnitee’s Losses in connection with, arising out of or related to any action, suit or proceeding, including any appeals, in an amount that is just and equitable in the circumstances; provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to any limitation on indemnification set forth in Section 6 or 7 hereof.

Section 10. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand or overnight courier service and receipted for by the party to whom said notice, request, demand or other communication shall have been directed, on the day of such delivery, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed or (c) if delivered by e-mail, provided the relevant computer record indicates a full and successful transmission or no failure message is generated (x) on the date of such transmission, if such transmission is completed at or prior to 5:00 p.m., local time of the recipient party, on the date of such transmission, and (y) on the next business day following the date of transmission, if such transmission is completed after 5:00 p.m., local time of the recipient party, on the date of such transmission.:

(i) If to Indemnitee, to the address set forth on the signature page hereto.

(ii) If to the Indemnitor, to:

Blue Owl Capital Inc.

399 Park Avenue, 38th Floor

New York, NY 10022

Attn: General Counsel

E-mail: neena.reddy@blueowl.com

or to such other address as may have been furnished in writing to Indemnitee by the Indemnitor or to the Indemnitor by Indemnitee, as the case may be.

Section 11. Nonexclusivity. The provisions for indemnification, advancement of expenses and contribution set forth in this Agreement shall not be deemed exclusive of, a substitute for or in abrogation of any other rights which Indemnitee may have under any provision of law, in any court in which a proceeding is brought, the certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement, or comparable organizational documents of the Indemnitors, other agreements or otherwise, and Indemnitee’s rights hereunder shall inure

 

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to the benefit of the heirs, executors and administrators of Indemnitee. No amendment or alteration of the certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement, or comparable organizational documents of the Indemnitors or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.

Section 12. Enforcement. The Indemnitor shall be precluded from asserting in any judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Indemnitor agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Indemnitor to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Indemnitor of its respective obligations under this Agreement.

Section 13. No Construction as Employment Agreement. Nothing contained herein shall be construed as giving Indemnitee any right to be retained as a director or officer of the Indemnitor or in the employ of the Indemnitor. For the avoidance of doubt, the indemnification, advancement of expenses and contribution provided under this Agreement shall continue as to the Indemnitee even though he may have ceased for any reason whatsoever to be a director, officer, employee or agent of the Indemnitor or any Primary Obligor, as the case may be.

Section 14. Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by applicable law. In the event of any change in applicable law, statute or rule which narrows the right of Indemnitee to indemnification, advancement of expenses or contribution from the Indemnitor hereunder, such change, to the extent not otherwise required by such law, shall have no effect on this Agreement and the rights and obligations hereunder.

Section 15. Entire Agreement. Except as provided in Section 11, this Agreement constitutes the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.

Section 16. Modification and Waiver. No supplement, modification, waiver or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. For the avoidance of doubt, this Agreement may not be terminated by the Indemnitors without Indemnitee’s prior written consent.

Section 17. Successor and Assigns. All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Indemnitor shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Indemnitor, by written agreement in form and substance reasonably satisfactory to Indemnitee, to expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Indemnitor would be required to perform if no such succession had taken place.

 

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Section 18. Service of Process and Venue. Each of the parties hereto hereby irrevocably and unconditionally (a) agrees that any action or proceeding arising out of or in connection with this Agreement may be brought in the Court of Chancery of the State of Delaware (the “Delaware Court”), (b) consents to submit to the non-exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) appoints, to the extent the Indemnitor or Indemnitee is not otherwise subject to service of process in the State of Delaware, irrevocably The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801 as its agent in the State of Delaware for acceptance of legal process in connection with any such action or proceeding against such Indemnitor with the same legal force and validity as if served upon the Indemnitor personally within the State of Delaware, (d) waives any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (e) waives, and agrees not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

Section 19. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within the State of Delaware, without regard to its conflicts of laws rules. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Indemnitor of Indemnitee, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted by the certificate of incorporation of the Indemnitor, as amended from time to time, and under such law, notwithstanding any provision of this Agreement to the contrary.

Section 20. Counterparts. This Agreement may be executed and delivered in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 21. Interpretation.

(a) Unless a clear contrary intention appears: (i) the defined terms herein shall apply equally to both the singular and plural forms of such terms; (ii) reference to any person includes such person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a person in a particular capacity excludes such person in any other capacity or individually; (iii) any pronoun shall include the corresponding masculine, feminine and neuter forms; (iv) reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (v) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular article, section or other provision hereof; (vi) numbered or lettered articles, sections and subsections herein contained refer to articles, sections and subsections of this Agreement; (vii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; (viii) “or” is used in the inclusive sense of “and/or”; (ix) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto; and (x) reference to dollars or $ shall be deemed to refer to U.S. dollars.

(b) All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement.

[Signature Pages Follow]

 

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

 

BLUE OWL CAPITAL INC.
By:  

                     

Name:  
Title:  

 

Signature Page to Indemnification Agreement


INDEMNITEE

                     

Name:  
Address:

 

 

 

Email:  

                     

 

Signature Page to Indemnification Agreement

Exhibit 10.9

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (this “Agreement”), is made and entered into as of May 19, 2021, by and between (i) Blue Owl Capital Inc., a Delaware corporation (the “Buyer”), and (ii) Neuberger Berman Group LLC, a Delaware limited liability company (the “Servicer”). The Buyer and Servicer are each referred to in this Agreement as a “Party” and collectively as the “Parties.” All capitalized terms used but not defined herein shall have the respective meanings set forth in the Business Combination Agreement (defined below).

WHEREAS, the Buyer (f/k/a Altimar Acquisition Corporation) is party to that certain Business Combination Agreement, dated as of December 23, 2020 (the “Business Combination Agreement”), by and among the Buyer, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and the Servicer that provides for, among other things, the acquisition by the Buyer of the Diamond Business and the Opal Business.

WHEREAS, in connection with the Closing of the transactions contemplated by the Business Combination Agreement, the Parties have agreed to enter into this Agreement to set forth the terms and conditions upon which the Servicer will provide or cause to be provided to the Buyer and its Subsidiaries certain identified services during the term of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and the Business Combination Agreement, and subject to the terms and conditions set forth in this Agreement, the Parties, intending to be legally bound, agree as follows:

1.    Transition Services.

(a)    Subject to and on the terms set forth in this Agreement, the Servicer shall perform or cause to be performed with respect to the Diamond Business certain transition services as set forth on Exhibit A (the “Service Exhibit”) hereto (such services, the “Transition Services” and each, a “Transition Service”), which Service Exhibit is incorporated herein by reference, for the time periods described in this Agreement. In consideration for the performance of the Transition Services, and subject to the provisions of Section 4, the Buyer shall pay (or cause to be paid) to the Servicer the fees set forth on the Service Exhibit (the “Service Fees”) in accordance with Section 3. Subject to the provisions of Section 4, the Servicer shall provide each of the Transition Services until the earlier of (i) the date that is one year after the date of this Agreement, or such other date as the Parties may reasonably agree in writing is necessary to accomplish the transition of the Diamond Business and the transactions contemplated by the Business Combination Agreement and (ii) the date set forth on the Service Exhibit with respect to such Transition Service, or such other date as the Parties may reasonably agree in writing with respect to such Transition Service (as applicable, the “Service Termination Date”).

(b)    The Service Exhibit sets forth the monthly Service Fee payable for each Transition Service for each calendar month during the term of this Agreement.


(c)    In addition to the Service Fees, upon receipt of reasonable documentation, the Buyer shall reimburse the Servicer for (i) any reasonable third-party fees or expenses and (ii) all reasonable out-of-pocket costs and expenses, including all reasonable overtime payments to Servicer employees (collectively, the “Expenses”), in each case, incurred by the Servicer in connection with and attributable to providing the Transition Services, including reasonable costs incurred pursuant to contracts with third parties under which the benefit is provided to the Buyer as part of the Services, reasonable out-of-pocket travel expenses and costs in obtaining third-party consents (including licenses) that the Parties agree to pursue pursuant to Section 1(d) (but not, for the avoidance of doubt, expenses and costs in obtaining other third-party consents); provided, however, that “Expenses” shall be determined without duplication of any applicable Services Fees; provided, further, that, notwithstanding anything to the contrary herein, the Buyer shall have no obligation to reimburse the Servicer for any individual Expense exceeding $25,000 without the prior written consent of the Buyer. For the avoidance of doubt, in the event fees and expenses contemplated by the preceding sentence are incurred in connection with the provision of the Transition Services and with other operations of the Servicer or its Affiliates, only the portion of such fees and expenses reasonably allocable to the provision of Transition Services shall be deemed to be “Expenses” and reimbursable by the Buyer hereunder (subject to the preceding sentence).

(d)    To the extent that (i) the Transition Services include Software or other technology licensed from third parties, or (ii) the Transition Services are procured or derive from third parties, it is intended and agreed that the Transition Services provided under this Agreement shall be within the scope and on the terms and conditions established by the third-party licensors or providers. This Agreement is not intended to constitute a sublicense of any Software or technology provided by third-party licensors or to create a commercial service bureau in favor of the Buyer or its customers, but instead is a services agreement intended to enable the Diamond Business to wind up its use of the software applications set forth on the Service Exhibit. In the event that the Servicer encounters a restriction or objection from a third-party licensor or supplier that prevents the Servicer, as a legal or practical matter from providing any Transition Service as contemplated by this Agreement, then the Servicer shall reasonably promptly so notify the Buyer, and the Parties will confer to decide upon a mutually-agreeable solution, which may include seeking necessary consents or licenses, replacing the affected resource or adopting a work-around; provided, that in no event will the Servicer be required to provide any such Transition Service in violation of its obligations under any third-party agreement and provided, further, that in the event that the Parties mutually agree not to seek a consent following such conference, the provisions of Section 8(c) shall apply to any claims arising out of such election. The Servicer shall use its commercially reasonable efforts during the term of this Agreement to not enter into or become bound by an agreement or other arrangement that includes such a restriction. Other than as set forth in the preceding sentence, the Servicer gives no assurance about whether such a restriction or objection can or may arise and, in any event, until such alternative approach is agreed upon by the Parties or the problem is otherwise resolved to the satisfaction of the Parties, the Servicer shall be excused from providing the affected Transition Service and, notwithstanding anything to the contrary herein, the Buyer shall have no obligation to pay any Service Fee for any such Transition Service that the Servicer does not provide. To the extent an agreed-upon alternative

 

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approach results in the incurrence of additional expense beyond what was incurred in connection with the underlying Transition Service, the Buyer shall make prompt payment to the Servicer in the amount of such additional expense in accordance with Section 3 hereof.

(e)    Notwithstanding anything to the contrary in this Agreement, the Buyer acknowledges that the Servicer may be providing services similar to the Transition Services for itself and its Affiliates, and the Servicer reserves the right to modify one or more Transition Services if such modifications are: (i) applicable to all other recipients of such Transition Service or services similar to such Transition Service; provided, that such modifications do not have a material adverse impact on the Buyer or its Subsidiaries and do not increase the Expenses in any material respect; or (ii) otherwise necessary to comply with applicable Law or other requirements of a Governmental Entity.

2.    Term. This Agreement commences as of the date hereof and will continue in effect until the latest Service Termination Date for any Transition Service, unless earlier terminated in accordance with Section 4; provided, that this Agreement shall terminate with respect to a Transition Service (including the Servicer’s obligation to provide, and the Buyer’s obligation to pay a Service Fee or Expenses with respect to, such Transition Service in accordance with Section 4(c)) on the applicable Service Termination Date for such Transition Service and provided, further, that in the event that a Transition Service has not been properly transitioned, separated and migrated to the Buyer or its designee as of the applicable Service Termination Date due to the Servicer’s failure to complete the tasks that have been designated as Servicer’s responsibilities in the Service Exhibit, the term of any such Transition Service shall be automatically extended by an additional thirty (30) days beyond the applicable Service Termination Date. Termination or expiration of this Agreement will not act as a waiver of any breach hereof and will not release any Party hereto for any liability or obligation incurred under this Agreement through the effective date of such termination or expiration.

3.    Payment.

(a)    The Servicer shall invoice the Buyer for the monthly Service Fees and all Expenses incurred in accordance with this Agreement for each month during which Transition Services are provided hereunder. The Buyer shall be liable for the Service Fees and the Buyer shall pay the Servicer the amounts shown as due and payable on each such invoice, including any applicable sales, use or value-added taxes, within forty-five (45) days of the Buyer’s receipt of such invoice, unless and to the extent subject to (and during the pendency of) any dispute between the Parties with respect to such amounts. The Buyer will not be entitled to offset any Service Fees, Expenses or any other amounts due hereunder against any amounts owed by the Servicer or any of its Affiliates to the Buyer or any of its Affiliates under the Business Combination Agreement, any other Ancillary Agreement, as a client of the Diamond Business or otherwise.

(b)    If there is a dispute between the Parties regarding the variable amounts shown as billed to the Buyer on any invoice, the Servicer shall, upon the written request of the Buyer, furnish to the Buyer such reasonable documentation to substantiate the amounts billed, including listings of the dates, times and amounts of the Transition Services in question, and any documentation from third parties with respect to Expenses for which the Servicer is seeking reimbursement.

 

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(c)    If there is a dispute regarding any invoice for Service Fees or Expenses under this Agreement, the Parties shall cooperate and use commercially reasonable efforts to resolve any such dispute among themselves as promptly as practicable; provided, that if any such dispute is not resolved by the invoice due date, then Buyer may withhold amounts disputed in good faith.    In the event that the Parties mutually agree that any amount disputed by Buyer was properly invoiced, the Buyer will pay to the Servicer such amount within fifteen (15) days of such agreement.

4.    Termination.

(a)    The Buyer may terminate this Agreement in its entirety by providing the Servicer with at least thirty (30) days’ prior written notice, which notice must specify the date on which the Transition Services are to be terminated (the “Termination Date”); provided, that the Buyer will be liable for the Service Fees through the Termination Date, along with any and all Expenses incurred in accordance with this Agreement in connection with the Transition Services provided during such period.

(b)    The Buyer may from time to time elect to terminate any Transition Service by providing the Servicer with at least thirty (30) days’ prior written notice, which notice shall specify which of the Transition Services are to be terminated (the “Terminated Services”) and the date on which such Terminated Services are to be terminated. Within fifteen (15) Business Days following receipt of a termination notice, the Servicer shall notify the Buyer in writing of its good faith belief as to whether the termination of any Transition Service or Transition Services that are the subject of the termination notice (i) will require termination or partial termination of any other Transition Service or Transition Services, or (ii) will result in the imposition of any additional costs to the Servicer or its Affiliates and, if so, a good faith estimate of the aggregate amount of such additional costs (an “Early Termination Consequence Notice”). If the Servicer delivers an Early Termination Consequence Notice to the Buyer, the Buyer may withdraw its termination notice within seven (7) days after its receipt of such notification. If the Buyer does not withdraw such termination notice within such seven (7) day period, termination of such Transition Services will be final, including with respect to (x) the termination of any other Transition Service or Transition Services identified by the Servicer in its Early Termination Consequence Notice, and (y) the Buyer obligation to pay the actual amount of any additional costs imposed on the Servicer as a result of such early termination as identified by the Servicer in its Early Termination Consequence Notice (notwithstanding that such actual amount of such identified costs may be greater than the estimated amount). Notwithstanding anything to the contrary herein, the Buyer shall not have the right to unilaterally reinstitute any Transition Service if such Transition Service has been terminated.

(c)     The Buyer will be liable for the Service Fees associated with the Terminated Services provided prior to or on (but not following) the date such Transition Service is terminated in accordance with Section 4(b), along with any and all Expenses

 

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incurred in accordance with this Agreement in connection with the Transition Services provided prior to or on (but not following) such date. The termination of the Terminated Services will not affect: (i) any obligation of Buyer to pay (x) additional costs with respect to the applicable termination pursuant to Section 4(b)(y), or (y) Service Fees associated with the Terminated Services provided prior to such termination or Expenses incurred in accordance with this Agreement prior to such termination; or (ii) this Agreement with respect to any Transition Services not terminated pursuant to any written notice under Section 4(b).

(d)    In the event of any breach by the Buyer of (i) Section 3 (i.e., late payment) or Section 6 (i.e., misuse of the Servicer’s business systems and communications networks) hereof or (ii) the Sublease Agreement dated on or about the date hereof, by and between the Servicer, and the Buyer, in each case, that continues without cure for a period of thirty (30) days after notice thereof to the Buyer and is not the subject of a good-faith dispute in accordance with Section 3(b) and Section 3(c) of this Agreement, the Servicer may, upon ten (10) days’ prior written notice to the Buyer, terminate this Agreement or, in its discretion, its obligation to provide the Transition Services relating to such nonpayment without any further obligation or liability to the Buyer. If the Servicer terminates this Agreement (or terminates its obligation to provide a particular Transition Services pursuant to this Section 4(d)), the Buyer will be liable for the Service Fees through, but not following, such date of termination (or such date of termination of the applicable Transition Service).

(e)    No termination of this Agreement or any Transition Services shall relieve any Party from liability for any breach of this Agreement prior to termination thereof. Sections 8 (Limitation on Liability; Indemnity), 10 (Confidentiality), 11 (Expenses), 15 (Governing Law; Waiver of Jury Trial; Jurisdiction) and 17 (Interpretation) shall survive any termination or expiration of this Agreement.

5.    Additional Covenants and Agreements. The Servicer shall use commercially reasonable efforts to provide or cause to be provided the Transition Services (i) subject to any applicable COVID-19 Measures, at a relative level of service (in terms of quantity and quality) substantially similar to that with which such services were provided to the Diamond Business as of immediately prior to the Closing and (ii) in a manner that is in accordance with applicable Law.

6.    Use of Business Systems and Communications Networks. From time to time under this Agreement, each Party may have access to the business systems and communications networks of the other Party. Each Party will use commercially reasonable efforts to ensure that none of its employees, officers, directors or agents, nor any employee, officer, director or agent of any of its Affiliates (collectively, “Users”) make any use of or attempt to gain access to any part of the other Party’s business systems and communications networks or to any data of the other Party or its Affiliates not specifically made available to such Party under this Agreement. Each Party will take reasonable precautions to ensure that its Users do not introduce (i) any code, program, or script (devices) that, upon the occurrence or the non-occurrence of any event, will disable any system or application of the other Party; (ii) to or through the other Party’s “network,” any worm, virus, trap door, back door, or any other contaminant or disabling devices; or (iii) any form of breach of security, data corruption or interruption into the other Party’s “network.” Each

 

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Party agrees that all of its Users, when given access to the business systems and communications networks of the other Party, shall conform to the policies and procedures of such other Party concerning, health, safety and security which are made known to the first Party in advance. If a Party reasonably determines that the other Party has violated this covenant, then without limiting any Party’s remedies hereunder, the other Party will, to such Party’s reasonable satisfaction, promptly take all reasonable action and implement all reasonably necessary procedures to mitigate and prevent the reoccurrence of any such violation.

7.    Designated Points of Contact; Separation Services.

(a)    The points of contact who shall be responsible for the day-to-day implementation of this Agreement, including attempted resolution of any issues that may arise during the performance of any Party’s obligations hereunder for the Servicer, on the one hand, and the Buyer, on the other hand, shall be as specified in Exhibit B under the title “TSA Liaison.”

(b)    The Parties will reasonably cooperate in the transition, separation and migration of the Transition Services. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, in no event shall the Servicer be required to (i) incur any out-of-pocket expenses in connection with the such transition, separation and/or migration for which the Servicer is not entitled to reimbursement from the Buyer hereunder or (ii) without limiting the Servicer’s obligations under the Business Combination Agreement, undertake responsibilities in connection with such transition, separation and/or migration not otherwise required by this Agreement or the Business Combination Agreement. All cooperation provided and actions taken by the Servicer in connection with transition, separation and migration of the Transition Services shall be subject to the same limitations on liability of the Servicer as set forth herein with respect to the performance of the Transition Services.

8.    Limitation of Liability; Indemnification.

(a)    OTHER THAN IN THE CASE OF INTENTIONAL FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AND WITHOUT LIMITATION OF SECTION 9 OF THE NDA (AS DEFINED BELOW), THE SERVICER’S LIABILITY UNDER THIS AGREEMENT OR WITH RESPECT TO THE PERFORMANCE OF THE TRANSITION SERVICES SHALL BE LIMITED TO THE AMOUNT OF THE SERVICE FEES ACTUALLY RECEIVED BY THE SERVICER HEREUNDER IN CONSIDERATION OF THE TRANSITION SERVICES THAT GAVE RISE TO OR RELATED TO THE INCURRENCE OF SUCH LIABILITY. THE SERVICER WILL HAVE NO LIABILITY UNDER THIS AGREEMENT OR WITH RESPECT TO THE PERFORMANCE OF THE TRANSITION SERVICES TO ANY PERSON OTHER THAN THE BUYER. EXCEPT AS MAY BE AWARDED TO A THIRD PARTY IN CONNECTION WITH A CLAIM SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 8(c) OR SECTION 8(d) OR IN THE CASE OF INTENTIONAL FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NO PARTY WILL BE LIABLE FOR ANY PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES, LOSS OF PROFIT OR LOSS OF OPPORTUNITY, LOSS OF REPUTATION, CONSEQUENTIAL LOSSES OR ANY OTHER INDIRECT DAMAGES THAT WERE NOT REASONABLY FORESEEABLE.

 

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(b)    EXCEPT TO THE EXTENT EXPRESSLY PROVIDED HEREIN, THE SERVICER DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF TITLE, AND ANY WARRANTIES ARISING FROM COURSE OF DEALING, USAGE, OR TRADE PRACTICE.

(c)    The Buyer shall, and shall cause its Subsidiaries to, indemnify, defend, hold harmless and reimburse the Servicer and the Servicer’s Affiliates (excluding, for the avoidance of doubt, the Buyer and any of its controlled Affiliates) and each of their respective directors, officers, employees, successors and permitted assigns, in their capacity as such (collectively, the “Servicer Indemnified Parties”), for, from and against all Losses imposed on, incurred or suffered by any Servicer Indemnified Party arising out of or relating to the provision of any Transition Service pursuant to this Agreement, except to the extent that such Losses arise out of or relate to any Servicer Indemnified Party’s breach of this Agreement, intentional fraud, gross negligence or willful misconduct. For the avoidance of doubt, any acts or omissions of the HK Employees (as defined in the Service Exhibit) shall be considered those of Buyer or its controlled Affiliate, as applicable, and not those of the Servicer Indemnified Parties. Each Servicer Indemnified Party is an express third party beneficiary of, and entitled to enforce, this Section 8(c).

(d)    The Servicer shall, and shall cause its Subsidiaries to, indemnify, defend, hold harmless and reimburse the Buyer and the Buyer’s Affiliates (excluding, for the avoidance of doubt, the Servicer and any of its controlled Affiliates) and each of their respective directors, officers, employees, successors and permitted assigns, in their capacity as such (collectively, the “Buyer Indemnified Parties”), for, from and against all Losses imposed on, incurred or suffered by any Buyer Indemnified Party arising out of or relating to the Servicer’s or its Representative’s intentional fraud, gross negligence or willful misconduct in providing any Transition Service. Each Buyer Indemnified Party is an express third party beneficiary of, and entitled to enforce, this Section 8(d).

(e)    The indemnification procedures set forth in Section 14.5 (Claim Procedures) of the Business Combination Agreement shall apply to claims for indemnification under this Agreement and are hereby incorporated by reference mutatis mutandis.

9.    Relationship of the Parties. The Parties intend that their relationship hereunder will be that of independent contractors. Nothing contained in this Agreement is to be construed as creating any partnership, joint venture, relationship of principal and agent or employer and employee, or other arrangement between the Parties. No Party will have any right, power or authority to act or create any obligation, expressed or implied, on behalf of another Party. The Servicer shall be responsible in accordance with applicable Law for workers’ compensation and other types of insurance covering its employees and employees of its Affiliates performing the Transition Services and shall have sole responsibility for compliance with all other applicable

 

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Laws relating to such employees. No employee of the Servicer or any of its Affiliates who renders any Transition Service shall be deemed or considered to be an employee of the Buyer or any of its Affiliates as a result thereof.

10.    Confidentiality. During the term of this Agreement, and for one (1) year thereafter, each Party shall be bound by and comply with the provisions set forth in the Non-Disclosure Agreement, dated as of November 16, 2020, between the Servicer and the Buyer (the “NDA”), as if such provisions were set forth in this Agreement, and such provisions are incorporated in this Agreement by reference with respect to Confidential Information; provided, that in each case for purposes of this Agreement: (a) Confidential Information with respect to the Diamond Business shall be deemed to be Confidential Information of Buyer (as Disclosing Party), and not of the Servicer; (b) the Purpose shall be the fulfillment of a Party’s obligations and receiving its benefits under, or otherwise enforcing, this Agreement, the Business Combination Agreement, any other Ancillary Agreement or any other agreement between the Servicer or one or more of its Affiliates, on the one hand, and Buyer or one or more of its Affiliates, on the other hand; and (c) Sections 10 and 11 and the last sentence of Section 3 of the NDA shall be disregarded; and provided, further, that nothing in this Agreement shall be deemed to restrict any Party’s or its Affiliates’ use, disclosure or retention of Confidential Information of either Party or its Affiliates as permitted pursuant to the Business Combination Agreement, any other Ancillary Agreement or any other agreement between such Party or one or more of its Affiliates, on the one hand, and the other Party or one or more of its Affiliates, on the other hand. Capitalized terms used in this Section 10 that are not otherwise defined in this Agreement shall have the respective meanings ascribed to such terms in the NDA. Each Party understands and acknowledges that the other Party and its Affiliates may now or in the future engage in any business that may be competitive with the business of such first Party or its Subsidiaries (it being agreed, for the avoidance of doubt, that Blue Owl Holdings, Blue Owl Carry and their respective Subsidiaries are Subsidiaries of Buyer), evaluate, invest in (directly or indirectly, including providing financing to) or do business with, competitors or potential competitors of such first Party or its Subsidiaries, and that the receipt or possession of Confidential Information is not intended to and shall not restrict or preclude such activities; provided, that the other Party does not use or disclose any Confidential Information in connection therewith in violation hereof. Further, each Party understands and acknowledges that the other Party and its Affiliates may (i) have general knowledge with respect to the industry in which such first Party or its Subsidiaries operate and that additional general industry knowledge may be gained by the other Party from reviewing or having received Confidential Information that cannot be separated from the such other Party’s overall knowledge and (ii) retain certain mental impressions of the Confidential Information (it being understood that a mental impression is what a person retains when such person has not intentionally memorized the information or retained notes or other aids to help retain such memory), and such general knowledge and mental impressions shall be permitted to be used in the ordinary course of such other Party’s business, including in connection with evaluating investment opportunities, trading securities in the public markets and participating in private investment transactions and is not intended to be limited by this Section 10. Prior to sharing with the Servicer any Confidential Information (other than with respect to Buyer) that could reasonably be expected to constitute material non-public information within the meaning of the insider trading provisions of the Securities Exchange Act of 1934 (“MNPI”), the Buyer shall use commercially reasonable efforts to first consult with Servicer Legal & Compliance personnel designated by Servicer to the Buyer to determine whether and how such information can be shared. For the avoidance of doubt, if and to the extent that the Buyer discloses MNPI (which,

 

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for the avoidance of doubt, does not include Confidential Information regarding Buyer) to Servicer or its subsidiaries, neither Servicer nor any of its subsidiaries shall be deemed to have any duty of trust or confidence to any party with respect to such MNPI unless specifically agreed in writing by Servicer or its subsidiaries prior to such disclosure.

11.    Expenses. Except as otherwise provided in this Agreement (including Section 1 hereof and the Service Exhibit), each Party shall be solely liable for and pay all of its own costs and expenses (including attorneys’, accountants’ and investment bankers’ fees and other out-of-pocket expenses) incurred by such Party or its Affiliates in connection with the performance of such Party’s obligations under this Agreement.

12.    Successors and Assigns. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned (whether voluntarily, involuntarily, by operation of law or otherwise) by either Party without the prior written consent of the other Party. Notwithstanding the foregoing, the Servicer may assign its obligation to perform Transition Services to any of its Affiliates without the Buyer’s prior consent; provided, that such assignment shall not relieve the Servicer of its obligations hereunder.

13.    Third-Party Beneficiaries. Other than as expressly provided in Section 8: (a) this Agreement does not benefit or create any legal or equitable right, remedy or claim in or on behalf of any Person other than the Parties and their permitted successors and assigns; and (b) this Agreement and all of its terms and conditions are for the sole and exclusive benefit of the Parties and their successors and permitted assigns.

14.    Notices. All notices, demands and other communications to be given or delivered under this Agreement shall be in writing and delivered in accordance with Section 15.3 (Notices) of the Business Combination Agreement, which shall apply hereto mutatis mutandis; provided, that a copy of any notice to the Buyer hereunder shall be delivered to the addresses set forth in Section 15.3 of the Business Combination Agreement for Opal Group, Opal Feeder and Opal Partners.

15.    Governing Law; Waiver of Jury Trial; Jurisdiction. Section 15.9 (Governing Law; Waiver of Jury Trial; Jurisdiction) of the Business Combination Agreement is hereby incorporated herein by reference mutatis mutandis.

16.    Entire Agreement. This Agreement (along with the Exhibits as such may be supplemented from time to time in accordance with this Agreement, which Exhibits are incorporated herein by reference), together with the Business Combination Agreement (including the Disclosure Letters and Exhibits thereto), the other Ancillary Agreements and the Confidentiality Agreements contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous agreements, understandings and discussions, whether written or oral, relating to such subject matter in any way. The Parties have voluntarily agreed to define their rights and Liabilities with respect to the transactions contemplated by this Agreement exclusively pursuant to the express terms and provisions of this Agreement and the Business Combination Agreement, and the Parties

 

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disclaim that they are owed any duties or are entitled to any remedies not set forth in this Agreement, the Business Combination Agreement, the other Ancillary Agreements or the Confidentiality Agreements. Furthermore, this Agreement embodies the justifiable expectations of sophisticated parties derived from arm’s-length negotiations, and no Person has any special relationship with another Person that would justify any expectation beyond that of an ordinary buyer and an ordinary seller in an arm’s-length transaction.

17.    Interpretation. The headings and captions used in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized terms used in any Exhibit attached to this Agreement or delivered at the same time and not otherwise defined therein shall have the meanings set forth in this Agreement. The use of the word “including” in this Agreement shall mean “including without limitation.” The words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References in this Agreement to a specific Section, Subsection, Clause, Recital, Section of a Schedule or Exhibit shall refer, respectively, to Sections, Subsections, Clauses, Recitals, Sections of a Schedules or Exhibits of this Agreement. Terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. References in this Agreement to any gender shall include each other gender. The word “or” shall not be exclusive unless the context clearly requires the selection of one (but not more than one) of a number of items. References to “written” or “in writing” include in electronic form. References in this Agreement to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and permitted assigns; provided, however, that nothing contained in this Section 17 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement. References in this Agreement to a Person in a particular capacity or capacities shall exclude such Person in any other capacity. Any reference to “days” shall mean calendar days unless Business Days are specified; provided, that if any action is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter. References in this Agreement to any Contract (including this Agreement) mean such Contract as amended, restated, supplemented or modified from time to time in accordance with the terms thereof. With respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.” References in this Agreement to any Law shall be deemed also to refer to such Law, as amended, and all rules and regulations promulgated thereunder. If any Party has breached any representation, warranty, covenant or agreement contained in this Agreement in any respect, the fact that there exists another representation, warranty, covenant or agreement relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, covenant or agreement. The word “extent” in the phrase “to the extent” (or similar phrases) shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” An accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP. Except where otherwise provided, all amounts in this Agreement are stated and shall be paid in United States dollars. The Parties and their respective counsel have reviewed and negotiated this Agreement as the joint agreement and understanding of the Parties, and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Person. In no event shall the Buyer or its Subsidiaries be deemed to be an Affiliate of the Servicer or any of its Affiliates for purposes of this Agreement.

 

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18.    Amendment; Waiver. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Parties. No waiver of any provision or condition of this Agreement shall be valid unless the same shall be in writing and signed by the Party against which such waiver is to be enforced. No waiver by either Party of any default, breach of representation or warranty or breach of covenant under this Agreement, whether intentional or not, shall be deemed to extend to any other, prior or subsequent default or breach or affect in any way any rights arising by virtue of any other, prior or subsequent such occurrence.

19.    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable Law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

20.    Counterparts; Electronic Delivery. This Agreement and any other agreements, certificates, instruments and documents delivered pursuant to this Agreement may be executed and delivered in one or more counterparts and by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No Party shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a Contract and each Party forever waives any such defense.

21.    Relationship of Documents. The Parties agree that this Agreement constitutes the “transition services agreement” contemplated by Section 10.22 of the Business Combination Agreement; provided, that nothing in this Agreement shall alter in any obligation of any Party from any after the date hereof under the Business Combination Agreement. In the event of a conflict between the provisions of this Agreement and the Business Combination Agreement, the provisions of the Business Combination Agreement shall control.

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IN WITNESS WHEREOF, the Buyer and the Servicer have caused this Agreement to be executed by their duly authorized officers or representatives as of the date set forth in the preamble hereto.

 

SERVICER:
NEUBERGER BERMAN GROUP LLC
By:  

/s/ Heather P. Zuckerman

Name:   Heather P. Zuckerman
Title:   Chief of Staff
BUYER:
BLUE OWL CAPITAL INC.
By:  

/s/ Alan Kirshenbaum

Name:   Alan Kirshenbaum
Title:   Chief Financial Officer

Signature Page to Transition Services Agreement


Exhibit A

Service Exhibit

See attached.

Exhibit A to the Transition Services Agreement


Exhibit B

TSA Liaisons

Servicer: Philip Ho

Buyer: Andrew Polland

Exhibit B to the Transition Services Agreement

Exhibit 16.1

May 21, 2021

Office of the Chief Accountant

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Ladies and Gentlemen:

We have read Blue Owl Capital Inc. (formerly known as Altimar Acquisition Corporation) statements included under Item 4.01 of its Form 8-K dated May 21, 2021. We agree with the statements concerning our Firm under Item 4.01, in which we were informed of our dismissal on May 19, 2021, following completion of the Company’s quarterly review for the period ended March 31, 2021, which consists only of the accounts of the pre-Business Combination Special Purpose Acquisition Company. We are not in a position to agree or disagree with other statements contained therein.

Very truly yours,

/s/ WithumSmith+Brown, PC

New York, New York

Exhibit 21.1

SUBSIDIARIES OF BLUE OWL CAPITAL INC.

 

Name of Subsidiary    Country (State)

Blue Owl Capital Carry LP

  

United States (Delaware)

Blue Owl Capital GP LLC

  

United States (Delaware)

Blue Owl Capital Holdings LP

  

United States (Delaware)

Dyal 2018 K-Coinvest Sidecar Associates LP

  

United States (Delaware)

Dyal Capital Holdings LLC

  

United States (Delaware)

Dyal Capital Partners I GP LLC

  

United States (Delaware)

Dyal Capital Partners II GP LLC

  

United States (Delaware)

Dyal Earl GP LLC

  

United States (Delaware)

Dyal Finance Associates (US) LP

  

United States (Delaware)

Dyal HomeCourt Associates LLC

  

United States (Delaware)

Dyal Horizon GP LLC

  

United States (Delaware)

Dyal LP Holdings LLC

  

United States (Delaware)

Dyal Strategic Capital Associates LLC

  

United States (Delaware)

Dyal UK Limited

  

United Kingdom

Dyal Advisors LLC

  

United States (Delaware)

Dyal Associates III LP

  

United States (Delaware)

Dyal Associates IV LP

  

United States (Delaware)

Dyal Associates V LP

  

United States (Delaware)

NB Dyal Columbus GP LLC

  

United States (Delaware)

Dyal GP Holdings LLC

  

United States (Delaware)

Dyal IV Advisors LLC

  

United States (Delaware)

NB James GP LLC

  

United States (Delaware)

OR Opportunistic I (H) GP LLC

  

United States (Delaware)

ORCA I LLC

  

United States (Delaware)

Owl Rock Access Fund GP, LLC

  

United States (Delaware)

OR Opportunistic DL (C) GP, LLC

  

United States (Delaware)

Owl Rock Capital Advisors LLC

  

United States (Delaware)

Owl Rock Capital Diversified Holdings LLC

  

United States (Delaware)

Owl Rock Capital GP Holdings LP

  

United States (Delaware)

Owl Rock Capital Group LLC

  

United States (Delaware)

Blue Owl Capital Holdings LLC

  

United States (Delaware)

Owl Rock Capital Private Fund Advisors LLC

  

United States (Delaware)

Blue Owl Securities LLC

  

United States (Delaware)

Owl Rock Capital Technology Holdings LLC

  

United States (Delaware)

 

1


Owl Rock Diversified Advisors LLC

  

United States (Delaware)

Owl Rock Europe (M) Holdings Limited

  

Malta

Owl Rock First Lien GP LLC

  

United States (Delaware)

Owl Rock Opportunistic GP LLC

  

United States (Delaware)

Owl Rock Technology Advisors LLC

  

United States (Delaware)

Owl Rock UK Holdings Limited

  

United Kingdom

Owl Rock UK LLC

  

United Kingdom

 

2

Exhibit 99.1

Owl Rock and Dyal Complete Business Combination; Newly Formed Blue Owl Commences Trading on NYSE

 

   

Transaction combines Owl Rock Capital Group and Dyal Capital Partners to form Blue Owl Capital Inc.

 

   

Blue Owl will commence trading under the ticker “OWL” on the NYSE on May 20, 2021

 

   

As of 3/31, Blue Owl has $52.5 billion in AUM, 91% of which is permanent capital

 

   

Doug Ostrover will serve as Chief Executive Officer; Marc Lipschultz and Michael Rees will become Co-Presidents; and Alan Kirshenbaum will serve as Chief Financial Officer

New York, NY – May 20, 2021 – Owl Rock Capital Group and Dyal Capital Partners today announced the formation of Blue Owl Capital Inc. (NYSE: OWL), a publicly traded alternative asset management firm. Blue Owl is the result of the completion of the business combination with Altimar Acquisition Corporation (NYSE: ATAC). The transaction was unanimously approved by Altimar’s Board of Directors and was approved at an extraordinary general meeting of Altimar stockholders on May 18, 2021.

With the completion of the business combination, Blue Owl will offer public investors exposure to two of the fastest growing segments in alternative asset management: direct lending and GP capital solutions. As of March 31, 2021, the combined entity has $52.5 billion in assets under management, of which 91% is permanent capital. Blue Owl will derive its distributable earnings from fee-related earnings, and as a result is expected to provide investors with enhanced earnings visibility.

Blue Owl will be led by an experienced management team consisting of Chief Executive Officer Doug Ostrover, a co-founder of Owl Rock, Co-Presidents Marc Lipschultz, a co-founder of Owl Rock, and Michael Rees, founder of Dyal, and Chief Financial Officer Alan Kirshenbaum.

Doug Ostrover, CEO of Blue Owl, said: “Today marks an important milestone in our mission to provide both public investors access to the fastest growing areas of private markets and our clients with access to attractive private investments to help them achieve their return objectives. We are excited about the opportunity to deliver value for our shareholders by continuing to grow our leadership position in the alternative asset management industry.”

Michael Rees, Co-President of Blue Owl, commented: “As institutional investors continue to seek out alternative sources of returns and yield, our strategies are well positioned to meet their objectives as well as those of private investment managers. We look forward to continuing to be the partner of choice for participants across the institutional and alternative investing ecosystems and supporting private market firms as they continue to drive growth across their portfolios and the broader economy.”

Marc Lipschultz, Co-President of Blue Owl, added: “We are excited to bring Blue Owl to the public markets and offer investors unique exposure to direct lending and GP capital solutions, supported by a financial profile that offers enhanced earnings stability.”

 

1


About Blue Owl

Blue Owl Capital is an alternative asset manager that provides investors access to direct lending and GP capital solutions strategies through a variety of vehicles. The firm’s breadth of offerings and permanent capital base enables it to offer a differentiated, holistic platform of capital solutions to participants throughout the private market ecosystem, including alternative asset managers and private middle market corporations. The firm has approximately $52.5 billion of assets under management as of March 31, 2021. Blue Owl’s management team is comprised of seasoned investment professionals with more than 25 years of experience building alternative investment businesses. Blue Owl has approximately 250 employees across its Dyal Capital Partners and Owl Rock Capital divisions and has six offices globally. For more information, please visit us at www.blueowl.com.

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Blue Owl’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important factors, among others, that may affect actual results or outcomes include the inability to recognize the anticipated benefits of the Business Combination; costs related to the Business Combination; the inability to maintain the listing of Blue Owl’s shares on the New York Stock Exchange (“NYSE”); Blue Owl’s ability to manage growth; Blue Owl’s ability to execute its business plan and meet its projections; potential litigation involving Blue Owl; changes in applicable laws or regulations; the possibility that Blue Owl may be adversely affected by other economic, business, and/or competitive factors; and the impact of the continuing COVID-19 pandemic on Blue Owl’s business.

 

2

Exhibit 99.2

Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Consolidated and Combined Financial Statements

INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Consolidated and Combined Statements of Financial Condition as of March 31, 2021 (Unaudited) and December 31, 2020

     F-1  

Consolidated and Combined Statements of Operations for the three months ended March 31, 2021 and 2020 (Unaudited)

     F-2  

Consolidated and Combined Statements of Changes in Members’ Capital (Deficit) for the three months ended March 31, 2021 and 2020 (Unaudited)

     F-3  

Consolidated and Combined Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited)

     F-4  

Notes to Consolidated and Combined Financial Statements (Unaudited)

     F-5  

 

 


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Consolidated and Combined Statements of Financial Condition

(Amounts in Thousands)

 

     March 31, 2021     December 31, 2020  
     (Unaudited)        

Assets

    

Cash and cash-equivalents

   $ 8,564     $ 11,630  

Due from affiliates, net

     100,253       92,698  

Operating lease assets

     12,614       —    

Other assets

     27,520       17,269  
  

 

 

   

 

 

 

Total assets

   $ 148,951     $ 121,597  
  

 

 

   

 

 

 

Liabilities

    

Debt obligations, net

   $ 359,757     $ 356,386  

Accrued compensation

     181,912       207,957  

Accounts payable, accrued expenses and other liabilities

     62,405       58,415  

Operating lease liabilities

     13,175       —    
  

 

 

   

 

 

 

Total liabilities

     617,249       622,758  
  

 

 

   

 

 

 

Commitments and contingencies (Note 9)

    

Members’ capital (deficit)

    

Members’ capital (deficit) attributed to members of Owl Rock Capital and sole member of Owl Rock Capital Securities LLC

     (477,398     (507,687

Non-controlling interests

     9,100       6,526  
  

 

 

   

 

 

 

Total members’ capital (deficit)

     (468,298     (501,161
  

 

 

   

 

 

 

Total liabilities and members’ capital (deficit)

   $ 148,951     $ 121,597  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

F-1


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Consolidated and Combined Statements of Operations

(Unaudited)

(Amounts in Thousands)

 

     For the Three Months Ended March 31,  
     2021      2020  

Revenues

     

Management fees, net (includes BDC Part I fees of $28,914 and $3,927 for the three months ended March 31, 2021 and 2020, respectively)

   $ 94,713      $ 36,847  

Administrative, transaction and other fees

     13,511        12,421  
  

 

 

    

 

 

 

Total revenues, net

     108,224        49,268  

Expenses

     

Compensation and benefits

     47,984        32,175  

General, administrative and other expenses

     14,860        19,220  
  

 

 

    

 

 

 

Total expenses

     62,844        51,395  

Interest expense

     5,858        5,894  
  

 

 

    

 

 

 

Net income (loss) before income taxes

     39,522        (8,021

Income tax expense (benefit)

     188        (46
  

 

 

    

 

 

 

Net income (loss) including non-controlling interests

     39,334        (7,975

Net (income) loss attributed to non-controlling interests

     80        915  
  

 

 

    

 

 

 

Net income (loss) attributable to members of Owl Rock Capital and sole member of Owl Rock Capital Securities LLC

   $ 39,414      $ (7,060
  

 

 

    

 

 

 

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

F-2


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Consolidated and Combined Statements of Changes in Members’ Capital (Deficit)

(Unaudited)

(Amounts in Thousands)

 

           Members of Owl Rock Capital              
     Sole Member
of Securities
    Sponsor B Units     Class A Units     Non-controlling
Interests
    Total  

Members’ capital (deficit) at December 31, 2019

   $ 2,823     $ (214,768   $ (140,811   $ 2,259     $ (350,497

Contributions

     —         —         —         1,868       1,868  

Distributions

     (500     (9,732     (9,693     (176     (20,101

Net income (loss)

           (3,537     (3,523     (915     (7,975
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Members’ capital (deficit) at March 31, 2020

   $ 2,323     $ (228,037   $ (154,027   $ 3,036     $ (376,705
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Members’ capital (deficit) at December 31, 2020

   $ 1,323     $ (291,637   $ (217,373   $ 6,526     $ (501,161

Contributions

     —         —         —         2,654       2,654  

Distributions

     —         (4,572     (4,553     —         (9,125

Net income (loss)

     —         19,746       19,668       (80     39,334  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Members’ capital (deficit) at March 31, 2021

   $ 1,323     $ (276,463   $ (202,258   $ 9,100     $ (468,298
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

F-3


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Consolidated and Combined Statements of Cash Flows

(Unaudited)

(Amounts in Thousands)

 

     For the Three Months Ended March 31,  
     2021     2020  

Cash flows from operating activities

    

Net income (loss) including non-controlling interests

   $ 39,334     $ (7,975

Adjustments to reconcile net income (loss) to net cash from operating activities:

    

Depreciation and amortization

     131       230  

Amortization of deferred financing costs

     218       168  

Non-cash lease expense

     1,148       —    

Changes in operating assets and liabilities:

    

Due from affiliates, net

     (7,555     7,635  

Other assets

     (10,047     1,724  

Accrued compensation

     (26,045     (17,962

Accounts payable, accrued expenses and other liabilities

     4,608       (3,927

Operating lease liabilities

     (1,205     —    
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     587       (20,107

Cash flows from investing activities

    

Purchase of fixed assets

     (295     (15
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (295     (15

Cash flows from financing activities

    

Proceeds from debt obligations

     97,898       71,570  

Repayments of debt obligations

     (94,745     (31,095

Deferred financing costs

     —         (300

Contributions

     2,614       1,804  

Distributions

     (9,125     (20,101
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (3,358     21,878  
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash-equivalents

     (3,066     1,756  
  

 

 

   

 

 

 

Cash and cash-equivalents, beginning of the period

     11,630       7,343  
  

 

 

   

 

 

 

Cash and cash-equivalents, end of the period

   $ 8,564     $ 9,099  
  

 

 

   

 

 

 

Supplemental Information

    

Cash paid for interest

   $ 5,675     $ 5,693  

Cash paid for income taxes

   $ 230     $ 142  

The accompanying notes are an integral part of these consolidated and combined financial statements.

 

F-4


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

1.

Organization and Business Description

Owl Rock Capital Group LLC (“Group” or “Parent”) is a Delaware limited liability company, headquartered in New York. Group is a leading alternative asset management firm focused on providing direct lending solutions to U.S. middle market companies (the “Business”). Prior to the formation of Group on June 6, 2018, the Business operated under Owl Rock Capital Holdings LLC (“Holdings”), a Delaware limited liability company that was formed on October 15, 2015 and which is a wholly-owned subsidiary of Group.

There are two types of equity interests in Group: Units, comprised of Class A Units and Sponsor B Units and which retain pro rata economic rights in the assets, liabilities, profits and losses of the Business, and FIC Interests, which retain pro rata economic rights in the assets, liabilities, profits and losses of certain assets (“FIC assets”), which are not assets of the Business. “Owl Rock Capital” is presented as a carve-out from Group representing the portion of Group attributable to the Business. FIC interests are not presented in the carve-out financial statements of Owl Rock Capital, as FIC assets are not assets of the Business.

Sponsor B Units are owned by an entity indirectly controlled by certain executives of Owl Rock Capital and Class A Units are held by certain third-party investors. An entity controlled by certain executives of Owl Rock Capital has the right to manage and conduct the business and affairs of Owl Rock Capital.

Owl Rock Capital Securities LLC (“Securities”) is a Delaware limited liability company formed on December 17, 2015. Securities is a broker-dealer registered with the Securities Exchange Commission (“SEC”), a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Securities is wholly owned by an affiliate of Owl Rock Capital and provides distribution services to Owl Rock Capital. Owl Rock Capital, collectively with its consolidated subsidiaries related to the Business (and excluding such subsidiaries constituting FIC assets), and combined with Securities, is referred to hereafter as “Owl Rock” or the “Company”. The Company measures its financial performance and allocates resources in a single segment, which operates primarily in the United States. Accordingly, Owl Rock considers itself to be in a single operating and reportable segment structure.

On December 23, 2020, Group entered into a business combination agreement with Altimar Acquisition Corporation (“Altimar”) and Neuberger Berman Group LLC (“Neuberger”) with respect to a business combination transaction (the “transaction”) involving Owl Rock, Dyal Capital Partners (“Dyal”), a division of Neuberger, and Altimar to form “Blue Owl,” a publicly-traded alternative asset manager. Effective May 19, 2021, (i) Altimar was redomiciled as a Delaware corporation and changed its name to Blue Owl Capital Inc. (ii) the Company merged with Altimar and (iii) the Company acquired Dyal.

 

2.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated and combined (thereafter referred to as “consolidated”) financial statements have been prepared from the Parent’s historical accounting records and are presented on a stand-alone basis. The Parent owns a residual interest in proceeds from the sale of Sponsor B Units, which are not presented as part of these stand-alone consolidated financial statements and footnotes. All inter-company balances and transactions have been eliminated upon consolidation and combination. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The consolidated statements of operations include all revenues and costs directly attributable to Owl Rock. The consolidated statements of financial condition of Owl Rock include assets and liabilities of the Parent that are specifically identifiable or otherwise attributable to the Company. Management of Owl Rock and the Parent consider these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to Owl Rock.

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported consolidated results of operations.

 

F-5


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates and such differences could be material to the consolidated financial statements.

Principles of Consolidation

The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Entities that are not variable interest entities (“VIEs”) are further evaluated for consolidation under the voting interest model (“VOE”).

An entity is considered to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights.

Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. Where the Company’s interests in funds are primarily management fees, incentive fees, and/or insignificant direct or indirect equity interests through related parties, the Company is not considered to have a variable interest in such entities.

The Company consolidates all VIEs for which it is the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest, which is defined as having (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE.

The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders that conclusion. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. The consolidation analysis is generally performed qualitatively, however, if the primary beneficiary is not readily determinable, a quantitative analysis may also be performed. This analysis requires judgment, including: (1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties’ equity interests should be aggregated, (4) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary.

Cash and Cash Equivalents

Cash and cash equivalents of the Company include demand deposit accounts.

As of March 31, 2021 and December 31, 2020, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions.

 

F-6


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Net Capital Requirement

As a registered broker-dealer, Securities is subject to SEC Rule 15c3-1, which requires the maintenance of minimum net capital in excess of the greater of $5 and 6.67% of aggregate indebtedness. As of March 31, 2021 and December 31, 2020, Securities’ net capital was in excess of minimum requirements.

Leases

Right-of-use assets and liabilities related to operating leases are included within operating lease assets and operating lease liabilities, respectively, in the Company’s consolidated statements of financial position. The Company adopted accounting standards update (“ASU”) 2016-02, Leases (Topic 842), as amended, on January 1, 2021 (“ASC 842”). The Company did not restate prior periods and there were no adjustments to retained earnings upon adoption of ASC 842. The Company applied the package of practical expedients permitted under the transition guidance within the new standard, including carrying forward the historical lease classification and not reassessing whether certain costs capitalized under the prior guidance are eligible for capitalization under ASC 842. The adoption of ASC 842 resulted in the recognition of $13.8 million and $14.4 million of operating lease assets and liabilities, respectively, with the net of these amounts offsetting the deferred rent credit liability in existence immediately prior to adoption.

The Company determines if an arrangement is a lease at inception. Right-of-use lease assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Right-of-use lease assets represent the Company’s right to use a leased asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company does not recognize right-of-use lease assets and lease liabilities for leases with an initial term of one year or less.

As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments. The determination of an appropriate incremental borrowing rate requires judgment. The Company determines its incremental borrowing rate based on data for instruments with similar characteristics, including recently issued debt, as well as other factors.

The operating lease assets include any lease payments made and include lease incentives. Lease terms include options to extend or terminate when it is reasonably certain that the Company will exercise that option. In addition, the Company separates lease and non-lease components embedded within lease agreements.

Lease expense for operating lease payments, which is comprised of amortization of right-of-use assets and interest accretion on lease liabilities, is generally recognized on a straight-line basis over the lease term and included within general, administrative and other expenses in the consolidated statements of operations. Amortization of right-of-use lease assets related to finance leases is included within general, administrative and other expenses and interest accretion on lease liabilities related to finance leases is included within interest expense.

Other Assets

Other assets include deferred transaction costs, deferred tax assets, fixed assets, capital contribution receivable, prepaid expenses and other. Fixed assets, consisting of furniture, fixtures and equipment, leasehold improvements, computer hardware, and internal-use software, are recorded at cost, less accumulated depreciation and amortization.

Direct costs associated with developing, purchasing, or otherwise acquiring software for internal use are capitalized and amortized on a straight-line basis over the expected useful life of the software, beginning when the software is ready for its intended purpose. Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred.

 

F-7


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Fixed assets are depreciated or amortized on a straight-line basis over an asset’s estimated useful life, with the corresponding depreciation and amortization expense included within general, administrative and other expenses on the Company’s consolidated statements of operations. The estimated useful life for leasehold improvements is the lesser of the remaining lease term and the life of the asset, while other fixed assets and internal-use software are generally depreciated between two and seven years. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Direct and incremental costs incurred in connection with the Blue Owl transaction are capitalized and deferred in the consolidated statements of financial condition within other assets. These costs will be recorded as a reduction of capital when the transaction becomes effective.

Distributions

Distributions to members are determined in accordance with the Company’s operating agreements and are recorded on the payment date.

Non-controlling Interests

Non-controlling interests in consolidated subsidiaries reflect third-party investor capital in operating subsidiaries. The allocation of net income or loss to non-controlling interests is based on the relative ownership interests of the third-party investors.

Revenue Recognition

Revenues consist primarily of management fees, incentive fees and administrative and other transaction fees. Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

Pursuant to ASC 606, the Company recognizes revenue at the time of transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Under this standard, revenue is based on a contract with a determinable transaction price and distinct performance obligations with probable collectability. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer.

Management Fees

Management fees are recognized over the period in which the investment management services are performed because customers simultaneously consume and receive benefits continuously over time. Payment terms and fee rates of management fees vary by fund. Management fees are generally based upon a defined percentage of average fair value of gross assets (excluding cash) or average fair value of gross assets (excluding cash) plus undrawn commitments in the case of the Company’s business development companies (“BDCs”), or fair value of gross assets (excluding cash), fair value of investments plus undrawn commitments, or invested capital in the case of the Company’s long-dated private funds (“Private Debt funds”) and separately managed accounts (“Managed Accounts”). The contractual terms of management fees vary by fund structure and investment strategy.

Management fees also include a fee based on the net investment income of the Company’s BDCs, Owl Rock Capital Corporation, Owl Rock Capital Corporation II, Owl Rock Technology Finance Corp. and Owl Rock Core Income Corp. (and should such BDC be listed in the future, Owl Rock Capital Corporation III, collectively, “BDC Part I Fees”), which are subject to performance hurdles. Such BDC Part I Fees are classified as management fees in the consolidated statements of operations as they are predictable and recurring in nature, not subject to contingent repayment and cash-settled each quarter.

 

F-8


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Incentive Fees

Incentive fees earned on the performance of certain fund structures are recognized based on the fund’s performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Incentive fees are realized at the end of a measurement period, typically annually. Once realized, such fees are no longer subject to reversal. The Company recognizes incentive fee revenue only when the amount is realized and no longer subject to reversal.

Administrative, Transaction and Other Fees

Administrative, transaction and other fees are comprised of fee income earned from services provided to portfolio companies, dealer manager revenue, and administrative fees reimbursed by products managed by the Company (“Owl Rock products”).

Fee income is earned for services provided to portfolio companies, which may include arrangement, syndication, origination, structuring analysis, capital structure and business plan advice and other services. The fees are recognized as income when the services rendered are completed.

Dealer manager revenue consists of commissions earned for providing distribution services to certain Owl Rock products. Dealer manager revenue is recorded on an accrual basis as earned.

Administrative fees represent expenses incurred by certain professionals of the Company and reimbursed by products managed by the Company. The Company may incur certain costs in connection with satisfying its performance obligations for investment management services or similar agreements – primarily employee travel costs – for which it receives reimbursements from its customers under the administrative agreements or similar agreements with Owl Rock products. For reimbursable travel costs, the Company concluded it controls the services provided by its employees and other parties and, therefore, is acting as principal. For reimbursable costs incurred in connection with satisfying its performance obligations for administration services, the Company concluded it does not control, with the exception of the allocable compensation and employee travel costs, the services provided by its employees and other parties and, therefore, is acting as agent. Accordingly, the Company records expenses for which it is acting as the principal on a gross basis within administrative, transaction and other fees, general, administrative and other expenses, compensation and benefits and records costs for which it is agent on a net basis within due from affiliates, net, within the consolidated statements of financial condition.

Compensation and Benefits

Compensation and benefits consist of salaries, bonuses, commissions, long-term deferral programs, benefits and payroll taxes. Compensation is accrued over the related service period and long-term deferral program awards are paid out based on the various vesting dates.

On September 15, 2020, the Company issued a special incentive award (the “Award”). The Award is determined in relation to the fair value of Owl Rock, measured by an independent third party valuation firm, was fully vested upon issuance, will be settled in cash and is subject to the terms and conditions of the Award. The Award is classified as a liability and will be remeasured at fair value, which is equal to its settlement value, each reporting period until it is settled. The Award incurred a non-cash compensation expense of $90.5 million in 2020 and it is included in compensation and benefits within the consolidated statements of operations and accrued compensation within the consolidated statements of financial condition.

On December 28, 2020, the Company entered into an agreement to convert the cash settled Award into 9.05 million restricted stock units of Blue Owl common stock upon closing of the transaction. As this modification is contingent upon the closing of the transaction, it will not be recognized until the contingency is resolved.

 

F-9


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Deferred Financing Costs

The Company records expenses related to debt obligations as deferred financing costs. These expenses are deferred and evenly amortized over the life of the related debt instrument and included within interest expense within the consolidated statements of operations. Deferred financing costs are presented on the consolidated statements of financial condition as a direct deduction from the outstanding debt obligations liability.

Income Taxes

Certain subsidiaries of the Company (the “Taxable Partnerships”) are treated as partnerships for federal income tax purposes and, accordingly, are generally not subject to federal and state income taxes, as such taxes are the responsibility of certain direct and indirect owners of the Taxable Partnerships. However, the Taxable Partnerships are subject to Unincorporated Business Tax in New York City and Connecticut at 4.00% and 6.99%, respectively (“UBT”) and other state taxes. Certain subsidiaries of the Company (the “Taxable Corporations”) are domestic and foreign corporations. Depending on the domicile of the Taxable Corporations, their income is subject to either U.S. federal, state and local income taxes or foreign income taxes (for which a foreign tax credit can generally offset U.S. corporate taxes imposed on the same income).

The Company accounts for income taxes and UBT using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax basis by applying statutory tax rates. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not, that some or all of the deferred tax asset will not be realized. Interest and penalties, if any, assessed under the relevant tax law are recognized as incurred within income tax expense in the consolidated statements of operations. Based on the available evidence, the Company has determined that it is more likely than not that all deferred tax assets will be realized and that a valuation allowance is not needed as of March 31, 2021 and December 31, 2020.

The Company is required to determine whether its tax positions are more-likely-than-not to be sustained upon examination by the applicable taxing authority based on the technical merits of the position. Tax positions not deemed to meet a more-likely-than-not standard would be recorded as a tax expense in the current period. At December 31, 2020, there were no uncertain tax positions meeting the above recognition criteria. The Taxable Partnerships and the Taxable Corporations file U.S. Federal, state and local tax returns as well as foreign tax returns. Deferred tax expense (benefit) is included in the accompanying consolidated statements of operations.

New Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which has subsequently been amended by ASU 2018-19, ASU 2019-04, ASU 2019-05, and ASU 2019-11 (collectively, “ASU 2016-13”). The objective of the guidance in ASU 2016-13 is to allow entities to recognize estimated credit losses in the period that the change in valuation occurs. ASU 2016-13 requires an entity to present financial assets measured on an amortized cost basis on the balance sheet net of an allowance for credit losses. Available for sale and held to maturity debt securities are also required to be held net of an allowance for credit losses. The guidance is effective for fiscal periods beginning after December 15, 2022. The guidance should be applied using a modified retrospective approach. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

 

F-10


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this update related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The temporary optional expedients and exceptions can be elected through December 31, 2022. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to adopt the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. An entity may elect to apply the amendments in ASU 2020-04 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

 

3.

Other Assets

Other assets consist of the following:

 

     March 31, 2021      December 31, 2020  
     (Unaudited)         

Deferred transaction costs

   $ 15,593      $ 8,255  

Fixed assets, net

     3,520        3,356  

Deferred tax assets

     850        800  

Contributions receivable

     607        567  

Other assets

     6,950        4,291  
  

 

 

    

 

 

 

Total

   $ 27,520      $ 17,269  
  

 

 

    

 

 

 

Fixed assets consist of the following:

 

     March 31, 2021      December 31, 2020  
     (Unaudited)         

Leasehold improvements

   $ 2,133      $ 2,133  

Furniture and fixtures

     1,603        1,612  

Computer equipment

     730        730  

Computer software

     860        556  
  

 

 

    

 

 

 

Fixed assets

     5,326        5,031  

Accumulated depreciation and amortization

     (1,806      (1,675
  

 

 

    

 

 

 

Fixed assets, net

   $ 3,520      $ 3,356  
  

 

 

    

 

 

 

 

F-11


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

The depreciation and amortization expense for the three months ended March 31, 2021 and 2020 was $131 and $230, respectively, and included in general, administrative and other expenses within the consolidated statements of operations.

 

4.

Debt Obligations, Net

The table below summarizes outstanding debt obligations of the Company:

 

     March 31, 2021 (Unaudited)  
     Current
Maturity
Date
     Aggregate
Facility
Size
     Outstanding
Debt
     Amount
Available (1)
     Net
Carrying
Value (2)
     Interest
Rate (3)
 

Revolving Credit Facility #1

     2/28/2022      $ 105,000      $ 92,432      $ 10,841      $ 92,145        4.31

Revolving Credit Facility #2

     8/20/2021        22,000        20,981        1,019        20,953        4.31

Term Loan

     10/25/2029        250,000        250,000        —          246,659        7.60
     

 

 

    

 

 

    

 

 

    

 

 

    

Total

      $ 377,000      $ 363,413      $ 11,860      $ 359,757     
     

 

 

    

 

 

    

 

 

    

 

 

    

 

(1)

Amount available is reduced by outstanding letters of credit.

(2)

The carrying values of the Revolving Credit Facility #1, Revolving Credit Facility #2, and Term Loan are presented net of capitalized and unamortized deferred financing costs of $287, $28, and $3.3 million, respectively.

(3)

Average interest rate noted above, excludes impact of deferred financing and unused commitment fees.

 

     December 31, 2020  
     Current
Maturity
Date
     Aggregate
Facility
Size
     Outstanding
Debt
     Amount
Available (1)
     Net
Carrying
Value (2)
     Interest
Rate (3)
 

Revolving Credit Facility #1

     2/28/2022      $ 105,000      $ 92,895      $ 10,377      $ 92,522        4.75

Revolving Credit Facility #2

     8/20/2021        22,000        17,365        4,635        17,303        4.49

Term Loan

     10/25/2029        250,000        250,000        —          246,561        7.86
     

 

 

    

 

 

    

 

 

    

 

 

    

Total

      $ 377,000      $ 360,260      $ 15,012      $ 356,386     
     

 

 

    

 

 

    

 

 

    

 

 

    

 

(1)

Amount available is reduced by outstanding letters of credit.

(2)

The carrying values of the Revolving Credit Facility #1, Revolving Credit Facility #2, and Term Loan are presented net of capitalized and unamortized deferred financing costs of $373, $62, and $3.4 million, respectively.

(3)

Average interest rate noted above, excludes impact of deferred financing and unused commitment fees.

Deferred financing cost amortization expense for the three months ended March 31, 2021 and 2020 was $218 and $168, respectively.

Corporate Revolving Credit Facility

On April 15, 2021, a wholly-owned subsidiary of the Company, entered into a $150 million credit facility (“Corporate Revolving Credit Facility”). The maximum capacity under the Corporate Revolving Credit Facility may be increased to $200 million though our exercise of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing.

Borrowings under the credit facility bear interest at a rate per annum equal to: (i) in the case of London Interbank Offered Rate (“LIBOR”) – based advances, LIBOR + 2.50%, or (ii) in the case of Alternate Base Rate (“ABR”) – based advances, ABR + 1.50% subject to an ABR floor of 1.00%. The ABR is determined as the greatest of: (a) Prime Rate, (b) NY Fed Bank Rate + 0.50%, and (c) LIBOR + 1.00%. The Company also pays a fee on the unused portion of the credit facility in the amount of: (i) 0.25% per annum to the extent utilization is greater than 50%, and (ii) 0.375% per annum to the extent utilization is less than 50%.

Borrowings under the credit facility are secured by a continuing interest in certain management fees, incentive fees and other fees or distributions.

 

F-12


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Revolving Credit Facility #1

On February 22, 2017, Owl Rock entered into a $10 million credit facility (“Revolving Credit Facility #1”). On March 12, 2018, the credit facility was amended to, among other things: (i) increase facility size to $36.5 million, (ii) extend the maturity date to February 28, 2022, (iii) reduce the LIBOR — based rate from LIBOR + 3.25% to LIBOR + 3.05% and prime rate — based rate from prime rate + 0.50% to prime rate + 0.25%, and (iv) added a letter of credit sublimit of $5 million. On December 13, 2018, the credit facility was increased to $50 million. On February 20, 2020, the credit facility was increased to $80 million. On October 30, 2020, the credit facility was increased to $105 million. In April 2021, the Company terminated Revolving Credit Facility #1.

Borrowings under the credit facility bear interest at a rate per annum equal to: (i) in the case of LIBOR — based advance, the greater of LIBOR + 3.05 % and 4.25%, or (ii) in the case of prime rate — based advance, the greater of prime rate, as published by the lending bank, + 0.25 % and 4.25%. The Company also pays fees of 0.5% and 2.0% per annum on the unused portion of the credit facility and outstanding letters of credit, respectively.

Borrowings under the credit facility are secured by a continuing interest in management fees, incentive fees and other fees or distributions.

Revolving Credit Facility #2

On February 22, 2019, Owl Rock entered into a $10 million credit facility (“Revolving Credit Facility #2”). On November 29, 2019, the credit facility was increased to $16 million. On September 14, 2020, the credit facility was increased to $22 million. In April 2021, the Company terminated Revolving Credit Facility #2.

Borrowings under the credit facility bear interest at a rate per annum equal to: (i) in the case of LIBOR – based advances, the greater of LIBOR + 3.05% and 4.25%, or (ii) in the case of the prime rate — based advances, the greater of the prime rate, as published by the lending bank, + 0.25% and 4.25%. The Company also pays a fee of 0.5% per annum on the unused portion of the credit facility.

Borrowings under the credit facility are secured by a continuing interest in management fees, incentive fees and other fees or distributions.

Term Loan

On October 25, 2019, Holdings entered into a $250 million term loan agreement (“Term Loan”). The Term Loan bears interest at a rate per annum equal to LIBOR + 6.00% and is subject to a LIBOR floor of 1.50%.

Borrowing under the Term Loan is secured by cash receipts and distributions from subsidiaries of Owl Rock.

 

5.

Leases

The Company primarily has non-cancelable operating leases for its headquarters in New York and its offices in New York, Greenwich, Menlo Park and London. Upon the adoption of ASC 842, the Company did not restate prior periods and therefore, comparative period ended March 31, 2020 is not presented below.

 

Lease Costs

   Three Months Ended
March 31, 2021
 

Operating lease costs

   $ 1,316  
  

 

 

 

Net Lease Costs

   $ 1,316  
  

 

 

 

 

F-13


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Supplement Lease Cash Flow Information

   Three Months Ended
March 31, 2021
 

Cash paid for amounts included in measurement of lease liabilities:

  

Operating cash flows for operating leases

   $ 1,373  

 

Lease Term and Discount Rate

   March 31, 2021  

Weighted average remaining lease terms:

  

Operating leases

     2.6 years  

Weighted average discount rate:

  

Operating leases

     5.3

 

Maturity of Lease Liabilities

   Operating Leases (1)  

April 1 to December 31, 2021

   $ 4,106  

2022

     5,424  

2023

     4,406  

2024

     77  
  

 

 

 

Total lease payments

     14,013  

Imputed interest

     (838
  

 

 

 

Total Lease Liabilities

   $ 13,175  
  

 

 

 

 

  (1)

The Company has future operating lease payments of $55.1 million related to leases that have not commenced that were entered into as of March 31, 2021. Such lease payments are not yet accounted for in the table above or the Company’s consolidated statements of financial condition as operating lease assets and operating lease liabilities. These operating lease payments are anticipated to commence in the fourth quarter of 2022 and continue for 10 years.

 

6.

Members’ Capital (Deficit)

Ownership Interests

Sponsor B and Class A Units (collectively “Units”) provide each unitholder with legal and beneficial ownership interests in, and rights and duties as a member of Owl Rock Capital, including, without limitation, the right to share in net income (loss), and the right to receive distributions.

Ownership interests of Owl Rock Capital are summarized in the following table:

 

     March 31, 2021 (Unaudited)     December 31, 2020  
     Units      Economic
Interest %
    Units      Economic
Interest %
 

Sponsor B Units

     5,010,000        50.1     5,010,000        50.1

Class A Units

     4,990,000        49.9     4,990,000        49.9
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

     10,000,000        100.0     10,000,000        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

Contributions

Contributions by Class A members, which are non-controlling interest holders, are made to the Company in accordance with the operating agreements and are recorded in the applicable period. During the three months ended March 31, 2021 and 2020 the Company received contributions of $2.7 million and $1.9 million, respectively.

 

F-14


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Distributions

Distributions to members are determined in accordance with the Company’s operating agreements and are recorded on the payment date. During the three months ended March 31, 2021 and 2020, the Company made distributions of $9.1 million and $20.1 million, respectively.

 

7.

Related Party Transactions

Due from Affiliates, Net

The Company considers its professionals and non-consolidated funds to be affiliates. Due from affiliates, net consists of the following:

 

     March 31, 2021      December 31, 2020  
     (Unaudited)         

Management and BDC Part I Fees receivable

   $ 90,648      $ 78,586  

Payments made on behalf of and amounts due from Owl Rock products and other amounts due

     9,605        14,112  
  

 

 

    

 

 

 

Total

   $ 100,253      $ 92,698  
  

 

 

    

 

 

 

Management fees, incentive fees, and administrative fees represent revenue that is earned from the Company’s affiliates. The related accounts receivable is included within due from affiliates, net within the consolidated statements of financial condition.

Administrative fees represent allocable compensation and expenses incurred by certain professionals of the Company and reimbursed by products managed by the Company. For reimbursable expenses in which the Company is determined to be principal, during the three months ended March 31, 2021 and 2020 the Company has recorded revenue of $3.5 million and $2.8 million, respectively, within administrative, transaction and other fees on the consolidated statements of operations.

Employees and other related parties may be permitted to directly or indirectly invest in Owl Rock products alongside fund investors. Participation is limited to individuals who qualify under applicable securities laws.

Fee Waivers

The Company is party to fee waiver agreements with certain BDCs pursuant to which certain portions of management fee and BDC Part I Fee revenue are waived. The management fees and BDC Part I Fees are reported net of the fee waivers. For the three months ended March 31, 2021 the Company waived management fees in the amount of $52. For the three months ended March 31, 2020, the Company waived management fees and BDC Part I Fees in the amount of $17.4 million and $25.6 million, respectively.

Expense Support Agreement

The Company is party to expense support agreements with two of the Owl Rock products. Pursuant to these agreements, the Company may not be reimbursed for certain of its expenditures made in connection with such funds until certain profitability and cash flow thresholds of the funds are achieved (“Expense Support”). During the three months ended March 31, 2021 and 2020, Expense Support amounted to $2.3 million and $6.6 million, respectively, and is included in general, administrative and other expenses within the consolidated statements of operations. These amounts are subject to recoupment from the Owl Rock products in the event certain criteria are met. As of March 31, 2021 and December 31, 2020, Expense Support recognized during the three months ended March 31, 2021 and 2020, respectively, had not been reimbursed.

 

F-15


Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC

Notes to Consolidated and Combined Financial Statements

(Unaudited)

(Amounts in Thousands, Except Where Noted)

 

Aircraft and Other Services

In the normal course of business, Owl Rock makes use of aircraft owned by affiliates of Owl Rock and reimburses such affiliates for such use based on current market rates. Affiliates of Owl Rock bear all of the operating, personnel and maintenance costs associated with the aircraft, with the exception of the aforementioned reimbursements. Personal use of the aircraft is not charged to Owl Rock. The transactions described herein are not material to the consolidated financial statements.

 

8.

Income Taxes

The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as tax laws and regulations change. Accordingly, the effective tax rate for interim periods is not indicative of the tax rate expected for a full year.

For the three months ended March 31, 2021 and 2020, the Company recorded income tax expense (benefit) of $0.2 million and $(46), respectively. The income tax effects of temporary differences give rise to significant portions of deferred tax assets and liabilities, which are presented on a net basis. As of March 31, 2021 and December 31, 2020, the Company recorded a net deferred tax asset of $0.9 million and $0.8 million, respectively, within other assets in the consolidated statements of financial condition.

 

9.

Commitments and Contingencies

Indemnification Arrangements

Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the consolidated statements of financial condition. As of March 31, 2021, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

Litigation

From time to time, the Company is named as a defendant in legal actions in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

Promissory Note Commitment

The Company was a party to an interest bearing promissory note with one of the Owl Rock products allowing it to borrow from the Company up to an aggregate of $50 million. Interest on the promissory note matched the one paid pursuant to Revolving Credit Facility #1. The unpaid principal balance and accrued interest were payable from time to time at the discretion of the Owl Rock product but immediately due and payable upon 120 days written notice by the Company. The promissory note matured on December 31, 2020.

 

10.

Subsequent Events

The Company evaluated subsequent events and transactions that occurred after March 31, 2021 through the date the consolidated financial statements were available to be issued. Other than described in these consolidated financial statements, the Company did not identify any subsequent events that require recognition or disclosure in the consolidated financial statements.

 

F-16

Exhibit 99.3

Dyal Capital Partners

(a business of Neuberger Berman Group LLC)

Combined Financial Statements

For the Three Months Ended March 31, 2021 and 2020

(Unaudited)

 

INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

  

Combined Statements of Financial Condition as of March 31, 2021 (Unaudited) and December 31, 2020

     F-2  

Combined Statements of Operations for the three months ended March 31, 2021 and 2020 (Unaudited)

     F-3  

Combined Statements of Changes in Equity for the three months ended March 31, 2021 and 2020 (Unaudited)

     F-4  

Combined Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited)

     F-5  

Notes to Combined Financial Statements (Unaudited)

     F-6  

 

 

F-1


Dyal Capital Partners

Combined Statements of Financial Condition

March 31, 2021 and December 31, 2020

(Dollars in thousands)

 

     (Unaudited)         
     March 31, 2021      December 31, 2020  

Assets

     

Equity method investments

   $ 29,137      $ 27,436  

Receivables:

     

Management fees

     54,325        37,321  

Incentive fees

     118        2,354  

Due from affiliates

     26,534        17,716  

Prepaid assets

     —          21,000  

Other assets

     556        1,888  
  

 

 

    

 

 

 

Total assets

   $ 110,670      $ 107,715  
  

 

 

    

 

 

 

Liabilities and Equity

     

Liabilities:

     

Accrued compensation and benefits

   $ 20,052      $ 140,807  

Accrued expenses and other payables

     15,619        8,666  
  

 

 

    

 

 

 

Total liabilities

   $ 35,671      $ 149,473  

Commitments and contingencies (note 9)

     

Equity:

     

Net Parent investment

   $ 71,080      $ (45,533

Non-controlling interest

     3,919        3,775  
  

 

 

    

 

 

 

Total Equity

   $ 74,999      $ (41,758
  

 

 

    

 

 

 

Total Liabilities and Equity

   $ 110,670      $ 107,715  
  

 

 

    

 

 

 

See accompanying notes to the combined financial statements.

 

 

F-2


Dyal Capital Partners

Combined Statements of Operations

Three Months Ended March 31, 2021 and 2020

(Unaudited)

(Dollars in thousands)

 

     2021      2020  

Revenues

     

Management fees, net

   $ 75,472      $ 70,607  

Administrative, transaction and other fees

     6,520        5,821  
  

 

 

    

 

 

 

Total revenues

     81,992        76,428  
  

 

 

    

 

 

 

Operating expenses

     

Compensation and benefits

     55,323        47,578  

General, administrative, and other expenses

     14,026        6,913  
  

 

 

    

 

 

 

Total operating expenses

     69,349        54,491  
  

 

 

    

 

 

 

Operating income

     12,643        21,937  

Net gains (losses) from investment activities

     2,314        (85
  

 

 

    

 

 

 

Income before income tax expense

     14,957        21,852  

Income tax expense

     2,181        1,984  
  

 

 

    

 

 

 

Net income

     12,776        19,868  

Net gain (loss) attributable to non-controlling interests

     144        (454
  

 

 

    

 

 

 

Net income attributable to Dyal 

   $ 12,632      $ 20,322  
  

 

 

    

 

 

 

See accompanying notes to the combined financial statements.

 

 

F-3


Dyal Capital Partners

Combined Statements of Changes in Equity

Three Months Ended March 31, 2021 and 2020

(Unaudited)

(Dollars in thousands)

 

     Net Parent
Investment
    Non-controlling
Interest
    Total Equity  

Balance at December 31, 2019

   $ (147,235   $ 4,328     $ (142,907

Net income

     20,322       (454     19,868  

Distributions to non-controlling interests

     —         (2     (2

Net transfer from Parent

     136,551       —         136,551  
  

 

 

   

 

 

   

 

 

 

Balance at March 31, 2020

   $ 9,638     $ 3,872     $ 13,510  
  

 

 

   

 

 

   

 

 

 
     Net Parent
Investment
    Non-controlling
Interest
    Total Equity  

Balance at December 31, 2020

   $ (45,533   $ 3,775     $ (41,758

Net income

     12,632       144       12,776  

Equity based compensation

     4,500       —         4,500  

Net transfer from Parent

     99,481       —         99,481  
  

 

 

   

 

 

   

 

 

 

Balance at March 31, 2021

   $ 71,080     $ 3,919     $ 74,999  
  

 

 

   

 

 

   

 

 

 

See accompanying notes to the combined financial statements.

 

 

F-4


Dyal Capital Partners

Combined Statements of Cash Flows

Three Months Ended March 31, 2021 and 2020

(Unaudited)

(Dollars in thousands)

 

     2021     2020  

Cash flows from operating activities:

    

Net income

   $ 12,776     $ 19,868  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

    

Net (gains) losses from investment activities

     (2,314     85  

Equity based compensation

     4,500       —    

Cash flows due to changes in operating assets and liabilities:

    

Management fees receivable, net

     (17,004     (30,126

Due from affiliates

     (8,818     (7,425

Incentive fees receivable

     2,236       —    

Prepaid assets

     21,000       —    

Other assets

     1,332       18  

Accrued compensation and benefits

     (120,755     (115,933

Accrued expenses and other payables

     6,953       (2,545

Distributions from equity method investments

     1,133       249  
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (98,961     (135,809
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of equity method investments

     (520     (830
  

 

 

   

 

 

 

Net cash used in investing activities

     (520     (830
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Distributions to non-controlling interests

     —         (2

Net transfer from Parent

     99,481       136,551  
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     99,481       136,549  
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     —         (90

Cash and cash equivalents, beginning of the period

     —         90  
  

 

 

   

 

 

 

Cash and cash equivalents, end of the period

   $ —       $ —    
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Cash paid during the period for:

    

Income tax

   $ 3,849     $ 3,722  

Supplemental disclosures of noncash activities:

    

Equity based compensation

   $ 4,500     $ —    

See accompanying notes to the combined financial statements.

 

 

F-5


(1) Business Overview

Dyal Capital Partners (“Dyal” or the “Company”) consists of the entities and personnel comprising the Dyal business of Neuberger Berman Group LLC (“NBG”), an independent, global asset management company headquartered in New York. The Company is indirectly owned by NBG (the “Parent”). Dyal seeks to acquire minority equity stakes in or provide debt financing to, established alternative asset managers worldwide. Dyal also includes a Business Services Platform, which provides strategic support in various areas to its underlying partner managers in which an equity stake is granted. The Company, including the Business Services Platform, operates primarily from New York, with personnel in London and Hong Kong. The Company measures its financial performance and allocates resources in a single segment, investment management services, which is provided primarily in the United States. Accordingly, Dyal considers itself to be in a single operating and reportable segment structure.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

Dyal operates as a part of the Parent; consequently, stand-alone financial statements historically have not been required for the Company. The accompanying combined financial statements have been prepared from the Parent’s accounting records and are presented on a stand-alone basis. These combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These combined financial statements include legal entities that comprise the operations of the Company’s business, which are under common control of the Parent.

The combined statements of operations include all revenues and costs directly attributable to Dyal, including costs for facilities, functions and services used by Dyal. Costs for certain functions and services performed centrally by the Parent are directly charged to Dyal based on specific identification, when possible, or based on a reasonable allocation method such as net revenues, time and effort, headcount or other allocation methods. The results of operations include allocations of costs for administrative functions and services performed on behalf of Dyal by centralized groups within the Parent’s organizational structure as well as employee benefits.

Management of Dyal and the Parent consider these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, Dyal. However, the combined financial statements included herein may not be indicative of the financial position, results of operations and cash flows of the Company in the future, or if the Company had been a separate, stand-alone entity during the periods presented. Actual costs that may have been incurred if Dyal had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made.

The Parent uses a centralized approach to cash management and financing. Accordingly, the Parent’s cash has not been assigned to Dyal for any of the periods presented because those cash balances are not directly attributable to Dyal. The Parent’s long-term debt, associated interest, lease obligations and other commitments have not been attributed to Dyal for any of the periods presented because the Parent’s borrowings are not the legal obligation of Dyal nor the allocated costs to Dyal. Transactions between the Parent and Dyal are deemed to have been settled through the Parent’s net investment. The net effect of the deemed settled transactions is reflected in the combined statements of cash flows as net transfer from the Parent within financing activities and in the combined statements of financial condition as the net Parent investment. See Note 7 – Related Party Transactions for additional information. Current and deferred income taxes have been determined based on a separate return method. The Company’s portion of its domestic income taxes and those in certain jurisdictions outside the United States are deemed to have been settled in the period the related tax expense was recorded.

 

 

F-6


(b) Use of Estimates

The preparation of the combined financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the combined financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could be materially different from those estimates.

(c) Concentrations of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of receivables. The concentration of credit risk with respect to fees receivable is generally limited due to the short payment terms extended to clients by the Company.

(d) Principles of Consolidation

The Company evaluates entities in which it has a variable interest for consolidation in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810, Consolidation, and it consolidates all such entities in which it has a controlling financial interest. As part of this evaluation, the Company performs an analysis to determine whether an entity in which the Company holds a variable interest is a variable interest entity (VIE). Any entity that is not determined to be a VIE is generally consolidated if the Company controls a majority of the voting interests related to the entity. Any entity that is determined to be a VIE is consolidated if the Company determines that its involvement, through holding interests directly or indirectly in the VIE or contractually through other variable interests (e.g., management and incentive related fees), makes it the primary beneficiary. Performance of such analysis requires the exercise of judgment to reach a determination as to whether the Company has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s business and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. In performing this analysis, the Company evaluates, among other factors, the VIE’s design and purpose, capital structure, contractual terms, whether interests create or absorb variability, and related party relationships, if any.

The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and at each reporting period reconsiders that conclusion. In determining if it is the primary beneficiary, the Company evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Company. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is or is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by the Company, affiliates of the Company, or third parties) or amendments to the governing documents of the respective entity could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Company assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.

The Company has identified certain of its investments as variable interests in VIEs. When it is determined that the Company is considered the primary beneficiary, the VIE’s assets, liabilities, and non-controlling interests are consolidated and included in the combined financial statements. See Note 4 – Variable Interest Entities for additional information.

 

 

F-7


(e) Equity Method Investments

For entities over which the Company exercises significant influence, but which do not meet the requirements for consolidation, the Company uses the equity method of accounting. Under the equity method of accounting, the Company’s share of the underlying investments’ earnings is recorded as net gains (losses) from investment activities in the combined statements of operations. The carrying amounts of equity method investments are reflected within equity method investments in the combined statements of financial condition. Equity method investments represent the Company’s investments as a general partner or limited partner in private funds. These funds are investment companies not required to be registered under the Investment Company Act of 1940, as amended, which carry their investments at fair value. The Company’s general partner and limited partner ownership interests are calculated as the applicable ownership percentages of the net asset values of these funds.

(f) Management Fees Receivables

Management fees are derived from investment management services provided to private funds and are payable quarterly or semi-annually, at the beginning or end of the service period. Management fees are determined by contractual agreements which require the Company to provide investment management services, which represents a performance obligation that the Company satisfies over time. The fees are generally determined based upon a percentage of capital committed during the investment period, and thereafter generally based on the cost of unrealized investments; or contributed capital; or investment acquisition cost; or as otherwise defined in the respective agreements. Management fees are presented net of fund overages, fee waivers and revenue sharing on the statements of operations.

(g) Non-controlling Interest

Non-controlling interests reflect employee investor capital in consolidated entities. The allocation of net income or loss to non-controlling interests is based on the relative ownership interests of the employee investors after the consideration of contractual arrangements that govern allocations of income or loss.

(h) Net Parent Investment

Net parent investment reflects the net of transactions with the Parent. Such transactions are recorded as Net transfer to/from parent within the combined statements of changes in equity and within the financing section of the combined statements of cash flows.

(i) Revenue Recognition

Principal versus agent

The Company has contractual agreements with third parties that are involved in providing various services primarily to private fund customers, including placement agents. Management’s determination of whether related revenue should be recorded on a gross basis, without subtracting payments to third-party service providers, or net of payments to third-party service providers is based on management’s assessment of whether the Company is serving as the principal service provider or is acting as an agent. The Company is serving as the principal service provider (and should therefore record revenue on a gross basis) if it controls the service as a result of being primarily responsible for providing the service before it is transferred to the fund. Alternatively, the Company is acting as an agent (and therefore should record revenue net of payments to third-party service providers) when it does not control the service as is the case where it arranges for the service to be provided by a third party. The Company controls the right to placement services performed by

 

 

F-8


various third parties (including financial intermediaries); therefore, placement fees are recorded on a gross basis. Fees incurred for third parties for placement services are recognized as an expense when incurred and are included in general, administrative and other expenses, respectively, in the Company’s combined statements of operations.

Contractual revenues:

The Company considers its performance obligations in its customer contracts to be one of the following based upon the services promised: management fees, incentive fees and administrative, transaction and other fees.

Management fees – Management fees are derived from investment management services provided to private funds and are payable quarterly or semi-annually, at the beginning or end of the service period. Management fees are determined by contractual agreements which require the Company to provide investment management services, which represents a performance obligation that the Company satisfies over time. The fees are generally determined based upon a percentage of capital committed during the investment period, and thereafter generally based on the cost of unrealized investments; or contributed capital; or investment acquisition cost; or as otherwise defined in the respective agreements.

Incentive fees – Incentive fees are calculated based on a contractual percentage of net income before realized and unrealized gains and losses of the funds above a preferred return threshold and a contractual percentage of any net realized capital gains from the funds as described within the respective agreements. The performance obligations for these revenues are satisfied over time as the services are rendered and the limited partner simultaneously receives and consumes the benefits of the services as they are performed. The Company records its fees when the service is provided and it is probable there would not be a significant reversal of revenue. Incentive fees receivable by the Company are recorded in the incentive fees line item on the combined statements of financial condition.

Administrative, transaction and other fees – Administrative, transaction and other fees are primarily comprised of amounts reimbursed by the Company’s private funds.

Administrative, transaction and other fees represent compensation-related and certain out-of-pocket expenses incurred by the Company’s Business Services Platform and reimbursed by the Company’s private funds. The Company may incur certain costs in connection with satisfying its performance obligations for investment management services, including employee travel costs, for which it receives reimbursements from its private funds under the applicable agreements. The Company concluded it controls the services provided by its employees and, therefore, is acting as principal. For all other reimbursable costs incurred in connection with satisfying its performance obligations such as third-party administration services, the Company concluded it does not control the services provided by such third parties and, therefore, is acting as agent. Accordingly, the Company records revenue for which it is acting as the principal on a gross basis within administrative, transaction and other fees and the related expenses within operating expenses and records costs for which it is agent on a net basis within due from affiliates within the combined statements of financial condition.

Non-Contractual Revenues:

Net gains (losses) from investment activities

Net gains (losses) from investment activities represent the Company’s share of the income or loss of the equity method investments.

 

 

F-9


Disaggregation of Revenue

The following table represents the Company’s revenue disaggregated by type of service:

 

     Three Months Ended March 31,  
     2021      2020  

Contractual Revenues 

     

Management fees, net

   $ 75,472      $ 70,607  

Administrative, transaction and other fees

     6,520        5,821  
  

 

 

    

 

 

 

Total contractual revenues

   $ 81,992      $ 76,428  
  

 

 

    

 

 

 
     

Non-Contractual Revenues

     

Net gains (losses) from investment activities

     2,314        (85
  

 

 

    

 

 

 

Total non-contractual revenues

   $ 2,314      $ (85
  

 

 

    

 

 

 

Total Contractual and Non-Contractual Revenues

   $ 84,306      $ 76,343  
  

 

 

    

 

 

 

(j) Equity Based Compensation

Compensation cost relating to the issuance of share-based payment awards to employees is measured at the fair value of the awards on the grant date, the estimation of which requires the use of complex and subjective judgments and assumptions that represent management’s best estimates. The compensation cost for awards that vest over a future service period is recognized over the requisite service period on a straight-line basis. For service-based awards subject to graded vesting, the Company recognizes compensation cost on a straight-line basis over the total requisite service period of the entire award, while ensuring that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date fair value of the award that is vested at that date. The Company recognizes forfeitures of share-based payment awards in the period in which they occur as a reversal of previously recognized compensation cost.

(k) Income Taxes

Income taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using currently enacted tax rates. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized, which results in a charge to income tax expense in the combined statement of operations.

After consideration of all relevant evidence, the Company believes that it is more likely than not that a benefit will be realized for federal, state and local, and foreign deferred tax assets and accordingly, no valuation allowance was recorded against these assets. The Company records its income taxes receivable and payable based upon its estimated tax liability. The Company is treated as a partnership for U.S. income tax purposes and as such is not subject to federal or state income tax but is subject to New York City Unincorporated Business Tax (NYC UBT).

 

 

F-10


The Company records uncertain tax positions in accordance with ASC 740, Accounting for Income Taxes, using a two-step approach wherein a tax benefit is recognized if a position is more likely than not to be sustained on the basis of the technical merits of the position, and for those tax positions that meet the ‘more likely than not’ recognition threshold, the Company recognizes the largest amount of benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of the income tax provision.

(l) Distributions from Equity Method Investments

The Company uses the nature of the distribution approach for determining the cash flow presentation of distributions from its investments in private funds accounted for under the equity method of accounting. Under this approach, the Company conducts an analysis to determine the nature of each distribution to determine whether the distribution is a return on investment or a return of investment. Distributions received that are determined to be return on investment are classified as cash inflows from operating activities.

(m) New Accounting Standards Not Yet Adopted

Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. ASU 2019-12 simplifies the accounting for income taxes by removing exceptions within the general principles of Topic 740 regarding the calculation of deferred tax liabilities, the incremental approach for intraperiod tax allocation, and calculating income taxes in an interim period. In addition, the ASU adds clarifications to the accounting for franchise tax (or similar tax) which is partially based on income, evaluating tax basis of goodwill recognized from a business combination, and reflecting the effect of any enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The ASU is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating the potential impact on its combined financial statements and related disclosure.

Credit Losses

In June 2016, the FASB issued ASU 2016-13, along with various updates and improvements “Financial Instruments – Credit Losses”. The standard, including subsequently issued amendments, requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, and requires the modified retrospective approach. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s combined financial statements and related disclosures.

(3) Equity Method Investments

The Company’s investments as a general partner or limited partner in private funds that are not required to be consolidated are presented as equity method investments. The Company reflects its share of the income or loss of the equity method investments in accordance with ASC 323, Investments – Equity Method on a one quarter lag based on the most recent information available from the underlying investment adjusted for cash

 

 

F-11


flows. Net asset value of the underlying funds is also reported on a one quarter lag. This reporting lag could result in a delay in recognition of the impact of changes in the business or operations of these equity method investees. Income from equity method investments is recorded within net gains (losses) from investment activities in the combined statement of operations.

(4) Variable Interest Entities

Consolidated VIEs

The Company consolidates a certain entity in which it has determined to be the primary beneficiary. The Company does not provide performance guarantees and has no other financial obligations to provide funding to such entity other than with respect to its capital commitments.

The following table represents the asset portion of the consolidated balances presented in the combined statements of financial condition attributable to the consolidated entity in which the Company is determined to be the primary beneficiary. The following assets may only be used to settle obligations of the consolidated entity. There are no liabilities attributable to the consolidated entity in which the Company is determined to be the primary beneficiary.

 

     March 31,      December 31,  
     2021      2020  

Assets

     

Equity method investments

   $ 4,803      $ 4,627  
  

 

 

    

 

 

 

Total assets

   $ 4,803      $ 4,627  
  

 

 

    

 

 

 

Unconsolidated VIEs

The Company holds variable interests through its equity method investments in, or acts as the sponsor of, certain VIEs that are not consolidated because the Company has determined that it is not the primary beneficiary, as defined in ASC 810. The Company’s involvement with such entities is in the form of general partner or limited partner interests. The Company may earn management fees, and, in certain instances, incentive fees based on the committed capital, invested capital, cost of unrealized investments, investment acquisition cost or as otherwise defined in the respective agreements of these entities. In addition, the Company earns a pro-rata portion of the VIE’s earnings in instances where the Company holds an equity interest.

The Company’s variable interests in these entities consist of the Company’s equity interests therein and any management and incentive fees earned but uncollected. The Company held investments in these entities included as a component of equity method investments on the combined statements of financial condition totaling $24.3 million and $22.8 million on March 31, 2021 and December 31, 2020, respectively, and management and incentive fees receivable from such entities totaling $52.4 million and $39.6 million on March 31, 2021 and December 31, 2020, respectively.

The Company’s maximum exposure with respect to these managed entities includes equity investments the Company has made or is required to make and any earned but uncollected management and incentive fees receivable from the entities.

 

 

F-12


 

     March 31, 2021  
     Equity interests      Maximum
exposure
 

Total private funds

   $ 24,334      $ 83,855  
  

 

 

    

 

 

 

 

     December 31, 2020  
     Equity interests      Maximum
exposure
 

Total private funds

   $ 22,810      $ 69,479  
  

 

 

    

 

 

 

(5) Accrued Expenses and Other Payables

Accrued expenses and other payables consist of the following:

 

     March 31      December 31,  
     2021      2020  

Accrued expenses and other payables:

     

Revenue share payable

   $ 4,615      $ 2,538  

Placement fees payable

     10,417        4,045  

Taxes payable

     588        2,083  
  

 

 

    

 

 

 

Total accrued expenses and other payables

   $ 15,619      $ 8,666  
  

 

 

    

 

 

 

(6) Income Taxes

The Company is treated as a partnership for U.S. tax purposes and as such is not subject to federal or state income tax but is subject to New York City Unincorporated Business Tax (NYC UBT). The Company is not itself a taxpayer. Instead, its partners are subject to tax on the results of its operations in the jurisdictions in which they operate.

 

 

F-13


Income tax provision

The income tax provision for the three months ended March 31, 2021 and 2020 is summarized as follows:

 

     Three Months Ended March 31,
 
     2021      2020  

Current:

     

U.S.

   $ 2,286      $ 1,906  

Foreign

     67        62  

Deferred:

     

U.S.

     (172      16  

Foreign

     —          —    
  

 

 

    

 

 

 

Income tax expense (benefit)

   $ 2,181      $ 1,984  
  

 

 

    

 

 

 

The effective tax rate for the Company represents the income tax provision as a percentage of pre-tax income (excluding non-controlling interests). The effective tax rate was 14.58% and 9.08% for the three months ended March 31, 2021 and 2020, respectively. The difference between the effective tax rate and the statutory NYC UBT rate of 4.0% is primarily driven by a non-deductible compensation expense for UBT purposes, and foreign taxable income subject to higher statutory tax rates.

Deferred taxes

At March 31, 2021 and December 31, 2020, the Company’s deferred tax asset was $0.4 million and $0.4 million, respectively. Significant components of the deferred tax asset include compensation & benefits and placement fees. At March 31, 2021 and December 31, 2020, the Company had no deferred tax liability. The deferred tax asset is recorded in other assets in the combined statements of financial condition.

Uncertain tax positions

Interest and penalties related to uncertain tax positions are recognized in the income tax provision. The Company had no accrued interest for the three months ended March 31, 2021 and March 31, 2020. At March 31, 2021 and December 31, 2020, the Company recognized no liability for interest related to unrecognized tax benefits.

Over the next 12 months, it is possible that the amount of the accrued tax liability for uncertain tax positions could change but the Company does not expect this to have a material impact on the combined financial statements.

(7) Related Party Transactions

The Company is indirectly wholly owned by the Parent. The Parent provides the Company with certain services, such as insurance and administrative support, and also provides benefits to employees, including for example, medical, dental, life and disability insurance, participation in retirement plans and certain post-employment benefits. These financial statements also include allocations of centralized corporate expenses from the Parent for services, such as sales and client services, support costs (e.g., finance, human capital management, legal, compliance, etc.), technology, and other services. These expenses were determined based on various allocation methods, including factors such as revenues, headcount, time and effort spent on matters relating to the Company. These allocated expenses are reflected within Compensation and benefits and

 

 

F-14


General, administrative and other expenses line items on the combined statements of operations. Management fees reported on the combined statements of operations represent revenue from affiliated funds. Reimbursed expenses on the combined statements of operations include expenses reimbursed by the Company’s private funds and reimbursement of expenses incurred by the Company’s Business Services Platform.

Management believes that the assumptions and estimates used to allocate these expenses are reasonable. However, the Company’s expenses as a stand-alone business may be different from those reflected in the combined statements of operations.

In addition, the Company participates in the Parent’s centralized cash management system. Under this system, on a daily basis, any excess cash generated by the Company is transferred to the Parent and any additional daily cash flow needs are funded by the Parent. As such, the Parent benefits from the positive cash flow the Company generates, and the Parent also provides the Company with sufficient daily liquidity to fund its ongoing cash needs. As a result, the Company has historically required minimal cash on hand.

The Parent manages its long-term debt obligations based on the needs of its entire portfolio of businesses. Long-term debt of the Parent and related interest expense are not allocated as none of the Parent’s debt is directly attributable to the Company.

Related party transactions also include transactions with affiliates which, for purposes of these combined financial statements, also include transactions with sponsored funds and employees. The Company’s employees invest on a discretionary basis in sponsored private funds, which are generally not subject to management fees and incentive fees.

The Company’s employees participate in the Retirement Contribution Program which is maintained by NBG. The Company’s retirement contribution for U.S. employees is equal to 15% of eligible earnings up to a maximum contribution of $38.5 thousand and $37.5 thousand for 2021 and 2020 respectively, for all eligible employees. Subject to certain eligibility requirements (such as being employed on December 31st of the plan year), all U.S. employees participate in the Retirement Contribution Program. Under the Retirement Contribution Program, the firm contribution is immediately vested, and the participant has full discretion in directing investments within his/her 401(k) account. Employees are eligible to participate in the Retirement Contribution Program immediately upon hire by the Company. For the three months ended March 31, 2021 and 2020, the Company expensed approximately $0.9 million and $0.9 million, respectively, with respect to this program.

Non-U.S. employees of the Company participate in retirement plans in locations where the Company has foreign operations.

Amounts due from affiliates and due to affiliates are comprised of the following:

 

     March 31,
2021
     December 31,
2020
 

Due from affiliates:

     

Reimbursements receivable from funds

   $ 26,534      $ 17,716  
  

 

 

    

 

 

 

Total due from affiliates

   $ 26,534      $ 17,716  
  

 

 

    

 

 

 

 

 

F-15


(8) Equity Based Compensation

On November 3, 2020, NBG issued share-based payment awards (the “Award Units”) to certain Dyal management members. The Award Units represent unvested, non-voting partnership interests in a subsidiary of NBG. The Award Units had no liquidation value on the date of grant, but instead provide the grantees with rights to distributions of the future profits, as defined, of the Company. The Award Units generally vest in four equal installments over four years commencing on the seventh anniversary of the grant date, provided that certain conditions are met, including continued employment with the Company. No additional Award Units are currently available for future issuance.

The Award Units are expensed and recorded into equity over the requisite service period based upon the fair value of the partnership interests on the date of grant, and the Company recognizes forfeitures when they occur. The estimated fair value of the partnership interests as of the grant date was $180 million, which was determined contemporaneously with the grant. The fair value of the partnership interests was determined by using a market approach to estimate enterprise value and an option-pricing method, or OPM, to allocate that value. The assumptions underlying the estimation of the fair value of the partnership interests were complex and subjective and represented management’s best estimates. They included, but were not limited to, assumptions regarding the selection of appropriate financial metric multiples and estimations of the amount at which the Company would be valued in a hypothetical transaction. For the three months ended March 31, 2021 the total expense recognized within Compensation and benefits related to the Award Units was $4.5 million.

A summary of the status of the Award Units as of March 31, 2021, and changes during the three months ended March 31, 2021, is presented below:

 

     Number (Units)      Weighted-
Average Grant

Date Fair Value
Per Unit ($)
 

Nonvested Award Units at January 1, 2021

     100,000        1,800  

Granted

     —          —    

Vested

     —          —    

Forfeited

     —          —    
  

 

 

    

 

 

 

Nonvested Award Units at March 31, 2021

     100,000      $ 1,800  
  

 

 

    

 

 

 

As of March 31, 2021, there was $172.5 million of total unrecognized compensation cost related to non-vested Award Units. That cost is expected to be recognized over a straight-line basis of approximately 10 years.

(9) Commitments and Contingencies

The Company has various commitments, litigation and contingencies that would be expected to be funded from NBG, including as a general partner or limited partner of private funds. The Company, including certain of its employees, had unfunded capital commitments as of March 31, 2021 and December 31, 2020, of $9.5 million and $9.3 million, respectively. If, upon a fund’s final close, capital commitments received exceed initial expectations, the firm’s anticipated capital commitment might increase.

 

 

F-16


The Company or the Company’s private funds may be involved, from time to time, in judicial, regulatory and arbitration proceedings or investigations concerning matters arising in connection with the conduct of its business. The Company recognizes liabilities for contingencies when there is an exposure that, when analyzed, indicates it is both probable that a liability will be incurred, and the amount of such liability can be reasonably estimated. When a range of probable liability can be estimated, Dyal accrues the amount it has determined it is most likely to incur. If the amount is not determinable, Dyal accrues the minimum of the range of probable loss.

The Company’s management believes, based on currently available information, advice of counsel, and established accruals, that the eventual outcome of such proceedings, in the aggregate, will not have a material adverse effect on Dyal’s combined financial condition, results of operations, or liquidity.

The Parent indemnifies the officers, directors and employees affiliated with the Company against liabilities arising from the administration and performance of their duties on behalf of the Company, subject to customary exclusions. The Company’s maximum exposure under these arrangements is unknown and not currently measurable, as any such indemnification would only be required if specified claims against the Company are made in the future.

(10) Merger Agreement

On December 23, 2020, the Parent executed a definitive business combination agreement with Altimar Acquisition Corporation and various Owl Rock Capital Group entities (“Owl Rock”) whereby the Company and Owl Rock will merge to form Blue Owl Capital Inc. (“Blue Owl”), an alternative asset management firm. Blue Owl will become publicly listed through a business combination with Altimar Acquisition Corporation, a special purpose acquisition company. The successful completion of the transaction, expected to close in the second quarter of 2021, is subject to the satisfaction of closing conditions, including receiving the appropriate regulatory approvals, shareholder approvals, and client consents.

(11) Risks

Coronavirus

The Company currently has not experienced an adverse impact on its operating model, but acknowledges it is too difficult to predict the full extent of the current COVID-19 outbreak. The Company will continue to watch the effectiveness of efforts to contain the spread of the COVID-19 virus and the potential long-term implications on the global economy and expects to monitor and adapt as necessary the firm’s operations and processes to effectively manage portfolios.

(12) Subsequent Events

The Company’s management has evaluated events occurring after the date of the combined financial statements through May 11, 2021, the date the combined financial statements are available to be issued. All subsequent events requiring recognition have been incorporated into these combined financial statements.

 

 

F-17

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

The following unaudited pro forma condensed combined balance sheet as of March 31, 2021 gives effect to the Business Combination as if it was completed on March 31, 2021. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 and the three months ended March 31, 2021, give pro forma effect to the Business Combination as if it was completed on January 1, 2020. The unaudited pro forma condensed combined balance sheet does not purport to represent, and is not necessarily indicative of, what the actual financial condition of the combined company would have been had the Business Combination taken place on March 31, 2021, nor is it indicative of the financial condition of the combined company as of any future date. The unaudited pro forma condensed combined financial information has been prepared, in accordance with Article 11 of Regulation S-X and is for informational purposes only. It is subject to several uncertainties and assumptions as described in the accompanying notes. The condensed combined financial information presents the pro forma effects of the following transactions:

 

   

The reverse recapitalization of Owl Rock;

 

   

The acquisition of Dyal; and

 

   

The issuance of Altimar common stock in the PIPE Investment

Altimar was formed on August 20, 2020. As a special purpose acquisition company (“SPAC”), the Company’s purpose entails efforts to acquire one or more businesses through a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. Effective December 23, 2020, Altimar, Owl Rock Group, Owl Rock Feeder, Owl Rock Capital Partners and Neuberger (the “Companies”), entered into an agreement pursuant to which Altimar used cash and issued shares in exchange for the equity and/or assets of Owl Rock and Dyal upon the Closing Date.

The following describes the two operating entities:

 

   

Owl Rock is a leading alternative asset management firm focused on providing direct lending solutions to U.S. middle market companies. Owl Rock’s breadth of lending product offerings enables us to offer a holistic platform to the middle market, which establishes Owl Rock as a partner of choice for private-equity sponsored companies as well as other businesses primarily in non-cyclical, recession-resistant businesses. Owl Rock provides these loans primarily by utilizing permanent capital vehicles funded by our high-quality, largely institutional investor base. By utilizing these permanent capital vehicles and long-duration capital funds, Owl Rock believes its business provides a high degree of earnings stability and predictability. Owl Rock investors include a diversified mix of institutional investors, including prominent domestic public and private pension funds, endowments, foundations, institutional-quality family offices, asset managers and insurance companies, as well as high net worth and retail clients, distributed through many well-known wealth management firms.

 

   

Dyal is a leading capital solutions provider to large, multi-product private markets managers. Dyal acquires minority equity stakes in, or provides debt financing to, established alternative asset managers worldwide (the “GP Capital Solutions”). Dyal is expanding its existing GP Capital Solutions strategies to provide capital to its managers’ seasoned portfolio companies through co-investments or structured equity. Dyal is also in the process of leveraging its significant experience in serving as a minority partner to alternative asset management firms by launching a strategy that will seek to acquire minority equity stakes in National Basketball Association (“NBA”) teams. All of its existing or emerging strategies make or will make, as the case may be, investments through long-term capital or permanent capital vehicles with a set of geographically diverse and high-quality investors.

 

1


In the Business Combination, Owl Rock has been determined to be the accounting acquirer. Owl Rock is deemed to be the accounting acquirer because the same party which controlled Owl Rock prior to the Business Combination (Owl Rock Capital Partners) obtained a controlling financial interest in Altimar at the Closing of the Business Combination.

The merger between Owl Rock and Altimar has been accounted for as a reverse asset acquisition, which is accounted for similar to a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, Altimar has been treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the reverse asset acquisition has been treated as the equivalent of Owl Rock issuing stock for the net assets of Altimar, accompanied by a recapitalization.

The acquisition of Dyal has been treated as a business combination for which Owl Rock is the accounting acquirer under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”) because Dyal meets the definition of a business and Owl Rock Capital Partners indirectly obtained control of Dyal via its acquisition of Altimar and Blue Owl’s consolidation of Blue Owl Holdings (including its wholly owned subsidiaries representing the Dyal business) under ASC 810. As a result, the acquisition of Dyal has been accounted for using the acquisition method whereby Blue Owl will record the fair value of assets and liabilities acquired from Dyal.

The Company determined Owl Rock to be the predecessor entity to the Business Combination based on a number of considerations, including i) Owl Rock former management making up the majority of the management team of Blue Owl, ii) Owl Rock former management nominating or representing the majority of Blue Owl’s board of directors and iii) Owl Rock representing the majority of the continuing operations of Blue Owl. Therefore, operations presented prior to the Business Combination will be those of Owl Rock.

The unaudited pro forma combined financial information should be read in conjunction with:

 

   

the accompanying notes to the unaudited pro forma condensed combined financial statements;

 

   

the historical financial statements of Altimar as of, and for the fiscal year ended December 31, 2020, included in Altimar’s Form 10-K/A, filed with the SEC on April 23, 2021;

 

   

the historical unaudited financial statements of Altimar as of, and for the three months ended March 31, 2021, included in Altimar’s Form 10-Q, filed with the SEC on May 17, 2021;

 

   

the historical financial statements of Owl Rock, as of, and for the fiscal year ended, December 31, 2020, included in the Proxy Statement/Prospectus;

 

   

the historical unaudited financial statements of Owl Rock, as of, and for the three months ended, March 31, 2021, included as Exhibit 99.2 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached;

 

   

the historical financial statements of Dyal, as of, and for the fiscal year ended, December 31, 2020, included in the Proxy Statement/Prospectus;

 

   

the historical unaudited financial statements of Dyal, as of, and for the three months ended, March 31, 2021, included as Exhibit 99.3 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached;

 

   

the sections entitled “Altimar’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Owl Rock’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The unaudited pro forma condensed combined financial information reflects the number of Altimar shareholders that elected to redeem their Class A ordinary shares (or Class A common stock) for a pro rata portion of cash in the Trust Account, and thus the remaining amount held in the Trust Account as of Closing is available for the Business Combination. The amount of cash available is sufficient to (i) satisfy the minimum cash condition in the Business Combination Agreement, (ii) pay applicable cash consideration to certain Owl Rock Equityholders and certain Dyal Equityholders (including Neuberger) and (iii) pay transaction expenses, upon the Closing of the Business Combination.

 

2


The following summarizes the pro forma ownership of Class A common stock of the Company (assuming Class E common stock and Seller Earnout Securities are earned) and the total economic ownership of the Blue Owl Operating Group (i.e., assuming the exchange of 100% of the Blue Owl Operating Group Units that will be outstanding at Closing for shares of Blue Owl common stock) following the Business Combination:

 

    Economic Interests
in Blue Owl
    Economic Interests
in Blue Owl
Operating
Group (2)
 
    %     %  

Altimar Public Shareholders

    2.8     0.7

Sponsor and Independent Directors

    1.3     0.4

PIPE Investors

    43.6     11.1

Owl Rock and Dyal Equity Holders and other Owl Rock Professionals (1)

    52.3     87.9
 

 

 

   

 

 

 

Closing Shares

    100.0     100.0
 

 

 

   

 

 

 

 

(1)

Represents the exercise of vested restricted stock units at March 31, 2021, in which the cash settled award converts into 9.05 million shares of Class A common stock upon exercise of the units. Please refer to “Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC Notes to Consolidated and Combined Financial Statements” included in Exhibit 99.2 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached.

(2)

Assumes the exchange of 100% of the Blue Owl Operating Group Units that will be outstanding at Closing for shares of Blue Owl common stock (inclusive of Seller Earnout Securities). Please refer to “The Business Combination Agreement—Related Agreements—Exchange Agreement” included within the Proxy Statement/Prospectus.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the Business Combination occurred on the dates indicated or the future results that the Company will experience. The pro forma adjustments are based on the information currently available and the assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. Actual results may differ from the assumptions used to present the accompanying unaudited pro forma condensed combined financial statements. The Company will incur additional costs after the Business Combination is consummated in order to satisfy its obligations as a public company registrant. In addition, at the Special Meeting of the Altimar shareholders held on May 18th, 2021, the Altimar shareholders considered and approved the Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan for employees, officers and directors. Please see the “Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan” included as Exhibit 10.6 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached for more information. No adjustments to the unaudited pro forma condensed combined statement of operations have been made for these items as such amounts are not yet known.

 

3


UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of March 31, 2021

(in thousands, except share amounts)

 

    As of March 31, 2021               As of
March 31,
2021
    As of
March 31,
2021
                                  As of
March 31,
2021
 
    Altimar
Acquisition
Corporation
(Historical)
(US GAAP)
    Owl Rock
(Historical)
(US GAAP)
    Pro Forma
Transaction
Accounting
Adjustments
        Pro
Forma
Combined
Altimar
and Owl
Rock
    Dyal
Capital
Partners
(Historical)
(US GAAP)
    Deal
Perimeter
Adjustments
        Dyal PPA
Adjustments
        Dyal Pro
Forma
Transaction
Adjustments
        Pro
Forma
Combined
 

Current assets:

                         

Cash and cash-equivalents

  $ 777     $ 8,564     $ 1,477,800     (b)   $ 1,125,584     $ —       $ —         $ (921,545   (e)(i)   $ —         $ 130,905  
        (491,954   (d)             (73,134   (e)(ii)      
        141,954     (d)                  
        96,649     (c)                  
        (9,625   (i)                  
        (98,581   (h)                  

Restricted cash

    —         —         —           —         —         —           —           —           —    

Investments

    —         —         —           —         29,137       (21,564   (a)     —           —           7,573  

Accounts receivable, net

    —         100,253       —           100,253       80,977       —           —           —           181,230  

Prepaid expenses and other current assets

    294       —         —           294       —         —           —           —           294  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total current assets

  $ 1,071     $ 108,817     $ 1,116,243       $ 1,226,131     $ 110,114     $ (21,564     $ (994,679     $ —         $ 320,002  

Cash held in trust account

    275,083       —         22     (c)     —         —         —           —           —           —    
        (178,455   (c)                  
        (96,649   (c)                  

Goodwill

    —         —         —           —         —         —           3,329,072     (e)     —           3,329,072  

Intangible assets, net

    —         —         —           —         —         —           2,245,000     (e)     —           2,245,000  

Deferred tax asset

    —         —         474,137     (g)     474,137       —         —           —           78,115     (g)     552,252  

Operating lease assets

    —         12,614       —           12,614       —         —           —           —           12,614  

Other assets

    —         27,520       (15,593   (h)     11,927       556       6     (a)     —           —           12,489  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total assets

  $ 276,154     $ 148,951     $ 1,299,704       $ 1,724,809     $ 110,670     $ (21,558     $ 4,579,393       $ 78,115       $ 6,471,429  

Liabilities and member’s equity

                         

Current liabilities:

                         

Accounts payable, accrued expenses and other liabilities

    91       62,405       (17,208   (h)     45,288       15,619       877     (a)     —           —           61,784  

Accrued compensation

    —         181,912       (90,525   (n)     91,387       20,052       (212   (a)     —           —           111,227  

Current portion of operating lease liabilities

    —         4,934       —           4,934       —         —           —           —           4,934  

Current portion of long-term debt

    —         113,098       —           113,098       —         —           —           —           113,098  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total current liabilities

  $ 91     $ 362,349     $ (107,733     $ 254,707     $ 35,671     $ 665       $ —         $ —         $ 291,043  

Operating lease liabilities, less current portion

    —         8,241       —           8,241       —         —           —           —           8,241  

Long-term debt, less current portion

    —         246,659       —           246,659       —         —           —           —           246,659  

Deferred tax liabilities

    —         —         —           —         —         —           102,017     (e)(iii)     —           102,017  

Warrant liability

    21,208       —         —           21,208       —         —           —           —           21,208  

TRA liability

    —         —         353,252     (f)     353,252       —         —           —           107,389     (f)(e)(iv)     460,641  

Deferred underwriting commissions

    9,625       —         (9,625   (i)     —         —         —           —           —           —    

Earnout liability

    —         —         265,090     (p)     265,090       —         —           259,608     (p)(e)(viii)     —           524,698  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total liabilities

  $ 30,924     $ 617,249     $ 500,984       $ 1,149,157     $ 35,671     $ 665       $ 361,625       $ 107,389       $ 1,654,507  

Commitments and contingencies:

                         

Redeemable Class A common stock

  $ 240,230     $ —       $ (61,775 )   (k)   $ —       $ —       $ —         $ —         $ —         $ —    
        (178,455   (c)                  

Equity:

        (j)                  

Preferred shares

    —         —         —           —         —         —           —           —           —    

Class A common stock

    —         —         15     (b)     33       —         —           —           —           33  
        2     (k)                  
        15     (l)                  
        1     (n)                  

Class B common stock

    1       —         (1   (k)     —         —         —           —           —           —    

Class C common stock

    —         —         63     (l)     63       —         —           —           —           63  

Class D common stock

    —         —         29     (l)     29       —         —           —           —           29  

Class E common stock

    —         —         1     (l)     1       —         —           —           —           1  

Additional paid-in capital

    (3,375     —         1,477,785     (b)     360,948       —         —           4,523,785     (e)(v)     (107,389   (f)(e)(iv)     1,482,772  
        (350,000   (d)             (3,372,687   (m)(e)(vii)     78,115     (g)  
        (96,604   (h)                  
        61,774     (k)                  
        (353,252   (f)                  
        474,137     (g)                  
        (851,623   (m)                  
        (108   (l)                  
        90,524     (n)                  
        (88,310   (p)                  

Retained earnings (accumulated deficit)

    8,374       (477,398     (362   (h)     (119,416     71,080       (24,671   (a)     (46,409   (e)(vi)     (338,796   (o)     (458,212
        349,948     (m)                  
        22     (c)                  

Non-controlling interest in subsidiaries of partnerships

    —         9,100       —           9,100       3,919       2,448     (a)     —           —           15,467  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total shareholders’ equity

  $ 5,000     $ (468,298   $ 714,056       $ 250,758     $ 74,999     $ (22,223     $ 1,104,689       $ (368,070     $ 1,040,153  

Noncontrolling interest in Blue Owl partnerships

    —         —         501,675     (m)(g)     324,894       —         —           3,372,687     (m)(e)(vii)     1,331,459     (o)     3,776,769  
        (176,781   (p)             (259,608   (p)(e)(viii)     (992,663   (o)  

Total equity

    5,000       (468,298     1,038,950         575,652       74,999       (22,223       4,217,768         (29,274       4,816,922  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total liabilities and equity

  $ 276,154     $ 148,951     $ 1,299,704       $ 1,724,809     $ 110,670     $ (21,558     $ 4,579,393       $ 78,115       $ 6,471,429  

 

4


UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Three Months Ended March 31, 2021

(in thousands, except share amounts)

 

    For the Three Months
Ended March 31, 2021
          For the
Three
Months
Ended
March 31,
2021
    For the
Three
Months
Ended
March 31,
2021
                      For the
Three
Months
Ended 31,
2021
 
    Altimar
Acquisition
Corporation
(Historical)
(US GAAP)
    Owl Rock
(Historical)
(US GAAP)
    Pro Forma
Transaction
Accounting
Adjustments
    Pro
Forma
Combined
Altimar
and Owl
Rock
    Dyal
Capital
Partners
(Historical)
(US GAAP)
    Perimeter
Adjustments
    Dyal PPA
Adjustments
    Dyal Pro
Forma
Transaction
Adjustments
    Pro
Forma
Combined
 

Revenues

                 

Management fees (includes BDC Part I fees)

  $ —       $ 94,713     $ —       $ 94,713     $ 75,472     $ —       $ —       $ —       $ 170,185  

Incentive fees

    —         —         —         —         —         —         —         —         —    

Administrative, transaction and other fees

    —         13,511       —         13,511       6,520       —         —         —         20,031  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  $ —       $ 108,224     $ —       $ 108,224     $ 81,992     $ —       $ —       $ —       $ 190,216  

Expenses

                 

Compensation and benefits

    —         47,984       —         47,984       55,323       —         —         (14,577 (gg)      88,730  

General, administrative and other expenses

    156       14,860       —         15,016       14,026       —         43,378  (ee)      —         72,420  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

  $ 156     $ 62,844     $ —       $ 63,000     $ 69,349     $ —       $ 43,378     $ (14,577   $ 161,150  

Other income (expense)

                 

Interest expense

    —         (5,858     (500 (ff)      (6,358     —         —         —         —         (6,358

Investment income

    45       —         (45 (hh)      —         2,314       (2,104 (dd)      —         —         210  

Change in value of warrant liability

    13,767       —         —         13,767       —         —         —         —         13,767  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

    13,812       (5,858     (545     7,409       2,314       (2,104     —         —         7,619  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) before income taxes

  $ 13,656     $ 39,522     $ (545   $ 52,633     $ 14,957     $ (2,104   $ (43,378   $ 14,577     $ 36,685  

Income tax expense (benefit)

    —         188       371  (bb)      559       2,181       —         —         —         2,740  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) including noncontrolling interest

  $ 13,656     $ 39,334     $ (916   $ 52,074     $ 12,776     $ (2,104   $ (43,378   $ 14,577     $ 33,945  

Net income (loss) attributed to noncontrolling interests in subsidiary of partnership

    —         (80     —         (80     144       35  (dd)      —         —         99  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 13,656     $ 39,414     $ (916   $ 52,154     $ 12,632     $ (2,139   $ (43,378   $ 14,577     $ 33,846  

Net income (loss) attributed to noncontrolling interests in Blue Owl partnerships

    —         —         486  (bb)      486       —         —         (32,340 (cc)      10,868  (cc)      26,369  
        47,355  (cc)      47,355            
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Blue Owl

  $ 13,656     $ 39,414     $ (48,757   $ 4,313     $ 12,632     $ (2,139   $ (11,038   $ 3,709     $ 7,477  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Earnings Per Share

                 

Basic and Diluted

                  $ 0.02  

Pro Forma Number of Shares Used in Computing EPS

                 

Basic and Diluted (#)

                    329,055  

 

5


UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Year Ended December 31, 2020

(in thousands, except share amounts)

 

    For the Year Ended
December 31, 2020
          For the Year
Ended
December 31,
2020
    For the Year
Ended
December 31,
2020
                      For the Year
Ended
December 31,
2020
 
    Altimar
Acquisition
Corporation
(Historical)
(US GAAP)
    Owl Rock
(Historical)
(US
GAAP)
    Pro Forma
Transaction
Accounting
Adjustments
    Pro Forma
Combined
Altimar and
Owl Rock
    Dyal Capital
Partners
(Historical)
(US GAAP)
    Perimeter
Adjustments
    Dyal PPA
Adjustments
    Dyal Pro
Forma
Transaction
Adjustments
    Pro Forma
Combined
 

Revenues

                 

Management fees (includes BDC Part I fees)

  $ —       $ 194,906     $ —       $ 194,906     $ 284,691     $ —       $ —       $ —       $ 479,597  

Incentive fees

    —         —         —         —         2,354       (800 (dd)      —         —         1,554  

Administrative, transaction and other fees

    —         54,909       —         54,909       22,676       —         —         —         77,585  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  $ —       $ 249,815     $ —       $ 249,815     $ 309,721     $ (800   $ —       $ —       $ 558,736  

Expenses

                 

Compensation and benefits

    —         240,731       —         240,731       187,527       (212 (dd)      —         1,298,726  (gg)      1,726,772  

General, administrative and other expenses

    300       67,811       362  (aa)      68,473       26,217       —         173,511  (ee)      —         268,201  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

  $ 300     $ 308,542     $ 362     $ 309,204     $ 213,744     $ (212   $ 173,511     $ 1,298,726     $ 1,994,973  

Other income (expense)

                 

Interest expense

    —         (23,816     (577 ) (ff)      (24,393     —         —         —         —         (24,393

Investment income

    38       —         (38 (hh)      —         1,542       (1,291 (dd)      —         —         251  

Change in value of warrant liability

    (5,020     —         —         (5,020     —         —         —         —         (5,020
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

    (4,982     (23,816     (615     (29,413     1,542       (1,291     —         —         (29,162
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) before income taxes

  $ (5,282   $ (82,543   $ (977   $ (88,802   $ 97,519     $ (1,879   $ (173,511   $ (1,298,726   $ (1,465,399

Income tax expense (benefit)

    —         (102     (17,132 ) (bb)      (17,234     8,435       —         —         —         (8,799
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) including noncontrolling interest

  $ (5,282   $ (82,441   $ 16,155     $ (71,568   $ 89,084     $ (1,879   $ (173,511   $ (1,298,726   $ (1,456,600

Net income (loss) attributed to noncontrolling interests in subsidiary of partnership

    —         (4,610     —         (4,610     (548     761  (dd)      —         —         (4,397
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ (5,282   $ (77,831   $ 16,155     $ (66,958   $ 89,632     $ (2,640   $ (173,511   $ (1,298,726   $ (1,452,203

Net income (loss) attributed to noncontrolling interests in Blue Owl partnerships

    —         —         7,986  (bb)      7,986       —         —         (129,360 (cc)      (968,259 (cc)      (1,087,039
        2,594  (cc)      2,594            
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Blue Owl

  $ (5,282   $ (77,831   $ 5,575     $ (77,538   $ 89,632     $ (2,640   $ (44,151   $ (330,467   $ (365,164
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Earnings Per Share

                 

Basic

                  $ (1.11

Diluted

                  $ (1.16

Pro Forma Number of Shares Used in Computing EPS

                 

Basic (#)

                    329,055  

Diluted (#)

                    1,252,092  

 

6


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 — Description of the Business Combination

Description of Business Combination

On December 23, 2020, Altimar entered into the Business Combination Agreement with Owl Rock Group, Owl Rock Feeder, Owl Rock Capital Partners and Neuberger. Subject to the terms of the Business Combination Agreement, the consideration for the Business Combination is funded through a combination of cash from Altimar, proceeds from the PIPE Investment and rollover equity from the Owl Rock Equityholders and the Dyal Equityholders (refer to the section entitled “Sources and Uses” below). As a result of the transaction, the Dyal Equityholders and the Owl Rock Equityholders collectively hold a majority of the equity of the combined company, referred to as “Blue Owl.” The Business Combination is structured as a customary Up-C transaction, whereby Blue Owl directly or indirectly owns equity in the Blue Owl Operating Group and holds direct voting rights in Blue Owl Operating Group. Pursuant to and in connection with the Business Combination, the following transactions have occurred:

 

   

Altimar changed its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation under the laws of the State of Delaware, upon which Altimar changed its name to “Blue Owl Capital Inc.”, and adopted the Blue Owl Charter and the Blue Owl Bylaws;

 

   

Blue Owl’s wholly owned subsidiary, Blue Owl GP, serves as the general partner of Blue Owl Holdings and Blue Owl Carry;

 

   

Blue Owl Holdings acquired (i) the Owl Rock Business and (ii) the Dyal Capital Partners division of Neuberger (i.e., the Dyal Business) (subject to, in each case, interests representing Specified Interests, as defined in the Proxy Statement/Prospectus), and Blue Owl and Blue Owl Holdings are responsible for all liabilities and obligations related to the Owl Rock Business and the Dyal Business except as specifically described herein;

 

   

Blue Owl Carry acquired 15% of the carried interest, incentive fees and any other incentive-based allocations or fees (net of certain investor and third party arrangements) arising in respect of all existing and future Owl Rock and Dyal funds, except that 100% of the fees (net of certain investor and third party arrangements) from the Owl Rock BDCs are being contributed to Blue Owl Holdings as described above. Certain of these amounts acquired by Blue Owl Carry may instead be acquired and/or held by Blue Owl Holdings. Blue Owl has not acquired any portion of the carried interest attributable to the Dyal Equity Funds or any portion of the carried interest attributable to existing or future co-investments or secondary transactions related to the Dyal Equity Funds. For clarity, a secondary-transaction vehicle related to a Dyal Equity Fund includes any continuation fund or other fund whose primary purpose is to acquire directly or indirectly all or a portion of the assets of, or interests in, such fund.

 

   

In exchange for the assets and businesses contributed to Blue Owl and its subsidiaries, (a) the Owl Rock Equityholders were paid an implied equity value of approximately $5,467 million (inclusive of the Owl Rock Special Incentive Award (as defined below)), consisting of (i) $350 million of cash consideration (subject to adjustment) and (ii) the remainder in shares of Class A common stock or Blue Owl Operating Group Units, as applicable, and (b) the Dyal Equityholders were paid an implied equity value of approximately $6,683 million, consisting of (i) $922 million of cash consideration subject to adjustments and (ii) the remainder in Blue Owl Operating Group Units;

 

   

Blue Owl contributed all amounts at the Closing then available in Altimar’s Trust Account (plus the net proceeds of any equity financing received in connection with the PIPE Investment), net of amounts required (a) to make the cash consideration payments contemplated by the preceding bulleted item and (b) to redeem 17,838,736 shares at a redemption price of $10 per share by Altimar shareholders exercising their respective redemption rights, to Blue Owl GP, which contributed any such amounts to Blue Owl Holdings and Blue Owl Carry to pay the transaction expenses of Altimar, Neuberger and Owl Rock and otherwise for general corporate purposes;

 

   

Blue Owl issued approximately 100.0 million Seller Earnout Securities (in the aggregate) to the Owl Rock Equityholders and the Dyal Equityholders;

 

7


   

Blue Owl adopted the Omnibus Equity Incentive Plan for itself and its subsidiaries; and

 

   

Blue Owl, the Blue Owl Operating Group entities, the Owl Rock Equityholders, the Dyal Equityholders, the Sponsor and certain other persons entered into the Related Agreement further described in the “Business Combination Agreement” included as Exhibit 2.1 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached.

Sources and Uses of Funds for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination which reflects actual redemptions of shares at a redemption price of $10 per share which is equal to the pro rata portion of the Trust Account.

Sources and Uses (in millions)

 

Sources

           

Uses

 

Proceeds from Trust Account

   $ 97         Cash to Balance Sheet    $ 138  

Private Placement

     1,478        

Cash to Seller

     1,404  

FIC Cash

     142         Escrow Amount      10  
         Transaction Costs      165  
  

 

 

          

 

 

 

Total Sources

   $ 1,717         Total Uses    $ 1,717  
  

 

 

          

 

 

 

Pursuant to the Business Combination Agreement, certain FIC Assets in the form of cash and cash equivalents attributable to “FIC Units” in Owl Rock Group (as defined in the Proxy Statement/Prospectus and held predominantly by Owl Rock Capital Partners, which is held by the Owl Rock Principals) may be retained within Owl Rock Group (including through its wholly owned subsidiaries, as applicable) for use to pay transaction expenses and for general corporate purposes. Approximately $142.0 million of such FIC Assets will be so retained, and accordingly, as contemplated by the Business Combination Agreement, $142.0 million of cash of Blue Owl GP is used to pay cash consideration to such holders of “FIC Units”.

As a result of the transactions contemplated by the Business Combination Agreement, an earnout of $150.0 million is payable by certain holders of Class A Units in Owl Rock Group related to a 2018 recapitalization transaction involving Owl Rock Group. This earnout may be funded by or offset against the Owl Rock Cash Consideration payable to holders of Class A Units in Owl Rock Group under the Business Combination. These earnout contributions are for the benefit of Owl Rock Capital Partners in accordance with Owl Rock Group’s existing Limited Liability Company Agreement.

Basis of presentation

The unaudited pro forma condensed combined balance sheet as of March 31, 2021 assumes that the Business Combination was completed on March 31, 2021. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 and the year ended December 31, 2020 gives pro forma effect to the Business Combination as if it had occurred on January 1, 2020.

 

8


The unaudited pro forma condensed combined balance sheet as of March 31, 2021 has been prepared using the following:

 

   

Altimar’s unaudited condensed balance sheet;

 

   

Owl Rock’s unaudited consolidated and combined statement of financial condition; and

 

   

Dyal’s unaudited combined statement of financial condition.

The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 has been prepared using the following:

 

   

Altimar’s unaudited condensed statement of operations;

 

   

Owl Rock’s unaudited consolidated and combined statement of operations; and

 

   

Dyal’s unaudited combined statement of operations.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 has been prepared using the following:

 

   

Altimar’s audited condensed statement of operations;

 

   

Owl Rock’s audited consolidated and combined statement of operations; and

 

   

Dyal’s audited combined statement of operations.

The merger between Owl Rock and Altimar has been accounted for as a reverse asset acquisition, which is accounted for similar to a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, Altimar has been treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the reverse asset acquisition has been treated as the equivalent of Owl Rock issuing stock for the net assets of Altimar, accompanied by a recapitalization. The acquisition of Dyal has been treated as a business combination under ASC 805 and is accounted for using the acquisition method. Blue Owl recorded the fair value of assets and liabilities acquired from Dyal.

Under the acquisition method, the acquisition date fair value of the gross consideration transferred to affect the Dyal Business Combination, as described in Note 3—Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, is allocated to the assets acquired and liabilities assumed based on their estimated fair values. The Company has made significant estimates and assumptions in determining the preliminary allocation of the gross consideration transferred in the unaudited pro forma condensed combined financial statements. As the unaudited pro forma condensed combined financial statements have been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.

The unaudited pro forma condensed combined financial statements do not give effect to any anticipated operating efficiencies or cost savings that may be associated with the Business Combination. Certain reclassification adjustments have been made in the unaudited pro forma condensed combined financial statements to conform the Dyal and Altimar’s historical basis of presentation to that of Owl Rock’s, where applicable.

The pro forma adjustments reflecting the consummation of the Business Combination are based on certain estimates and assumptions. The unaudited pro forma adjustments may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. Altimar believes that assumptions made provide a reasonable basis for presenting all of the significant effects of the Business Combination contemplated based on information available to Altimar at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the pro forma financial information. The unaudited pro forma condensed combined financial statements are not necessarily indicative of what the actual results of operations would have been had the Business Combination taken place on the date indicated, nor are they indicative of the future consolidated results of operations of the combined company. They should be read in conjunction with the historical consolidated financial statements and notes thereto of the Companies.

 

9


The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to Transaction Accounting Adjustments, which are adjustments that depict in the pro forma condensed combined financial statements the accounting for the transactions required by U.S. GAAP.

The unaudited pro forma condensed combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the Companies filed consolidated income tax returns during the period presented. The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of the Blue Owl shares outstanding, assuming the transaction occurred on January 1, 2020.

Note 2 — Accounting Policies

Upon consummation of the Business Combination, Owl Rock will perform a comprehensive review of Dyal’s accounting policies. As a result of the review, Owl Rock may identify differences between the accounting policies of the companies which, when conformed, could have a material impact on the combined financial statements. Based on its initial analysis, Owl Rock has not identified any material differences in accounting policies that would have an impact on the unaudited pro forma condensed combined financial information.

Note 3 — Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

The adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2021 are as follows:

(a)    Represents the pro forma adjustments to remove the economic investments in the Dyal Equity Funds that were not contributed, assigned or transferred and, where applicable, the related non-controlling interests in the entities holding such investments from the historical financial statements of Dyal.

Pursuant to the terms of the Business Combination Agreement, the Business Combination will include the contribution, assignment or other transfer of direct or indirect ownership of 100% of the non-economic general partner interests in the Dyal Equity Funds or 100% of the interests in the non-economic general partners of the Dyal Equity Funds such that, upon completion, Blue Owl shall indirectly control the Dyal Equity Funds. However, certain Dyal economic investments in the Dyal Equity Funds are not being contributed, assigned, or transferred.

(b)    Reflects the net proceeds from the issuance of 150,000,000 shares of Class A common stock with a par value of $0.0001 from the PIPE Investment based on commitments received. The proceeds of $1,500 million were net of $22.2 million of costs related to the issuance of the PIPE Investment.

(c)    Reflects the incremental interest earned in the Trust Account prior to Closing, the amount attributed to redemptions by the Alitmar public stockholders resulting in $178.5 million, and the reclassification of $96.6 million of cash and cash equivalents held in the Trust Account of Altimar that will become available for transaction consideration, transaction expenses, and the operating activities in conjunction with the Business Combination.

(d)     Reflects the use of $350.0 million of proceeds from the PIPE Investment to purchase existing Class A units from holders of Owl Rock. This represents the secondary purchase of partnership interests in Blue Owl. Note that pursuant to the Business Combination Agreement, $10.0 million of this $350.0 million is held in escrow at closing to satisfy 49.9% of purchase price true-up obligations and pre-closing income tax indemnification obligations of Owl Rock Group LLC equity holders under the Business Combination Agreement. An additional $142.0 million represents FIC Assets in the form of cash and cash equivalents that

 

10


will be retained inside of Owl Rock Group LLC. Holders of “FIC Units” received cash consideration from Blue Owl GP corresponding to such FIC Assets in exchange for their “FIC Units” as described in Note 1 —Description of the Business Combination.

(e)     Represents the adjustment for the estimated preliminary purchase price allocation for the acquisition of the Dyal business resulting from the Business Combination (“Dyal Business Combination”). The preliminary purchase price allocation is presented below as if the Dyal Business Combination was consummated on March 31, 2021. Reimbursed transaction and litigation costs incurred by Dyal are included as part of the total consideration below.

 

Calculation of consideration per the Business Combination Agreement

   Fair Value (in millions)  

Equity consideration for acquired stock (1)

   $ 4,154.2  

Cash consideration

     921.5  

Tax receivable agreement

     107.4  

Dyal reimbursed transaction and litigation costs

     73.1  

Fair value of earnout (2)

     262.3  

Non-controlling interest

     6.4  
  

 

 

 

Total consideration for allocation

   $ 5,524.9  
  

 

 

 

Recognized amounts of identifiable assets acquired and liabilities assumed

  

Assets acquired:

  

Investments

   $ 7.6  

Accounts receivable, net

     81.0  

Intangible assets, net

     2,245.0  

Deferred tax asset

     0.0  

Other assets (excluding goodwill)

     0.6  
  

 

 

 

Total assets acquired

   $ 2,334.2  

Liabilities assumed:

  

Accrued compensation

     19.9  

Accounts payable, accrued expenses and other liabilities

     16.5  

Deferred tax liabilities

     102.0  

Total liabilities assumed:

   $ 138.4  
  

 

 

 

Net identifiable assets acquired

   $ 2,195.8  
  

 

 

 

Goodwill

   $ 3,329.1  
  

 

 

 

 

  (1)

Represents share consideration issued to the Dyal selling shareholders based on the fair value of the acquired business reflecting a discount for lack of control.

  (2)

Represents the estimated fair value of the Seller Earnout Securities, which will be settled with shares of Class A, C, and/or D common stock and is accounted for as a contingent consideration in accordance with ASC 805. The equity owners of Blue Owl prior to the Closing are entitled to receive an earnout subject to vesting terms detailed within the section entitled “The Business Combination Agreement — Earnout” within the Proxy Statement/Prospectus. As a result, the Seller Earnout Securities are included in the value of consideration allocated in purchase accounting. The value of the Seller Earnout Securities is determined by using a Monte Carlo simulation to forecast the future daily price per share of Class A common stock over a five-year time period.

Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC Topic 805 and include trademarks, investment management agreements, and institutional investor relationships.

 

Identifiable Intangible Assets

   Fair Value
(in millions)
     Useful Life
(in years)
 

Trademarks

   $ 66.6        7  

Investment management agreements

     1,872.2        2-20  

Institutional investor relationships

     306.2        10  
  

 

 

    

Total

   $ 2,245.0     
  

 

 

    

Approximately $3,329.1 million has been allocated to goodwill. Goodwill represents the excess of the gross consideration over the fair value of the underlying net tangible and identifiable intangible assets acquired. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets. Goodwill represents future economic benefits arising from acquiring Dyal, primarily due to its strong market position, that are not individually identified and separately recognized as intangible assets.

 

11


In accordance with ASC Topic 350, Goodwill and Other Intangible Assets, goodwill will not be amortized, but instead will be tested for impairment at least annually or more frequently if certain indicators are present. In the event that the value of goodwill and/or intangible assets has become impaired, an accounting charge for impairment during the quarter in which the determination is made may be recognized.

In addition to the recognition of goodwill and intangibles, the following are adjustments made in connection with the acquisition of Dyal:

(i) A $921.5 million decrease to cash and cash equivalents representing Dyal’s secondary purchase of partnership interests in Blue Owl;

(ii) A $73.1 million decrease to cash and cash equivalents representing the amount of reimbursed acquisition costs included as part of consideration for the acquisition of Dyal as presented above (inclusive of $18.7 million attributed to Dyal litigation costs);

(iii) A $102.0 million increase in deferred tax liabilities that results from the step-up for tax purposes of certain assets of Dyal, including the deferred tax asset created as a result of payments resulting from the TRA. The deferred tax liability is driven by state and federal taxes, net of deferred tax assets within each jurisdiction in accordance with ASC 740. The realizability of any deferred tax assets is subject to various estimates and assumptions, including preliminary projections of future taxable income. Please refer to note (f) and (g) for additional information;

(iv) A $107.4 million increase to TRA liability to establish the net present value of the contingent consideration owed to previous Dyal owners as part of the TRA. The TRA represents an increase to the consideration transferred and is not an assumed liability within purchase accounting. The TRA liability has been recorded as an adjustment to shareholders equity of Blue Owl and would not impact non-controlling interest in the Blue Owl Operating Group. Please refer to note (f) for additional information;

(v) A $4,523.8 million increase to additional paid-in capital associated with the purchase accounting for Dyal;

(vi) A $46.4 million decrease to retained earnings to eliminate the historical retained earnings of Dyal;

(vii) A $3,372.7 million decrease to APIC and increase to non-controlling interest to reflect the non-controlling interest in the Dyal Business as a result of the transaction. Refer to note (m) for additional information;

(viii) A $259.6 million increase to earnout liability. The earnout liability represents an increase to the consideration transferred owed to the Dyal Owners and is not an assumed liability within purchase accounting. Please refer to note (p) for additional information.

(f)    As a result of the Business Combination, Blue Owl is a party to the Tax Receivable Agreement as included in Exhibit 10.1 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached. As detailed in the Tax Receivable Agreement, in connection with this Business Combination, Blue Owl entered into a TRA with certain existing direct and indirect members of the Blue Owl Operating Group. The agreement requires Blue Owl GP to pay to such members (or their owners) 85% of the amount of tax savings, if any, that the Company realizes (or is deemed to realize in certain circumstances) as a result of (i) increases in tax basis resulting from the Business Combination, (ii) certain tax attributes of the Blue Owl Operating Group (or certain corporations acquired in connection with the Business Combination) existing prior to the Business Combination, and (iii) tax benefits attributable to payments made under the TRA, generating a liability (the “TRA liability”). The deferred tax asset and the TRA liability for the TRA assume: (A) only exchanges associated with this Business Combination, (B) a share price equal to $10 per share, (C) a constant income tax rate, (D) no material changes in tax law, (E) the ability to utilize tax attributes, (F) no adjustment for potential remedial allocations and (G) future TRA payments.

The adjustments resulting from the TRA and attributable to the reverse recapitalization of Owl Rock and Dyal Business Combination have been recorded as an adjustment to shareholders equity. When payments are made from Blue Owl (or its subsidiaries) pursuant to the TRA, the applicable tax regulations consider the payments additional consideration related to the original transaction which gave rise to the tax attribute being utilized, resulting in additional tax basis adjustments equal to the TRA payments made. The tax effects of this temporary difference will be recorded as an increase to deferred tax assets. When establishing the TRA liability, the difference between the TRA liability and related deferred tax asset is recognized in additional paid-in capital as these adjustments are caused by transactions among or with shareholders.

Note that $107.4 million of the total TRA liability is accounted for as contingent consideration under ASC 805 related to the Dyal Business Combination. The TRA liability represents the estimated fair value of cash payments owed to Dyal selling shareholders pursuant to the TRA. The estimated undiscounted cash payments to be made by Blue Owl to selling shareholders pursuant to the TRA are discounted to present value utilizing an appropriate market discount rate to arrive at the estimated fair value of the cash payments and the associated liability. Refer to footnote (e) for details of the consideration transferred and the purchase price allocation.

 

12


(g)     The deferred tax adjustments are primarily related to the difference between the financial statement and tax basis in Blue Owl’s investment in Blue Owl Operating Group interests, deferred tax impacts connected to the TRA as described in note (f), as well as deferred taxes related to taxes that are assessed at the partnership level. The non-controlling interest benefit of the partnership level taxes is included as part of the non-controlling interest adjustment as described in note (j). The realizability of the deferred tax assets is subject to various estimates and assumptions, including preliminary projections of future taxable income.

(h)    A total $184.0 million of transaction costs and litigation costs were incurred with the Business Combination. Of the total, $73.1 million relates to the reimbursed acquisition and litigation costs included as part of the consideration for the Dyal Business Combination described in (e), and $9.6 million relates to deferred IPO fees described in (i).

This pro forma adjustment reflects the remaining $101.3 million of transaction and litigation costs incurred by Owl Rock and Altimar associated with the Business Combination, $15.6 million of which are deferred transaction costs included in other assets on Owl Rock’s consolidated and combined statement of financial condition. Of these costs, $96.6 million relate to advisory, legal, and other fees, which are direct and incremental to the transaction and are adjusted against additional paid-in capital, and $4.4 million is expected to be expensed, of which $4.3 million was expensed and accrued in the historical statement of operations of Owl Rock and $0.1 million was expensed and reflected in retained earnings. $0.3 million of litigation costs were expensed and reflected in retained earnings. The $17.2 million decrease to accounts payable represents the adjustment to eliminate the accrued transaction cost liabilities reflected in the Owl Rock historical balance sheet with an offsetting decrease to cash.

(i)     Reflects the payment of deferred IPO fees, which includes $9.6 million of deferred underwriters’ and professional fees in connection with Altimar’s IPO.

(j)     Following the Business Combination, the Company owns 25.4% of the economic interest of Blue Owl Operating Group, and the continuing members of Blue Owl own the remaining 74.6%.

 

(in millions)    Blue Owl
Membership Units
     %  

Investors in Blue Owl

     344        25.4

Continuing members of Blue Owl Partnerships

     1,008        74.6
  

 

 

    

 

 

 

Total

     1,352        100.0

The calculation of additional paid-in capital is as follows:

 

(in thousands)    Blue Owl      

Altimar historical additional paid-in capital

   $ (3,375  

Adjustments impacting additional paid-in capital

    

PIPE Investment

     1,477,785     (b)

Secondary purchase of membership units in Blue Owl Partnerships

     (350,000   (d)

Transaction and litigation costs

     (96,604   (h)

Reclass of redeemable Class A stock

     61,774     (k)

Establishment of par for new share classes

     (108   (l)

Dyal purchase price allocation

     4,523,785     (e)

Deferred taxes

     552,252     (g)

Due to affiliates for tax receivable agreement

     (460,641   (f)

Earnout liability

     (88,310   (p)

Settlement of “Award” liability

     90,524     (n)
  

 

 

   

Total adjustments impacting additional paid-in capital

   $ 5,710,457    

Non-controlling interest and liability classified earnouts attributed to Blue Owl Partnerships (see below)

     (4,224,310   (m)
  

 

 

   

Additional paid-in capital

   $ 1,482,772    

 

13


For purposes of the calculation of additional paid-in capital, the impact of non-controlling interest is calculated as follows:

 

(in thousands)    Blue Owl  

Altimar historical additional paid-in capital

   $ (3,375

Adjustments impacting additional paid-in capital

     5,710,457  

Adjustments impacting additional paid-in capital not subject to non-controlling interest:

  

Deferred taxes attributable to Blue Owl

     590,092  

Earnout liability

     (88,310

Due to affiliates for tax receivable agreement

     (460,641

Establishment of par for new share classes

     (108
  

 

 

 

Adjustments impacting additional paid-in capital subject to non-controlling interest

   $ 5,666,049  

Adjustments impacting par:

  

PIPE investment

     15  

Altimar historical par

     1  

Recapitalization

     1  

Reclass of “Award” liability

     1  
  

 

 

 

Total Equity Adjustments

   $ 5,666,067  

Continuing members’ economic interest in Blue Owl Partnerships

     74.6
  

 

 

 

Non-controlling interest impact to additional paid-in capital prior to reclassification of liability classified earnouts attributed to Blue Owl Partnerships

   $ 4,224,310  

Earnout liability directly attributable to Blue Owl Partnerships

     (436,389
  

 

 

 

Non-controlling interest impact to additional paid-in capital

   $ 3,787,921  

The calculation of non-controlling interest is as follows:

 

(in thousands)    Blue Owl      

Non-controlling interest prior to consummation of the Business Combination:

    

Beginning members’ deficit

   $ (388,299  

Historical adjustments to Dyal equity

     (22,223   (a)

PIPE Investment

     1,477,800     (b)

Secondary purchase

     (350,000   (d)

Reclass of redeemable Class A stock

     61,775     (k)

Transaction and litigation costs

     (96,966   (h)

Dyal purchase price allocation

     4,477,376     (e)

Settlement of “Award” liability

     90,525     (n)

Deferred taxes attributable to Blue Owl Partnerships

     (37,840   (g)

Non-controlling interest in subsidiaries of partnerships

     (15,467  
  

 

 

   

Total members’/stockholders’ equity

   $ 5,196,681    

Continuing members’ economic interest in Blue Owl Partnerships

     74.6  
  

 

 

   

Non-controlling interest

   $ 3,874,362    

Earnout liability directly attributable to Blue Owl Partnerships

     (436,389   (p)
  

 

 

   

Non-controlling interest before day one expenses

     3,437,973    

Non-controlling interest impact following consummation of the Business Combination:

 

 

Day one stock compensation expense associated with equity issuance

     1,331,459    

Continuing member’s economic interest in Blue Owl Partnerships

     74.6  
  

 

 

   

Day one stock compensation expense attributable to non-controlling interest

   $ 992,663    

Non-controlling interest before day one expenses

   $ 3,437,973    

Day one stock compensation expense associated with equity issuance

     1,331,459     (o)

Less: Day one stock compensation expense attributable to non-controlling interest

     992,663     (o)
  

 

 

   

Non-controlling interest following consummation of the Business Combination

   $ 3,776,769    

(k)    Represents the pro forma adjustments to reclassify Altimar Class B common stock, which were converted to Altimar Class F common stock as a required step for the Domestication of Altimar and subsequently and immediately converted to Altimar Class A common stock and Altimar redeemable Class A common stock that were converted to Class A common stock following the Business Combination, and is reflective of the impact of the forfeiture of 2,289,375 of the 6,675,000 shares of Class A common stock which are held by the Sponsor following the Business Combination as described within the Forfeiture and Support Agreement (included in the Business Combination Agreement as included in Exhibit 2.1 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached).

(l)    The pro forma adjustment reflects, (i) 1,267.1 million shares of common stock with a closing share price of $10 per share would be outstanding immediately after the Business Combination, including shares of Class A and Class E common stock (economic) and Class C and Class D common stock (vote-only, no economics stock) and (ii) such common stock would include 329.1 million shares of our Class A common stock issued in the Business Combination (inclusive of the Owl Rock Special Incentive Award), 628.4 million shares of Class C common stock, 294.7 million shares of Class D common stock, and 15.0 million shares of Class E common stock.

(m)     Represents the pro forma adjustments to record a non-controlling interest related to the interest held by the continuing members of the Blue Owl Operating Group, which will represent a majority of the economic interest in the Blue Owl Operating Group on the unaudited pro forma condensed combined balance sheet. Refer to (j) for a roll of non-controlling interest related to the interests held by continuing members of the Blue Owl Operating Group. Note that $3,372.7 million of the total non-controlling interest in Blue Owl is attributable to the Dyal acquisition. An adjustment was made to reclassify additional paid-in capital to non-controlling interest as result of the Dyal acquisition.

(n)    Represents the pro forma adjustment to eliminate the accrued compensation liability associated with an Owl Rock Special Incentive Award granted on September 15, 2020 (the “Owl Rock Special Incentive Award”). The adjustment was offset with an increase to Class A common stock, assuming the vested restricted stock units were exercised at March 31, 2021, and additional paid-in capital as the cash settled award converts into 9.05 million restricted stock shares upon exercise of the units. Please refer to “Owl Rock Capital and Subsidiaries and Owl Rock Capital Securities LLC Notes to Consolidated and Combined Financial Statements” within Exhibit 99.2 to the Current Report on Form 8-K to which this Exhibit 99.4 is attached.

(o)    Represents the pro forma adjustment as a result of a one-time compensation charge recognized post-combination associated with the accelerated vesting of certain employee share-based awards. On November 3, 2020, NBG issued share-based payment awards (the “Award Units”) to certain Dyal management members. The Award Units represent unvested, non-voting partnership interests in a subsidiary of NBG. The Award Units had no liquidation value on the date of grant, but instead provided the grantees with rights to distributions of the future profits, as defined, of Dyal. The Award Units generally vest in four equal installments over four years commencing on the seventh anniversary of the grant date, provided that certain conditions are met, including continued employment with Dyal. No additional Award Units are currently available for future issuance. The Award Units were being expensed and recorded into equity by Dyal over the requisite service period based upon the fair value of the partnership interests on the date of grant, and the Company recognizes forfeitures when they occur.

The Award Units were modified in connection with the Business Combination to remove certain forfeiture conditions tied to continued employment with Blue Owl post Business Combination. This modification was not a result of the existing terms within the Award Units (e.g. a change of control provision). Based on an evaluation of the facts and circumstances and in contemplation of the guidance provided in ASC 805, a determination has been made that the modification is to the benefit of Owl Rock as the accounting acquirer. As a result, a determination has been made that the modification of the Award Units is a transaction outside of the scope of the Business Combination and would be accounted for separately based on the guidance within ASC 805-30 which addresses replacement awards in accordance with ASC 718 as further discussed in (ii). The entity in which the Award Units were issued is incrementally entitled to its pro rata ownership of the Earnout Securities (please see (p) for further detail). The Award Units, and the related Earnout Securities, are remeasured at fair value and expensed as a day one stock compensation expense associated with the Business Combination.

 

14


For the impact of the award to non-controlling interests, refer to the calculation of non-controlling interests in (j). The impact to Blue Owl is calculated as follows:

 

(in thousands)    Blue Owl  

Day one stock compensation expense associated with equity issuance

   $ 1,331,459  

Controlling interest in Blue Owl Partnerships

     25.4
  

 

 

 

Day one stock compensation expense attributable to controlling interest

   $ 338,796  

(p)    The existing shareholders of Owl Rock and Dyal each received their proportionate amount of Seller Earnout Securities based on their proportionate ownership in Blue Owl upon consummation of the Business Combination. Included in existing shareholders of Dyal is a subsidiary of Neuberger that issued the Award Units to certain members of the Dyal management team. The Award Units entitle certain members of the Dyal management team to their proportionate equity ownership as well as the related Seller Earnout Securities as described in (o). The total value of the Seller Earnout Securities have an estimated fair value of $589.1 million, which is determined by using a Monte Carlo simulation to forecast the future daily price per share of Class A common stock over a five-year time period. The Earnout Triggering Events are detailed within the section entitled “The Business Combination Agreement — Earnout” within the Proxy Statement/Prospectus. Of the total estimated fair value, $265.1 million is attributable to the Seller Earnout Securities issued to the Owl Rock Equity holders, $259.6 million is accounted for as contingent consideration under ASC 805 related to the Dyal Business Combination (please refer to note (e) for additional information), $64.4 million is accounted for as equity classified stock based compensation under ASC 718 issued to certain employees of Dyal in connection with their Award Units, which was recognized as a one-time compensation charge post-combination associated with the acceleration of vesting of the awards as discussed in (ii). Note that, separately, under ASC 718, the indexation assessment under ASC 815-40 does not factor into the classification assessment. As a result, the immediately vested stock based compensation is equity classified. Please refer to note (o) for additional information.

The non-controlling interest impact associated with the liability attributable to the Blue Owl Partnerships is included as part of the non-controlling interest adjustment as described in note (j).

Note 4 — Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the twelve-month period ended December 31, 2020 and three-month period ended Match 31, 2021 are as follows:

(aa)    Represents the pro forma adjustments to reflect transaction and litigation costs that are not directly attributable to the Business Combination and therefore expensed as incurred.

(bb)    The combined entity of Owl Rock and Dyal will continue to be treated as a partnership (“Blue Owl Operating Group”) for U.S. federal and state income tax purposes. The Blue Owl Operating Group are generally

 

15


not subject to U.S. federal and state income taxes (although are subject to certain unincorporated business taxes, particularly in New York City). Any taxable income or loss generated by the Blue Owl Operating Group are passed through to and included in the taxable income or loss of its members. Blue Owl is subject to U.S. federal and state income taxes with respect to our allocable share of any taxable income generated by the Blue Owl Operating Group. This adjustment includes the tax effect of recognizing the allocable share of the pro forma taxable income generated by the Blue Owl Operating Group. We estimate that our allocable share of income or loss from the Blue Owl Operating Group will be subject to an effective tax rate of 23%. Further, these pro forma income tax provisions are prepared as if the acquisition of the Dyal business occurred on January 1, 2020. This adjustment also contains the deferred tax benefit that is connected to the post-transaction PPA amortization.

(cc)    Represents the pro forma adjustment to adjust non-controlling interest for the portion of net income attributable to Blue Owl based on the relative ownership. Blue Owl will own 25.4% of the economic interest of Blue Owl Operating Group, and the continuing members of the Blue Owl Operating Group will own the remaining 74.6%.

 

($ in thousands)    Three Months Ended
March 31, 2021
    Year Ended
December 31, 2020
 

Net income (loss) attributable to Blue Owl Partnerships

   $ 36,685     $ (1,465,399

Less:

    

Imputed interest for contingent consideration of Dyal acquisition

     (500     (577

Net income (loss) attributed to non-controlling interests in subsidiaries of partnerships

     99       (4,397
  

 

 

   

 

 

 

Allocable income

   $ 37,086     $ (1,460,425

Continuing members’ economic interest in Blue Owl Partnerships

     74.6     74.6
  

 

 

   

 

 

 

Income attributable to non-controlling interest

   $ 27,649     $ (1,088,813

NCI in Share of UBT

     (1,280     1,774  
  

 

 

   

 

 

 

Total income attributable to non-controlling interest

   $ 26,369     $ (1,087,039
  

 

 

   

 

 

 

(dd)    Represents the pro forma adjustments to remove income statement activity associated with the economic investments in the Dyal Equity Funds that were contributed, assigned or transferred and, where applicable, the related non-controlling interests in the entities holding such investments from the historical financial statements of Dyal as described in (a).

(ee)    Represents adjustments to incorporate intangible asset amortization for the step-up basis related to the Dyal Business Combination at the closing of the transaction. This pro forma adjustment has been calculated assuming the transaction occurred on January 1, 2020. The following table is a summary of information related to certain intangible assets acquired, including information used to calculate the pro forma amortization expense that is accounted for as an adjustment to general, administrative and other expenses.

 

Identifiable Intangible Assets

   Fair Value
(in millions)
     Useful life
(in years)
     Amortization
Expense for the
Three Months Ended
March 31,
2021
     Amortization
Expense for the
Year
Ended
December 31,
2020
 

Trademarks

     66.6        7        2.4        9.5  

Investment management agreements

     1,872.2        2-20        33.4        133.4  

Institutional investor relationships

     306.2        10        7.7        30.6  
  

 

 

       

 

 

    

 

 

 

Total

     2,245.0           43.5        173.5  

(ff)    Represents the adjustment to record imputed interest expense associated with the TRA liability which is considered contingent consideration associated with the Dyal Business Combination. The TRA liability is recorded as a long-term liability in the unaudited pro forma condensed combined balance sheet as described above in (f).

(gg)     Represents the impacts to compensation and benefits related to the Executed Employment Agreements for Key Individuals (see the section titled “Employment Agreements” within the Current Report on Form 8-K) which was effective as of the Closing of the Business Combination. The adjustment includes a reversal of compensation expense accrued throughout the three months ended March 31, 2021, and the year ended December 31, 2020, for the three Key Individuals (as defined in the Current Report on Form 8-K), and the recalculation and expense for the Key Individuals that have entered into the Executed Employment Agreements in connection with the Business Combination.

Additionally, the compensation expense adjustment includes a one-time compensation charge recognized post-combination associated with the accelerated vesting of the Award Units attributed to certain Dyal employees as the Award Units were modified to remove the requisite service period subsequent to the Business

 

16


Combination (described in (o)) and their related Earnout Securities (described in (o) and (p)). There were no impacts to compensation and benefits related to awards granted to Owl Rock employees other than the Owl Rock Special Incentive Award (described in (n)).

(hh)    Represents the elimination of interest earned on marketable securities held in the Trust Account.

Note 5 - Earnings/Loss per Share

Net (loss) per share is calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding at January 1, 2020. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net (loss) per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire periods presented.

For the purposes of calculating the weighted average number of shares of Class A common stock outstanding, the following factors are considered:

 

  1.

Management determined that the economic shares include 9.7 million Class A common shares issued to SPAC Shareholders, 4.6 million shares issued to SPAC Sponsors, 150.0 million shares issued to PIPE Investors, 155.8 million shares attributed to other Owl Rock Equityholders, and 9.05 million shares associated with the Owl Rock Special Incentive Award.

 

  2.

The additional 100.0 million Seller Earnout Securities of Class E common stock were allocated among the Stockholders, on a pro rata basis. The shares will vest in two series, Series E-1 and Series E-2 based on the vesting conditions that follow. If at any time following the Closing, the volume weighted average price (“VWAP”) of the shares of Class A common stock of Blue Owl is equal to at least $12.50 per share over any twenty (20) consecutive trading days following the Closing, the Series E-1 Shares will vest; and (ii) if the VWAP of the shares of Class A common stock of Blue Owl is equal to at least $15.00 per share over any twenty (20) consecutive trading days following the Closing, the Series E-2 Shares will vest. The Seller Earnout Securities shall be entitled to receive, ratably with participating shares, dividends and other distributions prior to vesting, at which point they become issued common stock. For the avoidance of doubt, if the Series E-1 and Series E-2 Shares expire without vesting, the holders are not entitled to the dividends referenced above. The Series E-1 and Series E-2 Shares, which are contingently returnable, are currently excluded from the basic and diluted calculations given that the vesting conditions have not been satisfied .

 

  3.

Existing shareholders have rights to exchange the pre-existing voting units to Class A and B common shares on a one-for-one exchange basis. Upon full exchange, Class A and B common shares shall be increased by 1,008.0 million.

 

  4.

The 14.2 million of SPAC and private placement warrants with an exercisable price at $11.50 are not converted to Class A common stock at Closing. The warrant effects are excluded from the diluted loss per share calculation, since the inclusion would be anti-dilutive for the three months ended March 31, 2021 and for the year ended December 31, 2020.

The unaudited pro forma condensed combined (loss) per share has been prepared for the three months ended March 31, 2021 and for the year ended December 31, 2020:

 

($ in thousands, except share and per share amounts)    Three Months Ended
March 31, 2021
     Year Ended
December 31, 2020
 

Basic and Diluted Net Income (Loss) Per Class A Share

     

Numerator

     

Net income (loss)

   $ 33,846      $ (1,452,203

Less: Net income (loss) attributable to non-controlling interest

     26,369        (1,087,039
  

 

 

    

 

 

 

Net income (loss) attributable to Class A common stockholders-basic

   $ 7,477      $ (365,164
  

 

 

    

 

 

 

Denominator

     

Weighted-average shares of Class A common stock outstanding-basic

     329,055        329,055  

Weighted-average shares of Class A common stock outstanding-diluted

     329,055        1,252,092  

Basic net income (loss) per share

   $ 0.02      $ (1.11
  

 

 

    

 

 

 

Diluted net income (loss) per share

   $ 0.02      $ (1.16
  

 

 

    

 

 

 

 

17


The following tables sets forth:

 

   

Historical per share information of Altimar as of March 31, 2021;

 

   

Unaudited pro forma combined per share information of the Company as of March 31, 2021, after giving effect to the Business Combination.

The pro forma book value per share information reflects the Business Combination as if it had occurred on March 31, 2021.

 

     Historical      Pro Forma
Combined
 
     Altimar Acquisition
Corporation for the
Three Months Ended
March 31, 2021
     Altimar Acquisition
Corporation for the
Three Months Ended
March 31, 2021
 

Book value per share (1)

   $ 0.73      $ 3.02  

 

(1)

Book value per share = total equity/shares outstanding. Shares outstanding includes Class E shares issued and outstanding. For the pro forma combined book value per share, total equity is derived using 344.0 million shares.

(2)

Prior to the Business Combination, Owl Rock and Dyal’s historical equity structure was not unitized, and therefore the calculation of book value per share is not a useful metric.

 

18

Exhibit 99.5

OWL ROCK’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this section, unless the context otherwise requires, references to “Owl Rock,” “we,” “us,” “our,” and the “Company” are intended to mean the business and operations of Owl Rock and its consolidated subsidiaries. The following discussion analyzes the financial condition and results of operations of the Company. Additional terms used by the Company are defined in the Glossary and throughout the Management’s Discussion and Analysis in this Current Report on Form 8-K.

The following discussion and analysis should be read in conjunction with the consolidated and combined audited financial statements and the related notes included in this Current Report on Form 8-K.

Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum. Certain prior period amounts have been reclassified to conform to the current year presentation.

Our Business

We are a leading alternative asset management firm focused on providing direct lending solutions to U.S. middle market companies. Our breadth of lending product offerings enables us to offer a holistic platform to the middle market, which establishes us as a partner of choice for private-equity sponsored companies as well as other businesses primarily in non-cyclical, recession-resistant businesses. We provide these loans predominantly by utilizing permanent capital vehicles funded by our high-quality, largely institutional investor base. By utilizing these permanent capital vehicles and long-dated private funds, we believe our business provides a high degree of earnings stability and predictability. Our investors include a diversified mix of institutional investors, including prominent domestic public and private pension funds, endowments, foundations, institutional-quality family offices, asset managers and insurance companies, as well as high net worth and retail clients, distributed through many well-known wealth management firms. We have continued to grow our dedicated investor base through emphasizing our disciplined investment approach, client service, best-in-class portfolio performance and industry leading margins. We operate across four different strategies, through which we currently manage five permanent capital vehicles, all of which are BDCs, as well as long-dated private funds and managed accounts. As of March 31, 2021, we managed $27.8 billion in AUM, 83% of which is considered permanent capital AUM. Our $27.8 billion in AUM reflects year-over-year growth of 42% since March 31, 2020 and a CAGR of 22% since December 31, 2019. Our executives and employees have invested over $515 million in our products.

Our business is focused on direct lending to middle market companies primarily in the United States under the following four investment strategies:

 

   

Diversified Lending. We primarily originate and make loans to, and make debt and equity investments in, U.S. middle market companies. We invest in senior secured or unsecured loans, subordinated loans or mezzanine loans and, to a lesser extent, equity and equity-related securities including warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity. Our investment objective is to generate current income and, to a lesser extent, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns. While we believe that current market conditions favor extending credit to middle market companies in the United States, our investment strategy is intended to generate favorable returns across credit cycles with an emphasis on preserving capital.

We focus on providing debt capital to private-equity sponsored companies and other businesses primarily in non-cyclical, recession-resistant businesses. We provide a wide range of financing solutions with strong focus on the top of the capital structure and operate this strategy through significant diversification by borrower, sector, sponsor, and position size.

Our Diversified Lending strategy is intended to generate favorable returns across credit cycles with an emphasis on preserving capital and is managed through four BDCs, ORCC, ORCC II, ORCC III and ORCIC, private debt funds and managed accounts. As of March 31, 2021, we have $17.7 billion of assets under management across these products.

 

1


   

Technology Lending. We are focused primarily on originating and making debt and equity investments in technology-related companies based primarily in the United States. We originate and invest in senior secured or unsecured loans, subordinated loans or mezzanine loans, and equity-related securities including common equity, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity. Our investment objective is to maximize total return by generating current income from debt investments and other income producing securities, and capital appreciation from our equity and equity-linked investments.

We invest in a broad range of established and high growth technology companies that are capitalizing on the large and growing demand for technology products and services. These companies use technology extensively to improve their business processes, applications and opportunities or seek to grow through technological developments and innovations. These companies operate in technology-related industries or sectors which include, but are not limited to, information technology, application or infrastructure software, financial services, data and analytics, security, cloud computing, communications, life sciences, healthcare, media, consumer electronics, semi-conductor, internet commerce and advertising, environmental, aerospace and defense industries and sectors.

Our Technology Lending strategy is managed through our technology-focused BDC, ORTF. As of March 31, 2021, we have $5.5 billion of assets under management in ORTF.

 

   

First Lien Lending. We seek to realize significant current income with an emphasis on preservation of capital primarily through originating primary transactions in and, to a lesser extent, secondary transactions of first lien senior secured loans in or related to middle market businesses based primarily in the United States. We may also invest, on a limited basis, in other types of debt and debt-related securities in or related to middle market businesses based primarily in the United States. While we believe that current market conditions favor extending credit to middle market companies in the United States, our investment strategy is intended to generate favorable returns across credit cycles with an emphasis on preserving capital. We expect that capital will be used by portfolio companies to support growth, acquisitions, market or product expansion, refinancings and/or recapitalizations.

Our First Lien Lending strategy is managed through our Private Debt fund, First Lien Fund, and through Managed Accounts. As of March 31, 2021, we have $3.1 billion of assets under management across these products.

 

   

Opportunistic Lending. We seek to generate attractive risk-adjusted returns by taking advantage of credit opportunities in U.S. middle-market companies with liquidity needs and market leaders seeking to improve their balance sheets. We focus on high quality companies that could be experiencing disruption, dislocation, distress, or transformational change. We leverage the Owl Rock platform to source investment opportunities directly from potential portfolio companies and/or financial sponsors.

We are a partner of choice for a number of privately held companies that are often controlled by private equity sponsors, and we are well positioned to provide such companies with a variety of financing solutions to meet a broad range of situations, including but not limited to the following: (i) rescue financing, (ii) new issuance and recapitalizations, (iii) wedge capital, (iv) debtor-in-possession loans, (v) financing for additional liquidity and covenant relief, and (vi) broken syndications. We may from time to time engage in secondary purchases as well.

We intend to make opportunistic investments in U.S. middle-market companies by providing a variety of approaches to financing, including but not limited to originating and/or investing in secured debt, unsecured debt, mezzanine debt, other subordinated debt, interests senior to common equity, as well as equity securities (or rights to acquire equity securities) which may or may not be acquired in connection with a debt financing transaction, and doing any and all things necessary, convenient or incidental thereto as necessary or desirable to promote and carry out such purpose.

Our Opportunistic Lending strategy is managed through our Private Debt fund, Owl Rock Opportunistic Fund, L.P., and through Managed Accounts. As of March 31, 2021, we have $1.4 billion of assets under management across these products.

 

2


Fee Structure

Management Fees

The investment adviser generally receives a quarterly management fee based upon a defined percentage of average fair value of gross assets (excluding cash) or average fair value of gross assets (excluding cash) plus undrawn commitments in the case of our BDCs, or fair value of gross assets (excluding cash), fair value of investments plus undrawn commitments, or invested capital in the case of our Private Debt funds and Managed Accounts, and also includes BDC Part I Fees. BDC Part I Fees refers to a quarterly performance income on the net investment income of ORCC, ORCC II, ORTF, ORCIC (and, should such BDC become publicly listed in the future, ORCC III), subject to a fixed hurdle rate. These fees are classified as management fees as they are predictable and recurring in nature, not subject to contingent repayment, and cash-settled each quarter.

Our investment advisory agreements of our BDCs typically must be reviewed or approved annually by their boards of directors (including a majority of its independent directors).

Incentive Fees

We are entitled to receive incentive fees in accordance with the investment advisory agreements we have with our BDCs. We may receive BDC Part II Fees, which are not paid unless a BDC achieves cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation).

Capital Invested In and Through Our Funds

To further align our interests with those of investors in our products, our executives and employees have invested and committed over $515 million in Owl Rock products across our platform. We determine these capital commitments based on a variety of factors, including regulatory requirements, investor requirements, estimates regarding liquidity over the estimated time period during which commitments will be funded, estimates regarding the amounts of capital that may be appropriate for other opportunities or other products we may be in the process of raising or are considering raising, prevailing industry standards with respect to sponsor commitments and our general working capital requirements. Our capital commitments are typically funded with cash and not with carried interest or deferral of management fees.

COVID-19 and Our Response

The outbreak of a novel strain of coronavirus (“COVID-19”) continues to impact the United States and other countries throughout the world. In March 2020, the World Health Organization declared COVID-19 to be a pandemic and the United States declared a national emergency due to the outbreak. In connection with these declarations, various governments around the world have instituted measures to slow the transmissions of COVID-19, which substantially restrict individual and business activities. These measures have included, for example, closures of non-essential businesses, limitations of crowd size, stay-at-home orders, quarantines, heightened border controls and limitations on travel. Governments in the United States and around the world have responded with fiscal and monetary stimuli that aim to provide emergency assistance to individuals and businesses negatively impacted by COVID-19. The outbreak of COVID-19 and the actions taken in response have had far reaching impact on the U.S. and global economies, contributing to significant volatility in the financial markets, resulting in increased volatility in equity prices and lower interest rates, and causing furloughs and layoffs in the labor market. While COVID-19 cases have declined in some parts of the United States, many states are seeing increases in the infection rates as they began to allow businesses to reopen. COVID-19 cases have also continued to surge in certain countries outside the United States, and certain countries that were initially successful at containing the virus have experienced renewed outbreaks in recent months. The extent of the impact of the COVID-19 pandemic on us and our funds’ operational and financial performance will depend on many factors, including the duration and scope of the public health emergency, the actions taken by governmental authorities to contain its financial and economic impact, the continued or renewed implementation of travel restrictions and shelter in place orders, the widespread availability and deployment of a vaccine, and the extent of disruption to global, regional and local supply chains and economic markets.

 

3


The scale and scope of the COVID-19 pandemic may heighten the potential adverse effects on our business, financial performance and operating results for the quarterly periods and full fiscal year of 2020 and possibly beyond, and may be material and affect us in ways that we cannot foresee at this time. Many of the adverse ways in which COVID-19 may impact us have already materialized and adversely affected (or may in the future materialize and adversely affect) our funds’ portfolio valuations and the operations of our business and the businesses of our funds’ portfolio companies, as well as the businesses of entities of which we or our funds are creditors, and our and their other counterparties, including suppliers and customers. These risks may, in the future, become even more significant than is currently the case or than is currently anticipated. It is impossible to predict with certainty the potential full magnitude of the business and economic ramifications, COVID-19 has impacted, and may further impact, our business.

As the global response to COVID-19 continues to evolve, our primary focus has been the safety and wellbeing of our employees and their families, as well as the seamless functioning of the firm in serving our stakeholders and fund investors who have entrusted us with their capital. In accordance with local government guidance and social distancing recommendations, the vast majority of our employees have been working remotely since mid-March 2020. Our technology infrastructure has proven to be robust and capable of supporting this model. We have implemented rigorous protocols for remote work across the firm, including increased cadence of group calls and updates, and frequent communication across leadership and working levels. We are leveraging technology to ensure our teams stay connected and productive, and that our culture remains strong even in these unusual circumstances. While we are generally not meeting with our clients in person, we continue to actively communicate with our clients and all of our stakeholders through videoconference, teleconference and email. Investment committees continue to convene as needed, and the firm continues to operate across investment, asset management and corporate support functions.

The combination of the pandemic and responses to it, together with the drop in LIBOR, slowed our capital deployment in 2020. However, in this challenging environment, we have continued to grow our fundraising and business. During the twelve months ended March 31, 2021, we have raised approximately $3.8 billion in commitments to our products, which represents an increase in equity commitments of over 25% since March 31, 2020.

Market Trends and Business Environment

We believe the sustained low interest rate environment following the most recent global financial crisis has resulted in increasing demand for yield, and significant tailwinds for direct lending. The search for yield has resulted in growing allocations to alternative assets, as investors seek to meet their return objectives. This rotation into alternatives, coupled with the void left by banks as they pulled back from the middle market following the global financial crisis, has helped give rise to and sustain continued growth of the direct lending market. Direct lending continues to attract investor capital given its position as a higher-yielding product with defensive characteristics that provides an attractive income alternative to traditional liquid fixed income and a lower-risk alternative to private equity.

We believe that our disciplined investment philosophy across our distinct but complementary investment strategies contributes to the stability of our performance throughout market cycles. As of March 31, 2021, approximately 83% of our AUM were in permanent capital vehicles, and for the three months ended March 31, 2021, 95% of our management fees (including BDC Part I Fees) were derived from permanent capital vehicles. Our products have a stable base of permanent or long-term capital enabling us to invest in assets with a long- term focus over different points in a market cycle and to take advantage of market volatility. However, our results of operations, including the fair value of our AUM, are affected by a variety of factors, particularly in the United States, including conditions in the global financial markets and the economic and political environments.

2020 was a challenging year for markets around the world due to the ongoing impact of the COVID-19 pandemic. Following a historic decline due to the effects of the COVID-19 pandemic, global capital markets continued to rally in the first quarter of 2021 as investor sentiment was encouraged by global central bank support, improving economic data and optimism surrounding vaccine development to combat COVID-19. In the U.S., corporate credit spreads continued to tighten amidst larger gains in the equity markets, economic data showing signs of stabilization, progress on development of COVID-19 vaccines, and investors’ continued search for yield. Specifically, the Credit Suisse Leveraged Loan Index (“CSLLI”), a leveraged loan index, returned 2.0% in the first quarter of 2021 and 4.8% since year-ended 2019, while the ICE BAML High Yield Master II Index, a high yield bond index, returned 0.9% in the first quarter of 2021 and 7.1% since year-ended 2019.

Equity markets continued to recover during the quarter. In the U.S., the S&P 500 returned 6.2% in the first quarter of 2021 and 25.7% since year-ended 2019. Outside the U.S., the MSCI All Country World ex USA Index returned 3.5% in the first quarter 2021 and 14.5% since full-year 2019.

 

4


Corporate performance and earnings across many industries continue to be impacted by COVID-19. While certain industries and companies have demonstrated resilience in the current environment, and in some cases, are experiencing positive trends, others have been negatively affected. We believe the market continues to experience a bifurcation between companies that can access the public markets versus those who cannot, creating an opportunity for our funds to provide flexible solutions.

We believe the middle-market lending environment provides opportunities for us to meet our goal of making investments that generate attractive risk-adjusted returns based on a combination of the following factors, which continue to remain true in the current environment, with the economic shutdown resulting from the COVID-19 national health emergency.

Limited Availability of Capital for Middle-Market Companies. We believe that regulatory and structural changes in the market have reduced the amount of capital available to U.S. middle-market companies. In particular, we believe there are currently fewer providers of capital to middle market companies. We believe that many commercial and investment banks have, in recent years, de-emphasized their service and product offerings to middle-market businesses in favor of lending to large corporate clients and managing capital markets transactions. In addition, these lenders may be constrained in their ability to underwrite and hold bank loans and high yield securities for middle-market issuers as they seek to meet existing and future regulatory capital requirements. We also believe that there is a lack of market participants that are willing to hold meaningful amounts of certain middle-market loans. As a result, we believe our products’ ability to minimize syndication risk for a company seeking financing by being able to hold its loans without having to syndicate them, coupled with reduced capacity of traditional lenders to serve the middle-market, present an attractive opportunity to invest in middle-market companies.

Capital Markets Have Been Unable to Fill the Void in U.S. Middle Market Finance Left by Banks. While underwritten bond and syndicated loan markets have been robust in recent years, middle market companies are less able to access these markets for reasons including the following:

High Yield Market – Middle market companies generally are not issuing debt in an amount large enough to be an attractively sized bond. High yield bonds are generally purchased by institutional investors who, among other things, are focused on the liquidity characteristics of the bond being issued. For example, mutual funds and exchange traded funds (“ETFs”) are significant buyers of underwritten bonds. However, mutual funds and ETFs generally require the ability to liquidate their investments quickly in order to fund investor redemptions and/or comply with regulatory requirements. Accordingly, the existence of an active secondary market for bonds is an important consideration in these entities’ initial investment decision. Because there is typically little or no active secondary market for the debt of U.S. middle market companies, mutual funds and ETFs generally do not provide debt capital to U.S. middle market companies. We believe this is likely to be a persistent problem and creates an advantage for those like us who have a more stable capital base and have the ability to invest in illiquid assets.

Syndicated Loan Market – While the syndicated loan market is modestly more accommodating to middle market issuers, as with bonds, loan issue size and liquidity are key drivers of institutional appetite and, correspondingly, underwriters’ willingness to underwrite the loans. Loans arranged through a bank are done either on a “best efforts” basis or are underwritten with terms plus provisions that permit the underwriters to change certain terms, including pricing, structure, yield and tenor, otherwise known as “flex”, to successfully syndicate the loan, in the event the terms initially marketed are insufficiently attractive to investors. Loans provided by companies such as ours provide certainty to issuers in that we can commit to a given amount of debt on specific terms, at stated coupons and with agreed upon fees. As our products are the ultimate holder of the loans, we do not require market “flex” or other arrangements that banks may require when acting on an agency basis.

Robust Demand for Debt Capital. We believe U.S. middle market companies will continue to require access to debt capital to refinance existing debt, support growth and finance acquisitions. In addition, we believe the large amount of uninvested capital held by funds of private equity firms, estimated by Preqin Ltd., an alternative assets industry data and research company, to be $1.5 trillion as of March 2020, will continue to drive deal activity. We expect that private equity sponsors will continue to pursue acquisitions and leverage their equity investments with secured loans provided by funds or products such as the ones we manage.

The Middle Market is a Large Addressable Market. According to the National Center for the Middle Market 4th quarter 2020 Middle Market Indicator, there are approximately 200 thousand U.S. middle market companies, which have approximately 48 million aggregate employees. Moreover, the U.S. middle market accounts for one-third of private sector gross domestic product (“GDP”). GE defines U.S. middle market companies as those between $10 million and $1 billion in annual revenue, which we believe has significant overlap with our definition of U.S. middle market companies.

 

5


Attractive Investment Dynamics. An imbalance between the supply of, and demand for, middle market debt capital creates attractive pricing dynamics. We believe the directly negotiated nature of middle market financings also generally provides more favorable terms to the lender, including stronger covenant and reporting packages, better call protection, and lender-protective change of control provisions. Additionally, we believe alternative credit managers’ expertise in credit selection and ability to manage through credit cycles has generally resulted in alternative credit managers experiencing lower loss rates than U.S. commercial banks through credit cycles. Further, we believe that historical middle market default rates have been lower, and recovery rates have been higher, as compared to the larger market capitalization, broadly distributed market, leading to lower cumulative losses. Lastly, we believe that in the current environment, with the economic shutdown resulting from the COVID-19 national health emergency, lenders with available capital may be able to take advantage of attractive investment opportunities as the economy re-opens and may be able to achieve improved economic spreads and documentation terms.

Conservative Capital Structures. Following the credit crisis, which we define broadly as occurring between mid-2007 and mid-2009, lenders have generally required borrowers to maintain more equity as a percentage of their total capitalization, specifically to protect lenders during economic downturns. With more conservative capital structures, U.S. middle market companies have exhibited higher levels of cash flows available to service their debt. In addition, U.S. middle market companies often are characterized by simpler capital structures than larger borrowers, which facilitates a streamlined underwriting process and, when necessary, restructuring process.

Attractive Opportunities in Investments in Loans. Our products invest in senior secured or unsecured loans, subordinated loans or mezzanine loans and, to a lesser extent, equity and equity-related securities. We believe that opportunities in senior secured loans are significant because of the floating rate structure of most senior secured debt issuances and because of the strong defensive characteristics of these types of investments. Given the current low interest rate environment, we believe that debt issues with floating interest rates offer a superior return profile as compared with fixed-rate investments, since floating rate structures are generally less susceptible to declines in value experienced by fixed-rate securities in a rising interest rate environment. Senior secured debt also provides strong defensive characteristics. Senior secured debt has priority in payment among an issuer’s security holders whereby holders are due to receive payment before junior creditors and equity holders. Further, these investments are secured by the issuer’s assets, which may provide protection in the event of a default.

Managing Business Performance and Key Financial Measures

Non-GAAP Financial Measures

Fee related earnings, or “FRE”, is used to assess our operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income (loss) before income taxes. FRE differs from income before taxes computed in accordance with GAAP as it adjusts for transaction-related charges, equity-based compensation, non-controlling interests in subsidiaries of the Company and certain other items that we believe reflects our operating performance. Other than for Owl Rock, the calculation of FRE also adjusts for performance income, performance related compensation and investment net gains (losses). Management believes that adding these adjustments assist in clarifying stable and predictable cash flows that cover operating expenses and lead to the generation of profits.

Distributable earnings, or “DE”, is used to assess performance and amounts available for dividends to members. DE is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income (loss) before income taxes. Distributable earnings is FRE less current income taxes and (other than with respect to Owl Rock), includes net realized gains, realized performance income and performance related compensation, if applicable. DE differs from income before taxes computed in accordance with GAAP as it adjusts for certain items that we believe are indicative of our ability to make our dividend payments. Our presentation of DE represents our operating performance, as further adjusted for performance income and performance related compensation, as applicable. Management believes that these adjustments enable investors to better understand the Company’s earnings that are available for distribution.

Adjusted EBITDA is used to assess the Company’s ability to service its borrowings. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income (loss) before income taxes. Adjusted EBITDA represents Distributable Earnings plus (a) interest expense, (b) income tax expense (benefits), and (c) depreciation and amortization.

 

6


Adjusted Revenues are used to assess the net revenue expected to be received by the Company. Adjusted Revenues are derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of total revenues. Adjusted Revenues differ from total revenues computed in accordance with GAAP as it excludes reimbursed expenses and dealer manager revenues, if applicable, that have an offsetting amount included within expenses on the consolidated and combined statement of operations.

Adjusted Compensation is used to assess the net cash settled compensation to be paid by the Company. Adjusted Compensation is derived from and reconciled to, but not equivalent to its most directly comparable GAAP measure of compensation and benefits. Adjusted Compensation differs from compensation and benefits computed in accordance with GAAP as it excludes equity compensation expense and compensation and benefits reimbursed through the receipt of administrative revenues. The administrative revenues reflect allocable compensation and expenses incurred by certain professionals of the Company and reimbursed by products managed by the Company.

We use FRE, DE, Adjusted EBITDA, Adjusted Revenues and Adjusted Compensation as non-GAAP measures to assess and track our performance. These are non-GAAP financial measure supplements and should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “—Components of Consolidated Results of Operations” and are prepared in accordance with GAAP. For the specific components and calculations of these non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see “—Reconciliation of Consolidated GAAP Financial Measures to Certain Non-GAAP Measures.”

Operating Metrics

We monitor certain operating metrics that are common to the alternative asset management industry, which are discussed below.

Assets Under Management

Assets under management (“AUM”) refers to the assets we manage. We view AUM as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus undrawn debt and available uncalled capital. Our AUM equals the sum of the following:

 

   

total assets (including assets acquired with leverage) of our products;

 

   

undrawn debt (at the product-level including certain amounts subject to restrictions); and

 

   

uncalled committed capital (including commitments to products that have yet to commence their investment periods).

Our calculations of assets under management and fee-earning assets under management may differ from the calculation methodologies of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of assets under management includes commitments to, and the fair value of invested capital in our products from executives and employees, regardless of whether such commitments or invested capital are subject to fees. Our definitions of assets under management and fee-earning assets under management are not based on any definition of assets under management and fee-earning assets under management that is set forth in the agreements governing the investment funds and products that we manage.

 

7


The tables below present roll forwards of our total AUM by investment strategy:

 

($ amounts in millions)    Diversified
Lending
    Technology
Lending
    First Lien
Lending
    Opportunistic
Lending
    Total AUM  

AUM at December 31, 2020

   $ 17,234     $ 5,387     $ 3,014     $ 1,466     $ 27,101  

Net change to total assets

     548       366       45       96       1,055  

Net change to uncalled committed capital

     63       (243     —         (182     (362

Net change to undrawn debt

     (130     27       88       —         (15
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AUM at March 31, 2021

   $ 17,715     $ 5,537     $ 3,147     $ 1,380     $ 27,779  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average AUM

   $ 17,474     $ 5,462     $ 3,081     $ 1,423     $ 27,440  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ amounts in millions)    Diversified
Lending
    Technology
Lending
    First Lien
Lending
    Opportunistic
Lending
    Total AUM  

AUM at December 31, 2019

   $ 12,490     $ 3,491     $ 2,655     $ —       $ 18,636  

Net change to total assets

     383       350       272       —         1,005  

Net change to uncalled committed capital

     —         5       (113     —         (108

Net change to undrawn debt

     281       (92     (160     —         29  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AUM at March 31, 2020

   $ 13,154     $ 3,754     $ 2,654     $ —       $ 19,562  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average AUM

   $ 12,822     $ 3,623     $ 2,655     $ —       $ 19,100  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The components of our AUM are presented below ($ in billions):

 

 

LOGO

Fee Paying Assets Under Management

Our FPAUM is generally comprised of the following components:

 

   

the portfolio value, invested capital, net asset value (“NAV”), or total assets (including assets acquired with leverage, but excluding cash) of our products, as applicable; and

 

   

the uncalled committed capital (including commitments to products that have yet to commence their investment periods) for products where we earn management fees on uncalled committed capital.

 

8


The tables below present rollforwards of our total FPAUM by investment strategy:

 

($ amounts in millions)    Diversified
Lending
     Technology
Lending
    First Lien
Lending
    Opportunistic
Lending
     Total FPAUM  

FPAUM at December 31, 2020

   $ 13,536      $ 4,772     $ 2,392     $ 162      $ 20,862  

Net change to fee paying assets

     609        166       (6     81        850  

Net change to uncalled capital earning fees

     —          (243     —         —          (243
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

FPAUM at March 31, 2021

   $ 14,145      $ 4,695     $ 2,386     $ 243      $ 21,469  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Average FPAUM

   $ 13,841      $ 4,734     $ 2,389     $ 202      $ 21,166  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
($ amounts in millions)    Diversified
Lending
     Technology
Lending
    First Lien
Lending
    Opportunistic
Lending
     Total FPAUM  

FPAUM at December 31, 2019

   $ 10,337      $ 3,228     $ 1,713     $ —        $ 15,278  

Net change to fee paying assets

     331        358       276       —          965  

Net change to uncalled capital earning fees

     —          5       (109     —          (104
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

FPAUM at March 31, 2020

   $ 10,668      $ 3,591     $ 1,880     $ —        $ 16,139  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Average FPAUM

   $ 10,503      $ 3,410     $ 1,797     $ —        $ 15,710  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

The components of our FPAUM are presented below ($ in billions):

 

 

LOGO

Available Capital and AUM Not Yet Paying Fees

Our Available Capital is generally comprised of the following components:

 

   

uncalled committed capital (including commitments to products that have yet to commence their investment periods)

 

   

cash and cash equivalents

 

   

undrawn debt (at the product-level including certain amounts subject to restrictions); and

Our AUM not yet paying fees refers to AUM that is not currently paying fees and is eligible to earn management fees and/or performance income upon deployment.

 

9


For the three months ended March 31, 2021, we experienced AUM and FPAUM growth of $0.7 billion and $0.6 billion, or 2.5% and 2.9%, respectively. These increases were primarily driven by fundraising and increased borrowings in our Diversified Lending and Technology Lending strategies.

The charts below present our available capital, which we may also refer to as dry powder, and AUM not yet paying fees, by investment strategy ($ in billions):

 

LOGO

Management Fees Product Duration

We view the duration of products we manage as a metric to measure the stability of our future management fees. For the three months ended March 31, 2021 and 2020, 100% of our management fees were attributable to products with five or more years in duration. The charts below present the composition of our management fees by remaining product duration:

 

10


LOGO

Our management fees, as well as our incentive fees, are typically earned over the life of the product. The duration of our products as well as the available capital should be contemplated in concert when evaluating our future earnings potential. We typically expect to deploy available capital within three to four years of launching a product. Our AUM is comprised of 83% permanent capital vehicles, and 100% of AUM is concentrated in the products with a remaining life in excess of five years. Therefore, given our fee structure, our typical expectation of capital deployment of three to four years from product launch, and the long dated remaining life of our funds, we expect that we will experience stable management fee growth, driven by capital deployment, in subsequent periods.

Product Performance Metrics

Product performance information is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented. We do not present product performance metrics for products with less than two years of investment performance from the date of the product’s first investment. The performance information reflected in this discussion and analysis is not indicative of our overall performance. An investment in Owl Rock is not an investment in any of our products. Past performance is not indicative of future results. As with any investment there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these products or our other existing and future funds will achieve similar returns.

 

11


                                                      MOIC     IRR (%)  
($ amounts in millions)    Year of
Inception
     AUM      Capital
Commitments
/ Equity
Raise(2)
     Invested
Capital
     Realized
Proceeds(3)
     Unrealized
Value (4)
     Total
Value
     Gross
(5)
    Net (6)     Gross
(7)
    Net (8)  

Diversified Lending(1)

                             

Owl Rock Capital Corp. (ORCC)

     2016      $ 13,065      $ 5,972      $ 5,984      $ 1,536      $ 5,802      $ 7,338        1.28     1.23     11.1     8.9

Owl Rock Capital Corp. II (ORCC II)(10)

     2017        2,453        1,399        1,373        177        1,361        1,538        N/A       1.12     N/A       7.0

Technology Lending(1)

                             

Owl Rock Technology Finance Corp. (ORTF)

     2018      $ 5,537      $ 3,164      $ 1,710      $ 135      $ 1,793      $ 1,928        1.18     1.13     14.2     9.9

First Lien Lending(9)

                             

Owl Rock First Lien Fund Levered

     2018      $ 2,696      $ 986      $ 715      $ 50      $ 741      $ 791        1.14     1.11     10.8     8.0

Owl Rock First Lien Fund Unlevered

     2019           175        129        3        131        134        1.07     1.04     5.6     3.3

 

(1)

Invested Capital includes capital calls, dividends reinvested and periodic investors closes, as applicable.

(2)

Includes dividend reinvest, if applicable.

(3)

Realized proceeds represent the sum of all cash distributions to all partners or shareholders.

(4)

Unrealized value represents the fund’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.

(5)

The gross multiple of invested capital (“MoIC”) is calculated at the fund-level and is based on the interests of the fee-paying limited partners or shareholders and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees. The gross MoIC is before giving effect to management fees and Part I/Part II BDC fees.

(6)

The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners or shareholders and if applicable, excludes interests attributable to the non-fee paying limited partners, and/or the general partner which does not pay management fees. The net MoIC is after giving effect to management fees, and Part I/Part II BDC fees, as applicable and all other expenses.

(7)

The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to the fee-paying limited partners or shareholders and if applicable, excludes interests attributable to the non-fee paying limited partners or shareholders and/or the general partner which does not pay management fees. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows or in case of BDCs, the ex-dividend dates of distributions. Gross IRRs are calculated before giving effect to management fees and Part I/Part II BDC fees, as applicable.

(8)

The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners or shareholders and if applicable, exclude interests attributable to the non-fee paying limited partners or shareholders and/or the general partner which does not pay management fees. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows or in case of BDCs, the ex-dividend dates of distributions. The net IRRs are calculated after giving effect to management fees or Part I/Part II BDC fees as applicable, and all other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would likely have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(9)

Owl Rock First Lien Fund is made up of three feeder funds: Onshore Levered, Offshore Levered and Insurance Unlevered. The gross and net MoIC and IRR presented in the chart are for Onshore Levered and Insurance Unlevered as those are the largest of the levered and unlevered feeder funds. The gross and net MoIC for the Offshore Levered feeder fund are 1.14x and 1.09x, respectively. The gross and net IRR for the Offshore Levered feeder are 10.3% and 6.2%, respectively. All other values for Owl Rock First Lien Fund Levered are for Onshore Levered and Offshore Levered combined. AUM is presented as the aggregate of the three Owl Rock First Lien Fund feeders. Owl Rock First Lien Fund Unlevered Investor equity and note commitments are both treated as capital for all values.

(10)

For the purposes of calculating Gross IRR, the expense support provided to the fund would be impacted when assuming a performance excluding management or Part I/Part II BDC fees, and therefore is not applicable to ORCC II.

 

12


Components of Consolidated Results of Operations

Revenues

Management Fees, Net. The investment adviser of each of our products receives a quarterly management fee generally based upon a defined percentage of average fair value of gross assets (excluding cash) or average fair value of gross assets (excluding cash) plus undrawn commitments in the case of our BDCs, or fair value of gross assets (excluding cash), fair value of investments plus undrawn commitments, or invested capital in the case of our Private Debt funds and Managed Accounts, and also include BDC Part I Fees. BDC Part I Fees refers to a quarterly performance income on the net investment income of ORCC, ORCC II, ORTF and ORCIC (and, should such BDC be listed in the future, ORCC III), subject to a fixed hurdle rate. These fees are classified as management fees as they are predictable and recurring in nature, not subject to contingent repayment, and cash-settled each quarter.

The fees are generally based on a quarterly measurement period and amounts can be paid in advance or in arrears depending on the terms set forth in each product’s investment advisory agreement. Management fees are recognized as revenue in the period advisory services are rendered, subject to our assessment of collectability.

Some of our BDC fee structures begin with a discounted management and/or BDC Part I/II Fees (in some cases, no BDC Part I/II Fees) and upon a listing event, as defined in their respective organization documents, revert to a market fee structure, typically 1.50% management fee for average gross assets (excluding cash) above an asset coverage ratio of 200%, and a 1.00% management fee for average gross assets (excluding cash) below an asset coverage ratio of 200% and 17.5% BDC Part I/II Fees, (which are independent of each other). As of March 31, 2021, our BDCs that have a discounted fee structure include ORCC III and ORTF.

We may also, from time to time, waive, rebate, or voluntarily defer any fees payable by our funds. In connection with the initial public offering of ORCC, we agreed to waive management fees, inclusive of BDC Part I Fees, and BDC Part II Fees for fifteen months following ORCC’s exchange listing which expired in October 2020. We did not extend the waiver.

Incentive Fees. Incentive fees earned on the performance of certain product structures are recognized based on the product’s performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each product’s investment advisory agreement. Incentive fees are realized at the end of a measurement period, typically annually. Once realized, such fees are no longer subject to reversal. Incentive fees include BDC Part II Fees. In addition, because BDC Part II Fees are not paid unless our BDCs achieve cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation), BDC Part II Fees payable to us are variable and not predictable.

Administrative, Transaction and Other Fees. Administrative, transaction and other fees primarily include fee income, administrative fees and dealer manager revenue. Fee income represents income earned for providing services to certain portfolio companies of Owl Rock products. Such services include arrangement, syndication, origination, structuring analysis, capital structure and business plan advice and other services. Administrative fees represent revenue from administrative services provided to certain of our funds that are paid to us. Dealer manager revenue consists of commissions earned for providing distribution services to certain of Owl Rock products.

Expenses

Compensation and Benefits. Compensation generally includes salaries, bonuses, commissions, long-term deferral programs, benefits and payroll taxes. Compensation is accrued over the related service period and long-term deferral program awards are paid out based on the various vesting dates.

General, Administrative and Other Expenses. General and administrative expenses include costs primarily related to professional services, occupancy, travel, communication and information services, depreciation and amortization, distribution costs, and other general operating items.

Interest Expense. Interest expense consists of the interest expense on our outstanding debt, amortization of deferred financing costs and amortization of original issue discount.

 

13


Income Tax Expense. Income tax expense (benefit) consists of taxes paid or payable by our consolidated operating subsidiaries. Certain of our subsidiaries (the “Taxable Partnerships”) are treated as partnerships for federal income tax purposes and, accordingly, are not subject to federal and state income taxes, as such taxes are the responsibility of certain direct and indirect owners of the Taxable Partnerships; however, the taxable partnerships are subjected to unincorporated business tax (“UBT”) and other state taxes. A portion of our operations is conducted through domestic and foreign corporations that are subject to corporate level taxes and for which we record current and deferred income taxes at the prevailing rates in the various jurisdictions in which these entities operate.

Non-Controlling Interests. Net (income) loss attributable to non-controlling interests represents the ownership interests that third parties hold in Owl Rock entities that are consolidated into our consolidated and combined financial statements based on their ownership interests in such Owl Rock entities.

Results of Operations

Consolidated and Combined Results of Operations –the Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

 

     For the Three Months Ended
March 31,
     Favorable (Unfavorable)  
($ amounts in thousands)    2021      2020      $ Change      % Change  

Revenues

           

Management fees, net (includes BDC Part I fees of $28,914 and $3,927 for the three months ended March 31, 2021 and 2020, respectively

   $ 94,713      $ 36,847        57,866        157

Administrative, transaction and other fees

     13,511        12,421        1,090        9
  

 

 

    

 

 

       

Total revenues, net

     108,224        49,268        58,956        120

Expenses

           

Compensation and benefits

     47,984        32,175        (15,809      -49

General, administrative and other expenses

     14,860        19,220        4,360        23
  

 

 

    

 

 

       

Total expenses

     62,844        51,395        (11,449      -22

Interest expense

     5,858        5,894        36        1
  

 

 

    

 

 

       

Net income (loss) before income taxes

     39,522        (8,021      47,543        NM  

Income tax expense (benefit)

     188        (46      (234      NM  
  

 

 

    

 

 

       

Net income (loss) including non-controlling interests

     39,334        (7,975      47,309        NM  

Net (income) loss attributed to non-controlling interests

     80        915        (835      -91
  

 

 

    

 

 

       

Net income (loss) attributable to members of Owl Rock Capital and sole member of Owl Rock Capital Securities LLC

   $ 39,414      $ (7,060      46,474        NM  
  

 

 

    

 

 

       

 

NM - Not Meaningful

Revenues

The Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

 

     For the Three Months Ended
March 31,
     Favorable (Unfavorable)  
($ amounts in thousands)    2021      2020      $ Change      % Change  

Management Fees (including BDC Part I Fees)

           

Diversified Lending

   $ 76,478      $ 24,899        51,579        NM  

Technology Lending

     13,857        9,167        4,690        51

First Lien Lending

     3,815        2,781        1,034        37

Opportunistic Lending

     563        —          563        NM  
  

 

 

    

 

 

       

Total

   $ 94,713      $ 36,847        57,866        157
  

 

 

    

 

 

       

 

14


Management Fees. Management fees increased by $57.9 million, or 157%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The increase was primarily due to the expiration of the ORCC fee waiver, which expired on October 18, 2020. Fee waivers were $43.0 million for the three months ended March 31, 2020. The remaining increase is due to the 35% increase in average FPAUM as of March 31, 2021 compared to March 31, 2020.

Administrative, Transaction and Other Fees. Administrative, transaction and other fees increased by $1.1 million, or 9%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. Administrative, transaction and other fees primarily include fee income, administrative fees and dealer manager revenue. The increase was driven by an increase in administrative fees and fee income, partially offset by a decrease in dealer manager revenue. Fee income, which is income earned from portfolio companies for providing arrangement, syndication, origination, structuring analysis, capital structure and business plan advice and other services, increased from $7.6 million to $9.0 million for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase was primarily due to higher fee income from portfolio companies for the three months ended March 31, 2021, a result of higher demand for such services as well as an increase in origination activity. Administrative fees increased from $2.8 million to $3.5 million for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. Administrative fees were higher for the three months ended March 31, 2021 due to the overall growth of the business and staff required to support the business. Dealer manager revenue was lower for the three months ended March 31, 2021 due to slower broker dealer fundraising.

Expenses

The Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

Compensation and Benefits. Compensation and benefits increased by $15.8 million, or 49%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The increases were primarily driven by headcount growth of 30% from March 31, 2020 to March 31, 2021, merit increases and long-term compensation award increases for the comparative periods.

General, Administrative and Other Expenses. General, administrative and other expenses decreased by $4.4 million, or 23%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The decrease was primarily driven by a $4.3 million decrease in expense support related to ORCC II. Additionally, certain expenses have increased during this period, including occupancy costs, and technology to support our growing headcount and expansion of our business. The three months ended March 31, 2021 was also impacted by the COVID-19 pandemic and resulted in a decrease in certain operating expenses.

Interest Expense. Interest expense remains relatively consistent for the three months ended March 31, 2021 and 2020.

Income Tax Expense (Benefit). Income tax expense increased by $0.2 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. Income taxes are a result of Owl Rock’s taxable income (loss), which for the three months ended March 31, 2021 was positive as compared to a net loss for the three months ended March 31, 2020.

Non-Controlling Interests. Net income (loss) attributable to non-controlling interests in Owl Rock entities represents results attributable to third parties in our operating subsidiaries. Net income (loss) is generally allocated based on such ownership interests held by third parties with respect to each of these entities.

Net income (loss) attributable to non-controlling interests in Owl Rock entities decreased by $0.8 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The changes in the comparative periods are a result of the respective changes in income (loss) before taxes and changes in third party ownership interests in such Owl Rock entities.

 

15


Reconciliation of Consolidated GAAP Financial Measures to Certain Non-GAAP Measures

We use FRE, DE, Adjusted EBITDA, Adjusted Revenues and Adjusted Compensation as non-GAAP measures to assess and track our performance. The following table presents the reconciliation of net income (loss) before taxes as reported in the consolidated and combined statements of operations to FRE, DE, Adjusted EBITDA, Adjusted Revenue and Adjusted Compensation:

 

     For the Three Months Ended March 31,  
($ amounts in thousands)    2021      2020  

Net income (loss) before taxes

   $ 39,522      $ (8,021

Adjustments:

     

Equity compensation expense

     —          —    

Net (gain) loss attributable to non-controlling interests

     80        915  

Transaction-related charges

     890        —    
  

 

 

    

 

 

 

Fee Related Earnings

   $ 40,492      $ (7,106
  

 

 

    

 

 

 

Fee Related Earnings

   $ 40,492      $ (7,106

Adjustments:

     

Current income tax (expense) benefit

     (238      (5
  

 

 

    

 

 

 

Distributable Earnings

   $ 40,254      $ (7,111
  

 

 

    

 

 

 

Distributable Earnings

   $ 40,254      $ (7,111

Adjustments:

     

Interest expense

     5,858        5,894  

Current income tax expense (benefit)

     238        5  

Depreciation and amortization expense

     131        230  
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 46,481      $ (982
  

 

 

    

 

 

 

Total revenues, net

   $ 108,224      $ 49,268  

Adjustments:

     

Administrative fees

     (3,454      (2,841

Dealer manager fees

     (999      (1,765
  

 

 

    

 

 

 

Adjusted Revenues

   $ 103,771      $ 44,662  
  

 

 

    

 

 

 

Compensation and benefits

   $ 47,984      $ 32,175  

Adjustments:

     

Equity compensation expense

     —          —    

Administrative fees

     (3,454      (2,841
  

 

 

    

 

 

 

Adjusted Compensation

   $ 44,530      $ 29,334  
  

 

 

    

 

 

 

Management is pleased with its non-GAAP results for the first quarter, as they are in line with its expectations for full year 2021 results.

Liquidity and Capital Resources

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. In the wake of the COVID-19 pandemic, management believes that we are well-positioned and our liquidity will continue to be sufficient for its foreseeable working capital needs, contractual obligations, distribution payments and strategic initiatives. For further discussion regarding the potential risks and impact of the COVID-19 pandemic on the Company, see “Risk Factors” in this Current Report on Form 8-K.

Sources and Uses of Liquidity

Our primary sources of liquidity are (1) cash on hand, (2) cash from operations, including management fees, which are generally collected quarterly (including our BDC Part I Fees), and (3) net borrowing from our credit facilities. As of March 31, 2021, our cash and cash equivalents were $8.6 million, we had $363.4 million outstanding, and availability under our credit facilities of $11.9 million. Our ability to draw from the credit facilities is subject to minimum management fee and other covenants. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for the foreseeable future. Market conditions resulting from the COVID-19 pandemic may impact our liquidity. Cash flows from management fees may be impacted by a slowdown or declines in deployment, declines, or write downs in valuations, or a slowdown or negatively impacted fundraising. Declines or delays and transaction activity may impact our product distributions and net realized performance income which could adversely impact our cash flows and liquidity. Market conditions may make it difficult to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms.

 

16


One of our sources of cash flows from operations is BDC Part I Fees. BDC Part I Fees are earned based on our BDCs’ net investment income, which does not include any realized gains or losses or any unrealized gains or losses resulting from changes in fair value. These calculations will be adjusted for any share issuances or repurchases. Once earned, BDC Part I Fees are not reversible.

We expect that our primary liquidity needs will continue to be to (1) provide capital to facilitate the growth of our existing investment management businesses, (2) provide capital to facilitate our expansion into businesses that are complementary to our existing investment management businesses as well as other strategic growth initiatives, (3) pay operating expenses, including cash compensation to our employees, (4) fund capital expenditures, (5) service our debt, (6) pay income taxes and (7) make distribution payments to our unit holders in accordance with our distribution policy.

In the normal course of business, we expect to pay distributions that are aligned with the expected changes in our fee related earnings. If cash flow from operations were insufficient to fund distributions over a sustained period of time, we expect that we would suspend or reduce paying such distributions. In addition, there is no assurance that distributions would continue at the current levels or at all.

Our ability to obtain debt financing provides us with additional sources of liquidity. For further discussion of financing transactions occurring in the current period and our debt obligations, see “Cash Flows” within this section and “Note 4. Debt Obligations, Net” to our unaudited consolidated and combined financial statements included in this Current Report on Form 8-K.

Cash Flows

The Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

The following tables and discussion summarize our consolidated and combined statements of cash flows by activity attributable to the Company. Negative amounts represent a net outflow or use of cash.

 

     For the Three Months Ended
March 31,
     Favorable (Unfavorable)  
($ amounts in thousands)    2021      2020      $ Change      % Change  

Net cash provided by (used in) operating activities

   $ 587      $ (20,107      20,694        103

Net cash provided by (used in) investing activities

     (295      (15      (280      NM  

Net cash provided by (used in) financing activities

     (3,358      21,878        (25,236      -115
  

 

 

    

 

 

       

Net change in cash and cash equivalents

   $ (3,066    $ 1,756        (4,822      NM  
  

 

 

    

 

 

       

 

NM - Not Meaningful

Operating Activities

 

     For the Three Months Ended
March 31,
     Favorable (Unfavorable)  
($ amounts in thousands)    2021      2020      $ Change      % Change  

Cash flows from operating activities

           

Net income (loss) including non-controlling interests

   $ 39,334      $ (7,975      47,309        NM  

Adjustments to reconcile net income (loss) to net cash from operating activities:

           

Depreciation and amortization

     131        230        (99      -43

Amortization of deferred financing costs

     218        168        50        30

Non-cash lease expense

     1,148        —          1,148        NM  

Changes in operating assets and liabilities:

           

Due from affiliates, net

     (7,555      7,635        (15,190      -199

Other assets

     (10,047      1,724        (11,771      NM  

Accrued compensation

     (26,045      (17,962      (8,083      45

Accounts payable, accrued expenses and other liabilities

     4,608        (3,927      8,535        NM  

Operating lease liabilities

     (1,205      —          
  

 

 

    

 

 

       

Net cash provided by (used in) operating activities

   $ 587      $ (20,107      20,694        103
  

 

 

    

 

 

       

 

17


Cash provided by (used in) the Company’s operating activities increased from $(20.1) million for the three months ended March 31, 2020 to $0.6 million for the three months ended March 31, 2021. Net income (loss) including non-controlling interests of the Company and its subsidiaries increased by $47.3 million for the three months ended March 31, 2021. The increase was primarily driven by the net income the business experienced in the three months ended March 31, 2021.

Our increasing working capital needs reflect the growth of our business. We believe that our ability to generate cash from operations, as well as the capacity under our credit facilities, provides us with the necessary liquidity to manage short-term fluctuations in working capital and to meet our short-term commitments.

Investing Activities

 

     For the Three Months Ended
March 31,
     Favorable (Unfavorable)  
($ amounts in thousands)    2021      2020      $ Change      % Change  

Cash flows from investing activities

           

Purchase of fixed assets

   $ (295    $ (15      (280      NM  
  

 

 

    

 

 

       

Net cash provided by (used in) investing activities

   $ (295    $ (15      (280      NM  
  

 

 

    

 

 

       

Net cash provided by (used in) in the Company’s investing activities for the three months ended March 31, 2021 was principally composed of cash used for furniture, fixtures, equipment and leasehold improvements purchased during both periods to support the growth in our staffing levels.

Financing Activities

 

     For the Three Months Ended
March 31,
     Favorable (Unfavorable)  
($ amounts in thousands)    2021      2020      $ Change      % Change  

Cash flows from financing activities

           

Proceeds from debt obligations

   $ 97,898      $ 71,570        26,328        37

Repayments of debt obligations

     (94,745      (31,095      (63,650      NM  

Deferred financing costs

     —          (300      300        100

Contributions

     2,614        1,804        810        45

Distributions

     (9,125      (20,101      10,976        55
  

 

 

    

 

 

       

Net cash provided by (used in) financing activities

   $ (3,358    $ 21,878        (25,236      -115
  

 

 

    

 

 

       

Net cash provided by (used in) the Company’s financing activities for the three months ended March 31, 2021 was principally composed of net proceeds from the use of our credit facilities. A portion of these proceeds were used to repay borrowings under our credit facilities. Distributions to third parties that own interests in Owl Rock entities were lower during the period.

Capital Resources

We intend to use a portion of our available liquidity to pay cash distributions on a quarterly basis in accordance with our distribution policies. Our ability to make cash dividends to our members is dependent on a large number of factors, including among others: general economic and business conditions; our strategic plans and prospects; our business and investment opportunities; our financial condition and operating results; working capital requirements and other anticipated cash needs; contractual restrictions and obligations; legal, tax and regulatory restrictions; restrictions on the payment of distributions by our subsidiaries and other relevant factors.

 

18


Financial Condition and Liquidity of Blue Owl Following the Business Combination

Our primary sources of liquidity are (1) cash on hand, (2) cash from operations, including management fees, which are generally collected quarterly (including our BDC Part I Fees), and (3) net borrowing from our credit facilities. We believe that following the Closing of the Business Combination, the sources of liquidity discussed above will continue to be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business, under current market conditions, for the foreseeable future. We intend to use a portion of our available liquidity to pay cash distributions on a quarterly basis in accordance with our distribution policies. We will continue to explore strategic financing and share buyback opportunities in the ordinary course of business. We expect this to include potential financings and refinancings of indebtedness, through the issuance of debt securities or otherwise, to maximize our liquidity and capital structure. As of the date of this filing, there were no borrowings outstanding under any revolving credit facility.

Contractual Obligations, Commitments and Contingencies

The following table sets forth information relating to our contractual obligations as of March 31, 2021:

 

($ amounts in thousands)    Less than 1 year      1 - 3 years      4 - 5 years      Thereafter      Total  

Operating lease obligations (1)(2)

   $ 4,106      $ 9,830      $ 77      $ —        $ 14,013  

Term loan payable

     —          —          —          250,000        250,000  

Interest obligations on debt (3)

     23,007        38,021        38,073        71,302        170,403  

Revolving credit facilities (4)

     113,413        —          —          —          113,413  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 140,526      $ 47,851      $ 38,150      $ 321,302      $ 547,829  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Office space and equipment are leased under agreements with lease commitments through 2024. Lease obligations include only base contractual rent.

(2)

The Company has future operating lease payments of $55.1 million related to leases that have not commenced that were entered into as of March 31, 2021. Such lease payments are not yet accounted for in the table above or the Company’s consolidated statements of financial condition as operating lease assets and operating lease liabilities. These operating lease payments are anticipated to commence in the fourth quarter of 2022 and continue for 10 years.

(3)

Interest obligations reflect future interest payments on outstanding debt obligations with interest rates in effect as of March 31, 2021.

(4)

Represents outstanding balance under the revolving credit facilities as of March 31, 2021 and maturing on August 20, 2021 and February 28, 2022. In April 2021, the Company repaid its borrowings and terminated these revolving credit facilities. In April 2021, the Company also entered into a $150 million Corporate Revolving Credit Facility. For further discussion, see “Note 4. Debt Obligations, Net” to our unaudited consolidated and combined financial statements included in this Current Report on Form 8-K.

Guarantees

As of March 31, 2021, we had assumed a guarantee of revolving credit facility #2 and a term loan for affiliated entities. This revolving credit facility matures in August 2021 and the term loan matures in October 2029. As of March 31, 2021, the total aggregate outstanding loan balance of this credit facility and term loan was $271.0 million. In April 2021, the Company terminated revolving credit facility #2. There has been no history of default and we have determined that the likelihood of default is remote.

Commitments and Contingencies

In the normal course of business, we may engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications and potential contingent repayment obligations. We do not have any off-balance sheet arrangements that would require us to fund losses or guarantee target returns to investors in our products.

Indemnification Arrangements

In many of its service contracts, Owl Rock agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has not been included in the table above or recorded in our Consolidated and Combined Financial Statements as of March 31, 2021.

 

19


Consistent with standard business practices in the normal course of business, we enter into contracts that contain indemnities for our affiliates and our employees, officers and directors, persons acting on our behalf or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the maximum exposure under these arrangements, if any, cannot be determined and has neither been recorded in the above table nor in our consolidated and combined financial statements. As of March 31, 2021, we have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

Litigation

From time to time, the Company may be named as a defendant in legal actions in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

Impact of Changes in Accounting on Recent and Future Trends

None of the changes to GAAP that went into effect during the three months ended March 31, 2021, or that have been issued but that we have not yet adopted are expected to substantively impact our future trends.

Critical Accounting Estimates

We prepare our consolidated and combined financial statements in accordance with U.S. GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated and combined financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. Actual results may also differ from our estimates and judgments due to risks and uncertainties and changing circumstances, including uncertainty in the current economic environment due to the COVID-19 pandemic. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. For a summary of our significant accounting policies, see “Note 2. Summary of Significant Accounting Policies,” to our consolidated and combined financial statements included in this Current Report on Form 8-K.

Principles of Consolidation

We consolidate entities based on either a variable interest model or voting interest model. As such, for entities that are determined to be variable interest entities (“VIEs”), we consolidate those entities where we have both significant economics and the power to direct the activities of the entity that impact economic performance. For limited partnerships and similar entities evaluated under the voting interest model, we do not consolidate those entities for which we act as the general partner unless we hold a majority voting interest.

The consolidation guidance requires qualitative and quantitative analysis to determine whether our involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related income), would give us a controlling financial interest. This analysis requires judgment. These judgments include: (1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties’ equity interests should be aggregated, (4) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary.

 

20


Revenue Recognition

We recognize revenue in accordance with ASC 606. Revenue is recognized in a manner that depicts the transfer of promised goods or services to customers and for an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We are required to identify our contracts with customers, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, variable consideration is included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Income Taxes

For tax purposes, we have historically been treated as a partnership for U.S. federal and state income tax purposes. As a result, we have not been subject to U.S. federal and state income taxes. The provision for income taxes in the historical consolidated statements of income consists of local and foreign income taxes. Following this transaction, we will be subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of any taxable income generated by the Partnership that will flow through to its interest holders, including us.

Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted.

Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent on the amount of the Company’s future taxable income. When evaluating the realizability of deferred tax assets, all evidence—both positive and negative—is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies.

GAAP requires us to recognize tax benefits in an amount that is more-likely-than-not to be sustained by the relevant taxing authority upon examination. We analyze our tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we determine that uncertainties in tax positions exist that do not meet the minimum threshold for recognition of the related tax benefit, a liability is recorded in the consolidated financial statements. We recognize interest and penalties, if any, related to unrecognized tax benefits as general, administrative and other expenses in the consolidated statements of income. If recognized, the entire amount of unrecognized tax positions would be recorded as a reduction in the provision for income taxes.

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new information becomes available.

Quantitative and Qualitative Disclosures About Market Risk

Our primary exposure to market risk is related to our role as investment adviser or general partner to our investment products and the sensitivity to movements in the fair value of their investments, including the effect on management fees, performance income and investment income. Uncertainty with respect to the economic effects of the COVID-19 pandemic has introduced significant volatility in the financial markets, and the effects of this volatility could materially impact our market risks, including those listed below. For additional information concerning the COVID-19 pandemic and its potential impact on our business and our operating results, see “Risk Factors” in this Current Report on Form 8-K.

 

21


Market Risk

The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions, which are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. It may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.

Our credit orientation has been a central tenet of our business across our investment strategies. Our investment professionals benefit from our independent research and relationship networks and insights from our portfolio of active investments. We believe the combination of high-quality proprietary pipeline and a consistent, rigorous approach to managing investments across our strategies has been, and we believe will continue to be, a major driver of our strong risk-adjusted returns and the stability and predictability of our income.

Interest Rate Risk

Our credit facilities provide $105 million and $22 million revolving lines of credit and $250 million of term loan debt. The facilities bear interest at a variable rate based on either LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly. Currently, the revolving facilities interest is calculated based on the base rate plus 0.25% or the LIBOR rate loans bear interest calculated based on LIBOR rate plus 3.05%, subject to a minimum interest rate. Our unused commitment fee is 0.5% per annum. Currently, the term loan bears interest calculated based on LIBOR rate plus 6.00%, subject to a LIBOR floor. As of March 31, 2021, we had $113.4 million and $250.0 million of borrowings outstanding under the revolving facilities and term loan, respectively.

We estimate that in the event of 100 basis points of an increase in LIBOR, there would be no impact to our interest expense; however, for any incremental increase above approximately 100 basis points, we would be subject to the variable rate and would expect our interest expense to increase commensurately.

Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. At March 31, 2021 and March 31, 2020, we had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. We seek to mitigate this exposure by monitoring the credit standing of these financial institutions.

There have been no material changes in our market risks for the three months ended March 31, 2021.

 

22

Exhibit 99.6

DYAL’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Unless the context otherwise requires, references in this section to “Dyal,” “we,” “us,” “our,” and the “Company” are intended to mean Dyal Capital Partners, the entities and personnel comprising the Dyal business of Neuberger Berman Group LLC (“Neuberger” or “Parent”), an independent, global asset management company headquartered in New York. Dyal is a division of Neuberger. The following discussion analyzes the financial condition and results of operations of Dyal.

The following discussion and analysis should be read in conjunction with the unaudited combined financial statements and the related notes and the audited combined financial statements and the related notes included herein.

Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and, consequently, totals may not appear to sum. Certain prior period amounts have been reclassified to conform to the current year presentation.

Our Business

Dyal is a leading capital solutions provider to large, multi-product private capital managers. Our funds seek to acquire minority equity stakes in, or provide debt financing to, established alternative asset managers worldwide (the “GP Capital Solutions”). We are expanding our existing GP Capital Solutions strategies to provide capital to our managers’ seasoned portfolio companies through co-investments or structured equity. We are also in the process of leveraging our significant experience in serving as a minority partner to alternative asset management firms by launching a strategy that will seek to acquire minority equity stakes in National Basketball Association (“NBA”) teams. All of our existing or emerging strategies make or will make, as the case may be, investments through long-term capital, permanent capital vehicles with a set of geographically diverse and high-quality investors. Our investors include a diversified mix of institutional investors globally, including prominent public and private pension funds, endowments, foundations, family offices, private banks, high net worth individuals and insurance companies in the Americas, Asia, Europe, the Middle East and Australia. Since 2010, the Dyal team has closed 61 equity and debt transactions across 52 managers. Dyal also includes a Business Services Platform, which provides strategic support in various areas to its GP Minority Equity Investments strategy’s underlying partner managers in which an equity stake is granted (“partner managers”). Dyal, including the Business Services Platform, operates primarily from New York, with personnel also located in London and Hong Kong. As of March 31, 2021, we managed approximately $24.7 billion in AUM, which reflects growth of 13.9% since March 31, 2020 and a CAGR of 11.1% since December 31, 2019. Approximately 96% of our AUM was comprised of our GP Minority Equity Investments strategy as of March 31, 2021.

GP Capital Solutions

Dyal’s GP Capital Solutions business is a leading capital solutions provider to large private capital managers. We primarily focus on acquiring equity stakes in, or providing debt financing to, large, multi-product private equity and private credit platforms. We are in the process of expanding our existing GP Capital Solutions business to provide capital to seasoned portfolio companies owned by funds that are managed by alternative asset managers that we have a pre-existing relationship with, either through our GP Minority Equity Investments or GP Debt Financing strategies. Our GP Capital Solutions business also houses our Business Services Platform, which provides strategic support to the managers that Dyal funds have an equity interest in. In addition to the GP Capital Solutions strategies, we are in the process of launching a strategy focused on acquiring minority equity stakes in NBA franchises and are planning to launch a co-investment and structured equity strategy.

 

1


Dyal operates through the following four investment strategies:

 

   

GP Minority Equity Investments – We build diversified portfolios of minority equity investments in institutionalized alternative asset management firms across multiple strategies, geographies, and asset classes. Our investment objective is to generate compelling cash yield by collecting a set percentage of contractually fixed management fees, a set percentage of carried interest and return on balance sheet investments made by underlying managers. We primarily focus on acquiring minority positions in large, multi-product alternative asset managers who continue to gain a disproportionate proportion of the assets flowing into private investment strategies and exhibit high levels of stability. Our inaugural funds followed a hedge fund manager-focused investment program that has since evolved into a private capital manager-focused investment program, as implemented by our later funds. Our GP Minority Equity Investments strategy is offered to investors through our closed-end permanent capital funds. A fundamental component of the fundraising efforts for our investment programs is the ability to identify and execute co-investment opportunities for our investors. We may offer, from time-to-time and in our sole discretion, co-investment opportunities in certain fund investments, generally with no management or performance-based fee. As of March 31, 2021, our funds include Dyal Fund I, a $1.3 billion fund predominately focused on hedge funds, Dyal Fund II, a $2.2 billion fund predominately focused on hedge funds, Dyal Fund III, a $5.3 billion fund focused on private capital managers, Dyal Fund IV, a $9.0 billion fund focused on private capital managers and Dyal Fund V, which is still open for investors but currently has raised $2.6 billion, and is also focused on private capital managers.

 

   

GP Debt Financing This strategy focuses on originating and making collateralized, long-term debt investments, preferred equity investments and structured investments in private capital managers. We originate and invest in secured term loans that are collateralized by substantially all of the assets of a manager and subject to repayment on an accelerated basis pursuant to cash flow sweeps of set percentages of management fees, GP realization, carried interest and other fee streams of the management company in the event that certain minimum coverage ratios are not maintained. Our investment objective is to generate current income by targeting investment opportunities with attractive risk-adjusted returns. We expect that capital that the investment management businesses or fund sponsors in which our funds invest receive from these loans will be used to support business growth, fund GP commitments, and launch new strategies. This strategy allows Dyal to offer a comprehensive suite of solutions to such private managers. Our GP Debt Financing strategy has $1.0 billion of AUM as of March 31, 2021.

 

   

Professional Sports Minority Investments We plan to build diversified portfolios of minority equity investments in professional sport teams. Our first endeavor in this area was creating an innovative partnership with the NBA, which has pre-approved us as a prospective buyer of NBA franchises and waived both its requirement that any minority owner own a stake in a single franchise and its limitation on any team having more than 25 individual beneficial owners. The NBA has also provided pre-approval for us to own interests in multiple NBA franchises. We believe having these approvals and waivers already established will provide selling owners with more certainty of our ability to close on any investment and will make us the buyer of choice when a minority interest in an NBA franchise becomes available. Our investments in the NBA are intended to provide low correlation to other asset classes and long-term value appreciation.

 

   

Co-Investment and Structured Equity This emerging strategy will focus on providing capital to seasoned portfolio companies managed by established private capital managers, in whom we have previously invested through our GP Minority Equity Investments or GP Debt Financing strategies and potentially with which we have a business relationship. The strategy will seek to make investments that are intended to provide strategic capital for organic and inorganic growth at mid-life investments, access to potential strategic partners for knowledge and intellectual property transfer and liquidity to existing fund investors. Our investment objective is to generate compelling investment returns, similar to traditional buy-out funds but with mitigated downside risk and faster return of capital.

 

2


The Business Services Platform Overview

Dyal’s Business Services Platform provides strategic support services to current and future partner managers within the GP Minority Equity Investments strategy, including client development and marketing support, product development, talent management, consulting on business strategies and operational advisory support. The Business Services Platform is able to utilize, subject to any applicable information barriers, powerful resources when assisting Dyal’s partner managers: the Dyal team’s extensive and varied experience and Dyal’s sophisticated investor base. New partner managers entering Dyal’s portfolio, subject to any applicable information barriers, are entitled to participate in and benefit from the customized suite of services provided by Dyal’s Business Services Platform. The Business Services Platform team currently consists of professionals who each have experience working with alternative asset management firms and who are responsible for assisting partner managers in achieving their individual business objectives. Certain expenses of the Business Services Platform are reimbursed by Dyal’s private funds and this expense reimbursement is equal to the total revenue of the Business Services Platform that is reflected as revenue within administrative, transaction, and other fees.

The Business Services Platform executes projects in five key areas:

 

   

Client Development & Marketing Support – The Business Services Platform team focuses on, subject to any applicable information barriers, providing investor intelligence, targeting LPs for fundraising, and making qualified introductions of Dyal’s partner managers to select investors, including investors in Dyal’s funds.

 

   

Product Development – The Business Services Platform assists partner managers as they consider launching new products. This assistance includes providing extensive market and product opportunity analyses that define relevant peer groups, examining performance data and identifying potential target investors and barriers to entry.

 

   

Talent Management – The Business Services Platform seeks to deliver talent management services to partner managers. Support spans all aspects of human capital best practices across organizations. Particular areas of focus include, but are not limited to, organizational design and development, talent sourcing, and in-depth peer benchmarking.

 

   

Business Strategy – The Business Services Platform undertakes individualized management consulting projects such as developing firm strategic growth plans, evaluating distribution expansion options, and assessing brand development strategies. Additionally, the team provides strategic best practices advice and competitive benchmarking reports. The Business Services Platform supports partner managers with originating and consummating mergers, acquisitions and bolt-on transactions. This support may include sourcing proprietary and intermediated opportunities, reviewing a potential deal’s strategic rationale, supporting business due diligence, gathering market intelligence, and providing valuation guidance and deal structuring advice.

 

   

Operational Advisory – The Business Services Platform delivers support and best practices advice to our partner managers’ business operations, technology, and infrastructure functions through peer benchmarking, thought leadership and customized analysis. The team may also leverage in-house and external vendors to support their efforts and provide analysis for various partner manager projects, which may include helping their portfolio companies through the use of data science specialists, technology service firms and consultants. In addition, the team seeks to leverage a preferred provider network of service providers to assist our partners and provide additional external support.

Fee Structure

Management Fees

Management fees are derived from investment management services provided to private funds and are payable quarterly or semi-annually, at the beginning or end of the service period. Management fees are determined by contractual agreements. For the GP Minority Equity Investments strategy, the fees are generally determined based upon a percentage of capital committed during the investment period, and thereafter generally based on the cost of unrealized investments; or as otherwise defined in the respective agreements. For the other strategies, the fees are generally determined based upon a percentage of investment cost or as otherwise defined in the respective agreements.

 

3


Administrative, Transaction and Other Fees

Administrative, transaction and other fees consist of expense reimbursements, which primarily represent expenses incurred by Dyal’s Business Services Platform in connection with the provision of strategic support to partner managers and reimbursed by Dyal’s private funds. The Business Services Platform’s reimbursed expenses are reflected as revenue. The Business Services Platform’s reimbursed expenses were $6.5 million and $5.7 million for the three months ending March 31, 2021 and March 31, 2020, respectively.

Incentive Fees

Incentive fees are calculated based on a contractual percentage of net income before realized and unrealized gains and losses of the funds above a preferred return threshold and a contractual percentage of any net realized capital gains from the funds as described within the respective agreements. The performance obligations for these revenues are satisfied over time as the services are rendered and the limited partner simultaneously receives and consumes the benefits of the services as they are performed. Dyal records its fees when the service is provided and it is probable there would not be a significant reversal of revenue.

Carried Interest

The Dyal Equity Funds provide for a distribution of carried interest. The timing and receipt of carried interest varies with the life cycle of our funds. Generally, we are entitled to carried interest payments after a return of all contributions and a preferred return to investors. Carried interest in the Dyal Equity Funds and any related co- investment or secondary-transaction vehicles will not be part of Blue Owl, however carried interest earned with respect to future Dyal funds (excluding co-investment or secondary-transaction vehicles related to the Dyal Equity Funds) will be shared with Blue Owl, which carried interest is expected to be determined in a manner similar to the Dyal Equity Funds.

Capital Invested In and Through Our Funds

To further align our interests with those of investors in our funds, we have invested the firm’s capital as have our professionals in the funds we sponsor and manage. General partner capital commitments to our funds are determined separately with respect to our funds. Dyal employee capital commitments range from 0.3% to 1.3% of the total commitments of any particular fund as of March 31, 2021. We determine the general partner capital commitments based on a variety of factors, including regulatory requirements, investor requirements, estimates regarding liquidity needed over the estimated time period during which commitments will be funded, estimates regarding the amounts of capital that may be appropriate for other opportunities or other funds we may be in the process of raising or are considering raising, prevailing industry standards with respect to sponsor commitments and our general working capital requirements. Our general partner capital commitments have historically been funded with cash, which may initially have been funded by Neuberger for administrative purposes and then directly by our professionals. The general partner commitments and the proceeds therefrom with respect to the Dyal Equity Funds and related co-investment vehicles will not be an asset of Blue Owl upon completion of the Business Combination. A portion of the general partner commitment to the Dyal Financing Fund and for future Dyal funds will be a Blue Owl asset upon completion of the Business Combination.

COVID-19 and Our Response

2020 was a challenging year for markets around the world due to the ongoing impact of the COVID-19 pandemic. Following a historic decline in March 2020, the global capital markets rallied as investor sentiment was encouraged by global central bank support and the gradual re-opening of economies, among other things.

 

4


Corporate performance and earnings across many industries continue to be impacted by the COVID-19 pandemic. Despite significant lingering health concerns, certain companies are rebounding more quickly than expected; however, performance and earnings are still well below pre-pandemic levels. As opposed to the broad-based sell-off in the first quarter, distressed activity in the second and third quarters was more industry and/or company specific. At the same time, transaction activity in the traditional private equity buyout market is beginning to resume. Furthermore, access to the capital markets is selectively re-opening for high quality businesses and the market for initial public offerings returned beginning in the second half of the second quarter.

The worldwide outbreak of COVID-19 has disrupted global travel and supply chains, and has adversely impacted commercial activity in many industries, including travel, hospitality and entertainment. It has also significantly negatively impacted global growth. While certain geographies are experiencing declining infection levels and are reopening businesses, others are seeing persistent or accelerating levels. The continued rapid development of this situation and uncertainty regarding potential economic recovery precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions.

While COVID-19 has created unparalleled challenges driven, first and foremost, by a public health crisis, we believe the Dyal funds are performing well due to the Dyal partner managers’ ability to continue fundraising and their underlying portfolios’ ongoing performance. As primarily human capital businesses, Dyal’s and our partner managers’ business continuity plans went into effect with no reported material issues. At the onset of the crisis, partner managers completed a thorough review of their respective portfolios on a name-by-name basis identifying liquidity needs, covenant and debt maturities, and assessing capital and operational expenditures, revenue outlook and near-term actions to be taken. Just as partner managers reviewed their portfolios, Dyal also identified any of our Funds’ potential liquidity needs and continued to act as a strategic, and potentially financial, resource to our partner managers during these unprecedented times.

With Dyal’s private capital partner managers having access to significant levels of capital to invest, over $185 billion across the Dyal platform as of March 31, 2020, approximately $230 billion across the Dyal platform as of June 30, 2020 and approximately $220 billion across the Dyal platform as of September 30, 2020, partner managers were able to and continue to take advantage of dislocations in the marketplace, notably through toeholds in public equities, distressed-for-control scenarios, niche dislocation plays, and compelling investment opportunities. We believe the unique investment environment as a result of the COVID-19 pandemic continues to elevate alternative managers’ brand recognition and promote continued disproportionate fundraising by bigger, institutionalized managers with a loyal and large existing investor base. When overlaid with a larger secular trend that has occurred since the 2008 financial crisis whereby an increasing proportion of capital has flowed to the largest managers, we believe that established firms, like those found in the Dyal portfolio, will continue to increase their fundraising advantage against their smaller competitors in a largely “virtual” fundraising environment. While there are many dynamics at play, we believe the current environment remains constructive for alternative investments, and specifically Dyal’s partner managers, relative to both its recent past and other asset classes.

Trends Affecting Our Business

We believe that our business and financial model contribute to the stability of our performance throughout market cycles. As of March 31, 2021, 100% of our AUM was in permanent capital vehicles. Our products have a stable base of committed capital enabling us to invest in assets with a long-term focus over different points in a market cycle and to take advantage of market volatility. Historically, the vast majority of our revenue has been derived from contractual, locked-in management fees, which are not subject to market volatility. We have a diversified range of investment strategies, and within our largest GP Minority Equity Investments strategy, our portfolios are further diversified across investment strategies, fund vintages, geographies, sectors, and enterprise values. However, our results of operations are affected by a variety of factors, particularly in the United States given the location of most of our partner managers, but also globally, including conditions in the global financial markets and the economic and political environments.

 

5


In addition to the aforementioned macroeconomic and sector-specific trends, we believe our future performance will be influenced by the following factors:

The extent to which investors favor alternative investments. Our ability to attract new capital is dependent on investors’ views of alternative investments relative to traditional asset classes. We believe fundraising efforts will continue to be impacted by certain fundamental asset management trends that include: (i) the increasing importance and market share of alternative investment strategies to investors of all types as investors focus on lower-correlated and higher absolute levels of return, (ii) increasing demand for alternative assets from retail investors, (iii) shifting asset allocation policies of institutional investors, (iv) de-leveraging of the global banking system, bank consolidation and increased regulatory requirements and (v) increasing barriers to entry and growth. In addition to driving our own ability to attract new capital, those trends will also impact the ability of our funds’ underlying GPs to retain and attract new capital, which in turn impacts our investment performance and ability to grow.

The attractiveness of our product offerings to a growing base of investors. Within the alternative investment universe, the GP Minority Investments strategy has grown into its own asset class. According to Preqin, total capital raised across the strategy has more than tripled from 2015-2019, compared to the five years prior. This has in part been driven by a growing demand for products offering strong cash yields, particularly among defined contribution plans, insurance companies and retail investors, and a recognition of the diversification benefits that our strategy offers. Dyal has been a beneficiary of those trends, having attracted more than 40% of new capital raised across the strategy from 2015-2019 based on Preqin data. Our future growth is dependent on our continued ability to successfully capitalize on these trends and continue to extend our reach with investors.

Our ability to generate strong, stable returns. The stability and strength of our investment performance is a significant factor in investors’ willingness to allocate capital to us. The new capital we are able to raise drives the growth of our fee-paying AUM and management fees. Although our fee-paying AUM and management fees have grown significantly since our inception, adverse market conditions or an outflow of capital in the alternative investments industry in general could affect our general growth rate. In addition, market dislocations, contractions or volatility could put pressure on our returns in the future which could in turn affect our fundraising abilities.

Our successful deployment of capital into attractive investments. The continued growth in our fee-paying AUM and revenues is dependent on our ability to identify attractive investments and deploy the capital we have raised. We believe our strategies target a large investible universe with attractive investment dynamics. However, our ability to identify attractive investments and execute on those investments is dependent on a number of factors, including general macroeconomic conditions, general political conditions, market conditions, and valuation, size, and liquidity of such investment opportunities, as well as our competitive positioning in the market. A significant decrease in the quality or quantity of potential opportunities, or our ability to execute on these opportunities, could adversely affect our ability to deploy our capital.

Our ability to maintain our leading competitive position. There has been a trend amongst alternative investors to consolidate the number of general partners in which they invest, which has driven a disproportionate amount of assets to large managers. We believe we have several competitive and structural advantages that position us as a preferred partner within this segment of the alternative asset management landscape. We expect these advantages enable us to provide unique access to asset classes that are traditionally difficult to access to our investors, and a differentiated value proposition to our partner managers. Our ability to attract and successfully deploy capital in the future is dependent on maintaining our leading competitive positioning in our target markets.

Our ability to launch new strategies and products. We have taken a diligent and deliberate approach to product expansion to serve the needs of our ecosystem while delivering an attractive value proposition and strong performance to our investors. We are currently in the market fundraising for two new strategies: Dyal HomeCourt Partners and Strategic Capital. Our growth is dependent on our ability to successfully attract and deploy capital, and subsequently scale these strategies. The successful launch of our new strategies and products is dependent on a number of factors, some of which are beyond our control, including, but not limited to: general macroeconomic conditions, general political conditions, market conditions, demand from investors, competition, availability of capital or financing, and legal or regulatory developments.

 

6


Managing Business Performance and Key Financial Measures

Non-GAAP Financial Measures

Fee related earnings, or “FRE”, is used to assess our operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income (loss) before income taxes. FRE differs from income before taxes computed in accordance with GAAP as it adjusts for equity-based compensation, non- controlling interests in subsidiaries of the Company and certain other items that we believe reflects our operating performance. Other than for Owl Rock, the calculation of FRE also adjusts for performance income, performance related compensation and investment net gains (losses). Management believes that adding these adjustments assists in clarifying stable and predictable cash flows that cover operating expenses and lead to the generation of profits.

Distributable earnings, or “DE”, is used to assess performance and amounts available for dividends to members. DE is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income (loss) before income taxes. Distributable Earnings is FRE less current income taxes and (other than with respect to Owl Rock) includes net realized gains, realized performance income and performance related compensation. DE differs from income before taxes computed in accordance with GAAP as it adjusts for certain items that we believe are indicative of our ability to make our dividend payments. Our presentation of DE represents our operating performance, as further adjusted for performance income and performance related compensation, as applicable. Management believes that these adjustments enable investors to better understand the Company’s earnings that are available for distribution.

Adjusted EBITDA is used to assess the Company’s ability to service its borrowings. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income (loss) before income taxes. Adjusted EBITDA represents Distributable Earnings plus (a) interest expense, income tax expense (benefits), and (c) depreciation and amortization.

Adjusted Revenues are used to assess the net revenue expected to be received by the Company. Adjusted Revenues is derived from and reconciled to, but not equivalent to its most directly comparable GAAP measure of total revenues, net. Adjusted Revenues differ from total revenues computed in accordance with GAAP by excluding reimbursed expenses and dealer manager revenues, if applicable, that have an offsetting amount included within expenses on the consolidated and combined statement of operations.

Adjusted Compensation is used to assess the net cash settled compensation to be paid by the Company. Adjusted Compensation is derived from and reconciled to, but not equivalent to its most directly comparable GAAP measure of compensation and benefits. Adjusted Compensation differs from compensation and benefits computed in accordance with GAAP as it excludes equity compensation expense and compensation and benefits reimbursed through the receipt of administrative revenues. The administrative revenues reflect allocable compensation and expenses incurred by certain professionals of the Company and reimbursed by products managed by the Company.

We use FRE, DE, Adjusted EBITDA, Adjusted Revenues and Adjusted Compensation as non-GAAP measures to assess and track our performance. These are non-GAAP financial measure supplements and should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “—Components of Combined Results of Operations ” and are prepared in accordance with GAAP. For the specific components and calculations of these non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see “Dyal’s Management’s Discussion and Analysis of Financial Condition and Results of Operations Reconciliation of Combined GAAP Financial Measures to Certain Non-GAAP Measures”.

 

7


Operating Metrics

We monitor certain operating metrics that are common to the alternative asset management industry, which are discussed below.

Assets Under Management

Assets under management (“AUM”) refers to the total capital commitments to our funds and co-investments. We view AUM as a metric to measure our ability to attract clients for our investment strategies. As of March 31, 2021, we managed approximately $24.7 billion in AUM.

 

     GP Minority
Equity
Investments
     GP Debt
Financing
     Total  
($ amounts in millions)                     

AUM at December 31, 2020

   $ 22,814      $ 1,010      $ 23,825  

Net change to total commitments

     913        —          913  
  

 

 

    

 

 

    

 

 

 

AUM at March 31, 2021

   $ 23,727      $ 1,010      $ 24,737  
  

 

 

    

 

 

    

 

 

 

Average AUM

   $ 23,271      $ 1,010      $ 24,281  
  

 

 

    

 

 

    

 

 

 

 

     GP Minority
Equity
Investments
     GP Debt
Financing
     Total  
($ amounts in millions)                     

AUM at December 31, 2019

   $ 20,685      $ 1,010      $ 21,695  

Net change to total commitments

     15        —          15  
  

 

 

    

 

 

    

 

 

 

AUM at March 31, 2020

   $ 20,700      $ 1,010      $ 21,710  
  

 

 

    

 

 

    

 

 

 

Average AUM

   $ 20,692      $ 1,010      $ 21,703  
  

 

 

    

 

 

    

 

 

 

For the three months ended March 31, 2021, AUM grew 3.8%, or $913 million, which was driven by additional closes of Dyal Fund V. For the three months ended March 31, 2020 AUM grew 0.1%, or $15 million, which was driven by additional co-investment commitments related to Dyal Fund IV.

Fee Paying Assets Under Management

Fee Paying Assets Under Management (“FPAUM”) refers to the sum of the investor capital base from which Dyal earns management fees and/or performance income, which varies among the Dyal funds. For Dyal’s GP Minority Equity Investments strategy, fee paying AUM is generally equal to capital commitments during the investment period and the cost of unrealized investments after the investment period. For Dyal’s other strategies, fee paying AUM is generally equal to investment cost. The investor capital base upon which fees are charged is defined within the respective agreements. As of March 31, 2021, total fee paying AUM was $18.6 billion.

The tables below present rollforwards of our total fee paying AUM by investment strategy:

 

     GP Minority
Equity
Investments
     GP Debt
Financing
     Total  
($ amounts in millions)                     

Fee Paying AUM at December 31, 2020

   $ 17,166      $ 558      $ 17,724  

Net change to fee paying investor capital base

     734        179        913  
  

 

 

    

 

 

    

 

 

 

Fee Paying AUM at March 31, 2021

   $ 17,900      $ 737      $ 18,637  
  

 

 

    

 

 

    

 

 

 

Average Fee Paying AUM

   $ 17,533      $ 648      $ 18,181  
  

 

 

    

 

 

    

 

 

 

 

     GP Minority
Equity
Investments
     GP Debt
Financing
     Total  
($ amounts in millions)                     

Fee Paying AUM at December 31, 2019

   $ 17,251      $ 295      $ 17,546  

Net change to fee paying investor capital base

     5        —          5  
  

 

 

    

 

 

    

 

 

 

Fee Paying AUM at March 31, 2020

   $ 17,256      $ 295      $ 17,551  
  

 

 

    

 

 

    

 

 

 

Average Fee Paying AUM

   $ 17,254      $ 295      $ 17,548  
  

 

 

    

 

 

    

 

 

 

For the three months ended March 31, 2021, fee paying AUM grew 5.1%, or $913 million, which was driven by additional investments made within our GP Debt Financing Strategy and $734 million of new fee paying commitments for Dyal Fund V. For the three months ended March 31, 2020, fee paying AUM grew by $5 million in Dyal Fund II.

AUM not yet paying fees

Our AUM not yet paying fees refers to AUM that is not currently paying fees and is eligible to earn management fees and/or performance income upon deployment. As of March 31, 2021, total AUM not yet paying fees was $2.1 billion.

 

8


AUM that does not pay fees

Our AUM that does not pay fees refers to AUM that is not currently paying management, incentive fees and is not eligible to earn management and/or incentive fees upon deployment. As of March 31, 2021, total AUM that does not pay fees was $4.0 billion.

The table below presents a summary of our total AUM disaggregated by fee paying AUM, AUM not yet paying fees and AUM that does not pay fees:

LOGO

 

9


Our calculations of AUM and fee paying AUM may differ from the calculation methodologies of other asset managers, and as a result this measure may not be comparable to similar measures presented by other asset managers. In addition, our calculation of AUM includes commitments to our products from the general partner and its affiliates, regardless of whether such commitments are subject to fees. Our definitions of AUM and fee paying AUM are not based on any definition of AUM and fee paying AUM that is set forth in the agreements governing the investment funds and products that we manage.

Product Performance Metrics

 

     LP Contribution
Date of Initial
Investment
     Dollars in Millions                      
     LP
Commitments
     LP
Contributions
     LP
Distributions
     NAV      Net
IRR
    Net
TVPI
     Net
DPI
 

Actual as of December 31, 20201

                      

Dyal I

     11/22/2011        1,274        1,248        583        618        -0.8     0.96x        0.47x  

Dyal II

     12/29/2014        2,139        1,846        336        1,495        -0.3     0.99x        0.18x  

Dyal III

     6/26/2015        5,279        3,241        2,266        3,958        25.1     1.92x        0.70x  

Dyal IV

     6/11/2018        8,920        2,787        498        3,494        69.1     1.43x        0.18x  

 

1. 

Contributions (Called Capital), Distributions (Cash Distributed) and NAV figures as well as performance metrics are exclusive of GP activity.

Product performance information is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented. We do not present product performance metrics for products with less than two years of investment performance from the date of the product’s first investment or for our co-investment funds related to our GP Minority Equity Investments strategy. The performance information reflected in this discussion and analysis is not indicative of our overall performance. An investment in Blue Owl is not an investment in any of our products. Past performance is not indicative of future results. As with any investment there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these products or our other existing and future funds will achieve similar returns.

Net internal rate of return (“Net IRR”) is computed based on inception-to-date contributions on the dates they were due and distributions on the dates they were paid and the limited partners’ aggregate capital accounts as of December 31, 2020. Net IRR shown is net of applicable fees and expenses based upon the net asset value as of December 31, 2020.

Net Distributions-to-Paid-In (“Net DPI”) is provided for the total portfolio and not for each investment as non-transaction-specific expenses and fees are levied on the total portfolio and not on an investment-by-investment basis. Net DPI is presented on a cumulative basis and is not annualized. Net DPI formula: (Cash Distributed) / (Called Capital) as of December 31, 2020.

Net Total-Value-to-Paid-In (“Net TVPI”) is provided for the total portfolio and not for each investment as non-transaction-specific expenses and fees are levied on the total portfolio and not on an investment-by-investment basis. Net TVPI formula: (Cash Distributed + NAV) / (Called Capital) as of December 31, 2020.

Components of Combined Results of Operations

Revenues

Contractual Revenues

Revenues primarily consist of management fees, incentive fees and reimbursed expenses.

Management fees, net – Management fees are derived from investment management services provided to private funds and are payable quarterly or semi-annually, at the beginning or end of the service period. Management fees are determined by contractual agreements which require us to provide investment management services, which represents a performance obligation that Dyal satisfies over time. For the GP Minority Equity Investments strategy, the fees are generally determined based upon a percentage of capital committed during the investment period, and thereafter generally based on the cost of unrealized investments; or as otherwise defined in the respective agreements. For the other strategies, the fees are generally determined based upon a percentage of investment cost or as otherwise defined in the respective agreements. Management fees are presented net of fund overages, fee waivers and economic sharing arrangements on the statements of operation.

Incentive fees– Incentive fees are calculated based on a contractual percentage of net income before realized and unrealized gains and losses of the funds above a preferred return threshold and a contractual percentage of any net realized capital gains from the funds as described within the respective agreements. The performance obligations for these revenues are satisfied over time as the services are rendered and the limited partner simultaneously receives and consumes the benefits of the services as they are performed. Dyal records its fees when the service is provided and it is probable there would not be a significant reversal of revenue. Incentive fees receivable by Dyal are recorded in the incentive fees line item on the combined statements of financial condition.

Administrative, transaction and other fees – Administrative, transaction and other fees primarily consists of expenses incurred by Dyal’s Business Services Platform and reimbursed by Dyal’s private funds in connection with the provision of strategic support to partner managers.

 

10


Non-Contractual Revenues

Net gains (losses) from investment activities

Net gains (losses) from investment activities represent the unrealized and realized gains and losses on the equity method investments.

Expenses

Compensation and Benefits

Compensation generally includes salaries, bonuses, employee benefits, employer-related payroll taxes. Bonuses are accrued over the service period to which they relate.

General, administrative, and other

General, administrative, and other expenses include costs primarily related to placement fees, rent, information technology, professional fees, business development and other general operating items.

Net Gains (losses) from Investment Activities

Net gains (losses) from investment activities represent the unrealized and realized gains and losses on investments.

Results of Operations

Combined Results of Operations – Three months ended March 31, 2021 compared to three months ended March 31, 2020

The following table presents the results of operations for the three months ended March 31, 2021 and 2020:

 

     Three Months Ended
March 31,
     Favorable (Unfavorable)  
     2021      2020      $ Change      % Change  

Revenues

           

Management fees, net

   $ 75,472      $ 70,607      $ 4,865        7

Administrative, transaction and other fees

     6,520        5,821        699        12
  

 

 

    

 

 

       

Total revenues

     81,992        76,428        5,564        7

Operating expenses

           

Compensation and benefits

     55,323        47,578        7,745        16

General, administrative, and other expenses

     14,026        6,913        7,113        103
  

 

 

    

 

 

       

Total operating expenses

     69,349        54,491        14,858        27
  

 

 

    

 

 

       

Operating income

     12,643        21,937        (9,294      -42

Net gains (losses) from investment activities

     2,314        (85      2,399        NM  
  

 

 

    

 

 

       

Income before income tax expense

     14,957        21,852        (6,895      -32

Income tax expense (benefit)

     2,181        1,984        197        10
  

 

 

    

 

 

       

Net income

     12,776        19,868        (7,092      -36

Net gain (loss) attributable to non-controlling interests

     144        (454      598        NM  
  

 

 

    

 

 

       

Net income attributable to Dyal

   $  12,632      $ 20,322      $ (7,690      -38
  

 

 

    

 

 

       

 

NM - Not Meaningful

 

11


Revenues

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

Management fees, net. Total management fees, net increased $4.9 million, or 7%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. $7.6 million was related to the launch of Dyal Fund V and $1.0 million was related to additional investments made by our GP Debt Financing strategy. This was partially offset by $3.8 million of management fee step downs in Dyal Fund I and Dyal Fund II.

Administrative, transaction and other fees. Administrative, transaction and other fees increased $0.7 million, or 12%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the growth of the Business Services Platform team during that period.

Expenses

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

Compensation and benefits. Compensation and benefits increased $7.7 million, or 16%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020, due to higher management fees, the growth of the Business Services Platform and equity based compensation.

General, administrative, and other expenses. General, administrative, and other expenses increased $7.1 million, or 103%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The net increase was primarily driven by higher distribution expenses and professional fees, partially offset by lower business development expenses, which were impacted by COVID-19 travel restrictions.

Net Gains (losses) from Investment Activities

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

Net gains (losses) from investment activities. Net gains (losses) from investment activities increased $2.4 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to fair value changes in the investments.

Income Taxes

Three Months Ended March 31, 2021 Compared to Three Months Ended March 21, 2020

Income tax expense (benefit). Income tax expense increased $0.2 million, or 10%, for the three months ended March 31, 2021 compared to the three months ended March 30, 2020, primarily due to an increase in non-deductible partner compensation expense for Unincorporated Business Tax (“UBT”) purposes, and foreign taxable income subject to higher statutory tax rates.

 

12


Reconciliation of Combined GAAP Financial Measures to Certain Non-GAAP Measures

We use FRE, DE, Adjusted EBITDA, Adjusted Revenues and Adjusted Compensation as non-GAAP measures to assess and track our performance. The following table presents the reconciliation of net income (loss) before taxes as reported in the combined statements of operations to FRE, DE, Adjusted EBITDA, Adjusted Revenues and Adjusted Compensation ($ in thousands):

 

     Three Months Ended March 31,  
     2021      2020  

Income before income tax expense

   $ 14,957      $ 21,852  

Adjustments:

     

Equity based compensation

     4,500        —    

Net (gains) losses from investment activities

     (2,314      85  
  

 

 

    

 

 

 

Fee Related Earnings

   $ 17,143      $ 21,937  
  

 

 

    

 

 

 

Fee Related Earnings

   $ 17,143      $ 21,937  

Adjustments:

     

Net realized gains

     1,119        249  

Current income tax (expense) benefit

     (2,353      (1,968
  

 

 

    

 

 

 

Distributable Earnings

   $ 15,909      $ 20,218  
  

 

 

    

 

 

 

Distributable Earnings

   $ 15,909      $ 20,218  

Current income tax expense (benefit)

     2,353        1,968  
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 18,262      $ 22,186  
  

 

 

    

 

 

 

Total revenues

   $ 81,992      $ 76,428  

Adjustments:

     

Administrative, transaction and other fees

     (6,520      (5,821
  

 

 

    

 

 

 

Adjusted Revenues

   $ 75,472      $ 70,607  
  

 

 

    

 

 

 

Compensation and benefits

   $ 55,323      $ 47,578  

Adjustments:

     

Equity based compensation

     (4,500      —    

Business Services Platform reimbursed compensation and benefits

     (6,648      (5,491
  

 

 

    

 

 

 

Adjusted Compensation

   $ 44,175      $ 42,087  
  

 

 

    

 

 

 

Liquidity and Capital Resources

Sources and Uses of Liquidity

Dyal historically participated in Neuberger’s centralized cash management system. Under this system, on a daily basis, any excess cash generated by Dyal is transferred to Neuberger and any additional daily cash flow needs are funded by Neuberger. As such, Neuberger benefits from the positive cash flow Dyal generates, and Neuberger also provides Dyal with sufficient daily liquidity to fund its ongoing cash needs. As a result, Dyal has historically required minimal cash on hand.

Neuberger manages its long-term debt obligations based on the needs of its entire portfolio of businesses. Long-term debt of Neuberger and related interest expense are not allocated to Dyal.

Neuberger uses a centralized approach to cash management and financing. Accordingly, Neuberger’s cash has not been assigned to Dyal for any of the periods presented because those cash balances are not directly attributable to Dyal. Transactions between Neuberger and Dyal are deemed to have been settled through Neuberger’s net investment in Dyal. The net effect of the deemed settled transactions is reflected in the combined statements of cash flows as net transfer from Neuberger within financing activities and in the combined statements of financial condition as the Neuberger net investment.

 

13


Cash Flows

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

 

     Three Months Ended
March 31,
     Favorable (Unfavorable)  
     2021      2020      $ Change      % Change  

Net cash used in operating activities

   $ (98,961    $ (135,809    $ 36,848        27

Net cash used in investing activities

     (520      (830      310        37

Net cash provided by financing activities

     99,481        136,549        (37,068      -27
  

 

 

    

 

 

       

Net change in cash and cash equivalents

   $ —        $ (90    $ 90        100
  

 

 

    

 

 

       

Operating Activities

 

     Three Months Ended
March 31,
     Favorable (Unfavorable)  
     2021      2020      $ Change      % Change  

Cash flows from operating activities:

           

Net income

   $ 12,776      $ 19,868      $ (7,092      -36

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

           

Net (gains) losses from investment activities

     (2,314      85        (2,399      NM  

Equity based compensation

     4,500        —          4,500        NM  

Cash flows due to changes in operating assets and liabilities:

           

Management fees receivable, net

     (17,004      (30,126      13,122        44

Due from affiliates

     (8,818      (7,425      (1,393      -19

Incentive fees receivable

     2,236        —          2,236        NM  

Prepaid assets

     21,000        —          21,000        NM  

Other assets

     1,332        18        1,314        NM  

Accrued compensation and benefits

     (120,755      (115,933      (4,822      -4

Accrued expenses and other payables

     6,953        (2,545      9,498        NM  

Distributions from equity method investments

     1,133        249        884        NM  
  

 

 

    

 

 

       

Net cash used in operating activities

   $ (98,961    $ (135,809    $ 36,848        27
  

 

 

    

 

 

       

Net cash used in Dyal’s operating activities decreased from $135.8 million for the three months ended March 31, 2020 to $99.0 million for the three months ended March 31, 2021, primarily due to the timing of management fee receivable collections, as well as distribution payments and compensation payments, including equity based compensation and compensation paid in advance in 2020, which is included in prepaid assets.

 

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Investing Activities

 

     Three Months Ended
March 31,
     Favorable (Unfavorable)  
     2021      2020      $ Change      % Change  

Cash flows from investing activities:

           

Purchases of equity method investments

   $ (520    $ (830    $ 310        37
  

 

 

    

 

 

       

Net cash used in investing activities

   $ (520    $ (830    $ 310        37
  

 

 

    

 

 

       

Net cash used in investing activities was $0.5 million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively. The change of $0.3 million from the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was due to less capital calls from the underlying funds.

Financing Activities

 

     Three Months Ended
March 31,
     Favorable (Unfavorable)  
     2021      2020      $ Change      % Change  

Cash flows from financing activities:

           

Distributions to non-controlling interests

   $ —        $ (2    $ 2        100

Net transfer from Parent

     99,481        136,551        (37,070      -27
  

 

 

    

 

 

       

Net cash provided by financing activities

   $ 99,481      $ 136,549      $ (37,068      -27
  

 

 

    

 

 

       

Net cash provided by Dyal’s financing activities for the three months ended March 31, 2021 was composed of net transfer of cash from Neuberger. Net parent investment reflects the impact of transactions with Neuberger. Such transactions are recorded as Net transfer from Neuberger within the combined statements of changes in equity and within the financing section of the combined statements of cash flows.

Contractual Obligations, Commitments and Contingencies

 

     As at March 31,  
     2021      2020  
Dollars in Millions              

Dyal Obligations

     

Unfunded Capital Commitments

   $ 9.5      $ 14.1  

Part of Blue Owl

     2.7        7.1  

Dyal has various commitments and contingencies, including as a general partner or limited partner of private funds. At March 31, 2021 and March 31, 2020, Dyal including certain of its employees, had unfunded capital commitments of $9.5 million and $14.1 million, respectively, of which $2.7 million and $7.1 million, respectively, will be part of Blue Owl.

Dyal or Dyal’s private funds may be involved, from time to time, in judicial, regulatory and arbitration proceedings or investigations concerning matters arising in connection with the conduct of its business. Dyal recognizes liabilities for contingencies when there is an exposure that, when analyzed, indicates it is both probable that a liability will be incurred and the amount of such liability can be reasonably estimated. When a range of probable liability can be estimated, Dyal accrues the amount it has determined it is most likely to incur. If the amount is not determinable, Dyal accrues the minimum of the range of probable loss. In 2018, Dyal recorded $2.7 million of expenses related to a settlement of the Company’s prior investment adviser with the U.S. Securities and Exchange Commission involving certain reimbursable expenses of certain of Dyal’s private funds.

 

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Neuberger indemnifies the officers, directors and employees affiliated with Dyal against liabilities arising from the administration and performance of their duties on behalf of Dyal, subject to customary exclusions. Dyal’s maximum exposure under these arrangements is unknown and not currently measurable, as any such indemnification would only be required if specified claims against Dyal are made in the future.

Off-Balance Sheet Arrangements

Dyal does not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our combined financial statements.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements and their impact on Dyal can be found in “Note 2. Summary of Significant Accounting Policies,” in the “Notes to the Combined Financial Statements” included in this Current Report on Form 8-K.

Critical Accounting Estimates

We prepare our combined financial statements in accordance with U.S. GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our combined financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. Actual results may also differ from our estimates and judgments due to risks and uncertainties and changing circumstances, including uncertainty in the current economic environment due to the COVID-19 pandemic. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. For a summary of our significant accounting policies, see “Note 2. Summary of Significant Accounting Policies,” to our combined financial statements included in this Current Report on Form 8-K.

Principles of Consolidation

We consolidate entities based on either a variable interest model or voting interest model. As such, for entities that are determined to be variable interest entities (“VIEs”), we consolidate those entities where we have both significant economics and the power to direct the activities of the entity that impact economic performance. For limited partnerships and similar entities evaluated under the voting interest model, we do not consolidate those entities for which we act as the general partner unless we hold a majority voting interest.

The consolidation guidance requires qualitative and quantitative analysis to determine whether our involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related income), would give us a controlling financial interest. This analysis requires judgment. These judgments include: (1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties’ equity interests should be aggregated, (4) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary.

 

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Revenue Recognition

We recognize revenue in accordance with ASC 606. Revenue is recognized in a manner that depicts the transfer of promised goods or services to customers and for an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We are required to identify our contracts with customers, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, variable consideration is included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Equity Based Compensation

Compensation cost relating to the issuance of share-based payment awards to employees is measured at the fair value of the awards on the grant date, the estimation of which requires the use of complex and subjective judgments and assumptions.

Income Taxes

The Company is treated as a partnership for U.S. tax purposes and as such is not subject to federal or state income tax but is subject to New York City Unincorporated Business Tax (NYC UBT). The Company is not itself a taxpayer. Instead, its partners are subject to tax on the results of its operations in the jurisdictions in which they operate.

Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted.

Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent on the amount of the Company’s future taxable income. When evaluating the realizability of deferred tax assets, all evidence —both positive and negative—is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies.

GAAP requires us to recognize tax benefits in an amount that is more-likely-than-not to be sustained by the relevant taxing authority upon examination. We analyze our tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we determine that uncertainties in tax positions exist that do not meet the minimum threshold for recognition of the related tax benefit, a liability is recorded in the combined financial statements. We recognize interest and penalties, if any, related to unrecognized tax benefits as general, administrative and other expenses in the combined statements of income. If recognized, the entire amount of unrecognized tax positions would be recorded as a reduction in the provision for income taxes.

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new information becomes available.

Quantitative and Qualitative Disclosures About Market Risk

Our primary exposure to market risk is related to our role as general partner or investment adviser to our investment products and the sensitivity to movements in the fair value of their investments, including the

 

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effect on management fees, performance income and investment gains or losses. Uncertainty with respect to the economic effects of the COVID-19 pandemic has introduced significant volatility in the financial markets, and the effects of this volatility could materially impact our market risks, including those listed below. For additional information concerning the COVID-19 pandemic and its potential impact on our business and our operating results, see “Risk Factors” in this Current Report on Form 8-K.

In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including price risk, interest- rate risk, access to and cost of financing risk, liquidity risk, counterparty risk and foreign exchange-rate risk.

Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit or financial market dislocations.

Market Risk

Our predominant exposure to market risk is related to our role as investment manager and general partner for our funds and the sensitivity to movements in the fair value of their investments. Our direct investments in the funds also expose us to market risk whereby movements in the fair values of the underlying investments will increase or decrease the net gains (losses) from investment activities from equity method investments.

The fair value of our financial assets and liabilities of our funds may fluctuate in response to changes in the value of investments, foreign exchange, commodities and interest rates. The net effect of these fair value changes impacts the gains and losses from investments in our combined statements of operations and may affect the incentive fees related to our GP Debt Financing strategy.

Our management fees are generally calculated as a percentage of committed capital or investment cost as described under “ —Fee Structure”. Accordingly, movements in the fair value of investments do not significantly affect the amount of fees we may charge in our funds. To the extent that management fees are calculated based on investment cost of the fund’s investments, the amount of fees that we may charge will increase or decrease from the effect of changes in the cost basis of the fund’s investments, including potential impairment losses.

Interest Rate Risk

Certain funds hold debt investments that generate interest income based on variable interest rates. We are exposed to interest rate risk relating to investments that generate yield since these debt investments earn income based on variable interest rates, which impact the amount of performance income generated. However, the contractual interest rate structure for a large portion of our debt investments bearing variable rates have “floors,” which establish a minimum rate of interest that will be earned. For these investments, a decrease in variable interest rates could materially impact the amount of interest income earned and the incentive fees on these funds.

Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.

 

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