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For the nine months ended September 30, 2023 and 2022, Other Revenue on a GAAP basis was $18.0 million and $427.8 million, and included $16.4 million and $426.7 million of foreign exchange gains (losses), respectively.This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds, the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests.Total Segment Revenues is comprised of the following:This adjustment removes Unrealized Performance Allocations Compensation.This adjustment removes Equity-Based Compensation on a segment basis.This adjustment adds back Interest Expense on a segment basis, excluding interest expense related to the Tax Receivable Agreement.This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation.Total Segment Expenses is comprised of the following:This adjustment removes Transaction-Related and Non-Recurring Items, which are excluded from Blackstone’s segment presentation. Transaction-Related and Non-Recurring Items arise from corporate actions including acquisitions, divestitures, Blackstone’s initial public offering and non-recurring gains, losses, or other charges, if any. They consist primarily of equity-based compensation charges, gains or losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs, gains or losses associated with these corporate actions and non-recurring gains, losses or other charges that affect period-to-period comparability and are not reflective of Blackstone’s operational performance.Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy. The Secured Borrowing, Due 10/27/2033 has an interest rate of 7.66% and the Secured Borrowing, Due 1/29/2035 has an interest rate of 3.72%. Principal on these borrowings will be paid over the term with repayment amounts dependent on the performance of the underlying assets securing each borrowing. During the period presented, Blackstone also had one share outstanding of each of Series I and Series II preferred stock, with par value of each less than one cent. As of September 30, 2023 and December 31, 2022, Other Investments includes Level III Freestanding Derivatives.Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.Corporate Treasury Commitments are measured using third party pricing. Level III contingent consideration liabilities are valued using a discounted cash flow model where the significant inputs include the discount rates. This adjustment adds an amount equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures.Represents the removal of Transaction-Related and Non-Recurring Items that are not recorded in the Total Segment measures.Blackstone Fund Facilities represents borrowing facilities for the various consolidated Blackstone Funds used to meet liquidity and investing needs. Such borrowings have varying maturities and may be rolled over until the disposition or refinancing event. Borrowings bear interest at spreads to market rates or at stated fixed rates that can vary over the borrowing term. Interest may be subject to the performance of the assets within the fund and therefore, the stated interest rate and effective interest rate may differ. CLO Notes Payable are due 10/15/2029 and have an effective interest rate of 7.90% as of September 30, 2023. Dividends declared reflects the calendar date of the declaration for each distribution.The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis.Total is a component of Due to Affiliates. 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SECURITIES AND EXCHANGE COMMISSION
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number:
001-33551
(Exact name of Registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(Address of principal executive offices)(Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered |
Common Stock |
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BX |
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New York Stock Exchange |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☒
No
☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
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Large accelerated filer ☒ |
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Smaller reporting company ☐ |
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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.
☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes
☐
No
☒
As of October 27, 2023, there were 710,544,667 shares of common stock of the registrant outstanding.
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Page |
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6 |
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Unaudited Condensed Consolidated Financial Statements: |
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6 |
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8 |
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9 |
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10 |
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14 |
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16 |
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68 |
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70 |
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143 |
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143 |
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144 |
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144 |
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145 |
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145 |
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145 |
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145 |
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146 |
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148 |
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Forward-Looking Statements
This report may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which reflect our current views with respect to, among other things, our operations, taxes, earnings and financial performance, share repurchases and dividends. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates,” “opportunity,” “leads,” “forecast” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2022, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Website and Social Media Disclosure
We use our website (www.blackstone.com), Facebook page (www.facebook.com/blackstone), X (Twitter) (www.x.com/blackstone), LinkedIn (www.linkedin.com/company/blackstonegroup), Instagram (www.instagram.com/blackstone), SoundCloud (www.soundcloud.com/blackstone-300250613), PodBean (www.blackstone.podbean.com), Spotify (https://spoti.fi/2LJ1tHG), YouTube (www.youtube.com/user/blackstonegroup) and Apple Podcast (https://apple.co/31Pe1Gg) accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone when you enroll your email address by visiting the “Contact Us/Email Alerts” section of our website at http://ir.blackstone.com. The contents of our website, any alerts and social media channels are not, however, a part of this report.
In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.
“Series I Preferred Stockholder” refers to Blackstone Partners L.L.C., the holder of the sole outstanding share of our Series I preferred stock.
“Series II Preferred Stockholder” refers to Blackstone Group Management L.L.C., the holder of the sole outstanding share of our Series II preferred stock.
“Blackstone Funds,” “our funds” and “our investment funds” refer to the funds and other vehicles that are managed by Blackstone. “Our carry funds” refers to funds managed by Blackstone that have commitment-based multi-year drawdown structures that pay carry on the realization of an investment.
We refer to our real estate opportunistic funds as Blackstone Real Estate Partners (“BREP”) funds and our real estate debt investment funds as Blackstone Real Estate Debt Strategies (“BREDS”) funds. We refer to our real estate investment trusts as “REITs,” to Blackstone Mortgage Trust, Inc., our NYSE-listed REIT, as “BXMT” and to
Blackstone Real Estate Income Trust, Inc., our
non-listed
REIT, as “BREIT.” We refer to our real estate funds that target substantially stabilized assets in prime markets, as Blackstone Property Partners (“BPP”) funds and our income-generating European real estate funds as Blackstone European Property Income (“BEPIF”) funds. We refer to BREIT, BPP and BEPIF collectively as our Core+ real estate strategies.
We refer to our flagship corporate private equity funds as Blackstone Capital Partners (“BCP”) funds, our energy-focused private equity funds as Blackstone Energy Transition Partners (“BETP”) funds, our core private equity funds as Blackstone Core Equity Partners (“BCEP”), our opportunistic investment platform that invests globally across asset classes, industries and geographies as Blackstone Tactical Opportunities (“Tactical Opportunities”), our secondary fund of funds business as Strategic Partners Fund Solutions (“Strategic Partners”), our infrastructure-focused funds as Blackstone Infrastructure Partners (“BIP”), our life sciences investment platform as Blackstone Life Sciences (“BXLS”), our growth equity investment platform as Blackstone Growth (“BXG”), our multi-asset investment program for eligible high net worth investors offering exposure to certain of our key illiquid investment strategies through a single commitment as Blackstone Total Alternatives Solution (“BTAS”) and our capital markets services business as Blackstone Capital Markets (“BXCM”).
“Our hedge funds” refers to our funds of hedge funds, hedge funds, certain of our real estate debt investment funds, including a registered investment company, and certain other credit-focused funds which are managed by Blackstone.
We refer to our business development companies as “BDCs,” to Blackstone Private Credit Fund as “BCRED” and to Blackstone Secured Lending Fund as “BXSL.”
“BIS” refers to Blackstone Insurance Solutions, which partners with insurers to deliver capital-efficient investments tailored to each insurer’s needs and risk profile.
We refer to our separately managed accounts as “SMAs.”
“Total Assets Under Management” refers to the assets we manage. Our Total Assets Under Management equals the sum of:
| |
(a) |
the fair value of the investments held by our carry funds and our and co-investment entities managed by us plus the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, |
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(b) |
the net asset value of (1) our hedge funds, real estate debt carry funds, BPP, certain co-investments managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, BREIT, and BEPIF, |
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(c) |
the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts, |
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(d) |
the amount of debt and equity outstanding for our collateralized loan obligations (“CLO”) during the reinvestment period, |
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(e) |
the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period, |
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(f) |
the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies and BDCs, |
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(g) |
the fair value of common stock, preferred stock, convertible debt, term loans or similar instruments issued by BXMT, and |
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(h) |
borrowings under and any amounts available to be borrowed under certain credit facilities of our funds. |
Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open-ended funds in our Real Estate, Credit & Insurance and Hedge Fund Solutions segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually, quarterly or monthly), typically with 2 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. In our Perpetual Capital vehicles where redemption rights exist, Blackstone has the ability to fulfill redemption requests only (a) in Blackstone’s or the vehicles’ board’s discretion, as applicable, or (b) to the extent there is sufficient new capital. Investment advisory agreements related to certain separately managed accounts in our Credit & Insurance and Hedge Fund Solutions segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice. Our BIS separately managed accounts can generally only be terminated for long-term underperformance, cause and certain other limited circumstances, in each case subject to Blackstone’s right to cure.
“Fee-Earning
Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. Our
Fee-Earning
Assets Under Management equals the sum of:
| |
(a) |
for our Private Equity segment funds, Real Estate segment carry funds including certain BREDS funds, and certain Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund, |
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(b) |
for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund, |
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(c) |
the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees, |
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(d) |
the net asset value of our funds of hedge funds, hedge funds, BPP, certain co-investments managed by us, certain registered investment companies, BREIT, BEPIF, and certain of our Hedge Fund Solutions drawdown funds, |
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(e) |
the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts, |
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(f) |
the net proceeds received from equity offerings and accumulated distributable earnings of BXMT, subject to certain adjustments, |
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(g) |
the aggregate par amount of collateral assets, including principal cash, of our CLOs, and |
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(h) |
the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies and BDCs. |
Each of our segments may include certain
Fee-Earning
Assets Under Management on which we earn performance revenues but not management fees.
Our calculations of Total Assets Under Management and
Fee-Earning
Assets Under Management may differ from the calculations 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 Total Assets Under Management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of Total Assets Under Management and
Fee-Earning
Assets Under Management are not based on any definition of Total Assets Under Management and
Fee-Earning
Assets Under Management that is set forth in the agreements governing the investment funds that we manage.
For our carry funds, Total Assets Under Management includes the fair value of the investments held and uncalled capital commitments, whereas
Fee-Earning
Assets Under Management may include the total amount of capital commitments or the remaining amount of invested capital at cost, depending on whether the investment period has expired or as specified by the fee terms of the fund. As such, in certain carry funds
Fee-Earning
Assets Under Management may be greater than Total Assets Under Management when the aggregate fair value of the remaining investments is less than the cost of those investments.
“Perpetual Capital” refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Perpetual Capital includes
co-investment
capital with an investor right to convert into Perpetual Capital.
This report does not constitute an offer of any Blackstone Fund.
Part I. Financial Information
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in Thousands, Except Share Data)
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Cash and Cash Equivalents |
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$ |
2,971,614 |
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$ |
4,252,003 |
|
Cash Held by Blackstone Funds and Other |
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|
138,181 |
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|
241,712 |
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|
|
27,339,857 |
|
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|
27,553,251 |
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|
|
|
693,786 |
|
|
|
462,904 |
|
|
|
|
4,398,333 |
|
|
|
4,146,707 |
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|
|
|
210,210 |
|
|
|
217,287 |
|
|
|
|
1,890,202 |
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|
|
1,890,202 |
|
|
|
|
972,069 |
|
|
|
800,458 |
|
|
|
|
864,691 |
|
|
|
896,981 |
|
|
|
|
2,184,880 |
|
|
|
2,062,722 |
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|
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|
|
|
|
|
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$ |
41,663,823 |
|
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$ |
42,524,227 |
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$ |
12,111,377 |
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$ |
12,349,584 |
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|
|
|
2,188,224 |
|
|
|
2,118,481 |
|
Accrued Compensation and Benefits |
|
|
5,983,137 |
|
|
|
6,101,801 |
|
Operating Lease Liabilities |
|
|
981,616 |
|
|
|
1,021,454 |
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
1,588,748 |
|
|
|
1,251,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
22,853,102 |
|
|
|
22,843,160 |
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Commitments and Contingencies |
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|
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Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
1,349,060 |
|
|
|
1,715,006 |
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Stockholders’ Equity of Blackstone Inc. |
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Common Stock, $0.00001 par value, 90 billion shares authorized, (718,442,863 shares issued and outstanding as of September 30, 2023; 710,276,923 shares issued and outstanding as of December 31, 2022) |
|
|
7 |
|
|
|
7 |
|
Series I Preferred Stock, $0.00001 par value, 999,999,000 shares authorized, (1 share issued and outstanding as of September 30, 2023 and December 31, 2022) |
|
|
— |
|
|
|
— |
|
Series II Preferred Stock, $0.00001 par value, 1,000 shares authorized, (1 share issued and outstanding as of September 30, 2023 and December 31, 2022) |
|
|
— |
|
|
|
— |
|
|
|
|
6,057,065 |
|
|
|
5,935,273 |
|
|
|
|
1,114,009 |
|
|
|
1,748,106 |
|
Accumulated Other Comprehensive Loss |
|
|
(38,258 |
) |
|
|
(27,475 |
) |
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity of Blackstone Inc. |
|
|
7,132,823 |
|
|
|
7,655,911 |
|
Non-Controlling Interests in Consolidated Entities |
|
|
5,174,473 |
|
|
|
5,056,480 |
|
Non-Controlling Interests in Blackstone Holdings |
|
|
5,154,365 |
|
|
|
5,253,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
17,461,661 |
|
|
|
17,966,061 |
|
|
|
|
|
|
|
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|
|
Total Liabilities and Equity |
|
$ |
41,663,823 |
|
|
$ |
42,524,227 |
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Financial Condition (Unaudited)
The following presents the asset and liability portion of the consolidated balances presented in the Condensed Consolidated Statements of Financial Condition attributable to consolidated Blackstone Funds which are variable interest entities. The following assets may only be used to settle obligations of these consolidated Blackstone Funds and these liabilities are only the obligations of these consolidated Blackstone Funds and they do not have recourse to the general credit of Blackstone.
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| |
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| |
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|
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|
Cash Held by Blackstone Funds and Other |
|
$ |
138,181 |
|
|
$ |
241,712 |
|
|
|
|
5,224,104 |
|
|
|
5,136,542 |
|
|
|
|
6,732 |
|
|
|
55,223 |
|
|
|
|
8,185 |
|
|
|
7,152 |
|
|
|
|
358 |
|
|
|
2,159 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,377,560 |
|
|
$ |
5,442,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,589,649 |
|
|
$ |
1,450,000 |
|
|
|
|
94,807 |
|
|
|
82,345 |
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
171,887 |
|
|
|
25,858 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,856,343 |
|
|
$ |
1,558,203 |
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in Thousands, Except Share and Per Share Data)
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| |
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| |
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| |
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| |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
$ |
1,655,443 |
|
|
$ |
1,617,754 |
|
|
$ |
5,023,128 |
|
|
$ |
4,654,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
158,801 |
|
|
|
110,776 |
|
|
|
454,754 |
|
|
|
314,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
453,690 |
|
|
|
725,888 |
|
|
|
1,602,668 |
|
|
|
4,946,043 |
|
| |
|
|
(63,204 |
) |
|
|
(771,637 |
) |
|
|
(708,021 |
) |
|
|
(2,946,255 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
94,313 |
|
|
|
193,228 |
|
|
|
257,206 |
|
|
|
743,493 |
|
| |
|
|
69,340 |
|
|
|
(1,069,697 |
) |
|
|
(257,988 |
) |
|
|
(1,496,226 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Income (Loss) |
|
|
554,139 |
|
|
|
(922,218 |
) |
|
|
893,865 |
|
|
|
1,247,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Revenue |
|
|
109,133 |
|
|
|
52,420 |
|
|
|
348,123 |
|
|
|
168,980 |
|
| |
|
|
63,769 |
|
|
|
199,382 |
|
|
|
17,951 |
|
|
|
427,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
2,541,285 |
|
|
|
1,058,114 |
|
|
|
6,737,821 |
|
|
|
6,813,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
700,268 |
|
|
|
600,273 |
|
|
|
2,153,570 |
|
|
|
1,942,790 |
|
Incentive Fee Compensation |
|
|
65,432 |
|
|
|
50,355 |
|
|
|
192,940 |
|
|
|
136,737 |
|
Performance Allocations Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
168,620 |
|
|
|
313,930 |
|
|
|
670,610 |
|
|
|
2,067,447 |
|
| |
|
|
11,866 |
|
|
|
(359,590 |
) |
|
|
(247,228 |
) |
|
|
(1,273,849 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Compensation and Benefits |
|
|
946,186 |
|
|
|
604,968 |
|
|
|
2,769,892 |
|
|
|
2,873,125 |
|
General, Administrative and Other |
|
|
279,186 |
|
|
|
270,369 |
|
|
|
827,614 |
|
|
|
800,331 |
|
| |
|
|
110,599 |
|
|
|
80,507 |
|
|
|
323,136 |
|
|
|
216,896 |
|
| |
|
|
38,934 |
|
|
|
5,517 |
|
|
|
118,918 |
|
|
|
12,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1,374,905 |
|
|
|
961,361 |
|
|
|
4,039,560 |
|
|
|
3,902,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Tax Receivable Agreement Liability |
|
|
— |
|
|
|
— |
|
|
|
1,887 |
|
|
|
748 |
|
Net Gains (Losses) from Fund Investment Activities |
|
|
(49,078 |
) |
|
|
1,178 |
|
|
|
102,486 |
|
|
|
(52,272 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Loss) |
|
|
(49,078 |
) |
|
|
1,178 |
|
|
|
104,373 |
|
|
|
(51,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Provision for Taxes |
|
|
1,117,302 |
|
|
|
97,931 |
|
|
|
2,802,634 |
|
|
|
2,859,594 |
|
| |
|
|
196,560 |
|
|
|
94,231 |
|
|
|
467,504 |
|
|
|
614,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
920,742 |
|
|
|
3,700 |
|
|
|
2,335,130 |
|
|
|
2,245,568 |
|
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
(92,577 |
) |
|
|
25,773 |
|
|
|
(81,589 |
) |
|
|
56,700 |
|
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities |
|
|
20,716 |
|
|
|
(62,093 |
) |
|
|
185,021 |
|
|
|
(62,425 |
) |
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings |
|
|
440,609 |
|
|
|
37,724 |
|
|
|
992,618 |
|
|
|
1,061,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Blackstone Inc. |
|
$ |
551,994 |
|
|
$ |
2,296 |
|
|
$ |
1,239,080 |
|
|
$ |
1,189,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
0.73 |
|
|
$ |
— |
|
|
$ |
1.64 |
|
|
$ |
1.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
0.73 |
|
|
$ |
— |
|
|
$ |
1.64 |
|
|
$ |
1.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares of Common Stock Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
757,958,602 |
|
|
|
742,345,646 |
|
|
|
754,211,390 |
|
|
|
739,963,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
758,046,096 |
|
|
|
742,495,532 |
|
|
|
754,456,326 |
|
|
|
740,272,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
$ |
920,742 |
|
|
$ |
3,700 |
|
|
$ |
2,335,130 |
|
|
$ |
2,245,568 |
|
Other Comprehensive Loss, Currency Translation Adjustment |
|
|
(67,046 |
) |
|
|
(156,610 |
) |
|
|
(20,754 |
) |
|
|
(226,076 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income (Loss) |
|
|
853,696 |
|
|
|
(152,910 |
) |
|
|
2,314,376 |
|
|
|
2,019,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss Attributable to Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
(129,432 |
) |
|
|
(76,820 |
) |
|
|
(84,903 |
) |
|
|
(78,623 |
) |
Comprehensive Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities |
|
|
20,716 |
|
|
|
(62,093 |
) |
|
|
185,021 |
|
|
|
(62,425 |
) |
Comprehensive Income Attributable to Non-Controlling Interests in Blackstone Holdings |
|
|
431,471 |
|
|
|
16,282 |
|
|
|
985,961 |
|
|
|
1,025,937 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income (Loss) Attributable to Non-Controlling Interests |
|
|
322,755 |
|
|
|
(122,631 |
) |
|
|
1,086,079 |
|
|
|
884,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income (Loss) Attributable to Blackstone Inc. |
|
$ |
530,941 |
|
|
$ |
(30,279) |
|
|
$ |
1,228,297 |
|
|
$ |
1,134,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Shares of
Blackstone
Inc. (a) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
713,551,859 |
|
|
$ |
7 |
|
|
$ |
6,076,367 |
|
|
$ |
1,160,278 |
|
|
$ |
(17,205 |
) |
|
$ |
7,219,447 |
|
|
$ |
5,174,961 |
|
|
$ |
5,069,722 |
|
|
$ |
17,464,130 |
|
|
$ |
1,626,349 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
551,994 |
|
|
|
— |
|
|
|
551,994 |
|
|
|
20,716 |
|
|
|
440,609 |
|
|
|
1,013,319 |
|
|
|
(92,577 |
) |
Currency Translation Adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(21,053 |
) |
|
|
(21,053 |
) |
|
|
— |
|
|
|
(9,138 |
) |
|
|
(30,191 |
) |
|
|
(36,855 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
156,074 |
|
|
|
2,425 |
|
|
|
158,499 |
|
|
|
48,560 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(598,263 |
) |
|
|
— |
|
|
|
(598,263 |
) |
|
|
(177,001 |
) |
|
|
(443,207 |
) |
|
|
(1,218,471 |
) |
|
|
(196,417 |
) |
Transfer of Non-Controlling Interests in Consolidated Entities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(277 |
) |
|
|
— |
|
|
|
(277 |
) |
|
|
— |
|
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders |
|
|
— |
|
|
|
— |
|
|
|
2,938 |
|
|
|
— |
|
|
|
— |
|
|
|
2,938 |
|
|
|
— |
|
|
|
— |
|
|
|
2,938 |
|
|
|
— |
|
Equity-Based Compensation |
|
|
— |
|
|
|
— |
|
|
|
149,843 |
|
|
|
— |
|
|
|
— |
|
|
|
149,843 |
|
|
|
— |
|
|
|
97,040 |
|
|
|
246,883 |
|
|
|
— |
|
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock |
|
|
4,759,543 |
|
|
|
— |
|
|
|
(40,897 |
) |
|
|
— |
|
|
|
— |
|
|
|
(40,897 |
) |
|
|
— |
|
|
|
— |
|
|
|
(40,897 |
) |
|
|
— |
|
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units |
|
|
(1,318,175 |
) |
|
|
— |
|
|
|
(134,272 |
) |
|
|
— |
|
|
|
— |
|
|
|
(134,272 |
) |
|
|
— |
|
|
|
— |
|
|
|
(134,272 |
) |
|
|
— |
|
Change in Blackstone Inc.’s Ownership Interest |
|
|
— |
|
|
|
— |
|
|
|
(12,858 |
) |
|
|
— |
|
|
|
— |
|
|
|
(12,858 |
) |
|
|
— |
|
|
|
12,858 |
|
|
|
— |
|
|
|
— |
|
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock |
|
|
1,449,636 |
|
|
|
— |
|
|
|
15,944 |
|
|
|
— |
|
|
|
— |
|
|
|
15,944 |
|
|
|
— |
|
|
|
(15,944 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2023 |
|
|
718,442,863 |
|
|
$ |
7 |
|
|
$ |
6,057,065 |
|
|
$ |
1,114,009 |
|
|
$ |
(38,258 |
) |
|
$ |
7,132,823 |
|
|
$ |
5,174,473 |
|
|
$ |
5,154,365 |
|
|
$ |
17,461,661 |
|
|
$ |
1,349,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
During the period presented, Blackstone also had one share outstanding of each of Series I and Series II preferred stock, with par value of each less than one cent. |
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Shares of
Blackstone
Inc. (a) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
706,476,877 |
|
|
$ |
7 |
|
|
$ |
5,870,285 |
|
|
$ |
2,803,100 |
|
|
$ |
(42,225 |
) |
|
$ |
8,631,167 |
|
|
$ |
5,281,244 |
|
|
$ |
6,146,196 |
|
|
$ |
20,058,607 |
|
|
$ |
1,275,491 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,296 |
|
|
|
— |
|
|
|
2,296 |
|
|
|
(62,093 |
) |
|
|
37,724 |
|
|
|
(22,073 |
) |
|
|
25,773 |
|
Currency Translation Adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(32,575 |
) |
|
|
(32,575 |
) |
|
|
— |
|
|
|
(21,442 |
) |
|
|
(54,017 |
) |
|
|
(102,593 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
268,165 |
|
|
|
2,460 |
|
|
|
270,625 |
|
|
|
180,300 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(935,933 |
) |
|
|
— |
|
|
|
(935,933 |
) |
|
|
(142,675 |
) |
|
|
(775,697 |
) |
|
|
(1,854,305 |
) |
|
|
(21,440 |
) |
Transfer of Non-Controlling Interests in Consolidated Entities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,507 |
|
|
|
— |
|
|
|
12,507 |
|
|
|
(13,343 |
) |
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders |
|
|
— |
|
|
|
— |
|
|
|
5,562 |
|
|
|
— |
|
|
|
— |
|
|
|
5,562 |
|
|
|
— |
|
|
|
— |
|
|
|
5,562 |
|
|
|
— |
|
Equity-Based Compensation |
|
|
— |
|
|
|
— |
|
|
|
121,264 |
|
|
|
— |
|
|
|
— |
|
|
|
121,264 |
|
|
|
— |
|
|
|
80,087 |
|
|
|
201,351 |
|
|
|
— |
|
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock |
|
|
2,938,303 |
|
|
|
— |
|
|
|
(30,418 |
) |
|
|
— |
|
|
|
— |
|
|
|
(30,418 |
) |
|
|
— |
|
|
|
— |
|
|
|
(30,418 |
) |
|
|
— |
|
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units |
|
|
(1,954,545 |
) |
|
|
— |
|
|
|
(196,642 |
) |
|
|
— |
|
|
|
— |
|
|
|
(196,642 |
) |
|
|
— |
|
|
|
— |
|
|
|
(196,642 |
) |
|
|
— |
|
Change in Blackstone Inc.’s Ownership Interest |
|
|
— |
|
|
|
— |
|
|
|
80 |
|
|
|
— |
|
|
|
— |
|
|
|
80 |
|
|
|
— |
|
|
|
(80 |
) |
|
|
— |
|
|
|
— |
|
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock |
|
|
1,579,975 |
|
|
|
— |
|
|
|
20,875 |
|
|
|
— |
|
|
|
— |
|
|
|
20,875 |
|
|
|
— |
|
|
|
(20,875 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2022 |
|
|
709,040,610 |
|
|
$ |
7 |
|
|
$ |
5,791,006 |
|
|
$ |
1,869,463 |
|
|
$ |
(74,800 |
) |
|
$ |
7,585,676 |
|
|
$ |
5,357,148 |
|
|
$ |
5,448,373 |
|
|
$ |
18,391,197 |
|
|
$ |
1,344,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
During the period presented, Blackstone also had one share outstanding of each of Series I and Series II preferred stock, with par value of each less than one cent. |
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Shares of
Blackstone
Inc. (a) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2022 |
|
|
710,276,923 |
|
|
$ |
7 |
|
|
$ |
5,935,273 |
|
|
$ |
1,748,106 |
|
|
$ |
(27,475 |
) |
|
$ |
7,655,911 |
|
|
$ |
5,056,480 |
|
|
$ |
5,253,670 |
|
|
$ |
17,966,061 |
|
|
$ |
1,715,006 |
|
Transfer Out Due to Deconsolidation of Fund Entities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(53,713 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,239,080 |
|
|
|
— |
|
|
|
1,239,080 |
|
|
|
185,021 |
|
|
|
992,618 |
|
|
|
2,416,719 |
|
|
|
(81,589 |
) |
Currency Translation Adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,783 |
) |
|
|
(10,783 |
) |
|
|
— |
|
|
|
(6,657 |
) |
|
|
(17,440 |
) |
|
|
(3,314 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
463,377 |
|
|
|
7,284 |
|
|
|
470,661 |
|
|
|
140,840 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,873,177 |
) |
|
|
— |
|
|
|
(1,873,177 |
) |
|
|
(527,333 |
) |
|
|
(1,363,233 |
) |
|
|
(3,763,743 |
) |
|
|
(368,170 |
) |
Transfer of Non-Controlling Interests in Consolidated Entities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,072 |
) |
|
|
— |
|
|
|
(3,072 |
) |
|
|
— |
|
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders |
|
|
— |
|
|
|
— |
|
|
|
6,857 |
|
|
|
— |
|
|
|
— |
|
|
|
6,857 |
|
|
|
— |
|
|
|
— |
|
|
|
6,857 |
|
|
|
— |
|
Equity-Based Compensation |
|
|
— |
|
|
|
— |
|
|
|
460,615 |
|
|
|
— |
|
|
|
— |
|
|
|
460,615 |
|
|
|
— |
|
|
|
299,404 |
|
|
|
760,019 |
|
|
|
— |
|
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock |
|
|
7,432,747 |
|
|
|
— |
|
|
|
(63,998 |
) |
|
|
— |
|
|
|
— |
|
|
|
(63,998 |
) |
|
|
— |
|
|
|
— |
|
|
|
(63,998 |
) |
|
|
— |
|
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units |
|
|
(3,318,175 |
) |
|
|
— |
|
|
|
(310,403 |
) |
|
|
— |
|
|
|
— |
|
|
|
(310,403 |
) |
|
|
— |
|
|
|
— |
|
|
|
(310,403 |
) |
|
|
— |
|
Change in Blackstone Inc.’s Ownership Interest |
|
|
— |
|
|
|
— |
|
|
|
(15,867 |
) |
|
|
— |
|
|
|
— |
|
|
|
(15,867 |
) |
|
|
— |
|
|
|
15,867 |
|
|
|
— |
|
|
|
— |
|
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock |
|
|
4,051,368 |
|
|
|
— |
|
|
|
44,588 |
|
|
|
— |
|
|
|
— |
|
|
|
44,588 |
|
|
|
— |
|
|
|
(44,588 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2023 |
|
|
718,442,863 |
|
|
$ |
7 |
|
|
$ |
6,057,065 |
|
|
$ |
1,114,009 |
|
|
$ |
(38,258 |
) |
|
$ |
7,132,823 |
|
|
$ |
5,174,473 |
|
|
$ |
5,154,365 |
|
|
$ |
17,461,661 |
|
|
$ |
1,349,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
During the period presented, Blackstone also had one share outstanding of each of Series I and Series II preferred stock, with par value of each less than one cent. |
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(Dollars in Thousands, Except Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Shares of
Blackstone
Inc. (a) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2021 |
|
|
704,339,774 |
|
|
$ |
7 |
|
|
$ |
5,794,727 |
|
|
$ |
3,647,785 |
|
|
$ |
(19,626 |
) |
|
$ |
9,422,893 |
|
|
$ |
5,600,653 |
|
|
$ |
6,614,472 |
|
|
$ |
21,638,018 |
|
|
$ |
68,028 |
|
Transfer in Due to Consolidation of Fund Entities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,146,410 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,189,777 |
|
|
|
— |
|
|
|
1,189,777 |
|
|
|
(62,425 |
) |
|
|
1,061,516 |
|
|
|
2,188,868 |
|
|
|
56,700 |
|
Currency Translation Adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(55,174 |
) |
|
|
(55,174 |
) |
|
|
— |
|
|
|
(35,579 |
) |
|
|
(90,753 |
) |
|
|
(135,323 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
720,930 |
|
|
|
7,423 |
|
|
|
728,353 |
|
|
|
285,767 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,968,099 |
) |
|
|
— |
|
|
|
(2,968,099 |
) |
|
|
(905,773 |
) |
|
|
(2,370,205 |
) |
|
|
(6,244,077 |
) |
|
|
(64,051 |
) |
Transfer of Non-Controlling Interests in Consolidated Entities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,763 |
|
|
|
— |
|
|
|
3,763 |
|
|
|
(13,343 |
) |
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders |
|
|
— |
|
|
|
— |
|
|
|
13,091 |
|
|
|
— |
|
|
|
— |
|
|
|
13,091 |
|
|
|
— |
|
|
|
— |
|
|
|
13,091 |
|
|
|
— |
|
Equity-Based Compensation |
|
|
— |
|
|
|
— |
|
|
|
370,519 |
|
|
|
— |
|
|
|
— |
|
|
|
370,519 |
|
|
|
— |
|
|
|
245,174 |
|
|
|
615,693 |
|
|
|
— |
|
Net Delivery of Vested Blackstone Holdings Partnership Units and Shares of Common Stock |
|
|
5,203,342 |
|
|
|
— |
|
|
|
(69,791 |
) |
|
|
— |
|
|
|
— |
|
|
|
(69,791 |
) |
|
|
— |
|
|
|
— |
|
|
|
(69,791 |
) |
|
|
— |
|
Repurchase of Shares of Common Stock and Blackstone Holdings Partnership Units |
|
|
(3,804,545 |
) |
|
|
— |
|
|
|
(391,968 |
) |
|
|
— |
|
|
|
— |
|
|
|
(391,968 |
) |
|
|
— |
|
|
|
— |
|
|
|
(391,968 |
) |
|
|
— |
|
Change in Blackstone Inc.’s Ownership Interest |
|
|
— |
|
|
|
— |
|
|
|
28,846 |
|
|
|
— |
|
|
|
— |
|
|
|
28,846 |
|
|
|
— |
|
|
|
(28,846 |
) |
|
|
— |
|
|
|
— |
|
Conversion of Blackstone Holdings Partnership Units to Shares of Common Stock |
|
|
3,302,039 |
|
|
|
— |
|
|
|
45,582 |
|
|
|
— |
|
|
|
— |
|
|
|
45,582 |
|
|
|
— |
|
|
|
(45,582 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2022 |
|
|
709,040,610 |
|
|
$ |
7 |
|
|
$ |
5,791,006 |
|
|
$ |
1,869,463 |
|
|
$ |
(74,800 |
) |
|
$ |
7,585,676 |
|
|
$ |
5,357,148 |
|
|
$ |
5,448,373 |
|
|
$ |
18,391,197 |
|
|
$ |
1,344,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
During the period presented, Blackstone also had one share outstanding of each of Series I and Series II preferred stock, with par value of each less than one cent. |
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
$ |
2,335,130 |
|
|
$ |
2,245,568 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Net Realized Gains on Investments |
|
|
(2,171,161 |
) |
|
|
(5,869,897 |
) |
Changes in Unrealized Losses on Investments |
|
|
236,161 |
|
|
|
1,712,735 |
|
Non-Cash Performance Allocations |
|
|
708,021 |
|
|
|
2,946,255 |
|
Non-Cash Performance Allocations and Incentive Fee Compensation |
|
|
612,097 |
|
|
|
914,965 |
|
Equity-Based Compensation Expense |
|
|
797,762 |
|
|
|
636,454 |
|
Amortization of Intangibles |
|
|
31,073 |
|
|
|
52,288 |
|
Other Non-Cash Amounts Included in Net Income |
|
|
(691,415 |
) |
|
|
(923,678 |
) |
Cash Flows Due to Changes in Operating Assets and Liabilities |
|
|
|
|
|
|
|
|
Cash Acquired with Consolidation of Fund Entities |
|
|
— |
|
|
|
31,791 |
|
Cash Relinquished with Deconsolidation of Fund Entities |
|
|
(113,588 |
) |
|
|
— |
|
| |
|
|
(236,453 |
) |
|
|
(190,786 |
) |
| |
|
|
101,157 |
|
|
|
661,934 |
|
| |
|
|
(44,728 |
) |
|
|
(142,410 |
) |
Accrued Compensation and Benefits |
|
|
(510,514 |
) |
|
|
(1,562,779 |
) |
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
88,010 |
|
|
|
404,867 |
|
| |
|
|
(3,955 |
) |
|
|
93,669 |
|
| |
|
|
(2,437,975 |
) |
|
|
(3,783,564 |
) |
Cash Proceeds from Sale of Investments |
|
|
4,461,596 |
|
|
|
8,393,706 |
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities |
|
|
3,161,218 |
|
|
|
5,621,118 |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Purchase of Furniture, Equipment and Leasehold Improvements |
|
|
(192,904 |
) |
|
|
(186,783 |
) |
Net Cash Paid for Acquisitions, Net of Cash Acquired |
|
|
(5,420 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Investing Activities |
|
|
(198,324 |
) |
|
|
(186,783 |
) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Distributions to Non-Controlling Interest Holders in Consolidated Entities |
|
|
(795,554 |
) |
|
|
(969,606 |
) |
Contributions from Non-Controlling Interest Holders in Consolidated Entities |
|
|
591,547 |
|
|
|
989,963 |
|
Payments Under Tax Receivable Agreement |
|
|
(64,634 |
) |
|
|
(46,880 |
) |
Net Settlement of Vested Common Stock and Repurchase of Common Stock and Blackstone Holdings Partnership Units |
|
|
(374,401 |
) |
|
|
(461,759 |
) |
Proceeds from Loans Payable |
|
|
— |
|
|
|
2,036,264 |
|
See notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, |
| |
|
|
|
|
Financing Activities (Continued) |
|
|
|
|
|
|
|
|
Repayment and Repurchase of Loans Payable |
|
$ |
(469,460 |
) |
|
$ |
(250,101 |
) |
Dividends/Distributions to Stockholders and Unitholders |
|
|
(3,229,127 |
) |
|
|
(5,330,882 |
) |
|
|
|
|
|
|
|
|
|
Net Cash Used in Financing Activities |
|
|
(4,341,629 |
) |
|
|
(4,033,001 |
) |
|
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other |
|
|
(5,185 |
) |
|
|
(26,705 |
) |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other |
|
|
|
|
|
|
|
|
|
|
|
(1,383,920 |
) |
|
|
1,374,629 |
|
|
|
|
4,493,715 |
|
|
|
2,199,732 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,109,795 |
|
|
$ |
3,574,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flows Information |
|
|
|
|
|
|
|
|
|
|
$ |
292,525 |
|
|
$ |
221,155 |
|
|
|
|
|
|
|
|
|
|
Payments for Income Taxes |
|
$ |
460,531 |
|
|
$ |
604,137 |
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities |
|
|
|
|
|
|
|
|
Non-Cash Contributions from Non-Controlling Interest Holders |
|
$ |
18,566 |
|
|
$ |
14,410 |
|
|
|
|
|
|
|
|
|
|
Non-Cash Distributions to Non-Controlling Interest Holders |
|
$ |
(107,232 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
18,423 |
|
|
|
|
|
|
|
|
|
|
Transfer of Interests to Non-Controlling Interest Holders |
|
$ |
(3,072 |
) |
|
$ |
3,764 |
|
|
|
|
|
|
|
|
|
|
Change in Blackstone Inc.’s Ownership Interest |
|
$ |
(15,867 |
) |
|
$ |
28,846 |
|
|
|
|
|
|
|
|
|
|
Net Settlement of Vested Common Stock |
|
$ |
617,197 |
|
|
$ |
364,976 |
|
|
|
|
|
|
|
|
|
|
Conversion of Blackstone Holdings Units to Common Stock |
|
$ |
44,588 |
|
|
$ |
45,582 |
|
|
|
|
|
|
|
|
|
|
Acquisition of Ownership Interests from Non-Controlling Interest Holders |
|
|
|
|
|
|
|
|
|
|
$ |
(98,627 |
) |
|
$ |
(102,947 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
91,770 |
|
|
$ |
89,856 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,857 |
|
|
$ |
13,091 |
|
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other reported within the Condensed Consolidated
Sta
tements of Financial Condition:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
Cash and Cash Equivalents |
|
$ |
2,971,614 |
|
|
$ |
4,252,003 |
|
Cash Held by Blackstone Funds and Other |
|
|
138,181 |
|
|
|
241,712 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,109,795 |
|
|
$ |
4,493,715 |
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Blackstone Inc., together with its consolidated subsidiaries (“Blackstone” or the “Company”), is one of the world’s leading investment firms. Blackstone’s asset management business includes investment vehicles focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets and secondary funds, all on a global basis. “Blackstone Funds” refers to the funds and other vehicles that are managed by Blackstone. Blackstone’s business is organized into four segments: Real Estate, Private Equity, Credit & Insurance and Hedge Fund Solutions.
Blackstone Inc. was initially formed as The Blackstone Group L.P., a Delaware limited partnership, on March 12, 2007. Prior to its conversion (effective July 1, 2019) to a Delaware corporation, Blackstone Inc. was managed and operated by Blackstone Group Management L.L.C., which is wholly owned by Blackstone’s senior managing directors and controlled by one of Blackstone’s founders, Stephen A. Schwarzman (the “Founder”).
The activities of Blackstone are conducted through its holding partnerships: Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. (collectively, “Blackstone Holdings,” “Blackstone Holdings Partnerships” or the “Holding Partnerships”). Blackstone, through its wholly owned subsidiaries, is the sole general partner of each of the Holding Partnerships. Generally, holders of the limited partner interests in the Holding Partnerships may, four times each year, exchange their limited partnership interests (“Partnership Units”) for Blackstone common stock, on a
basis, exchanging one Partnership Unit from each of the Holding Partnerships for one share of Blackstone common stock.
2. Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements of Blackstone have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to
Form 10-Q.
The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in audited financial statements. Management believes it has made all necessary adjustments (consisting of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in Blackstone’s Annual Report on
Form 10-K
for the year ended December 31, 2022 filed with the Securities and Exchange Commission.
The condensed consolidated financial statements include the accounts of Blackstone, its wholly owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities and for which Blackstone is considered the primary beneficiary, and certain partnerships or similar entities which are not considered variable interest entities but in which the general partner is determined to have control.
All intercompany balances and transactions have been eliminated in consolidation.
Blackstone consolidates all entities that it controls through a majority voting interest or otherwise, including those Blackstone Funds in which the general partner has a controlling financial interest. Blackstone has a controlling financial interest in Blackstone Holdings because the limited partners do not have the right to dissolve the partnerships or have substantive
kick-out
rights or participating rights that would overcome the control held by Blackstone. Accordingly, Blackstone consolidates Blackstone Holdings and records
non-controlling
interests to reflect the economic interests of the limited partners of Blackstone Holdings.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
In addition, Blackstone consolidates all variable interest entities (“VIE”) for which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a 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 consolidation guidance requires an analysis to determine (a) whether an entity in which Blackstone holds a variable interest is a VIE and (b) whether Blackstone’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires the exercise of judgment.
Blackstone determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether Blackstone is the primary beneficiary, Blackstone evaluates its control rights as well as economic interests in the entity held either directly or indirectly by Blackstone. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that Blackstone is not the primary beneficiary, a quantitative analysis may also be performed. Investments and redemptions (either by Blackstone, affiliates of Blackstone or third parties) or amendments to the governing documents of the respective Blackstone Funds could affect an entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, Blackstone assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly.
Assets of consolidated VIEs that can only be used to settle obligations of the consolidated VIE and liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of Blackstone are presented in a separate section in the Condensed Consolidated Statements of Financial Condition.
Blackstone’s other disclosures regarding VIEs are discussed in Note 9. “Variable Interest Entities.”
Revenues primarily consist of management and advisory fees, incentive fees, investment income, interest and dividend revenue and other.
Management and advisory fees and incentive fees are accounted for as contracts with customers. Under the guidance for contracts with customers, an entity is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration 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. See Note 18. “Segment Reporting” for a disaggregated presentation of revenues from contracts with customers.
Management and Advisory Fees, Net
— Management and Advisory Fees, Net are comprised of management fees, including base management fees, transaction and other fees and advisory fees net of management fee reductions and offsets.
Blackstone earns base management fees from its customers, at a fixed percentage of a calculation base which is typically assets under management, net asset value, gross asset value, total assets, committed capital or invested capital. Blackstone identifies its customers on a fund by fund basis in accordance with the terms and circumstances of the individual fund. Generally, the customer is identified as the investors in its managed funds
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
and investment vehicles, but for certain widely held funds or vehicles, the fund or vehicle itself may be identified as the customer. These customer contracts require Blackstone to provide investment management services, which represents a performance obligation that Blackstone satisfies over time. Management fees are a form of variable consideration because the fees Blackstone is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.
Transaction, advisory and other fees are principally fees charged to the investors of funds indirectly through the managed funds and portfolio companies. The investment advisory agreements generally require that the investment adviser reduce the amount of management fees payable by the investors to Blackstone (“management fee reductions”) by an amount equal to a portion of the transaction and other fees paid to Blackstone by the portfolio companies. The amount of the reduction varies by fund, the type of fee paid by the portfolio company and the previously incurred expenses of the fund. These fees and associated management fee reductions are a component of the transaction price for Blackstone’s performance obligation to provide investment management services to the investors of funds and are recognized as changes to the transaction price in the period in which they are charged and the services are performed.
Management fee offsets are reductions to management fees payable by the investors of the Blackstone Funds, which are based on the amount such investors reimburse the Blackstone Funds or Blackstone primarily for placement fees. Providing investment management services requires Blackstone to arrange for services on behalf of its customers. In those situations where Blackstone is acting as an agent on behalf of the investors of funds, it presents the cost of services as net against management fee revenue. In all other situations, Blackstone is primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements. As a result, the cost of those services is presented as Compensation or General, Administrative and Other expense, as appropriate, with any reimbursement from the investors of the funds recorded as Management and Advisory Fees, Net. In cases where the investors of the funds are determined to be the customer in an arrangement, placement fees may be capitalized as a cost to acquire a customer contract. Capitalized placement fees are amortized over the life of the customer contract, are recorded within Other Assets in the Consolidated Statements of Financial Condition and amortization is recorded within General, Administrative and Other within the Consolidated Statements of Operations.
Accrued but unpaid Management and Advisory Fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts Receivable or Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.
— Contractual fees earned based on the performance of Blackstone vehicles (“Incentive Fees”) are a form of variable consideration in Blackstone’s contracts with customers to provide investment management services. Incentive Fees are earned based on performance of the vehicle during the period, subject to the achievement of minimum return levels, or high water marks, in accordance with the respective terms set out in each vehicle’s governing agreements. Incentive Fees will not be recognized as revenue until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Incentive Fees are typically recognized as revenue when realized at the end of the measurement period. Once realized, such fees are not subject to clawback or reversal. Accrued but unpaid Incentive Fees charged directly to investors in Blackstone vehicles as of the reporting date are recorded within Due from Affiliates in the Condensed Consolidated Statements of Financial Condition.
— Investment Income (Loss) represents the unrealized and realized gains and losses on Blackstone’s Performance Allocations and Principal Investments.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
In carry fund structures and certain open-ended structures, Blackstone, through its subsidiaries, invests alongside its limited partners in a partnership and is entitled to its
pro-rata
share of the results of the fund vehicle (a
“pro-rata
allocation”). In addition to a
pro-rata
allocation, and assuming certain investment returns are achieved, Blackstone is entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”).
Performance Allocations in carry fund structures are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. Performance Allocations in open-ended structures are based on vehicle performance over a period of time, subject to a high water mark and preferred return to investors. At the end of each reporting period, Blackstone calculates the balance of accrued Performance Allocations (“Accrued Performance Allocations”) that would be due to Blackstone for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner or (b) negative performance that would cause the amount due to Blackstone to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. Blackstone ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. Blackstone is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. Accrued Performance Allocations as of the reporting date are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.
Performance Allocations in carry fund structures are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Performance Allocations in carry fund structures are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results. As such, the accrual for potential repayment of previously received Performance Allocations, which is a component of Due to Affiliates, represents all amounts previously distributed to Blackstone Holdings and
non-controlling
interest holders that would need to be repaid to the Blackstone carry funds if the Blackstone carry funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain funds, including certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. Performance Allocations in open-ended structures are realized based on the stated time period in the agreements and are generally not subject to clawback once paid.
Principal Investments include the unrealized and realized gains and losses on Blackstone’s principal investments, including its investments in Blackstone Funds that are not consolidated and receive
pro-rata
allocations, its equity method investments, and other principal investments. Income (Loss) on Principal Investments is realized when Blackstone redeems all or a portion of its investment or when Blackstone receives cash income, such as dividends or distributions. Unrealized Income (Loss) on Principal Investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.
Interest and Dividend Revenue
— Interest and Dividend Revenue comprises primarily interest and dividend income earned on principal investments not accounted for under the equity method held by Blackstone.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
— Other Revenue consists of miscellaneous income and foreign exchange gains and losses arising on transactions denominated in currencies other than U.S. dollars.
Fair Value of Financial Instruments
GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:
| |
|
|
Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. Blackstone does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price. |
| |
|
|
Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within consolidated collateralized loan obligations (“CLO”) vehicles, government and agency securities, less liquid and restricted equity securities, and certain derivatives where the fair value is based on observable inputs. Notes issued by consolidated CLO vehicles are classified within Level II of the fair value hierarchy. |
| |
|
|
Level III – Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and non-investment grade residual interests in securitizations, investments in non-consolidated CLOs and certain derivatives where the fair value is based on unobservable inputs. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Blackstone’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
Level II Valuation Techniques
Financial instruments classified within Level II of the fair value hierarchy comprise debt instruments, debt securities sold, not yet purchased and certain equity securities and derivative instruments valued using observable inputs are also classified as Level II.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:
| |
|
|
Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants including those provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction. |
| |
|
|
Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads. |
| |
|
|
Notes issued by consolidated CLO vehicles are measured based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services. |
Level III Valuation Techniques
In the absence of observable market prices, Blackstone values its investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for
non-performance
and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, real estate properties, investments in
non-consolidated
CLO vehicles, certain funds of hedge funds and credit-focused investments.
– The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures and considerations. The methods used to estimate the fair value of real estate investments include the discounted cash flow method, where value is calculated by discounting the estimated cash flows and the estimated terminal value of the subject investment by the assumed buyer’s weighted average cost of capital. A terminal value is derived by reference to an exit multiple, such as for estimates of earnings before interest, taxes, depreciation and amortization (“EBITDA”), or a capitalization rate, such as for estimates of net operating income (“NOI”). Valuations may also be derived by the performance multiple or market approach, by reference to observable valuation measures for comparable companies or assets (for example, dividing NOI by a relevant capitalization rate observed for comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables.
Private Equity Investments
– The fair values of private equity investments are determined by reference to projected net earnings, EBITDA, the discounted cash flow method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received. Where a discounted cash flow method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples. Valuations may also be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company, such as EBITDA, by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Credit-Focused Investments
– The fair values of credit-focused investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. For credit-focused investments that are not publicly traded or whose market prices are not readily available, Blackstone may utilize other valuation techniques, including the discounted cash flow method or a market approach. The discounted cash flow method projects the expected cash flows of the debt instrument based on contractual terms, and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly traded debt instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.
The market approach is generally used to determine the enterprise value of the issuer of a credit investment, and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.
Investments, at Fair Value
Generally, the Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide,
, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. Such consolidated funds’ investments are reflected in Investments on the Condensed Consolidated Statements of Financial Condition at fair value, with unrealized gains and losses resulting from changes in fair value reflected as a component of Net Gains (Losses) from Fund Investment Activities in the Condensed Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, at current market conditions (i.e., the exit price).
Blackstone’s principal investments are presented at fair value with unrealized appreciation or depreciation and realized gains and losses recognized in the Condensed Consolidated Statements of Operations within Investment Income (Loss).
For certain instruments, Blackstone has elected the fair value option. Such election is irrevocable and is applied on an investment by investment basis at initial recognition or other eligible election dates. Blackstone has applied the fair value option for certain loans and receivables, unfunded loan commitments and certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses recorded in net income. The methodology for measuring the fair value of such investments is consistent with the methodology applied to private equity, real estate, credit-focused and funds of hedge funds investments. Changes in the fair value of such instruments are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations. Interest income on interest bearing loans and receivables and debt securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest and Dividend Revenue.
Blackstone has elected the fair value option for the assets of consolidated CLO vehicles. As permitted under GAAP, Blackstone measures notes issued by consolidated CLO vehicles as (a) the sum of the fair value of the consolidated CLO assets and the carrying value of any
non-financial
assets held temporarily, less (b) the sum of the fair value of any beneficial interests retained by Blackstone (other than those that represent compensation for services) and Blackstone’s carrying value of any beneficial interests that represent compensation for services. As a result of this measurement alternative, there is no attribution of amounts to
Non-Controlling
Interests for consolidated CLO vehicles. Assets of the consolidated CLOs are presented within Investments within the Condensed Consolidated Statements of Financial Condition and notes payable within Loans Payable for the amounts due to unaffiliated third parties. Changes in the fair value of consolidated CLO assets and liabilities and related interest, dividend and other income are presented within Net Gains from Fund Investment Activities. Expenses of consolidated CLO vehicles are presented in Fund Expenses.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Blackstone has elected the fair value option for certain proprietary investments that would otherwise have been accounted for using the equity method of accounting. The fair value of such investments is based on quoted prices in an active market or using the discounted cash flow method. Changes in fair value are recognized in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.
Further disclosure on instruments for which the fair value option has been elected is presented in Note 7. “Fair Value Option.”
Blackstone may elect to measure certain proprietary investments in equity securities without readily determinable fair values under the measurement alternative, which reflects cost less impairment, with adjustments in value resulting from observable price changes arising from orderly transactions of the same or a similar security from the same issuer. If the measurement alternative election is not made, the equity security is measured at fair value. The measurement alternative election is made on an instrument by instrument basis. The election is reassessed each reporting period to determine whether investments under the measurement alternative have readily determinable fair values, in which case they would no longer be eligible for this election.
The investments of consolidated Blackstone Funds in funds of hedge funds (“Investee Funds”) are valued at net asset value (“NAV”) per share of the Investee Fund. In limited circumstances, Blackstone may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, Blackstone will estimate the fair value in good faith and in a manner that it reasonably chooses, in accordance with the requirements of GAAP.
Certain investments of Blackstone and of the consolidated Blackstone funds of hedge funds and credit-focused funds measure their investments in underlying funds at fair value using NAV per share without adjustment. The terms of the investee’s investment generally provide for minimum holding periods or
lock-ups,
the institution of gates on redemptions or the suspension of redemptions or an ability to side-pocket investments, at the discretion of the investee’s fund manager, and as a result, investments may not be redeemable at, or within three months of, the reporting date. A side-pocket is used by hedge funds and funds of hedge funds to separate investments that may lack a readily ascertainable value, are illiquid or are subject to liquidity restriction. Redemptions are generally not permitted until the investments within a side-pocket are liquidated or it is deemed that the conditions existing at the time that required the investment to be included in the side-pocket no longer exist. As the timing of either of these events is uncertain, the timing at which Blackstone may redeem an investment held in a side-pocket cannot be estimated. Further disclosure on instruments for which fair value is measured using NAV per share is presented in Note 5. “Net Asset Value as Fair Value.”
Security and loan transactions are recorded on a trade date basis.
Equity Method Investments
Investments in which Blackstone is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. Blackstone has significant influence over all Blackstone Funds in which it invests but does not consolidate. Therefore, its investments in such Blackstone Funds, which generally include both a proportionate and disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), are accounted for under the equity method. Under the equity method of accounting, Blackstone’s share of earnings (losses) from equity method investments is included in Investment Income (Loss) in the Condensed Consolidated Statements of Operations.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
In cases where Blackstone’s equity method investments provide for a disproportionate allocation of the profits and losses (as is the case with carry funds that include a Performance Allocation), Blackstone’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period, Blackstone calculates the Accrued Performance Allocations that would be due to Blackstone for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as Accrued Performance Allocations to reflect either (a) positive performance resulting in an increase in the Accrued Performance Allocation to the general partner, or (b) negative performance that would cause the amount due to Blackstone to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the Accrued Performance Allocation to the general partner. In each scenario, it is necessary to calculate the Accrued Performance Allocation on cumulative results compared to the Accrued Performance Allocation recorded to date and make the required positive or negative adjustments. Blackstone ceases to record negative Performance Allocations once previously Accrued Performance Allocations for such fund have been fully reversed. Blackstone is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative Performance Allocations over the life of a fund. The carrying amounts of equity method investments are reflected in Investments in the Condensed Consolidated Statements of Financial Condition.
Strategic Partners’ results presented in Blackstone’s condensed consolidated financial statements are reported on a three month lag from Strategic Partners’ fund financial statements, which report the performance of underlying investments generally on a same quarter basis, if available. Therefore, Strategic Partners’ results presented herein do not reflect the impact of economic and market activity in the current quarter. Current quarter market activity of Strategic Partners’ underlying investments is expected to affect Blackstone’s reported results in upcoming periods.
Compensation and Benefits
Compensation and Benefits
—
— Compensation consists of (a) salary and bonus, and benefits paid and payable to employees and senior managing directors and (b) equity-based compensation associated with the grants of equity-based awards to employees and senior managing directors. Compensation cost relating to the issuance of equity-based awards to senior managing directors and employees is measured at fair value at the grant date, and expensed over the vesting period on a straight-line basis, taking into consideration expected forfeitures, except in the case of (a) equity-based awards that do not require future service, which are expensed immediately, and (b) certain awards to recipients that meet criteria making them eligible for retirement (allowing such recipient to keep a percentage of those awards upon departure from Blackstone after becoming eligible for retirement), for which the expense for the portion of the award that would be retained in the event of retirement is either expensed immediately or amortized to the retirement date. Cash settled equity-based awards and awards settled in a variable number of shares are classified as liabilities and are remeasured at the end of each reporting period.
Compensation and Benefits
— Incentive Fee Compensation
Incentive Fee Compensation consists of compensation paid based on Incentive Fees.
Compensation and Benefits
— Performance Allocations Compensation
Performance Allocation Compensation consists of compensation paid based on Performance Allocations (which may be distributed in cash or
in-kind).
Such compensation expense is subject to both positive and negative adjustments. Performance Allocations Compensation is generally based on the performance of individual investments held by a fund rather than on a fund by fund basis. These amounts may also include allocations of investment income from Blackstone’s principal investments, to senior managing directors and employees participating in certain profit sharing initiatives.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Non-Controlling
Interests in Consolidated Entities
Non-Controlling
Interests in Consolidated Entities represent the component of Equity in general partner entities and consolidated Blackstone Funds held by third party investors and employees. The percentage interests in consolidated Blackstone Funds held by third parties and employees is adjusted for general partner allocations and by subscriptions and redemptions in funds of hedge funds and certain credit-focused funds which occur during the reporting period. Income (Loss) and other comprehensive income, if applicable, arising from the respective entities is allocated to
non-controlling
interests in consolidated entities based on the relative ownership interests of third party investors and employees after considering any contractual arrangements that govern the allocation of income (loss) such as fees allocable to Blackstone Inc.
Redeemable
Non-Controlling
Interests in Consolidated Entities
Investors in certain consolidated vehicles may be granted redemption rights that allow for quarterly or monthly redemption, as outlined in the relevant governing documents. Such redemption rights may be subject to certain limitations, including limits on the aggregate amount of interests that may be redeemed in a given period, may only allow for redemption following the expiration of a specified period of time, or may be withdrawn subject to a redemption fee during the period when capital may not be withdrawn. As a result, amounts relating to third party interests in such consolidated vehicles are presented as Redeemable
Non-Controlling
Interests in Consolidated Entities within the Condensed Consolidated Statements of Financial Condition. When redeemable amounts become legally payable to investors, they are classified as a liability and included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition. For all consolidated vehicles in which redemption rights have not been granted,
non-controlling
interests are presented within Equity in the Condensed Consolidated Statements of Financial Condition as
Non-Controlling
Interests in Consolidated Entities.
Non-Controlling
Interests in Blackstone Holdings
Non-Controlling
Interests in Blackstone Holdings represent the component of Equity in the consolidated Blackstone Holdings Partnerships held by Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships.
Certain costs and expenses are borne directly by the Holdings Partnerships. Income (Loss), excluding those costs directly borne by and attributable to the Holdings Partnerships, is attributable to
Non-Controlling
Interests in Blackstone Holdings. This residual attribution is based on the year to date average percentage of Blackstone Holdings Partnership Units and unvested participating Holdings Partnership Units held by Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. Unvested participating Holdings Partnership Units are excluded from the attribution in periods of loss as they are not contractually obligated to share in losses of the Holdings Partnerships.
Provision of Income Taxes
Income taxes are provided for using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities, resulting in all pretax amounts being appropriately tax effected in the period, irrespective of which tax return year items will be reflected. Blackstone reports interest expense and tax penalties related to income tax matters in provision for income taxes.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities. These temporary differences result in taxable or deductible amounts in future years and are measured using the tax rates and laws that will be in effect when such differences are expected to reverse. Valuation allowances are established to reduce the deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets are separately stated, and deferred tax liabilities are included in Accounts Payable, Accrued Expenses, and Other Liabilities in the condensed consolidated financial statements.
Unrecognized Tax Benefits
Blackstone recognizes tax positions in the condensed consolidated financial statements when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in the return and amounts recognized in the condensed consolidated financial statements.
Net Income (Loss) Per Share of Common Stock
Basic Income (Loss) Per Share of Common Stock is calculated by dividing Net Income (Loss) Attributable to Blackstone Inc. by the weighted-average shares of common stock, unvested participating shares of common stock outstanding for the period and vested deferred restricted shares of common stock that have been earned for which issuance of the related shares of common stock is deferred until future periods. Diluted Income (Loss) Per Share of Common Stock reflects the impact of all dilutive securities. Unvested participating shares of common stock are excluded from the computation in periods of loss as they are not contractually obligated to share in losses.
Blackstone applies the treasury stock method to determine the dilutive weighted-average common shares outstanding for certain equity-based compensation awards. Blackstone applies the
“if-converted”
method to the Blackstone Holdings Partnership Units to determine the dilutive impact, if any, of the exchange right included in the Blackstone Holdings Partnership Units. Blackstone applies the contingently issuable share model to contracts that may require the issuance of shares.
Reverse Repurchase and Repurchase Agreements
Securities purchased under agreements to resell (“reverse repurchase agreements”) and securities sold under agreements to repurchase (“repurchase agreements”), comprised primarily of U.S. and
non-U.S.
government and agency securities, asset-backed securities and corporate debt, represent collateralized financing transactions. Such transactions are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition at their contractual amounts and include accrued interest. The carrying value of reverse repurchase and repurchase agreements approximates fair value.
Blackstone manages credit exposure arising from reverse repurchase agreements and repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide Blackstone, in the event of a counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.
Blackstone takes possession of securities purchased under reverse repurchase agreements and is permitted to repledge, deliver or otherwise use such securities. Blackstone also pledges its financial instruments to counterparties to collateralize repurchase agreements. Financial instruments pledged that can be repledged, delivered or otherwise used by the counterparty are recorded in Investments in the Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to repurchase agreements are discussed in Note 10. “Repurchase Agreements.”
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Blackstone does not offset assets and liabilities relating to reverse repurchase agreements and repurchase agreements in its Condensed Consolidated Statements of Financial Condition. Additional disclosures relating to offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities.”
Securities Sold, Not Yet Purchased
Securities Sold, Not Yet Purchased consist of equity and debt securities that Blackstone has borrowed and sold. Blackstone is required to “cover” its short sale in the future by purchasing the security at prevailing market prices and delivering it to the counterparty from which it borrowed the security. Blackstone is exposed to loss in the event that the price at which a security may have to be purchased to cover a short sale exceeds the price at which the borrowed security was sold short.
Securities Sold, Not Yet Purchased are recorded at fair value within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.
Blackstone recognizes all derivatives as assets or liabilities on its Condensed Consolidated Statements of Financial Condition at fair value. On the date Blackstone enters into a derivative contract, it designates and documents each derivative contract as one of the following: (a) a hedge of a recognized asset or liability (“fair value hedge”), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), (c) a hedge of a net investment in a foreign operation, or (d) a derivative instrument not designated as a hedging instrument (“freestanding derivative”).
For freestanding derivative contracts, Blackstone presents changes in fair value in current period earnings. Changes in the fair value of derivative instruments held by consolidated Blackstone Funds are reflected in Net Gains from Fund Investment Activities or, where derivative instruments are held by Blackstone, within Investment Income (Loss) in the Condensed Consolidated Statements of Operations. The fair value of freestanding derivative assets of the consolidated Blackstone Funds are recorded within Investments, the fair value of freestanding derivative assets that are not part of the consolidated Blackstone Funds are recorded within Other Assets and the fair value of freestanding derivative liabilities are recorded within Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition.
Blackstone has elected to not offset derivative assets and liabilities or financial assets in its Condensed Consolidated Statements of Financial Condition, including cash, that may be received or paid as part of collateral arrangements, even when an enforceable master netting agreement is in place that provides Blackstone, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.
Blackstone’s other disclosures regarding derivative financial instruments are discussed in Note 6. “Derivative Financial Instruments.”
Blackstone’s disclosures regarding offsetting are discussed in Note 11. “Offsetting of Assets and Liabilities.”
Blackstone considers its Founder, senior managing directors, employees, the Blackstone Funds and the Portfolio Companies to be affiliates.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Dividends are reflected in the condensed consolidated financial statements when declared.
Intangible Assets, Net consists of the following:
|
|
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|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
Finite-Lived Intangible Assets/Contractual Rights |
|
$ |
1,769,372 |
|
|
$ |
1,745,376 |
|
| |
|
|
(1,559,162 |
) |
|
|
(1,528,089 |
) |
|
|
|
|
|
|
|
|
|
| |
|
$ |
210,210 |
|
|
$ |
217,287 |
|
|
|
|
|
|
|
|
|
|
Amortization expense associated with Blackstone’s intangible assets was $9.0 million and $31.1 million for the three and nine month periods ended September 30, 2023, respectively, and $14.9 million and $52.3 million for the three and nine month periods ended September 30, 2022, respectively.
Amortization of Intangible Assets held at September 30, 2023 is expected to be $40.1 million, $35.9 million, $35.9 million, $35.7 million, and $34.6 million for each of the years ending December 31, 2023, 2024, 2025, 2026, and 2027, respectively. Blackstone’s Intangible Assets as of September 30, 2023 are expected to amortize over a weighted-average period of 6.4 years.
Investments consist of the following:
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|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
Investments of Consolidated Blackstone Funds |
|
$ |
5,224,104 |
|
|
$ |
5,136,966 |
|
Equity Method Investments |
|
|
|
|
|
|
|
|
| |
|
|
5,588,222 |
|
|
|
5,530,419 |
|
Accrued Performance Allocations |
|
|
11,606,901 |
|
|
|
12,360,684 |
|
Corporate Treasury Investments |
|
|
763,515 |
|
|
|
1,053,540 |
|
| |
|
|
4,157,115 |
|
|
|
3,471,642 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,339,857 |
|
|
$ |
27,553,251 |
|
|
|
|
|
|
|
|
|
|
Blackstone’s share of Investments of Consolidated Blackstone Funds totaled $266.3 million and $393.9 million at September 30, 2023 and December 31, 2022, respectively.
Where appropriate, the accounting for Blackstone’s investments incorporates the changes in fair value of those investments as determined under GAAP. The significant inputs and assumptions required to determine the change in fair value of the investments of Consolidated Blackstone Funds, Corporate Treasury Investments and Other Investments are discussed in more detail in Note 8. “Fair Value Measurements of Financial Instruments.”
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Investments of Consolidated Blackstone Funds
The following table presents the Realized and Net Change in Unrealized Gains (Losses) on investments held by the consolidated Blackstone Funds and a reconciliation to Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities in the Condensed Consolidated Statements of Operations:
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|
|
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| |
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|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
$ |
(2,624 |
) |
|
$ |
17,083 |
|
|
$ |
18,184 |
|
|
$ |
128,952 |
|
Net Change in Unrealized Gains (Losses) |
|
|
(19,145 |
) |
|
|
(30,603 |
) |
|
|
21,805 |
|
|
|
(216,198 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and Net Change in Unrealized Gains (Losses) from Consolidated Blackstone Funds |
|
|
(21,769 |
) |
|
|
(13,520 |
) |
|
|
39,989 |
|
|
|
(87,246 |
) |
Interest and Dividend Revenue and Foreign Exchange Gains Attributable to Consolidated Blackstone Funds |
|
|
(27,309 |
) |
|
|
14,698 |
|
|
|
62,497 |
|
|
|
34,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities |
|
$ |
(49,078 |
) |
|
$ |
1,178 |
|
|
$ |
102,486 |
|
|
$ |
(52,272 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Method Investments
Blackstone’s equity method investments include Partnership Investments, which represent the
pro-rata
investments, and any associated Accrued Performance Allocations, in Blackstone Funds, excluding any equity method investments for which the fair value option has been elected. Blackstone evaluates each of its equity method investments, excluding Accrued Performance Allocations, to determine if any were significant as defined by guidance from the United States Securities and Exchange Commission. As of and for the nine months ended September 30, 2023 and 2022, no individual equity method investment held by Blackstone met the significance criteria.
Blackstone recognized net gains (losses) related to its Partnership Investments accounted for under the equity method of $48.1 million and $19.8 million for the three months ended September 30, 2023 and 2022, respectively. Blackstone recognized net gains (losses) related to its equity method investments of $208.6 million and $217.4 million for the nine months ended September 30, 2023 and 2022, respectively.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Accrued Performance Allocations
Accrued Performance Allocations to Blackstone were as follows:
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| |
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|
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|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Accrued Performance Allocations, December 31, 2022 |
|
$ |
5,334,117 |
|
|
$ |
6,037,575 |
|
|
$ |
569,898 |
|
|
$ |
419,094 |
|
|
$ |
12,360,684 |
|
Performance Allocations as a Result of Changes in Fund Fair Values |
|
|
(771,235 |
) |
|
|
1,441,800 |
|
|
|
169,754 |
|
|
|
85,859 |
|
|
|
926,178 |
|
|
|
|
(512 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(512 |
) |
|
|
|
(686,861 |
) |
|
|
(701,561 |
) |
|
|
(204,937 |
) |
|
|
(86,090 |
) |
|
|
(1,679,449 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Performance Allocations, September 30, 2023 |
|
$ |
3,875,509 |
|
|
$ |
6,777,814 |
|
|
$ |
534,715 |
|
|
$ |
418,863 |
|
|
$ |
11,606,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Treasury Investments
The portion of corporate treasury investments included in Investments represents Blackstone’s investments into primarily fixed income securities, mutual fund interests, and other fund interests. These strategies are managed by a combination of Blackstone personnel and third party advisors. The following table presents the Realized and Net Change in Unrealized Gains (Losses) on these investments:
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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| |
|
|
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|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
$ |
(2,283 |
) |
|
$ |
(2,857 |
) |
|
$ |
(2,206 |
) |
|
$ |
(23,474 |
) |
Net Change in Unrealized Gains (Losses) |
|
|
(7,425 |
) |
|
|
(16,196 |
) |
|
|
1,161 |
|
|
|
(63,779 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(9,708 |
) |
|
$ |
(19,053 |
) |
|
$ |
(1,045 |
) |
|
$ |
(87,253 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Other Investments consist of equity method investments where Blackstone has elected the fair value option and other proprietary investment securities held by Blackstone, including equity securities carried at fair value, equity investments without readily determinable fair values, and senior secured and subordinated notes in
non-consolidated
CLO vehicles. Equity securities carried at fair value include the ownership of common stock of Corebridge Financial, Inc., formerly known as American International Group, Inc.’s Life and Retirement business (“Corebridge”). Such common stock is subject to certain phased
lock-up
restrictions that expire over time through five years after the initial public offering (“IPO”) of Corebridge. Equity investments without a readily determinable fair value had a carrying value of $380.2 million as of September 30, 2023. In the period of acquisition and upon remeasurement in connection with an observable transaction, such investments are reported at fair value. See Note 8. “Fair Value Measurements of Financial Instruments” for additional detail. The following table presents Blackstone’s Realized and Net Change in Unrealized Gains (Losses) in Other Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
$ |
2,305 |
|
|
$ |
83,269 |
|
|
$ |
(13,880 |
) |
|
$ |
200,610 |
|
Net Change in Unrealized Gains (Losses) |
|
|
149,851 |
|
|
|
(970,654 |
) |
|
|
(5,334 |
) |
|
|
(1,121,924 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
152,156 |
|
|
$ |
(887,385 |
) |
|
$ |
(19,214 |
) |
|
$ |
(921,314 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Net Asset Value as Fair Value
A summary of fair value by strategy type and ability to redeem such investments as of September 30, 2023 is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
447,923 |
|
|
|
(b) |
|
|
|
(b) |
|
|
|
|
115,850 |
|
|
|
(c) |
|
|
|
(c) |
|
|
|
|
5,758 |
|
|
|
(d) |
|
|
|
(d) |
|
|
|
|
1,038 |
|
|
|
(e) |
|
|
|
(e) |
|
|
|
|
16 |
|
|
|
(f) |
|
|
|
(f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
570,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
As of September 30, 2023, Blackstone had no unfunded commitments. |
(b) |
The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 39% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. Investments representing 61% of the fair value of the investments in this category are redeemable as of the reporting date. |
(c) |
The Real Estate category includes investments in funds that primarily invest in real estate assets. All investments in this category are redeemable as of the reporting date. |
(d) |
The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. All investments in this category may not be redeemed at, or within three months of, the reporting date. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
(e) |
The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. All investments in this category may not be redeemed at, or within three months of, the reporting date. |
(f) |
Diversified Instruments include investments in funds that invest across multiple strategies. All investments in this category may not be redeemed at, or within three months of, the reporting date. |
6. Derivative Financial Instruments
Blackstone and the consolidated Blackstone Funds enter into derivative contracts in the normal course of business to achieve certain risk management objectives and for general investment and business purposes. Blackstone may enter into derivative contracts in order to hedge its interest rate risk exposure against the effects of interest rate changes. Additionally, Blackstone may also enter into derivative contracts in order to hedge its foreign currency risk exposure against the effects of a portion of its
non-U.S.
dollar denominated currency net investments. As a result of the use of derivative contracts, Blackstone and the consolidated Blackstone Funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, Blackstone and the consolidated Blackstone Funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.
Freestanding derivatives are instruments that Blackstone and certain of the consolidated Blackstone Funds have entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, foreign exchange contracts, equity swaps, options, futures and other derivative contracts.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The table below summarizes the aggregate notional amount and fair value of the derivative financial instruments. The notional amount represents the absolute value amount of all outstanding derivative contracts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
768,990 |
|
|
$ |
213,737 |
|
|
$ |
604,200 |
|
|
$ |
119,274 |
|
|
$ |
789,540 |
|
|
$ |
188,043 |
|
|
$ |
621,700 |
|
|
$ |
83,331 |
|
Foreign Currency Contracts |
|
|
140,256 |
|
|
|
3,328 |
|
|
|
427,596 |
|
|
|
10,042 |
|
|
|
541,238 |
|
|
|
8,040 |
|
|
|
190,774 |
|
|
|
3,542 |
|
| |
|
|
3,108 |
|
|
|
589 |
|
|
|
3,748 |
|
|
|
616 |
|
|
|
2,007 |
|
|
|
384 |
|
|
|
8,768 |
|
|
|
1,309 |
|
| |
|
|
31,916 |
|
|
|
4,349 |
|
|
|
— |
|
|
|
— |
|
|
|
42,233 |
|
|
|
6,210 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
— |
|
|
|
— |
|
|
|
1,155,320 |
|
|
|
260,167 |
|
|
|
— |
|
|
|
— |
|
|
|
996,592 |
|
|
|
48,581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
944,270 |
|
|
|
222,003 |
|
|
|
2,190,864 |
|
|
|
390,099 |
|
|
|
1,375,018 |
|
|
|
202,677 |
|
|
|
1,817,834 |
|
|
|
136,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
819,679 |
|
|
|
73,120 |
|
|
|
— |
|
|
|
— |
|
|
|
931,752 |
|
|
|
74,926 |
|
|
|
— |
|
|
|
— |
|
Foreign Currency Contracts |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,133 |
|
|
|
284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
819,679 |
|
|
|
73,120 |
|
|
|
— |
|
|
|
— |
|
|
|
931,752 |
|
|
|
74,926 |
|
|
|
5,133 |
|
|
|
284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,763,949 |
|
|
$ |
295,123 |
|
|
$ |
2,190,864 |
|
|
$ |
390,099 |
|
|
$ |
2,306,770 |
|
|
$ |
277,603 |
|
|
$ |
1,822,967 |
|
|
$ |
137,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes the impact to the Condensed Consolidated Statements of Operations from derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
2,213 |
|
|
$ |
7,740 |
|
|
$ |
2,360 |
|
|
$ |
13,018 |
|
Foreign Currency Contracts |
|
|
(3,072 |
) |
|
|
(2,206 |
) |
|
|
6,951 |
|
|
|
(6,981 |
) |
| |
|
|
— |
|
|
|
(115 |
) |
|
|
(413 |
) |
|
|
13 |
|
| |
|
|
3,436 |
|
|
|
— |
|
|
|
14,461 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,577 |
|
|
|
5,419 |
|
|
|
23,359 |
|
|
|
6,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Change in Unrealized Gains (Losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
(3,148 |
) |
|
|
113,623 |
|
|
|
(371 |
) |
|
|
221,300 |
|
Foreign Currency Contracts |
|
|
(3,375 |
) |
|
|
(22,626 |
) |
|
|
(11,213 |
) |
|
|
(25,232 |
) |
| |
|
|
2 |
|
|
|
131 |
|
|
|
366 |
|
|
|
(289 |
) |
| |
|
|
884 |
|
|
|
526 |
|
|
|
(1,293 |
) |
|
|
526 |
|
| |
|
|
(38,710 |
) |
|
|
— |
|
|
|
(211,586 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(44,347 |
) |
|
|
91,654 |
|
|
|
(224,097 |
) |
|
|
196,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(41,770 |
) |
|
$ |
97,073 |
|
|
$ |
(200,738 |
) |
|
$ |
202,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
As of September 30, 2023 and December 31, 2022, Blackstone had not designated any derivatives as fair value, cash flow or net investment hedges.
The following table summarizes the financial instruments for which the fair value option has been elected:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
79,339 |
|
|
$ |
315,039 |
|
Equity and Preferred Securities |
|
|
2,530,474 |
|
|
|
1,868,192 |
|
|
|
|
63,776 |
|
|
|
24,784 |
|
Assets of Consolidated CLO Vehicles |
|
|
|
|
|
|
|
|
|
|
|
189,111 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,862,700 |
|
|
$ |
2,208,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
225,396 |
|
|
$ |
— |
|
Corporate Treasury Commitments |
|
|
1,558 |
|
|
|
8,144 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
226,954 |
|
|
$ |
8,144 |
|
|
|
|
|
|
|
|
|
|
The following tables present the Realized and Net Change in Unrealized Gains (Losses) on financial instruments on which the fair value option was elected:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30, |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(520 |
) |
|
$ |
406 |
|
|
$ |
(3,246 |
) |
|
$ |
1,050 |
|
Equity and Preferred Securities |
|
|
406 |
|
|
|
11,538 |
|
|
|
3,719 |
|
|
|
(45,301 |
) |
|
|
|
— |
|
|
|
(904 |
) |
|
|
(5,056 |
) |
|
|
(4,418 |
) |
Assets of Consolidated CLO Vehicles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47 |
|
|
|
703 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(67 |
) |
|
$ |
11,743 |
|
|
$ |
(4,583 |
) |
|
$ |
(48,669 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
(907 |
) |
|
$ |
— |
|
|
$ |
— |
|
Corporate Treasury Commitments |
|
|
— |
|
|
|
2,213 |
|
|
|
— |
|
|
|
(1,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
1,306 |
|
|
$ |
— |
|
|
$ |
(1,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(6,515 |
) |
|
$ |
4,330 |
|
|
$ |
(6,663 |
) |
|
$ |
(4,309 |
) |
Equity and Preferred Securities |
|
|
(776 |
) |
|
|
(6,763 |
) |
|
|
16,020 |
|
|
|
(58,239 |
) |
|
|
|
— |
|
|
|
(3,611 |
) |
|
|
(9,423 |
) |
|
|
(32,627 |
) |
Assets of Consolidated CLO Vehicles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,152 |
) |
|
|
5,335 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(13,443 |
) |
|
$ |
(709 |
) |
|
$ |
(66 |
) |
|
$ |
(95,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
16 |
|
|
$ |
— |
|
|
$ |
— |
|
Corporate Treasury Commitments |
|
|
— |
|
|
|
6,586 |
|
|
|
— |
|
|
|
(9,236 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
6,602 |
|
|
$ |
— |
|
|
$ |
(9,236 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents information for those financial instruments for which the fair value option was elected:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(466 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(2,861 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
(54,292 |
) |
|
|
— |
|
|
|
— |
|
|
|
(48,670 |
) |
|
|
— |
|
|
|
— |
|
Assets of Consolidated CLO Vehicles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,303 |
) |
|
|
1,338 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(62,061 |
) |
|
$ |
1,338 |
|
|
$ |
— |
|
|
$ |
(51,531 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Assets are classified as past due if contractual payments are more than 90 days past due. |
As of September 30, 2023 and December 31, 2022, no Loans and Receivable
s for
which the fair value option was elected were past due or in
non-accrual
status. As of September 30, 2023, there were two Corporate Loans included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected that was past due but was not in
non-accrual
status. As of December 31, 2022, no Corporate Loans included within the Assets of Consolidated CLO Vehicles for which the fair value option was elected were past due or in
non-accrual
status.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
8. Fair Value Measurements of Financial Instruments
The following tables summarize the valuation of Blackstone’s financial assets and liabilities by the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
127,047 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
127,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities, Partnerships and LLC Interests (a) |
|
|
7,855 |
|
|
|
130,881 |
|
|
|
4,237,717 |
|
|
|
563,773 |
|
|
|
4,940,226 |
|
| |
|
|
— |
|
|
|
199,567 |
|
|
|
11,191 |
|
|
|
— |
|
|
|
210,758 |
|
| |
|
|
— |
|
|
|
73,120 |
|
|
|
— |
|
|
|
— |
|
|
|
73,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds |
|
|
7,855 |
|
|
|
403,568 |
|
|
|
4,248,908 |
|
|
|
563,773 |
|
|
|
5,224,104 |
|
Corporate Treasury Investments |
|
|
76,838 |
|
|
|
678,552 |
|
|
|
8,125 |
|
|
|
— |
|
|
|
763,515 |
|
| |
|
|
1,458,415 |
|
|
|
2,247,894 |
|
|
|
70,191 |
|
|
|
6,812 |
|
|
|
3,783,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1,543,108 |
|
|
|
3,330,014 |
|
|
|
4,327,224 |
|
|
|
570,585 |
|
|
|
9,770,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable - Loans and Receivables |
|
|
— |
|
|
|
— |
|
|
|
79,339 |
|
|
|
— |
|
|
|
79,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets - Freestanding Derivatives |
|
|
754 |
|
|
|
216,900 |
|
|
|
4,349 |
|
|
|
— |
|
|
|
222,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,670,909 |
|
|
$ |
3,546,914 |
|
|
$ |
4,410,912 |
|
|
$ |
570,585 |
|
|
$ |
10,199,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Payable - CLO Notes Payable |
|
$ |
— |
|
|
$ |
225,396 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
225,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives (b) |
|
|
49 |
|
|
|
129,883 |
|
|
|
260,167 |
|
|
|
— |
|
|
|
390,099 |
|
Contingent Consideration (c) |
|
|
— |
|
|
|
— |
|
|
|
800 |
|
|
|
— |
|
|
|
800 |
|
Corporate Treasury Commitments (d) |
|
|
— |
|
|
|
— |
|
|
|
1,558 |
|
|
|
— |
|
|
|
1,558 |
|
Securities Sold, Not Yet Purchased |
|
|
3,789 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
3,838 |
|
|
|
129,883 |
|
|
|
262,525 |
|
|
|
— |
|
|
|
396,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,838 |
|
|
$ |
355,279 |
|
|
$ |
262,525 |
|
|
$ |
— |
|
|
$ |
621,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
1,134,733 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,134,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities, Partnerships and LLC Interests (a) |
|
|
12,024 |
|
|
|
149,689 |
|
|
|
4,195,859 |
|
|
|
596,708 |
|
|
|
4,954,280 |
|
| |
|
|
— |
|
|
|
53,787 |
|
|
|
53,973 |
|
|
|
— |
|
|
|
107,760 |
|
| |
|
|
— |
|
|
|
74,926 |
|
|
|
— |
|
|
|
— |
|
|
|
74,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds |
|
|
12,024 |
|
|
|
278,402 |
|
|
|
4,249,832 |
|
|
|
596,708 |
|
|
|
5,136,966 |
|
Corporate Treasury Investments |
|
|
116,266 |
|
|
|
931,406 |
|
|
|
5,868 |
|
|
|
— |
|
|
|
1,053,540 |
|
| |
|
|
1,473,611 |
|
|
|
1,597,696 |
|
|
|
51,155 |
|
|
|
5,985 |
|
|
|
3,128,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1,601,901 |
|
|
|
2,807,504 |
|
|
|
4,306,855 |
|
|
|
602,693 |
|
|
|
9,318,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable - Loans and Receivables |
|
|
— |
|
|
|
— |
|
|
|
315,039 |
|
|
|
— |
|
|
|
315,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets - Freestanding Derivatives |
|
|
279 |
|
|
|
196,188 |
|
|
|
6,210 |
|
|
|
— |
|
|
|
202,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,736,913 |
|
|
$ |
3,003,692 |
|
|
$ |
4,628,104 |
|
|
$ |
602,693 |
|
|
$ |
10,971,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Blackstone Funds - Freestanding Derivatives |
|
$ |
— |
|
|
$ |
284 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
284 |
|
Freestanding Derivatives (b) |
|
|
21 |
|
|
|
88,161 |
|
|
|
48,581 |
|
|
|
— |
|
|
|
136,763 |
|
Corporate Treasury Commitments (d) |
|
|
— |
|
|
|
— |
|
|
|
8,144 |
|
|
|
— |
|
|
|
8,144 |
|
Securities Sold, Not Yet Purchased |
|
|
3,825 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
3,846 |
|
|
|
88,445 |
|
|
|
56,725 |
|
|
|
— |
|
|
|
149,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,846 |
|
|
$ |
88,445 |
|
|
$ |
56,725 |
|
|
$ |
— |
|
|
$ |
149,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LLC Limited Liability Company.
(a) |
Equity Securities, Partnership and LLC Interest includes investments in investment funds. |
(b) |
Level III freestanding derivatives are valued using an option pricing model where the significant inputs include the expected return and expected volatility. |
(c) |
Level III contingent consideration liabilities are valued using a discounted cash flow model where the significant inputs include the discount rates. |
(d) |
Corporate Treasury Commitments are measured using third party pricing. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of September 30, 2023. Consistent with presentation in these Notes to Condensed Consolidated Financial Statements,
this table presents the Level III Investments only of Consolidated Blackstone Funds and therefore does not reflect any other Blackstone Funds.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Impact to
Valuation
from an
Increase
in Input |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities, Partnership and LLC Interests |
|
$ |
4,237,717 |
|
|
|
Discounted Cash Flows |
|
|
|
Discount Rate |
|
|
|
2.5% - 36.0% |
|
|
|
7.9% |
|
|
|
Lower |
|
| |
|
|
|
|
|
|
|
|
|
|
Exit Multiple - EBITDA |
|
|
|
|
|
|
|
14.9x |
|
|
|
Higher |
|
| |
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate |
|
|
|
|
|
|
|
5.0% |
|
|
|
Lower |
|
| |
|
|
|
|
|
|
Transaction Price |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
11,191 |
|
|
|
Other |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds |
|
|
4,248,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Treasury Investments |
|
|
8,125 |
|
|
|
Third Party Pricing |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
79,339 |
|
|
|
Discounted Cash Flows |
|
|
|
Discount Rate |
|
|
|
|
|
|
|
10.7% |
|
|
|
Lower |
|
| |
|
|
74,540 |
|
|
|
Third Party Pricing |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
4,410,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following table summarizes the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of December 31, 2022:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Impact to
Valuation
from an
Increase
in Input |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of Consolidated Blackstone Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities, Partnership and LLC Interests |
|
$ |
4,195,859 |
|
|
|
Discounted Cash Flows |
|
|
|
Discount Rate |
|
|
|
|
|
|
|
8.8% |
|
|
|
Lower |
|
| |
|
|
|
|
|
|
|
|
|
|
Exit Multiple - EBITDA |
|
|
|
|
|
|
|
14.7x |
|
|
|
Higher |
|
| |
|
|
|
|
|
|
|
|
|
|
Exit Capitalization Rate |
|
|
|
|
|
|
|
4.7% |
|
|
|
Lower |
|
| |
|
|
|
|
|
|
Transaction Price |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
53,973 |
|
|
|
Transaction Price |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Third Party Pricing |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments of Consolidated Blackstone Funds |
|
|
4,249,832 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Treasury Investments |
|
|
5,868 |
|
|
|
Third Party Pricing |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
315,039 |
|
|
|
Discounted Cash Flows |
|
|
|
Discount Rate |
|
|
|
|
|
|
|
9.8% |
|
|
|
Lower |
|
| |
|
|
57,365 |
|
|
|
Transaction Price |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Third Party Pricing |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
4,628,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/a |
|
Not applicable. |
EBITDA |
|
Earnings before interest, taxes, depreciation and amortization. |
Exit Multiple |
|
Ranges include the last twelve months EBITDA and forward EBITDA multiples. |
Third Party Pricing |
|
Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services. |
Transaction Price |
|
Includes recent acquisitions or transactions. |
(a) |
|
Unobservable inputs were weighted based on the fair value of the investments included in the range. |
(b) |
|
As of September 30, 2023 and December 31, 2022, Other Investments includes Level III Freestanding Derivatives. |
For the nine months ended September 30, 2023, there have been no changes in valuation techniques within Level II and Level III that have had a material impact on the valuation of financial instruments.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following tables summarize the changes in financial assets and liabilities measured at fair value for which Blackstone has used Level III inputs to determine fair value and does not include gains or losses that were reported in Level III in prior years or for instruments that were transferred out of Level III prior to the end of the respective reporting period. These tables also exclude financial assets and liabilities measured at fair value on a
non-recurring
basis. Total realized and unrealized gains and losses recorded for Level III investments are reported in either Investment Income (Loss) or Net Gains from Fund Investment Activities in the Condensed Consolidated Statements of Operations.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Level III Financial Assets at Fair Value
Three Months Ended September 30, |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, Beginning of Period |
|
$ |
4,439,851 |
|
|
$ |
76,861 |
|
|
$ |
73,612 |
|
|
$ |
4,590,324 |
|
|
$ |
2,791,812 |
|
|
$ |
534,105 |
|
|
$ |
38,603 |
|
|
$ |
3,364,520 |
|
Transfer Into Level III (b) |
|
|
12,858 |
|
|
|
— |
|
|
|
— |
|
|
|
12,858 |
|
|
|
2,466 |
|
|
|
— |
|
|
|
1,610 |
|
|
|
4,076 |
|
Transfer Out of Level III (b) |
|
|
(11,544 |
) |
|
|
— |
|
|
|
(649 |
) |
|
|
(12,193 |
) |
|
|
(6,293 |
) |
|
|
— |
|
|
|
(4,043 |
) |
|
|
(10,336 |
) |
|
|
|
43,208 |
|
|
|
28,823 |
|
|
|
4,913 |
|
|
|
76,944 |
|
|
|
195,133 |
|
|
|
229,502 |
|
|
|
1,124 |
|
|
|
425,759 |
|
|
|
|
(51,735 |
) |
|
|
(23,312 |
) |
|
|
(1,573 |
) |
|
|
(76,620 |
) |
|
|
(2,280 |
) |
|
|
(217,173 |
) |
|
|
(51 |
) |
|
|
(219,504 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,437 |
|
|
|
— |
|
|
|
6,437 |
|
|
|
|
— |
|
|
|
(4,117 |
) |
|
|
(3,389 |
) |
|
|
(7,506 |
) |
|
|
— |
|
|
|
(12,688 |
) |
|
|
566 |
|
|
|
(12,122 |
) |
Changes in Gains (Losses) Included in Earnings |
|
|
(183,730 |
) |
|
|
1,084 |
|
|
|
3,332 |
|
|
|
(179,314 |
) |
|
|
(158,059 |
) |
|
|
3,214 |
|
|
|
1,577 |
|
|
|
(153,268 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,248,908 |
|
|
$ |
79,339 |
|
|
$ |
76,246 |
|
|
$ |
4,404,493 |
|
|
$ |
2,822,779 |
|
|
$ |
543,397 |
|
|
$ |
39,386 |
|
|
$ |
3,405,562 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date |
|
$ |
(88,307 |
) |
|
$ |
(52 |
) |
|
$ |
(1,891 |
) |
|
$ |
(90,250 |
) |
|
$ |
(53,588 |
) |
|
$ |
(3,010 |
) |
|
$ |
1,591 |
|
|
$ |
(55,007 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Level III Financial Assets at Fair Value
Nine Months Ended September 30, |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, Beginning of Period |
|
$ |
4,249,832 |
|
|
$ |
315,039 |
|
|
$ |
30,971 |
|
|
$ |
4,595,842 |
|
|
$ |
1,200,315 |
|
|
$ |
392,732 |
|
|
$ |
43,987 |
|
|
$ |
1,637,034 |
|
Transfer In Due to Consolidation and Acquisition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,535,171 |
|
|
|
— |
|
|
|
— |
|
|
|
1,535,171 |
|
Transfer Out Due to Deconsolidation |
|
|
(3,837 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,837 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfer Into Level III (b) |
|
|
26,856 |
|
|
|
— |
|
|
|
898 |
|
|
|
27,754 |
|
|
|
2,518 |
|
|
|
— |
|
|
|
2,517 |
|
|
|
5,035 |
|
Transfer Out of Level III (b) |
|
|
(16,608 |
) |
|
|
— |
|
|
|
(3,374 |
) |
|
|
(19,982 |
) |
|
|
(111,824 |
) |
|
|
— |
|
|
|
(4,043 |
) |
|
|
(115,867 |
) |
|
|
|
214,076 |
|
|
|
200,791 |
|
|
|
56,589 |
|
|
|
471,456 |
|
|
|
522,941 |
|
|
|
674,286 |
|
|
|
8,622 |
|
|
|
1,205,849 |
|
|
|
|
(173,442 |
) |
|
|
(459,825 |
) |
|
|
(3,258 |
) |
|
|
(636,525 |
) |
|
|
(169,710 |
) |
|
|
(522,198 |
) |
|
|
(2,864 |
) |
|
|
(694,772 |
) |
|
|
|
— |
|
|
|
57,008 |
|
|
|
— |
|
|
|
57,008 |
|
|
|
— |
|
|
|
30,336 |
|
|
|
— |
|
|
|
30,336 |
|
|
|
|
— |
|
|
|
(57,205 |
) |
|
|
(8,086 |
) |
|
|
(65,291 |
) |
|
|
— |
|
|
|
(34,706 |
) |
|
|
566 |
|
|
|
(34,140 |
) |
Changes in Gains (Losses) Included in Earnings |
|
|
(47,969 |
) |
|
|
23,531 |
|
|
|
2,506 |
|
|
|
(21,932 |
) |
|
|
(156,632 |
) |
|
|
2,947 |
|
|
|
(9,399 |
) |
|
|
(163,084 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,248,908 |
|
|
$ |
79,339 |
|
|
$ |
76,246 |
|
|
$ |
4,404,493 |
|
|
$ |
2,822,779 |
|
|
$ |
543,397 |
|
|
$ |
39,386 |
|
|
$ |
3,405,562 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date |
|
$ |
(48,875 |
) |
|
$ |
2,391 |
|
|
$ |
2,869 |
|
|
$ |
(43,615 |
) |
|
$ |
(41,596 |
) |
|
$ |
(10,940 |
) |
|
$ |
(9,476 |
) |
|
$ |
(62,012 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Represents freestanding derivatives, corporate treasury investments and Other Investments. |
(b) |
Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities. |
(c) |
For Freestanding Derivatives included within Other Investments, Settlements includes all ongoing contractual cash payments made or received over the life of the instrument. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
9. Variable Interest Entities
Pursuant to GAAP consolidation guidance, Blackstone consolidates certain VIEs for which it is the primary beneficiary either directly or indirectly, through a consolidated entity or affiliate. VIEs include certain private equity, real estate, credit-focused or funds of hedge funds entities and CLO vehicles. The purpose of such VIEs is to provide strategy specific investment opportunities for investors in exchange for management and performance-based fees. The investment strategies of the Blackstone Funds differ by product; however, the fundamental risks of the Blackstone Funds are similar, including loss of invested capital and loss of management fees and performance-based fees. In Blackstone’s role as general partner, collateral manager or investment adviser, it generally considers itself the sponsor of the applicable Blackstone Fund. Blackstone does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.
The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to Blackstone for the consolidated VIEs’ liabilities.
Blackstone holds variable interests in certain VIEs which are not consolidated as it is determined that Blackstone is not the primary beneficiary. Blackstone’s involvement with such entities is in the form of direct and indirect equity interests and fee arrangements. The maximum exposure to loss represents the loss of assets recognized by Blackstone relating to
non-consolidated
VIEs and any clawback obligation relating to previously distributed Performance Allocations. Blackstone’s maximum exposure to loss relating to
non-consolidated
VIEs were as follows:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
$ |
3,286,386 |
|
|
$ |
3,326,669 |
|
|
|
|
184,778 |
|
|
|
189,240 |
|
Potential Clawback Obligation |
|
|
72,058 |
|
|
|
384,926 |
|
| |
|
|
|
|
|
|
|
|
|
|
$ |
3,543,222 |
|
|
$ |
3,900,835 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
Amounts Due to Non-Consolidated VIEs |
|
$ |
24 |
|
|
$ |
6 |
|
| |
|
|
|
|
|
|
|
|
10. Repurchase Agreements
At September 30, 2023, Blackstone had no Repurchase Agreements and hence no pledge
d
securities or cash. At December 31, 2022, Blackstone pledged securities with a carrying value of $89.9 million and cash to collateralize its repurchase agreements. Such securities can be repledged, delivered or otherwise used by the counterparty.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following table provides information regarding Blackstone’s Repurchase
Agreements
obligation by type of collateral pledged as of December 31, 2022. At September 30, 2023, Blackstone had no Repurchase Agreements and hence no collateral outstanding.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
Remaining Contractual Maturity of the Agreements |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
70,776 |
|
|
$ |
— |
|
|
$ |
19,168 |
|
|
$ |
89,944 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 11. “Offsetting of Assets and Liabilities” |
|
|
$ |
89,944 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amounts Related to Agreements Not Included in Offsetting Disclosure in Note 11. “Offsetting of Assets and Liabilities” |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11. Offsetting of Assets and Liabilities
The following tables present the offsetting of assets and liabilities as of September 30, 2023 and December 31, 2022:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
295,123 |
|
|
$ |
194,042 |
|
|
$ |
86,991 |
|
|
$ |
14,090 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
129,931 |
|
|
$ |
120,633 |
|
|
$ |
616 |
|
|
$ |
8,682 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
129,931 |
|
|
$ |
120,633 |
|
|
$ |
616 |
|
|
$ |
8,682 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
277,603 |
|
|
$ |
165,897 |
|
|
$ |
96,436 |
|
|
$ |
15,270 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
88,182 |
|
|
$ |
85,366 |
|
|
$ |
1,345 |
|
|
$ |
1,471 |
|
|
|
|
89,944 |
|
|
|
89,944 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
178,126 |
|
|
$ |
175,310 |
|
|
$ |
1,345 |
|
|
$ |
1,471 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Repurchase Agreements and Freestanding Derivative liabilities are included in Accounts Payable, Accrued Expenses and Other Liabilities in the Condensed Consolidated Statements of Financial Condition. Freestanding Derivative assets are included in Other Assets in the Condensed Consolidated Statements of Financial Condition.
The following table presents the components of Other Assets:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Furniture, Equipment and Leasehold Improvements |
|
$ |
908,676 |
|
|
$ |
748,334 |
|
Less: Accumulated Depreciation |
|
|
(372,231 |
) |
|
|
(336,621 |
) |
| |
|
|
|
|
|
|
|
|
Furniture, Equipment and Leasehold Improvements, Net |
|
|
536,445 |
|
|
|
411,713 |
|
|
|
|
190,392 |
|
|
|
165,079 |
|
|
|
|
222,003 |
|
|
|
202,677 |
|
|
|
|
23,229 |
|
|
|
20,989 |
|
| |
|
|
|
|
|
|
|
|
| |
|
$ |
972,069 |
|
|
$ |
800,458 |
|
| |
|
|
|
|
|
|
|
|
Notional Pooling Arrangements
Blackstone has notional cash pooling arrangements with financial institutions for cash management purposes. These arrangements allow for cash withdrawals based upon aggregate cash balances on deposit at the same financial institution. Cash withdrawals cannot exceed aggregate cash balances on deposit. The net balance of cash on deposit and overdrafts is used as a basis for calculating net interest expense or income. As of September 30, 2023, the aggregate cash balance on deposit relating to the cash pooling arrangements was $995.4 million, which was offset and reported net of the accompanying overdraft of $995.3 million.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following table presents each of Blackstone’s borrowings as of September 30, 2023 and December 31, 2022, as well as their carrying value and fair value. The borrowings are included in Loans Pa
ya
ble within the Condensed Consolidated Statements of Financial Condition. Each of the Senior Notes were issued at a discount through Blackstone’s indirect subsidiary, Blackstone Holdings Finance Co. L.L.C. The Senior Notes accrue interest from the issue date thereof and pay interest in arrears on a semi-annual basis or annual basis. The Secured Borrowings were issued at par, accrue interest from the issue date thereof and pay interest in arrears on a quarterly basis. CLO Notes Payable pay interest in arrears on a quarterly basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone Operating Borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
399,838 |
|
|
$ |
399,776 |
|
|
|
|
321,745 |
|
|
|
305,197 |
|
|
|
325,292 |
|
|
|
305,754 |
|
|
|
|
635,870 |
|
|
|
578,320 |
|
|
|
642,968 |
|
|
|
568,525 |
|
|
|
|
298,381 |
|
|
|
272,340 |
|
|
|
298,101 |
|
|
|
271,284 |
|
|
|
|
595,147 |
|
|
|
600,144 |
|
|
|
594,381 |
|
|
|
606,450 |
|
|
|
|
645,167 |
|
|
|
536,621 |
|
|
|
644,456 |
|
|
|
530,933 |
|
|
|
|
638,389 |
|
|
|
543,816 |
|
|
|
645,819 |
|
|
|
532,043 |
|
|
|
|
493,328 |
|
|
|
407,660 |
|
|
|
492,604 |
|
|
|
405,965 |
|
|
|
|
496,332 |
|
|
|
363,495 |
|
|
|
495,990 |
|
|
|
365,380 |
|
|
|
|
788,978 |
|
|
|
585,423 |
|
|
|
788,082 |
|
|
|
589,407 |
|
|
|
|
495,553 |
|
|
|
380,395 |
|
|
|
495,207 |
|
|
|
390,370 |
|
|
|
|
891,740 |
|
|
|
896,382 |
|
|
|
891,277 |
|
|
|
907,965 |
|
|
|
|
499,022 |
|
|
|
459,952 |
|
|
|
504,695 |
|
|
|
452,934 |
|
|
|
|
239,385 |
|
|
|
229,193 |
|
|
|
239,176 |
|
|
|
251,480 |
|
|
|
|
489,906 |
|
|
|
408,990 |
|
|
|
489,704 |
|
|
|
441,355 |
|
|
|
|
344,655 |
|
|
|
260,946 |
|
|
|
344,549 |
|
|
|
287,242 |
|
|
|
|
291,095 |
|
|
|
205,593 |
|
|
|
290,935 |
|
|
|
227,946 |
|
|
|
|
392,391 |
|
|
|
252,984 |
|
|
|
392,259 |
|
|
|
275,588 |
|
|
|
|
394,067 |
|
|
|
217,988 |
|
|
|
393,958 |
|
|
|
237,552 |
|
|
|
|
543,278 |
|
|
|
304,695 |
|
|
|
543,162 |
|
|
|
323,527 |
|
|
|
|
987,333 |
|
|
|
599,690 |
|
|
|
987,131 |
|
|
|
646,880 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
10,481,762 |
|
|
|
8,409,824 |
|
|
|
10,899,584 |
|
|
|
9,018,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured Borrowing, Due 10/27/2033 |
|
|
19,966 |
|
|
|
19,966 |
|
|
|
— |
|
|
|
— |
|
Secured Borrowing, Due 1/29/2035 |
|
|
20,000 |
|
|
|
20,000 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
10,521,728 |
|
|
|
8,449,790 |
|
|
|
10,899,584 |
|
|
|
9,018,356 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of Consolidated Blackstone Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone Fund Facilities (c) |
|
|
1,364,253 |
|
|
|
1,364,253 |
|
|
|
1,450,000 |
|
|
|
1,450,000 |
|
|
|
|
225,396 |
|
|
|
225,396 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1,589,649 |
|
|
|
1,589,649 |
|
|
|
1,450,000 |
|
|
|
1,450,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
12,111,377 |
|
|
$ |
10,039,439 |
|
|
$ |
12,349,584 |
|
|
$ |
10,468,356 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
(b) |
The Secured Borrowing, Due 10/27/2033 has an interest rate of 7.66% and the Secured Borrowing, Due 1/29/2035 has an interest rate of 3.72%. Principal on these borrowings will be paid over the term with repayment amounts dependent on the performance of the underlying assets securing each borrowing. |
(c) |
Blackstone Fund Facilities represents borrowing facilities for the various consolidated Blackstone Funds used to meet liquidity and investing needs. Such borrowings have varying maturities and may be rolled over until the disposition or refinancing event. Borrowings bear interest at spreads to market rates or at stated fixed rates that can vary over the borrowing term. Interest may be subject to the performance of the assets within the fund and therefore, the stated interest rate and effective interest rate may differ. |
(d) |
CLO Notes Payable are due 10/15/2029 and have an effective interest rate of 7.90% as of September 30, 2023. |
Scheduled principal payments for borrowings as of September 30, 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
$ |
34 |
|
|
$ |
— |
|
|
$ |
34 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
325,413 |
|
|
|
— |
|
|
|
325,413 |
|
|
|
|
640,427 |
|
|
|
— |
|
|
|
640,427 |
|
|
|
|
911,572 |
|
|
|
— |
|
|
|
911,572 |
|
|
|
|
8,777,120 |
|
|
|
1,685,566 |
|
|
|
10,462,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,654,566 |
|
|
$ |
1,685,566 |
|
|
$ |
12,340,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone’s net deferred tax assets relate primarily to basis differences resulting from a
step-up
in tax basis of certain assets at the time of its conversion to a corporation, as well as ongoing exchanges of units for common shares by founders and partners. As of September 30, 2023, Blackstone had no material valuation allowance recorded against deferred tax assets.
Blackstone is subject to examination by the U.S. Internal Revenue Service and other taxing authorities where Blackstone has significant business operations such as the United Kingdom, and various state and local jurisdictions such as New York State and New York City. The tax years under examination vary by jurisdiction. Blackstone does not expect the completion of these audits to have a material impact on its financial condition, but it may be material to operating results for a particular period, depending on the operating results for that period. Blackstone believes the liability established for unrecognized tax benefits is adequate in relation to the potential for additional assessments. It is reasonably possible that changes in the balance of unrecognized tax benefits may occur within the next 12 months; however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on Blackstone’s effective tax rate over the next 12 months.
As of September 30, 2023, the following are the major filing jurisdictions and their respective earliest open tax period subject to examination:
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
14. Earnings Per Share and Stockholders’ Equity
Basic and diluted net income per share of common stock for the three and nine months ended September 30, 2023 and 2022 was calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Net Income for Per Share of Common Stock Calculations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Blackstone Inc., Basic and Diluted |
|
$ |
551,994 |
|
|
$ |
2,296 |
|
|
$ |
1,239,080 |
|
|
$ |
1,189,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares of Common Stock Outstanding, Basic |
|
|
757,958,602 |
|
|
|
742,345,646 |
|
|
|
754,211,390 |
|
|
|
739,963,370 |
|
Weighted-Average Shares of Unvested Deferred Restricted Common Stock |
|
|
87,494 |
|
|
|
149,886 |
|
|
|
244,936 |
|
|
|
308,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares of Common Stock Outstanding, Diluted |
|
|
758,046,096 |
|
|
|
742,495,532 |
|
|
|
754,456,326 |
|
|
|
740,272,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.73 |
|
|
$ |
— |
|
|
$ |
1.64 |
|
|
$ |
1.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.73 |
|
|
$ |
— |
|
|
$ |
1.64 |
|
|
$ |
1.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared Per Share of Common Stock (a) |
|
$ |
0.79 |
|
|
$ |
1.27 |
|
|
$ |
2.52 |
|
|
$ |
4.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Dividends declared reflects the calendar date of the declaration for each distribution. |
In computing the dilutive effect that the exchange of Blackstone Holdings Partnership Units would have on Net Income Per Share of Common Stock, Blackstone considered that net income available to holders of shares of common stock would increase due to the elimination of
non-controlling
interests in Blackstone Holdings, inclusive of any tax impact. The hypothetical conversion may be dilutive to the extent there is activity at the Blackstone Inc. level that has not previously been attributed to the
non-controlling
interests or if there is a change in tax rate as a result of a hypothetical conversion.
The following table summarizes the anti-dilutive securities for the three and nine months ended September 30, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Weighted-Average Blackstone Holdings Partnership Units |
|
|
460,160,593 |
|
|
|
465,522,745 |
|
|
|
461,549,778 |
|
|
|
466,703,389 |
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.
During the three and nine months ended September 30, 2023, Blackstone repurchased 1.3 million and 3.3 million shares of common stock at a total cost of $134.3 million and $310.4 million, respectively. During the three and nine months ended September 30, 2022, Blackstone repurchased 2.0 million and 3.9 million shares of common stock at a total cost of $196.6 million and $392.0 million, respectively. As of September 30, 2023, the amount remaining available for repurchases under the program was $797.6 million.
Shares Eligible for Dividends and Distributions
As of September 30, 2023, the total shares of common stock and Blackstone Holdings Partnership Units entitled to participate in dividends and distributions were as follows:
|
|
|
|
|
| |
|
|
|
|
|
718,442,863 |
|
Unvested Participating Common Stock |
|
|
39,338,248 |
|
|
|
|
|
|
Total Participating Common Stock |
|
|
757,781,111 |
|
Participating Blackstone Holdings Partnership Units |
|
|
459,651,045 |
|
|
|
|
|
|
|
|
|
1,217,432,156 |
|
|
|
|
|
|
15. Equity-Based Compensation
Blackstone has granted equity-based compensation awards to Blackstone’s senior managing directors,
non-partner
professionals,
non-professionals
and selected external advisers under Blackstone’s Amended and Restated 2007 Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for the granting of options, share appreciation rights or other share-based awards (shares, restricted shares, restricted shares of common stock, deferred restricted shares of common stock, phantom restricted shares of common stock or other share-based awards based in whole or in part on the fair value of shares of common stock or Blackstone Holdings Partnership Units) which may contain certain service or performance requirements. As of January 1, 2023, Blackstone had the ability to grant 172,161,191 shares under the Equity Plan.
For the three and nine months ended September 30, 2023, Blackstone recorded compensation expense of $260.0 million and $797.8 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $49.1 million and $132.2 million, respectively. For the three and nine months ended September 30, 2022, Blackstone recorded compensation expense of $206.6 million and $636.5 million, respectively, in relation to its equity-based awards with corresponding tax benefits of $54.6 million and $127.5 million, respectively.
As of September 30, 2023, there was $2.2 billion of estimated unrecognized compensation expense related to unvested awards, including compensation with performance conditions where it is probable that the performance condition will be met. This cost is expected to be recognized over a weighted-average period of 3.4 years.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Total vested and unvested outstanding shares, including common stock, Blackstone Holdings Partnership Units and deferred restricted shares of common stock, were 1,217,472,540 as of September 30, 2023. Total outstanding phantom shares were 94,466 as of September 30, 2023.
A summary of the status of Blackstone’s unvested equity-based awards as of September 30, 2023 and of changes during the period January 1, 2023 through September 30, 2023 is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022 |
|
|
11,029,996 |
|
|
$ |
38.02 |
|
|
|
31,001,563 |
|
|
$ |
82.94 |
|
|
|
48,886 |
|
|
$ |
85.04 |
|
|
|
|
— |
|
|
|
— |
|
|
|
15,541,313 |
|
|
|
85.15 |
|
|
|
69,267 |
|
|
|
93.20 |
|
|
|
|
(5,974,487 |
) |
|
|
37.49 |
|
|
|
(8,362,042 |
) |
|
|
73.81 |
|
|
|
(10,204 |
) |
|
|
99.50 |
|
|
|
|
(48,299 |
) |
|
|
42.65 |
|
|
|
(602,684 |
) |
|
|
89.92 |
|
|
|
(18,866 |
) |
|
|
68.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2023 |
|
|
5,007,210 |
|
|
$ |
38.69 |
|
|
|
37,578,150 |
|
|
$ |
85.82 |
|
|
|
89,083 |
|
|
$ |
104.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares/Units Expected to Vest
The following unvested shares and units, after expected forfeitures, as of September 30, 2023, are expected to vest:
|
|
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
Blackstone Holdings Partnership Units |
|
|
4,916,949 |
|
|
1.1 |
Deferred Restricted Shares of Common Stock |
|
|
32,867,925 |
|
|
3.1 |
|
|
|
|
|
|
|
Total Equity-Based Awards |
|
|
37,784,874 |
|
|
2.9 |
|
|
|
|
|
|
|
|
|
|
73,413 |
|
|
3.2 |
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
16. Related Party Transactions
Affiliate Receivables and Payables
Due from Affiliates and Due to Affiliates consisted of the following:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from Non-Consolidated Entities and Portfolio Companies |
|
$ |
3,555,322 |
|
|
$ |
3,344,813 |
|
Due from Certain Non-Controlling Interest Holders and Blackstone Employees |
|
|
764,012 |
|
|
|
741,319 |
|
Accrual for Potential Clawback of Previously Distributed Performance Allocations |
|
|
78,999 |
|
|
|
60,575 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,398,333 |
|
|
$ |
4,146,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to Certain Non-Controlling Interest Holders in Connection with the Tax Receivable Agreements |
|
$ |
1,628,268 |
|
|
$ |
1,602,933 |
|
Due to Non-Consolidated Entities |
|
|
106,972 |
|
|
|
157,982 |
|
Due to Certain Non-Controlling Interest Holders and Blackstone Employees |
|
|
230,713 |
|
|
|
198,875 |
|
Accrual for Potential Repayment of Previously Received Performance Allocations |
|
|
222,271 |
|
|
|
158,691 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,188,224 |
|
|
$ |
2,118,481 |
|
|
|
|
|
|
|
|
|
|
Interests of the Founder, Senior Managing Directors, Employees and Other Related Parties
The Founder, senior managing directors, employees and certain other related parties invest on a discretionary basis in the consolidated Blackstone Funds both directly and through consolidated entities. These investments generally are subject to preferential management fee and performance allocation or incentive fee arrangements. As of September 30, 2023 and December 31, 2022, such investments aggregated $1.7 billion and $1.6 billion, respectively. Their share of the Net Income Attributable to Redeemable
Non-Controlling
and
Non-Controlling
Interests in Consolidated Entities aggregated to $13.4 million and $(10.0) million for the three months ended September 30, 2023 and 2022, respectively, and $67.8 million and $(20.4) million for the nine months ended September 30, 2023 and 2022, respectively.
Contingent Repayment Guarantee
Blackstone and its personnel who have received Performance Allocation distributions have guaranteed payment on a several basis (subject to a cap) to the carry funds of any clawback obligation with respect to the excess Performance Allocation allocated to the general partners of such funds and indirectly received thereby to the extent that either Blackstone or its personnel fails to fulfill its clawback obligation, if any. The Accrual for Potential Repayment of Previously Received Performance Allocations represents amounts previously paid to Blackstone Holdings and
non-controlling
interest holders that would need to be repaid to the Blackstone Funds if the carry funds were to be liquidated based on the fair value of their underlying investments as of September 30, 2023. See Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback).”
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Tax Receivable Agreements
Blackstone used a portion of the proceeds from the IPO and other sales of shares to purchase interests in the predecessor businesses from the predecessor owners. In addition, holders of Blackstone Holdings Partnership Units may exchange their Blackstone Holdings Partnership Units for shares of Blackstone common stock on a
basis. The purchase and subsequent exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Blackstone Holdings and therefore reduce the amount of tax that Blackstone would otherwise be required to pay in the future.
Blackstone has entered into tax receivable agreements with each of the predecessor owners and additional tax receivable agreements have been executed, and will continue to be executed, with senior managing directors and others who acquire Blackstone Holdings Partnership Units. The agreements provide for the payment by the corporate taxpayer to such owners of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the corporate taxpayers actually realize as a result of the aforementioned increases in tax basis and of certain other tax benefits related to entering into these tax receivable agreements. For purposes of the tax receivable agreements, cash savings in income tax will be computed by comparing the actual income tax liability of the corporate taxpayers to the amount of such taxes that the corporate taxpayers would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Blackstone Holdings as a result of the exchanges and had the corporate taxpayers not entered into the tax receivable agreements.
Assuming no future material changes in the relevant tax law and that the corporate taxpayers earn sufficient taxable income to realize the full tax benefit of the increased amortization of the assets, the expected future payments under the tax receivable agreements (which are taxable to the recipients) will aggregate $1.6 billion over the next 15 years. The
after-tax
net present value of these estimated payments totals $510.0 million assuming a 15% discount rate and using Blackstone’s most recent projections relating to the estimated timing of the benefit to be received. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. The payments under the tax receivable agreements are not conditioned upon continued ownership of Blackstone equity interests by the
pre-IPO
owners and the others mentioned above.
Amounts related to the deferred tax asset resulting from the increase in tax basis from the exchange of Blackstone Holdings Partnership Units to shares of Blackstone common stock, the resulting remeasurement of net deferred tax assets at the Blackstone ownership percentage at the balance sheet date, the due to affiliates for the future payments resulting from the tax receivable agreements and resulting adjustment to partners’ capital are included as Acquisition of Ownership Interests from
Non-Controlling
Interest Holders in the Supplemental Disclosure of
Non-Cash
Investing and Financing Activities in the Condensed Consolidated Statements of Cash Flows.
Blackstone does business with and on behalf of some of its Portfolio Companies; all such arrangements are on a negotiated basis.
Additionally, please see Note 17. “Commitments and Contingencies — Contingencies — Guarantees” for information regarding guarantees provided to a lending institution for certain loans held by employees.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
17. Commitments and Contingencies
Blackstone had $4.8 billion of investment commitments as of September 30, 2023 representing general partner capital funding commitments to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments, including loan commitments. The consolidated Blackstone Funds had signed investment commitments of $173.6 million as of September 30, 2023, which includes $59.2 million of signed investment commitments for portfolio company acquisitions in the process of closing.
Certain of Blackstone’s consolidated real estate funds guarantee payments to third parties in connection with the ongoing business activities and/or acquisitions of their Portfolio Companies. There is no direct recourse to Blackstone to fulfill such obligations. To the extent that underlying funds are required to fulfill guarantee obligations, Blackstone’s invested capital in such funds is at risk. Total investments at risk in respect of guarantees extended by consolidated real estate funds was $22.5 million as of September 30, 2023.
The Blackstone Holdings Partnerships provided guarantees to a lending institution for certain loans held by employees either for investment in Blackstone Funds or for members’ capital contributions to The Blackstone Group International Partners LLP. The amount guaranteed as of September 30, 2023 was $75.2 million.
In December 2022 and January 2023, Blackstone entered into
long-term
strategic ventures with the Regents of the University of California (“UC Investments”), an institutional investor that subscribed for $4.5 billion of BREIT Class I shares during the three months ended March 31, 2023. The strategic ventures between Blackstone and UC Investments provide a waterfall structure with UC Investments receiving an 11.25% target annualized net return on its $4.5 billion investment in BREIT shares and upside from its investment. This target return, while not guaranteed, is supported by a pledge by Blackstone of $1.1 billion of its holdings in BREIT
as of the subscription dates,
including any appreciation or dividends received by Blackstone in respect thereof. Pursuant to the strategic venture, Blackstone is entitled to receive an incremental 5% cash payment from UC Investments on any returns received in excess of the target return. An asset or liability is recognized based on fair value with the maximum potential future obligation capped at the fair value of the assets pledged by Blackstone in connection with the above arrangements. As of September 30, 2023, the fair value of the assets pledged was $1.2 billion and the total liability recognized was $260.2 million.
Blackstone may from time to time be involved in litigation and claims incidental to the conduct of its business. Blackstone’s businesses are also subject to extensive regulation, which may result in regulatory proceedings against Blackstone.
Blackstone accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such legal actions, based on information known by management, Blackstone 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 position or cash flows.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
In December 2017, eight pension plan members of the Kentucky Retirement System (“KRS”) filed a derivative lawsuit on behalf of KRS in the Franklin County Circuit Court of the Commonwealth of Kentucky (the “Mayberry Action”). The Mayberry Action alleged various breaches of fiduciary duty and other violations of Kentucky state law in connection with KRS’s investment in three hedge funds of funds, including a fund managed by Blackstone Alternative Asset Management L.P. (“BLP”). The suit named more than 30 defendants, including, among others, The Blackstone Group L.P. (now Blackstone Inc.); BLP; Stephen A. Schwarzman, as Chairman and CEO of Blackstone; and J. Tomilson Hill, as
then-CEO
of BLP (collectively, the “Blackstone Defendants”). In July 2020, the Kentucky Supreme Court directed the Circuit Court to dismiss the action due to the plaintiffs’ lack of standing.
Over the objection of the Blackstone Defendants and others, in December 2020, the Circuit Court permitted the Attorney General of the Commonwealth of Kentucky (the “AG”) to intervene in the Mayberry Action. In December 2022, the Mayberry Action was stayed pending resolution of an interlocutory appeal in which the Blackstone Defendants and others argued that the Circuit Court did not have jurisdiction to continue the Mayberry Action after the ruling of the Kentucky Supreme Court. In April 2023, the Kentucky Court of Appeals agreed with the defendants’ position, holding that the Circuit Court exceeded its authority in permitting the AG’s intervention despite the Kentucky Supreme Court’s instruction to dismiss. Accordingly, the Kentucky Court of Appeals vacated all orders entered by the Circuit Court other than the order dismissing the original derivative complaint in the Mayberry Action. In July 2023, the AG filed a motion for discretionary review of the Court of Appeals’ decision by the Kentucky Supreme Court, which is pending. Additionally, around the time the AG moved to intervene in 2020, the AG separately filed an additional
back-up
complaint asserting substantially identical claims against
largely the same defendants as the Mayberry Action, including Stephen A. Schwarzman, J. Tomilson Hill and Blackstone Inc. (the “July 2020 Action”). The AG did not pursue the July 2020 Action until August 2023, when the AG served a substantially identical amended complaint which, in September 2023, the named defendants moved to dismiss. Concurrently, out of an abundance of caution, BLP filed a motion to dismiss and a motion to strike references to BLP as a purported defendant, even though the July 2020 Action, as amended, does not name BLP as a defendant. We believe that the July 2020 Action—initiated some nine years after BLP was engaged by KRS—is even more clearly barred by the statute of limitations than the Mayberry Action.
In August 2022, KRS was ordered to disclose, and in September 2022, did disclose, a report prepared in 2021 by a law firm retained by KRS to conduct an investigation into the investment activities underlying the lawsuit. According to the report, the investigators “did not find any violations of fiduciary duty or illegal activity by [BLP]” related to KRS’s due diligence and retention of BLP or KRS’s continued investment with BLP. The report quotes contemporaneous communications by KRS staff during the period of the investment recognizing that BLP was exceeding KRS’s returns benchmark, that BLP was providing KRS with “far fewer negative months than any liquid market comparable,” and that BLP “[h]as killed it.”
In January 2021, certain former plaintiffs in the Mayberry Action filed a separate action (“Taylor I”) against the Blackstone Defendants and other defendants named in the Mayberry Action, asserting allegations substantially similar to those in the Mayberry Action, and in July 2021 they amended their complaint to add class action allegations. Defendants removed Taylor I to the U.S. District Court for the Eastern District of Kentucky, and in March 2022, the District Court stayed Taylor I pending the resolution of the AG’s suit in the Mayberry Action.
In August 2021, a group of KRS members—including those that filed Taylor I—filed a new action in Franklin County Circuit Court (“Taylor II”), against the Blackstone Defendants, other defendants named in the Mayberry Action, and other KRS officials. The filed complaint is substantially similar to that filed in Taylor I and the Mayberry Action. Motions to dismiss are pending. The Blackstone Defendants believe they have strong defenses on statute of limitations grounds, among others, to both Taylor I and Taylor II.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
In May 2022, the presiding judge recused himself from the Mayberry Action and Taylor II, and the cases were reassigned to another judge in the Franklin County Circuit Court.
In April 2021, the AG filed an action (the “Declaratory Judgment Action”) against BLP and the other fund manager defendants from the Mayberry Action in Franklin County Circuit Court. The action sought to have certain provisions in the subscription agreements between KRS and the fund managers declared to be in violation of the Kentucky Constitution. In March 2022, the Circuit Court granted summary judgment to the AG. BLP’s appeal is currently pending.
Blackstone continues to believe that the preceding lawsuits against Blackstone are totally without merit and intends to defend them vigorously.
In July 2021, BLP filed a breach of contract action against defendants affiliated with KRS alleging that the Mayberry Action and the Declaratory Judgment Action breach the parties’ subscription agreements governing KRS’s investment with BLP. The action seeks damages, including legal fees and expenses incurred in defending against the above actions. In April 2022, the Circuit Court dismissed BLP’s complaint without prejudice to refiling, on the grounds that the action was not yet ripe for adjudication. On May 19, 2023, the Court of Appeals affirmed the Circuit Court’s dismissal, without prejudice, of BLP’s complaint on ripeness grounds. On August 7, 2023, BLP filed a motion with the Kentucky Supreme Court for discretionary review, to which defendants affiliated with KRS objected. That motion is currently pending.
In October 2022, as part of a sweep of private equity and other investment advisory firms, the SEC sent us a request for information relating to the retention of certain types of electronic business communications, including text messages, that may be required to be preserved under certain SEC rules. We are cooperating with the SEC’s inquiry.
Contingent Obligations (Clawback)
Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceeds the amount due to Blackstone based on cumulative results of that fund. The actual clawback liability, however, generally does not become realized until the end of a fund’s life except for certain Blackstone real estate funds, multi-asset class investment funds and credit-focused funds, which may have an interim clawback liability. The lives of the carry funds, including available contemplated extensions, for which a liability for potential clawback obligations has been recorded for financial reporting purposes, are currently anticipated to expire at various points through 2032. Further extensions of such terms may be implemented under given circumstances.
For financial reporting purposes, when applicable, the general partners record a liability for potential clawback obligations to the limited partners of some of the carry funds due to changes in the unrealized value of a fund’s remaining investments and where the fund’s general partner has previously received Performance Allocation distributions with respect to such fund’s realized investments.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following table presents the clawback obligations by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
87,842 |
|
|
$ |
54,506 |
|
|
$ |
142,348 |
|
|
$ |
78,644 |
|
|
$ |
51,771 |
|
|
$ |
130,415 |
|
| |
|
|
38,384 |
|
|
|
24,235 |
|
|
|
62,619 |
|
|
|
19,279 |
|
|
|
8,569 |
|
|
|
27,848 |
|
| |
|
|
204 |
|
|
|
258 |
|
|
|
462 |
|
|
|
223 |
|
|
|
205 |
|
|
|
428 |
|
| |
|
|
17,399 |
|
|
|
(557 |
) |
|
|
16,842 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
143,829 |
|
|
$ |
78,442 |
|
|
$ |
222,271 |
|
|
$ |
98,146 |
|
|
$ |
60,545 |
|
|
$ |
158,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis. |
(b) |
Total is a component of Due to Affiliates. See Note 16. “Related Party Transactions — Affiliate Receivables and Payables — Due to Affiliates.” |
During the nine months ended September 30, 2023, the Blackstone general partners paid an interim cash clawback obligation of $6.5 million, primarily related to a Real Estate segment fund, of which $4.2 million was paid by Blackstone Holdings and $2.3 million by current and former Blackstone personnel.
For Private Equity, Real Estate, and certain Credit & Insurance Funds, a portion of the Performance Allocations paid to current and former Blackstone personnel is held in segregated accounts in the event of a cash clawback obligation. These segregated accounts are not included in the Condensed Consolidated Financial Statements of Blackstone, except to the extent a portion of the assets held in the segregated accounts may be allocated to a consolidated Blackstone fund of hedge funds. At September 30, 2023, $1.1 billion was held in segregated accounts for the purpose of meeting any clawback obligations of current and former personnel if such payments are required.
In the Credit & Insurance segment, payment of Performance Allocations to Blackstone by the majority of the stressed/distressed, mezzanine and credit alpha strategies funds are substantially deferred under the terms of the partnership agreements. This deferral mitigates the need to hold funds in segregated accounts in the event of a cash clawback obligation.
If, at September 30, 2023, all of the investments held by Blackstone’s carry funds were deemed worthless, a possibility that management views as remote, the amount of Performance Allocations subject to potential clawback would be $6.3 billion, on an
after-tax
basis where applicable, of which Blackstone Holdings is potentially liable for $5.9 billion if current and former Blackstone personnel default on their share of the liability, a possibility that management also views as remote.
Blackstone conducts its alternative asset management businesses through four segments:
| |
• |
|
Real Estate – Blackstone’s Real Estate segment primarily comprises its management of opportunistic real estate funds, Core+ real estate funds, and real estate debt and credit strategies. |
| |
• |
|
Private Equity – Blackstone’s Private Equity segment includes its management of flagship corporate private equity funds, sector and geographically-focused corporate private equity funds, core private equity funds, an opportunistic investment platform, a secondary fund of funds business, infrastructure-focused funds, a life sciences investment platform, a growth equity investment platform, a multi-asset investment program for eligible high net worth investors and a capital markets services business. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
| |
• |
|
Credit & Insurance – Blackstone’s Credit & Insurance segment consists principally of Blackstone Credit, which is organized into two overarching strategies: private credit (which includes mezzanine and direct lending funds, private placement strategies, stressed/distressed strategies and energy strategies) and liquid credit (which consists of CLOs, closed-ended funds, open-ended funds and separately managed accounts). In addition, the segment includes an insurer-focused platform, an asset-based finance platform and publicly traded master limited partnership investment platform. |
| |
• |
|
Hedge Fund Solutions – The largest component of Blackstone’s Hedge Fund Solutions segment is Blackstone Alternative Asset Management, which manages a broad range of commingled and customized hedge fund of fund solutions. The segment also includes a GP Stakes business and investment platforms that invest directly, as well as investment platforms that seed new hedge fund businesses and create alternative solutions through daily liquidity products. |
These business segments are differentiated by their various investment strategies. Each of the segments primarily earns its income from management fees and investment returns on assets under management.
Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments.
Segment Distributable Earnings represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates
non-controlling
ownership interests in Blackstone’s consolidated operating partnerships, removes the amortization of intangible assets and removes Transaction-Related and
Non-Recurring
Items. Transaction-Related and
Non-Recurring
Items arise from corporate actions including acquisitions, divestitures, Blackstone’s initial public offering and
non-recurring
gains, losses, or other charges, if any. They consist primarily of equity-based compensation charges, gains or losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs, gains or losses associated with these corporate actions and
non-recurring
gains, losses or other charges that affect
comparability and are not reflective of Blackstone’s operational performance.
For segment reporting purposes, Segment Distributable Earnings is presented along with its major components, Fee Related Earnings and Net Realizations. Fee Related Earnings is used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Net Realizations is the sum of Realized Principal Investment Income and Realized Performance Revenues less Realized Performance Compensation. Performance Allocations and Incentive Fees are presented together and referred to collectively as Performance Revenues or Performance Compensation.
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following tables present the financial data for Blackstone’s four segments for the three months ended September 30, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30, 2023 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
697,561 |
|
|
$ |
457,008 |
|
|
$ |
333,828 |
|
|
$ |
131,346 |
|
|
$ |
1,619,743 |
|
Transaction, Advisory and Other Fees, Net |
|
|
10,686 |
|
|
|
21,780 |
|
|
|
10,362 |
|
|
|
1,783 |
|
|
|
44,611 |
|
|
|
|
(7,616 |
) |
|
|
(1,982 |
) |
|
|
(898 |
) |
|
|
(18 |
) |
|
|
(10,514 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net |
|
|
700,631 |
|
|
|
476,806 |
|
|
|
343,292 |
|
|
|
133,111 |
|
|
|
1,653,840 |
|
Fee Related Performance Revenues |
|
|
127,841 |
|
|
|
— |
|
|
|
146,710 |
|
|
|
— |
|
|
|
274,551 |
|
|
|
|
(199,384 |
) |
|
|
(145,987 |
) |
|
|
(148,056 |
) |
|
|
(46,496 |
) |
|
|
(539,923 |
) |
|
|
|
(83,074 |
) |
|
|
(78,547 |
) |
|
|
(76,147 |
) |
|
|
(26,677 |
) |
|
|
(264,445 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
546,014 |
|
|
|
252,272 |
|
|
|
265,799 |
|
|
|
59,938 |
|
|
|
1,124,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
17,419 |
|
|
|
299,272 |
|
|
|
14,349 |
|
|
|
6,900 |
|
|
|
337,940 |
|
Realized Performance Compensation |
|
|
(7,813 |
) |
|
|
(117,814 |
) |
|
|
(5,451 |
) |
|
|
(2,917 |
) |
|
|
(133,995 |
) |
Realized Principal Investment Income |
|
|
1,565 |
|
|
|
22,497 |
|
|
|
29,213 |
|
|
|
2,225 |
|
|
|
55,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,171 |
|
|
|
203,955 |
|
|
|
38,111 |
|
|
|
6,208 |
|
|
|
259,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings |
|
$ |
557,185 |
|
|
$ |
456,227 |
|
|
$ |
303,910 |
|
|
$ |
66,146 |
|
|
$ |
1,383,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30, 2022 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
610,606 |
|
|
$ |
466,474 |
|
|
$ |
312,663 |
|
|
$ |
138,818 |
|
|
$ |
1,528,561 |
|
Transaction, Advisory and Other Fees, Net |
|
|
54,342 |
|
|
|
24,313 |
|
|
|
10,629 |
|
|
|
581 |
|
|
|
89,865 |
|
| |
|
|
(1,842 |
) |
|
|
(3,634 |
) |
|
|
(1,323 |
) |
|
|
(57 |
) |
|
|
(6,856 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net |
|
|
663,106 |
|
|
|
487,153 |
|
|
|
321,969 |
|
|
|
139,342 |
|
|
|
1,611,570 |
|
Fee Related Performance Revenues |
|
|
260,003 |
|
|
|
— |
|
|
|
112,128 |
|
|
|
— |
|
|
|
372,131 |
|
| |
|
|
(239,572 |
) |
|
|
(142,381 |
) |
|
|
(135,420 |
) |
|
|
(40,895 |
) |
|
|
(558,268 |
) |
| |
|
|
(74,701 |
) |
|
|
(76,138 |
) |
|
|
(68,696 |
) |
|
|
(26,599 |
) |
|
|
(246,134 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
608,836 |
|
|
|
268,634 |
|
|
|
229,981 |
|
|
|
71,848 |
|
|
|
1,179,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
142,794 |
|
|
|
309,326 |
|
|
|
12,459 |
|
|
|
4,430 |
|
|
|
469,009 |
|
Realized Performance Compensation |
|
|
(33,464 |
) |
|
|
(164,531 |
) |
|
|
(4,992 |
) |
|
|
(3,237 |
) |
|
|
(206,224 |
) |
Realized Principal Investment Income |
|
|
45,297 |
|
|
|
38,015 |
|
|
|
46,993 |
|
|
|
9,460 |
|
|
|
139,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
154,627 |
|
|
|
182,810 |
|
|
|
54,460 |
|
|
|
10,653 |
|
|
|
402,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings |
|
$ |
763,463 |
|
|
$ |
451,444 |
|
|
$ |
284,441 |
|
|
$ |
82,501 |
|
|
$ |
1,581,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
The following tables present the financial data for Blackstone’s four segments as of September 30, 2023 and for the nine months ended September 30, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 30, 2023 and the Nine Months Then Ended |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
2,112,925 |
|
|
$ |
1,351,630 |
|
|
$ |
995,915 |
|
|
$ |
399,429 |
|
|
$ |
4,859,899 |
|
Transaction, Advisory and Other Fees, Net |
|
|
58,313 |
|
|
|
85,389 |
|
|
|
33,815 |
|
|
|
5,539 |
|
|
|
183,056 |
|
| |
|
|
(26,380 |
) |
|
|
(4,058 |
) |
|
|
(3,055 |
) |
|
|
(49 |
) |
|
|
(33,542 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net |
|
|
2,144,858 |
|
|
|
1,432,961 |
|
|
|
1,026,675 |
|
|
|
404,919 |
|
|
|
5,009,413 |
|
Fee Related Performance Revenues |
|
|
279,888 |
|
|
|
— |
|
|
|
409,645 |
|
|
|
— |
|
|
|
689,533 |
|
| |
|
|
(536,000 |
) |
|
|
(463,293 |
) |
|
|
(480,289 |
) |
|
|
(138,120 |
) |
|
|
(1,617,702 |
) |
| |
|
|
(229,204 |
) |
|
|
(229,713 |
) |
|
|
(231,760 |
) |
|
|
(82,782 |
) |
|
|
(773,459 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1,659,542 |
|
|
|
739,955 |
|
|
|
724,271 |
|
|
|
184,017 |
|
|
|
3,307,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
148,236 |
|
|
|
945,770 |
|
|
|
181,874 |
|
|
|
92,009 |
|
|
|
1,367,889 |
|
Realized Performance Compensation |
|
|
(80,571 |
) |
|
|
(413,389 |
) |
|
|
(79,794 |
) |
|
|
(34,635 |
) |
|
|
(608,389 |
) |
Realized Principal Investment Income |
|
|
3,719 |
|
|
|
59,353 |
|
|
|
15,866 |
|
|
|
12,792 |
|
|
|
91,730 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
71,384 |
|
|
|
591,734 |
|
|
|
117,946 |
|
|
|
70,166 |
|
|
|
851,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings |
|
$ |
1,730,926 |
|
|
$ |
1,331,689 |
|
|
$ |
842,217 |
|
|
$ |
254,183 |
|
|
$ |
4,159,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
13,683,819 |
|
|
$ |
14,152,032 |
|
|
$ |
6,683,449 |
|
|
$ |
2,516,441 |
|
|
$ |
37,035,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, 2022 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,802,543 |
|
|
$ |
1,321,405 |
|
|
$ |
911,697 |
|
|
$ |
428,941 |
|
|
$ |
4,464,586 |
|
Transaction, Advisory and Other Fees, Net |
|
|
141,801 |
|
|
|
64,522 |
|
|
|
27,143 |
|
|
|
5,500 |
|
|
|
238,966 |
|
|
|
|
(3,491 |
) |
|
|
(53,933 |
) |
|
|
(4,107 |
) |
|
|
(166 |
) |
|
|
(61,697 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net |
|
|
1,940,853 |
|
|
|
1,331,994 |
|
|
|
934,733 |
|
|
|
434,275 |
|
|
|
4,641,855 |
|
Fee Related Performance Revenues |
|
|
1,017,027 |
|
|
|
(648 |
) |
|
|
260,410 |
|
|
|
— |
|
|
|
1,276,789 |
|
|
|
|
(858,307 |
) |
|
|
(446,053 |
) |
|
|
(399,799 |
) |
|
|
(145,993 |
) |
|
|
(1,850,152 |
) |
|
|
|
(229,033 |
) |
|
|
(227,115 |
) |
|
|
(189,745 |
) |
|
|
(75,849 |
) |
|
|
(721,742 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,870,540 |
|
|
|
658,178 |
|
|
|
605,599 |
|
|
|
212,433 |
|
|
|
3,346,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
2,943,430 |
|
|
|
882,448 |
|
|
|
122,175 |
|
|
|
40,540 |
|
|
|
3,988,593 |
|
Realized Performance Compensation |
|
|
(1,154,897 |
) |
|
|
(428,614 |
) |
|
|
(54,487 |
) |
|
|
(14,320 |
) |
|
|
(1,652,318 |
) |
Realized Principal Investment Income |
|
|
128,388 |
|
|
|
112,357 |
|
|
|
76,793 |
|
|
|
22,831 |
|
|
|
340,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,916,921 |
|
|
|
566,191 |
|
|
|
144,481 |
|
|
|
49,051 |
|
|
|
2,676,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings |
|
$ |
3,787,461 |
|
|
$ |
1,224,369 |
|
|
$ |
750,080 |
|
|
$ |
261,484 |
|
|
$ |
6,023,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Total Segment Amounts
The following tables reconcile the Total Segment Revenues, Expenses and Distributable Earnings to their equivalent GAAP measure for the three and nine months ended September 30, 2023 and 2022 along with Total Assets as of September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,541,285 |
|
|
$ |
1,058,114 |
|
|
$ |
6,737,821 |
|
|
$ |
6,813,614 |
|
Less: Unrealized Performance Revenues (a) |
|
|
63,209 |
|
|
|
771,637 |
|
|
|
708,146 |
|
|
|
2,946,255 |
|
Less: Unrealized Principal Investment (Income) Loss (b) |
|
|
(84,780 |
) |
|
|
996,105 |
|
|
|
233,638 |
|
|
|
1,172,635 |
|
Less: Interest and Dividend Revenue (c) |
|
|
(113,904 |
) |
|
|
(57,462 |
) |
|
|
(362,245 |
) |
|
|
(178,090 |
) |
|
|
|
(63,748 |
) |
|
|
(198,546 |
) |
|
|
(17,850 |
) |
|
|
(427,069 |
) |
Impact of Consolidation (e) |
|
|
(20,389 |
) |
|
|
23,373 |
|
|
|
(139,784 |
) |
|
|
(79,124 |
) |
Transaction-Related and Non-Recurring Items (f) |
|
|
(420 |
) |
|
|
(1,264 |
) |
|
|
(3,093 |
) |
|
|
(2,714 |
) |
Intersegment Eliminations |
|
|
578 |
|
|
|
518 |
|
|
|
1,932 |
|
|
|
2,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenue (g) |
|
$ |
2,321,831 |
|
|
$ |
2,592,475 |
|
|
$ |
7,158,565 |
|
|
$ |
10,247,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,374,905 |
|
|
$ |
961,361 |
|
|
$ |
4,039,560 |
|
|
$ |
3,902,496 |
|
Less: Unrealized Performance Allocations Compensation (h) |
|
|
(11,866 |
) |
|
|
359,590 |
|
|
|
247,228 |
|
|
|
1,273,849 |
|
Less: Equity-Based Compensation (i) |
|
|
(255,616 |
) |
|
|
(190,197 |
) |
|
|
(773,505 |
) |
|
|
(587,386 |
) |
Less: Interest Expense (j) |
|
|
(110,014 |
) |
|
|
(80,312 |
) |
|
|
(321,353 |
) |
|
|
(216,339 |
) |
Impact of Consolidation (e) |
|
|
(43,172 |
) |
|
|
(14,125 |
) |
|
|
(140,725 |
) |
|
|
(33,325 |
) |
Amortization of Intangibles (k) |
|
|
(7,357 |
) |
|
|
(13,238 |
) |
|
|
(26,110 |
) |
|
|
(47,326 |
) |
Transaction-Related and Non-Recurring Items (f) |
|
|
(6,670 |
) |
|
|
(10,511 |
) |
|
|
(20,192 |
) |
|
|
(62,435 |
) |
Administrative Fee Adjustment (l) |
|
|
(2,425 |
) |
|
|
(2,460 |
) |
|
|
(7,285 |
) |
|
|
(7,421 |
) |
Intersegment Eliminations |
|
|
578 |
|
|
|
518 |
|
|
|
1,932 |
|
|
|
2,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Expenses (m) |
|
$ |
938,363 |
|
|
$ |
1,010,626 |
|
|
$ |
2,999,550 |
|
|
$ |
4,224,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP Other Income (Loss) |
|
$ |
(49,078 |
) |
|
$ |
1,178 |
|
|
$ |
104,373 |
|
|
$ |
(51,524 |
) |
Impact of Consolidation (e) |
|
|
49,078 |
|
|
|
(1,178 |
) |
|
|
(104,373 |
) |
|
|
51,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Other Income |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Income Before Provision for Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP Income Before Provision for Taxes |
|
$ |
1,117,302 |
|
|
$ |
97,931 |
|
|
$ |
2,802,634 |
|
|
$ |
2,859,594 |
|
Less: Unrealized Performance Revenues (a) |
|
|
63,209 |
|
|
|
771,637 |
|
|
|
708,146 |
|
|
|
2,946,255 |
|
Less: Unrealized Principal Investment (Income) Loss (b) |
|
|
(84,780 |
) |
|
|
996,105 |
|
|
|
233,638 |
|
|
|
1,172,635 |
|
Less: Interest and Dividend Revenue (c) |
|
|
(113,904 |
) |
|
|
(57,462 |
) |
|
|
(362,245 |
) |
|
|
(178,090 |
) |
|
|
|
(63,748 |
) |
|
|
(198,546 |
) |
|
|
(17,850 |
) |
|
|
(427,069 |
) |
Plus: Unrealized Performance Allocations Compensation (h) |
|
|
11,866 |
|
|
|
(359,590 |
) |
|
|
(247,228 |
) |
|
|
(1,273,849 |
) |
Plus: Equity-Based Compensation (i) |
|
|
255,616 |
|
|
|
190,197 |
|
|
|
773,505 |
|
|
|
587,386 |
|
Plus: Interest Expense (j) |
|
|
110,014 |
|
|
|
80,312 |
|
|
|
321,353 |
|
|
|
216,339 |
|
Impact of Consolidation (e) |
|
|
71,861 |
|
|
|
36,320 |
|
|
|
(103,432 |
) |
|
|
5,725 |
|
Amortization of Intangibles (k) |
|
|
7,357 |
|
|
|
13,238 |
|
|
|
26,110 |
|
|
|
47,326 |
|
Transaction-Related and Non-Recurring Items (f) |
|
|
6,250 |
|
|
|
9,247 |
|
|
|
17,099 |
|
|
|
59,721 |
|
Administrative Fee Adjustment (l) |
|
|
2,425 |
|
|
|
2,460 |
|
|
|
7,285 |
|
|
|
7,421 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings |
|
$ |
1,383,468 |
|
|
$ |
1,581,849 |
|
|
$ |
4,159,015 |
|
|
$ |
6,023,394 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
|
$ |
41,663,823 |
|
Impact of Consolidation (e) |
|
|
(4,628,082 |
) |
| |
|
|
|
|
|
|
$ |
37,035,741 |
|
| |
|
|
|
|
Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles and Transaction-Related and
Non-Recurring
Items.
(a) |
This adjustment removes Unrealized Performance Revenues on a segment basis. |
(b) |
This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. |
(c) |
This adjustment removes Interest and Dividend Revenue on a segment basis. |
(d) |
This adjustment removes Other Revenue on a segment basis. For the three months ended September 30, 2023 and 2022, Other Revenue on a GAAP basis was $63.8 million and $199.4 million, and included $63.2 million and $198.4 million of foreign exchange gains (losses), respectively. For the nine months ended September 30, 2023 and 2022, Other Revenue on a GAAP basis was $18.0 million and $427.8 million, and included $16.4 million and $426.7 million of foreign exchange gains (losses), respectively. |
(e) |
This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds, the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
(f) |
This adjustment removes Transaction-Related and Non-Recurring Items, which are excluded from Blackstone’s segment presentation. Transaction-Related and Non-Recurring Items arise from corporate actions including acquisitions, divestitures, Blackstone’s initial public offering and non-recurring gains, losses, or other charges, if any. They consist primarily of equity-based compensation charges, gains or losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs, gains or losses associated with these corporate actions and non-recurring gains, losses or other charges that affect comparability and are not reflective of Blackstone’s operational performance. |
|
Total Segment Revenues is comprised of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Management and Advisory Fees, Net |
|
$ |
1,653,840 |
|
|
$ |
1,611,570 |
|
|
$ |
5,009,413 |
|
|
$ |
4,641,855 |
|
Total Segment Fee Related Performance Revenues |
|
|
274,551 |
|
|
|
372,131 |
|
|
|
689,533 |
|
|
|
1,276,789 |
|
Total Segment Realized Performance Revenues |
|
|
337,940 |
|
|
|
469,009 |
|
|
|
1,367,889 |
|
|
|
3,988,593 |
|
Total Segment Realized Principal Investment Income |
|
|
55,500 |
|
|
|
139,765 |
|
|
|
91,730 |
|
|
|
340,369 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,321,831 |
|
|
$ |
2,592,475 |
|
|
$ |
7,158,565 |
|
|
$ |
10,247,606 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) |
This adjustment removes Unrealized Performance Allocations Compensation. |
(i) |
This adjustment removes Equity-Based Compensation on a segment basis. |
(j) |
This adjustment adds back Interest Expense on a segment basis, excluding interest expense related to the Tax Receivable Agreement. |
(k) |
This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. |
(l) |
This adjustment adds an amount equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation. |
(m) |
Total Segment Expenses is comprised of the following: |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
| |
|
|
|
|
|
|
|
|
Total Segment Fee Related Compensation |
|
$ |
539,923 |
|
|
$ |
558,268 |
|
|
$ |
1,617,702 |
|
|
$ |
1,850,152 |
|
Total Segment Realized Performance Compensation |
|
|
133,995 |
|
|
|
206,224 |
|
|
|
608,389 |
|
|
|
1,652,318 |
|
Total Segment Other Operating Expenses |
|
|
264,445 |
|
|
|
246,134 |
|
|
|
773,459 |
|
|
|
721,742 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
938,363 |
|
|
$ |
1,010,626 |
|
|
$ |
2,999,550 |
|
|
$ |
4,224,212 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
Reconciliations of Total Segment Components
The following tables reconcile the components of Total Segments to their equivalent GAAP measures, reported on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,655,443 |
|
|
$ |
1,617,754 |
|
|
$ |
5,023,128 |
|
|
$ |
4,654,877 |
|
|
|
|
(1,603 |
) |
|
|
(6,184 |
) |
|
|
(13,715 |
) |
|
|
(13,022 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,653,840 |
|
|
$ |
1,611,570 |
|
|
$ |
5,009,413 |
|
|
$ |
4,641,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
158,801 |
|
|
$ |
110,776 |
|
|
$ |
454,754 |
|
|
$ |
314,863 |
|
Investment Income - Realized Performance Allocations |
|
|
453,690 |
|
|
|
725,888 |
|
|
|
1,602,668 |
|
|
|
4,946,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
612,491 |
|
|
|
836,664 |
|
|
|
2,057,422 |
|
|
|
5,260,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Realized Performance Revenues |
|
|
(337,940 |
) |
|
|
(469,009 |
) |
|
|
(1,367,889 |
) |
|
|
(3,988,593 |
) |
|
|
|
— |
|
|
|
4,476 |
|
|
|
— |
|
|
|
4,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
274,551 |
|
|
$ |
372,131 |
|
|
$ |
689,533 |
|
|
$ |
1,276,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
GAAP Compensation to Total Segment Fee Related Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
700,268 |
|
|
$ |
600,273 |
|
|
$ |
2,153,570 |
|
|
$ |
1,942,790 |
|
Incentive Fee Compensation |
|
|
65,432 |
|
|
|
50,355 |
|
|
|
192,940 |
|
|
|
136,737 |
|
Realized Performance Allocations Compensation |
|
|
168,620 |
|
|
|
313,930 |
|
|
|
670,610 |
|
|
|
2,067,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
934,320 |
|
|
|
964,558 |
|
|
|
3,017,120 |
|
|
|
4,146,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Realized Performance Compensation |
|
|
(133,995 |
) |
|
|
(206,224 |
) |
|
|
(608,389 |
) |
|
|
(1,652,318 |
) |
Less: Equity-Based Compensation - Fee Related Compensation |
|
|
(252,928 |
) |
|
|
(187,873 |
) |
|
|
(764,527 |
) |
|
|
(580,029 |
) |
Less: Equity-Based Compensation - Performance Compensation |
|
|
(2,688 |
) |
|
|
(2,324 |
) |
|
|
(8,978 |
) |
|
|
(7,357 |
) |
|
|
|
(4,786 |
) |
|
|
(9,869 |
) |
|
|
(17,524 |
) |
|
|
(57,118 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
539,923 |
|
|
$ |
558,268 |
|
|
$ |
1,617,702 |
|
|
$ |
1,850,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
GAAP General, Administrative and Other to Total Segment Other Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
279,186 |
|
|
$ |
270,369 |
|
|
$ |
827,614 |
|
|
$ |
800,331 |
|
|
|
|
(14,741 |
) |
|
|
(24,235 |
) |
|
|
(54,155 |
) |
|
|
(78,589 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
264,445 |
|
|
$ |
246,134 |
|
|
$ |
773,459 |
|
|
$ |
721,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
158,801 |
|
|
$ |
110,776 |
|
|
$ |
454,754 |
|
|
$ |
314,863 |
|
Investment Income - Realized Performance Allocations |
|
|
453,690 |
|
|
|
725,888 |
|
|
|
1,602,668 |
|
|
|
4,946,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
612,491 |
|
|
|
836,664 |
|
|
|
2,057,422 |
|
|
|
5,260,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fee Related Performance Revenues |
|
|
(274,551 |
) |
|
|
(372,131 |
) |
|
|
(689,533 |
) |
|
|
(1,276,789 |
) |
|
|
|
— |
|
|
|
4,476 |
|
|
|
— |
|
|
|
4,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
337,940 |
|
|
$ |
469,009 |
|
|
$ |
1,367,889 |
|
|
$ |
3,988,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Realized Performance Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Fee Compensation |
|
$ |
65,432 |
|
|
$ |
50,355 |
|
|
$ |
192,940 |
|
|
$ |
136,737 |
|
Realized Performance Allocation Compensation |
|
|
168,620 |
|
|
|
313,930 |
|
|
|
670,610 |
|
|
|
2,067,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
234,052 |
|
|
|
364,285 |
|
|
|
863,550 |
|
|
|
2,204,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fee Related Performance Compensation (e) |
|
|
(97,369 |
) |
|
|
(155,737 |
) |
|
|
(246,183 |
) |
|
|
(544,509 |
) |
Less: Equity-Based Compensation - Performance Compensation |
|
|
(2,688 |
) |
|
|
(2,324 |
) |
|
|
(8,978 |
) |
|
|
(7,357 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
133,995 |
|
|
$ |
206,224 |
|
|
$ |
608,389 |
|
|
$ |
1,652,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
Realized Principal Investment Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
94,313 |
|
|
$ |
193,228 |
|
|
$ |
257,206 |
|
|
$ |
743,493 |
|
|
|
|
(38,813 |
) |
|
|
(53,463 |
) |
|
|
(165,476 |
) |
|
|
(403,124 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
55,500 |
|
|
$ |
139,765 |
|
|
$ |
91,730 |
|
|
$ |
340,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment basis presents revenues and expenses on a basis that deconsolidates the investment funds Blackstone manages and excludes the amortization of intangibles, the expense of equity-based awards and Transaction-Related and
Non-Recurring
Items.
(a) |
Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures. |
(b) |
Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation. |
(c) |
Represents the removal of Transaction-Related and Non-Recurring Items that are not recorded in the Total Segment measures. |
(d) |
Represents the (1) removal of amortization of transaction-related intangibles, (2) removal of certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures, and (3) a reduction equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units which is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation. |
(e) |
Fee related performance compensation may include equity-based compensation based on fee related performance revenues. |
(f) |
Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. |
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
(All Dollars are in Thousands, Except Share and Per Share Data, Except Where Noted)
There have been no events since September 30, 2023 that require recognition or disclosure in the Condensed Consolidated Financial Statements.
Item 1A. Unaudited Supplemental Presentation of Statements of Financial Condition
Unaudited Consolidating Statements of Financial Condition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
2,971,614 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,971,614 |
|
Cash Held by Blackstone Funds and Other |
|
|
— |
|
|
|
138,181 |
|
|
|
— |
|
|
|
138,181 |
|
|
|
|
22,822,913 |
|
|
|
5,224,104 |
|
|
|
(707,160 |
) |
|
|
27,339,857 |
|
|
|
|
687,054 |
|
|
|
6,732 |
|
|
|
— |
|
|
|
693,786 |
|
|
|
|
4,432,466 |
|
|
|
9,354 |
|
|
|
(43,487 |
) |
|
|
4,398,333 |
|
|
|
|
210,210 |
|
|
|
— |
|
|
|
— |
|
|
|
210,210 |
|
|
|
|
1,890,202 |
|
|
|
— |
|
|
|
— |
|
|
|
1,890,202 |
|
|
|
|
971,711 |
|
|
|
358 |
|
|
|
— |
|
|
|
972,069 |
|
|
|
|
864,691 |
|
|
|
— |
|
|
|
— |
|
|
|
864,691 |
|
|
|
|
2,184,880 |
|
|
|
— |
|
|
|
— |
|
|
|
2,184,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
37,035,741 |
|
|
$ |
5,378,729 |
|
|
$ |
(750,647 |
) |
|
$ |
41,663,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,521,728 |
|
|
$ |
1,589,649 |
|
|
$ |
— |
|
|
$ |
12,111,377 |
|
|
|
|
2,096,929 |
|
|
|
136,967 |
|
|
|
(45,672 |
) |
|
|
2,188,224 |
|
Accrued Compensation and Benefits |
|
|
5,983,137 |
|
|
|
— |
|
|
|
— |
|
|
|
5,983,137 |
|
Operating Lease Liabilities |
|
|
981,616 |
|
|
|
— |
|
|
|
— |
|
|
|
981,616 |
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
1,416,861 |
|
|
|
171,887 |
|
|
|
— |
|
|
|
1,588,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,000,271 |
|
|
|
1,898,503 |
|
|
|
(45,672 |
) |
|
|
22,853,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
1 |
|
|
|
1,349,059 |
|
|
|
— |
|
|
|
1,349,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Series II Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
6,057,065 |
|
|
|
684,836 |
|
|
|
(684,836 |
) |
|
|
6,057,065 |
|
|
|
|
1,114,009 |
|
|
|
20,139 |
|
|
|
(20,139 |
) |
|
|
1,114,009 |
|
Accumulated Other Comprehensive Loss |
|
|
(34,278 |
) |
|
|
(3,980 |
) |
|
|
— |
|
|
|
(38,258 |
) |
Non-Controlling Interests in Consolidated Entities |
|
|
3,744,301 |
|
|
|
1,430,172 |
|
|
|
— |
|
|
|
5,174,473 |
|
Non-Controlling Interests in Blackstone Holdings |
|
|
5,154,365 |
|
|
|
— |
|
|
|
— |
|
|
|
5,154,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,035,469 |
|
|
|
2,131,167 |
|
|
|
(704,975 |
) |
|
|
17,461,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
37,035,741 |
|
|
$ |
5,378,729 |
|
|
$ |
(750,647 |
) |
|
$ |
41,663,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidating Statements of Financial Condition - Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
4,252,003 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,252,003 |
|
Cash Held by Blackstone Funds and Other |
|
|
— |
|
|
|
241,712 |
|
|
|
— |
|
|
|
241,712 |
|
|
|
|
23,236,603 |
|
|
|
5,136,542 |
|
|
|
(819,894 |
) |
|
|
27,553,251 |
|
|
|
|
407,681 |
|
|
|
55,223 |
|
|
|
— |
|
|
|
462,904 |
|
|
|
|
4,185,982 |
|
|
|
8,417 |
|
|
|
(47,692 |
) |
|
|
4,146,707 |
|
|
|
|
217,287 |
|
|
|
— |
|
|
|
— |
|
|
|
217,287 |
|
|
|
|
1,890,202 |
|
|
|
— |
|
|
|
— |
|
|
|
1,890,202 |
|
|
|
|
798,299 |
|
|
|
2,159 |
|
|
|
— |
|
|
|
800,458 |
|
|
|
|
896,981 |
|
|
|
— |
|
|
|
— |
|
|
|
896,981 |
|
|
|
|
2,062,722 |
|
|
|
— |
|
|
|
— |
|
|
|
2,062,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
37,947,760 |
|
|
$ |
5,444,053 |
|
|
$ |
(867,586 |
) |
|
$ |
42,524,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,899,584 |
|
|
$ |
1,450,000 |
|
|
$ |
— |
|
|
$ |
12,349,584 |
|
|
|
|
2,039,549 |
|
|
|
128,681 |
|
|
|
(49,749 |
) |
|
|
2,118,481 |
|
Accrued Compensation and Benefits |
|
|
6,101,801 |
|
|
|
— |
|
|
|
— |
|
|
|
6,101,801 |
|
Operating Lease Liabilities |
|
|
1,021,454 |
|
|
|
— |
|
|
|
— |
|
|
|
1,021,454 |
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
1,225,982 |
|
|
|
25,858 |
|
|
|
— |
|
|
|
1,251,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,288,370 |
|
|
|
1,604,539 |
|
|
|
(49,749 |
) |
|
|
22,843,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
3 |
|
|
|
1,715,003 |
|
|
|
— |
|
|
|
1,715,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Series II Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
5,935,273 |
|
|
|
800,381 |
|
|
|
(800,381 |
) |
|
|
5,935,273 |
|
|
|
|
1,748,106 |
|
|
|
17,456 |
|
|
|
(17,456 |
) |
|
|
1,748,106 |
|
Accumulated Other Comprehensive Income (Loss) |
|
|
(35,346 |
) |
|
|
7,871 |
|
|
|
— |
|
|
|
(27,475 |
) |
Non-Controlling Interests in Consolidated Entities |
|
|
3,757,677 |
|
|
|
1,298,803 |
|
|
|
— |
|
|
|
5,056,480 |
|
Non-Controlling Interests in Blackstone Holdings |
|
|
5,253,670 |
|
|
|
— |
|
|
|
— |
|
|
|
5,253,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,659,387 |
|
|
|
2,124,511 |
|
|
|
(817,837 |
) |
|
|
17,966,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
37,947,760 |
|
|
$ |
5,444,053 |
|
|
$ |
(867,586 |
) |
|
$ |
42,524,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
The Consolidated Blackstone Funds consisted of the following: |
Blackstone / GSO Global Dynamic Credit Feeder Fund (Cayman) LP**
Blackstone / GSO Global Dynamic Credit Funding Designated Activity Company**
Blackstone / GSO Global Dynamic Credit Master Fund**
Blackstone / GSO Global Dynamic Credit USD Feeder Fund (Ireland)**
Blackstone Annex Onshore Fund L.P.
Blackstone Horizon Fund L.P.
Blackstone Real Estate Special Situations Holdings L.P.**
Blackstone Strategic Alliance Fund L.P.**
Blackstone Dislocation Fund L.P.
Blackstone Private Equity Strategies Fund L.P.
Blackstone Private Equity Strategies Fund SICAV
Blackstone Private Equity Strategies Fund (Master) FCP*
Blackstone Infrastructure Hogan
Co-Invest
(CYM) L.P.
Clover Credit Partners CLO III, Ltd.*
Mezzanine
investment vehicles**
Private equity
investment vehicles
Real estate
investment vehicles
Hedge Fund Solutions
investment vehicles.
*Consolidated as of September 30, 2023 only
** Consolidated as of December 31, 2022 only
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with Blackstone Inc.’s condensed consolidated financial statements and the related notes included within this Quarterly Report on
Form 10-Q.
In this report, references to “Blackstone,” the “Company,” “we,” “us” or “our” refer to Blackstone Inc. and its consolidated subsidiaries.
Blackstone is one of the world’s leading investment firms. We generate revenue from fees earned pursuant to contractual arrangements with funds, fund investors and fund portfolio companies (including management, transaction and monitoring fees), and from capital markets services. We also invest in the funds we manage and we are entitled to a
pro-rata
share of the income of the fund
(a “pro-rata
allocation”). In addition to a
pro-rata
allocation, and assuming certain investment returns are achieved, we are entitled to a disproportionate allocation of the income otherwise allocable to the limited partners, commonly referred to as carried interest (“Performance Allocations”). In certain structures, we receive a contractual incentive fee from an investment fund based on achieving certain investment returns (an “Incentive Fee,” and together with Performance Allocations, “Performance Revenues”). The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate. Net investment gains and investment income generated by the Blackstone Funds are driven by the performance of the underlying investments as well as overall market conditions. Fair values are affected by changes in the fundamentals of our portfolio companies and other investments, the industries in which they operate, the overall economy and other market conditions.
Our business is organized into four segments:
Our Real Estate business is a global leader in real estate investing. Our Real Estate segment operates as one globally integrated business, with investments across the globe, including in the Americas, Europe and Asia. Our real estate investment teams seek to utilize our global expertise and presence to generate attractive risk-adjusted returns for our investors.
Our Blackstone Real Estate Partners (“BREP”) business is geographically diversified and targets a broad range of opportunistic real estate and real estate-related investments. The BREP funds include global funds as well as funds focused specifically on Europe or Asia investments. BREP seeks to invest thematically in high-quality assets, focusing where we see outsized growth potential driven by global economic and demographic trends.
Our Core+ strategy invests in substantially stabilized real estate globally primarily through perpetual capital vehicles. These include our (a) Blackstone Property Partners funds (“BPP”), which are focused on high-quality assets in the Americas, Europe and Asia and (b) Blackstone Real Estate Income Trust, Inc. (“BREIT”) and our Blackstone European Property Income (“BEPIF”) funds, which provide income-focused individual investors access to institutional quality real estate globally in developed markets.
Our Blackstone Real Estate Debt Strategies (“BREDS”) vehicles primarily target real estate-related debt investment opportunities. BREDS invests in both public and private markets, primarily in the U.S. and Europe. BREDS’ scale and investment mandates enable it to provide a variety of lending options for our borrowers and investment options for our investors, including commercial real estate and mezzanine loans, residential mortgage loan pools and liquid real estate-related debt securities. The BREDS platform includes high-yield real estate debt funds, liquid real estate debt funds and Blackstone Mortgage Trust, Inc. (“BXMT”), a NYSE-listed real estate investment trust (“REIT”). The BREDS platform also includes real estate credit products managed on behalf of insurance companies.
Our Private Equity segment includes our corporate private equity business, which consists of: (a) our global private equity funds, Blackstone Capital Partners (“BCP”), (b) our sector-focused funds, including our energy- and energy transition-focused funds, Blackstone Energy Transition Partners (“BETP”), (c) our Asia-focused private equity funds, Blackstone Capital Partners Asia and (d) our core private equity funds, Blackstone Core Equity Partners (“BCEP”). Our Private Equity segment also includes (a) our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (b) our secondary fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), (c) our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (d) our life sciences investment platform, Blackstone Life Sciences (“BXLS”), (e) our growth equity investment platform, Blackstone Growth (“BXG”), (f) our multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (g) our capital markets services business, Blackstone Capital Markets (“BXCM”).
We are a global leader in private equity investing. Our corporate private equity business pursues transactions across industries on a global basis. It strives to create value by investing in great businesses where our capital, strategic insight, global relationships and operational support can drive transformation. Our corporate private equity business’s investment strategies and core themes continually evolve in anticipation of, or in response to, changes in the global economy, local markets, regulation, capital flows and geopolitical trends. We seek to construct a differentiated portfolio of investments with a well-defined, post-acquisition value creation strategy. Similarly, we seek investments that can generate strong unlevered returns regardless of entry or exit cycle timing. Blackstone Core Equity Partners pursues control-oriented investments in high-quality companies with durable businesses and seeks to offer a lower level of risk and a longer hold period than traditional private equity.
Tactical Opportunities pursues a thematically driven, opportunistic investment strategy. Our flexible, global mandate enables us to find differentiated opportunities across asset classes, industries, and geographies and invest behind them with the frequent use of structure to generate attractive risk-adjusted returns. With a focus on businesses and/or asset-backed investments in market sectors that are benefitting from long-term transformational tailwinds, Tactical Opportunities seeks to leverage the full power of Blackstone to help those businesses grow and improve. Tactical Opportunities’ ability to dynamically shift focus to the most compelling opportunities in any market environment, combined with the business’ expertise in structuring complex transactions, enables Tactical Opportunities to invest behind attractive market areas often with securities that provide downside protection and maintain upside return.
Strategic Partners, our secondary fund of funds business, is a total fund solutions provider. As a secondary investor it acquires interests in high-quality private funds from original holders seeking liquidity. Strategic Partners focuses on a range of opportunities in underlying funds such as private equity, real estate, infrastructure, venture and growth capital, credit and other types of funds, as well as general
partner-led
transactions and primary investments and
co-investments
with financial sponsors. Strategic Partners also provides investment advisory services to separately managed account clients investing in primary and secondary investments in private funds and
co-investments.
BIP targets a diversified mix of core+, core and public-private partnership investments across all infrastructure sectors, including energy infrastructure, transportation, digital infrastructure, and water and waste with a primary focus in the U.S. BIP applies a disciplined, operationally intensive investment approach to investments, seeking to apply a long-term
strategy to large-scale infrastructure assets with a focus on delivering stable, long-term capital appreciation together with a predictable annual cash flow yield.
BXLS is our investment platform with capabilities to invest across the life cycle of companies and products within the life sciences sector. BXLS primarily focuses on investments in life sciences products in late stage clinical development within the pharmaceutical and biotechnology sectors.
BXG is our growth equity platform that seeks to deliver attractive risk-adjusted returns by investing in dynamic, growth-stage businesses, with a focus on the consumer, consumer technology, enterprise solutions, financial services and healthcare sectors.
Our Credit & Insurance segment includes Blackstone Credit (“BXC”). BXC is one of the largest credit-oriented managers and CLO managers in the world. The investment portfolios of the funds BXC manages or
sub-advises
consist primarily of loans and securities of
non-investment
and investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity.
BXC is organized into two overarching strategies: private credit and liquid credit. BXC’s private credit strategies include mezzanine and direct lending funds, private placement strategies, stressed/distressed strategies and energy strategies (including our sustainable resources platform). BXC’s direct lending funds include Blackstone Private Credit Fund (“BCRED”) and Blackstone Secured Lending Fund (“BXSL”), both of which are business development companies (“BDCs”). BXC’s liquid credit strategies consist of CLOs, closed-ended funds, open-ended funds, systematic strategies and separately managed accounts.
Our Credit & Insurance segment also includes our insurer-focused platform, Blackstone Insurance Solutions (“BIS”). BIS focuses on providing full investment management services for insurers’ general accounts, seeking to deliver customized and diversified portfolios that include allocations to Blackstone managed products and strategies across asset classes and Blackstone’s private credit origination capabilities. BIS provides its clients tailored portfolio construction and strategic asset allocation, seeking to generate risk-managed, capital-efficient returns, diversification and capital preservation that meets clients’ objectives. BIS also provides similar services to
clients through separately managed accounts or by
sub-managing
assets for certain insurance-dedicated funds and special purpose vehicles. BIS currently manages assets for clients that include Corebridge Financial Inc., Everlake Life Insurance Company, Fidelity & Guaranty Life Insurance Company and Resolution Life Group, among others.
In addition, our Credit & Insurance segment includes our asset-based finance platform and our publicly traded midstream energy infrastructure, listed infrastructure and master limited partnership (“MLP”) investment platform, which is managed by Harvest Fund Advisors LLC (“Harvest”). Harvest primarily invests capital raised from institutional investors in separately managed accounts and pooled vehicles, investing in publicly traded energy infrastructure, listed infrastructure, renewables and MLPs holding primarily midstream energy assets in North America.
In September 2023, we announced the integration of BXC, BIS and our asset-based finance platform into a single new business unit, Blackstone Credit & Insurance (“BXCI”). Upon completion of the integration, BXCI is expected to offer its clients and borrowers a comprehensive solution across corporate and asset-based, as well as investment grade and
non-investment
The principal component of our Hedge Fund Solutions segment is Blackstone Alternative Asset Management (“BAAM”). BAAM is the world’s largest discretionary allocator to hedge funds, managing a broad range of commingled and customized fund solutions since its inception in 1990. The Hedge Fund Solutions segment also includes (a) our GP Stakes business (“GP Stakes”), which targets minority investments in the general partners of private equity and other private-market alternative asset management firms globally, with a focus on delivering a combination of recurring annual cash flow yield and long-term capital appreciation, (b) investment platforms that invest directly, including our Blackstone Strategic Opportunity Fund, which seeks to produce long-term, risk-adjusted returns by investing in a wide variety of securities, assets and instruments, often sourced and/or managed by third party subadvisors or affiliated Blackstone managers, (c) our hedge fund seeding business and (d) registered funds that provide alternative asset solutions through daily liquidity products. Hedge Fund Solutions’ overall investment philosophy is to seek to grow investors’ assets through both commingled and custom-tailored investment strategies designed to deliver compelling risk-adjusted returns. Diversification, risk management and due diligence are key tenets of our approach.
Blackstone’s businesses are materially affected by conditions in the financial markets and economic conditions in the U.S., Europe, Asia and, to a lesser extent, elsewhere in the world.
In the third quarter of 2023, most major equity markets declined and volatility increased, as investor sentiment was negatively impacted by tightening monetary conditions, economic uncertainty and geopolitical turbulence, including in the Middle East. In the U.S., growing Treasury debt issuance, coupled with robust growth in consumer spend and low unemployment rates, resulted in a sharp increase in bond yields in the latter half of the third quarter. This further negatively impacted sentiment and slowed capital markets activity. The S&P 500 declined 3.3% in the third quarter, with declines across most individual sectors. The energy sector was an outlier, increasing 12.2% in the quarter due to higher energy prices. The price of West Texas Intermediate crude oil increased 29% in the third quarter to $90.79 per barrel, with the prospect of further increases in the fourth quarter amid potential tightening of supply resulting from Israel’s war against Hamas and possible fallout across the region.
The CBOE Volatility Index rose 29% in the third quarter, reversing the decline in the second quarter. In credit markets, the S&P leveraged loan index increased by 3.5% and the Credit Suisse high yield bond index increased by 0.5% in the third quarter. High yield spreads tightened by 12 basis points in the third quarter compared to the second quarter of 2023, while issuance increased 90% on a year-over-year basis.
Outside of the U.S., many central banks around the world continued to tighten monetary policy, contributing to continued investor concerns regarding slowing growth. The European Central Bank raised its deposit facility rate by 50 basis points in the third quarter to 4.0%. Eurozone inflation slowed to 4.3% year-over-year in September 2023, down from a peak of 10.6% in October of 2022 and down from 5.5% in June of 2023.
In the U.S., inflation continued to decelerate in the third quarter, with the headline CPI reading in September 2023 increasing 3.7% year-over-year, up moderately from 3.0% in June 2023, but remaining well below the recent peak of 9.1% in June 2022. Core CPI continued to decelerate, increasing 4.1% year-over-year in September 2023, compared to a 4.8% year-over-year increase in June 2023. In light of continued tightness in the labor market and historically high wages, however, the Federal Reserve raised the federal funds target range by 25 basis points in the third quarter to 5.25-5.50% and signaled its intention to keep rates at an elevated level for a sustained period given inflation remains well above its long-run target of 2%. The ten-year U.S. Treasury yield increased 73 basis points to 4.57% in the third quarter of 2023. It further increased to 4.73% as of November 1, 2023, after briefly touching 5% on October 23, 2023. Meanwhile, short-term yields moved higher as well, with three-month LIBOR up 11 basis points to 5.66% in the third quarter and 5.64% as of October 27, 2023.
Despite sustained high interest rates, the U.S. economy continues to exhibit strength, with the advance estimate of annualized GDP growth accelerating in the third quarter to 4.9%. Additionally, the labor market remains tight, with near historically low levels of unemployment. Wages increased 4.2% year-over-year in September 2023, while retail sales rose 3.8% year-over-year. In manufacturing, the ISM Manufacturing PMI increased to 49.0 in September 2023, up from 46.0 in the second quarter, reflecting growth in the sector.
Market activity levels modestly improved in the third quarter of 2023 compared to the second quarter but remain at historically depressed levels. On a year-to-date basis, U.S. initial public offering volumes rose 1%, while U.S. announced merger and acquisition deal volumes declined 18% over the same period.
During the third quarter, the U.S. saw significant progress on inflation while maintaining strong growth in the economy. Nevertheless, sustained high interest rates and the continued possibility of economic deceleration in the U.S. and globally, combined with geopolitical turbulence, have weighed heavily on investor sentiment. This has negatively impacted market conditions, which are likely to remain challenging for some time.
The simplified diagram below depicts our current organizational structure. The diagram does not depict all of our subsidiaries, including intermediate holding companies through which certain of the subsidiaries depicted are held.
Key Financial Measures and Indicators
We manage our business using certain financial measures and key operating metrics since we believe these metrics measure the productivity of our investment activities. We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See “— Item 1. Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 2. Summary of Significant Accounting Policies” and “— Critical Accounting Policies.” Our key
non-GAAP
financial measures and operating indicators and metrics are discussed below.
Distributable Earnings is derived from Blackstone’s segment reported results. Distributable Earnings is used to assess performance and amounts available for dividends to Blackstone stockholders, including Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships. Distributable Earnings is the sum of Segment Distributable Earnings plus Net Interest and Dividend Income (Loss) less Taxes and Related Payables. Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Distributable Earnings.
Net Interest and Dividend Income (Loss) is presented on a segment basis and is equal to Interest and Dividend Revenue less Interest Expense, adjusted for the impact of consolidation of Blackstone Funds, and interest expense associated with the Tax Receivable Agreement.
Taxes and Related Payables represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and including the Payable under the Tax Receivable Agreement. Further, the current tax provision utilized when calculating Taxes and Related Payables and Distributable Earnings reflects the benefit of deductions available to the company on certain expense items that are excluded from the underlying calculation of Segment Distributable Earnings and Total Segment Distributable Earnings, such as equity-based compensation charges and certain Transaction-Related and
Non-Recurring
Items where there is a current tax provision or benefit. The economic assumptions and methodologies that impact the implied income tax provision are the same as those methodologies and assumptions used in calculating the current income tax provision for Blackstone’s Consolidated Statements of Operations under GAAP, excluding the impact of divestitures and accrued tax contingencies and refunds which are reflected when paid or received. Management believes that including the amount payable under the Tax Receivable Agreement and utilizing the current income tax provision adjusted as described above when calculating Distributable Earnings is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to stockholders.
Segment Distributable Earnings
Segment Distributable Earnings is Blackstone’s segment profitability measure used to make operating decisions and assess performance across Blackstone’s four segments. Blackstone believes it is useful to stockholders to review the measure that management uses in assessing segment performance. Segment Distributable Earnings represents the net realized earnings of Blackstone’s segments and is the sum of Fee Related Earnings and Net Realizations for each segment. Blackstone’s segments are presented on a basis that deconsolidates Blackstone Funds, eliminates
non-controlling
ownership interests in Blackstone’s consolidated operating partnerships, removes the amortization of intangible assets and removes Transaction-Related and
Non-Recurring
Items. Transaction-Related and
Non-Recurring
Items arise from corporate actions including acquisitions, divestitures, Blackstone’s initial public offering and
non-recurring
gains, losses, or other charges, if any. They consist primarily of equity-based compensation charges, gains or losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs, gains or losses associated with these corporate actions and
non-recurring
gains, losses or other charges that affect
comparability and are not reflective of Blackstone’s operational performance. Segment Distributable Earnings excludes unrealized activity and is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Segment Distributable Earnings.
Effective September 30, 2023, Blackstone redefined Segment Distributable Earnings to exclude the impact of
non-recurring
gains, losses or other charges that affect
comparability and are not reflective of Blackstone’s operational performance. Blackstone believes the exclusion of such amounts is useful to investors as it assists in the comparison of Blackstone’s operational performance across different periods. The updated definition had no impact to the current or any previously reported period.
Net Realizations is presented on a segment basis and is the sum of Realized Principal Investment Income and Realized Performance Revenues (which refers to Realized Performance Revenues excluding Fee Related Performance Revenues), less Realized Performance Compensation (which refers to Realized Performance Compensation excluding Fee Related Performance Compensation and Equity-Based Performance Compensation).
Realized Performance Compensation reflects an increase in the aggregate Realized Performance Compensation paid to certain of our professionals above the amounts allocable to them based upon the percentage participation in the relevant performance plans previously awarded to them. The expectation is that for the full year 2023, Fee Related Compensation will be decreased by the total amount of additional Performance Compensation awarded for the year. During the three months ended September 30, 2023, Realized Performance Compensation neither increased nor decreased, and Fee Related Compensation decreased by $16.3 million. This had a neutral impact to Net Realizations, increased Fee Related Earnings and had a positive impact on Income Before Provision (Benefit) for Taxes and Distributable Earnings. During the nine months ended September 30, 2023, Realized Performance Compensation increased by $62.5 million and Fee Related Compensation decreased by $48.8 million. These changes decreased Net Realizations, increased Fee Related Earnings and had a negative impact on Income Before Provision (Benefit) for Taxes and Distributable Earnings. These changes are not expected to impact Income Before Provision (Benefit) for Taxes and Distributable Earnings for the year ending December 31, 2023. Changes to Realized Performance Compensation and Fee Related Compensation had an impact on individual quarters in 2022 but did not impact Income Before Provision (Benefit) for Taxes and Distributable Earnings for the year ended December 31, 2022.
Fee Related Earnings is a performance measure used to assess Blackstone’s ability to generate profits from revenues that are measured and received on a recurring basis and not subject to future realization events. Blackstone believes Fee Related Earnings is useful to stockholders as it provides insight into the profitability of the portion of Blackstone’s business that is not dependent on realization activity. Fee Related Earnings equals management and advisory fees (net of management fee reductions and offsets) plus Fee Related Performance Revenues, less (a) Fee Related Compensation on a segment basis, and (b) Other Operating Expenses. Fee Related Earnings is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Fee Related Earnings.
Fee Related Compensation is presented on a segment basis and refers to the compensation expense, excluding Equity-Based Compensation, directly related to (a) Management and Advisory Fees, Net and (b) Fee Related Performance Revenues, referred to as Fee Related Performance Compensation.
Fee Related Performance Revenues refers to the realized portion of Performance Revenues from Perpetual Capital that are (a) measured and received on a recurring basis, and (b) not dependent on realization events from the underlying investments.
Other Operating Expenses is presented on a segment basis and is equal to General, Administrative and Other Expenses, adjusted to (a) remove the amortization of transaction-related intangibles, (b) remove certain expenses reimbursed by the Blackstone Funds which are netted against Management and Advisory Fees, Net in Blackstone’s segment presentation, and (c) give effect to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation.
Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization
Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (“Adjusted EBITDA”), is a supplemental measure used to assess performance derived from Blackstone’s segment results and may be used to assess its ability to service its borrowings. Adjusted EBITDA represents Distributable Earnings plus the addition of (a) Interest Expense on a segment basis, (b) Taxes and Related Payables, and (c) Depreciation and Amortization. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Income (Loss) Before Provision (Benefit) for Taxes. See “—
Non-GAAP
Financial Measures” for our reconciliation of Adjusted EBITDA.
Net Accrued Performance Revenues
Net Accrued Performance Revenues is a
non-GAAP
financial measure Blackstone believes is useful to stockholders as an indicator of potential future realized performance revenues based on the current investment portfolio of the funds and vehicles we manage. Net Accrued Performance Revenues represents the accrued performance revenues receivable by Blackstone, net of the related accrued performance compensation payable by Blackstone, excluding performance revenues that have been realized but not yet distributed as of the reporting date and clawback amounts, if any. Net Accrued Performance Revenues is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of Investments. See “—
Non-GAAP
Financial Measures” for our reconciliation of Net Accrued Performance Revenues and Note 2. “Summary of Significant Accounting Policies — Equity Method Investments” in the “Notes to Consolidated Financial Statements” in “— Item 1. Financial Statements” for additional information on the calculation of Investments — Accrued Performance Allocations.
The alternative asset management business is primarily based on managing third party capital and does not require substantial capital investment to support rapid growth. Since our inception, we have developed and used various key operating metrics to assess and monitor the operating performance of our various alternative asset management businesses in order to monitor the effectiveness of our value creating strategies.
Total and
Fee-Earning
Assets Under Management
“Total Assets Under Management” refers to the assets we manage. We believe this measure is useful to stockholders as it represents the total capital for which we provide investment management services. Our Total Assets Under Management equals the sum of:
| |
(a) |
the fair value of the investments held by our carry funds and our and co-investment entities managed by us plus the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, |
| |
(b) |
the net asset value of (1) our hedge funds, real estate debt carry funds, BPP, certain co-investments managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, BREIT, and BEPIF, |
| |
(c) |
the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts, |
| |
(d) |
the amount of debt and equity outstanding for our CLOs during the reinvestment period, |
| |
(e) |
the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period, |
| |
(f) |
the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies and BDCs, |
| |
(g) |
the fair value of common stock, preferred stock, convertible debt, term loans or similar instruments issued by BXMT, and |
| |
(h) |
borrowings under and any amounts available to be borrowed under certain credit facilities of our funds. |
Our carry funds are commitment-based drawdown structured funds that do not permit investors to redeem their interests at their election. Our funds of hedge funds, hedge funds, funds structured like hedge funds and other open-ended funds in our Real Estate, Credit & Insurance and Hedge Fund Solutions segments generally have structures that afford an investor the right to withdraw or redeem their interests on a periodic basis (for example, annually, quarterly or monthly), typically with 2 to 95 days’ notice, depending on the fund and the liquidity profile of the underlying assets. In our Perpetual Capital vehicles where redemption rights exist, Blackstone has the ability to fulfill redemption requests only (a) in Blackstone’s or the vehicles’ board’s discretion, as applicable, or (b) to the extent there is sufficient new capital. Investment advisory agreements related to certain separately managed accounts in our Credit & Insurance and Hedge Fund Solutions segments, excluding our BIS separately managed accounts, may generally be terminated by an investor on 30 to 90 days’ notice. Our BIS separately managed accounts can generally only be terminated for long-term underperformance, cause and certain other limited circumstances, in each case subject to Blackstone’s right to cure.
“Fee-Earning
Assets Under Management” refers to the assets we manage on which we derive management fees and/or performance revenues. We believe this measure is useful to stockholders as it provides insight into the capital base upon which we can earn management fees and/or performance revenues. Our
Fee-Earning
Assets Under Management equals the sum of:
| |
(a) |
for our Private Equity segment funds, Real Estate segment carry funds including certain BREDS funds, and certain Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund, |
| |
(b) |
for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund, |
| |
(c) |
the remaining invested capital or fair value of assets held in co-investment vehicles managed by us on which we receive fees, |
| |
(d) |
the net asset value of our funds of hedge funds, hedge funds, BPP, certain co-investments managed by us, certain registered investment companies, BREIT, BEPIF, and certain of our Hedge Fund Solutions drawdown funds, |
| |
(e) |
the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts, |
| |
(f) |
the net proceeds received from equity offerings and accumulated distributable earnings of BXMT, subject to certain adjustments, |
| |
(g) |
the aggregate par amount of collateral assets, including principal cash, of our CLOs, and |
| |
(h) |
the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies and BDCs. |
Each of our segments may include certain
Fee-Earning
Assets Under Management on which we earn performance revenues but not management fees.
Our calculations of Total Assets Under Management and
Fee-Earning
Assets Under Management may differ from the calculations 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 Total Assets Under Management includes commitments to, and the fair value of, invested capital in our funds from Blackstone and our personnel, regardless of whether such commitments or invested capital are subject to fees. Our definitions of Total Assets Under Management and
Fee-Earning
Assets Under Management are not based on any definition of Total Assets Under Management and
Fee-Earning
Assets Under Management that is set forth in the agreements governing the investment funds that we manage.
For our carry funds, Total Assets Under Management includes the fair value of the investments held and uncalled capital commitments, whereas
Fee-Earning
Assets Under Management may include the total amount of capital commitments or the remaining amount of invested capital at cost depending on whether the investment period has expired or as specified by the fee terms of the fund. As such, in certain carry funds
Fee-Earning
Assets Under Management may be greater than Total Assets Under Management when the aggregate fair value of the remaining investments is less than the cost of those investments.
Perpetual Capital refers to the component of assets under management with an indefinite term, that is not in liquidation, and for which there is no requirement to return capital to investors through redemption requests in the ordinary course of business, except where funded by new capital inflows. Perpetual Capital includes
co-investment
capital with an investor right to convert into Perpetual Capital. We believe this measure is useful to stockholders as it represents capital we manage that has a longer duration and the ability to generate recurring revenues in a different manner than traditional fund structures.
Dry Powder represents the amount of capital available for investment or reinvestment, including general partner and employee capital, and is an indicator of the capital we have available for future investments. We believe this measure is useful to stockholders as it provides insight into the extent to which capital is available for Blackstone to deploy capital into investment opportunities as they arise.
Invested Performance Eligible Assets Under Management
Invested Performance Eligible Assets Under Management represents invested capital at fair value, including capital closed for funds whose investment period has not yet commenced, on which performance revenues could be earned if certain hurdles are met. We believe Invested Performance Eligible Assets Under Management is useful to stockholders as it provides insight into the capital deployed that has the potential to generate performance revenues.
Consolidated Results of Operations
Following is a discussion of our consolidated results of operations. For a more detailed discussion of the factors that affected the results of our four business segments (which are presented on a basis that deconsolidates the investment funds, eliminates
non-controlling
ownership interests in Blackstone’s consolidated operating partnerships and removes the amortization of intangibles assets and Transaction-Related and
Non-Recurring
Items) in these periods, see “— Segment Analysis” below.
The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the three and nine months ended September 30, 2023 and 2022:
|
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|
|
|
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|
| |
|
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| |
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|
| |
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| |
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| |
|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Management and Advisory Fees, Net |
|
$ |
1,655,443 |
|
|
$ |
1,617,754 |
|
|
$ |
37,689 |
|
|
|
2 |
% |
|
$ |
5,023,128 |
|
|
$ |
4,654,877 |
|
|
$ |
368,251 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
158,801 |
|
|
|
110,776 |
|
|
|
48,025 |
|
|
|
43 |
% |
|
|
454,754 |
|
|
|
314,863 |
|
|
|
139,891 |
|
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
453,690 |
|
|
|
725,888 |
|
|
|
(272,198 |
) |
|
|
-37 |
% |
|
|
1,602,668 |
|
|
|
4,946,043 |
|
|
|
(3,343,375 |
) |
|
|
-68 |
% |
|
|
|
(63,204 |
) |
|
|
(771,637 |
) |
|
|
708,433 |
|
|
|
-92 |
% |
|
|
(708,021 |
) |
|
|
(2,946,255 |
) |
|
|
2,238,234 |
|
|
|
-76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,313 |
|
|
|
193,228 |
|
|
|
(98,915 |
) |
|
|
-51 |
% |
|
|
257,206 |
|
|
|
743,493 |
|
|
|
(486,287 |
) |
|
|
-65 |
% |
|
|
|
69,340 |
|
|
|
(1,069,697 |
) |
|
|
1,139,037 |
|
|
|
n/m |
|
|
|
(257,988 |
) |
|
|
(1,496,226 |
) |
|
|
1,238,238 |
|
|
|
-83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Income (Loss) |
|
|
554,139 |
|
|
|
(922,218 |
) |
|
|
1,476,357 |
|
|
|
n/m |
|
|
|
893,865 |
|
|
|
1,247,055 |
|
|
|
(353,190 |
) |
|
|
-28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Revenue |
|
|
109,133 |
|
|
|
52,420 |
|
|
|
56,713 |
|
|
|
108 |
% |
|
|
348,123 |
|
|
|
168,980 |
|
|
|
179,143 |
|
|
|
106 |
% |
|
|
|
63,769 |
|
|
|
199,382 |
|
|
|
(135,613 |
) |
|
|
-68 |
% |
|
|
17,951 |
|
|
|
427,839 |
|
|
|
(409,888 |
) |
|
|
-96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,541,285 |
|
|
|
1,058,114 |
|
|
|
1,483,171 |
|
|
|
140 |
% |
|
|
6,737,821 |
|
|
|
6,813,614 |
|
|
|
(75,793 |
) |
|
|
-1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
700,268 |
|
|
|
600,273 |
|
|
|
99,995 |
|
|
|
17 |
% |
|
|
2,153,570 |
|
|
|
1,942,790 |
|
|
|
210,780 |
|
|
|
11 |
% |
Incentive Fee Compensation |
|
|
65,432 |
|
|
|
50,355 |
|
|
|
15,077 |
|
|
|
30 |
% |
|
|
192,940 |
|
|
|
136,737 |
|
|
|
56,203 |
|
|
|
41 |
% |
Performance Allocations Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
168,620 |
|
|
|
313,930 |
|
|
|
(145,310 |
) |
|
|
-46 |
% |
|
|
670,610 |
|
|
|
2,067,447 |
|
|
|
(1,396,837 |
) |
|
|
-68 |
% |
|
|
|
11,866 |
|
|
|
(359,590 |
) |
|
|
371,456 |
|
|
|
n/m |
|
|
|
(247,228 |
) |
|
|
(1,273,849 |
) |
|
|
1,026,621 |
|
|
|
-81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Compensation and Benefits |
|
|
946,186 |
|
|
|
604,968 |
|
|
|
341,218 |
|
|
|
56 |
% |
|
|
2,769,892 |
|
|
|
2,873,125 |
|
|
|
(103,233 |
) |
|
|
-4 |
% |
General, Administrative and Other |
|
|
279,186 |
|
|
|
270,369 |
|
|
|
8,817 |
|
|
|
3 |
% |
|
|
827,614 |
|
|
|
800,331 |
|
|
|
27,283 |
|
|
|
3 |
% |
|
|
|
110,599 |
|
|
|
80,507 |
|
|
|
30,092 |
|
|
|
37 |
% |
|
|
323,136 |
|
|
|
216,896 |
|
|
|
106,240 |
|
|
|
49 |
% |
|
|
|
38,934 |
|
|
|
5,517 |
|
|
|
33,417 |
|
|
|
606 |
% |
|
|
118,918 |
|
|
|
12,144 |
|
|
|
106,774 |
|
|
|
879 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,374,905 |
|
|
|
961,361 |
|
|
|
413,544 |
|
|
|
43 |
% |
|
|
4,039,560 |
|
|
|
3,902,496 |
|
|
|
137,064 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Tax Receivable Agreement Liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
n/m |
|
|
|
1,887 |
|
|
|
748 |
|
|
|
1,139 |
|
|
|
152 |
% |
Net Gains (Losses) from Fund Investment Activities |
|
|
(49,078 |
) |
|
|
1,178 |
|
|
|
(50,256 |
) |
|
|
n/m |
|
|
|
102,486 |
|
|
|
(52,272 |
) |
|
|
154,758 |
|
|
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Loss) |
|
|
(49,078 |
) |
|
|
1,178 |
|
|
|
(50,256 |
) |
|
|
n/m |
|
|
|
104,373 |
|
|
|
(51,524 |
) |
|
|
155,897 |
|
|
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Provision for Taxes |
|
|
1,117,302 |
|
|
|
97,931 |
|
|
|
1,019,371 |
|
|
|
n/m |
|
|
|
2,802,634 |
|
|
|
2,859,594 |
|
|
|
(56,960 |
) |
|
|
-2 |
% |
|
|
|
196,560 |
|
|
|
94,231 |
|
|
|
102,329 |
|
|
|
109 |
% |
|
|
467,504 |
|
|
|
614,026 |
|
|
|
(146,522 |
) |
|
|
-24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
920,742 |
|
|
|
3,700 |
|
|
|
917,042 |
|
|
|
n/m |
|
|
|
2,335,130 |
|
|
|
2,245,568 |
|
|
|
89,562 |
|
|
|
4 |
% |
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
(92,577 |
) |
|
|
25,773 |
|
|
|
(118,350 |
) |
|
|
n/m |
|
|
|
(81,589 |
) |
|
|
56,700 |
|
|
|
(138,289 |
) |
|
|
n/m |
|
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities |
|
|
20,716 |
|
|
|
(62,093 |
) |
|
|
82,809 |
|
|
|
n/m |
|
|
|
185,021 |
|
|
|
(62,425 |
) |
|
|
247,446 |
|
|
|
n/m |
|
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings |
|
|
440,609 |
|
|
|
37,724 |
|
|
|
402,885 |
|
|
|
n/m |
|
|
|
992,618 |
|
|
|
1,061,516 |
|
|
|
(68,898 |
) |
|
|
-6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Blackstone Inc. |
|
$ |
551,994 |
|
|
$ |
2,296 |
|
|
$ |
549,698 |
|
|
|
n/m |
|
|
$ |
1,239,080 |
|
|
$ |
1,189,777 |
|
|
$ |
49,303 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Revenues were $2.5 billion for the three months ended September 30, 2023, an increase of $1.5 billion, compared to $1.1 billion for the three months ended September 30, 2022. The increase in Revenues was primarily attributable to an increase of $1.5 billion in Investment Income (Loss), which was composed of an increase of $1.8 billion in Unrealized Investment Income (Loss) and a decrease of $371.1 million in Realized Investment Income (Loss).
The $1.8 billion increase in Unrealized Investment Income (Loss) was primarily attributable to net unrealized appreciation of investments in the three months ended September 30, 2023 compared to net unrealized depreciation of investments in the three months ended September 30, 2022. Principal drivers were:
| |
• |
|
An increase of $1.1 billion in our Credit & Insurance segment, primarily attributable to lower net unrealized depreciation of investments in BIS in the three months ended September 30, 2023 compared to the three months ended September 30, 2022. |
| |
• |
|
An increase of $868.9 million in our Private Equity segment, primarily attributable to net unrealized appreciation of investments in corporate private equity, Tactical Opportunities, Strategic Partners and BIP in the three months ended September 30, 2023 compared to net unrealized depreciation of investments in corporate private equity, Tactical Opportunities and Strategic Partners and lower net unrealized appreciation of investments in BIP in the three months ended September 30, 2022. The carrying values of corporate private equity, Tactical Opportunities, Strategic Partners and BIP increased 2.4%, 0.1%, 0.4% and 11.0%, respectively, in the three months ended September 30, 2023 compared to decreases of 0.3%, 1.7% and 3.5% and an increase of 6.8%, respectively, in the three months ended September 30, 2022. |
| |
• |
|
A decrease of $152.7 million in our Real Estate segment, primarily attributable to lower appreciation in BREP and Core+ in the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The carrying values of BREP and Core+ decreased 2.0% and increased 0.3%, respectively, in the three months ended September 30, 2023 compared to a decrease of 0.6% and an increase of 2.3%, respectively, in the three months ended September 30, 2022. |
The $371.1 million decrease in Realized Investment Income (Loss) was primarily attributable to lower realized gains in our Real Estate segment.
Expenses were $1.4 billion for the three months ended September 30, 2023, an increase of $413.5 million, compared to $961.4 million for the three months ended September 30, 2022. The increase was primarily attributable to an increase of $341.2 million in Total Compensation and Benefits, of which $226.1 million was an increase in Performance Allocations Compensation. The increase in Performance Allocations Compensation was primarily due to the increase in Investment Income (Loss), on which a portion of compensation is based.
Other Income (Loss) was $(49.1) million for the three months ended September 30, 2023, a decrease of $50.3 million, compared to $1.2 million for the three months ended September 30, 2022. The decrease in Other Income (Loss) was principally due to a decrease of $50.3 million in Net Gains (Losses) from Fund Investment Activities.
The decrease in Net Gains (Losses) from Fund Investment Activities was principally driven by a decrease of $126.2 million in our Real Estate segment, partially offset by increases of $47.2 million and $19.7 million in our Private Equity and Hedge Fund Solutions segments, respectively. The decrease in our Real Estate segment was
primarily due to unrealized depreciation of investments in our consolidated funds. The increase in our Private Equity segment was primarily due to unrealized appreciation of investments, partially offset by lower realized gains of investments, in our consolidated funds. The increase in our Hedge Fund Solutions segment was primarily due to unrealized appreciation of investments, partially offset by realized losses of investments, in our consolidated funds.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Revenues were $6.7 billion for the nine months ended September 30, 2023, a decrease of $75.8 million, compared to $6.8 billion for the nine months ended September 30, 2022. The decrease in Revenues was primarily attributable to decreases of $409.9 million in Other Revenue and $353.2 million in Investment Income (Loss), which was composed of an increase of $3.5 billion in Unrealized Investment Income (Loss) and a decrease of $3.8 billion in Realized Investment Income (Loss), partially offset by an increase of $368.3 million in Management and Advisory Fees, Net.
The decrease in Other Revenue was primarily due to foreign exchange losses on our cross-currency swaps and our euro-denominated bonds.
The $3.5 billion increase in Unrealized Investment Income (Loss) was primarily attributable to lower unrealized depreciation of investments in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Principal drivers were:
| |
• |
|
An increase of $2.0 billion in our Private Equity segment, primarily attributable to net unrealized appreciation of investments in corporate private equity in the nine months ended September 30, 2023, compared to net unrealized depreciation of investments in the nine months ended September 30, 2022. The carrying value of corporate private equity increased 8.6% in the nine months ended September 30, 2023 compared to a decrease of 4.3% in the nine months ended September 30, 2022. |
| |
• |
|
An increase of $990.8 million in our Credit & Insurance segment, primarily attributable to lower net unrealized depreciation of investments in BIS in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. |
| |
• |
|
An increase of $221.4 million in our Real Estate segment, primarily attributable to increased asset sales in BREP in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2023. |
| |
• |
|
A decrease of $52.4 million in our Hedge Fund Solutions segment, primarily attributable to lower net unrealized appreciation of investment holdings in liquid and specialized solutions in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. |
The $3.8 billion decrease in Realized Investment Income (Loss) was primarily attributable to lower realized gains in our Real Estate segment.
The $368.3 million increase in Management and Advisory Fees, Net was primarily due to increases in our Real Estate and Private Equity segments of $204.0 million and $101.0 million, respectively. The increase in our Real Estate segment was primarily due to
Fee-Earning
Assets Under Management growth in BREP and BREDS. The increase in our Private Equity segment was primarily due to an increase in Management and Advisory Fees, Net in Strategic Partners and BIP.
Expenses were $4.0 billion for the nine months ended September 30, 2023, an increase of $137.1 million, compared to $3.9 billion for the nine months ended September 30, 2022. The increase was primarily attributable to increases of $106.8 million in Fund Expenses and $106.2 million in Interest Expense, partially offset by a decrease of $103.2 million in Total Compensation and Benefits, which is composed of a decrease of $370.2 million in Performance Allocations Compensation and an increase of $210.8 million in Compensation. The increase in Fund Expenses was primarily due to an increase in interest expense in a consolidated private equity fund. The increase in Interest Expense was primarily due to an increase in borrowings. The decrease in Performance Allocations Compensation was primarily due to the decrease in Investment Income, on which a portion of compensation is based. The increase in Compensation was primarily due to the increase in Management and Advisory Fees, Net, on which a portion of compensation is based.
Other Income (Loss) was $104.4 million for the nine months ended September 30, 2023, an increase of $155.9 million, compared to $(51.5) million for the nine months ended September 30, 2022. The increase in Other Income (Loss) was principally due to an increase of $154.8 million in Net Gains (Losses) from Fund Investment Activities.
The increase in Net Gains (Losses) from Fund Investment Activities was driven by increases of $201.5 million, $112.3 million and $26.1 million in our Private Equity, Hedge Fund Solutions and Credit & Insurance segments, respectively, partially offset by a decrease of $185.2 million in our Real Estate segment. The increase in our Private Equity segment was primarily due to unrealized appreciation of investments, partially offset by lower realized gains of investments, in our consolidated funds. The increase in our Hedge Fund Solutions segment was primarily due to unrealized appreciation of investments, partially offset by realized losses of investments, in our consolidated funds. The increase in our Credit & Insurance segment was primarily due to unrealized appreciation of investments in our consolidated funds and the deconsolidation of a fund in the nine months ended September 30, 2023. The decrease in our Real Estate segment was primarily due to unrealized losses of investments and lower realized gains of investments in our consolidated funds.
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Blackstone’s Provision for Taxes for the three months ended September 30, 2023 was $196.6 million, an increase of $102.4 million, compared to $94.2 million for the three months ended September 30, 2022. This resulted in an effective tax rate of 17.6% and 96.2%, based on our Income (Loss) Before Provision for Taxes of $1.1 billion and $97.9 million for the three months ended September 30, 2023 and 2022, respectively.
The decrease in Blackstone’s effective tax rate for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, relates primarily to the impact of
Non-Controlling
Interests in Consolidated Entities and Blackstone’s state tax provisions for the jurisdictions in which it operates. During the three months ended September 30, 2022, the effective tax rate was also impacted by a previously disclosed out-of-period adjustment to revise the book investment basis used to calculate deferred tax assets and the deferred tax provision.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Blackstone’s Provision for Taxes for the nine months ended September 30, 2023 was $467.5 million, a decrease of $146.5 million, compared to $614.0 million for the nine months ended September 30, 2022. This resulted in an effective tax rate of 16.7% and 21.5%, based on our Income (Loss) Before Provision for Taxes of $2.8 billion and $2.9 billion for the nine months ended September 30, 2023 and 2022, respectively.
The decrease in Blackstone’s effective tax rate for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, relates primarily to the impact of
Non-Controlling
Interests in Consolidated Entities and Blackstone’s state tax provisions for the jurisdictions in which it operates. During the nine months ended September 30, 2022, the effective tax rate was also impacted by a previously disclosed out-of-period adjustment to revise the book investment basis used to calculate deferred tax assets and the deferred tax provision.
Blackstone expects to have a corporate alternative minimum tax (“CAMT”) liability for the year ending December 31, 2023 based on the recently-enacted Inflation Reduction Act. Blackstone will continue to assess the overall impact to its Provision for Income Tax upon the issuance of applicable additional guidance by the U.S. Treasury Department related to interpretations of CAMT. For the nine months ended September 30, 2023, there is no meaningful CAMT impact reflected in the Provision for Income Taxes given current year tax payments made under CAMT are permitted to be carried forward and used as credits in future years resulting in a deferred tax benefit.
Additional information regarding our income taxes can be found in Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Non-Controlling
Interests in Consolidated Entities
The Net Income Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities and Net Income Attributable to
Non-Controlling
Interests in Consolidated Entities is attributable to the consolidated Blackstone Funds. The amounts of these items vary directly with the performance of the consolidated Blackstone Funds and largely eliminate the amount of Other Income (Loss) – Net Gains (Losses) from Fund Investment Activities from the Net Income (Loss) Attributable to Blackstone Inc.
Net Income Attributable to
Non-Controlling
Interests in Blackstone Holdings is derived from the Income Before Provision (Benefit) for Taxes at the Blackstone Holdings level, excluding the Net Gains (Losses) from Fund Investment Activities and the percentage allocation of the income between Blackstone personnel and others who are limited partners of Blackstone Holdings and Blackstone after considering any contractual arrangements that govern the allocation of income such as fees allocable to Blackstone.
For the three months ended September 30, 2023 and 2022, the Net Income Before Taxes allocated to Blackstone personnel and other limited partners of Blackstone Holdings was 39.1% and 39.7%, respectively. For the nine months ended September 30, 2023 and 2022, the Net Income Before Taxes allocated to Blackstone personnel and others who are limited partners of Blackstone Holdings was 39.3% and 39.8%, respectively. The respective decreases of 0.6% and 0.5% were primarily due to the conversion of Blackstone Holdings Partnership Units to shares of common stock and the vesting of shares of common stock.
The Other Income (Loss) — Change in Tax Receivable Agreement Liability was entirely allocated to Blackstone Inc.
Total and
Fee-Earning
Assets Under Management
The following graphs and tables summarize the
Fee-Earning
Assets Under Management by Segment and Total Assets Under Management by Segment, followed by a rollforward of activity for the three and nine months ended September 30, 2023 and 2022. For a description of how Assets Under Management and
Fee-Earning
Assets Under Management are determined, please see “— Key Financial Measures and Indicators — Operating Metrics — Total and
Fee-Earning
Assets Under Management.”
Note: |
Totals may not add due to rounding. |
|
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| |
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| |
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| |
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| |
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| |
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|
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|
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|
| |
|
|
Fee-Earning Assets Under Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, Beginning of Period |
|
$ |
287,556,241 |
|
|
$ |
165,642,235 |
|
|
$ |
208,367,109 |
|
|
$ |
69,579,480 |
|
|
$ |
731,145,065 |
|
|
$ |
252,125,870 |
|
|
$ |
163,521,507 |
|
|
$ |
195,548,963 |
|
|
$ |
72,629,621 |
|
|
$ |
683,825,961 |
|
|
|
|
10,868,551 |
|
|
|
2,283,157 |
|
|
|
9,607,146 |
|
|
|
2,005,240 |
|
|
|
24,764,094 |
|
|
|
35,565,611 |
|
|
|
5,720,545 |
|
|
|
9,236,906 |
|
|
|
956,594 |
|
|
|
51,479,656 |
|
|
|
|
(7,228,016 |
) |
|
|
(91,048 |
) |
|
|
(2,802,460 |
) |
|
|
(1,525,471 |
) |
|
|
(11,646,995 |
) |
|
|
(8,845,200 |
) |
|
|
(443,618 |
) |
|
|
(6,325,326 |
) |
|
|
(1,614,636 |
) |
|
|
(17,228,780 |
) |
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,640,535 |
|
|
|
2,192,109 |
|
|
|
6,804,686 |
|
|
|
479,769 |
|
|
|
13,117,099 |
|
|
|
26,720,411 |
|
|
|
5,276,927 |
|
|
|
2,911,580 |
|
|
|
(658,042 |
) |
|
|
34,250,876 |
|
|
|
|
(4,631,227 |
) |
|
|
(2,147,394 |
) |
|
|
(3,568,454 |
) |
|
|
(378,909 |
) |
|
|
(10,725,984 |
) |
|
|
(4,238,668 |
) |
|
|
(1,932,887 |
) |
|
|
(1,457,210 |
) |
|
|
(431,322 |
) |
|
|
(8,060,087 |
) |
|
|
|
(1,628,646 |
) |
|
|
2,102,988 |
|
|
|
(913,991 |
) |
|
|
1,445,072 |
|
|
|
1,005,423 |
|
|
|
(1,159,763 |
) |
|
|
407,777 |
|
|
|
(3,297,392 |
) |
|
|
(102,021 |
) |
|
|
(4,151,399 |
) |
|
|
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|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
Balance, End of Period (e) |
|
$ |
284,936,903 |
|
|
$ |
167,789,938 |
|
|
$ |
210,689,350 |
|
|
$ |
71,125,412 |
|
|
$ |
734,541,603 |
|
|
$ |
273,447,850 |
|
|
$ |
167,273,324 |
|
|
$ |
193,705,941 |
|
|
$ |
71,438,236 |
|
|
$ |
705,865,351 |
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|
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|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
$ |
(2,619,338 |
) |
|
$ |
2,147,703 |
|
|
$ |
2,322,241 |
|
|
$ |
1,545,932 |
|
|
$ |
3,396,538 |
|
|
$ |
21,321,980 |
|
|
$ |
3,751,817 |
|
|
$ |
(1,843,022 |
) |
|
$ |
(1,191,385 |
) |
|
$ |
22,039,390 |
|
|
|
|
-1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
2 |
% |
|
|
— |
|
|
|
8 |
% |
|
|
2 |
% |
|
|
-1 |
% |
|
|
-2 |
% |
|
|
3 |
% |
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| |
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| |
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|
|
|
|
| |
|
|
Fee-Earning Assets Under Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
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|
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|
|
|
|
|
|
|
Balance, Beginning of Period |
|
$ |
281,967,153 |
|
|
$ |
167,082,852 |
|
|
$ |
198,162,931 |
|
|
$ |
71,173,952 |
|
|
$ |
718,386,888 |
|
|
$ |
221,476,699 |
|
|
$ |
156,556,959 |
|
|
$ |
197,900,832 |
|
|
$ |
74,034,568 |
|
|
$ |
649,969,058 |
|
|
|
|
33,698,852 |
|
|
|
5,449,389 |
|
|
|
30,379,567 |
|
|
|
5,193,581 |
|
|
|
74,721,389 |
|
|
|
83,072,471 |
|
|
|
17,201,200 |
|
|
|
34,262,589 |
|
|
|
6,736,594 |
|
|
|
141,272,854 |
|
|
|
|
(14,801,926 |
) |
|
|
(357,026 |
) |
|
|
(10,898,559 |
) |
|
|
(5,720,618 |
) |
|
|
(31,778,129 |
) |
|
|
(16,659,446 |
) |
|
|
(1,359,978 |
) |
|
|
(16,116,378 |
) |
|
|
(7,402,333 |
) |
|
|
(41,538,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,896,926 |
|
|
|
5,092,363 |
|
|
|
19,481,008 |
|
|
|
(527,037 |
) |
|
|
42,943,260 |
|
|
|
66,413,025 |
|
|
|
15,841,222 |
|
|
|
18,146,211 |
|
|
|
(665,739 |
) |
|
|
99,734,719 |
|
|
|
|
(14,583,553 |
) |
|
|
(6,684,441 |
) |
|
|
(10,295,758 |
) |
|
|
(2,521,855 |
) |
|
|
(34,085,607 |
) |
|
|
(18,443,319 |
) |
|
|
(7,585,363 |
) |
|
|
(6,717,555 |
) |
|
|
(1,255,419 |
) |
|
|
(34,001,656 |
) |
|
|
|
(1,343,623 |
) |
|
|
2,299,164 |
|
|
|
3,341,169 |
|
|
|
3,000,352 |
|
|
|
7,297,062 |
|
|
|
4,001,445 |
|
|
|
2,460,506 |
|
|
|
(15,623,547 |
) |
|
|
(675,174 |
) |
|
|
(9,836,770 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, End of Period (e) |
|
$ |
284,936,903 |
|
|
$ |
167,789,938 |
|
|
$ |
210,689,350 |
|
|
$ |
71,125,412 |
|
|
$ |
734,541,603 |
|
|
$ |
273,447,850 |
|
|
$ |
167,273,324 |
|
|
$ |
193,705,941 |
|
|
$ |
71,438,236 |
|
|
$ |
705,865,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,969,750 |
|
|
$ |
707,086 |
|
|
$ |
12,526,419 |
|
|
$ |
(48,540 |
) |
|
$ |
16,154,715 |
|
|
$ |
51,971,151 |
|
|
$ |
10,716,365 |
|
|
$ |
(4,194,891 |
) |
|
$ |
(2,596,332 |
) |
|
$ |
55,896,293 |
|
|
|
|
1 |
% |
|
|
— |
|
|
|
6 |
% |
|
|
— |
|
|
|
2 |
% |
|
|
23 |
% |
|
|
7 |
% |
|
|
-2 |
% |
|
|
-4 |
% |
|
|
9 |
% |
Annualized Base Management Fee Rate (f) |
|
|
0.99 |
% |
|
|
1.08 |
% |
|
|
0.64 |
% |
|
|
0.75 |
% |
|
|
0.89 |
% |
|
|
0.97 |
% |
|
|
1.09 |
% |
|
|
0.62 |
% |
|
|
0.78 |
% |
|
|
0.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| |
|
|
| |
|
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|
| |
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| |
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|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Total Assets Under Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, Beginning of Period |
|
$ |
333,241,514 |
|
|
$ |
295,293,356 |
|
|
$ |
294,580,360 |
|
|
$ |
78,240,729 |
|
|
$ |
1,001,355,959 |
|
|
$ |
320,038,428 |
|
|
$ |
275,886,414 |
|
|
$ |
264,829,491 |
|
|
$ |
80,051,408 |
|
|
$ |
940,805,741 |
|
|
|
|
9,080,894 |
|
|
|
3,551,775 |
|
|
|
10,447,636 |
|
|
|
2,262,973 |
|
|
|
25,343,278 |
|
|
|
10,106,034 |
|
|
|
14,490,688 |
|
|
|
19,092,560 |
|
|
|
1,154,963 |
|
|
|
44,844,245 |
|
|
|
|
(3,666,574 |
) |
|
|
(790,417 |
) |
|
|
(3,018,396 |
) |
|
|
(1,677,783 |
) |
|
|
(9,153,170 |
) |
|
|
(3,832,277 |
) |
|
|
(891,533 |
) |
|
|
(6,419,532 |
) |
|
|
(1,494,809 |
) |
|
|
(12,638,151 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,414,320 |
|
|
|
2,761,358 |
|
|
|
7,429,240 |
|
|
|
585,190 |
|
|
|
16,190,108 |
|
|
|
6,273,757 |
|
|
|
13,599,155 |
|
|
|
12,673,028 |
|
|
|
(339,846 |
) |
|
|
32,206,094 |
|
|
|
|
(4,210,722 |
) |
|
|
(5,145,059 |
) |
|
|
(5,033,967 |
) |
|
|
(386,233 |
) |
|
|
(14,775,981 |
) |
|
|
(4,077,373 |
) |
|
|
(5,306,409 |
) |
|
|
(5,913,377 |
) |
|
|
(448,706 |
) |
|
|
(15,745,865 |
) |
|
|
|
(2,944,415 |
) |
|
|
5,733,818 |
|
|
|
236,785 |
|
|
|
1,557,184 |
|
|
|
4,583,372 |
|
|
|
(2,888,406 |
) |
|
|
(911,462 |
) |
|
|
(2,530,364 |
) |
|
|
10,776 |
|
|
|
(6,319,456 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, End of Period (e) |
|
$ |
331,500,697 |
|
|
$ |
298,643,473 |
|
|
$ |
297,212,418 |
|
|
$ |
79,996,870 |
|
|
$ |
1,007,353,458 |
|
|
$ |
319,346,406 |
|
|
$ |
283,267,698 |
|
|
$ |
269,058,778 |
|
|
$ |
79,273,632 |
|
|
$ |
950,946,514 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(1,740,817 |
) |
|
$ |
3,350,117 |
|
|
$ |
2,632,058 |
|
|
$ |
1,756,141 |
|
|
$ |
5,997,499 |
|
|
$ |
(692,022 |
) |
|
$ |
7,381,284 |
|
|
$ |
4,229,287 |
|
|
$ |
(777,776 |
) |
|
$ |
10,140,773 |
|
|
|
|
-1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
— |
|
|
|
3 |
% |
|
|
2 |
% |
|
|
-1 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Total Assets Under Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, Beginning of Period |
|
$ |
326,146,904 |
|
|
$ |
288,902,142 |
|
|
$ |
279,908,030 |
|
|
$ |
79,716,001 |
|
|
$ |
974,673,077 |
|
|
$ |
279,474,105 |
|
|
$ |
261,471,007 |
|
|
$ |
258,622,467 |
|
|
$ |
81,334,141 |
|
|
$ |
880,901,720 |
|
|
|
|
34,017,611 |
|
|
|
16,646,720 |
|
|
|
39,340,217 |
|
|
|
5,813,626 |
|
|
|
95,818,174 |
|
|
|
76,028,056 |
|
|
|
43,964,395 |
|
|
|
55,808,400 |
|
|
|
7,177,191 |
|
|
|
182,978,042 |
|
|
|
|
(11,593,028 |
) |
|
|
(1,947,838 |
) |
|
|
(13,381,979 |
) |
|
|
(5,940,344 |
) |
|
|
(32,863,189 |
) |
|
|
(9,969,465 |
) |
|
|
(2,869,020 |
) |
|
|
(16,635,968 |
) |
|
|
(7,524,173 |
) |
|
|
(36,998,626 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,424,583 |
|
|
|
14,698,882 |
|
|
|
25,958,238 |
|
|
|
(126,718 |
) |
|
|
62,954,985 |
|
|
|
66,058,591 |
|
|
|
41,095,375 |
|
|
|
39,172,432 |
|
|
|
(346,982 |
) |
|
|
145,979,416 |
|
|
|
|
(14,177,010 |
) |
|
|
(17,840,879 |
) |
|
|
(15,211,905 |
) |
|
|
(2,676,198 |
) |
|
|
(49,905,992 |
) |
|
|
(33,462,061 |
) |
|
|
(18,611,016 |
) |
|
|
(14,853,399 |
) |
|
|
(1,364,756 |
) |
|
|
(68,291,232 |
) |
|
|
|
(2,893,780 |
) |
|
|
12,883,328 |
|
|
|
6,558,055 |
|
|
|
3,083,785 |
|
|
|
19,631,388 |
|
|
|
7,275,771 |
|
|
|
(687,668 |
) |
|
|
(13,882,722 |
) |
|
|
(348,771 |
) |
|
|
(7,643,390 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, End of Period (e) |
|
$ |
331,500,697 |
|
|
$ |
298,643,473 |
|
|
$ |
297,212,418 |
|
|
$ |
79,996,870 |
|
|
$ |
1,007,353,458 |
|
|
$ |
319,346,406 |
|
|
$ |
283,267,698 |
|
|
$ |
269,058,778 |
|
|
$ |
79,273,632 |
|
|
$ |
950,946,514 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,353,793 |
|
|
$ |
9,741,331 |
|
|
$ |
17,304,388 |
|
|
$ |
280,869 |
|
|
$ |
32,680,381 |
|
|
$ |
39,872,301 |
|
|
$ |
21,796,691 |
|
|
$ |
10,436,311 |
|
|
$ |
(2,060,509 |
) |
|
$ |
70,044,794 |
|
|
|
|
2 |
% |
|
|
3 |
% |
|
|
6 |
% |
|
|
— |
|
|
|
3 |
% |
|
|
14 |
% |
|
|
8 |
% |
|
|
4 |
% |
|
|
-3 |
% |
|
|
8 |
% |
(a) |
Inflows include contributions, capital raised, other increases in available capital (recallable capital and increased commitments), purchases, inter-segment allocations and acquisitions. |
(b) |
Outflows represent redemptions, client withdrawals and decreases in available capital (expired capital, expense drawdowns and decreased commitments). |
(c) |
Realizations represent realization proceeds from the disposition or other monetization of assets, current income or capital returned to investors from CLOs. |
(d) |
Market Activity includes realized and unrealized gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations. |
(e) |
Total and Fee-Earning Assets Under Management are reported in the segment where the assets are managed. |
(f) |
Annualized Base Management Fee Rate represents annualized year to date Base Management Fee divided by the average of the beginning of year and each quarter end’s Fee-Earning Assets Under Management in the reporting period. |
(g) |
For the three months ended September 30, 2023, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(1.6) billion, $(117.9) million, $(630.5) million, $(213.5) million and $(2.6) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the three months ended September 30, 2022, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(3.7) billion, $(135.5) million, $(1.5) billion, $(556.0) million and $(5.9) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. |
(h) |
For the nine months ended September 30, 2023, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(617.3) million, $(61.2) million, $98.9 million, $(453.8) million and $(1.0) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the nine months ended September 30, 2022, the impact to Fee-Earning Assets Under Management due to foreign exchange rate fluctuations was $(7.5) billion, $(331.4) million, $(3.4) billion, $(556.0) million and $(11.8) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. |
(i) |
For the three months ended September 30, 2023, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(2.6) billion, $(822.0) million, $(693.5) million, $(213.8) million and $(4.3) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the three months ended September 30, 2022, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(5.7) billion, $(1.3) billion, $(1.6) billion, $(556.0) million and $(9.1) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. |
(j) |
For the nine months ended September 30, 2023, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(1.3) billion, $28.6 million, $130.8 million, $(446.5) million and $(1.6) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. For the nine months ended September 30, 2022, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(12.4) billion, $(3.2) billion, $(3.8) billion, $(556.0) million and $(19.9) billion for the Real Estate, Private Equity, Credit & Insurance, Hedge Fund Solutions and Total segments, respectively. |
Fee-Earning
Assets Under Management
Fee-Earning
Assets Under Management were $734.5 billion at September 30, 2023, an increase of $3.4 billion compared to $731.1 billion at June 30, 2023. The net increase was due to:
| |
• |
|
In our Real Estate segment, a decrease of $2.6 billion from $287.6 billion at June 30, 2023 to $284.9 billion at September 30, 2023. The net decrease was due to outflows of $7.2 billion, realizations of $4.6 billion and market depreciation of $1.6 billion, offset by inflows of $10.9 billion. |
| |
o |
Outflows were driven by $3.6 billion from BREP and co-investment, due to remaining uninvested reserves at the end of BREP Europe VI’s investment period, and $3.3 billion from BREIT, reflecting repurchases. |
| |
o |
Realizations were driven by $2.5 billion from BREIT and $1.2 billion from BREDS. |
| |
o |
Market depreciation was driven by depreciation of $1.8 billion from BPP and co-investment (which reflected $1.1 billion of foreign exchange depreciation), $544.4 million from BREDS (which reflected $36.9 million of foreign exchange depreciation) and $430.7 million from BREP and co-investment (all of which reflected foreign exchange depreciation), partially offset by appreciation of $1.3 billion from BREIT (which reflected $74.3 million of foreign exchange depreciation). |
| |
o |
Inflows were driven by $5.2 billion from BREP and co-investment, primarily from the commencement of the investment period for the seventh European opportunistic fund, $2.8 billion from BREDS, primarily due to allocations of insurance capital, and $2.8 billion from BREIT. |
Fee-Earning Assets Under Management inflows and outflows in BREP exceeds the Total Assets Under Management inflows and outflows due to the commencement of the seventh European opportunistic fund’s investment period and the termination of BREP Europe VI’s investment period in September 2023. Fee-Earning Assets Under Management inflows are reported when a fund’s investment period commences, whereas Total Assets Under Management inflows are reported at each fund closing. Fee-Earning Assets Under Management outflows include the change in fee base within BREP Europe VI from committed capital to invested capital.
| |
• |
|
In our Private Equity segment, an increase of $2.1 billion from $165.6 billion at June 30, 2023 to $167.8 billion at September 30, 2023. The net increase was due to inflows of $2.3 billion and market appreciation of $2.1 billion, offset by realizations of $2.1 billion and outflows of $91.0 million. |
| |
o |
Inflows were driven by $933.6 million from Tactical Opportunities, $692.9 million from BIP and $573.2 million from Strategic Partners. |
| |
o |
Market appreciation was driven by appreciation of $2.2 billion from BIP (which reflected $115.7 million of foreign exchange depreciation), partially offset by depreciation of $127.3 million from Strategic Partners. |
| |
o |
Realizations were driven by $1.3 billion from corporate private equity and $405.7 million from Strategic Partners. |
| |
o |
Outflows were driven by $78.3 million from BTAS. |
| |
• |
|
In our Credit & Insurance segment, an increase of $2.3 billion from $208.4 billion at June 30, 2023 to $210.7 billion at September 30, 2023. The net increase was due to inflows of $9.6 billion, offset by realizations of $3.6 billion, outflows of $2.8 billion and market depreciation of $914.0 million. |
| |
o |
Inflows were driven by $4.1 billion from direct lending, $1.6 billion from liquid credit strategies, $1.2 billion from asset-based finance and $863.6 million from private placement credit. |
| |
o |
Realizations were driven by $1.4 billion from direct lending and $1.3 billion from liquid credit strategies. |
| |
o |
Outflows were driven by $1.1 billion from liquid credit strategies, $963.6 million from direct lending and $432.2 million from BIS. |
| |
o |
Market depreciation was driven by depreciation of $1.1 billion from liquid credit strategies (which reflected $487.7 million of foreign exchange depreciation), $423.3 million from private placement credit and $404.9 million from asset-based finance, partially offset by appreciation of $1.1 billion from direct lending (which reflected $142.6 million of foreign exchange depreciation). |
| |
• |
|
In our Hedge Fund Solutions segment, an increase of $1.5 billion from $69.6 billion at June 30, 2023 to $71.1 billion at September 30, 2023. The net increase was due to inflows of $2.0 billion and market appreciation of $1.4 billion, offset by outflows of $1.5 billion and realizations of $378.9 million. |
| |
o |
Inflows were driven by $952.3 million from customized solutions, $919.4 million from liquid and specialized solutions and $133.5 million from commingled products. |
| |
o |
Market appreciation was driven by appreciation of $957.2 million from customized solutions (which reflected $107.4 million of foreign exchange depreciation), $351.0 million from liquid and specialized solutions (which reflected $18.3 million of foreign exchange depreciation) and $136.9 million from commingled products (which reflected $87.8 million of foreign exchange depreciation). |
| |
o |
Outflows were driven by $781.1 million from customized solutions, $682.0 million from liquid and specialized solutions and $62.3 million from commingled products. |
| |
o |
Realizations were driven by $320.5 million from liquid and specialized solutions. |
Fee-Earning
Assets Under Management were $734.5 billion at September 30, 2023, an increase of $16.2 billion compared to $718.4 billion at December 31, 2022. The net increase was due to:
| |
• |
|
In our Real Estate segment, an increase of $3.0 billion from $282.0 billion at December 31, 2022 to $284.9 billion at September 30, 2023. The net increase was due to inflows of $33.7 billion, offset by outflows of $14.8 billion, realizations of $14.6 billion and market depreciation of $1.3 billion. |
| |
o |
Inflows were driven by $13.0 billion from BREIT, including $4.5 billion from the Regents of the University of California (“UC Investments”) in the first quarter of 2023, $11.2 billion from BREDS, primarily due to allocations of insurance capital and BREDS IV, and $7.6 billion from BREP and co-investment, primarily from the commencement of the investment period for the seventh European opportunistic fund and from BREP X. |
| |
o |
Outflows were driven by $10.1 billion from BREIT, reflecting repurchases, and $3.6 billion from BREP and co-investment, due to remaining uninvested reserves at the end of BREP Europe VI’s investment period. |
| |
o |
Realizations were driven by $7.4 billion from BREIT and $3.5 billion from BREDS. |
| |
o |
Market depreciation was driven by depreciation of $2.6 billion from BPP and co-investment (which reflected $402.3 million of foreign exchange depreciation) and $510.6 million from BREDS (which reflected $4.2 million of foreign exchange appreciation), partially offset by appreciation of $2.1 billion from BREIT (which reflected $11.3 million of foreign exchange depreciation). |
| |
• |
|
In our Private Equity segment, an increase of $707.1 million from $167.1 billion at December 31, 2022 to $167.8 billion at September 30, 2023. The net increase was due to inflows of $5.4 billion and market appreciation of $2.3 billion, offset by realizations of $6.7 billion and outflows of $357.0 million. |
| |
o |
Inflows were driven by $2.3 billion from BIP and $1.8 billion from Tactical Opportunities. |
| |
o |
Market appreciation was driven by appreciation of $2.2 billion from BIP (which reflected $48.1 million of foreign exchange depreciation). |
|
o |
Realizations were driven by $2.9 billion from corporate private equity, $1.5 billion from Strategic Partners and $1.4 billion from Tactical Opportunities. |
| |
o |
Outflows were driven by $259.0 million from Tactical Opportunities and $79.3 million from BTAS. |
Total Assets Under Management inflows in corporate private equity exceed the Fee-Earning Assets Under Management inflows primarily due to the fund closings of BCP IX and BETP IV and capital raised in co-investments in the nine months ended September 30, 2023. Fee-Earning Assets Under Management inflows are reported when a fund’s investment period commences or fee-earning co-investment capital is raised, whereas Total Assets Under Management activity is reported at each fund closing or when co-investment capital is raised.
| |
• |
|
In our Credit & Insurance segment, an increase of $12.5 billion from $198.2 billion at December 31, 2022 to $210.7 billion at September 30, 2023. The net increase was due to inflows of $30.4 billion and market appreciation of $3.3 billion, offset by outflows of $10.9 billion and realizations of $10.3 billion. |
| |
o |
Inflows were driven by $10.8 billion from liquid credit strategies, $9.3 billion from direct lending and $3.2 billion from asset-based finance. |
| |
o |
Market appreciation was driven by appreciation of $2.9 billion from direct lending (which reflected $2.9 million of foreign exchange depreciation). |
| |
o |
Outflows were driven by $5.2 billion from liquid credit strategies and $3.6 billion from direct lending. |
| |
o |
Realizations were driven by $4.1 billion from direct lending, $2.4 billion from liquid credit strategies and $1.7 billion from mezzanine funds. |
| |
• |
|
In our Hedge Fund Solutions segment, a decrease of $48.5 million from $71.2 billion at December 31, 2022 to $71.1 billion at September 30, 2023. The net decrease was due to outflows of $5.7 billion and realizations of $2.5 billion, offset by inflows of $5.2 billion and market appreciation of $3.0 billion. |
| |
o |
Outflows were driven by $2.2 billion from customized solutions, $1.8 billion from commingled products and $1.7 billion from liquid and specialized solutions. |
| |
o |
Realizations were driven by $2.4 billion from liquid and specialized solutions. |
| |
o |
Inflows were driven by $2.5 billion from liquid and specialized solutions, $2.4 billion from customized solutions and $351.7 million from commingled products. |
| |
o |
Market appreciation was driven by appreciation of $1.5 billion from customized solutions (which reflected $261.0 million of foreign exchange depreciation), $1.1 billion from liquid and specialized solutions (which reflected $49.3 million of foreign exchange depreciation) and $352.2 million from commingled products (which reflected $143.4 million of foreign exchange depreciation). |
Total Assets Under Management
Total Assets Under Management were $1,007.4 billion at September 30, 2023, an increase of $6.0 billion compared to $1,001.4 billion at June 30, 2023. The net increase was due to:
| |
• |
|
In our Real Estate segment, a decrease of $1.7 billion from $333.2 billion at June 30, 2023 to $331.5 billion at September 30, 2023. The net decrease was due to realizations of $4.2 billion, outflows of $3.7 billion and market depreciation of $2.9 billion, offset by inflows of $9.1 billion. |
| |
o |
Realizations were driven by $2.5 billion from BREIT and $916.9 million from BREDS. |
| |
o |
Outflows were driven by $3.3 billion from BREIT, reflecting repurchases. |
| |
o |
Market depreciation was driven by depreciation of $2.1 billion from BREP and co-investment (which reflected $1.3 billion of foreign exchange depreciation) and $1.9 billion from BPP and co-investment (which reflected $1.1 billion of foreign exchange depreciation), partially offset by appreciation of $1.3 billion from BREIT (which reflected $74.3 million of foreign exchange depreciation). |
| |
o |
Inflows were driven by $3.2 billion from BREP and co-investment, primarily from fundraising for the seventh European opportunistic fund, $2.9 billion from BREDS, primarily due to allocations of insurance capital, and $2.8 billion from BREIT. |
| |
• |
|
In our Private Equity segment, an increase of $3.4 billion from $295.3 billion at June 30, 2023 to $298.6 billion at September 30, 2023. The net increase was due to market appreciation of $5.7 billion and inflows of $3.6 billion, offset by realizations of $5.1 billion and outflows of $790.4 million. |
| |
o |
Market appreciation was driven by appreciation of $2.6 billion from BIP (which reflected $187.9 million of foreign exchange depreciation) and $2.3 billion from corporate private equity (which reflected $575.6 million of foreign exchange depreciation). |
| |
o |
Inflows were driven by $1.2 billion from Tactical Opportunities, $1.1 billion from Strategic Partners and $829.6 million from corporate private equity. |
| |
o |
Realizations were driven by $2.9 billion from corporate private equity and $1.3 billion from Strategic Partners. |
| |
o |
Outflows were driven by $555.7 million from Strategic Partners and $82.7 million from corporate private equity. |
| |
• |
|
In our Credit & Insurance segment, an increase of $2.6 billion from $294.6 billion at June 30, 2023 to $297.2 billion at September 30, 2023. The net increase was due to inflows of $10.4 billion and market appreciation of $236.8 million, offset by realizations of $5.0 billion and outflows of $3.0 billion. |
| |
o |
Inflows were driven by $5.0 billion from direct lending, $1.9 billion from liquid credit strategies and $1.2 billion from asset-based finance. |
| |
o |
Market appreciation was driven by appreciation of $1.4 billion from direct lending (which reflected $167.9 million of foreign exchange depreciation), partially offset by depreciation of $1.1 billion from liquid credit strategies (which reflected $520.6 million of foreign exchange depreciation). |
| |
o |
Realizations were driven by $2.1 billion from direct lending, $1.3 billion from liquid credit strategies and $451.6 million from our energy strategies. |
| |
o |
Outflows were driven by $1.2 billion from liquid credit strategies and $1.0 billion from direct lending. |
| |
• |
|
In our Hedge Fund Solutions segment, an increase of $1.8 billion from $78.2 billion at June 30, 2023 to $80.0 billion at September 30, 2023. The net increase was due to inflows of $2.3 billion and market appreciation of $1.6 billion, offset by outflows of $1.7 billion and realizations of $386.2 million. |
| |
o |
Inflows were driven by $1.2 billion from customized solutions, $865.9 million from liquid and specialized solutions and $196.8 million from commingled products. |
| |
o |
Market appreciation was driven by appreciation of $951.3 million from customized solutions (which reflected $107.4 million of foreign exchange depreciation), $387.9 million from liquid and specialized solutions (which reflected $18.6 million of foreign exchange depreciation) and $218.0 million from commingled products (which reflected $87.8 million of foreign exchange depreciation). |
|
o |
Outflows were driven by $820.4 million from customized solutions, $784.0 million from liquid and specialized solutions and $73.3 million from commingled products. |
| |
o |
Realizations were driven by $327.8 million from liquid and specialized solutions. |
Total Assets Under Management were $1,007.4 billion at September 30, 2023, an increase of $32.7 billion compared to $974.7 billion at December 31, 2022. The net increase was due to:
| |
• |
|
In our Real Estate segment, an increase of $5.4 billion from $326.1 billion at December 31, 2022 to $331.5 billion at September 30, 2023. The net increase was due to inflows of $34.0 billion, offset by realizations of $14.2 billion, outflows of $11.6 billion and market depreciation of $2.9 billion. |
| |
o |
Inflows were driven by $13.3 billion from BREDS, primarily due to allocations of insurance capital and fundraising for the fifth real estate debt strategies fund, $13.0 billion from BREIT, including $4.5 billion from UC Investments in the first quarter of 2023, and $6.7 billion from BREP and co-investment, primarily from fundraising for the seventh European opportunistic fund and BREP X. |
| |
o |
Realizations were driven by $7.4 billion from BREIT, $2.5 billion from BREP and co-investment and $2.5 billion from BREDS. |
| |
o |
Outflows were driven by $10.1 billion from BREIT, reflecting repurchases. |
| |
o |
Market depreciation was primarily driven by depreciation of $2.6 billion from BPP and co-investment (which reflected $401.2 million of foreign exchange depreciation) and $2.1 billion from BREP and co-investment (which reflected $883.9 million of foreign exchange depreciation), partially offset by appreciation of $2.1 billion from BREIT (which reflected $11.3 million of foreign exchange depreciation). |
| |
• |
|
In our Private Equity segment, an increase of $9.7 billion from $288.9 billion at December 31, 2022 to $298.6 billion at September 30, 2023. The net increase was due to inflows of $16.6 billion and market appreciation of $12.9 billion, offset by realizations of $17.8 billion and outflows of $1.9 billion. |
| |
o |
Inflows were driven by $8.0 billion from corporate private equity, $2.9 billion from Tactical Opportunities, $2.7 billion from BIP and $2.4 billion from Strategic Partners. |
| |
o |
Market appreciation was driven by appreciation of $7.2 billion from corporate private equity (which reflected $7.6 million of foreign exchange appreciation) and $2.7 billion from BIP (which reflected $81.2 million of foreign exchange depreciation). |
| |
o |
Realizations were driven by $9.9 billion from corporate private equity, $3.8 billion from Strategic Partners and $2.9 billion from Tactical Opportunities. |
| |
o |
Outflows were driven by $853.7 million from Strategic Partners, $538.4 million from corporate private equity and $257.3 million from Tactical Opportunities. |
| |
• |
|
In our Credit & Insurance segment, an increase of $17.3 billion from $279.9 billion at December 31, 2022 to $297.2 billion at September 30, 2023. The net increase was due to inflows of $39.3 billion and market appreciation of $6.6 billion, offset by realizations of $15.2 billion and outflows of $13.4 billion. |
| |
o |
Inflows were driven by $17.0 billion from direct lending, $9.7 billion from liquid credit strategies and $4.4 billion from asset-based finance. |
| |
o |
Market appreciation was driven by appreciation of $3.8 billion from direct lending (which reflected $13.7 million of foreign exchange depreciation) and $1.3 billion from liquid credit strategies (which reflected $103.6 million of foreign exchange appreciation). |
| |
o |
Realizations were driven by $6.4 billion from direct lending, $3.0 billion from mezzanine funds and $2.4 billion from liquid credit strategies. |
| |
o |
Outflows were driven by $5.8 billion from liquid credit strategies and $4.8 billion from direct lending. |
| |
• |
|
In our Hedge Fund Solutions segment, an increase of $280.9 million from $79.7 billion at December 31, 2022 to $80.0 billion at September 30, 2023. The net increase was due to inflows of $5.8 billion and market appreciation of $3.1 billion, offset by outflows of $5.9 billion and realizations of $2.7 billion. |
| |
o |
Inflows were driven by $2.7 billion from liquid and specialized solutions, $2.6 billion from customized solutions and $471.3 million from commingled products. |
| |
o |
Market appreciation was driven by appreciation of $1.5 billion from customized solutions (which reflected $262.3 million of foreign exchange depreciation), $1.1 billion from liquid and specialized solutions (which reflected $50.5 million of foreign exchange depreciation) and $474.6 million from commingled products (which reflected $133.7 million of foreign exchange depreciation). |
| |
o |
Outflows were driven by $2.2 billion from customized solutions, $1.9 billion from liquid and specialized solutions and $1.9 billion from commingled products. |
| |
o |
Realizations were driven by $2.6 billion from liquid and specialized solutions. |
Total Assets Under Management inflows in our Credit & Insurance segment direct lending funds exceed the
Fee-Earning
Assets Under Management because Total Assets Under Management inflows are reported at their gross value while, for certain funds,
Fee-Earning
Assets Under Management are reported as net assets, which is the basis on which fees are charged.
Total Assets Under Management realizations in our BREP and
co-investment
funds and our Private Equity segment generally represents the total proceeds and typically exceeds the
Fee-Earning
Assets Under Management realizations.
Fee-Earning
Assets Under Management generally represents only the invested capital.
The following presents our Dry Powder as of quarter end of each period:
Note: |
Totals may not add due to rounding. |
(a) |
Represents illiquid drawdown funds, a component of Perpetual Capital and fee-paying co-investments; includes fee-paying third party capital as well as general partner and employee capital that does not earn fees. Amounts are reduced by outstanding capital commitments, for which capital has not yet been invested. |
Net Accrued Performance Revenues
The following table presents the Accrued Performance Revenues, net of performance compensation, of the Blackstone Funds as of September 30, 2023 and 2022. Net Accrued Performance Revenues presented do not include clawback amounts, if any, which are disclosed in Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. See “—
Non-GAAP
Financial Measures” for our reconciliation of Net Accrued Performance Revenues.
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6 |
|
|
$ |
7 |
|
|
|
|
4 |
|
|
|
3 |
|
|
|
|
20 |
|
|
|
24 |
|
|
|
|
22 |
|
|
|
145 |
|
|
|
|
657 |
|
|
|
830 |
|
|
|
|
916 |
|
|
|
1,002 |
|
|
|
|
23 |
|
|
|
68 |
|
|
|
|
— |
|
|
|
96 |
|
|
|
|
109 |
|
|
|
74 |
|
|
|
|
93 |
|
|
|
105 |
|
|
|
|
— |
|
|
|
119 |
|
|
|
|
387 |
|
|
|
735 |
|
|
|
|
30 |
|
|
|
14 |
|
|
|
|
18 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,285 |
|
|
|
3,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
7 |
|
|
|
|
17 |
|
|
|
8 |
|
|
|
|
365 |
|
|
|
463 |
|
|
|
|
810 |
|
|
|
870 |
|
|
|
|
345 |
|
|
|
227 |
|
|
|
|
113 |
|
|
|
137 |
|
|
|
|
29 |
|
|
|
33 |
|
|
|
|
143 |
|
|
|
— |
|
|
|
|
215 |
|
|
|
86 |
|
|
|
|
220 |
|
|
|
219 |
|
|
|
|
235 |
|
|
|
233 |
|
|
|
|
512 |
|
|
|
548 |
|
|
|
|
324 |
|
|
|
126 |
|
|
|
|
62 |
|
|
|
26 |
|
|
|
|
176 |
|
|
|
202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
3,569 |
|
|
|
3,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
292 |
|
|
|
297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
289 |
|
|
|
320 |
|
|
|
|
|
|
|
|
|
|
Total Blackstone Net Accrued Performance Revenues |
|
$ |
6,435 |
|
|
$ |
7,060 |
|
|
|
|
|
|
|
|
|
|
Note: |
Totals may not add due to rounding. |
(a) |
Real Estate and Private Equity include co-investments, as applicable. |
For the twelve months ended September 30, 2023, Net Accrued Performance Revenues receivable decreased due to net realized distributions of $1.6 billion, partially offset by Net Performance Revenues of $1.0 billion.
Invested Performance Eligible Assets Under Management
The following presents our Invested Performance Eligible Assets Under Management as of quarter end for each period:
Note: |
Totals may not add due to rounding. |
The following presents our Perpetual Capital Total Assets Under Management as of quarter end for each period:
Note: |
Totals may not add due to rounding. |
Perpetual Capital Total Assets Under Management were $388.3 billion as of September 30, 2023, an increase of $4.0 billion, compared to $384.3 billion as of June 30, 2023. Perpetual Capital Total Assets Under Management in our Credit & Insurance and Private Equity segments increased $3.7 billion and $2.9 billion, respectively. Principal drivers of these increases were:
| |
• |
|
In our Private Equity segment, growth in BIP resulted in an increase of $2.8 billion. |
| |
• |
|
In our Credit & Insurance segment, growth in BCRED and insurance capital managed in the Credit & Insurance segment resulted in increases of $2.3 billion and $1.2 billion, respectively. |
Perpetual Capital Total Assets Under Management were $388.3 billion as of September 30, 2023, an increase of $17.1 billion, compared to $371.1 billion as of December 31, 2022. Perpetual Capital Total Assets Under Management in our Credit & Insurance and Private Equity segments increased $11.6 billion and $5.4 billion, respectively. Principal drivers of these increases were:
| |
• |
|
In our Credit & Insurance segment, growth in insurance capital managed in the Credit & Insurance segment and BCRED resulted in increases of $8.1 billion and $2.7 billion, respectively. |
| |
• |
|
In our Private Equity segment, growth in BIP resulted in an increase of $4.7 billion. |
Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
The following table presents the investment record of our significant carry/drawdown funds and selected perpetual capital strategies from inception through September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Date / Ending Date) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(Dollars/Euros in Thousands, Except Where Noted) |
|
|
|
|
$ 140,714 |
|
$ — |
|
$ — |
|
|
n/a |
|
|
|
— |
|
|
$ 345,190 |
|
|
2.5x |
|
|
$ 345,190 |
|
|
2.5x |
|
|
|
33 |
% |
|
|
33 |
% |
BREP I (Sep 1994 / Oct 1996) |
|
380,708 |
|
— |
|
— |
|
|
n/a |
|
|
|
— |
|
|
1,327,708 |
|
|
2.8x |
|
|
1,327,708 |
|
|
2.8x |
|
|
|
40 |
% |
|
|
40 |
% |
BREP II (Oct 1996 / Mar 1999) |
|
1,198,339 |
|
— |
|
— |
|
|
n/a |
|
|
|
— |
|
|
2,531,614 |
|
|
2.1x |
|
|
2,531,614 |
|
|
2.1x |
|
|
|
19 |
% |
|
|
19 |
% |
BREP III (Apr 1999 / Apr 2003) |
|
1,522,708 |
|
— |
|
— |
|
|
n/a |
|
|
|
— |
|
|
3,330,406 |
|
|
2.4x |
|
|
3,330,406 |
|
|
2.4x |
|
|
|
21 |
% |
|
|
21 |
% |
BREP IV (Apr 2003 / Dec 2005) |
|
2,198,694 |
|
— |
|
19,990 |
|
|
n/a |
|
|
|
— |
|
|
4,641,310 |
|
|
1.7x |
|
|
4,661,300 |
|
|
1.7x |
|
|
|
12 |
% |
|
|
12 |
% |
BREP V (Dec 2005 / Feb 2007) |
|
5,539,418 |
|
— |
|
6,226 |
|
|
n/a |
|
|
|
— |
|
|
13,463,448 |
|
|
2.3x |
|
|
13,469,674 |
|
|
2.3x |
|
|
|
11 |
% |
|
|
11 |
% |
BREP VI (Feb 2007 / Aug 2011) |
|
11,060,122 |
|
550,788 |
|
177,175 |
|
|
2.1x |
|
|
|
73 |
% |
|
27,555,714 |
|
|
2.5x |
|
|
27,732,889 |
|
|
2.5x |
|
|
|
13 |
% |
|
|
13 |
% |
BREP VII (Aug 2011 / Apr 2015) |
|
13,501,324 |
|
1,440,070 |
|
2,251,607 |
|
|
0.6x |
|
|
|
5 |
% |
|
28,259,297 |
|
|
2.4x |
|
|
30,510,904 |
|
|
2.0x |
|
|
|
21 |
% |
|
|
14 |
% |
BREP VIII (Apr 2015 / Jun 2019) |
|
16,597,812 |
|
2,172,541 |
|
13,402,672 |
|
|
1.5x |
|
|
|
1 |
% |
|
21,694,783 |
|
|
2.5x |
|
|
35,097,455 |
|
|
2.0x |
|
|
|
28 |
% |
|
|
15 |
% |
BREP IX (Jun 2019 / Aug 2022) |
|
21,340,670 |
|
3,404,572 |
|
26,429,803 |
|
|
1.5x |
|
|
|
1 |
% |
|
8,490,679 |
|
|
2.2x |
|
|
34,920,482 |
|
|
1.6x |
|
|
|
61 |
% |
|
|
21 |
% |
*BREP X (Aug 2022 / Feb 2028) |
|
30,498,731 |
|
28,585,335 |
|
2,023,421 |
|
|
1.1x |
|
|
|
37 |
% |
|
— |
|
|
n/a |
|
|
2,023,421 |
|
|
1.1x |
|
|
|
n/a |
|
|
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 103,979,240 |
|
$ 36,153,306 |
|
$ 44,310,894 |
|
|
1.4x |
|
|
|
3 |
% |
|
$ 111,640,149 |
|
|
2.4x |
|
|
$ 155,951,043 |
|
|
2.0x |
|
|
|
18 |
% |
|
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BREP Int’l (Jan 2001 / Sep 2005) |
|
|
|
|
|
|
|
|
n/a |
|
|
|
— |
|
|
|
|
|
2.1x |
|
|
|
|
|
2.1x |
|
|
|
23 |
% |
|
|
23 |
% |
BREP Int’l II (Sep 2005 / Jun 2008) (e) |
|
1,629,748 |
|
— |
|
— |
|
|
n/a |
|
|
|
— |
|
|
2,583,032 |
|
|
1.8x |
|
|
2,583,032 |
|
|
1.8x |
|
|
|
8 |
% |
|
|
8 |
% |
BREP Europe III (Jun 2008 / Sep 2013) |
|
3,205,420 |
|
398,122 |
|
196,294 |
|
|
0.4x |
|
|
|
— |
|
|
5,854,592 |
|
|
2.4x |
|
|
6,050,886 |
|
|
2.0x |
|
|
|
18 |
% |
|
|
13 |
% |
BREP Europe IV (Sep 2013 / Dec 2016) |
|
6,674,949 |
|
1,310,820 |
|
1,234,020 |
|
|
0.9x |
|
|
|
— |
|
|
9,972,153 |
|
|
1.9x |
|
|
11,206,173 |
|
|
1.7x |
|
|
|
19 |
% |
|
|
12 |
% |
BREP Europe V (Dec 2016 / Oct 2019) |
|
7,979,853 |
|
1,146,014 |
|
4,967,635 |
|
|
0.9x |
|
|
|
— |
|
|
6,694,372 |
|
|
3.9x |
|
|
11,662,007 |
|
|
1.7x |
|
|
|
41 |
% |
|
|
10 |
% |
BREP Europe VI (Oct 2019 / Sep 2023) |
|
10,033,576 |
|
3,578,573 |
|
7,906,179 |
|
|
1.2x |
|
|
|
— |
|
|
3,424,218 |
|
|
2.6x |
|
|
11,330,397 |
|
|
1.4x |
|
|
|
72 |
% |
|
|
18 |
% |
*BREP Europe VII (Sep 2023 / Mar 2029) |
|
4,055,206 |
|
4,055,206 |
|
— |
|
|
n/a |
|
|
|
— |
|
|
— |
|
|
n/a |
|
|
— |
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0x |
|
|
|
— |
|
|
|
|
|
2.3x |
|
|
|
|
|
1.7x |
|
|
|
17 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Date / Ending Date) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(Dollars/Euros in Thousands, Except Where Noted) |
| |
|
BREP Asia I (Jun 2013 / Dec 2017) |
|
$ |
4,262,075 |
|
|
$ |
898,383 |
|
|
$ |
1,666,676 |
|
|
|
1.6x |
|
|
|
28 |
% |
|
$ |
6,927,744 |
|
|
|
1.9x |
|
|
$ |
8,594,420 |
|
|
|
1.9x |
|
|
|
16% |
|
|
|
12% |
|
BREP Asia II (Dec 2017 / Mar 2022) |
|
|
7,353,190 |
|
|
|
1,345,680 |
|
|
|
6,659,758 |
|
|
|
1.2x |
|
|
|
4 |
% |
|
|
1,617,659 |
|
|
|
1.9x |
|
|
|
8,277,417 |
|
|
|
1.3x |
|
|
|
32% |
|
|
|
6% |
|
*BREP Asia III (Mar 2022 / Sep 2027) |
|
|
8,225,044 |
|
|
|
7,104,528 |
|
|
|
996,803 |
|
|
|
0.9x |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
996,803 |
|
|
|
0.9x |
|
|
|
n/a |
|
|
|
-26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
19,840,309 |
|
|
|
9,348,591 |
|
|
|
9,323,237 |
|
|
|
1.2x |
|
|
|
8 |
% |
|
|
8,545,403 |
|
|
|
1.9x |
|
|
|
17,868,640 |
|
|
|
1.5x |
|
|
|
17% |
|
|
|
9% |
|
| |
|
|
7,298,717 |
|
|
|
31,955 |
|
|
|
1,009,091 |
|
|
|
2.2x |
|
|
|
— |
|
|
|
15,150,534 |
|
|
|
2.2x |
|
|
|
16,159,625 |
|
|
|
2.2x |
|
|
|
16% |
|
|
|
16% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
171,601,150 |
|
|
$ |
56,688,317 |
|
|
$ |
70,819,791 |
|
|
|
1.3x |
|
|
|
3 |
% |
|
$ |
171,890,997 |
|
|
|
2.3x |
|
|
$ |
242,710,788 |
|
|
|
1.9x |
|
|
|
17% |
|
|
|
15% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*BREDS High-Yield (Various) (g) |
|
$ |
|
|
|
$ |
7,740,038 |
|
|
$ |
6,078,085 |
|
|
|
1.0x |
|
|
|
— |
|
|
$ |
18,306,169 |
|
|
|
1.3x |
|
|
$ |
24,384,254 |
|
|
|
1.2x |
|
|
|
10% |
|
|
|
9% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BCP I (Oct 1987 / Oct 1993) |
|
$ |
859,081 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
n/a |
|
|
|
— |
|
|
$ |
1,741,738 |
|
|
|
2.6x |
|
|
$ |
1,741,738 |
|
|
|
2.6x |
|
|
|
19% |
|
|
|
19% |
|
BCP II (Oct 1993 / Aug 1997) |
|
|
1,361,100 |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
3,268,627 |
|
|
|
2.5x |
|
|
|
3,268,627 |
|
|
|
2.5x |
|
|
|
32% |
|
|
|
32% |
|
BCP III (Aug 1997 / Nov 2002) |
|
|
3,967,422 |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
9,228,707 |
|
|
|
2.3x |
|
|
|
9,228,707 |
|
|
|
2.3x |
|
|
|
14% |
|
|
|
14% |
|
BCOM (Jun 2000 / Jun 2006) |
|
|
2,137,330 |
|
|
|
24,575 |
|
|
|
15,819 |
|
|
|
n/a |
|
|
|
— |
|
|
|
2,981,999 |
|
|
|
1.4x |
|
|
|
2,997,818 |
|
|
|
1.4x |
|
|
|
6% |
|
|
|
6% |
|
BCP IV (Nov 2002 / Dec 2005) |
|
|
6,773,182 |
|
|
|
195,824 |
|
|
|
27,813 |
|
|
|
n/a |
|
|
|
— |
|
|
|
21,694,051 |
|
|
|
2.9x |
|
|
|
21,721,864 |
|
|
|
2.9x |
|
|
|
36% |
|
|
|
36% |
|
BCP V (Dec 2005 / Jan 2011) |
|
|
21,009,112 |
|
|
|
1,035,259 |
|
|
|
69,929 |
|
|
|
4.7x |
|
|
|
100 |
% |
|
|
38,790,444 |
|
|
|
1.9x |
|
|
|
38,860,373 |
|
|
|
1.9x |
|
|
|
8% |
|
|
|
8% |
|
BCP VI (Jan 2011 / May 2016) |
|
|
15,195,536 |
|
|
|
1,341,319 |
|
|
|
5,225,663 |
|
|
|
2.0x |
|
|
|
28 |
% |
|
|
27,574,219 |
|
|
|
2.2x |
|
|
|
32,799,882 |
|
|
|
2.2x |
|
|
|
14% |
|
|
|
13% |
|
BCP VII (May 2016 / Feb 2020) |
|
|
18,856,748 |
|
|
|
1,693,546 |
|
|
|
18,896,671 |
|
|
|
1.6x |
|
|
|
21 |
% |
|
|
15,254,119 |
|
|
|
2.5x |
|
|
|
34,150,790 |
|
|
|
1.9x |
|
|
|
30% |
|
|
|
13% |
|
*BCP VIII (Feb 2020 / Feb 2026) |
|
|
25,651,696 |
|
|
|
11,181,728 |
|
|
|
19,590,887 |
|
|
|
1.3x |
|
|
|
7 |
% |
|
|
1,179,647 |
|
|
|
2.4x |
|
|
|
20,770,534 |
|
|
|
1.4x |
|
|
|
n/m |
|
|
|
12% |
|
| |
|
|
17,097,378 |
|
|
|
17,097,378 |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Energy I (Aug 2011 / Feb 2015) |
|
|
2,441,558 |
|
|
|
174,492 |
|
|
|
513,784 |
|
|
|
1.6x |
|
|
|
58 |
% |
|
|
4,169,241 |
|
|
|
2.0x |
|
|
|
4,683,025 |
|
|
|
2.0x |
|
|
|
14% |
|
|
|
11% |
|
Energy II (Feb 2015 / Feb 2020) |
|
|
4,628,418 |
|
|
|
866,986 |
|
|
|
4,356,903 |
|
|
|
1.8x |
|
|
|
67 |
% |
|
|
3,463,693 |
|
|
|
1.6x |
|
|
|
7,820,596 |
|
|
|
1.7x |
|
|
|
13% |
|
|
|
8% |
|
*Energy III (Feb 2020 / Feb 2026) |
|
|
4,364,432 |
|
|
|
1,951,764 |
|
|
|
4,555,423 |
|
|
|
2.0x |
|
|
|
20 |
% |
|
|
1,139,860 |
|
|
|
2.3x |
|
|
|
5,695,283 |
|
|
|
2.0x |
|
|
|
61% |
|
|
|
39% |
|
Energy Transition IV (TBD) |
|
|
2,317,245 |
|
|
|
2,317,245 |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
BCP Asia I (Dec 2017 / Sep 2021) |
|
|
2,438,028 |
|
|
|
418,459 |
|
|
|
2,969,214 |
|
|
|
1.6x |
|
|
|
28 |
% |
|
|
1,787,587 |
|
|
|
4.9x |
|
|
|
4,756,801 |
|
|
|
2.2x |
|
|
|
96% |
|
|
|
27% |
|
*BCP Asia II (Sep 2021 / Sep 2027) |
|
|
6,656,786 |
|
|
|
4,945,392 |
|
|
|
1,878,551 |
|
|
|
1.2x |
|
|
|
10 |
% |
|
|
25 |
|
|
|
n/a |
|
|
|
1,878,576 |
|
|
|
1.2x |
|
|
|
n/a |
|
|
|
n/m |
|
Core Private Equity I (Jan 2017 / Mar 2021) (h) |
|
|
4,761,601 |
|
|
|
1,164,732 |
|
|
|
7,320,559 |
|
|
|
1.9x |
|
|
|
— |
|
|
|
2,440,551 |
|
|
|
4.4x |
|
|
|
9,761,110 |
|
|
|
2.2x |
|
|
|
56% |
|
|
|
18% |
|
*Core Private Equity II (Mar 2021 / Mar 2026) (h) |
|
|
8,205,237 |
|
|
|
5,721,426 |
|
|
|
3,182,425 |
|
|
|
1.3x |
|
|
|
— |
|
|
|
68,770 |
|
|
|
n/a |
|
|
|
3,251,195 |
|
|
|
1.4x |
|
|
|
n/a |
|
|
|
13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Private Equity |
|
$ |
148,721,890 |
|
|
$ |
50,130,125 |
|
|
$ |
68,603,641 |
|
|
|
1.6x |
|
|
|
17 |
% |
|
$ |
134,783,278 |
|
|
|
2.2x |
|
|
$ |
203,386,919 |
|
|
|
1.9x |
|
|
|
16% |
|
|
|
15% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Date / Ending Date) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(Dollars/Euros in Thousands, Except Where Noted) |
Private Equity (continued) |
|
|
|
*Tactical Opportunities (Various) |
|
$ |
30,364,340 |
|
|
$ |
15,896,639 |
|
|
$ |
11,532,042 |
|
|
|
1.2x |
|
|
|
8 |
% |
|
$ |
22,701,599 |
|
|
|
1.8x |
|
|
$ |
34,233,641 |
|
|
|
1.6x |
|
|
|
16% |
|
|
|
11% |
|
*Tactical Opportunities Co-Investment and Other (Various) |
|
|
10,029,256 |
|
|
|
1,411,126 |
|
|
|
4,675,833 |
|
|
|
1.7x |
|
|
|
5 |
% |
|
|
8,853,429 |
|
|
|
1.6x |
|
|
|
13,529,262 |
|
|
|
1.6x |
|
|
|
18% |
|
|
|
16% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Tactical Opportunities |
|
$ |
40,393,596 |
|
|
$ |
17,307,765 |
|
|
$ |
16,207,875 |
|
|
|
1.3x |
|
|
|
7 |
% |
|
$ |
31,555,028 |
|
|
|
1.8x |
|
|
$ |
47,762,903 |
|
|
|
1.6x |
|
|
|
17% |
|
|
|
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*BXG I (Jul 2020 / Jul 2025) |
|
$ |
5,056,267 |
|
|
$ |
1,256,237 |
|
|
$ |
3,447,373 |
|
|
|
1.0x |
|
|
|
2 |
% |
|
$ |
484,034 |
|
|
|
2.7x |
|
|
$ |
3,931,407 |
|
|
|
1.0x |
|
|
|
n/m |
|
|
|
-3% |
|
|
|
|
4,093,732 |
|
|
|
4,093,732 |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,149,999 |
|
|
$ |
5,349,969 |
|
|
$ |
3,447,373 |
|
|
|
1.0x |
|
|
|
2 |
% |
|
$ |
484,034 |
|
|
|
2.7x |
|
|
$ |
3,931,407 |
|
|
|
1.0x |
|
|
|
n/m |
|
|
|
-3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategic Partners (Secondaries) |
|
Strategic Partners I-V (Various) (i) |
|
$ |
11,035,527 |
|
|
$ |
616,300 |
|
|
$ |
330,662 |
|
|
|
n/a |
|
|
|
— |
|
|
$ |
16,562,619 |
|
|
|
n/a |
|
|
$ |
16,893,281 |
|
|
|
1.7x |
|
|
|
n/a |
|
|
|
13% |
|
Strategic Partners VI (Apr 2014 / Apr 2016) (i) |
|
|
4,362,772 |
|
|
|
617,474 |
|
|
|
901,474 |
|
|
|
n/a |
|
|
|
— |
|
|
|
4,160,215 |
|
|
|
n/a |
|
|
|
5,061,689 |
|
|
|
1.7x |
|
|
|
n/a |
|
|
|
14% |
|
Strategic Partners VII (May 2016 / Mar 2019) (i) |
|
|
7,489,970 |
|
|
|
1,635,172 |
|
|
|
4,273,087 |
|
|
|
n/a |
|
|
|
— |
|
|
|
6,418,775 |
|
|
|
n/a |
|
|
|
10,691,862 |
|
|
|
2.0x |
|
|
|
n/a |
|
|
|
18% |
|
Strategic Partners Real Assets II (May 2017 / Jun 2020) (i) |
|
|
1,749,807 |
|
|
|
487,992 |
|
|
|
1,207,710 |
|
|
|
n/a |
|
|
|
— |
|
|
|
1,113,866 |
|
|
|
n/a |
|
|
|
2,321,576 |
|
|
|
1.7x |
|
|
|
n/a |
|
|
|
17% |
|
Strategic Partners VIII (Mar 2019 / Oct 2021) (i) |
|
|
10,763,600 |
|
|
|
4,540,254 |
|
|
|
8,336,051 |
|
|
|
n/a |
|
|
|
— |
|
|
|
5,946,803 |
|
|
|
n/a |
|
|
|
14,282,854 |
|
|
|
1.8x |
|
|
|
n/a |
|
|
|
32% |
|
*Strategic Partners Real Estate, SMA and Other (Various) (i) |
|
|
6,530,642 |
|
|
|
2,256,022 |
|
|
|
2,007,881 |
|
|
|
n/a |
|
|
|
— |
|
|
|
2,003,485 |
|
|
|
n/a |
|
|
|
4,011,366 |
|
|
|
1.6x |
|
|
|
n/a |
|
|
|
15% |
|
*Strategic Partners Infrastructure III (Jun 2020 / Jul 2024) (i) |
|
|
3,250,100 |
|
|
|
891,683 |
|
|
|
1,429,920 |
|
|
|
n/a |
|
|
|
— |
|
|
|
239,153 |
|
|
|
n/a |
|
|
|
1,669,073 |
|
|
|
1.5x |
|
|
|
n/a |
|
|
|
32% |
|
*Strategic Partners IX (Oct 2021 / Jan 2027) (i) |
|
|
19,492,126 |
|
|
|
12,116,523 |
|
|
|
4,890,255 |
|
|
|
n/a |
|
|
|
— |
|
|
|
538,872 |
|
|
|
n/a |
|
|
|
5,429,127 |
|
|
|
1.4x |
|
|
|
n/a |
|
|
|
24% |
|
*Strategic Partners GP Solutions (Jun 2021 / / Dec 2026) (i) |
|
|
2,045,211 |
|
|
|
966,522 |
|
|
|
722,901 |
|
|
|
n/a |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
722,901 |
|
|
|
1.1x |
|
|
|
n/a |
|
|
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Strategic Partners (Secondaries) |
|
$ |
66,719,755 |
|
|
$ |
24,127,942 |
|
|
$ |
24,099,941 |
|
|
|
n/a |
|
|
|
— |
|
|
$ |
36,983,788 |
|
|
|
n/a |
|
|
$ |
61,083,729 |
|
|
|
1.7x |
|
|
|
n/a |
|
|
|
15% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarus IV (Jan 2018 / Jan 2020) |
|
$ |
910,000 |
|
|
$ |
92,300 |
|
|
$ |
825,214 |
|
|
|
1.5x |
|
|
|
1 |
% |
|
$ |
337,376 |
|
|
|
1.9x |
|
|
$ |
1,162,590 |
|
|
|
1.6x |
|
|
|
23% |
|
|
|
10% |
|
*BXLS V (Jan 2020 / Jan 2025) |
|
|
4,915,804 |
|
|
|
3,118,269 |
|
|
|
2,251,754 |
|
|
|
1.6x |
|
|
|
2 |
% |
|
|
139,281 |
|
|
|
1.1x |
|
|
|
2,391,035 |
|
|
|
1.5x |
|
|
|
n/m |
|
|
|
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Date / Ending Date) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(Dollars/Euros in Thousands, Except Where Noted) |
|
|
Mezzanine / Opportunistic I (Jul 2007 / Oct 2011) |
|
$ |
2,000,000 |
|
|
$ |
97,114 |
|
|
$ |
— |
|
|
|
n/a |
|
|
|
— |
|
|
$ |
4,809,097 |
|
|
|
1.6x |
|
|
$ |
4,809,097 |
|
|
|
1.6x |
|
|
|
n/a |
|
|
|
17 |
% |
Mezzanine / Opportunistic II (Nov 2011 / Nov 2016) |
|
|
4,120,000 |
|
|
|
993,248 |
|
|
|
165,527 |
|
|
|
0.4x |
|
|
|
— |
|
|
|
6,589,943 |
|
|
|
1.4x |
|
|
|
6,755,470 |
|
|
|
1.4x |
|
|
|
n/a |
|
|
|
10 |
% |
Mezzanine / Opportunistic III (Sep 2016 / Jan 2021) |
|
|
6,639,133 |
|
|
|
1,036,502 |
|
|
|
2,556,242 |
|
|
|
1.0x |
|
|
|
— |
|
|
|
7,323,798 |
|
|
|
1.6x |
|
|
|
9,880,040 |
|
|
|
1.4x |
|
|
|
n/a |
|
|
|
11 |
% |
*Mezzanine / Opportunistic IV (Jan 2021 / Jan 2026) |
|
|
5,016,771 |
|
|
|
2,779,863 |
|
|
|
3,082,289 |
|
|
|
1.1x |
|
|
|
— |
|
|
|
568,391 |
|
|
|
1.9x |
|
|
|
3,650,680 |
|
|
|
1.1x |
|
|
|
n/a |
|
|
|
11 |
% |
Stressed / Distressed I (Sep 2009 / May 2013) |
|
|
3,253,143 |
|
|
|
— |
|
|
|
— |
|
|
|
n/a |
|
|
|
— |
|
|
|
5,777,098 |
|
|
|
1.3x |
|
|
|
5,777,098 |
|
|
|
1.3x |
|
|
|
n/a |
|
|
|
9 |
% |
Stressed / Distressed II (Jun 2013 / Jun 2018) |
|
|
5,125,000 |
|
|
|
547,430 |
|
|
|
273,036 |
|
|
|
0.4x |
|
|
|
— |
|
|
|
5,312,944 |
|
|
|
1.2x |
|
|
|
5,585,980 |
|
|
|
1.1x |
|
|
|
n/a |
|
|
|
1 |
% |
Stressed / Distressed III (Dec 2017 / Dec 2022) |
|
|
7,356,380 |
|
|
|
1,946,417 |
|
|
|
2,843,752 |
|
|
|
1.0x |
|
|
|
— |
|
|
|
3,278,224 |
|
|
|
1.4x |
|
|
|
6,121,976 |
|
|
|
1.2x |
|
|
|
n/a |
|
|
|
8 |
% |
Energy I (Nov 2015 / Nov 2018) |
|
|
2,856,867 |
|
|
|
1,134,875 |
|
|
|
492,250 |
|
|
|
0.7x |
|
|
|
— |
|
|
|
3,022,524 |
|
|
|
1.8x |
|
|
|
3,514,774 |
|
|
|
1.5x |
|
|
|
n/a |
|
|
|
10 |
% |
Energy II (Feb 2019 / Jun 2023) |
|
|
3,616,081 |
|
|
|
1,566,007 |
|
|
|
1,811,154 |
|
|
|
1.0x |
|
|
|
— |
|
|
|
1,713,153 |
|
|
|
1.6x |
|
|
|
3,524,307 |
|
|
|
1.3x |
|
|
|
n/a |
|
|
|
17 |
% |
*Green Energy III (May 2023 / May 2028) |
|
|
6,477,000 |
|
|
|
6,294,372 |
|
|
|
183,395 |
|
|
|
1.0x |
|
|
|
— |
|
|
|
4,910 |
|
|
|
n/a |
|
|
|
188,305 |
|
|
|
1.0x |
|
|
|
n/a |
|
|
|
n/m |
|
European Senior Debt I (Feb 2015 / Feb 2019) |
|
|
1,964,689 |
|
|
|
287,688 |
|
|
|
525,783 |
|
|
|
0.7x |
|
|
|
— |
|
|
|
2,668,448 |
|
|
|
1.3x |
|
|
|
3,194,231 |
|
|
|
1.2x |
|
|
|
n/a |
|
|
|
2 |
% |
European Senior Debt II (Jun 2019 / Jun 2023) (j) |
|
|
4,088,344 |
|
|
|
983,930 |
|
|
|
4,399,254 |
|
|
|
1.0x |
|
|
|
— |
|
|
|
1,882,079 |
|
|
|
2.0x |
|
|
|
6,281,333 |
|
|
|
1.2x |
|
|
|
n/a |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Credit Drawdown Funds (k) |
|
$ |
53,366,033 |
|
|
$ |
17,742,168 |
|
|
$ |
16,622,026 |
|
|
|
0.9x |
|
|
|
— |
|
|
$ |
43,657,741 |
|
|
|
1.5x |
|
|
$ |
60,279,767 |
|
|
|
1.3x |
|
|
|
n/a |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Perpetual Capital Strategies (l)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund (Inception Year) (a) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
(Dollars in Thousands, Except Where Noted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BPP - Blackstone Property Partners Platform (2013) (n) |
|
|
Core+ Real Estate |
|
|
$ |
68,708,288 |
|
|
|
8 |
% |
BREIT - Blackstone Real Estate Income Trust (2017) (o) |
|
|
Core+ Real Estate |
|
|
|
66,009,910 |
|
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
BXMT - Blackstone Mortgage Trust (2013) (q) |
|
|
Real Estate Debt |
|
|
|
6,419,843 |
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
BIP - Blackstone Infrastructure Partners (2019) (r) |
|
|
Infrastructure |
|
|
|
31,418,214 |
|
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
BXSL - Blackstone Secured Lending Fund (2018) (s) |
|
|
U.S. Direct Lending |
|
|
|
11,065,490 |
|
|
|
11 |
% |
BCRED - Blackstone Private Credit Fund (2021) (t) |
|
|
U.S. Direct Lending |
|
|
|
61,283,160 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BSCH - Blackstone Strategic Capital Holdings (2014) (v) |
|
|
GP Stakes |
|
|
|
9,038,198 |
|
|
|
10 |
% |
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
n/m |
Not meaningful generally due to the limited time since initial investment. |
SMA |
Separately managed account. |
* |
Represents funds that are currently in their investment period. |
(a) |
Excludes investment vehicles where Blackstone does not earn fees. |
(b) |
Available Capital represents total investable capital commitments, including adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments. |
(c) |
Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by invested capital. |
(d) |
Unless otherwise indicated, Net Internal Rate of Return (“IRR”) represents the annualized inception to September 30, 2023 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of limited partner cash flows. Initial inception date of cash flows may differ from the Investment Period Beginning Date. |
(e) |
The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR. |
(f) |
BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. |
(g) |
BREDS High-Yield represents the flagship real estate debt drawdown funds only. |
(h) |
Blackstone Core Equity Partners is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity. |
(i) |
Strategic Partners’ Unrealized Investment Value, Realized Investment Value, Total Investment Value, Total MOIC and Total Net IRRs are reported on a three-month lag and therefore do not include the impact of economic and market activities in the current quarter. Prior to June 30, 2023, the calculation of such metrics also incorporated investor cash flow information from the current quarter to the extent available. Effective June 30, 2023, such current quarter cash flow information is no longer incorporated. Committed |
| |
Capital and Available Capital continue to be presented as of the current quarter. We believe the updated presentation is more reflective of the Strategic Partners’ investor experience. Realizations are treated as returns of capital until fully recovered and therefore Unrealized and Realized MOICs and Realized Net IRRs are not applicable. Effective June 30, 2023, Strategic Partners I-V and Strategic Partners Real Estate, SMA and Other exclude investment vehicles where Blackstone does not earn fees, which were previously included. |
(j) |
European Senior Debt II Levered has a net return of 16%, European Senior Debt II Unlevered has a net return of 8%. |
(k) |
Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented. |
(l) |
Represents the performance for select Perpetual Capital Strategies; strategies excluded consist primarily of (1) investment strategies that have been investing for less than one year, (2) perpetual capital assets managed for certain insurance clients, and (3) investment vehicles where Blackstone does not earn fees. |
(m) |
Unless otherwise indicated, Total Net Return represents the annualized inception to September 30, 2023 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of investor cash flows. Initial inception date of cash flows occurred during the Inception Year. |
(n) |
BPP represents the aggregate Total Assets Under Management and Total Net Return of the BPP Platform, which comprises over 30 funds, co-investment and separately managed account vehicles. It includes certain vehicles managed as part of the BPP Platform but not classified as Perpetual Capital. As of September 30, 2023, these vehicles represented $2.8 billion of Total Assets Under Management. |
(o) |
The BREIT Total Net Return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. This return is not representative of the return experienced by any particular investor or share class. Total Net Return is presented on an annualized basis and is from January 1, 2017. |
(p) |
Represents the Total Net Return for BREIT’s Class I shares, its largest share class. Performance varies by share class. Class I Total Net Return assumes reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT, Class I Total Net Return is presented on an annualized basis and is from January 1, 2017. |
(q) |
The BXMT Total Net Return reflects annualized market return of a shareholder invested in BXMT since inception, May 22, 2013, through September 30, 2023, assuming reinvestment of all dividends received during the period. |
(r) |
Including co-investment vehicles, BIP Total Assets Under Management is $39.8 billion. |
(s) |
The BXSL Total Assets Under Management and Total Net Return are presented as of June 30, 2023. Refer to BXSL public filings for current quarter results. BXSL Total Net Return reflects the change in Net Asset Value (“NAV”) per share, plus distributions per share (assuming dividends and distributions are reinvested in accordance with BXSL’s dividend reinvestment plan) divided by the beginning NAV per share. Total Net Returns are presented on an annualized basis and are from November 20, 2018. |
(t) |
The BCRED Total Net Return reflects a per share blended return, assuming BCRED had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BCRED. This return is not representative of the return experienced by any particular investor or share class. Total Net Return is presented on an annualized basis and is from January 7, 2021. Total Assets Under Management reflects gross asset value plus amounts borrowed or available to be borrowed under certain credit facilities. BCRED net asset value as of September 30, 2023 was $26.2 billion. |
(u) |
Represents the Total Net Return for BCRED’s Class I shares, its largest share class. Performance varies by share class. Class I Total Net Return assumes reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BCRED. Class I Total Net Return is presented on an annualized basis and is from January 7, 2021. |
(v) |
BSCH represents the aggregate Total Assets Under Management and Total Net Return of BSCH I and BSCH II funds that invest as part of the GP Stakes strategy, which targets minority investments in the general partners of private equity and other private-market alternative asset management firms globally. Including co-investment vehicles that do not pay fees, BSCH Total Assets Under Management is $9.9 billion. |
Discussed below is our Segment Distributable Earnings for each of our segments. This information is reflected in the manner utilized by our senior management to make operating decisions, assess performance and allocate resources. References to “our” sectors or investments may also refer to portfolio companies and investments of the underlying funds that we manage.
The following table presents the results of operations for our Real Estate segment:
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$ |
697,561 |
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$ |
610,606 |
|
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$ |
86,955 |
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14% |
|
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$ |
2,112,925 |
|
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$ |
1,802,543 |
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$ |
310,382 |
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17% |
|
Transaction and Other Fees, Net |
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10,686 |
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|
54,342 |
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|
(43,656 |
) |
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-80% |
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|
58,313 |
|
|
|
141,801 |
|
|
|
(83,488 |
) |
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-59% |
|
|
|
|
(7,616 |
) |
|
|
(1,842 |
) |
|
|
(5,774 |
) |
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313% |
|
|
|
(26,380 |
) |
|
|
(3,491 |
) |
|
|
(22,889 |
) |
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|
656% |
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Total Management Fees, Net |
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700,631 |
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|
663,106 |
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|
37,525 |
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|
6% |
|
|
|
2,144,858 |
|
|
|
1,940,853 |
|
|
|
204,005 |
|
|
|
11% |
|
Fee Related Performance Revenues |
|
|
127,841 |
|
|
|
260,003 |
|
|
|
(132,162 |
) |
|
|
-51% |
|
|
|
279,888 |
|
|
|
1,017,027 |
|
|
|
(737,139 |
) |
|
|
-72% |
|
|
|
|
(199,384 |
) |
|
|
(239,572 |
) |
|
|
40,188 |
|
|
|
-17% |
|
|
|
(536,000 |
) |
|
|
(858,307 |
) |
|
|
322,307 |
|
|
|
-38% |
|
|
|
|
(83,074 |
) |
|
|
(74,701 |
) |
|
|
(8,373 |
) |
|
|
11% |
|
|
|
(229,204 |
) |
|
|
(229,033 |
) |
|
|
(171 |
) |
|
|
- |
|
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|
|
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|
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|
|
|
|
|
546,014 |
|
|
|
608,836 |
|
|
|
(62,822 |
) |
|
|
-10% |
|
|
|
1,659,542 |
|
|
|
1,870,540 |
|
|
|
(210,998 |
) |
|
|
-11% |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
Realized Performance Revenues |
|
|
17,419 |
|
|
|
142,794 |
|
|
|
(125,375 |
) |
|
|
-88% |
|
|
|
148,236 |
|
|
|
2,943,430 |
|
|
|
(2,795,194 |
) |
|
|
-95% |
|
Realized Performance Compensation |
|
|
(7,813 |
) |
|
|
(33,464 |
) |
|
|
25,651 |
|
|
|
-77% |
|
|
|
(80,571 |
) |
|
|
(1,154,897 |
) |
|
|
1,074,326 |
|
|
|
-93% |
|
Realized Principal Investment Income |
|
|
1,565 |
|
|
|
45,297 |
|
|
|
(43,732 |
) |
|
|
-97% |
|
|
|
3,719 |
|
|
|
128,388 |
|
|
|
(124,669 |
) |
|
|
-97% |
|
|
|
|
|
|
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|
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|
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|
|
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|
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|
|
|
|
|
|
|
11,171 |
|
|
|
154,627 |
|
|
|
(143,456 |
) |
|
|
-93% |
|
|
|
71,384 |
|
|
|
1,916,921 |
|
|
|
(1,845,537 |
) |
|
|
-96% |
|
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Segment Distributable Earnings |
|
$ |
557,185 |
|
|
$ |
763,463 |
|
|
$ |
(206,278 |
) |
|
|
|
|
|
$ |
1,730,926 |
|
|
$ |
3,787,461 |
|
|
$ |
(2,056,535 |
) |
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Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Segment Distributable Earnings were $557.2 million for the three months ended September 30, 2023, a decrease of $206.3 million, compared to $763.5 million for the three months ended September 30, 2022. The decrease in Segment Distributable Earnings was attributable to decreases of $62.8 million in Fee Related Earnings and $143.5 million in Net Realizations.
Our global opportunistic and core+ real estate portfolios’ concentration in high-conviction sectors where we see favorable long-term fundamentals helped support performance in a challenging market environment in the third quarter of 2023. Notably, strong demand drove operating performance in key sectors, including digital infrastructure, logistics and student housing. Notwithstanding this strength, the real estate market has been characterized by divergent performance across sectors. Growth has begun to moderate in certain areas of the real estate portfolio, including U.S. multifamily and U.S. hotels. Weakening fundamentals persist in the office sector and traditional U.S. office buildings remain particularly challenged. Traditional U.S. office, however, represents less than 2% of the aggregate net asset value of our global opportunistic and core+ real estate portfolios. Additionally, the rapid rise in interest rates has adversely impacted real estate valuations and represents a headwind for real estate valuations. Coupled with a more constrained financing market, these conditions have also resulted and are likely to continue to result in reduced realizations for a period of time, which would negatively impact Segment Distributable Earnings in our Real Estate segment. Nevertheless, these difficult market conditions will further constrain future new supply, which we believe could be favorable for longer-term real estate values. We also believe that in the context of decelerating inflation and as markets stabilize, realizations should re-accelerate over time. Although deployment has been more challenging in recent quarters, we believe our real estate segment funds are well positioned to take advantage of deployment opportunities that arise.
Fundraising in the third quarter of 2023 remained positive despite a challenging market backdrop. Perpetual capital strategies, including BREIT, represent an increasing percentage of Total Assets Under Management in our Real Estate segment. While BREIT repurchase requests in September and October were materially down from their peak in January 2023, BREIT continued to experience net outflows in the third quarter. A continuation or worsening of the current environment, however, could further adversely affect net flows in certain perpetual capital strategies for an extended period of time. We believe the long-term growth trajectory remains positive and that strong investment performance and investor under-allocation to such strategies should drive flows over the long-term. See “Part I. Item 1A. Risk Factors — Risks Related to our Business — We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to individual investors, which could expose us to new and greater levels of risk” in our Annual Report on Form
10-K for
the year ended December 31, 2022.
Fee Related Earnings were $546.0 million for the three months ended September 30, 2023, a decrease of $62.8 million, compared to $608.8 million for the three months ended September 30, 2022. The decrease in Fee Related Earnings was attributable to a decrease of $132.2 million in Fee Related Performance Revenues and an increase of $8.4 million in Other Operating Expenses, partially offset by a decrease of $40.2 million in Fee Related Compensation and an increase of $37.5 million in Management Fees, Net.
Fee Related Performance Revenues were $127.8 million for the three months ended September 30, 2023, a decrease of $132.2 million, compared to $260.0 million for the three months ended September 30, 2022. The decrease was primarily due to lower Fee Related Performance Revenues in BREIT.
Other Operating Expenses were $83.1 million for the three months ended September 30, 2023, an increase of $8.4 million, compared to $74.7 million for the three months ended September 30, 2022. The increase was primarily due to occupancy costs and technology-related expenses.
Fee Related Compensation was $199.4 million for the three months ended September 30, 2023, a decrease of $40.2 million, compared to $239.6 million for the three months ended September 30, 2022. The decrease was primarily due to a decrease in Fee Related Performance Revenues, partially offset by an increase in Management Fees, Net, both of which impact Fee Related Compensation.
Management Fees, Net were $700.6 million for the three months ended September 30, 2023, an increase of $37.5 million, compared to $663.1 million for the three months ended September 30, 2022, primarily driven by an increase in Base Management Fees, partially offset by a decrease in Transaction and Other Fees, Net. Base Management Fees increased $87.0 million primarily due to
Fee-Earning
Assets Under Management growth in BREP and BREDS. Transaction and Other Fees, Net decreased $43.7 million primarily due to a decrease in acquisition fees paid to the advisor of certain funds.
Net Realizations were $11.2 million for the three months ended September 30, 2023, a decrease of $143.5 million, compared to $154.6 million for the three months ended September 30, 2022. The decrease in Net Realizations was attributable to decreases of $125.4 million in Realized Performance Revenues and $43.7 million in Realized Principal Investment Income, partially offset by a decrease of $25.7 million in Realized Performance Compensation.
Realized Performance Revenues were $17.4 million for the three months ended September 30, 2023, a decrease of $125.4 million, compared to $142.8 million for the three months ended September 30, 2022. The decrease was primarily due to lower Realized Performance Revenues in BREP.
Realized Principal Investment Income was $1.6 million for the three months ended September 30, 2023, a decrease of $43.7 million, compared to $45.3 million for the three months ended September 30, 2022. The decrease was primarily due to lower realized gains in BREP.
Realized Performance Compensation was $7.8 million for the three months ended September 30, 2023, a decrease of $25.7 million, compared to $33.5 million for the three months ended September 30, 2022. The decrease was primarily due to the decrease in Realized Performance Revenues.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Segment Distributable Earnings were $1.7 billion for the nine months ended September 30, 2023, a decrease of $2.1 billion, compared to $3.8 billion for the nine months ended September 30, 2022. The decrease in Segment Distributable Earnings was attributable to decreases of $211.0 million in Fee Related Earnings and $1.8 billion in Net Realizations.
Fee Related Earnings were $1.7 billion for the nine months ended September 30, 2023, a decrease of $211.0 million, compared to $1.9 billion for the nine months ended September 30, 2022. The decrease in Fee Related Earnings was primarily attributable to a decrease of $737.1 million in Fee Related Performance Revenues, partially offset by a decrease of $322.3 million in Fee Related Compensation and an increase of $204.0 million in Management Fees, Net.
Fee Related Performance Revenues were $279.9 million for the nine months ended September 30, 2023, a decrease of $737.1 million, compared to $1.0 billion for the nine months ended September 30, 2022. The decrease was primarily due to lower Fee Related Performance Revenues in BREIT.
Fee Related Compensation was $536.0 million for the nine months ended September 30, 2023, a decrease of $322.3 million, compared to $858.3 million for the nine months ended September 30, 2022. The decrease was primarily due to a decrease in Fee Related Performance Revenues, partially offset by an increase in Management Fees, Net, both of which impact Fee Related Compensation.
Management Fees, Net were $2.1 billion for the nine months ended September 30, 2023, an increase of $204.0 million, compared to $1.9 billion for the nine months ended September 30, 2022, primarily driven by an increase in Base Management Fees, partially offset by a decrease in Transaction and Other Fees, Net. Base Management Fees increased $310.4 million primarily due to
Fee-Earning
Assets Under Management growth in BREP and BREDS. Transaction and Other Fees, Net decreased $83.5 million primarily due to a decrease in acquisition fees paid to the advisor of certain funds.
Net Realizations were $71.4 million for the nine months ended September 30, 2023, a decrease of $1.8 billion, compared to $1.9 billion for the nine months ended September 30, 2022. The decrease in Net Realizations was primarily attributable to a decrease of $2.8 billion in Realized Performance Revenues, partially offset by a decrease of $1.1 billion in Realized Performance Compensation.
Realized Performance Revenues were $148.2 million for the nine months ended September 30, 2023, a decrease of $2.8 billion, compared to $2.9 billion for the nine months ended September 30, 2022. The decrease was primarily due to lower Realized Performance Revenues in BREP.
Realized Performance Compensation was $80.6 million for the nine months ended September 30, 2023, a decrease of $1.1 billion, compared to $1.2 billion for the nine months ended September 30, 2022. The decrease was primarily due to the decrease in Realized Performance Revenues.
Fund return information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
The following table presents the internal rates of return, except where noted, of our significant real estate funds:
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-11% |
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-10% |
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-4% |
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-3% |
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-24% |
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-21% |
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8% |
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6% |
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29% |
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21% |
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21% |
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14% |
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-3% |
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|
-3% |
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- |
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- |
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-5% |
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|
-5% |
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13% |
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|
10% |
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35% |
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28% |
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21% |
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15% |
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-2% |
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|
-2% |
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- |
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- |
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-1% |
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|
-2% |
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|
17% |
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|
13% |
|
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|
89% |
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61% |
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30% |
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21% |
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|
-7% |
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|
-6% |
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|
-4% |
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|
-4% |
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-12% |
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|
-11% |
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|
-2% |
|
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|
-3% |
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|
26% |
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|
19% |
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|
18% |
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|
12% |
|
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|
-4% |
|
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|
-3% |
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|
-2% |
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|
-2% |
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|
-7% |
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|
-6% |
|
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|
5% |
|
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|
4% |
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|
50% |
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|
41% |
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|
15% |
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|
10% |
|
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|
3% |
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|
2% |
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|
-3% |
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|
-3% |
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|
11% |
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|
7% |
|
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|
10% |
|
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|
6% |
|
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|
97% |
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|
72% |
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|
29% |
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|
18% |
|
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|
2% |
|
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|
2% |
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|
-3% |
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|
-2% |
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|
1% |
|
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|
- |
|
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|
-3% |
|
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|
-3% |
|
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|
24% |
|
|
|
16% |
|
|
|
18% |
|
|
|
12% |
|
|
|
|
-2% |
|
|
|
-3% |
|
|
|
-1% |
|
|
|
-1% |
|
|
|
-4% |
|
|
|
-2% |
|
|
|
-1% |
|
|
|
-1% |
|
|
|
47% |
|
|
|
32% |
|
|
|
10% |
|
|
|
6% |
|
|
|
|
-9% |
|
|
|
-13% |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
-8% |
|
|
|
-20% |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
-9% |
|
|
|
-26% |
|
|
|
|
1% |
|
|
|
1% |
|
|
|
- |
|
|
|
- |
|
|
|
4% |
|
|
|
3% |
|
|
|
22% |
|
|
|
21% |
|
|
|
18% |
|
|
|
16% |
|
|
|
18% |
|
|
|
16% |
|
|
|
|
-2% |
|
|
|
-2% |
|
|
|
2% |
|
|
|
2% |
|
|
|
-3% |
|
|
|
-4% |
|
|
|
14% |
|
|
|
12% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
10% |
|
|
|
8% |
|
|
|
|
n/a |
|
|
|
2% |
|
|
|
n/a |
|
|
|
2% |
|
|
|
n/a |
|
|
|
3% |
|
|
|
n/a |
|
|
|
9% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
11% |
|
|
|
|
n/a |
|
|
|
2% |
|
|
|
n/a |
|
|
|
2% |
|
|
|
n/a |
|
|
|
3% |
|
|
|
n/a |
|
|
|
9% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
12% |
|
|
|
|
4% |
|
|
|
2% |
|
|
|
2% |
|
|
|
2% |
|
|
|
8% |
|
|
|
5% |
|
|
|
2% |
|
|
|
- |
|
|
|
14% |
|
|
|
10% |
|
|
|
13% |
|
|
|
9% |
|
|
|
|
n/a |
|
|
|
7% |
|
|
|
n/a |
|
|
|
-13% |
|
|
|
n/a |
|
|
|
13% |
|
|
|
n/a |
|
|
|
-19% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
7% |
|
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
n/m |
Not meaningful generally due to the limited time since initial investment. |
(a) |
Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. Excludes investment vehicles where Blackstone does not earn fees. |
(b) |
Euro-based internal rates of return. |
(c) |
BREP Co-Investment represents co-investment capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each co-investment’s realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. |
(d) |
The BPP platform, which comprises over 30 funds, co-investment and separately managed account vehicles, represents the Core+ real estate funds which invest with a more modest risk profile and lower leverage. |
(e) |
Reflects a per share blended return for each respective period, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date returns are presented on an annualized basis and are from January 1, 2017. |
(f) |
Represents the Total Net Return for BREIT’s Class I shares, its largest share class. Performance varies by share class. Class I Total Net Return assumes reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. Inception to date return is from January 1, 2017. |
(g) |
BREDS High-Yield represents the flagship real estate debt drawdown funds only. Inception to date returns are from July 1, 2009. |
(h) |
Reflects annualized return of a shareholder invested in BXMT as of the beginning of each period presented, assuming reinvestment of all dividends received during the period, and net of all fees and expenses incurred by BXMT. Return incorporates the closing NYSE stock price as of each period end. Inception to date returns are from May 22, 2013. |
Funds With Closed Investment Periods as of September 30, 2023
The Real Estate segment has thirteen funds with closed investment periods as of September 30, 2023: BREP IX, BREP VIII, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe VI, BREP Europe V, BREP Europe IV, BREP Europe III, BREP Asia II, BREP Asia I and BREDS III. As of September 30, 2023, BREP VII, BREP VI, BREP V, BREP IV, BREP Europe IV, BREP Europe III and BREP Asia I were above their carried interest thresholds (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would have been above their carried interest thresholds even if all remaining investments were valued at zero. BREP IX, BREP VIII, BREP Europe VI, BREP Europe V and BREDS III were above their carried interest thresholds. As of September 30, 2023, BREP Asia II was below its carried interest threshold. Funds are considered above their carried interest thresholds based on the aggregate fund position, although individual limited partners may be below their respective carried interest thresholds in certain funds.
The following table presents the results of operations for our Private Equity segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Management and Advisory Fees, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
457,008 |
|
|
$ |
466,474 |
|
|
$ |
(9,466) |
|
|
|
-2% |
|
|
$ |
1,351,630 |
|
|
$ |
1,321,405 |
|
|
$ |
30,225 |
|
|
|
2% |
|
Transaction, Advisory and Other Fees, Net |
|
|
21,780 |
|
|
|
24,313 |
|
|
|
(2,533) |
|
|
|
-10% |
|
|
|
85,389 |
|
|
|
64,522 |
|
|
|
20,867 |
|
|
|
32% |
|
|
|
|
(1,982) |
|
|
|
(3,634) |
|
|
|
1,652 |
|
|
|
-45% |
|
|
|
(4,058) |
|
|
|
(53,933) |
|
|
|
49,875 |
|
|
|
-92% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net |
|
|
476,806 |
|
|
|
487,153 |
|
|
|
(10,347) |
|
|
|
-2% |
|
|
|
1,432,961 |
|
|
|
1,331,994 |
|
|
|
100,967 |
|
|
|
8% |
|
Fee Related Performance Revenues |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
n/m |
|
|
|
- |
|
|
|
(648) |
|
|
|
648 |
|
|
|
-100% |
|
|
|
|
(145,987) |
|
|
|
(142,381) |
|
|
|
(3,606) |
|
|
|
3% |
|
|
|
(463,293) |
|
|
|
(446,053) |
|
|
|
(17,240) |
|
|
|
4% |
|
|
|
|
(78,547) |
|
|
|
(76,138) |
|
|
|
(2,409) |
|
|
|
3% |
|
|
|
(229,713) |
|
|
|
(227,115) |
|
|
|
(2,598) |
|
|
|
1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
252,272 |
|
|
|
268,634 |
|
|
|
(16,362) |
|
|
|
-6% |
|
|
|
739,955 |
|
|
|
658,178 |
|
|
|
81,777 |
|
|
|
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
299,272 |
|
|
|
309,326 |
|
|
|
(10,054) |
|
|
|
-3% |
|
|
|
945,770 |
|
|
|
882,448 |
|
|
|
63,322 |
|
|
|
7% |
|
Realized Performance Compensation |
|
|
(117,814) |
|
|
|
(164,531) |
|
|
|
46,717 |
|
|
|
-28% |
|
|
|
(413,389) |
|
|
|
(428,614) |
|
|
|
15,225 |
|
|
|
-4% |
|
Realized Principal Investment Income |
|
|
22,497 |
|
|
|
38,015 |
|
|
|
(15,518) |
|
|
|
-41% |
|
|
|
59,353 |
|
|
|
112,357 |
|
|
|
(53,004) |
|
|
|
-47% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
203,955 |
|
|
|
182,810 |
|
|
|
21,145 |
|
|
|
12% |
|
|
|
591,734 |
|
|
|
566,191 |
|
|
|
25,543 |
|
|
|
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Distributable Earnings |
|
$ |
456,227 |
|
|
$ |
451,444 |
|
|
$ |
4,783 |
|
|
|
1% |
|
|
$ |
1,331,689 |
|
|
$ |
1,224,369 |
|
|
$ |
107,320 |
|
|
|
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Segment Distributable Earnings were $456.2 million for the three months ended September 30, 2023, an increase of $4.8 million, compared to $451.4 million for the three months ended September 30, 2022. The increase in Segment Distributable Earnings was attributable to an increase of $21.1 million in Net Realizations, partially offset by a decrease of $16.4 million in Fee Related Earnings.
Despite a challenging market environment, our Private Equity segment demonstrated resilient performance across nearly all of its strategies in the third quarter of 2023. Our thematic investments, including those in digital infrastructure and life sciences, were substantial drivers of appreciation in the segment in the third quarter. In corporate private equity, input and wage costs have continued to abate, allowing for improved margin performance in the overall portfolio relative to the prior year period. Nonetheless, in the third quarter, continued economic uncertainty and negative market sentiment contributed to muted realizations, which could continue at a relatively low level until such conditions improve. Deployment has also been more challenging in recent quarters, but we believe our Private Equity segment funds are well positioned to take advantage of investment opportunities that arise in a dislocated market. Difficult market conditions and lower realizations have pressured investors’ ability to allocate to private equity strategies and contributed to an already demanding fundraising environment. Given these near-term headwinds, fundraising for our flagship corporate private equity fund has remained challenging.
Fee Related Earnings were $252.3 million for the three months ended September 30, 2023, a decrease of $16.4 million, compared to $268.6 million for the three months ended September 30, 2022. The decrease in Fee Related Earnings was primarily attributable to a decrease of $10.3 million in Management and Advisory Fees, Net.
Management and Advisory Fees, Net were $476.8 million for the three months ended September 30, 2023, a decrease of $10.3 million, compared to $487.2 million for the three months ended September 30, 2022, primarily driven by a decrease in Base Management Fees. Base Management Fees decreased $9.5 million primarily due to (a) management fees charged from inception for additional commitments from limited partners to Strategic Partners IX and Strategic Partners GP Solutions in the third quarter of 2022, and (b) a decrease in
Fee-Earning
Assets Under Management due to dispositions in Tactical Opportunities.
Net Realizations were $204.0 million for the three months ended September 30, 2023, an increase of $21.1 million, or 12%, compared to $182.8 million for the three months ended September 30, 2022. The increase in Net Realizations was attributable to a decrease of $46.7 million in Realized Performance Compensation, partially offset by decreases of $15.5 million in Realized Principal Investment Income and $10.1 million in Realized Performance Revenues.
Realized Performance Compensation was $117.8 million for the three months ended September 30, 2023, a decrease of $46.7 million, compared to $164.5 million for the three months ended September 30, 2022. The decrease was primarily due to lower Realized Performance Compensation in Tactical Opportunities and Strategic Partners, partially offset by higher Realized Performance Compensation in corporate private equity.
Realized Principal Investment Income was $22.5 million for the three months ended September 30, 2023, a decrease of $15.5 million, compared to $38.0 million for the three months ended September 30, 2022. The decrease was primarily due to lower Realized Principal Investment Income in Tactical Opportunities, Strategic Partners and BIP.
Realized Performance Revenues were $299.3 million for the three months ended September 30, 2023, a decrease of $10.1 million, compared to $309.3 million for the three months ended September 30, 2022. The decrease was primarily due to lower Realized Performance Revenues in Tactical Opportunities and Strategic Partners, partially offset by higher Realized Performance Revenues in corporate private equity.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Segment Distributable Earnings were $1.3 billion for the nine months ended September 30, 2023, an increase of $107.3 million, compared to $1.2 billion for the nine months ended September 30, 2022. The increase in Segment Distributable Earnings was attributable to increases of $81.8 million in Fee Related Earnings and $25.5 million in Net Realizations.
Fee Related Earnings were $740.0 million for the nine months ended September 30, 2023, an increase of $81.8 million, or 12%, compared to $658.2 million for the nine months ended September 30, 2022. The increase in Fee Related Earnings was primarily attributable to an increase of $101.0 million in Management and Advisory Fees, Net, partially offset by a decrease of $17.2 million in Fee Related Compensation.
Management and Advisory Fees, Net were $1.4 billion for the nine months ended September 30, 2023, an increase of $101.0 million, compared to $1.3 billion for the nine months ended September 30, 2022, driven by a decrease in Management Fee Offsets and increases in Base Management Fees and Transaction, Advisory and Other Fees, Net. Management Fee Offsets decreased $49.9 million primarily due to a reduction in Management Fee Offsets in Strategic Partners IX. Base Management Fees increased $30.2 million primarily due to (a) additional commitments from limited partners to Strategic Partners IX and the commencement of Strategic Partners Real Estate VIII’s investment period in the second quarter of 2022, and
(b) Fee-Earning
Assets Under Management Growth in BIP. Transaction, Advisory and Other Fees, Net increased $20.9 million primarily due to deal activity in BXCM.
Fee Related Compensation was $463.3 million for the nine months ended September 30, 2023, an increase of $17.2 million, compared to $446.1 million for the nine months ended September 30, 2022. The increase was primarily due to an increase in Management Fees, Net, on which a portion of Fee Related Compensation is based.
Net Realizations were $591.7 million for the nine months ended September 30, 2023, an increase of $25.5 million, compared to $566.2 million for the nine months ended September 30, 2022. The increase in Net Realizations was attributable to an increase of $63.3 million in Realized Performance Revenues and a decrease of $15.2 million in Realized Performance Compensation, partially offset by a decrease of $53.0 million in Realized Principal Investment Income.
Realized Performance Revenues were $945.8 million for the nine months ended September 30, 2023, an increase of $63.3 million, compared to $882.4 million for the nine months ended September 30, 2022. The increase was primarily due to higher Realized Performance Revenues in corporate private equity, partially offset by lower Realized Performance Revenues in Tactical Opportunities and Strategic Partners.
Realized Performance Compensation was $413.4 million for the nine months ended September 30, 2023, a decrease of $15.2 million, compared to $428.6 million for the nine months ended September 30, 2022. The decrease was primarily due to a decrease in Realized Performance Revenues in Tactical Opportunities and Strategic Partners, partially offset by higher Realized Performance Revenues in corporate private equity.
Realized Principal Investment Income was $59.4 million for the nine months ended September 30, 2023, a decrease of $53.0 million, compared to $112.4 million for the nine months ended September 30, 2022. The decrease was primarily due to the segment’s allocation of the gain recognized in a Pátria Investments Limited and Pátria Investimentos Ltda. (collectively, “Pátria”) sale transaction in the third quarter of 2022, partially offset by higher Realized Principal Investment Income in corporate private equity.
Fund returns information for our significant funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The fund returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future performance of any particular fund. An investment in Blackstone is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns.
The following table presents the internal rates of return of our significant private equity funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2% |
|
|
|
1% |
|
|
|
7% |
|
|
|
6% |
|
|
|
6% |
|
|
|
5% |
|
|
|
3% |
|
|
|
3% |
|
|
|
19% |
|
|
|
14% |
|
|
|
17% |
|
|
|
13% |
|
|
|
|
-1% |
|
|
|
-1% |
|
|
|
-4% |
|
|
|
-4% |
|
|
|
9% |
|
|
|
7% |
|
|
|
-13% |
|
|
|
-12% |
|
|
|
38% |
|
|
|
30% |
|
|
|
19% |
|
|
|
13% |
|
|
|
|
3% |
|
|
|
2% |
|
|
|
- |
|
|
|
-1% |
|
|
|
8% |
|
|
|
5% |
|
|
|
-1% |
|
|
|
-3% |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
22% |
|
|
|
12% |
|
|
|
|
- |
|
|
|
- |
|
|
|
9% |
|
|
|
8% |
|
|
|
-10% |
|
|
|
-8% |
|
|
|
45% |
|
|
|
36% |
|
|
|
18% |
|
|
|
14% |
|
|
|
15% |
|
|
|
11% |
|
|
|
|
6% |
|
|
|
3% |
|
|
|
2% |
|
|
|
2% |
|
|
|
13% |
|
|
|
7% |
|
|
|
28% |
|
|
|
27% |
|
|
|
14% |
|
|
|
13% |
|
|
|
12% |
|
|
|
8% |
|
|
|
|
4% |
|
|
|
3% |
|
|
|
9% |
|
|
|
6% |
|
|
|
28% |
|
|
|
21% |
|
|
|
15% |
|
|
|
10% |
|
|
|
82% |
|
|
|
61% |
|
|
|
59% |
|
|
|
39% |
|
|
|
|
7% |
|
|
|
5% |
|
|
|
-8% |
|
|
|
-7% |
|
|
|
4% |
|
|
|
2% |
|
|
|
-39% |
|
|
|
-36% |
|
|
|
128% |
|
|
|
96% |
|
|
|
39% |
|
|
|
27% |
|
|
|
|
1% |
|
|
|
1% |
|
|
|
1% |
|
|
|
1% |
|
|
|
- |
|
|
|
- |
|
|
|
6% |
|
|
|
5% |
|
|
|
62% |
|
|
|
56% |
|
|
|
21% |
|
|
|
18% |
|
|
|
|
12% |
|
|
|
10% |
|
|
|
- |
|
|
|
-1% |
|
|
|
20% |
|
|
|
15% |
|
|
|
4% |
|
|
|
1% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
20% |
|
|
|
13% |
|
|
|
|
- |
|
|
|
-1% |
|
|
|
-3% |
|
|
|
-3% |
|
|
|
5% |
|
|
|
2% |
|
|
|
-2% |
|
|
|
-2% |
|
|
|
20% |
|
|
|
16% |
|
|
|
15% |
|
|
|
11% |
|
Tactical Opportunities Co-Investment and Other |
|
|
- |
|
|
|
1% |
|
|
|
-2% |
|
|
|
1% |
|
|
|
4% |
|
|
|
4% |
|
|
|
-1% |
|
|
|
2% |
|
|
|
19% |
|
|
|
18% |
|
|
|
19% |
|
|
|
16% |
|
|
|
|
-2% |
|
|
|
-3% |
|
|
|
-1% |
|
|
|
-2% |
|
|
|
-4% |
|
|
|
-6% |
|
|
|
-14% |
|
|
|
-14% |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
2% |
|
|
|
-3% |
|
Strategic Partners VI (c) |
|
|
- |
|
|
|
- |
|
|
|
-6% |
|
|
|
-7% |
|
|
|
-1% |
|
|
|
-1% |
|
|
|
-6% |
|
|
|
-7% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
18% |
|
|
|
14% |
|
Strategic Partners VII (c) |
|
|
1% |
|
|
|
1% |
|
|
|
-6% |
|
|
|
-6% |
|
|
|
2% |
|
|
|
2% |
|
|
|
-1% |
|
|
|
-2% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
23% |
|
|
|
18% |
|
Strategic Partners Real Assets II (c) |
|
|
1% |
|
|
|
- |
|
|
|
-1% |
|
|
|
-1% |
|
|
|
19% |
|
|
|
16% |
|
|
|
12% |
|
|
|
11% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
20% |
|
|
|
17% |
|
Strategic Partners VIII (c) |
|
|
- |
|
|
|
-1% |
|
|
|
-5% |
|
|
|
-5% |
|
|
|
1% |
|
|
|
- |
|
|
|
6% |
|
|
|
5% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
41% |
|
|
|
32% |
|
Strategic Partners Real Estate, SMA and Other (c) |
|
|
-1% |
|
|
|
-2% |
|
|
|
6% |
|
|
|
6% |
|
|
|
-4% |
|
|
|
-5% |
|
|
|
31% |
|
|
|
29% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
16% |
|
|
|
15% |
|
Strategic Partners Infrastructure III (c) |
|
|
1% |
|
|
|
1% |
|
|
|
3% |
|
|
|
2% |
|
|
|
6% |
|
|
|
3% |
|
|
|
43% |
|
|
|
33% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
51% |
|
|
|
32% |
|
Strategic Partners IX (c) |
|
|
1% |
|
|
|
- |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
16% |
|
|
|
9% |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
41% |
|
|
|
24% |
|
Strategic Partners GP Solutions (c) |
|
|
-3% |
|
|
|
-2% |
|
|
|
1% |
|
|
|
1% |
|
|
|
-9% |
|
|
|
-9% |
|
|
|
44% |
|
|
|
35% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
9% |
|
|
|
4% |
|
|
|
|
11% |
|
|
|
9% |
|
|
|
8% |
|
|
|
6% |
|
|
|
12% |
|
|
|
9% |
|
|
|
18% |
|
|
|
14% |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
22% |
|
|
|
17% |
|
|
|
|
-2% |
|
|
|
-2% |
|
|
|
3% |
|
|
|
3% |
|
|
|
- |
|
|
|
-1% |
|
|
|
6% |
|
|
|
4% |
|
|
|
28% |
|
|
|
23% |
|
|
|
17% |
|
|
|
10% |
|
|
|
|
21% |
|
|
|
14% |
|
|
|
4% |
|
|
|
2% |
|
|
|
29% |
|
|
|
18% |
|
|
|
6% |
|
|
|
-1% |
|
|
|
n/m |
|
|
|
n/m |
|
|
|
24% |
|
|
|
10% |
|
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
n/m |
Not meaningful generally due to the limited time since initial investment. |
SMA |
Separately managed account. |
(a) |
Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. Excludes investment vehicles where Blackstone does not earn fees. |
(b) |
BCEP is a core private equity strategy which invests with a more modest risk profile and longer hold period than traditional private equity. |
(c) |
Gross and net returns are reported on a three-month lag and therefore do not include the impact of economic and market activities in the current quarter. Prior to June 30, 2023, the calculation of such metrics also incorporated investor cash flow information from the current quarter to the extent available. Effective June 30, 2023, such current quarter cash flow information is no longer incorporated. We believe the updated presentation is more reflective of the Strategic Partners’ investor experience. Prior periods have been recast. Realizations are treated as returns of capital until fully recovered and therefore Realized IRRs are not applicable. Effective June 30, 2023, Strategic Partners I-V and Strategic Partners Real Estate, SMA and Other exclude investment vehicles where Blackstone does not earn fees, which were previously included. |
Funds With Closed Investment Periods as of September 30, 2023
The corporate private equity funds within the Private Equity segment have nine funds with closed investment periods: BCP IV, BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP Asia I. As of September 30, 2023, BCP IV was above its carried interest threshold (i.e., the preferred return payable to its limited partners before the general partner is eligible to receive carried interest) and would still be above its carried interest threshold even if all remaining investments were valued at zero. BCP V is comprised of two fund classes, the BCP V “main fund” and
BCP V-AC
fund. Within these fund classes, the general partner is subject to equalization such that (a) the general partner accrues carried interest when the respective carried interest for either fund class is positive and (b) the general partner realizes carried interest so long as clawback obligations, if any, for either of the respective fund classes are fully satisfied. BCP V, BCP VI, BCP VII, BCOM, BEP I, BEP II, BCEP I and BCP Asia I were above their respective carried interest thresholds. Funds are considered above their carried interest thresholds based on the aggregate fund position, although individual limited partners may be below their respective carried interest thresholds in certain funds. We are entitled to retain previously realized carried interest up to 20% of BCOM’s net gains. As a result, Performance Revenues are recognized from BCOM on current period gains and losses.
The Tactical Opportunities funds within the Private Equity segment have various funds with closed investment periods, including but not limited to:
BTOF-POOL,
BTOF-POOL
II, and
BTOF-POOL
III, which are each above their carried interest thresholds based on aggregate fund position. Strategic Partners funds within the Private Equity segment have various funds with closed investment periods, including but not limited to: Strategic Partners Real Assets II, Strategic Partners VIII and Strategic Partners Real Estate VII, which are above their respective carried interest thresholds based on aggregate fund position. Certain Strategic Partners funds with closed investment periods do not generate carried interest for Blackstone as agreed to at the time the Strategic Partners business was acquired. The Blackstone Life Sciences funds within the Private Equity segment has one fund with a closed investment period: Clarus IV, which was above its carried interest threshold.
The following table presents the results of operations for our Credit & Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
333,828 |
|
|
$ |
312,663 |
|
|
$ |
21,165 |
|
|
|
7% |
|
|
$ |
995,915 |
|
|
$ |
911,697 |
|
|
$ |
84,218 |
|
|
|
9% |
|
Transaction and Other Fees, Net |
|
|
10,362 |
|
|
|
10,629 |
|
|
|
(267 |
) |
|
|
-3% |
|
|
|
33,815 |
|
|
|
27,143 |
|
|
|
6,672 |
|
|
|
25% |
|
|
|
|
(898 |
) |
|
|
(1,323 |
) |
|
|
425 |
|
|
|
-32% |
|
|
|
(3,055 |
) |
|
|
(4,107 |
) |
|
|
1,052 |
|
|
|
-26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management Fees, Net |
|
|
343,292 |
|
|
|
321,969 |
|
|
|
21,323 |
|
|
|
7% |
|
|
|
1,026,675 |
|
|
|
934,733 |
|
|
|
91,942 |
|
|
|
10% |
|
Fee Related Performance Revenues |
|
|
146,710 |
|
|
|
112,128 |
|
|
|
34,582 |
|
|
|
31% |
|
|
|
409,645 |
|
|
|
260,410 |
|
|
|
149,235 |
|
|
|
57% |
|
|
|
|
(148,056 |
) |
|
|
(135,420 |
) |
|
|
(12,636 |
) |
|
|
9% |
|
|
|
(480,289 |
) |
|
|
(399,799 |
) |
|
|
(80,490 |
) |
|
|
20% |
|
|
|
|
(76,147 |
) |
|
|
(68,696 |
) |
|
|
(7,451 |
) |
|
|
11% |
|
|
|
(231,760 |
) |
|
|
(189,745 |
) |
|
|
(42,015 |
) |
|
|
22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265,799 |
|
|
|
229,981 |
|
|
|
35,818 |
|
|
|
16% |
|
|
|
724,271 |
|
|
|
605,599 |
|
|
|
118,672 |
|
|
|
20% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
14,349 |
|
|
|
12,459 |
|
|
|
1,890 |
|
|
|
15% |
|
|
|
181,874 |
|
|
|
122,175 |
|
|
|
59,699 |
|
|
|
49% |
|
Realized Performance Compensation |
|
|
(5,451 |
) |
|
|
(4,992 |
) |
|
|
(459 |
) |
|
|
9% |
|
|
|
(79,794 |
) |
|
|
(54,487 |
) |
|
|
(25,307 |
) |
|
|
46% |
|
Realized Principal Investment Income |
|
|
29,213 |
|
|
|
46,993 |
|
|
|
(17,780 |
) |
|
|
-38% |
|
|
|
15,866 |
|
|
|
76,793 |
|
|
|
(60,927 |
) |
|
|
-79% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,111 |
|
|
|
54,460 |
|
|
|
(16,349 |
) |
|
|
-30% |
|
|
|
117,946 |
|
|
|
144,481 |
|
|
|
(26,535 |
) |
|
|
-18% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Distributable Earnings |
|
$ |
303,910 |
|
|
$ |
284,441 |
|
|
$ |
19,469 |
|
|
|
7% |
|
|
$ |
842,217 |
|
|
$ |
750,080 |
|
|
$ |
92,137 |
|
|
|
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Segment Distributable Earnings were $303.9 million for the three months ended September 30, 2023, an increase of $19.5 million, compared to $284.4 million for the three months ended September 30, 2022. The increase in Segment Distributable Earnings was attributable to an increase of $35.8 million in Fee Related Earnings, partially offset by a decrease of $16.3 million in Net Realizations.
Our credit funds continued to demonstrate strong performance in the third quarter of 2023, driven by a higher interest rate environment and the concentration of our portfolios in floating rate debt. Longer-term structural shifts in the lending market, combined with a more constrained financing market, have contributed and are likely to continue to contribute to attractive and sizeable deployment opportunities for our credit funds as banks and other originators seek capital and borrowers seek alternative financing sources. Additionally, we continue to see opportunities for growth in our insurance and energy transition strategies. Fundraising in our Credit & Insurance segment, including in our perpetual capital strategies, has been positively impacted by these trends. In the broader market, a higher cost of capital as a result of historically high interest rates has negatively impacted the free cash flow and credit quality of certain borrowers. Default rates across corporate issuers in our credit funds’ portfolios have remained at historically low levels given the quality of the borrowers to which such funds lend. Nonetheless, the current environment increases the potential for defaults. In addition, a period of significant market dislocation could limit the liquidity of certain assets traded in the credit markets. This would impact our funds’ ability to sell such assets at attractive prices or in a timely manner.
Perpetual capital strategies, including BCRED, represent an increasing percentage of Total Assets Under Management in our Credit & Insurance segment. Compelling private credit fundamentals contributed to an acceleration of BCRED inflows in the third quarter, with inflows representing the highest quarter since the second quarter of 2022. We believe the long-term growth trajectory remains positive and that strong investment performance and investor under-allocation to such private wealth strategies should continue to drive flows over the long-term. See “Item 1A. Risk Factors – Risks Related to Our Business – We have increasingly undertaken business initiatives to increase the number and type of investment products we offer to individual investors, which could expose us to new and greater levels of risk” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Fee Related Earnings were $265.8 million for the three months ended September 30, 2023, an increase of $35.8 million, or 16%, compared to $230.0 million for the three months ended September 30, 2022. The increase in Fee Related Earnings was attributable to increases of $34.6 million in Fee Related Performance Revenues and $21.3 million in Management Fees, Net, partially offset by increases of $12.6 million in Fee Related Compensation and $7.5 million in Other Operating Expenses.
Fee Related Performance Revenues were $146.7 million for the three months ended September 30, 2023, an increase of $34.6 million, compared to $112.1 million for the three months ended September 30, 2022. The increase was primarily due to performance and higher
Fee-Earning
Assets Under Management in BCRED.
Management Fees, Net were $343.3 million for the three months ended September 30, 2023, an increase of $21.3 million, compared to $322.0 million for the three months ended September 30, 2022, primarily driven by an increase in Base Management Fees. Base Management Fees increased $21.2 million primarily due to inflows from
Fee-Earning
Assets Under Management in BXSL and mezzanine funds.
Fee Related Compensation was $148.1 million for the three months ended September 30, 2023, an increase of $12.6 million, compared to $135.4 million for the three months ended September 30, 2022. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, both of which impact Fee Related Compensation.
Other Operating Expenses were $76.1 million for the three months ended September 30, 2023, an increase of $7.5 million, compared to $68.7 million for the three months ended September 30, 2022. The increase was primarily due to occupancy costs.
Net Realizations were $38.1 million for the three months ended September 30, 2023, a decrease of $16.3 million, compared to $54.5 million for the three months ended September 30, 2022. The decrease in Net Realizations was primarily attributable to a decrease of $17.8 million in Realized Principal Investment Income, partially offset by an increase of $1.9 million in Realized Performance Revenues.
Realized Principal Investment Income was $29.2 million for the three months ended September 30, 2023, a decrease of $17.8 million, compared to $47.0 million for the three months ended September 30, 2022. The decrease was primarily due to the segment’s allocation of the gain recognized in a Pátria sale transaction in the third quarter of 2022.
Realized Performance Revenues were $14.3 million for the three months ended September 30, 2023, an increase of $1.9 million, compared to $12.5 million for the three months ended September 30, 2022. The increase was primarily attributable to higher Realized Performance Revenues in our direct lending and energy funds.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Segment Distributable Earnings were $842.2 million for the nine months ended September 30, 2023, an increase of $92.1 million, or 12%, compared to $750.1 million for the nine months ended September 30, 2022. The increase in Segment Distributable Earnings was attributable to an increase of $118.7 million in Fee Related Earnings, partially offset by a decrease of $26.5 million in Net Realizations.
Fee Related Earnings were $724.3 million for the nine months ended September 30, 2023, an increase of $118.7 million, or 20%, compared to $605.6 million for the nine months ended September 30, 2022. The increase in Fee Related Earnings was attributable to increases of $149.2 million in Fee Related Performance Revenues and $91.9 million in Management Fees, Net, partially offset by increases of $80.5 million in Fee Related Compensation and $42.0 million in Other Operating Expenses.
Fee Related Performance Revenues were $409.6 million for the nine months ended September 30, 2023, an increase of $149.2 million, compared to $260.4 million for the nine months ended September 30, 2022. The increase was primarily due to performance and higher
Fee-Earning
Assets Under Management in BCRED.
Management Fees, Net were $1.0 billion for the nine months ended September 30, 2023, an increase of $91.9 million, compared to $934.7 million for the nine months ended September 30, 2022, primarily driven by an increase in Base Management Fees. Base Management Fees increased $84.2 million primarily due to inflows from
Fee-Earning
Assets Under Management in BCRED and mezzanine funds.
Fee Related Compensation was $480.3 million for the nine months ended September 30, 2023, an increase of $80.5 million, compared to $399.8 million for the nine months ended September 30, 2022. The increase was primarily due to increases in Management Fees, Net and Fee Related Performance Revenues, both of which impact Fee Related Compensation.
Other Operating Expenses were $231.8 million for the nine months ended September 30, 2023, an increase of $42.0 million, compared to $189.7 million for the nine months ended September 30, 2022. The increase was primarily due to occupancy costs, market data and technology-related expenses.
Net Realizations were $117.9 million for the nine months ended September 30, 2023, a decrease of $26.5 million, compared to $144.5 million for the nine months ended September 30, 2022. The decrease in Net Realizations was attributable to a decrease of $60.9 million in Realized Principal Investment Income and an increase of $25.3 million in Realized Performance Compensation, partially offset by an increase of $59.7 million in Realized Performance Revenues.
Realized Principal Investment Income was $15.9 million for the nine months ended September 30, 2023, a decrease of $60.9 million, compared to $76.8 million for the nine months ended September 30, 2022. The decrease was primarily due to the segment’s allocation of the gain recognized in Pátria sale transactions in the first and third quarters of 2022 and a realized loss related to BIS.
Realized Performance Compensation was $79.8 million for the nine months ended September 30, 2023, an increase of $25.3 million, compared to $54.5 million for the nine months ended September 30, 2022. The increase was primarily due to the increase in Realized Performance Revenues.
Realized Performance Revenues were $181.9 million for the nine months ended September 30, 2023, an increase of $59.7 million, compared to $122.2 million for the nine months ended September 30, 2022. The increase was primarily due to higher Realized Performance Revenues in our direct lending and energy funds.
Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future results of any particular fund or composite. An investment in Blackstone is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.
The following table presents the return information for the Private Credit and Liquid Credit composites:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
|
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|
| |
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|
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| |
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| |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5% |
|
|
|
3% |
|
|
|
3% |
|
|
|
2% |
|
|
|
12% |
|
|
|
9% |
|
|
|
5% |
|
|
|
2% |
|
|
|
12% |
|
|
|
7% |
|
|
|
|
3% |
|
|
|
3% |
|
|
|
1% |
|
|
|
1% |
|
|
|
9% |
|
|
|
9% |
|
|
|
-5% |
|
|
|
-6% |
|
|
|
5% |
|
|
|
4% |
|
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
(a) |
Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Allocations, net of tax advances. |
(b) |
Private Credit returns include mezzanine lending funds and middle market direct lending funds (including BXSL and BCRED), stressed/distressed strategies (including stressed/distressed funds and credit alpha strategies) and energy strategies. Liquid Credit returns include CLOs, closed-ended funds, open-ended funds and separately managed accounts. Only fee-earning funds exceeding $100 million of fair value at the beginning of each respective quarter-end are included. Funds in liquidation, funds investing primarily in investment grade corporate credit and asset-based finance funds are excluded. Blackstone Funds that were contributed to BXC as part of Blackstone’s acquisition of BXC in March 2008 and the pre-acquisition date performance for funds and vehicles acquired by BXC subsequent to March 2008, are also excluded. Private Credit and Liquid Credit’s inception to date returns are from December 31, 2005. |
The following table presents information regarding our Invested Performance Eligible Assets Under Management:
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|
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|
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| |
|
Eligible Assets Under
Management |
|
Estimated % Above
High Water Mark/
Hurdle (a) |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
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|
|
| |
|
|
|
|
|
|
|
|
$ |
86,462,059 |
|
|
$ |
85,164,349 |
|
|
96% |
|
93% |
(a) |
Estimated % Above High Water Mark/Hurdle represents the percentage of Invested Performance Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Credit & Insurance managed fund has positive investment performance relative to a hurdle, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a hurdle return, thereby resulting in an increase in Estimated % Above High Water Mark/Hurdle. |
(b) |
For the Credit & Insurance managed funds, at September 30, 2023, the incremental appreciation needed for the 4% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles to reach their respective High Water Marks/Hurdles was $2.0 billion, a decrease of $(163.6) million, compared to $2.1 billion at September 30, 2022. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Hurdles as of September 30, 2023, 5% were within 5% of reaching their respective High Water Mark. |
The following table presents the results of operations for our Hedge Fund Solutions segment:
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| |
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| |
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|
|
|
| |
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
131,346 |
|
|
$ |
138,818 |
|
|
$ |
(7,472 |
) |
|
|
-5% |
|
|
$ |
399,429 |
|
|
$ |
428,941 |
|
|
$ |
(29,512 |
) |
|
|
-7% |
|
Transaction and Other Fees, Net |
|
|
1,783 |
|
|
|
581 |
|
|
|
1,202 |
|
|
|
207% |
|
|
|
5,539 |
|
|
|
5,500 |
|
|
|
39 |
|
|
|
1% |
|
|
|
|
(18 |
) |
|
|
(57 |
) |
|
|
39 |
|
|
|
-68% |
|
|
|
(49 |
) |
|
|
(166 |
) |
|
|
117 |
|
|
|
-70% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management Fees, Net |
|
|
133,111 |
|
|
|
139,342 |
|
|
|
(6,231 |
) |
|
|
-4% |
|
|
|
404,919 |
|
|
|
434,275 |
|
|
|
(29,356 |
) |
|
|
-7% |
|
|
|
|
(46,496 |
) |
|
|
(40,895 |
) |
|
|
(5,601 |
) |
|
|
14% |
|
|
|
(138,120 |
) |
|
|
(145,993 |
) |
|
|
7,873 |
|
|
|
-5% |
|
|
|
|
(26,677 |
) |
|
|
(26,599 |
) |
|
|
(78 |
) |
|
|
- |
|
|
|
(82,782 |
) |
|
|
(75,849 |
) |
|
|
(6,933 |
) |
|
|
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,938 |
|
|
|
71,848 |
|
|
|
(11,910 |
) |
|
|
-17% |
|
|
|
184,017 |
|
|
|
212,433 |
|
|
|
(28,416 |
) |
|
|
-13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues |
|
|
6,900 |
|
|
|
4,430 |
|
|
|
2,470 |
|
|
|
56% |
|
|
|
92,009 |
|
|
|
40,540 |
|
|
|
51,469 |
|
|
|
127% |
|
Realized Performance Compensation |
|
|
(2,917 |
) |
|
|
(3,237 |
) |
|
|
320 |
|
|
|
-10% |
|
|
|
(34,635 |
) |
|
|
(14,320 |
) |
|
|
(20,315 |
) |
|
|
142% |
|
Realized Principal Investment Income |
|
|
2,225 |
|
|
|
9,460 |
|
|
|
(7,235 |
) |
|
|
-76% |
|
|
|
12,792 |
|
|
|
22,831 |
|
|
|
(10,039 |
) |
|
|
-44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,208 |
|
|
|
10,653 |
|
|
|
(4,445 |
) |
|
|
-42% |
|
|
|
70,166 |
|
|
|
49,051 |
|
|
|
21,115 |
|
|
|
43% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Distributable Earnings |
|
$ |
66,146 |
|
|
$ |
82,501 |
|
|
$ |
(16,355 |
) |
|
|
-20% |
|
|
$ |
254,183 |
|
|
$ |
261,484 |
|
|
$ |
(7,301 |
) |
|
|
-3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Segment Distributable Earnings were $66.1 million for the three months ended September 30, 2023, a decrease of $16.4 million, compared to $82.5 million for the three months ended September 30, 2022. The decrease in Segment Distributable Earnings was attributable to decreases of $11.9 million in Fee Related Earnings and $4.4 million in Net Realizations.
Our Hedge Fund Solutions segment funds continued to modestly navigate liquid market volatility in the third quarter of 2023. The majority of Hedge Fund Solutions strategies had positive performance in the third quarter of 2023, with significantly less volatility than the broader markets. Segment Distributable Earnings in the Hedge Fund Solutions segment would likely be negatively impacted, however, by a significant or sustained weak market environment or decline in asset prices, including as a result of concerns over macroeconomic factors. In addition, while certain of our strategies are designed to benefit from a high interest rate environment, in an environment concurrently characterized by high interest rates and weak equity markets, it may be difficult for funds in certain strategies to exceed interest rate-based performance hurdles to which such funds are subject. This would negatively impact our Segment Distributable Earnings.
Despite significant volatility in recent quarters, overall in recent years markets have experienced relatively low volatility, which has at times resulted in certain investors reallocating capital away from traditional hedge fund strategies. To the extent markets experience a prolonged period of low volatility and outperform our hedge fund strategies, investors may seek to reallocate capital away from traditional hedge fund strategies, which could negatively impact net flows in our Hedge Fund Solutions segment. Conversely, outperformance by our Hedge Fund Solutions strategies in a weak market environment has in some cases resulted in such strategies representing an increasing portion of the value of certain investors’ portfolios, which may limit such investors’ ability to allocate additional capital to certain funds in the segment, or result in such investors seeking to withdraw capital from such funds. The Hedge Fund Solutions segment operates multiple business lines, manages strategies that are both long and short asset classes and generates a majority of its revenue through management fees. In that regard, the segment’s revenues depend in part on our ability to successfully grow such existing, diverse business lines and strategies and to identify and scale new ones to meet evolving investor appetites. In recent years we have shifted the mix of our product offerings to include more products whose performance-based fees represent a more significant proportion of the fees earned from such products than has historically been the case.
Fee Related Earnings were $59.9 million for the three months ended September 30, 2023, a decrease of $11.9 million, compared to $71.8 million for the three months ended September 30, 2022. The decrease in Fee Related Earnings was primarily attributable to a decrease of $6.2 million in Management Fees, Net and an increase of $5.6 million in Fee Related Compensation.
Management Fees, Net were $133.1 million for the three months ended September 30, 2023, a decrease of $6.2 million, compared to $139.3 million for the three months ended September 30, 2022, primarily driven by a decrease in Base Management Fees. Base Management Fees decreased $7.5 million primarily due to a decrease in
Fee-Earning
Assets Under Management in commingled products and liquid and specialized solutions.
Fee Related Compensation was $46.5 million for the three months ended September 30, 2023, an increase of $5.6 million, compared to $40.9 million for the three months ended September 30, 2022. The increase was primarily due to changes in compensation accruals and corporate allocations.
Net Realizations were $6.2 million for the three months ended September 30, 2023, a decrease of $4.4 million, compared to $10.7 million for the three months ended September 30, 2022. The decrease in Net Realizations was primarily attributable to a decrease of $7.2 million in Realized Principal Investment Income.
Realized Principal Investment Income was $2.2 million for the three months ended September 30, 2023, a decrease of $7.2 million, compared to $9.5 million for the three months ended September 30, 2022. The decrease was primarily due to the segment’s allocation of the gain recognized in a Pátria sale transaction in the third quarter of 2022.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Segment Distributable Earnings were $254.2 million for the nine months ended September 30, 2023, a decrease of $7.3 million, compared to $261.5 million for the nine months ended September 30, 2022. The decrease in Segment Distributable Earnings was attributable to a decrease of $28.4 million in Fee Related Earnings, partially offset by an increase of $21.1 million in Net Realizations.
Fee Related Earnings were $184.0 million for the nine months ended September 30, 2023, a decrease of $28.4 million, compared to $212.4 million for the nine months ended September 30, 2022. The decrease in Fee Related Earnings was primarily attributable to a decrease of $29.4 million in Management Fees, Net, partially offset by a decrease of $7.9 million in Fee Related Compensation.
Management Fees, Net were $404.9 million for the nine months ended September 30, 2023, a decrease of $29.4 million, compared to $434.3 million for the nine months ended September 30, 2022, primarily due to a decrease in Base Management Fees. Base Management Fees decreased $29.5 million primarily driven by a decrease in
Fee-Earning
Assets Under Management in commingled products and liquid and specialized solutions.
Fee Related Compensation was $138.1 million for the nine months ended September 30, 2023, a decrease of $7.9 million, compared to $146.0 million for the nine months ended September 30, 2022. The decrease was primarily due to a decrease in Management Fees, Net, on which a portion of Fee Related Compensation is based.
Net Realizations were $70.2 million for the nine months ended September 30, 2023, an increase of $21.1 million, or 43%, compared to $49.1 million for the nine months ended September 30, 2022. The increase in Net Realizations was attributable to an increase of $51.5 million in Realized Performance Revenues, partially offset by an increase of $20.3 million in Realized Performance Compensation and a decrease of $10.0 million in Realized Principal Investment Income.
Realized Performance Revenues were $92.0 million for the nine months ended September 30, 2023, an increase of $51.5 million, compared to $40.5 million for the nine months ended September 30, 2022. The increase was primarily due to increased Realized Performance Revenues in liquid and specialized solutions offset by a decrease in customized solutions.
Realized Performance Compensation was $34.6 million for the nine months ended September 30, 2023, an increase of $20.3 million, compared to $14.3 million for the nine months ended September 30, 2022. The increase was primarily due to the increase in Realized Performance Revenues.
Realized Principal Investment Income was $12.8 million for the nine months ended September 30, 2023, a decrease of $10.0 million, compared to $22.8 million for the nine months ended September 30, 2022. The decrease was primarily due to the segment’s allocation of the gain recognized in Pátria sale transactions in the first and third quarters of 2022.
Composite returns information is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. The composite returns information reflected in this discussion and analysis is not indicative of the financial performance of Blackstone and is also not necessarily indicative of the future results of any particular fund or composite. An investment in Blackstone is not an investment in any of our funds or composites. There can be no assurance that any of our funds or composites or our other existing and future funds or composites will achieve similar returns.
The following table presents the return information of the BAAM Principal Solutions Composite:
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|
| |
|
|
|
|
|
Average Annual Returns (a) |
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
BAAM Principal Solutions Composite (b) |
|
|
2 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
5 |
% |
|
|
5 |
% |
|
|
3 |
% |
|
|
2 |
% |
|
|
8 |
% |
|
|
7 |
% |
|
|
8 |
% |
|
|
7 |
% |
|
|
6 |
% |
|
|
5 |
% |
|
|
7 |
% |
|
|
6 |
% |
The returns presented herein represent those of the applicable Blackstone Funds and not those of Blackstone.
(a) |
Composite returns present a summarized asset-weighted return measure to evaluate the overall performance of the applicable class of Blackstone Funds. |
(b) |
BAAM’s Principal Solutions (“BPS”) Composite covers the period from January 2000 to present, although BAAM’s inception date is September 1990. The BPS Composite includes only BAAM-managed commingled and customized multi-manager funds and accounts and does not include BAAM’s individual investor solutions (liquid alternatives), strategic capital (seeding and GP minority stakes), strategic opportunities (co-invests), and advisory (non-discretionary) platforms, except for investments by BPS funds directly into those platforms. BAAM-managed funds in liquidation and, in the case of net returns, assets are also excluded. The funds/accounts that comprise the BPS Composite are not managed within a single fund or account and are managed with different mandates. There is no guarantee that BAAM would have made the same mix of investments in a stand-alone fund/account. The BPS Composite is not an investible product and, as such, the performance of the BPS Composite does not represent the performance of an actual fund or account. The historical return is from January 1, 2000. |
The following table presents information regarding our Invested Performance Eligible Assets Under Management:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Estimated % Above
High Water Mark/
Benchmark (a) |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Hedge Fund Solutions Managed Funds (b) |
|
$ |
51,268,712 |
|
|
$ |
48,764,525 |
|
|
87% |
|
77% |
(a) |
Estimated % Above High Water Mark/Benchmark represents the percentage of Invested Performance Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Hedge Fund Solutions managed fund has positive investment performance relative to a benchmark, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a benchmark return, thereby resulting in an increase in Estimated % Above High Water Mark/Benchmark. |
(b) |
For the Hedge Fund Solutions managed funds, at September 30, 2023, the incremental appreciation needed for the 13% of Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $637.5 million, a decrease of $(209.1) million, compared to $846.6 million at September 30, 2022. Of the Invested Performance Eligible Assets Under Management below their respective High Water Marks/Benchmarks as of September 30, 2023, 61% were within 5% of reaching their respective High Water Mark. |
Non-GAAP
Financial Measures
These
non-GAAP
financial measures are presented without the consolidation of any Blackstone Funds that are consolidated into the Condensed Consolidated Financial Statements. Consequently, all
non-GAAP
financial measures exclude the assets, liabilities and operating results related to the Blackstone Funds. See “— Key Financial Measures and Indicators” for our definitions of Distributable Earnings, Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA.
The following table is a reconciliation of Net Income (Loss) Attributable to Blackstone Inc. to Distributable Earnings, Total Segment Distributable Earnings, Fee Related Earnings and Adjusted EBITDA:
|
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|
|
|
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|
|
|
|
| |
|
|
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| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
Net Income Attributable to Blackstone Inc. |
|
$ |
551,994 |
|
|
$ |
2,296 |
|
|
$ |
1,239,080 |
|
|
$ |
1,189,777 |
|
Net Income Attributable to Non-Controlling Interests in Blackstone Holdings |
|
|
440,609 |
|
|
|
37,724 |
|
|
|
992,618 |
|
|
|
1,061,516 |
|
Net Income (Loss) Attributable to Non-Controlling Interests in Consolidated Entities |
|
|
20,716 |
|
|
|
(62,093 |
) |
|
|
185,021 |
|
|
|
(62,425 |
) |
Net Income (Loss) Attributable to Redeemable Non-Controlling Interests in Consolidated Entities |
|
|
(92,577 |
) |
|
|
25,773 |
|
|
|
(81,589 |
) |
|
|
56,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
920,742 |
|
|
|
3,700 |
|
|
|
2,335,130 |
|
|
|
2,245,568 |
|
|
|
|
196,560 |
|
|
|
94,231 |
|
|
|
467,504 |
|
|
|
614,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Before Provision for Taxes |
|
|
1,117,302 |
|
|
|
97,931 |
|
|
|
2,802,634 |
|
|
|
2,859,594 |
|
Transaction-Related and Non-Recurring Items (a) |
|
|
6,250 |
|
|
|
9,247 |
|
|
|
17,099 |
|
|
|
59,721 |
|
Amortization of Intangibles (b) |
|
|
7,357 |
|
|
|
13,238 |
|
|
|
26,110 |
|
|
|
47,326 |
|
Impact of Consolidation (c) |
|
|
71,861 |
|
|
|
36,320 |
|
|
|
(103,432 |
) |
|
|
5,725 |
|
Unrealized Performance Revenues (d) |
|
|
63,209 |
|
|
|
771,637 |
|
|
|
708,146 |
|
|
|
2,946,255 |
|
Unrealized Performance Allocations Compensation (e) |
|
|
11,866 |
|
|
|
(359,590 |
) |
|
|
(247,228 |
) |
|
|
(1,273,849 |
) |
Unrealized Principal Investment (Income) Loss (f) |
|
|
(84,780 |
) |
|
|
996,105 |
|
|
|
233,638 |
|
|
|
1,172,635 |
|
|
|
|
(63,748 |
) |
|
|
(198,546 |
) |
|
|
(17,850 |
) |
|
|
(427,069 |
) |
Equity-Based Compensation (h) |
|
|
255,616 |
|
|
|
190,197 |
|
|
|
773,505 |
|
|
|
587,386 |
|
Administrative Fee Adjustment (i) |
|
|
2,425 |
|
|
|
2,460 |
|
|
|
7,285 |
|
|
|
7,421 |
|
Taxes and Related Payables (j) |
|
|
(175,747 |
) |
|
|
(184,130 |
) |
|
|
(527,132 |
) |
|
|
(686,571 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,211,611 |
|
|
|
1,374,869 |
|
|
|
3,672,775 |
|
|
|
5,298,574 |
|
Taxes and Related Payables (j) |
|
|
175,747 |
|
|
|
184,130 |
|
|
|
527,132 |
|
|
|
686,571 |
|
Net Interest and Dividend (Income) Loss (k) |
|
|
(3,890 |
) |
|
|
22,850 |
|
|
|
(40,892 |
) |
|
|
38,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings |
|
|
1,383,468 |
|
|
|
1,581,849 |
|
|
|
4,159,015 |
|
|
|
6,023,394 |
|
Realized Performance Revenues (l) |
|
|
(337,940 |
) |
|
|
(469,009 |
) |
|
|
(1,367,889 |
) |
|
|
(3,988,593 |
) |
Realized Performance Compensation (m) |
|
|
133,995 |
|
|
|
206,224 |
|
|
|
608,389 |
|
|
|
1,652,318 |
|
Realized Principal Investment Income (n) |
|
|
(55,500 |
) |
|
|
(139,765 |
) |
|
|
(91,730 |
) |
|
|
(340,369 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,124,023 |
|
|
$ |
1,179,299 |
|
|
$ |
3,307,785 |
|
|
$ |
3,346,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,211,611 |
|
|
$ |
1,374,869 |
|
|
$ |
3,672,775 |
|
|
$ |
5,298,574 |
|
|
|
|
110,014 |
|
|
|
80,312 |
|
|
|
321,353 |
|
|
|
216,339 |
|
Taxes and Related Payables (j) |
|
|
175,747 |
|
|
|
184,130 |
|
|
|
527,132 |
|
|
|
686,571 |
|
Depreciation and Amortization (p) |
|
|
21,598 |
|
|
|
14,958 |
|
|
|
68,873 |
|
|
|
44,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,518,970 |
|
|
$ |
1,654,269 |
|
|
$ |
4,590,133 |
|
|
$ |
6,246,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
This adjustment removes Transaction-Related and Non-Recurring Items, which are excluded from Blackstone’s segment presentation. Transaction-Related and Non-Recurring Items arise from corporate actions including acquisitions, divestitures, Blackstone’s initial public offering and non-recurring gains, losses, or other charges, if any. They consist primarily of equity-based compensation charges, gains or losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs, gains or losses associated with these corporate actions and non-recurring gains, losses or other charges that affect comparability and are not reflective of Blackstone’s operational performance. |
(b) |
This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. |
(c) |
This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. |
(d) |
This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
GAAP Unrealized Performance Allocations |
|
$ |
(63,204 |
) |
|
$ |
(771,637 |
) |
|
$ |
(708,021 |
) |
|
$ |
(2,946,255 |
) |
|
|
|
(5 |
) |
|
|
— |
|
|
|
(125 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Performance Revenues |
|
$ |
(63,209 |
) |
|
$ |
(771,637 |
) |
|
$ |
(708,146 |
) |
|
$ |
(2,946,255 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e) |
This adjustment removes Unrealized Performance Allocations Compensation. |
(f) |
This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by non-controlling interests. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
GAAP Unrealized Principal Investment Income (Loss) |
|
$ |
69,340 |
|
|
$ |
(1,069,697 |
) |
|
$ |
(257,988 |
) |
|
$ |
(1,496,226 |
) |
|
|
|
15,440 |
|
|
|
73,592 |
|
|
|
24,350 |
|
|
|
323,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Principal Investment Income (Loss) |
|
$ |
84,780 |
|
|
$ |
(996,105 |
) |
|
$ |
(233,638 |
) |
|
$ |
(1,172,635 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) |
This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related and Non-Recurring Items. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
$ |
63,769 |
|
|
$ |
199,382 |
|
|
$ |
17,951 |
|
|
$ |
427,839 |
|
|
|
|
(21 |
) |
|
|
(836 |
) |
|
|
(101 |
) |
|
|
(770 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
63,748 |
|
|
$ |
198,546 |
|
|
$ |
17,850 |
|
|
$ |
427,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) |
This adjustment removes Equity-Based Compensation on a segment basis. |
(i) |
This adjustment adds an amount equal to an administrative fee collected on a quarterly basis from certain holders of Blackstone Holdings Partnership Units. The administrative fee is accounted for as a capital contribution under GAAP, but is reflected as a reduction of Other Operating Expenses in Blackstone’s segment presentation. |
(j) |
Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and adjusted to exclude the tax impact of any divestitures. For interim periods, taxes are calculated using the preferred annualized effective tax rate approach. Related Payables represent tax-related payables including the amount payable under the Tax Receivable Agreement. See “— Key Financial Measures and Indicators — Distributable Earnings” for the full definition of Taxes and Related Pa yables. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
| |
|
$ |
151,812 |
|
|
$ |
163,602 |
|
|
$ |
459,770 |
|
|
$ |
613,201 |
|
| |
|
|
23,935 |
|
|
|
20,528 |
|
|
|
67,362 |
|
|
|
73,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes and Related Payables |
|
$ |
175,747 |
|
|
$ |
184,130 |
|
|
$ |
527,132 |
|
|
$ |
686,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(k) |
This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Interest and Dividend Revenue earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
GAAP Interest and Dividend Revenue |
|
$ |
109,133 |
|
|
$ |
52,420 |
|
|
$ |
348,123 |
|
|
$ |
168,980 |
|
|
|
|
4,771 |
|
|
|
5,042 |
|
|
|
14,122 |
|
|
|
9,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Revenue |
|
|
113,904 |
|
|
|
57,462 |
|
|
|
362,245 |
|
|
|
178,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,599 |
|
|
|
80,507 |
|
|
|
323,136 |
|
|
|
216,896 |
|
|
|
|
(585 |
) |
|
|
(195 |
) |
|
|
(1,783 |
) |
|
|
(557 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,014 |
|
|
|
80,312 |
|
|
|
321,353 |
|
|
|
216,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest and Dividend Income (Loss) |
|
$ |
3,890 |
|
|
$ |
(22,850 |
) |
|
$ |
40,892 |
|
|
$ |
(38,249 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(l) |
This adjustment removes the total segment amount of Realized Performance Revenues. |
(m) |
This adjustment removes the total segment amount of Realized Performance Compensation. |
(n) |
This adjustment removes the total segment amount of Realized Principal Investment Income. |
(o) |
This adjustment adds back Interest Expense on a segment basis, excluding interest expense related to the Tax Receivable Agreement. |
(p) |
This adjustment adds back Depreciation and Amortization on a segment basis. |
The following tables are a reconciliation of Total GAAP Investments to Net Accrued Performance Revenues. Total GAAP Investments and Net Accrued Performance Revenues consist of the following:
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
Investments of Consolidated Blackstone Funds |
|
$ |
5,224,104 |
|
|
$ |
3,828,497 |
|
Equity Method Investments |
|
|
|
|
|
|
|
|
|
|
|
5,588,222 |
|
|
|
5,566,645 |
|
Accrued Performance Allocations |
|
|
11,606,901 |
|
|
|
12,938,888 |
|
Corporate Treasury Investments |
|
|
763,515 |
|
|
|
799,016 |
|
|
|
|
4,157,115 |
|
|
|
3,123,102 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,339,857 |
|
|
$ |
26,256,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Performance Allocations - GAAP |
|
$ |
11,606,901 |
|
|
$ |
12,938,888 |
|
Impact of Consolidation (a) |
|
|
— |
|
|
|
2,412 |
|
Due from Affiliates - GAAP (b) |
|
|
196,510 |
|
|
|
154,587 |
|
Less: Net Realized Performance Revenues (c) |
|
|
(367,944 |
) |
|
|
(342,922 |
) |
Less: Accrued Performance Compensation - GAAP (d) |
|
|
(5,000,253 |
) |
|
|
(5,693,325 |
) |
|
|
|
|
|
|
|
|
|
Net Accrued Performance Revenues |
|
$ |
6,435,214 |
|
|
$ |
7,059,640 |
|
|
|
|
|
|
|
|
|
|
(a) |
This adjustment adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation. |
(b) |
Represents GAAP accrued performance revenue recorded within Due from Affiliates. |
(c) |
Represents Performance Revenues realized but not yet distributed as of the reporting date and are included in Distributable Earnings in the period they are realized. |
(d) |
Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates. |
Liquidity and Capital Resources
Blackstone’s business model derives revenue primarily from third party Assets Under Management. Blackstone is not a capital or balance sheet intensive business and targets operating expense levels such that total management and advisory fees exceed total operating expenses each period. As a result, we require limited capital resources to support the working capital or operating needs of our businesses. We draw primarily on the long-term committed capital of our limited partner investors to fund the investment requirements of the Blackstone Funds and use our own realizations and cash flows to invest in growth initiatives, make commitments to our own funds, where our minimum general partner commitments are generally less than 5% of the limited partner commitments of a fund, and pay dividends to stockholders and distributions to holders of Holdings Units.
Fluctuations in our statement of financial condition result primarily from activities of the Blackstone Funds that are consolidated as well as business transactions, such as the issuance of senior notes. The majority economic ownership interests of such consolidated Blackstone Funds are reflected as Redeemable
Non-Controlling
Interests in Consolidated Entities, and
Non-Controlling
Interests in Consolidated Entities in the Consolidated Financial Statements. The consolidation of these Blackstone Funds has no net effect on Blackstone’s Net Income or Equity. Additionally, fluctuations in our statement of financial condition also include appreciation or depreciation in Blackstone investments in the
non-consolidated
Blackstone Funds, additional investments and redemptions of such interests in the
non-consolidated
Blackstone Funds and the collection of receivables related to management and advisory fees.
Total Assets were $41.7 billion as of September 30, 2023, a decrease of $860.4 million from December 31, 2022. The decrease in Total Assets was principally due to a decrease of $912.0 million in total assets attributable to consolidated operating partnerships. The decrease in total assets attributable to consolidated operating partnerships was primarily due to decreases of $1.3 billion in Cash and Cash Equivalents and $413.7 million in Investments, partially offset by increases in Accounts Receivable and Due from Affiliates of $279.4 million and $246.5 million, respectively. The decrease in Cash and Cash Equivalents was primarily due to ongoing operating activities including the payoff at maturity of Blackstone’s 4.750% senior note due February 15, 2023 (the “February 2023 Senior Note Payoff”). The decrease in Investments was primarily due to unrealized depreciation across our Real Estate segment and sales of investments within Corporate Treasury Investments, partially offset by unrealized appreciation in our Private Equity segment. The increase in Accounts Receivable was principally due to the purchase of notes issued to Blackstone in connection with its strategic partnership with Resolution Life. The increase in Due from Affiliates was principally due to an increase in management fees due from
non-consolidated
Blackstone Funds.
Total Liabilities were $22.9 billion as of September 30, 2023, an increase of $9.9 million from December 31, 2022. The increase in Total Liabilities was principally due to an increase of $294.0 million in total liabilities attributable to consolidated Blackstone Funds, partially offset by a decrease of $288.1 million in total liabilities attributable to consolidated operating partnerships. The increase in total liabilities attributable to consolidated Blackstone Funds was primarily due to increases of $146.0 million in Accounts Payable, Accrued Expenses and Other Liabilities and $139.6 million in Loans Payable. The increase in Accounts Payable, Accrued Expenses and Other Liabilities was primarily due to the consolidation of one Blackstone Fund during the nine months ended September 30, 2023 and the interest payable on its borrowings. The increase in Loans Payable was primarily due to the consolidation of one CLO. The decrease in total liabilities attributable to consolidated operating partnerships was primarily due to a decrease of $377.9 million in Loans Payable, partially offset by an increase of $190.9 million in Accounts Payable, Accrued Expenses and Other Liabilities. The decrease in Loans Payable was primarily due to the February 2023 Senior Note Payoff, partially offset by the consolidation of one Blackstone operating partnership. The increase in Accounts Payable, Accrued Expenses and Other Liabilities was primarily due to an increase in derivative liabilities.
Sources and Uses of Liquidity
We have multiple sources of liquidity to meet our capital needs, including annual cash flows, accumulated earnings in our businesses, the proceeds from our issuances of senior notes, liquid investments we hold on our balance sheet and access to our $4.135 billion committed revolving credit facility. As of September 30, 2023, Blackstone had $3.0 billion in Cash and Cash Equivalents, $763.5 million invested in Corporate Treasury Investments and $4.2 billion in Other Investments (which included $3.7 billion of liquid investments), against $10.6 billion in borrowings from our bond issuances, and no borrowings outstanding under our revolving credit facility.
In addition to the cash we received from our notes offerings and availability under our revolving credit facility, we expect to receive (a) cash generated from operating activities, (b) Performance Revenue realizations, and (c) realizations on the fund investments that we make. The amounts received from these three sources in particular may vary substantially from year to year and quarter to quarter depending on the frequency and size of realization events or net returns experienced by our investment funds. Our available capital could be adversely affected if there are prolonged periods of few substantial realizations from our investment funds accompanied by substantial capital calls for new investments from those investment funds. Therefore, Blackstone’s commitments to our funds are taken into consideration when managing our overall liquidity and cash position.
We expect that our primary liquidity needs will be cash to (a) provide capital to facilitate the growth of our existing businesses, which principally includes funding our general partner and
co-investment
commitments to our funds, (b) provide capital for business expansion, (c) pay operating expenses, including cash compensation to our employees and other obligations as they arise, (d) fund modest capital expenditures, (e) repay borrowings and related interest costs, (f) pay income taxes, (g) repurchase shares of our common stock and Blackstone Holdings Partnership Units pursuant to our repurchase program and (h) pay dividends to our stockholders and distributions to the holders of Blackstone Holdings Partnership Units. For a tabular presentation of Blackstone’s contractual obligations and the expected timing of such see “— Contractual Obligations.”
Our own capital commitments to our funds, the funds we invest in and our investment strategies as of September 30, 2023 consisted of the following:
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|
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|
|
|
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| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Senior Managing Directors |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
750,000 |
|
|
$ |
36,809 |
|
|
$ |
150,000 |
|
|
$ |
12,270 |
|
|
|
|
300,000 |
|
|
|
31,843 |
|
|
|
100,000 |
|
|
|
10,614 |
|
|
|
|
300,000 |
|
|
|
40,704 |
|
|
|
100,000 |
|
|
|
13,568 |
|
|
|
|
300,000 |
|
|
|
47,648 |
|
|
|
100,000 |
|
|
|
15,883 |
|
|
|
|
300,000 |
|
|
|
282,293 |
|
|
|
100,000 |
|
|
|
94,098 |
|
|
|
|
100,000 |
|
|
|
11,257 |
|
|
|
35,000 |
|
|
|
3,752 |
|
|
|
|
130,000 |
|
|
|
22,477 |
|
|
|
43,333 |
|
|
|
7,492 |
|
|
|
|
150,000 |
|
|
|
22,292 |
|
|
|
43,333 |
|
|
|
6,440 |
|
|
|
|
130,000 |
|
|
|
46,393 |
|
|
|
43,333 |
|
|
|
15,464 |
|
|
|
|
130,000 |
|
|
|
130,000 |
|
|
|
43,333 |
|
|
|
43,333 |
|
|
|
|
50,392 |
|
|
|
10,342 |
|
|
|
16,797 |
|
|
|
3,447 |
|
|
|
|
70,707 |
|
|
|
13,221 |
|
|
|
23,569 |
|
|
|
4,407 |
|
|
|
|
81,078 |
|
|
|
69,065 |
|
|
|
27,026 |
|
|
|
23,022 |
|
|
|
|
50,000 |
|
|
|
13,499 |
|
|
|
16,667 |
|
|
|
4,500 |
|
|
|
|
50,000 |
|
|
|
15,156 |
|
|
|
49,113 |
|
|
|
14,887 |
|
|
|
|
50,000 |
|
|
|
50,000 |
|
|
|
49,660 |
|
|
|
49,660 |
|
|
|
|
312,235 |
|
|
|
31,721 |
|
|
|
— |
|
|
|
— |
|
|
|
|
29,596 |
|
|
|
9,183 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,284,008 |
|
|
|
883,903 |
|
|
|
941,164 |
|
|
|
322,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Senior Managing Directors |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
629,356 |
|
|
|
30,642 |
|
|
|
— |
|
|
|
— |
|
|
|
|
719,718 |
|
|
|
81,403 |
|
|
|
250,000 |
|
|
|
28,276 |
|
|
|
|
500,000 |
|
|
|
36,635 |
|
|
|
225,000 |
|
|
|
16,486 |
|
|
|
|
500,000 |
|
|
|
211,001 |
|
|
|
225,000 |
|
|
|
94,951 |
|
|
|
|
500,000 |
|
|
|
500,000 |
|
|
|
225,000 |
|
|
|
225,000 |
|
|
|
|
50,000 |
|
|
|
4,728 |
|
|
|
— |
|
|
|
— |
|
|
|
|
80,000 |
|
|
|
12,018 |
|
|
|
26,667 |
|
|
|
4,006 |
|
|
|
|
80,000 |
|
|
|
34,702 |
|
|
|
26,667 |
|
|
|
11,567 |
|
|
|
|
46,345 |
|
|
|
46,345 |
|
|
|
15,448 |
|
|
|
15,448 |
|
|
|
|
117,747 |
|
|
|
27,016 |
|
|
|
18,992 |
|
|
|
4,358 |
|
|
|
|
160,000 |
|
|
|
112,943 |
|
|
|
32,640 |
|
|
|
23,040 |
|
|
|
|
40,000 |
|
|
|
5,869 |
|
|
|
13,333 |
|
|
|
1,956 |
|
|
|
|
100,000 |
|
|
|
74,993 |
|
|
|
33,333 |
|
|
|
24,998 |
|
|
|
|
489,986 |
|
|
|
233,238 |
|
|
|
163,329 |
|
|
|
77,746 |
|
|
|
|
1,258,964 |
|
|
|
739,369 |
|
|
|
1,174,464 |
|
|
|
692,673 |
|
|
|
|
335,315 |
|
|
|
83,504 |
|
|
|
— |
|
|
|
— |
|
|
|
|
142,057 |
|
|
|
87,701 |
|
|
|
37,352 |
|
|
|
27,272 |
|
|
|
|
162,381 |
|
|
|
106,782 |
|
|
|
53,959 |
|
|
|
35,583 |
|
|
|
|
290,209 |
|
|
|
42,819 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,202,078 |
|
|
|
2,471,708 |
|
|
|
2,521,184 |
|
|
|
1,283,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine / Opportunistic II |
|
|
120,000 |
|
|
|
29,182 |
|
|
|
110,101 |
|
|
|
26,774 |
|
Mezzanine / Opportunistic III |
|
|
130,783 |
|
|
|
38,331 |
|
|
|
96,654 |
|
|
|
28,328 |
|
Mezzanine / Opportunistic IV |
|
|
122,000 |
|
|
|
77,078 |
|
|
|
115,608 |
|
|
|
73,040 |
|
|
|
|
63,000 |
|
|
|
10,137 |
|
|
|
56,882 |
|
|
|
9,153 |
|
|
|
|
92,366 |
|
|
|
34,763 |
|
|
|
89,639 |
|
|
|
33,759 |
|
|
|
|
52,938 |
|
|
|
52,938 |
|
|
|
17,646 |
|
|
|
17,646 |
|
|
|
|
125,000 |
|
|
|
51,695 |
|
|
|
119,878 |
|
|
|
49,576 |
|
Stressed / Distressed III |
|
|
151,000 |
|
|
|
93,835 |
|
|
|
147,380 |
|
|
|
91,586 |
|
|
|
|
80,000 |
|
|
|
37,626 |
|
|
|
75,445 |
|
|
|
35,484 |
|
|
|
|
150,000 |
|
|
|
104,410 |
|
|
|
148,601 |
|
|
|
103,437 |
|
|
|
|
127,000 |
|
|
|
127,000 |
|
|
|
123,077 |
|
|
|
123,077 |
|
|
|
|
52,102 |
|
|
|
19,752 |
|
|
|
50,670 |
|
|
|
19,209 |
|
|
|
|
25,500 |
|
|
|
12,550 |
|
|
|
24,385 |
|
|
|
12,001 |
|
|
|
|
155,541 |
|
|
|
65,079 |
|
|
|
42,521 |
|
|
|
9,596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,447,230 |
|
|
|
754,376 |
|
|
|
1,218,487 |
|
|
|
632,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Senior Managing Directors |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
1,482 |
|
|
|
— |
|
|
|
— |
|
|
|
|
22,000 |
|
|
|
16,577 |
|
|
|
— |
|
|
|
— |
|
|
|
|
15,000 |
|
|
|
13,900 |
|
|
|
— |
|
|
|
— |
|
|
|
|
154,610 |
|
|
|
21,924 |
|
|
|
— |
|
|
|
— |
|
|
|
|
50,000 |
|
|
|
21,187 |
|
|
|
— |
|
|
|
— |
|
|
|
|
100,000 |
|
|
|
27,765 |
|
|
|
— |
|
|
|
— |
|
|
|
|
20,000 |
|
|
|
12,274 |
|
|
|
— |
|
|
|
— |
|
|
|
|
7,481 |
|
|
|
2,703 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hedge Fund Solutions |
|
|
419,091 |
|
|
|
117,812 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
645,590 |
|
|
|
578,962 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,997,997 |
|
|
$ |
4,806,761 |
|
|
$ |
4,680,835 |
|
|
$ |
2,238,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
We expect our commitments to be drawn down over time and to be funded by available cash and cash generated from operations and realizations. Taking into account prevailing market conditions and both the liquidity and cash or liquid investment balances, we believe that the sources of liquidity described above will be more than sufficient to fund our working capital requirements. Additionally, for some of the general partner commitments shown in the table above, we require our senior managing directors and certain other professionals to fund a portion of the commitment even though the ultimate obligation to fund the aggregate commitment is ours pursuant to the governing agreements of the respective funds. The amounts of the aggregate applicable general partner original and remaining commitment are shown in the table above. |
(b) |
Includes the full portion of our commitments (i) required to be funded by senior managing directors and certain other professionals and (ii) that are elected by such individuals to be funded for the life of a fund, where such fund permits such election. Excludes amounts that are elected by such individuals to be funded on an annual basis and certain de minimis commitments funded by such individuals in certain carry funds. |
(c) |
Represents capital commitments to a number of other funds in each respective segment. |
(d) |
Represents loan origination commitments, revolver commitments and capital market commitments. |
For a tabular presentation of the timing of Blackstone’s remaining capital commitments to our funds, the funds we invest in and our investment strategies see “— Contractual Obligations.”
As of September 30, 2023, Blackstone Holdings Finance Co. L.L.C. (the “Issuer”), an indirect subsidiary of Blackstone, had issued and outstanding the following senior notes (collectively the “Notes”):
|
|
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
300,000 |
|
|
|
|
600,000 |
|
|
|
$ |
300,000 |
|
|
|
$ |
600,000 |
|
|
|
$ |
650,000 |
|
|
|
|
600,000 |
|
|
|
$ |
500,000 |
|
|
|
$ |
500,000 |
|
|
|
$ |
800,000 |
|
|
|
$ |
500,000 |
|
|
|
$ |
900,000 |
|
|
|
|
500,000 |
|
|
|
$ |
250,000 |
|
|
|
$ |
500,000 |
|
|
|
$ |
350,000 |
|
|
|
$ |
300,000 |
|
|
|
$ |
400,000 |
|
|
|
$ |
400,000 |
|
|
|
$ |
550,000 |
|
|
|
$ |
1,000,000 |
|
|
|
|
|
|
|
|
$ |
10,614,600 |
|
|
|
|
|
|
(a) |
The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by Blackstone Inc. and each of the Blackstone Holdings Partnerships. The Notes contain customary covenants and financial restrictions that, among other things, limit the Issuer and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The Notes also contain customary events of default. All or a portion of the Notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the Notes are subject to repurchase at the repurchase price as set forth in the Notes. |
Blackstone, through its indirect subsidiary Blackstone Holdings Finance Co. L.L.C., has a $4.135 billion unsecured revolving credit facility (the “Credit Facility”) with Citibank, N.A., as administrative agent with a maturity date of June 3, 2027. Borrowings may also be made in U.K. sterling, euros, Swiss francs, Japanese yen or Canadian dollars, in each case subject to certain
sub-limits.
The Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of
fee-earning
assets under management, each tested quarterly.
For a tabular presentation of the payment timing of principal and interest due on Blackstone’s issued notes and revolving credit facility see “— Contractual Obligations.”
The following table sets forth information relating to our contractual obligations as of September 30, 2023 on a consolidated basis and on a basis deconsolidating the Blackstone Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
Operating Lease Obligations (a) |
|
$ |
37,179 |
|
|
$ |
329,160 |
|
|
$ |
323,223 |
|
|
$ |
722,597 |
|
|
$ |
1,412,159 |
|
|
|
|
55,911 |
|
|
|
171,848 |
|
|
|
61,417 |
|
|
|
4,102 |
|
|
|
293,278 |
|
Blackstone Operating Borrowings (b) |
|
|
34 |
|
|
|
325,413 |
|
|
|
1,551,999 |
|
|
|
8,777,120 |
|
|
|
10,654,566 |
|
Interest on Blackstone Operating Borrowings (c) |
|
|
92,345 |
|
|
|
693,676 |
|
|
|
671,698 |
|
|
|
3,547,984 |
|
|
|
5,005,703 |
|
Borrowings of Consolidated Blackstone Funds |
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
1,685,566 |
|
|
|
1,685,566 |
|
Interest on Borrowings of Consolidated Blackstone Funds |
|
|
4,464 |
|
|
|
35,712 |
|
|
|
35,712 |
|
|
|
31,994 |
|
|
|
107,882 |
|
Blackstone Funds Capital Commitments to Investee Funds (d) |
|
|
173,580 |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
173,580 |
|
Due to Certain Non-Controlling Interest Holders in Connection with Tax Receivable Agreements (e) |
|
|
¯ |
|
|
|
188,261 |
|
|
|
239,243 |
|
|
|
1,201,677 |
|
|
|
1,629,181 |
|
Unrecognized Tax Benefits, Including Interest and Penalties (f) |
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (g) |
|
|
4,806,761 |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
4,806,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Contractual Obligations |
|
|
5,170,274 |
|
|
|
1,744,070 |
|
|
|
2,883,292 |
|
|
|
15,971,040 |
|
|
|
25,768,676 |
|
Borrowings of Consolidated Blackstone Funds |
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
(1,685,566 |
) |
|
|
(1,685,566 |
) |
Interest on Borrowings of Consolidated Blackstone Funds |
|
|
(4,464 |
) |
|
|
(35,712 |
) |
|
|
(35,712 |
) |
|
|
(31,994 |
) |
|
|
(107,882 |
) |
Blackstone Funds Capital Commitments to Investee Funds (d) |
|
|
(173,580 |
) |
|
|
¯ |
|
|
|
¯ |
|
|
|
¯ |
|
|
|
(173,580 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blackstone Operating Entities Contractual Obligations |
|
$ |
4,992,230 |
|
|
$ |
1,708,358 |
|
|
$ |
2,847,580 |
|
|
$ |
14,253,480 |
|
|
$ |
23,801,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
We lease our primary office space and certain office equipment under agreements that expire through 2043. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses and utilities. To the extent these are fixed or determinable they are included in the table above. The table above includes operating leases that are recognized as Operating Lease Liabilities, short-term leases that are not recorded as Operating Lease Liabilities and leases that have been signed but not yet commenced which are not recorded as Operating Lease Liabilities. The amounts in this table are presented net of contractual sublease commitments. |
(b) |
Represents the principal amounts due on our senior notes and secured borrowings. For our senior notes, we assume no pre-payments and the borrowings are held until their final maturity. For our secured borrowings we project prepayments based on the performance of the underlying assets and principal may be paid down in full prior to their stated maturity. As of September 30, 2023, we had no borrowings outstanding under our revolver. |
(c) |
Represents interest to be paid over the maturity of our senior notes and secured borrowings. For our senior notes, we assume no pre-payments and the borrowings are held until their final maturity. For our secured borrowings, we project pre-payments based on the performance of the underlying assets with interest payments based on the estimated principal outstanding, inclusive of projected pre-payments. These amounts include commitment fees for unutilized borrowings under our revolver. |
(d) |
These obligations represent commitments of the consolidated Blackstone Funds to make capital contributions to investee funds and portfolio companies. These amounts are generally due on demand and are therefore presented in the less than one year category. |
(e) |
Represents obligations by Blackstone’s corporate subsidiary to make payments under the Tax Receivable Agreements to certain non-controlling interest holders for the tax savings realized from the taxable purchases of their interests in connection with the reorganization at the time of Blackstone’s initial public offering (“IPO”) in 2007 and subsequent purchases. The obligation represents the amount of the payments currently expected to be made, which are dependent on the tax savings actually realized as determined annually without discounting for the timing of the payments. As required by GAAP, the amount of the obligation included in the Condensed Consolidated Financial Statements and shown in Note 16. “Related Party Transactions” (see “Part I. Item 1. Financial Statements”) differs to reflect the net present value of the payments due to certain non-controlling interest holders. |
(f) |
As of September 30, 2023, there were no Unrecognized Tax Benefits, including Interest and Penalties. In addition, Blackstone is not able to make a reasonably reliable estimate of the timing of payments in individual years in connection with gross unrecognized benefits of $171.8 million and interest of $50.8 million, therefore, such amounts are not included in the above contractual obligations table. |
(g) |
These obligations represent commitments by us to provide general partner capital funding to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. These amounts are generally due on demand and are therefore presented in the less than one year category; however, a substantial amount of the capital commitments are expected to be called over the next three years. We expect to continue to make these general partner capital commitments as we raise additional amounts for our investment funds over time. |
Blackstone and certain of its consolidated funds provide financial guarantees. The amounts and nature of these guarantees are described in Note 17. “Commitments and Contingencies — Contingencies — Guarantees” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
In many of its service contracts, Blackstone 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 above contractual obligations table or recorded in our Condensed Consolidated Financial Statements as of September 30, 2023.
Performance Allocations are subject to clawback to the extent that the Performance Allocations received to date with respect to a fund exceed the amount due to Blackstone based on cumulative results of that fund. The amounts and nature of Blackstone’s clawback obligations are described in Note 17. “Commitments and Contingencies — Contingencies — Contingent Obligations (Clawback)” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.
During the three and nine months ended September 30, 2023, Blackstone repurchased 1.3 million and 3.3 million shares of common stock at a total cost of $134.3 million and $310.4 million, respectively. As of September 30, 2023, the amount remaining available for repurchases under the program was $797.6 million.
Our intention is to pay to holders of common stock a quarterly dividend representing approximately 85% of Blackstone Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future cash requirements such as
tax-related
payments, clawback obligations and dividends to stockholders for any ensuing quarter. The dividend amount could also be adjusted upward in any one quarter.
For Blackstone’s definition of Distributable Earnings, see “— Key Financial Measures and Indicators.”
All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of our board of directors and our board of directors may change our dividend policy at any time, including, without limitation, to reduce such quarterly dividends or even to eliminate such dividends entirely.
Because the publicly traded entity and/or its wholly owned subsidiaries must pay taxes and make payments under the tax receivable agreements, the amounts ultimately paid as dividends by Blackstone to common stockholders in respect of each fiscal year are generally expected to be less, on a per share or per unit basis, than the amounts distributed by the Blackstone Holdings Partnerships to the Blackstone personnel and others who are limited partners of the Blackstone Holdings Partnerships in respect of their Blackstone Holdings Partnership Units. Following Blackstone’s conversion from a limited partnership to a corporation, we expect to pay more corporate income taxes than we would have as a limited partnership, which will increase this difference between the per share dividend and per unit distribution amounts.
Dividends are treated as qualified dividends to the extent of Blackstone’s current and accumulated earnings and profits, with any excess dividends treated as a return of capital to the extent of the stockholder’s basis.
The following graph shows fiscal quarterly and annual per common stockholder dividends for 2023 and 2022. Dividends are declared and paid in the quarter subsequent to the quarter in which they are earned.
With respect to the third quarter of fiscal year 2023, we paid to stockholders of our common stock a dividend of $0.80 per share, aggregating to $2.41 per share of common stock in respect of the nine months ended September 30, 2023. With respect to fiscal year 2022, we paid stockholders aggregate dividends of $4.40 per share.
We may under certain circumstances use leverage opportunistically and over time to create the most efficient capital structure for Blackstone and our stockholders. In addition to the borrowings from our note issuances and our revolving credit facility, we may use reverse repurchase agreements, repurchase agreements and securities sold, not yet purchased. Reverse repurchase agreements are entered into primarily to take advantage of opportunistic yields otherwise absent in the overnight markets and also to use the collateral received to cover securities sold, not yet purchased. Repurchase agreements are entered into primarily to opportunistically yield higher spreads on purchased securities. The balances held in these financial instruments fluctuate based on Blackstone’s liquidity needs, market conditions and investment risk profiles.
The following table presents information regarding these financial instruments which are included in Accounts Payable, Accrued Expenses and Other Liabilities in our Condensed Consolidated Statements of Financial Condition:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
Balance, September 30, 2023 |
|
$ |
— |
|
|
$ |
3.8 |
|
Balance, December 31, 2022 |
|
$ |
89.9 |
|
|
$ |
3.8 |
|
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
$ |
33.1 |
|
|
$ |
3.8 |
|
|
|
$ |
90.1 |
|
|
$ |
3.9 |
|
Critical Accounting Policies
We prepare our Condensed Consolidated Financial Statements in accordance with 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 Condensed Consolidated 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 often subjective. Actual results may be affected negatively based on changing circumstances. 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. We believe the following critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments. For a description of our accounting policies, see Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Principles of Consolidation
For a description of our accounting policy on consolidation, see Note 2. “Summary of Significant Accounting Policies — Consolidation” and Note 9. “Variable Interest Entities” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing for detailed information on Blackstone’s involvement with VIEs. The following discussion is intended to provide supplemental information about how the application of consolidation principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
The determination that Blackstone holds a controlling financial interest in a Blackstone Fund or investment vehicle significantly changes the presentation of our condensed consolidated financial statements. In our Condensed Consolidated Statements of Financial Position included in this filing, we present 100% of the assets and liabilities of consolidated VIEs along with a
non-controlling
interest which represents the portion of the consolidated vehicle’s interests held by third parties. However, assets of our consolidated VIEs can only be used to settle obligations of the consolidated VIE and are not available for general use by Blackstone. Further, the liabilities of our consolidated VIEs do not have recourse to the general credit of Blackstone. In the Condensed Consolidated Statements of Operations, we eliminate any management fees, Incentive Fees, or Performance Allocations received or accrued from consolidated VIEs as they are considered intercompany transactions. We recognize 100% of the consolidated VIE’s investment income (loss) and allocate the portion of that income (loss) attributable to third party ownership to
non-controlling
interests in arriving at Net Income Attributable to Blackstone Inc.
The assessment of whether we consolidate a Blackstone Fund or investment vehicle we manage requires the application of significant judgment. These judgments are applied both at the time we become involved with the VIE and on an ongoing basis and include, but are not limited to:
| |
• |
|
Determining whether our management fees, Incentive Fees or Performance Allocations represent variable interests – We make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees and at market rates. In making this judgment, we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in the VIE. |
| |
• |
|
Determining whether kick-out rights are substantive – We make judgments as to whether the third party investors in a partnership entity have the ability to remove the general partner, the investment manager or its equivalent, or to dissolve (liquidate) the partnership entity, through a simple majority vote. This includes an evaluation of whether barriers to exercise these rights exist. |
| |
• |
|
Concluding whether Blackstone has an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE – As there is no explicit threshold in GAAP to define “potentially significant,” management must apply judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met. |
For a description of our accounting policy on revenue recognition, see Note 2. “Summary of Significant Accounting Policies — Revenue Recognition” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements.” For an additional description of the nature of our revenue arrangements, including how management fees, Incentive Fees, and Performance Allocations are generated, please refer to “Part I. Item 1. Business — Fee Structure/Incentive Arrangements” in our Annual Report on
Form 10-K
for the year ended December 31, 2022. The following discussion is intended to provide supplemental information about how the application of revenue recognition principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
Management and Advisory Fees, Net
— Blackstone earns base management fees from its customers at a fixed percentage of a calculation base which is typically assets under management, net asset value, gross asset value, total assets, committed capital or invested capital. The range of management fee rates and the calculation base from which they are earned, generally, are as follows:
On private equity, real estate, and certain of our hedge fund solutions and credit-focused funds:
| |
• |
|
0.25% to 1.75% of committed capital or invested capital during the investment period, |
| |
• |
|
0.25% to 1.50% of invested capital, committed capital or investment fair value subsequent to the investment period for private equity and real estate funds, and |
| |
• |
|
1.00% to 1.75% of invested capital or net asset value subsequent to the investment period for certain of our hedge fund solutions and credit-focused funds. |
On real estate and credit-focused funds structured like hedge funds:
| |
• |
|
0.50% to 1.00% of net asset value. |
On credit separately managed accounts:
| |
• |
|
0.20% to 1.35% of net asset value or total assets. |
On real estate separately managed accounts:
| |
• |
|
0.65% to 2.00% of invested capital, net operating income or net asset value. |
On insurance separately managed accounts and investment vehicles:
| |
• |
|
0.25% to 1.00% of net asset value. |
On funds of hedge funds, certain hedge funds and separately managed accounts invested in hedge funds:
| |
• |
|
0.20% to 1.50% of net asset value. |
| |
• |
|
0.20% to 0.50% of the aggregate par amount of collateral assets, including principal cash. |
On credit-focused registered and
non-registered
investment companies:
| |
• |
|
0.25% to 1.25% of total assets or net asset value. |
The investment adviser of BXMT receives annual management fees based on 1.50% of BXMT’s net proceeds received from equity offerings and accumulated “distributable earnings” (which is generally equal to its GAAP net income excluding certain
non-cash
and other items), subject to certain adjustments. The investment advisers of BREIT and BEPIF receive a management fee of 1.25% per annum of net asset value, payable monthly.
Management fee calculations based on committed capital or invested capital are mechanical in nature and therefore do not require the use of significant estimates or judgments. Management fee calculations based on net asset value, total assets, or investment fair value depend on the fair value of the underlying investments within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used as well as economic conditions. See “— Fair Value” below for further discussion of the judgment required for determining the fair value of the underlying investments.
— Performance Allocations are made to the general partner based on cumulative fund performance to date, subject to a preferred return to limited partners. Blackstone has concluded that investments made alongside its limited partners in a partnership which entitle Blackstone to a Performance Allocation represent equity method investments that are not in the scope of the GAAP guidance on accounting for revenues from contracts with customers. Blackstone accounts for these arrangements under the equity method of accounting. Under the equity method, Blackstone’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period Blackstone calculates the accrued Performance Allocations that would be due to Blackstone for each fund pursuant to the fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. Performance Allocations are subject to clawback to the extent that the Performance Allocation received to date exceeds the amount due to Blackstone based on cumulative results.
The change in the fair value of the investments held by certain Blackstone Funds is a significant input into the accrued Performance Allocation calculation and accrual for potential repayment of previously received Performance Allocations. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds. See “— Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments.
Blackstone uses fair value throughout the reporting process. For a description of our accounting policies related to valuation, see Note 2. “Summary of Significant Accounting Policies — Fair Value of Financial Instruments” and “Summary of Significant Accounting Policies — Investments, at Fair Value” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing. The following discussion is intended to provide supplemental information about how the application of fair value principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
The fair value of the investments held by Blackstone Funds is the primary input to the calculation of certain of our management fees, Incentive Fees, Performance Allocations and the related Compensation we recognize. Generally, Blackstone Funds are accounted for as investment companies under the American Institute of Certified Public Accountants Audit and Accounting Guide,
, and in accordance with the GAAP guidance on investment companies and reflect their investments, including majority-owned and controlled investments (the “Portfolio Companies”), at fair value. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For investments where little market activity exists management’s determination of fair value is based on the best information available in the circumstances, which may incorporate management’s own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors, including the appropriate risk adjustments for
non-performance
and liquidity risks.
Blackstone has also elected the fair value option for certain instruments it owns directly, including loans and receivables, investments in private debt securities and other proprietary investments. Blackstone is required to measure certain financial instruments at fair value, including debt instruments, equity securities and freestanding derivatives.
Fair Value of Investments or Instruments that are Publicly Traded
Securities that are publicly traded and for which a quoted market exists will be valued at the closing price of such securities in the principal market in which the security trades, or in the absence of a principal market, in the most advantageous market on the valuation date. When a quoted price in an active market exists, no block discounts or control premiums are permitted regardless of the size of the public security held. In some cases, securities will include legal and contractual restrictions limiting their purchase and sale for a period of time. A discount to publicly traded price may be appropriate in instances where a legal restriction is a characteristic of the security, such as may be required under SEC Rule 144. The amount of the discount, if taken, shall be determined based on the time period that must pass before the restricted security becomes unrestricted or otherwise available for sale.
Fair Value of Investments or Instruments that are not Publicly Traded
Investments for which market prices are not observable include private investments in the equity or debt of operating companies or real estate properties. Our primary methodology for determining the fair values of such investments is generally the income approach which provides an indication of fair value based on the present value of cash flows that a business, security, or property is expected to generate in the future. The most widely used methodology under the income approach is the discounted cash flow method which includes significant assumptions about the underlying investment’s projected net earnings or cash flows, discount rate, capitalization rate and exit multiple. Our secondary methodology, generally used to corroborate the results of the income approach, is typically the market approach. The most widely used methodology under the market approach relies upon valuations for comparable public companies, transactions, or assets, and includes making judgments about which companies, transactions, or assets are comparable. Depending on the facts and circumstances associated with the investment, different primary and secondary methodologies may be used including option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, probability weighted methods or recent round of financing.
In certain cases debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments.
Management Process on Fair Value
Due to the importance of fair value throughout the condensed consolidated financial statements and the significant judgment required to be applied in arriving at those fair values, we have developed a process around valuation that incorporates several levels of approval and review from both internal and external sources. Investments held by Blackstone Funds and investment vehicles are valued on at least a quarterly basis by our internal valuation or asset management teams, which are independent from our investment teams.
For investments valued utilizing the income method and where Blackstone has information rights, we generally have a direct line of communication with each of the Portfolio Companies’ and underlying assets’ finance teams and collect financial data used to support projections used in a discounted cash flow analysis. The valuation team then analyzes the data received and updates the valuation models reflecting any changes in the underlying cash flow projections, weighted-average cost of capital, exit multiple or capitalization rate, and any other valuation input relevant to economic conditions.
The results of all valuations of investments held by Blackstone Funds and investment vehicles are reviewed by the relevant business unit’s valuation
sub-committee,
which is comprised of key personnel from the business unit, typically the chief investment officer, chief operating officer, chief financial officer, chief compliance officer (or their respective equivalents where applicable) and other senior managing directors in the business. To further corroborate results, each business unit also generally obtains either a positive assurance opinion or a range of value from an independent valuation party, at least annually for internally prepared valuations for investments that have been held by Blackstone Funds and investment vehicles for greater than a year and quarterly for certain investments. Our firmwide valuation committee, chaired by our Chief Financial Officer and comprised of senior members of our businesses and representatives from corporate functions, including legal and finance, reviews the valuation process for investments held by us and our investment vehicles, including the application of appropriate valuation standards on a consistent basis. Each quarter, the valuation process is also reviewed by the audit committee of our board of directors, which is comprised of our
non-employee
directors.
For a description of our accounting policy on taxes and additional information on taxes see Note 2. “Summary of Significant Accounting Policies” and Note 13. “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Our provision for income taxes is composed of current and deferred taxes. Current income taxes approximate taxes to be paid or refunded for the current period. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the applicable enacted tax rates and laws that will be in effect when such differences are expected to reverse.
Additionally, significant judgment is required in estimating the provision for (benefit from) income taxes, current and deferred tax balances (including valuation allowance), accrued interest or penalties and uncertain tax positions. In evaluating these judgments, we consider, among other items, projections of taxable income (including the character of such income), beginning with historic results and incorporating assumptions of the amount of future pretax operating income. These assumptions about future taxable income require significant judgment and are consistent with the plans and estimates that Blackstone uses to manage its business. To the extent any portion of the deferred tax assets are not considered to be more likely than not to be realized, a valuation allowance is recorded.
Revisions in estimates and/or actual costs of a tax assessment may ultimately be materially different from the recorded accruals and unrecognized tax benefits, if any.
Recent Accounting Developments
Information regarding recent accounting developments and their impact on Blackstone, if any, can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” in “Part I. Item 1. Financial Statements” of this filing.
Interbank Offered Rates Transition
Certain jurisdictions are currently reforming or phasing out their benchmark interest rates, most notably the London Interbank Offered Rates (“LIBOR”) across multiple currencies. Most such reforms and phase outs, including all tenors of U.S. dollar LIBOR, became effective on or prior to June 30, 2023, though some rates may persist on a synthetic basis through September 2024. Blackstone has taken steps to prepare for and mitigate the impact of changing base rates and continues to manage transition efforts and evaluate the impact of prospective changes on existing transactions and contractual arrangements. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business — Interest rates on our and our portfolio companies’ outstanding financial instruments might be subject to change based on regulatory developments, which could adversely affect our revenue, expenses and the value of those financial instruments.” in our Annual Report on
Form 10-K
for the year ended December 31, 2022.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our predominant exposure to market risk is related to our role as general partner or investment adviser to the Blackstone Funds and the sensitivities to movements in the fair value of their investments, including the effect on management fees, performance revenues and investment income. There were no material changes in our market risks as of September 30, 2023 as compared to December 31, 2022. For additional information, refer to our Annual Report on
Form 10-K
for the year ended December 31, 2022.
Item 4. Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in
Rules 13a-15(e)
and
15d-15(e)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to
Rule 13a-15
under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in
Rule 13a-15(e)
under the Exchange Act) are effective at the reasonable assurance level to accomplish
their objectives of ensuring that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
No change in our internal control over financial reporting (as such term is defined in
Rules 13a-15(f)
and
15d-15(f)
under the Exchange Act) occurred during our most recent quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Part II. Other Information
Item 1. Legal Proceedings
We may from time to time be involved in litigation and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. See “Part I. Item 1A. Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2022. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings that we expect to have a material impact on our condensed consolidated financial statements. However, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on Blackstone’s financial results in any particular period. See “Part I. Item 1. Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 17. Commitments and Contingencies — Contingencies — Litigation.”
For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on
Form 10-K
for the year ended December 31, 2022 and in our subsequently filed periodic reports as such factors may be updated from time to time, all of which are accessible on the Securities and Exchange Commission’s website at www.sec.gov.
See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment” in this report for a discussion of the conditions in the financial markets and economic conditions affecting our businesses. This discussion updates, and should be read together with, the risk factor entitled “Difficult market and geopolitical conditions can adversely affect our business in many ways, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.” in our Annual Report on
Form 10-K
for the year ended December 31, 2022.
The risks described in our Annual Report on
Form 10-K
and in our subsequently filed periodic reports are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
The following table sets forth information regarding repurchases of shares of our common stock during the three months ended September 30, 2023:
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(Dollars in Thousands) (a) |
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181,816 |
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$ |
104.72 |
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181,816 |
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$ |
912,862 |
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1,045,449 |
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$ |
100.91 |
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1,045,449 |
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$ |
807,367 |
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90,910 |
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$ |
107.13 |
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90,910 |
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$ |
797,628 |
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1,318,175 |
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1,318,175 |
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(a) |
On December 7, 2021, Blackstone’s board of directors authorized the repurchase of up to $2.0 billion of common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. See “Part I. Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 14. Earnings Per Share and Stockholders’ Equity — Share Repurchase Program” and “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Share Repurchase Program” for further information regarding this repurchase program. |
As permitted by our policies and procedures governing transactions in our securities by our directors, executive officers and other employees, from time to time some of these persons may establish plans or arrangements complying with
Rule 10b5-1
under the Exchange Act, and similar plans and arrangements relating to our common stock and Blackstone Holdings Partnership Units.
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, Blackstone hereby incorporates by reference herein Exhibit 99.1 of this report, which includes disclosures provided to us by Mundys S.p.A.
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10.1*+ |
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10.2*+ |
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10.3*+ |
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10.4*+ |
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10.5*+ |
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10.6*+ |
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31.1* |
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31.2* |
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32.1* |
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32.2* |
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99.1* |
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101.INS* |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL* |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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101.DEF* |
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Inline XBRL Taxonomy Extension Definition Linkbase Document. |
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101.LAB* |
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Inline XBRL Taxonomy Extension Label Linkbase Document. |
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101.PRE* |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
+ |
Management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate. |
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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 thereunto duly authorized.
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Blackstone Inc. |
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Name: |
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Michael S. Chae |
Title: |
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Chief Financial Officer |
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(Principal Financial Officer and |
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Authorized Signatory) |
Exhibit 10.1
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BXGA GP L.P.
AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT
DATED AS OF NOVEMBER 3, 2023
EFFECTIVE AS OF JULY 15, 2020
THE LIMITED
PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BXGA GP L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF
ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE
REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
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Page |
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| ARTICLE I DEFINITIONS |
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1 |
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| Section 1.1. Definitions |
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1 |
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| Section 1.2. Terms Generally |
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16 |
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| ARTICLE II GENERAL PROVISIONS |
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16 |
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| Section 2.1. General Partner, Limited Partner, Special Partner |
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16 |
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| Section 2.2. Formation; Name; Foreign Jurisdictions |
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17 |
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| Section 2.3. Term |
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17 |
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| Section 2.4. Purposes; Powers |
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17 |
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| Section 2.5. Place of Business |
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20 |
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| ARTICLE III MANAGEMENT |
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20 |
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| Section 3.1. General Partner |
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20 |
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| Section 3.2. Partner Voting, etc. |
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20 |
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| Section 3.3. Management |
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21 |
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| Section 3.4. Responsibilities of Partners |
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23 |
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| Section 3.5. Exculpation and Indemnification |
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23 |
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| Section 3.6. Representations of Partners |
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25 |
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| Section 3.7. Tax Representation and Further Assurances |
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26 |
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| ARTICLE IV CAPITAL OF THE PARTNERSHIP |
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27 |
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| Section 4.1. Capital Contributions by Partners |
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27 |
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| Section 4.2. Interest |
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35 |
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| Section 4.3. Withdrawals of Capital |
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35 |
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| ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
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35 |
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| Section 5.1. General Accounting Matters |
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35 |
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| Section 5.2. GP-Related Capital Accounts |
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37 |
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| Section 5.3. GP-Related Profit Sharing
Percentages |
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37 |
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| Section 5.4. Allocations of GP-Related Net Income
(Loss) |
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38 |
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| Section 5.5. Liability of Partners |
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39 |
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| Section 5.6. [Intentionally omitted.] |
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39 |
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| Section 5.7. Repurchase Rights, etc. |
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39 |
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| Section 5.8. Distributions |
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40 |
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| Section 5.9. Business Expenses |
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47 |
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| Section 5.10. Tax Capital Accounts; Tax Allocations |
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47 |
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| ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP
INTERESTS; TERMINATION |
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48 |
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| Section 6.1. Additional Partners |
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48 |
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| Section 6.2. Withdrawal of Partners |
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49 |
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| Section 6.3. GP-Related Partner Interests Not
Transferable |
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50 |
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-i-
TABLE OF CONTENTS
(continued)
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Page |
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| Section 6.4. Consequences upon Withdrawal of a Partner |
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51 |
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| Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests |
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51 |
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| Section 6.6. Dissolution of the Partnership |
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57 |
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| Section 6.7. Certain Tax Matters |
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57 |
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| Section 6.8. Special Basis Adjustments |
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58 |
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| ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS;
DISTRIBUTIONS |
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58 |
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| Section 7.1. Capital Commitment Interests, etc. |
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58 |
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| Section 7.2. Capital Commitment Capital Accounts |
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60 |
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| Section 7.3. Allocations |
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60 |
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| Section 7.4. Distributions |
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60 |
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| Section 7.5. Valuations |
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65 |
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| Section 7.6. Disposition Election |
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65 |
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| Section 7.7. Capital Commitment Special Distribution Election |
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66 |
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| ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
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66 |
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| Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests |
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66 |
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| Section 8.2. Transfer of Partner’s Capital Commitment Interest |
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71 |
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| Section 8.3. Compliance with Law |
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72 |
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| ARTICLE IX DISSOLUTION |
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72 |
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| Section 9.1. Dissolution |
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72 |
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| Section 9.2. Final Distribution |
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72 |
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| Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests |
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73 |
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| ARTICLE X MISCELLANEOUS |
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73 |
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| Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial |
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73 |
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| Section 10.2. Ownership and Use of the Blackstone Name |
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75 |
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| Section 10.3. Written Consent |
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75 |
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| Section 10.4. Letter Agreements; Schedules |
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75 |
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| Section 10.5. Governing Law; Separability of Provisions |
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75 |
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| Section 10.6. Successors and Assigns; Third Party Beneficiaries |
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76 |
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| Section 10.7. Confidentiality |
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76 |
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| Section 10.8. Notices |
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77 |
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| Section 10.9. Counterparts |
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77 |
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| Section 10.10. Power of Attorney |
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78 |
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| Section 10.11. Partner’s Will |
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78 |
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| Section 10.12. Cumulative Remedies |
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78 |
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| Section 10.13. Legal Fees |
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78 |
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| Section 10.14. Entire Agreement; Modifications |
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78 |
|
-ii-
BXGA GP L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of BXGA GP L.P., a Delaware limited partnership (the “Partnership”), dated
as of November 3, 2023, and effective as of July 20, 2020, by and among BXGA L.L.C., a Delaware limited liability company, as general partner of the Partnership (in its capacity as general partner of the Partnership (the “General
Partner”), Blackstone Holdings II L.P., a Delaware limited partnership, as limited partner), and such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS, the Partnership was formed pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq., as it may be amended from time to time (the “Partnership Act”), pursuant to a certificate of limited partnership filed in the office of the Secretary of State of the State of
Delaware on October 8, 2019;
WHEREAS, the General Partner and the initial Limited Partner entered into a Limited Partnership
Agreement dated as of October 8, 2019 (the “Original Agreement”);
WHEREAS, the parties hereto desire to enter into
this Agreement, and hereby amend and restate the Original Agreement in its entirety; and
NOW, THEREFORE, in consideration of the mutual
promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for
purposes of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(ii).
“Advancing Party” has the meaning set forth in Section 7.1(c).
“Affiliate” when used with reference to another person means any person (other than the Partnership), directly
or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires, endowment funds, estate planning vehicles
(including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone
and/or its affiliates, partners and current and/or former employees and/or related persons.
“Agreement” means this Amended and Restated Limited Partnership
Agreement, as it may be further amended, supplemented, restated or otherwise modified from time to time.
“Applicable Collateral Percentage” with respect to any Firm Collateral or Special Firm Collateral, has the
meaning set forth in the books and records of the Partnership with respect thereto.
“Associates” means
Blackstone Growth Associates L.P., a Delaware limited partnership and the general partner of BXG, or any other entity that serves as the general partner or managing member of a vehicle indicated in the definition of BXG.
“Associates LP Agreement” means the limited partnership agreement, dated as of the date set forth therein, of
Associates, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the
filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or
her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or
defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment
or decree unstayed and in effect for a period of 60 consecutive days.
“BE Agreement” means the limited
partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of “Blackstone Entity,” as such limited partnership
agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing
document may be further amended, supplemented, restated or otherwise modified from time to time.
“BE
Investment” means any direct or indirect investment by any Blackstone Entity.
“Blackstone”
means, collectively, Blackstone Inc., a Delaware corporation, and any successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any
affiliate thereof that is not otherwise an Affiliate of Blackstone Inc.)).
2
“Blackstone Commitment” has the meaning set forth in the BXG
Partnership Agreement.
“Blackstone Entity” means any partnership, limited liability company or other
entity (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of Blackstone Inc., as designated by the General Partner in its sole discretion.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or
required by law to be closed in New York, New York.
“BXG” means (i) Blackstone Growth L.P., a
Delaware limited partnership, (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clauses (i) and (iii) of this definition, (iii) any parallel fund, managed
account or other capital vehicle relating to, or formed in connection with, the partnership referred to in clause (i) of this definition and (iv) any other limited partnership, limited liability company or other entity (in each case,
whether now or hereafter established) of which Associates or the General Partner serves, directly or indirectly, as the general partner, special general partner, manager, managing member or in a similar capacity.
“BXG Agreements” means the collective reference to (i) the BXG Partnership Agreement and (ii) any
other BXG partnership, limited liability company or other governing agreements, as each may be amended, supplemented, restated or otherwise modified from time to time.
“BXG Partnership Agreement” means the partnership agreement of the limited partnership named in clause
(i) of the definition of “BXG,” as it may be amended, supplemented, restated or otherwise modified from time to time.
“Capital Commitment Associates Partner Interest” means the interest of the Partnership, if any, as a limited
partner of Associates with respect to any Capital Commitment BXG Interest that may be held by Associates.
“Capital
Commitment BXG Commitment” means the Capital Commitment (as defined in the BXG Partnership Agreement), if any, of the Partnership or Associates to BXG that relates solely to the Capital Commitment BXG Interest, if any.
“Capital Commitment BXG Interest” means the Interest (as defined in the BXG Partnership Agreement), if
any, of the Partnership or Associates as a capital partner in BXG.
“Capital Commitment BXG Investment”
means the Partnership’s interest in a specific investment of BXG, which interest may be held by the Partnership (i) through the Partnership’s direct interest in BXG through the Partnership’s Capital Commitment BXG Interest, if
the Partnership holds the Capital Commitment BXG Interest, or (ii) through the Partnership’s interest in Associates and Associates’ interest in BXG through Associates’ Capital Commitment BXG Interest, if Associates holds the
Capital Commitment BXG Interest.
3
“Capital Commitment Capital Account” means, with respect to each
Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to
such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner
with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset
distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
“Capital Commitment Class A Interest” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Class B Interest” has the meaning set forth
in Section 7.4(f).
“Capital Commitment Defaulting Party” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Deficiency Contribution” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Disposable Investment” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Distributions” means, with respect to each Capital Commitment
Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BXG Interest, if any, less any costs, fees and expenses of the Partnership with
respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital Commitment
Investment as it may determine in good faith is appropriate.
“Capital Commitment Giveback Amount” has the
meaning set forth in Section 7.4(g)(i).
“Capital Commitment Interest” means the interest of a
Partner in a specific Capital Commitment Investment as provided herein.
“Capital Commitment Investment”
means any Capital Commitment BXG Investment, but shall exclude any GP-Related Investment.
4
“Capital Commitment Liquidating Share” means, with respect to
each Capital Commitment Investment, in the case of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” means, with respect to each Capital Commitment Investment, all amounts
of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and
expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
“Capital Commitment Partner Carried Interest” means, with respect to any Partner, the aggregate amount of
distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest.” Capital Commitment Partner Carried Interest includes any amount initially received by
an Affiliate of the Partnership from any fund (including BXG, any similar funds formed after the date hereof, and any Other Blackstone Funds (as defined in the BXG Partnership Agreement), whether or not in existence as of the date hereof) to which
such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make the
investment of such fund giving rise to such “carried interest”).
“Capital Commitment Partner
Interest” means a Partner’s interest in the Partnership which relates (i) to any Capital Commitment BXG Interest held by the Partnership or (ii) through the Partnership and Associates, to any Capital Commitment BXG Interest
that may be held by Associates.
“Capital Commitment Profit Sharing Percentage” means, with respect to
each Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
“Capital Commitment Recontribution Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the meaning set forth in Section 7.1(b).
“Capital Commitment-Related Commitment” means, with respect to any Partner, such Partner’s commitment to
the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment
Agreement or SMD Agreement, if any.
5
“Capital Commitment Special Distribution” has the meaning set
forth in Section 7.7(a).
“Capital Commitment Value” has the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest” as defined in the BXG Partnership
Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BXG Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be less any costs, fees
and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may allocate among all or
any portion of the GP-Related Investments as it determines in good faith is appropriate).
“Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to
Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by
(B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of
determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be
deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
“Carried Interest Sharing Percentage” means, with respect to each
GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
“Cause” means the occurrence or existence of any of the following with respect to any Partner, as
determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material
breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or
(z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in the case
of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”) within 15 days after the General Partner becomes aware of such action and such Partner fails to
cure such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure;
provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its
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Affiliates; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or
crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body
or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations
thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner
of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an
event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
“Clawback Adjustment
Amount” has the meaning set forth in Section 5.8(e)(ii)(C).
“Clawback Amount” means
the “Clawback Amount”, as defined in the BXG Partnership Agreement, and any other clawback amount payable to the limited partners of BXG or to BXG pursuant to any BXG Agreement, as applicable.
“Clawback Provisions” means Section 9.4 of the BXG Partnership Agreement and any other similar
provisions in any other BXG Agreement existing heretofore or hereafter entered into.
“Code” means the
Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreements” means the agreements between the Partnership or an Affiliate thereof and Partners,
pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the
Partnership and the relevant Partner.
“Contingent” means subject to repurchase rights and/or other
requirements.
The term “control” when used with reference to any person means the power to direct the
management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one
or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
“Controlled Entity” when used with reference to another person means any person controlled by such other
person.
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“Covered Person” has the meaning set forth in
Section 3.5(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who
suffers from Incompetence. For purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such
Deceased Partner’s interest in the Partnership.
“Delaware Arbitration Act” has the meaning set forth
in Section 10.1(d).
“Default Interest Rate” means the lower of (i) the sum of (a) the
Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
“Electronic
Signature” has the meaning set forth in Section 10.9.
“Estate Planning Vehicle” has the
meaning set forth in Section 6.3(a).
“Excess Holdback” has the meaning set forth in
Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in
Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the
meaning set forth in Section 5.8(e).
“Existing Partner” means any Partner who is neither a Retaining
Withdrawn Partner nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence,
Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
“Firm
Advances” has the meaning set forth in Section 7.1(c).
“Firm Collateral” means a
Partner’s or Withdrawn Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been
pledged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnership’s books and records; provided, that for all purposes hereof
(and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding
references to “Firm Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).
“Firm
Collateral Realization” has the meaning set forth in Section 4.1(d)(v)(B).
“Fiscal Year”
means a calendar year, or any other period chosen by the General Partner.
“Fund GP” means the Partnership
(only with respect to the GP-Related BXG Interest) and the Other Fund GPs.
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“GAAP” means U.S. generally accepted accounting principles.
“General Partner” means BXGA L.L.C. and any person admitted to the Partnership as an additional or substitute
general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act).
“Giveback Amount(s)” means the amount(s) payable by partners of BXG pursuant to the Giveback Provisions.
“Giveback Provisions” means Section 5.2 of the BXG Partnership Agreement and any other similar provisions
in any other BXG Agreement existing heretofore or hereafter entered into.
“Governmental Entity” has the
meaning set forth in Section 10.7(b).
“GP-Related Associates
Interest” means the interest of the Partnership as a limited partner of Associates with respect to the GP-Related BXG Interest, but does not include any interest of the Partnership in Associates with
respect to any Capital Commitment BXG Interest that may be held by Associates.
“GP-Related BXG Interest” means the interest of Associates in BXG as
general partner of BXG, excluding any Capital Commitment BXG Interest that may be held by Associates.
“GP-Related BXG Investment” means the Partnership’s indirect interest in Associates’ indirect interest in an Investment (for purposes of this definition, as defined in the BXG Partnership
Agreement) in Associates’ capacity as general partner of BXG, but does not include any Capital Commitment Investment.
“GP-Related Capital Account” has the meaning set forth in
Section 5.2(a).
“GP-Related Capital Contributions” has the
meaning set forth in Section 4.1(a).
“GP-Related
Class A Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Class B Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Commitment”, with respect to any Partner, means such
Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such
commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“GP-Related Defaulting Party” has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related Deficiency Contribution” has the meaning set forth in
Section 5.8(d)(ii)(A).
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“GP-Related Disposable
Investment” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback Amount” has the meaning set forth in
Section 5.8(d)(i)(A).
“GP-Related Investment” means any
investment (direct or indirect) of the Partnership in respect of the GP-Related BXG Interest (including, without limitation, any GP-Related BXG Investment, but excluding
any Capital Commitment Investment).
“GP-Related Net Income
(Loss)” has the meaning set forth in Section 5.1(b).
“GP-Related Partner Interest” of a Partner means all interests of such
Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect to the GP-Related
BXG Interest and with respect to all GP-Related Investments.
“GP-Related Profit Sharing Percentage” means the “Carried Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each
Partner; provided, that any references in this Agreement to GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or
(ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the
“Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the term “GP-Related Profit Sharing Percentage” shall
not include any Capital Commitment Profit Sharing Percentage.
“GP-Related
Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“GP-Related Required Amounts” has the meaning set forth in Section 4.1(a).
“GP-Related Unallocated Percentage” has the meaning set forth in
Section 5.3(b).
“GP-Related Unrealized Net Income (Loss)”
attributable to any GP-Related BXG Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BXG Investment if BXG’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with Section 5.1(e))
and all distributions payable by BXG to the Partnership (indirectly through the general partner of BXG) pursuant to any BXG Partnership Agreement with respect to such GP-Related BXG Investment were made on
such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other GP-Related Investment (other than any Capital Commitment Investment) as of any
date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such
GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(e)).
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
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“Holdback Vote” has the meaning set forth in
Section 4.1(d)(iv)(A).
“Holdings” means Blackstone Holdings II L.P., a Delaware limited partnership.
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole
discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Interest” means a partnership interest (as defined in
§17-101(13) of the Partnership Act) in the Partnership, including any interest that is held by a Retaining Withdrawn Partner and including any Partner’s
GP-Related Partner Interest and Capital Commitment Partner Interest.
“Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner
from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to
purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such
Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net
Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources; provided further, that
references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an “Investor Note” refer to one such
loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not
the lender or guarantor with respect thereto.
“Investor Special Partner” means any Special Partner so
designated at the time of its admission by the General Partner as a Partner of the Partnership.
“Issuer”
means the issuer of any Security comprising part of an Investment.
“L/C” has the meaning set forth in
Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
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“Lender or Guarantor” means Blackstone Holdings I L.P., in its
capacity as lender or guarantor under the Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
“Limited Partner” means each of the parties listed as Limited Partners in the books and records of the
Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of
doubt, the term “Limited Partner” does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited partners of the Partnership).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
“Losses” has the meaning set forth in Section 3.5(b)(i).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more persons
who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to
the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all
the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“Net Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(C).
“Net Carried Interest Distribution Recontribution Amount” has the meaning set forth in
Section 5.8(e).
“Net GP-Related Recontribution
Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such
GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated
with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
“Non-Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the
books and records of the Partnership.
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“Non-Contingent” means
generally not subject to repurchase rights or other requirements.
“Nonvoting Partner” has the
meaning set forth in Section 8.2.
“Nonvoting Special Partner” has the meaning set forth in
Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Other Fund GPs” means Associates and any other entity (other than the Partnership) through which any Partner,
Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates that it is
a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither BXGA L.L.C. nor Holdings nor any Estate Planning Vehicle established for the benefit of family members of any
Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
“Other Sources” means (i) distributions or payments of Capital Commitment Partner Carried Interest (which
shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto),
and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
“Partner” means any person who is a partner of the Partnership, including the Limited Partners, the General
Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter
relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
“Partner Category” means the General Partner, Existing Partners, Retaining Withdrawn Partners or Deceased
Partners, each referred to as a group for purposes hereof.
“Partnership” has the meaning set forth in the
preamble hereto.
“Partnership Act” has the meaning set forth in the preamble hereto.
“Partnership Affiliate” has the meaning set forth in Section 3.3(b).
“Partnership Affiliate Governing Agreement” has the meaning set forth in Section 3.3(b).
“Pledgable Blackstone Interests” has the meaning set forth in Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank,
N.A. as its prime rate.
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“Qualifying Fund” means any fund designated by the General
Partner as a “Qualifying Fund”.
“Repurchase Period” has the meaning set forth in
Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
“Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a
GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled
Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market
investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor
statute.
“Settlement Date” has the meaning set forth in Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of its Affiliates and certain
of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets that have been pledged to
the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnership’s books and records.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Partner” means any person shown in the books and records of the Partnership as a Special Partner of
the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
“S&P”
means Standard & Poor’s Ratings Group, and any successor thereto.
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“Subject Investment” has the meaning set forth in
Section 5.8(e)(i).
“Subject Partner” has the meaning set forth in Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder of; (ii) trustee, custodian, receiver or other
person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or former officer, director or partner,
or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or assign of, any Partner, whether by operation of law or
otherwise.
“Tax Advances” has the meaning set forth in Section 6.7(d).
“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“TM” has the meaning set forth in Section 10.2.
“Total Disability” means the inability of a Limited Partner substantially to perform the services required of
such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of
sickness, accident or otherwise.
“Transfer” has the meaning set forth in Section 8.2.
“Trust Account” has the meaning set forth in the Trust Agreement.
“Trust Agreement” means the Trust Agreement, dated as of the date set forth therein, as amended, supplemented,
restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“U.S.” means the United States of America.
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“Withdraw” or “Withdrawal” means, with respect
to a Partner, such Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary), unless the
context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
“Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner
Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal
representatives of any such Partner.
“W-8BEN” has the meaning set
forth in Section 3.7.
“W-8BEN-E” has the meaning set
forth in Section 3.7.
“W-8IMY” has the meaning set forth in
Section 3.7.
“W-9” has the meaning set forth in
Section 3.7.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships (including limited
liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special
Partners. The General Partner as of the date hereof is BXGA L.L.C. and the Limited Partners as of the date hereof are those persons shown as Limited Partners in the books and records of the Partnership and the Special Partners as of the date hereof
are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership as of the date hereof.
The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment
Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional GP-Related Investments, additional
Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the
GP-Related Profit Sharing
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Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including,
without limitation, the General Partner), as modified from time to time, the admission of additional Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement. At the
time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate
and such Partner’s GP-Related Commitment, Capital Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner
Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership
is hereby continued as a limited partnership pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of BXGA GP L.P. The certificate of limited partnership of the Partnership may be amended and/or
restated from time to time by the General Partner, as an “authorized person” (within the meaning of the Partnership Act). The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments
and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3. Term. The term of the Partnership shall continue until December 31, 2069, unless earlier dissolved and its
affairs wound up in accordance with this Agreement and the Partnership Act.
Section 2.4. Purposes; Powers. (a) The
purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates:
(i) to serve as a limited
partner or general partner of Associates and perform the functions of a limited partner or general partner of Associates specified in the Associates LP Agreement and, if applicable, the BXG Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BXG Interest as, a capital partner (and, if applicable, a
limited partner and/or a general partner) of BXG and perform the functions of a capital partner (and, if applicable, a limited partner and/or a general partner) of BXG specified in the BXG Agreements;
(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and
acquire and invest in Securities or other property directly or indirectly through Associates and/or BXG;
(iv) to make the
Blackstone Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other
property either directly or indirectly through Associates or another entity;
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(v) to serve as a general partner or limited partner of BXG and/or other
partnerships and perform the functions of a general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement, charter or other governing
documents, as amended, supplemented, restated or otherwise modified from time to time, of any such partnership;
(vi) to
serve as a member, shareholder or other equity interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the
respective limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by
the General Partner and as are permitted under the Partnership Act, the Associates LP Agreement, the BXG Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to in
clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its
purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a general partner or
limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the
acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common
and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and
Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or
other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
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(iii) to buy, sell and otherwise acquire investments, whether such investments
are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other short-term investments;
(v) to hold, receive, mortgage, pledge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant
options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership;
(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge,
conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell,
pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or
funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one
or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the
maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants,
both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or
cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and
be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all
contracts, agreements and other undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
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(xiv) to sue and be sued, to prosecute, settle or compromise all claims against
third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or
investments or other property of the Partnership, or any combination thereof; and
(xvi) to take such other actions
necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
Section 2.5. Place of Business. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services Delaware
Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time to time
and as set forth in the books and records of the Partnership. The name and address of the Partnership’s registered agent is Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center,
Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the certificate of limited partnership of the Partnership.
ARTICLE III
MANAGEMENT
Section 3.1. General Partner. (a) BXGA L.L.C. is the General Partner as of the date hereof. The General Partner shall cease
to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General Partner
may not be removed without its consent. There may be one or more General Partners. In the event that one or more other General Partners is admitted to the Partnership as such, all references herein to the “General Partner” in the singular
form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights and responsibilities of such General Partners will be as agreed upon from time to time between them.
(b) Upon the Withdrawal from the Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested
therein pursuant to this Agreement and the Partnership Act shall be exercised by a Majority in Interest of the Partners.
Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be expressly
required by the Partnership Act, Partners (including Special Partners), other than General Partners, as such shall have no right to, and shall not, take part in the management or control of the Partnership’s business or act for or bind the
Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a Partner is
entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner
(or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
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(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn
Partner that fails to respond to a notice provided by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner
shall be deemed to have given its affirmative consent or approval thereto.
Section 3.3. Management. (a) The management,
control and operation of the Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the
purposes of the Partnership, including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement
shall be made in its sole discretion, subject only to the express terms and conditions of this Agreement.
(b) Notwithstanding any
provision in this Agreement to the contrary, the Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the
Partnership, on its own behalf or in its capacity as a partner of Associates on Associates’ own behalf or in Associates’ capacity as general partner, capital partner and/or limited partner of BXG or as general partner or limited partner,
member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BXG or as general or limited partner, member, shareholder or other equity interest owner of
any Partnership Affiliate): (i) to execute and deliver, and to perform the Partnership’s obligations under the Associates LP Agreement, including, without limitation, serving as a partner of Associates, (ii) to execute and deliver, and to
cause Associates to perform Associates’ obligations under, the BXG Agreements, including, without limitation, serving as a general partner of BXG and, if applicable, a capital partner of BXG, (iii) if applicable, to execute and deliver,
and to perform the Partnership’s obligations under, the BXG Agreements, including, without limitation, serving as a capital partner of BXG, (iv) to execute and deliver, and to perform, or, if applicable, to cause Associates to perform, the
Partnership’s or Associates’ obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a “Partnership Affiliate Governing Agreement”), of any other partnership, limited
liability company, other company, corporation or other entity (each a “Partnership Affiliate”) of which the Partnership or Associates is, or is to become, a general partner or limited partner, member, shareholder or other equity
interest owner, including, without limitation, serving as a general partner or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate, and (v) to take any action, in the applicable capacity,
contemplated by or arising out of this Agreement, the Associates LP Agreement, the BXG Agreements or each Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
(c) The General Partner and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered,
as an authorized person of the Partnership within the meaning of the Partnership Act, or otherwise, or as an authorized representative of the General Partner (the General Partner hereby authorizing and ratifying any of the following actions):
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(i) to execute and deliver and/or file (including any such action, directly or
indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a partner of Associates on Associates’ own behalf, or in Associates’ capacity as general partner, special
general partner, capital partner and/or limited partner of BXG or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a
capital partner of BXG or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates, BXG or any Partnership Affiliate
(and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates LP Agreement, the BXG Agreements and each Partnership Affiliate Governing Agreement,
(II) subscription agreements and documents on behalf of BXG or Associates, (III) side letters issued in connection with investments in BXG, and (IV) such other agreements, certificates, instruments and other documents as may be
necessary or desirable in furtherance of the purposes of the Partnership, Associates, BXG or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing referred to in (I) through
(IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the
Partnership, Associates, BXG and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
(C) any other certificates, notices, applications and other documents (and any amendments, supplements, restatements and/or
other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates, BXG or any Partnership Affiliate to qualify to
do business in a jurisdiction in which the Partnership, Associates, BXG or such Partnership Affiliate desires to do business;
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or
indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a partner of Associates on Associates’ own behalf or in Associates’ capacity as general partner, capital
partner and/or limited partner of BXG, or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BXG or as
general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications and other documents to be filed with any government or governmental or
regulatory body on behalf
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of the Partnership, Associates, BXG and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications and other documents that may be necessary or advisable in connection
with any bank account of the Partnership, Associates, BXG or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, Associates, BXG or any Partnership Affiliate, and all checks, notes, drafts and
other documents of the Partnership, Associates, BXG or any Partnership Affiliate that may be required in connection with any such bank account or banking facilities or services and (C) resolutions with respect to any of the foregoing matters
(which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, Associates, BXG or any Partnership
Affiliate, as applicable, for all purposes).
(d) The authority granted to any person (other than the General Partner) in
Section 3.3(c) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
Section 3.4. Responsibilities of Partners. (a) Unless otherwise determined by the General Partner in a particular case, each
Limited Partner (other than a Special Partner) shall devote substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to
the businesses of the Partnership or its Affiliates.
(b) All outside business or investment activities of the Partners (including outside
directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the
General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent
permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a
“Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any
transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial
determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority
granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any
Covered Person in reliance on such advice shall in any event
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subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating thereto
to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to modify to
that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its duties
under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b)
Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the extent of the Partnership’s assets (including, without limitation, the remaining capital commitments of
the Partners)) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and
penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of
this Section 3.5(b), “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be
involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than
claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to
indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered
Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided
further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such Losses in accordance with such Covered Person’s GP-Related Profit Sharing
Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General
Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in
this Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts
otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the
amount of such Partner’s Interests and remaining capital commitments, for such Partner’s pro rata share of
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the Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to
cover losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the
authority to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the
Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BXG and/or a particular
portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of
proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BXG; second, by the applicable portfolio entity through which such investment is indirectly held; third, by BXG and fourth by
Associates (only to the extent the foregoing sources are exhausted).
(B) The Partnership’s obligation, if any, to
indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BXG and/or the applicable portfolio entity (including by virtue of any applicable
insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates, BXG and/or the applicable portfolio entity (including by virtue of
any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against Associates and/or BXG and/or such portfolio entity in respect of such advancement or payments. The
General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of Blackstone Inc. or any of its Affiliates, which shall not
be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
Section 3.6. Representations of Partners. (a) Each Limited Partner and Special Partner by execution of this Agreement (or by
otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Partner is
acquiring each of such Partner’s Interests for such Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the
rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms hereof). Each Limited Partner and
Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without
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registration under the Securities Act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite
period of time. Each Limited Partner and Special Partner represents that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the
Partnership, and that such Partner is able to bear the economic risk of such investment. Each Limited Partner and Special Partner represents that such Partner’s overall commitment to the Partnership and other investments which are not readily
marketable is not disproportionate to the Partner’s net worth and the Partner has no need for liquidity in the Partner’s investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the
Partner, the Partner has been furnished any materials that such Partner has requested relating to the Partnership, any Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the
Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the
Partner has consulted to the extent deemed appropriate by the Partner with the Partner’s own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the
Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and
warranties contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with
respect to any Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such
repayment shall serve as confirmation thereof.
Section 3.7. Tax Representation and Further Assurances. (a) Each
Limited Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the
Partnership’s obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner and Special
Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partner’s name, social security number (or, if applicable, employer
identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W- 9, Request for Taxpayer Identification Number Certification
(“W-9”) or otherwise are correct and (ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited
Partner or Special Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the
Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for
United States Tax Withholding and Reporting (Individuals) (“W-8BEN”), IRS Form W-8BEN-E, Certificate of Status
of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS
Form W-8IMY, Certificate of Foreign Intermediary, Foreign
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Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and
(ii) the Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN,
W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the
Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited
to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the General Partner may release confidential
information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partner’s investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion,
determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon
the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability
as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading,
or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any
remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s or Special Partner’s action or inaction
from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the
Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as are required
to satisfy the Partnership’s obligation to make capital contributions to Associates in respect of the GP-Related Associates Interest to fund Associates’ capital contributions with respect to any GP-Related BXG Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partner’s Commitment Agreement or SMD Agreement, if any, or otherwise;
provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among the Partners based upon
each Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing
business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth
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in Section 4.1(d) and Section 5.8(d))) shall be determined by the General Partner. Special Partners shall not be required to make additional
GP-Related Capital Contributions to the Partnership in excess of the GP-Related Required Amounts, except (i) as a condition of an increase in such Special
Partner’s GP-Related Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that
such Special Partner shall make an additional GP-Related Capital Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital
of the Partnership related to the GP-Related BXG Interest.
(b) Each
GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject
to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner
(including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) the amount of any
GP-Related Capital Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any
Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by
the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain
amounts of the distributions relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The
General Partner shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such withheld percentage constituting the General
Partner’s and such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining
Withdrawn Partners (other than the General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner
and/or Holdings shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her
Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is
decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating
to Carried Interest made after the date of such reduction.
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(iii) The Holdback Percentage may not be increased for any individual Partner as
compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the General Partner
concurrently increases the Existing Partners’ Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both
Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback
Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the Holdback Percentage of any
Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces the Holdback Percentages
for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase or decrease the Holdback
Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to a majority vote of the Limited Partners (a “Holdback Vote”); provided, that, notwithstanding anything
to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partner’s Holdback Percentage shall not
be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and (y) has, if requested by such Subject Partner, been given
30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject Partner’s
Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partner’s Holdback Percentage is less than the prevailing Holdback
Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage unless such voting Partner determines, in such Partner’s good
faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns (including such Subject Partner’s estate or heirs) who at the time of
such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related
Recontribution Amounts that may become due.
(B) A Holdback Vote shall take place at a Partnership meeting. Each of the
Limited Partners shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Limited Partner’s interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
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(C) If the result of the second Holdback Vote is an increase in a Subject
Partner’s Holdback Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the
Subject Partner cannot agree upon a mutually satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to
such candidates; provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally
select the arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses
(i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs
leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such
arbitration, such “losing” party shall then provide any additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership if the Holdback
Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject Partner
shall be the “victorious” party. The party that is not the “victorious” party shall be the “losing” party.
(D) In the event of a decrease in a Subject Partner’s Holdback Percentage (1) pursuant to a Holdback Vote under this
clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly
provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback Percentage) as though such reduced Holdback
Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the “Excess
Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess Holdback”), and such
Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such
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Partner or Withdrawn Partner) satisfying such Partner’s or Withdrawn Partner’s Excess Holdback obligation, by pledging, granting a security interest or otherwise making available to the
General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner seeking to satisfy all or any portion of the Excess
Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise
assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnership’s books and records in which Partners are permitted to pledge or grant a security
interest over their interests therein to finance all or a portion of their capital contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority security interest is unavailable because of an
existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further,
that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or (y) if the General Partner otherwise determines in its good faith judgment that a
security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the
relevant partnership, limited liability company or other entity listed in the Partnership’s books and records to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully
provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm
Collateral as provided hereunder.
(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a
“Firm Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such
Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such
Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such
Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any valuation or
revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including upon a Firm
Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership shall
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provide notice of the foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm
Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply
thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this
clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the
terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be
construed as the amount due pursuant to this clause (C).
(vi) Any Partner or Withdrawn Partner may (A) obtain the
release of any Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or
Withdrawn Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for
the benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C
from a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moody’s (if the L/C is for a term of 1 year or less), or
(y) long-term deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”). If the relevant rating of the commercial bank issuing such L/C drops below
the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient
L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BXG, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose
relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as
directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback
Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted
hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the
Trust Account and satisfaction of the Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted
hereunder), or (3) the release, by the Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the
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Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as
directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion
satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C
Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any
in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose
of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnership’s books and records; provided, that the initial contribution of such Special Firm Collateral
shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such
Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess
Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not
the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding any Excess Holdback) by pledging or granting a
security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn
Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith
judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm
Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is
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being used in connection with an Excess Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback
as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization
(which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to
fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess
Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner
shall be required to promptly fund such Partner’s or Withdrawn Partner’s deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any valuation or revaluation of the Special Firm Collateral and/or any adjustment in the Applicable Collateral
Percentage applicable to a Qualifying Fund (as provided in the Partnership’s books and records), if such Partner’s or Withdrawn Partner’s Special Firm Collateral is valued at less than such Partner’s Holdback (excluding any
Excess Holdback) as provided in the Partnership’s books and records, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and,
within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn
Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed inapplicable to such default;
provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in
such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and
“GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such
Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn
Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess
Holdback).
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(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or
Withdrawn Partner from using any amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment
of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General
Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s
GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or
(iii) as determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be
determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b)
“GP-Related Net Income (Loss)” means:
(i) from any activity of
the Partnership related to the GP-Related BXG Interest for any accounting period (other than GP-Related Net Income (Loss) from
GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items
that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such
GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related
Investment (determined as provided below); and
(iii) from any GP-Related
Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period
less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
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(c) GP-Related Net Income (Loss) shall be determined in
accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not otherwise taken into
account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its adjusted tax basis for
U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in the books of the
Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of
the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this definition shall
be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such
GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership, Holdings and other Affiliates of the Partnership shall be
allocated among the Partnership, Holdings and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner.
Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid,
unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with GAAP; provided, that the
General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the
option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal
Year. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to
the Partners’ GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated
Percentages or adjustments to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing
Percentages during such accounting period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such
GP-Related Investment was acquired.
(e) In establishing
GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it
deems appropriate.
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(f) All determinations, valuations and other matters of judgment required to be made for
accounting purposes under this Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on
all Partners, all Withdrawn Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of
the Partnership or any successor thereto.
Section 5.2. GP-Related Capital Accounts.
(a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting
for such Partner’s interests in the capital of the Partnership related to the GP-Related BXG Interest and the GP-Related Net Income (Loss) of the Partnership (each
a “GP-Related Capital Account”).
(b) As of the end of each accounting period or,
in the case of a contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more
of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate
GP-Related Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership
related to such Partner’s GP-Related Partner Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such
accounting period and (C) the interest credited on the balance of such Partner’s capital related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to
Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated
promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partner’s
GP-Related Partner Interest and (y) the GP-Related Net Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related Profit Sharing Percentages. (a) Prior to the beginning of
each annual accounting period, the General Partner shall establish the profit sharing percentage (the “GP-Related Profit Sharing Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, that (i) the General
Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related
Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (c) below and
(ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the
GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former
Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of
any
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Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to
the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partner’s GP-Related Profit
Sharing Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the
foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit
Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”); provided, that any
GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90
days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit
Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and
shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss). (a) Except as provided in
Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related
Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in
proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest
distributed to the Partners; second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or
Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a
return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the
Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have
been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net
Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BXG and allocated to the Partnership with respect to its pro rata share
thereof (based on capital contributions made by the Partnership to BXG with respect to the GP-Related BXG Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BXG and
(ii) GP-Related Net Loss relating to realized losses suffered by BXG and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s (including
a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)).
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(c) Notwithstanding Section 5.4(a) above, GP-Related
Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest
Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related
Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried
Interest.
(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any
accounting period unrelated to BXG, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the
beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners (including any
additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) against their allocable shares of
GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such
allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this
Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to
make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or
Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6. [Intentionally omitted.]
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or
other requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BXG Investments as the General Partner may determine. The
General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that
is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from
time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
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Section 5.8. Distributions. (a) (i) The Partnership shall make distributions of
available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as
are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of
GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made
among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with
respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by BXG of a portion of a
GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each
Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate
GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a
Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such
GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related
Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BXG) relating to a GP-Related Disposable Investment (with
respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B
Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by BXG) relating to a GP-Related Investment excluding such
GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of
GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related
Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of
GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall
make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such
Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an
individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account (x) the
limitations on the
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deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable
income and (iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the
foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
(c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee
(including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a
“Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof
(together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by virtue of the expiration of the
applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase
Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains
Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be
allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage interests in such GP-Related Investment,
or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partner’s share of
unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn Partner’s Withdrawal Date on any basis it may determine, including to existing or new
Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor Special Partner shall be allocated a share of such unrealized investment income equal to
its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
(d)
(i) (A) If Associates is obligated under the Clawback Provisions or Giveback Provisions to contribute to BXG a Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute
any such amount to Associates, directly or indirectly, in respect of the Partnership’s GP-Related Associates Interest (the amount of any such obligation of the Partnership with respect to such a Giveback
Amount being herein called a “GP-Related Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the
General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect
to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related
Recontribution Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in
the case of Clawback Amounts and (II) with respect to a GP-Related Giveback
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Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with (a) the GP-Related BXG Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BXG Investments other than the one giving rise to such obligation, but only those amounts received by the Partners with an interest in
the GP-Related BXG Investment referred to in clause (II)(a) above, and (c) if the GP-Related Giveback Amount pursuant to an applicable BXG Agreement is unrelated to a specific GP-Related BXG Investment, all GP-Related BXG Investments. Each Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her
comparable obligations to the Other Fund GPs, if any, upon such call such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of
such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the Partnership, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried
Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related Recontribution Amount”), irrespective of the fact that the
amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’ obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a
Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his or her GP-Related
Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner
shall specify each Partner’s and Withdrawn Partner’s GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide
notice that in the General Partner’s judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided
further, that any amount from a Partner’s Trust Account used to pay any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such
Partner to such Partner’s Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback
Amount.
(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral,
such Partner or Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of
the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such
Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if
any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnership’s and the Other Fund GPs’ obligation
to pay the Clawback Amount. The failure of any Partner or Withdrawn
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Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes
a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BXG Partnership Agreement, each partner of the General Partner shall have the same obligations as a
Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under Section 5.8(d)(ii)(A) with respect to such partner’s pro rata share of any Clawback Amount
and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BXG Partnership Agreement.
(ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related
Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount for any reason, the
General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully described in clause (II) of Section 5.8(d)(i)(A) above)), such
amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such GP-Related Defaulting Party’s Net
GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”) if the General Partner determines in its good faith judgment that the
Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the Clawback Amount or GP-Related
Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the Clawback Amount or GP-Related
Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to
contribute an amount in excess of 150% of the amount of the Net GP-Related Recontribution Amount initially requested from such Partner or Withdrawn Partner in respect of such default.
(B) Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not
attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or
equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the
GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to
Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a
GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment
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from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In
furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power
and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled
to collect interest on the Net GP-Related Recontribution Amount of a GP-Related Defaulting Party from the date such Net
GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(C) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related
Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust
Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution before seeking cash
contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or
Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this
Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is
hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns and
Losses (each as defined in the BXG Agreements) on GP-Related BXG Investments that have been the subject of a writedown and/or Net Realized Loss (each, a “Loss Investment”) to those Partners
who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried Interest distributions from other
GP-Related BXG Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a
GP-Related BXG Investment (the “Subject Investment”) that have been reduced under any BXG Agreement as a result of one or more Loss Investments, the General Partner shall calculate amounts
distributable to or due from each such Partner as follows:
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(A) determine each Partner’s share of each such Loss Investment based on his
or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all Partners (indirectly through
the Partnership from BXG) from the Subject Investment (such reduction, the “Loss Amount”);
(B) determine
the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from BXG) before any reduction in respect of the amount determined in clause
(A) above (the “Unadjusted Carried Interest Distributions”); and
(C) subtract (I) the Loss
Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest
Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is
a negative number, the General Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried
Interest distributions (a “Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to
clause (I) are insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest
Distribution. If a Partner’s (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Income
Tax Rate (as defined in the BXG Agreements) in effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of paying such Partner’s
Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried
Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount
is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount
of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest
Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
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A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly
upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the
extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried
Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution
Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the
Subject Investment; provided, that any such amounts then subject to a Holdback may be so distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such
distribution (taken together with the other Carried Interest distributions received by such Partner to date).
(ii) In the
case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partner’s share of any Net Realized Losses (as defined in the BXG Agreements) in any GP-Related BXG Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BXG Investment with respect to which Carried Interest
distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related BXG Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest
Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from
the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to
the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a
positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the
extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount
was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
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Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General
Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all
Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners
and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the BXG Agreements.
Section 5.9.
Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations
established by the General Partner from time to time.
Section 5.10. Tax Capital Accounts; Tax Allocations.
(a) For U.S. federal income tax purposes, there shall be established for each Partner a single capital account combining such Partner’s Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the
General Partner determines are appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and
local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable
law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its
respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated
shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are
in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S. federal, state
and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are
allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations
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for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and
the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain, loss, deduction or credit of the Partnership (or an adjustment to any Partner’s distributive share thereof), the
General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in accordance with the final resolution of such audit adjustment.
ARTICLE VI
ADDITIONAL PARTNERS;
WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners. (a) Effective on the first day of any month (or on such other date as shall be determined
by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the
representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute
Partner) all terms of such additional Partner’s participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital
Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time
to time unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a “Nonvoting Special
Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note
approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s purchase of his or her Capital Commitment Interests, Blackstone or
such other or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a
GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of
the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established
by the General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction
in all other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the
need for any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional
Partners admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
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(c) An additional Partner shall be required to contribute to the Partnership his or her pro rata
share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and
in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission
of an additional Partner will be evidenced by (i) the execution of a counterpart copy of this Agreement by such additional Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner,
as determined by the General Partner, or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to be bound by the terms of this Agreement and such writing
being acceptable to the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust
Agreement that is acceptable to the General Partner on behalf of the Partnership.
Section 6.2. Withdrawal of Partners.
(a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner, including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual
obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary
Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days’ prior written notice by such Partner to the General Partner (or on such
shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may Withdraw from the Partnership with respect to such Partner’s
GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to
such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any
Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a
Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such person’s GP-Related Partner Interest; provided, that the General Partner may elect to admit such
Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such person’s GP-Related Partner Interest, with such GP-Related Partner Interest
as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of
agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
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(d) If the General Partner determines that it shall be in the best interests of the Partnership
for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with
respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after
the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital
Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue
the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the
fullest extent provided by law.
Section 6.3. GP-Related Partner Interests Not
Transferable. (a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partner’s GP-Related Partner Interest other than
as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the
death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may
transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust, limited partnership, or limited liability company with respect to which a
Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting
Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the Partnership (including the obligation to make additional
GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning Vehicle to Withdraw from the Partnership on the terms of
this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any
Partner’s GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be given or withheld in its sole discretion without
giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner
Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
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Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the
Partnership Act, the General Partner may not transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the
prior written approval of a Majority in Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with
regard to compliance with applicable law or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with
respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in
connection with any liquidation, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the
General Partner. A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the
interest in the Partnership so acquired. The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner
shall not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby
authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall be no remaining Limited Partners, the Partnership shall be
dissolved and shall be wound up unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such
Withdrawal, of one or more Limited Partners.
(c) The Partnership shall not be dissolved, in and of itself, by the Withdrawal of any
Partner, but shall continue with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related
Partner Interests. (a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this
Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term “Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion
of whose GP-Related Partner Interest is retained as a Special Partner, shall be considered a Withdrawn Partner for all purposes hereof.
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(b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that
if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the
interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions,
interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partner’s
GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partner’s Settlement Date (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date
in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General
Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise
determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner
Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or
not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn
Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided
in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such
Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss), or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or other assets related to such
Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related Partner Interest for any reason
other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s
GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related
Investment) and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in
paragraph (f) below (which shall be settled in accordance
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with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this Section 6.5. If the amount determined pursuant to clause (x) above is an aggregate
negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the Withdrawn Partner
was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital Accounts in accordance with their respective
GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of
such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or
the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to
such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described
below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than
all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to
above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership
pursuant to this Section 6.5.
(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s
“percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn
Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable
to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Partner for such purpose (and, if the General Partner so
designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and
conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole
discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that
the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
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(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a
Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to (ii) distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro
rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other
investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the
Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted.]
(i)
Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the
Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership
(e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by
the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other
inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future
creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment
(x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal
Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the
General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn
Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding
Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner
to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate
equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts payable by
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a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn
Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to
such GP-Related Investment. The “due date” of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(l) At the time of the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, grant of security interest, encumbrance or other
transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such
Withdrawn Partner’s right to any payment from the Partnership.
(m) If a Partner is required to Withdraw from the Partnership with
respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in
accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such
settlement:
(i) In settling the Withdrawn Partner’s interest in any
GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized
Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn
Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partner’s
GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her
GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply
the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any
GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as
of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in
right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or
distribution.
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(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on
the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a
period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph
(n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such
restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the
General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to
any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance
to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such
professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent,
representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and
all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including,
without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force
and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
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Section 6.6. Dissolution of the Partnership. The General Partner may dissolve
the Partnership prior to the expiration of its term at any time on not less than 60 days’ notice of the dissolution date given to the other Partners. Upon the dissolution of the Partnership, the Partners’ respective interests in the
Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5.
Section 6.7. Certain Tax
Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such
returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and
credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the
preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of
such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such
item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim
for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any
item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such
claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded
from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys’, accountants’ and other experts’ fees and disbursements) shall be
expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss,
deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the
Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted
by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or
the Tax Matters Partner. The Partnership and each Partner hereby designate any Partner selected by the General Partner as the “partnership representative” (as defined under the Code) (the “Tax Matters Partner”). To the
fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach
or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys’ fees and disbursements, incident to any such
breach or violation.
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(c) Each individual Partner shall provide to the Partnership copies of each federal, state and
local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the
General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or
with respect to any Partner, including pursuant to Section 6225 of the Code (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of
a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding
distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner.
Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions
(whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and
against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth
in this Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the
terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election
to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc. (a) This Article VII and Article VIII hereof set forth certain terms
and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BXG Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BXG Interest. Except as otherwise expressly
provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the
GP-Related BXG Interest.
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(b) Each Partner, severally, agrees to make contributions of capital to the Partnership
(“Capital Commitment-Related Capital Contributions”) as required to fund the Partnership’s capital contributions to BXG or Associates in respect of the Capital Commitment BXG Interest, if any, and the related Capital Commitment
BXG Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such
Partner’s Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily
participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital Commitment Profit Sharing Percentage with respect to
(i) the Partnership’s portion of the Blackstone Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement
or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the
terms upon which the Partnership and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital
Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its Affiliates (in such capacity, the “Advancing Party”) may in its sole discretion advance to
any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital
Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Partner shall pay interest to the Advancing Party on each Firm Advance from the date of such Firm
Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written notice by the Advancing Party. The making and repayment of each Firm
Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Partner and the Advancing Party absent manifest error. Except as provided below, the
interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party shall inform any Partner of such rate upon such Partner’s request;
provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise payable to such Partner pursuant to Section 7.4(a) shall be used to repay
such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that
(i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable
by applicable law.
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Section 7.2. Capital Commitment Capital Accounts. (a) There shall be established
for each Partner in the books of the Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment
Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital
Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall
be adjusted to reflect any transfer of a Partner’s interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital
Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment
Investment and in whole upon the dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the consent of the General Partner.
Section 7.3. Allocations. (a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment
shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing
Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s aggregate Capital Commitment
Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each
Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital
Commitment Profit Sharing Percentages for such Capital Commitment Investment.
(b) Any special costs relating to distributions pursuant to
Section 7.6 or Section 7.7 shall be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General
Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4. Distributions.
(a) Each Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments,
distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests)
during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the
General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected
by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
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(i) First, to the payment of interest then due on all Investor Notes (relating to
Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all interest payments due, the selection of those of such
Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Partner of an amount equal to the U.S. federal, state and local income taxes on income of
the Partnership allocated to such Partner for such year in respect of such Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that
the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were all allocated to an individual subject to the
then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character of such taxable income allocated by the
Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause (ii) to the extent that such
amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant partnership or other entity;
provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant to provisions in such other BE
Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the principal amount of the
Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the
extent not repaid from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all Capital
Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any
Blackstone Entity (other than the Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related
Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
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(v) Fifth, to the payment of principal (including any previously deferred
amounts) then owing under all other Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid and the division of payments among such Investor Notes to be
determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after
application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such
Partner’s Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment Net Income remaining after making the
distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in
clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted
to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to
clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partner’s Capital Commitment
Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed
to such Partner.
Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner.
At the General Partner’s discretion, any amounts distributed to a Partner in respect of such Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period
in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy
any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining
principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a
Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
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(d) [Intentionally omitted.]
(e) The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to
Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment
is being considered by the Partnership or BXG (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect to such Capital Commitment Investment
shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class B
Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class A
Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital
Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions
(including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to
holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.
(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a Giveback Amount to BXG in respect of any
Capital Commitment BXG Interest that may be held by the Partnership or (y) Associates is obligated under the Giveback Provisions to contribute to BXG a Giveback Amount with respect to any Capital Commitment BXG Interest that may be held by
Associates and the Partnership is obligated to contribute any such amount to Associates in respect of the Partnership’s Capital Commitment Associates Partner Interest (the amount of any such obligation of the Partnership with respect to such a
Giveback Amount in the case of either (x) or (y) being herein called a “Capital Commitment Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligation of the Partnership as
determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership with respect to
the Capital Commitment BXG Interest (the “Capital Commitment Recontribution Amount”) which equals such Partner’s pro rata share of prior distributions in connection with (a) the Capital Commitment BXG
Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BXG Investments other
than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to an applicable BXG Agreement is unrelated to a specific Capital Commitment BXG Investment, all Capital Commitment BXG Investments. Each
Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partner’s discretion (but shall be under no
obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
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(ii) (A) In the event any Partner (a “Capital Commitment Defaulting
Party”) fails to recontribute all or any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to
contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital Commitment
Defaulting Party’s Capital Commitment Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such
amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount;
provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested from such
Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood
of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting Party, the cost
of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a
Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any amounts otherwise payable to the
Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts
receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such
collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and
authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the
Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
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(B) Any Partner’s failure to make a Capital Commitment Deficiency
Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount.
(iii) A
Partner’s obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the termination of the Partnership.
Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the end of each year (and at such other
times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates (or any other Affiliate of the Partnership that is a general partner of BXG) in valuing investments of BXG or, in the case of investments
not held by BXG, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment Interest as of any date (the “Capital Commitment
Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an earlier date if determined appropriate by the General
Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment Interest (as compared to the value of the
underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment Investment. To the full extent permitted by
applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a person who is or was at any time a direct
member or partner of a General Partner of the Partnership.
Section 7.6. Disposition Election. (a) At any time prior to
the date of the Partnership’s execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such
Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing
prior to such date (i) not to dispose of all or any portion of such Partner’s pro rata share of such Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion
to such Partner on the closing date of such disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute
such Retained Portion to such Partner. Such Partner’s Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other
Partners’ pro rata shares of such Capital Commitment Investment; provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon
distribution of proceeds with respect to a subsequent disposition thereof by the Partnership.
(b) No distribution of such Retained Portion
shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such distribution.
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Section 7.7. Capital Commitment Special Distribution Election. (a) From time to
time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by
such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a “Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital Account shall be adjusted upon
distribution of such Capital Commitment Special Distribution.
(b) No Capital Commitment Special Distributions shall occur unless any
Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL,
ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests. (a) Capital
Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital
Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital
Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount
of the Investor Note. A Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months
prior to the date on which such Partner is no longer an employee or officer of Holdings or an Affiliate thereof, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase
price of a Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made by a Partner shall apply pro rata against all of such Partner’s Investor Notes; provided, that such
Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment Interests
that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an officer or employee of the Partnership or any of its Affiliates, other than as a result of such
Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within 30 days and by the Partnership or its
designee(s) within 45 days after such Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the obligation, to require the Partnership (subject to the prior consent of the General
Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by
the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
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(ii) The purchase price for each such Contingent Capital Commitment Interest
shall be an amount equal to (A) the outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the
“Adjustment Amount”) equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to
be repurchased, plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on
the Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the
Adjustment Amount, in the General Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next
Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall
be payable to the holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn
Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a
Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partner’s Contingent Capital Commitment
Interests, his or her related Investor Note shall be payable in full.
(iii) Upon such Partner ceasing to be such an
officer or employee, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of
the Withdrawn Partner’s Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the
Partnership nor its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor
Notes shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the
Withdrawn Partner at his or her option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis.
(v) To the extent that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the
purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
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(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall
thereupon cease to be a Partner with respect to such Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a
Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such
Partner’s Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or
Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in
Interest to such Partner, whether by operation of law or otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until
distribution of any such Partner’s interest in the Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal
or redemption without the consent of the General Partner. The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such
Partner’s Capital Commitment Partner Interest.
(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment
Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partner’s death or Total Disability) (and the purchase price for such
Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partner’s estate, personal representative or other Successor in Interest, in
cash)), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partner’s death or Total Disability, any Investor Note(s) financing such Contingent
Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within
180 days after the Partner’s death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership
or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnership’s then current
Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of
this Agreement. In addition, the Partnership may, in the sole discretion of the
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General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General Partner knows or has
reason to know of such Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the
Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital
Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership or any of its Affiliates, or at any time thereafter, upon
30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership
or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another person designated by the General Partner (who may be itself
another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital
Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase). The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph
(d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as
described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General Partner’s designee(s), Holdings may loan all or
a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is
an executive officer of Blackstone Inc. or any Affiliate thereof). To the extent that a Withdrawn Partner’s Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another
person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased
Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself as an
unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital Commitment Interests”). To the extent that a Capital Commitment Interest is allocated to Partners as provided in
clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be Contingent
and shall become
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Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Partners receiving such allocations shall be
responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this Section 8.1 and except as such Partners and the General Partner shall otherwise
agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be
non-recourse or so limited, the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to
such Partners; provided, that a Partner shall not, except as set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1), unless his or her prior
consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness
financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income
(Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt
service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.
(g) If a Partner is
required to Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs
(a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not
be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such
Withdrawn Partner’s Non-Contingent Capital Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of
(A) the original cost of such Non-Contingent Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date
of the purchase of such Non-Contingent Capital Commitment Interest);
(ii) allow
the Withdrawn Partner to retain such Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to
any Capital Commitment Investment shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing
Capital Commitment Value thereof; or
(iii) in lieu of cash, purchase such
Non-Contingent Capital Commitment Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten
(10) years with interest at the Federal Funds Rate.
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(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case
may be, in the settlement of the Withdrawn Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn
Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If
the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s
day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements,
instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without
limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and
effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 8.2. Transfer of Partner’s Capital Commitment Interest. Except as otherwise agreed by the General
Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment
Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or Deceased or Totally
Disabled Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of
Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any
reason therefor) and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it
being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in
connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). The General Partner shall
designate that each Estate Planning Vehicle shall not have voting rights (any such Partner being called a “Nonvoting Partner”). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such
Nonvoting Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate
Planning
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Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a
Partner of the Partnership, or acquire such Partner’s right to participate in the affairs of the Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the
Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its entire Interest in the Partnership in accordance with the provisions of this Agreement.
Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the contrary, no sale or Transfer of a Capital
Commitment Interest in the Partnership may be made except in compliance with all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution. The Partnership shall be dissolved and subsequently terminated:
(a) pursuant to Section 6.6; or
(b) upon the expiration of the term of the Partnership.
Section 9.2. Final Distribution. Upon the dissolution of the Partnership, and following the payment of creditors of the
Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account
balances of the Partners; and
(b) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such
Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment
Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment;
and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for
each Capital Commitment Investment from which such cash or Securities are derived.
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The General Partner shall be the liquidator. In the event that the General Partner is unable to
serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any Securities or other
property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing
a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment
Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be
paid or distributed until such time as the liquidator shall determine.
(b) If there is any pending transaction, contingent liability or
claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the liquidator, be then ascertained, the value thereof or
probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or
such earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest an amount which the liquidator estimates to be
sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon
determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest
practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other
property were withheld.
ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including
the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, liquidation or winding up of the Partnership), whether arising during the
existence of the Partnership or at or after its termination or during or after the liquidation or winding up of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance
with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within 30 days of the receipt of the request for arbitration, the International
Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
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(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause
the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking
temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this
Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate,
and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such
Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL
PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such
ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s)
designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may
have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible
to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it shall be determined
by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable
law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware
Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
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Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges
that Blackstone TM L.L.C. (“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the
mark and name BLACKSTONE and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company
(or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark
and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM. All services
rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The
Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps
necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
Section 10.3. Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken
without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements;
Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered into separate letter agreements with individual Partners, officers or employees with respect to
GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or
supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement,
including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules
which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the
General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD
Agreement.
Section 10.5. Governing Law; Separability of Provisions. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be
as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement
shall not be affected thereby.
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Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall
be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a
party hereto; provided, that no person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a
Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall
remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such
Partner’s or Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in
Section 5.8(d)(ii)(A) and Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from
the transferee with respect to any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal
representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BXG Agreements, (x) the limited partners in BXG shall be third-party beneficiaries of the provisions of
Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in Section 9.4(a) of the BXG Partnership Agreement), and
(y) the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in Section 9.4(a) of the BXG
Partnership Agreement), shall not be amended in a manner materially adverse to the limited partners without the 66 2/3% Combined Limited Partner Consent (as defined in the BXG Partnership Agreement) and shall be effective against such limited
partners only with the 66 2/3% Combined Limited Partner Consent.
Section 10.7. Confidentiality. (a) By executing this
Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than
the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally
known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate Partner may
disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations
Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate
thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information
relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
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(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating,
cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not
limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such
communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the
disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to
the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.
Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no
circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone.
Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in
writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnership’s books and records or, if given to the
General Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery, when delivered to the address of such
Partner, the General Partner or the Partnership specified as aforesaid.
Section 10.9. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument. For the avoidance of doubt, a person’s execution and delivery of this Agreement by electronic signature
and electronic transmission (jointly, an “Electronic Signature”), including via DocuSign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such person and
shall bind such person to the terms of this Agreement. The parties hereto agree that this Agreement and any additional information incidental hereto may be maintained as electronic records. Any person executing and delivering this Agreement by an
Electronic Signature further agrees to take any and all reasonable additional actions, if any, evidencing its intent to be bound by the terms of this Agreement, as may be reasonably requested by the General Partner.
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Section 10.10. Power of Attorney. Each Partner hereby irrevocably appoints the
General Partner as such Partner’s true and lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make,
execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State
of Delaware or any other state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney
is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of
such Partner.
Section 10.11. Partner’s Will. Each Partner and Withdrawn Partner shall include in his or
her will a provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership,
in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partner’s or Withdrawn Partner’s Interest is transferred shall
include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or
Withdrawn Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of
such notice, the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other
rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided herein,
in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this
Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount
or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such dispute (such
determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue
interest at the Default Interest Rate.
Section 10.14. Entire Agreement; Modifications. This Agreement embodies
the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any
time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
* * *
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year
first above written. In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
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|
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| GENERAL PARTNER: |
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| BXGA L.L.C. |
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| By: |
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Blackstone Holdings II L.P., its managing member |
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| By: |
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Blackstone Holdings I/II GP L.L.C., its general partner |
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|
| By: |
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/s/ John G. Finley |
| Name: John G. Finley |
| Title: Chief Legal Officer and Secretary |
[Signature Page to Amended and Restated Limited Partnership Agreement of BXGA GP L.P.]
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|
|
| LIMITED PARTNERS AND SPECIAL PARTNERS: |
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| Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to BXGA L.L.C. |
|
| BXGA L.L.C. |
|
|
| By: |
|
Blackstone Holdings II L.P., its managing member |
|
|
| By: |
|
Blackstone Holdings I/II GP L.L.C., its general partner |
|
|
| By: |
|
/s/ John G. Finley |
| Name: John G. Finley |
| Title: Chief Legal Officer and Secretary |
[Signature Page to Amended and Restated Limited Partnership Agreement of BXGA GP L.P.]
Exhibit 10.2
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BMA ASIA II GP L.P.
AMENDED AND
RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT
DATED NOVEMBER 3, 2023
EFFECTIVE FROM MARCH 31, 2021
THE EXEMPTED
LIMITED PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BMA ASIA II GP L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE
SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY
NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS
AND CONDITIONS OF THIS AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT. THEREFORE,
PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
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Page |
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| ARTICLE I DEFINITIONS |
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1 |
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| Section 1.1. |
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Definitions |
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1 |
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| Section 1.2. |
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Terms Generally |
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16 |
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| ARTICLE II GENERAL PROVISIONS |
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17 |
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| Section 2.1. |
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General Partner, Limited Partner, Special Partner |
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17 |
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| Section 2.2. |
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Formation; Name; Foreign Jurisdictions |
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17 |
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| Section 2.3. |
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Term |
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18 |
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| Section 2.4. |
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Purposes; Powers |
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18 |
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| Section 2.5. |
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Place of Business |
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21 |
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| Section 2.6. |
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Withdrawal of Initial Limited Partner |
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21 |
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| Section 2.7. |
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Reorganization or Reconstitution and De-Registration of the Partnership |
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21 |
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| ARTICLE III MANAGEMENT |
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21 |
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| Section 3.1. |
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General Partner |
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21 |
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| Section 3.2. |
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Partner Voting, etc. |
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21 |
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| Section 3.3. |
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Management |
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22 |
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| Section 3.4. |
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Responsibilities of Partners |
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24 |
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| Section 3.5. |
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Exculpation and Indemnification |
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25 |
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| Section 3.6. |
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Representations of Partners |
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27 |
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| Section 3.7. |
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Tax Representation and Further Assurances |
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28 |
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| ARTICLE IV CAPITAL OF THE PARTNERSHIP |
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29 |
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| Section 4.1. |
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Capital Contributions by Partners |
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29 |
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| Section 4.2. |
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Interest |
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36 |
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| Section 4.3. |
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Withdrawals of Capital |
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36 |
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| ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
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37 |
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| Section 5.1. |
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General Accounting Matters |
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37 |
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| Section 5.2. |
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GP-Related Capital Accounts |
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38 |
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| Section 5.3. |
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GP-Related Profit Sharing Percentages |
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39 |
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| Section 5.4. |
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Allocations of GP-Related Net Income (Loss) |
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40 |
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| Section 5.5. |
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Liability of Partners |
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41 |
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| Section 5.6. |
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[Intentionally omitted.] |
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41 |
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| Section 5.7. |
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Repurchase Rights, etc. |
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41 |
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| Section 5.8. |
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Distributions |
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41 |
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| Section 5.9. |
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Business Expenses |
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48 |
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| Section 5.10. |
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Tax Capital Accounts; Tax Allocations |
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49 |
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i
TABLE OF CONTENTS
(Continued)
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Page |
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| ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION |
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50 |
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| Section 6.1. |
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Additional Partners |
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50 |
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| Section 6.2. |
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Withdrawal of Partners |
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51 |
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| Section 6.3. |
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GP-Related Partner Interests Not Transferable |
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52 |
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| Section 6.4. |
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Consequences upon Withdrawal of a Partner |
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52 |
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| Section 6.5. |
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Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests |
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53 |
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| Section 6.6. |
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Dissolution of the Partnership |
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59 |
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| Section 6.7. |
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Certain Tax Matters |
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59 |
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| Section 6.8. |
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Special Basis Adjustments |
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60 |
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| ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS;
DISTRIBUTIONS |
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61 |
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| Section 7.1. |
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Capital Commitment Interests, etc. |
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61 |
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| Section 7.2. |
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Capital Commitment Capital Accounts |
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62 |
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| Section 7.3. |
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Allocations |
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62 |
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| Section 7.4. |
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Distributions |
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63 |
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| Section 7.5. |
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Valuations |
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67 |
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| Section 7.6. |
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Disposition Election |
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68 |
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| Section 7.7. |
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Capital Commitment Special Distribution Election |
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68 |
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| ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
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68 |
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| Section 8.1. |
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Partner Withdrawal; Repurchase of Capital Commitment Interests |
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68 |
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| Section 8.2. |
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Transfer of Partner’s Capital Commitment Interest |
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74 |
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| Section 8.3. |
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Compliance with Law |
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74 |
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| ARTICLE IX DISSOLUTION |
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74 |
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| Section 9.1. |
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Dissolution |
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74 |
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| Section 9.2. |
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Final Distribution |
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75 |
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| Section 9.3. |
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Amounts Reserved Related to Capital Commitment Partner Interests |
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75 |
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| ARTICLE X MISCELLANEOUS |
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76 |
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| Section 10.1. |
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Submission to Jurisdiction; Waiver of Jury Trial |
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76 |
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| Section 10.2. |
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Ownership and Use of the Blackstone Name |
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77 |
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| Section 10.3. |
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Written Consent |
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78 |
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| Section 10.4. |
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Letter Agreements; Schedules |
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78 |
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| Section 10.5. |
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Governing Law; Separability of Provisions |
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78 |
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| Section 10.6. |
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Successors and Assigns; Third Party Beneficiaries |
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78 |
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| Section 10.7. |
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Confidentiality |
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79 |
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| Section 10.8. |
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Notices |
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80 |
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| Section 10.9. |
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Counterparts |
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80 |
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| Section 10.10. |
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Power of Attorney |
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80 |
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| Section 10.11. |
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Partner’s Will |
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81 |
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ii
TABLE OF CONTENTS
(Continued)
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Page |
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| Section 10.12. |
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Cumulative Remedies |
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81 |
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| Section 10.13. |
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Legal Fees |
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81 |
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| Section 10.14. |
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Entire Agreement; Modifications |
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81 |
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iii
BMA ASIA II GP L.P.
AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT dated November 3, 2023, but with an effective date as between the parties
hereto of March 31, 2021, of BMA Asia II GP L.P., a Cayman Islands exempted limited partnership (the “Partnership”), by and among BMA Asia II L.L.C., a Delaware limited liability company, as general partner of the Partnership
(in its capacity as general partner of the Partnership (the “General Partner”), Mapcal Limited (the “Initial Limited Partner”), as initial limited partner), the limited partners listed as Limited Partners in the
books and records of the Partnership and such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS, the General Partner, as general partner, and Mapcal Limited, as initial limited partner have formed an exempted limited partnership
under the laws of the Cayman Islands under the name of BMA Asia II GP L.P. pursuant to an Initial Exempted Limited Partnership Agreement dated September 9, 2020 (the “Original Agreement”) and registered such partnership
pursuant to the filing of a statement under Section 9(1) of the Partnership Act with the Registrar on September 9, 2020; and
WHEREAS, the parties hereto desire to enter into this Agreement, effective on March 31, 2021, and hereby amend and restate the Original
Agreement in its entirety and reflect the withdrawal of the Initial Limited Partner from the Partnership and the admission of certain limited partners to the Partnership and to further make the modifications hereinafter set forth, in each case
effective on March 31, 2021;
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be
legally bound hereby, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for
purposes of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(ii).
“Advancing Party” has the meaning set forth in Section 7.1(c).
“Affiliate” when used with reference to another person means any person (other than the Partnership), directly
or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires, endowment funds, estate planning vehicles
(including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone
and/or its affiliates, partners and current and/or former employees and/or related persons.
1
“Agreement” means this Amended and Restated Exempted Limited
Partnership Agreement, as it may be further amended, supplemented, restated or otherwise modified from time to time.
“Applicable Collateral Percentage” with respect to any Firm Collateral or Special Firm Collateral, has the
meaning set forth in the books and records of the Partnership with respect thereto.
“Associates Asia II”
means Blackstone Management Associates Asia II L.P., a Cayman Islands exempted limited partnership and the general partner of BCP Asia II, or any other entity that serves as the general partner, special general partner or managing member of a
vehicle indicated in the definition of BCP Asia II.
“Associates Asia II LP Agreement” means the exempted
limited partnership agreement, dated the date set forth therein, of Associates Asia II, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the
filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or
her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or
defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment
or decree unstayed and in effect for a period of 60 consecutive days.
“BCP Asia II” means
(i) Blackstone Capital Partners Asia II L.P., a Cayman Islands exempted limited partnership, (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clauses (i) and
(iii) of this definition, (iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, the partnership referred to in clause (i) of this definition and (iv) any other limited
partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which Associates Asia II or the General Partner serves, directly or indirectly, as the general partner, special general partner, manager,
managing member or in a similar capacity.
2
“BCP Asia II Agreements” means the collective reference to
(i) the BCP Asia II Partnership Agreement and (ii) any other BCP Asia II partnership, limited liability company or other governing agreements, as each may be amended, supplemented, restated or otherwise modified from time to time.
“BCP Asia II Partnership Agreement” means the exempted limited partnership agreement of the limited
partnership named in clause (i) of the definition of “BCP Asia II,” as it may be amended, supplemented, restated or otherwise modified from time to time.
“BE Agreement” means the limited partnership agreement, limited liability company agreement or other governing
document of any limited partnership, limited liability company or other entity referred to in the definition of “Blackstone Entity,” as such limited partnership agreement, limited liability company agreement or other governing document may
be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from
time to time.
“BE Investment” means any direct or indirect investment by any Blackstone Entity.
“Blackstone” means, collectively, Blackstone Inc., a Delaware corporation, and any predecessor or successor
thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of Blackstone Inc.)).
“Blackstone Capital Commitment” has the meaning set forth in the BCP Asia II Partnership Agreement.
“Blackstone Entity” means any partnership, limited liability company or other entity (excluding any
natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of Blackstone Inc., as designated by the General Partner in its sole discretion.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or
required by law to be closed in New York, New York.
“Capital Commitment Associates Asia II Partner
Interest” means the interest of the Partnership, if any, as a limited partner of Associates Asia II with respect to any Capital Commitment BCP Asia II Interest that may be held by Associates Asia II.
“Capital Commitment BCP Asia II Commitment” means the Capital Commitment (as defined in the BCP Asia II
Partnership Agreement), if any, of the Partnership or Associates Asia II to BCP Asia II that relates solely to the Capital Commitment BCP Asia II Interest, if any.
“Capital Commitment BCP Asia II Interest” means the Interest (as defined in the BCP Asia II Partnership
Agreement), if any, of the Partnership or Associates Asia II as a capital partner in BCP Asia II .
3
“Capital Commitment BCP Asia II Investment” means the
Partnership’s interest in a specific investment of BCP Asia II , which interest may be held by the Partnership (i) through the Partnership’s direct interest in BCP Asia II through the Partnership’s Capital Commitment BCP Asia II
Interest, if the Partnership holds the Capital Commitment BCP Asia II Interest, or (ii) through the Partnership’s interest in Associates Asia II and Associates Asia II’s interest in BCP Asia II through Associates Asia II’s
Capital Commitment BCP Asia II Interest, if Associates Asia II holds the Capital Commitment BCP Asia II Interest.
“Capital Commitment Capital Account” means, with respect to each Capital Commitment Investment for each
Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3
with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment
Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable
transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
“Capital Commitment Class A Interest” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Class B Interest” has the meaning set forth
in Section 7.4(f).
“Capital Commitment Defaulting Party” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Deficiency Contribution” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Disposable Investment” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Distributions” means, with respect to each Capital Commitment
Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BCP Asia II Interest, if any, less any costs, fees and expenses of the Partnership
with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital
Commitment Investment as it may determine in good faith is appropriate.
“Capital Commitment Giveback
Amount” has the meaning set forth in Section 7.4(g)(i).
4
“Capital Commitment Interest” means the interest of a Partner in
a specific Capital Commitment Investment as provided herein.
“Capital Commitment Investment” means any
Capital Commitment BCP Asia II Investment, but shall exclude any GP-Related Investment.
“Capital Commitment Liquidating Share” means, with respect to each Capital Commitment Investment, in the case
of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” means, with respect to each Capital Commitment Investment, all amounts
of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and
expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
“Capital Commitment Partner Carried Interest” means, with respect to any Partner, the aggregate amount of
distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest.” Capital Commitment Partner Carried Interest includes any amount initially received by
an Affiliate of the Partnership from any fund (including BCP Asia II , any similar funds formed after the date hereof, and any Other Blackstone Clients (as defined in the BCP Asia II Partnership Agreement), whether or not in existence as of the date
hereof) to which such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital
contributions to make the investment of such fund giving rise to such “carried interest”).
“Capital
Commitment Partner Interest” means a Partner’s interest in the Partnership which relates (i) to any Capital Commitment BCP Asia II Interest held by the Partnership or (ii) through the Partnership and Associates Asia II, to
any Capital Commitment BCP Asia II Interest that may be held by Associates Asia II.
“Capital Commitment Profit
Sharing Percentage” means, with respect to each Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the
Partnership.
“Capital Commitment Recontribution Amount” has the meaning set forth in
Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the meaning set forth in
Section 7.1(b).
5
“Capital Commitment-Related Commitment” means, with respect to
any Partner, such Partner’s commitment to the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may
be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“Capital Commitment Special
Distribution” has the meaning set forth in Section 7.7(a).
“Capital Commitment Value” has
the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest
Distributions” as defined in the BCP Asia II Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BCP Asia II Agreement. In the case of each of (i) and (ii) above, except as
determined by the General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with
respect thereto (in each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
“Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to
Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by
(B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of
determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be
deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
“Carried Interest Sharing Percentage” means, with respect to each
GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
“Cause” means the occurrence or existence of any of the following with respect to any Partner, as
determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material
breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or
(z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in the case of any
of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice
6
of Breach”) within 15 days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform or conduct or behavior within 15 days
after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure; provided, that such Partner is diligently pursuing such cure);
(ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere)
of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a
determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has
violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse
effect on (A) such Partner’s ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of
the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
“Clawback Adjustment Amount” has the meaning set forth in Section 5.8(e)(ii)(C).
“Clawback Amount” means the “Clawback Amount”, as defined in the BCP Asia II Partnership
Agreement, and any other clawback amount payable to the limited partners of BCP Asia II or to BCP Asia II pursuant to any BCP Asia II Agreement, as applicable.
“Clawback Provisions” means paragraph 9.2.8 of the BCP Asia II Partnership Agreement and any other
similar provisions in any other BCP Asia II Agreement existing heretofore or hereafter entered into.
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreements” means the agreements between the Partnership or an Affiliate thereof and Partners,
pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the
Partnership and the relevant Partner.
“Contingent” means subject to repurchase rights and/or other
requirements.
The term “control” when used with reference to any person means the power to direct the
management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one
or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
7
“Controlled Entity” when used with reference to another person
means any person controlled by such other person.
“Covered Person” has the meaning set forth in
Section 3.5(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who
suffers from Incompetence. For purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such
Deceased Partner’s interest in the Partnership.
“Default Interest Rate” means the lower of
(i) the sum of (a) the Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
“Delaware Arbitration Act” has the meaning set forth in Section 10.1(d).
“Electronic Signature” has the meaning set forth in Section 10.9.
“Estate Planning Vehicle” has the meaning set forth in Section 6.3(a).
“Excess Holdback” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the meaning set forth in
Section 5.8(e).
“Existing Partner” means any Partner who is neither a Retaining Withdrawn Partner
nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence, Bankruptcy,
winding up, dissolution or Withdrawal from the Partnership of any person who is a Partner.
“Firm
Advances” has the meaning set forth in Section 7.1(c).
“Firm Collateral” means a
Partner’s or Withdrawn Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been
pledged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnership’s books and records; provided, that for all purposes hereof
(and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding
references to “Firm Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).
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“Firm Collateral Realization” has the meaning set forth in
Section 4.1(d)(v)(B).
“Fiscal Year” means a calendar year, or any other period chosen by the General
Partner.
“Fund GP” means the Partnership (only with respect to the
GP-Related BCP Asia II Interest) and the Other Fund GPs.
“GAAP”
means U.S. generally accepted accounting principles.
“General Partner” means BMA Asia II L.L.C. and any
person admitted to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided
herein or in the Partnership Act).
“Giveback Amount(s)” means the amount(s) payable by partners of BCP
Asia II pursuant to the Giveback Provisions.
“Giveback Provisions” means paragraph 3.4.3 of the BCP Asia
II Partnership Agreement and any other similar provisions in any other BCP Asia II Agreement existing heretofore or hereafter entered into.
“Governmental Entity” has the meaning set forth in Section 10.7(b).
“GP-Related Associates Asia II Interest” means the interest of the
Partnership as a limited partner of Associates Asia II with respect to the GP-Related BCP Asia II Interest, but does not include any interest of the Partnership in Associates Asia II with respect to any
Capital Commitment BCP Asia II Interest that may be held by Associates Asia II.
“GP-Related BCP Asia II Interest” means the interest of Associates
Asia II in BCP Asia II as general partner of BCP Asia II , excluding any Capital Commitment BCP Asia II Interest that may be held by Associates Asia II.
“GP-Related BCP Asia II Investment” means the Partnership’s
indirect interest in Associates Asia II’s indirect interest in an Investment (for purposes of this definition, as defined in the BCP Asia II Partnership Agreement) in Associates Asia II’s capacity as general partner and/or special general
partner of BCP Asia II , but does not include any Capital Commitment Investment.
“GP-Related Capital Account” has the meaning set forth in
Section 5.2(a).
“GP-Related Capital Contributions” has the
meaning set forth in Section 4.1(a).
“GP-Related
Class A Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Class B Interest” has the meaning set forth in Section 5.8(a)(ii).
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“GP-Related Commitment”,
with respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership,
including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“GP-Related Defaulting Party” has the meaning set forth in
Section 5.8(d)(ii)(A).
“GP-Related Deficiency Contribution”
has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related
Disposable Investment” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“GP-Related Investment” means any investment (direct or indirect) of
the Partnership in respect of the GP-Related BCP Asia II Interest (including, without limitation, any GP-Related BCP Asia II Investment, but excluding any Capital
Commitment Investment).
“GP-Related Net Income (Loss)” has the
meaning set forth in Section 5.1(b).
“GP-Related Partner
Interest” of a Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect
to the GP-Related BCP Asia II Interest and with respect to all GP-Related Investments.
“GP-Related Profit Sharing Percentage” means the “Carried
Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to
GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the
term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.
“GP-Related Recontribution Amount” has the meaning set
forth in Section 5.8(d)(i)(A).
“GP-Related Required Amounts”
has the meaning set forth in Section 4.1(a).
“GP-Related Unallocated
Percentage” has the meaning set forth in Section 5.3(b).
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“GP-Related Unrealized Net Income
(Loss)” attributable to any GP-Related BCP Asia II Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership
with respect to such GP-Related BCP Asia II Investment if BCP Asia II ’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date
(determined in accordance with Section 5.1(e)) and all distributions payable by BCP Asia II to the Partnership (indirectly through the general partner of BCP Asia II ) pursuant to any BCP Asia II Partnership Agreement with respect to such GP-Related BCP Asia II Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other
GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with
respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in
accordance with Section 5.1(e)).
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
“Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A).
“Holdings” means Blackstone Holdings IV L.P., a Québec société en commandite.
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole
discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Initial Limited Partner” has the meaning set forth in the preamble hereto.
“Interest” means a Partner’s exempted limited partnership interest in the Partnership, including any
interest that is held by a Retaining Withdrawn Partner and including any Partner’s GP-Related Partner Interest and Capital Commitment Partner Interest.
“Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner
from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to
purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such
Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net
Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources; provided further, that
references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an “Investor Note” refer to one such
loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not
the lender or guarantor with respect thereto.
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“Investor Special Partner” means any Special Partner so
designated at the time of its admission by the General Partner as a Partner of the Partnership.
“Issuer”
means the issuer of any Security comprising part of an Investment.
“L/C” has the meaning set forth in
Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
“Lender or Guarantor” means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the
Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
“Limited Partner” means each of the parties admitted as limited partners of the Partnership in accordance with
the terms hereof and listed as Limited Partners in the books and records of the Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each
in its capacity as a limited partner of the Partnership. For the avoidance of doubt, the term “Limited Partner” does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited
partners of the Partnership).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
“Losses” has the meaning set forth in Section 3.5(b)(i).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more persons
who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to
the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all
the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“Net Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(C).
“Net Carried Interest Distribution Recontribution Amount” has the meaning set forth in
Section 5.8(e).
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“Net GP-Related
Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment
Distributions, received by the Partnership with respect to such GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of
costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may
determine in good faith is appropriate.
“Non-Carried Interest Sharing
Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
“Non-Contingent” means generally not subject to repurchase rights or other requirements.
“Nonvoting Partner” has the meaning set forth in Section 8.2.
“Nonvoting Special Partner” has the meaning set forth in Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Other Fund GPs” means Associates Asia II and any other entity (other than the Partnership) through which any
Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates
that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither BMA Asia II L.L.C. nor Holdings nor any Estate Planning Vehicle established for the benefit of
family members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
“Other Sources” means (i) distributions or payments of Capital Commitment Partner Carried Interest (which
shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto),
and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
“Partner” means any person who is a partner of the Partnership, including the Limited Partners, the General
Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter
relating to the Partnership, including, but not limited to, any merger, reorganization, winding up or dissolution.
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“Partner Category” means the General Partner, Existing Partners,
Retaining Withdrawn Partners or Deceased Partners, each referred to as a group for purposes hereof.
“Partnership” has the meaning set forth in the preamble hereto.
“Partnership Act” means the Exempted Limited Partnership Act (As Revised) of the Cayman Islands, as amended
from time to time, or any successor statute.
“Partnership Affiliate” has the meaning set forth in
Section 3.3(b).
“Partnership Affiliate Governing Agreement” has the meaning set forth in
Section 3.3(b).
“Pledgable Blackstone Interests” has the meaning set forth in
Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate.
“Qualifying Fund” means any fund designated by
the General Partner as a “Qualifying Fund”.
“Registrar” shall have the meaning specified in
Section 2.3.
“Repurchase Period” has the meaning set forth in Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
“Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a
GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
“S&P” means Standard & Poor’s Ratings Group, and any successor thereto.
“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled
Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market
investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor
statute.
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“Settlement Date” has the meaning set forth in
Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of
its Affiliates and certain of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership
and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets
that have been pledged to the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnership’s books and records.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Partner” means any person shown in the books and records of the Partnership as a Special Partner of
the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
“Subject
Investment” has the meaning set forth in Section 5.8(e)(i).
“Subject Partner” has the
meaning set forth in Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder
of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or
receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the termination, winding up or dissolution of; or (vi) other executor, administrator, committee, legal representative or other successor or
assign of, any Partner, whether by operation of law or otherwise.
“Tax Advances” has the meaning set
forth in Section 6.7(d).
“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“Third Party Rights Law” shall have the meaning specified in Section 3.5(b)(iii).
“TM” has the meaning set forth in Section 10.2.
“Total Disability” means the inability of a Limited Partner substantially to perform the services required of
such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of
sickness, accident or otherwise.
“Transfer” has the meaning set forth in Section 8.2.
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“Trust Account” has the meaning set forth in the Trust
Agreement.
“Trust Agreement” means the Trust Agreement, dated as of the date set forth therein, as
amended, supplemented, restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“U.S.” means the United States of America.
“W-8BEN” has the meaning set forth in Section 3.7.
“W-8BEN-E” has the meaning set
forth in Section 3.7.
“W-8IMY” has the meaning set forth in
Section 3.7.
“W-9” has the meaning set forth in
Section 3.7.
“Withdraw” or “Withdrawal” means, with respect to a Partner, such
Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation, retirement or pursuant to the Partnership Act, whether such is voluntary or involuntary),
unless the context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
“Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner
Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal
representatives of any such Partner.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships
(including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
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ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special
Partners. The General Partner as of the date hereof is BMA Asia II L.L.C. and the Limited Partners as of the date hereof are those persons admitted as limited partners of the Partnership in accordance with the terms hereof and shown as Limited
Partners in the books and records of the Partnership and the Special Partners as of the date hereof are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the
Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect
to the GP-Related Investments of the Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related
Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General
Partner from time to time in accordance with the Partnership Act and this Agreement to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without
limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the admission of additional
Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement. At the time of admission of each additional Partner, the General Partner shall determine in its sole
discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partner’s GP-Related Commitment, Capital
Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with
respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest. Each Limited Partner and each Special Partner hereby waives
any and all rights under section 22 of the Partnership Act or otherwise to demand information regarding the Partnership, its business or financial condition, or to inspect the Partnership’s books, records or registers, except as expressly
provided for in this Agreement or as otherwise agreed to by the General Partner in its sole discretion.
Section 2.2. Formation;
Name; Foreign Jurisdictions. The Partnership is hereby continued as an exempted limited partnership pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of BMA Asia II GP L.P. The General
Partner shall have the power to change the name of the Partnership at any time, subject to compliance with the requirements of the Partnership Act., and shall thereupon file the requisite notice with the Registrar pursuant to the Partnership Act.
The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may
wish to conduct business, and the General Partner shall make the filings required pursuant to the Partnership Act in relation thereto.
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Section 2.3. Term. The Partnership commenced upon the filing of the Section 9
Statement with the Registrar of Exempted Limited Partnerships in the Cayman Islands (the “Registrar”), and shall continue unless earlier terminated, wound up and dissolved and its affairs wound up in accordance with this Agreement
and the Partnership Act.
Section 2.4. Purposes; Powers. (a) The purposes of the Partnership shall be, directly or
indirectly through subsidiaries or Affiliates:
(i) to serve as a limited partner or general partner of Associates Asia II
and perform the functions of a limited partner, special general partner or general partner of Associates Asia II specified in the Associates Asia II LP Agreement and, if applicable, the BCP Asia II Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BCP Asia II Interest as, a capital partner (and, if
applicable, a limited partner, special general partner and/or a general partner) of BCP Asia II and perform the functions of a capital partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BCP Asia II
specified in the BCP Asia II Agreements;
(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and acquire and invest in Securities or other property directly or indirectly through Associates Asia II and/or BCP Asia II or otherwise;
(iv) to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through Associates Asia II or another entity;
(v) to serve as a general partner or limited partner of BCP Asia II and/or other partnerships and perform the functions of a
general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement, charter or other governing documents, as amended, supplemented, restated
or otherwise modified from time to time, of any such partnership;
(vi) to serve as a member, shareholder or other equity
interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter
or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
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(vii) to carry on such other businesses, perform such other services and make
such other investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act, the Associates Asia II LP Agreement, the BCP Asia II Agreements, and any applicable partnership agreement, limited liability
company agreement, charter or other governing document referred to in clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership (acting by the General Partner) shall have all powers necessary, suitable or convenient for
the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to be and
become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the
making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection
therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company
interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether
such Investments and Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments
or Securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other
short-term investments;
(v) to hold, receive, mortgage, pledge, grant security
interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or
owned by the Partnership;
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(vi) to borrow or raise money from time to time and to issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the
interest thereon by mortgage, pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the
obligations of others and to buy, sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one or more offices within or without the Cayman Islands, and in connection therewith, to rent
or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants,
both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or
cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and
be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all
contracts, agreements and other undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept
judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or
investments or other property of the Partnership, or any combination thereof; and
(xvi) to take such other actions
necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Cayman Islands and other applicable law.
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Section 2.5. Place of Business. The Partnership shall maintain a registered office at
the offices of Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman, KY1-9005, Cayman Islands. The Partnership shall maintain an office and place of business at such
place or places as the General Partner specifies from time to time and as set forth in the books and records of the Partnership. The General Partner may from time to time change the registered office.
Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the
Partnership, the Initial Limited Partner shall (a) Withdraw as the Initial Limited Partner of the Partnership, and (b) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided,
that the effective date of such Withdrawal shall be deemed as between the parties hereto to be March 31, 2021.
Section 2.7.
Reorganization or Reconstitution and De-Registration of the Partnership. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by law, the Partnership may, at the
election of the General Partner in its sole discretion, be reorganized or reconstituted and/or registered by way of consolidation as a limited partnership (or other similar entity) under the laws of a jurisdiction outside of the Cayman Islands (and
therefore de-register the Partnership by filing an application to de-register the Partnership with the Registrar).
ARTICLE III
MANAGEMENT
Section 3.1. General Partner. (a) BMA Asia II L.L.C. is the General Partner as of the date hereof. The General Partner shall
cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General
Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or more other General Partners is admitted to the Partnership as such, all references herein to the “General Partner” in the
singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights and responsibilities of such General Partners will be as agreed upon from time to time between them.
(b) Upon the Withdrawal from the Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested
therein pursuant to this Agreement and the Partnership Act shall be exercised by a person admitted as a replacement general partner of the Partnership in accordance with the Partnership Act duly appointed by a Majority in Interest of the Partners.
Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be
expressly required by the Partnership Act, Partners (including Special Partners), other than General Partners, as such shall have no right to, and shall not, take part in the management, conduct or control of the Partnership’s business or act
for or bind the Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
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(b) To the extent a Partner is entitled to vote with respect to any matter relating to the
Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided
by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent
or approval thereto.
Section 3.3. Management. (a) The management, conduct of business, control and operation of the
Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership,
including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its sole
discretion, subject only to the express terms and conditions of this Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, the Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in the
Partnership’s capacity as a partner of Associates Asia II on Associates Asia II’s own behalf or in Associates Asia II’s capacity as general partner, special general partner, capital partner and/or limited partner of BCP Asia II or as
general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BCP Asia II or as general or limited partner, member,
shareholder or other equity interest owner of any Partnership Affiliate): (i) to execute and deliver, and to perform the Partnership’s obligations under the Associates Asia II LP Agreement, including, without limitation, serving as a partner of
Associates Asia II, (ii) to execute and deliver, and to cause Associates Asia II to perform Associates Asia II’s obligations under, the BCP Asia II Agreements, including, without limitation, serving as a general partner or special general
partner of BCP Asia II and, if applicable, a capital partner of BCP Asia II , (iii) if applicable, to execute and deliver, and to perform the Partnership’s obligations under, the BCP Asia II Agreements, including, without limitation, serving as
a capital partner of BCP Asia II , (iv) to execute and deliver, and to perform, or, if applicable, to cause Associates Asia II to perform, the Partnership’s or Associates Asia II’s obligations under, the governing agreement, as amended,
supplemented, restated or otherwise modified (each a “Partnership Affiliate Governing Agreement”), of any other partnership, limited liability company, other company, corporation or other entity (each a “Partnership
Affiliate”) of which the Partnership or Associates Asia II is, or is to become, a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner, special
general partner, or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate, and (v) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the Associates Asia
II LP Agreement, the BCP Asia II Agreements or each Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
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(c) The General Partner and any other person designated by the General Partner, each acting
individually, is hereby authorized and empowered, as an authorized person of the Partnership, or otherwise, or as an authorized representative of the General Partner (the General Partner hereby authorizing and ratifying any of the following
actions):
(i) to execute and deliver and/or file (including any such action, directly or indirectly through one or more
other entities, in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a limited partner or general partner of Associates Asia II on Associates Asia II’s own behalf, or in Associates Asia II’s capacity as
general partner, special general partner, capital partner and/or limited partner of BCP Asia II or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the
Partnership’s capacity as a capital partner of BCP Asia II or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates Asia II, BCP Asia II or any
Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates Asia II LP Agreement, the BCP Asia II Agreements and each Partnership
Affiliate Governing Agreement, (II) subscription agreements and documents on behalf of BCP Asia II or Associates Asia II, (III) side letters issued in connection with investments in BCP Asia II , and (IV) such other agreements,
certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, Associates Asia II, BCP Asia II or any Partnership Affiliate (and any amendments, supplements, restatements and/or
other modifications of any of the foregoing referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of exempted limited partnership and/or other organizational documents of the
Partnership, Associates Asia II, BCP Asia II and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
(C) any other certificates, notices, applications and other documents (and any amendments, supplements, restatements and/or
other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates Asia II, BCP Asia II or any Partnership Affiliate
to qualify to do business in a jurisdiction in which the Partnership, Associates Asia II, BCP Asia II or such Partnership Affiliate desires to do business;
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(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or
file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a limited partner or general partner of Associates Asia II on
Associates Asia II’s own behalf or in Associates Asia II’s capacity as general partner, special general partner, capital partner and/or limited partner of BCP Asia II , or as general partner or limited partner, member, shareholder or other
equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BCP Asia II or as general partner or limited partner, member, shareholder or other equity interest owner of any
Partnership Affiliate): (A) any certificates, forms, notices, applications and other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, Associates Asia II, BCP Asia II and/or any Partnership
Affiliate, (B) any certificates, forms, notices, applications and other documents that may be necessary or advisable in connection with any bank account of the Partnership, Associates Asia II, BCP Asia II or any Partnership Affiliate or any
banking facilities or services that may be utilized by the Partnership, Associates Asia II, BCP Asia II or any Partnership Affiliate, and all checks, notes, drafts and other documents of the Partnership, Associates Asia II, BCP Asia II or any
Partnership Affiliate that may be required in connection with any such bank account or banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as
provided in this Section 3.3(c), each acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, Associates Asia II, BCP Asia II or any Partnership Affiliate, as applicable, for all purposes).
(d) The authority granted to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General
Partner by an instrument in writing signed by the General Partner.
Section 3.4. Responsibilities of Partners. (a) Unless
otherwise determined by the General Partner in a particular case, each Limited Partner (other than a Special Partner) shall devote substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each
Special Partner shall not be required to devote any time or attention to the businesses of the Partnership or its Affiliates. Notwithstanding the foregoing no Partner other than General Partner is permitted to take part in the business of
Partnership for the purposes of the Partnership Act.
(b) All outside business or investment activities of the Partners (including outside
directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the
General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
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Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent
permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a
“Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any
transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial
determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority
granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any
Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating
thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of
this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to
modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its
duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the
extent of the Partnership’s assets (including, without limitation, the remaining capital commitments of the Partners)) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without
limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of
any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out
of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person
constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and
non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to,
the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of
such Losses in accordance with such Covered Person’s
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GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent
permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time
to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the
extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered
Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes litigation against a
Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partner’s Interests and remaining capital commitments, for such Partner’s pro rata share of the
Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by
the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority to enter into separate agreements with any Covered
Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A)
Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the
indemnification, advancement of expenses and related provisions under applicable law governing BCP Asia II and/or a particular portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered
Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BCP
Asia II ; second, by the applicable portfolio entity through which such investment is indirectly held; third, by BCP Asia II and fourth by Associates Asia II (only to the extent the foregoing sources are exhausted).
(B) The Partnership’s obligation, if any, to indemnify or advance expenses to any Covered Person shall be reduced by any
amount that such Covered Person may collect as indemnification or advancement from BCP Asia II and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), and to the extent the Partnership
(or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates Asia II, BCP Asia II and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), it
is agreed among the Partners that the Partnership shall have a subrogation claim against Associates Asia II and/or BCP Asia II and/or such portfolio entity in respect of such advancement or payments. The General Partner and the Partnership shall be
specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of Blackstone Inc. or any of its Affiliates, which shall not be permitted) as the General Partner may
determine necessary or advisable to give effect to or otherwise implement the foregoing.
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(iii) A Person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act (As Revised), as amended, modified, re-enacted or replaced, (the “Third Party Rights Law”) to enforce directly any term of this Agreement save
(i) that, each Indemnitee may enforce directly its rights pursuant to Section 3.5 of this Agreement subject to and in accordance with the provisions of the Third Party Rights Law and (ii) as contemplated by Section 10.6.
Notwithstanding any other term of this Agreement, the consent of any Person who is not a party to this Agreement (including, without limitation, any Indemnitee) is not required for any variation of, amendment to, or release, rescission, or
termination of, this Agreement.
Section 3.6. Representations of Partners. (a) Each Limited Partner and Special Partner
by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the
General Partner, that such Partner is acquiring each of such Partner’s Interests for such Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any
interest in any such Interest or in the rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the
terms hereof). Each Limited Partner and Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without registration
under the Securities Act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner represents
that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic risk of
such investment. Each Limited Partner and Special Partner represents that such Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partner’s net worth and
the Partner has no need for liquidity in the Partner’s investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such Partner has
requested relating to the Partnership, any Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any
matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the Partner with the
Partner’s own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and warranties contained in paragraph (a) above shall be true
and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that such
capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
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Section 3.7. Tax Representation and Further Assurances. (a) Each Limited
Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the
Partnership’s obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner and Special
Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partner’s name, social security number (or, if applicable, employer
identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W- 9, Request for Taxpayer Identification Number Certification
(“W-9”) or otherwise are correct and (ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited
Partner or Special Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United
States) status or (B) if the Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign
Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (“W-8BEN”), IRS Form
W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or
Certain U.S. Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and (ii) the Limited Partner or Special Partner will complete and return the
applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY, and
(y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited
Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably
requested by the Partnership or the General Partner.
(c) Each Limited Partner and Special Partner acknowledges and agrees that the
Partnership and the General Partner may release confidential information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partner’s investment in the Partnership if the Partnership
or the General Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure
shall not be treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any
of their Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
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(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides
information that is in anyway materially misleading, or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner
reserves the right to take any action and pursue any remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited
Partner’s or Special Partner’s action or inaction from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE
PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital
contributions to the Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required
Amounts”) as are required to satisfy the Partnership’s obligation to make capital contributions to Associates Asia II in respect of the GP-Related Associates Asia II Interest to fund Associates
Asia II’s capital contributions with respect to any GP-Related BCP Asia II Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited
Partner’s Commitment Agreement or SMD Agreement, if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related
Required Amounts may be made pro rata among the Partners based upon each Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in
Section 4.1(d) and Section 5.8(d))) shall be determined by the General Partner. Special Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess
of the GP-Related Required Amounts, except (i) as a condition of an increase in such Special Partner’s GP-Related Profit Sharing Percentage or (ii) as
specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital
Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BCP Asia II Interest.
(b) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional
Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) the amount of any GP-Related Capital
Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc.
or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
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(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant
to which certain amounts of the distributions relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a
“Holdback”). The General Partner shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such withheld
percentage constituting the General Partner’s and such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the
General Partner), 21% for Retaining Withdrawn Partners (other than the General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the
Holdback Percentage for the General Partner and/or Holdings shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her
Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is
decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating
to Carried Interest made after the date of such reduction.
(iii) The Holdback Percentage may not be increased for any
individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the
General Partner concurrently increases the Existing Partners’ Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback
Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any
increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the
Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces
the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial
Holdback Percentages.
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(iv) (A) Notwithstanding anything contained herein to the contrary, the General
Partner may increase or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to a majority vote of the Limited Partners (a “Holdback Vote”);
provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a
Subject Partner’s Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and
(y) has, if requested by such Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such
decrease occurs subsequent to an increase in a Subject Partner’s Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject
Partner’s Holdback Percentage is less than the prevailing Holdback Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback
Percentage unless such voting Partner determines, in such Partner’s good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or
assigns (including such Subject Partner’s estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not
be capable of satisfying any GP-Related Recontribution Amounts that may become due.
(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Limited Partners shall be entitled to cast one vote
with respect to the Holdback Vote regardless of such Limited Partner’s interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback Percentage, such Subject
Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually
satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided
further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject
Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected
out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator,
pay the total of such estimated expenses (i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses
associated with such arbitration (including costs leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing
party is insufficient to cover the expenses of such arbitration, such “losing” party shall then provide any additional
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funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership if the Holdback Percentage ultimately
determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject Partner shall be the
“victorious” party. The party that is not the “victorious” party shall be the “losing” party.
(D) In the event of a decrease in a Subject Partner’s Holdback Percentage (1) pursuant to a Holdback Vote under this
clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly
provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback Percentage) as though such reduced Holdback
Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the “Excess
Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess Holdback”), and such
Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or Withdrawn Partner’s Excess Holdback obligation, by pledging, granting a
security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner
seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a
first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnership’s books and records in which
Partners are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority
security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner
provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or (y) if the General Partner
otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause
(x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company
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or other entity listed in the Partnership’s books and records to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more
fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use
Firm Collateral as provided hereunder.
(B) If upon a sale or other realization of all or any portion of any Firm
Collateral (a “Firm Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise
distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to
fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary
to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any
valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including
upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership shall provide notice of the
foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her
Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii)
shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term
“GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the
amount due pursuant to this clause (C).
(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or
(B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the benefit of the
Trustee(s) in such amounts. Any Partner or Withdrawn Partner
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choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial bank
whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moody’s (if the L/C is for a term of 1 year or less), or (y) long-term deposits
are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”). If the relevant rating of the commercial bank issuing such L/C drops below the relevant Required Rating,
the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has
a term expiring on a date earlier than the latest possible termination date of BCP Asia II , the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at
least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the
Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback Provisions or
(II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least
30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and
satisfaction of the Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder), or
(3) the release, by the Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm
Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of
an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that
in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any in-kind distributions by the Partnership relating to Carried Interest
shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind distributions held in the Trust Account at any time. The
net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
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(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security
interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnership’s books and records; provided, that the initial contribution
of such Special Firm Collateral shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm
Collateral. To the extent such Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from
the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her
Holdback (excluding any Excess Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a
release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding any Excess
Holdback) by pledging or granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback
distributed to the Partner or Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is
necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, winding up or other realization of all or any portion of any Special Firm
Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess
Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust
Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or
other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes
hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a
Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partner’s or Withdrawn Partner’s
deficiency with respect to his or her Holdback in cash or an L/C.
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(C) Upon any valuation or revaluation of the Special Firm Collateral and/or any
adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnership’s books and records), if such Partner’s or Withdrawn Partner’s Special Firm Collateral is valued at less than such
Partner’s Holdback (excluding any Excess Holdback) as provided in the Partnership’s books and records, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to
such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such
deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed
inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party”
where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such
Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn
Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess
Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any
amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment
of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General
Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s
GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or
(iii) as determined by the General Partner.
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ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be
determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b)
“GP-Related Net Income (Loss)” means:
(i) from any activity of
the Partnership related to the GP-Related BCP Asia II Interest for any accounting period (other than GP-Related Net Income (Loss) from
GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items
that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such
GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related
Investment (determined as provided below); and
(iii) from any GP-Related
Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period
less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall be
determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not
otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its
adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in
the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any
expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this
definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the
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calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of income and
expense (including interest income and overhead and other indirect expenses) of the Partnership, Holdings and other Affiliates of the Partnership shall be allocated among the Partnership, Holdings and such Affiliates, among various Partnership
activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss)
by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened
litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the option of the General Partner, an accounting period will terminate and a
new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the
General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners’ GP-Related
Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to
GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing Percentages during such accounting
period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such
accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
(e) In establishing GP-Related Profit Sharing Percentages and allocating
GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made
by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn Partners, their successors,
heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any successor thereto.
Section 5.2. GP-Related Capital Accounts. (a) There shall be established for each
Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partner’s interests in the
capital of the Partnership related to the GP-Related BCP Asia II Interest and the GP-Related Net Income (Loss) of the Partnership (each a “GP-Related Capital Account”).
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(b) As of the end of each accounting period or, in the case of a contribution to the Partnership
by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or
Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall
be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to such Partner’s GP-Related Partner
Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partner’s capital
related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital
Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of
any property distributed to such Partner during such accounting period with respect to such Partner’s GP-Related Partner Interest and (y) the GP-Related Net
Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related Profit
Sharing Percentages. (a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing percentage (the “GP-Related Profit Sharing
Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner
deems appropriate; provided, that (i) the General Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from
any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph
(c) below and (ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former
Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of
any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the
GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partner’s GP-Related Profit Sharing
Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the
General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit
Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”); provided, that any
GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90
days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
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(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in
proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and
(ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at
the time such GP-Related Investment is acquired and shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss). (a) Except as provided in
Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related
Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in
proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest
distributed to the Partners; second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or
Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a
return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the
Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have
been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net
Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BCP Asia II and allocated to the Partnership with respect to its pro rata
share thereof (based on capital contributions made by the Partnership to BCP Asia II with respect to the GP-Related BCP Asia II Interest) shall be allocated to the Partners in accordance with each
Partner’s Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BCP Asia II and (ii) GP-Related Net Loss relating to realized losses suffered by BCP Asia II and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s
(including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)).
(c) Notwithstanding Section 5.4(a) above, GP-Related Net Income relating to Carried Interest
allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest Give Back Percentages until such time as
the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in
accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried Interest.
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(d) To the extent the Partnership has any GP-Related Net
Income (Loss) for any accounting period unrelated to BCP Asia II , such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing
Percentages prevailing at the beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to
Partners (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such
allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this
Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to
make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or
Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6. [Intentionally omitted.]
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or
other requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BCP Asia II Investments as the General Partner may determine.
The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner
that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements
from time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
Section 5.8.
Distributions. (a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and
distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and
Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
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(ii) At any time that a sale, exchange, transfer or other disposition by BCP Asia
II of a portion of a GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General
Partner each Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a Partner’s
“GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such
GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related
Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BCP Asia II ) relating to a GP-Related Disposable Investment
(with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B
Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by BCP Asia II ) relating to a GP-Related Investment excluding such
GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of
GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related
Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of
GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall
make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such
Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an
individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account (x) the
limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income) and (iii) taking into
account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General
Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
(c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee
(including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a
“Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof
(together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by virtue of the expiration of the
applicable
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Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof
irrespective of whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined
otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage
interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner;
provided, that the General Partner may allocate the Withdrawn Partner’s share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn
Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor
Special Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
(d) (i) (A) If Associates Asia II is obligated under the Clawback Provisions or Giveback Provisions to contribute to BCP Asia II a
Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such amount to Associates Asia II in respect of the Partnership’s
GP-Related Associates Asia II Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a
“GP-Related Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the General Partner, in which
case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest
(and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related Recontribution
Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of Clawback Amounts
and (II) with respect to a GP-Related Giveback Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried
Interest in connection with (a) the GP-Related BCP Asia II Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to
clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BCP Asia II Investments other than the one giving rise to such obligation,
but only those amounts received by the Partners with an interest in the GP-Related BCP Asia II Investment referred to in clause (II)(a) above, and (c) if the GP-Related Giveback Amount pursuant to an
applicable BCP Asia II Agreement is unrelated to a specific GP-Related BCP Asia II Investment, all GP-Related BCP Asia II Investments. Each Partner and Withdrawn Partner
shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call such Partner’s or Withdrawn Partner’s GP-Related
Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the Partnership, or if applicable, any of the Other Fund GPs with respect to
Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related
Recontribution Amount”), irrespective of the fact that the amounts
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in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’ obligation under the Clawback Provisions and/or Giveback Provisions;
provided, that to the extent a Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such
written instructions from the General Partner shall specify each Partner’s and Withdrawn Partner’s GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion
(but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate
amount of such obligations); provided further, that any amount from a Partner’s Trust Account used to pay any GP-Related Giveback Amount (or such lesser amount as may be required by the
General Partner) shall be contributed by such Partner to such Partner’s Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount.
(B) To the extent any Partner or Withdrawn Partner has
satisfied any Holdback obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment
into the Trust Account in an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of
(I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the
Trustee(s) shall take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such
Partner or Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the
satisfaction of the Partnership’s and the Other Fund GPs’ obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall
constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BCP
Asia II Partnership Agreement, each partner of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and
under Section 5.8(d)(ii)(A) with respect to such partner’s pro rata share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BCP Asia II
Partnership Agreement.
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(ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net
GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried
Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully
described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such
GP-Related Defaulting Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”)
if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the
Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the
Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Net GP-Related Recontribution Amount initially requested from
such Partner or Withdrawn Partner in respect of such default.
(B) Thereafter, the General Partner shall determine in its
good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the
General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent
not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party
becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to
Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a
GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General
Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the
intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related
Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
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(C) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first
seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency
Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or
Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this
Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is
hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns (as
defined in the BCP Asia II Agreements) and Losses (as defined in the BCP VIII Agreements) on GP-Related BCP Asia II Investments that have been the subject of a writedown and/or Net Loss (as defined in the BCP
VIII Agreements) (each, a “Loss Investment”) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried
Interest distributions from other GP-Related BCP Asia II Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth
in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a
GP-Related BCP Asia II Investment (the “Subject Investment”) that have been reduced under any BCP Asia II Agreement as a result of one or more Loss Investments, the General Partner shall
calculate amounts distributable to or due from each such Partner as follows:
(A) determine each Partner’s share of
each such Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution
to all Partners (indirectly through the Partnership from BCP Asia II ) from the Subject Investment (such reduction, the “Loss Amount”);
(B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject
Investment (indirectly through the Partnership from BCP Asia II ) before any reduction in respect of the amount determined in clause (A) above (the “Unadjusted Carried Interest Distributions”); and
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(C) subtract (I) the Loss Amounts relating to all Loss Investments from
(II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General
Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a
“Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to clause (I) are
insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a
Partner’s (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the
BCP Asia II Agreements) in effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of paying such Partner’s Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise
distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is determined
(as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of negative Net
Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be
allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A
Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all
purposes hereof.
A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject
to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account
any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest
Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect
to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such
distribution (taken together with the other Carried Interest distributions received by such Partner to date).
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(ii) In the case of Clawback Amounts which are required to be contributed to the
Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partner’s share of any Net Losses (as defined in the BCP Asia II Agreements) in any GP-Related BCP Asia II Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BCP Asia II Investment with respect to
which Carried Interest distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related BCP Asia II Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest
Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from
the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to
the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a
positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the
extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount
was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith
judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of
each Partner regarding the Clawback Amount as provided in the BCP Asia II Agreements.
Section 5.9. Business Expenses. The
Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner
from time to time.
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Section 5.10. Tax Capital Accounts; Tax Allocations. (a) For U.S. federal
income tax purposes, there shall be established for each Partner a single capital account combining such Partner’s Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are
appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder. In furtherance of the foregoing and in accordance
with Treasury Regulations Section 1.1061-3(c)(3)(ii)(B), the Partnership shall (i) calculate separate allocations attributable to (A) the Carried Interest and any other distribution entitlements that are not commensurate
with capital contributed to the Partnership, and (B) any distribution entitlements of the Partners that are commensurate with capital contributed to the Partnership (in each case, within the meaning of Treasury Regulations
Section 1.1061-3(c)(3)(ii)(B) and as reasonably determined by the General Partner), and (ii) consistently reflect each such allocation in its books and records.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and
local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable
law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its
respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated
shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are
in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S. federal, state
and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are
allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations
have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain,
loss, deduction or credit of the Partnership (or an adjustment to any Partner’s distributive share thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in
accordance with the final resolution of such audit adjustment.
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ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners. (a) Effective on the first day of any month (or on such other date as shall be determined
by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the
representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute
Partner) all terms of such additional Partner’s participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital
Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time
to time unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a “Nonvoting Special
Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to adhere to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved
by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s purchase of his or her Capital Commitment Interests, Blackstone or such other
or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a GP-Related
Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The
GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other
Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be
allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by
the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for any further act, vote or consent of any person, to make adjustments to the
GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners admitted to the Partnership, adjustments with respect to other Partners of the
Partnership and to give effect to other matters set forth herein, as applicable.
(c) An additional Partner shall be required to contribute
to the Partnership his or her pro rata share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not
acquire any interests, at such times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
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(d) The admission of an additional Partner will be evidenced by (i) the execution of a
counterpart copy of this Agreement by such additional Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, as determined by the General Partner, or (iii) the execution by such
additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to adhere to and be bound by the terms of this Agreement and such writing being acceptable to the General Partner on behalf of the
Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is acceptable to the General Partner on
behalf of the Partnership.
Section 6.2. Withdrawal of Partners. (a) Any Partner may Withdraw voluntarily from the
Partnership subject to the prior written consent of the General Partner, including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the
General Partner, have a material adverse effect on the Partnership or its business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such
other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days’ prior written notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between
such Partner and the General Partner); provided, that a Partner may Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest without Withdrawing from the Partnership
with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to
such Partner’s GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including
by the occurrence of any withdrawal event under the Partnership Act with respect to any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such
person’s GP-Related Partner Interest; provided, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such
person’s GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of whether any Partner has
suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a
qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
(d) If
the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership
(whether or not Cause exists) with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such Partner, upon written notice by
the General Partner to such Partner, shall be required to Withdraw with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest,
as of a date specified in such notice, which date shall be on or after the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such person’s GP-Related
Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
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(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the
obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its
acts or omissions as a General Partner to the fullest extent provided by law.
Section 6.3.
GP-Related Partner Interests Not Transferable. (a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partner’s GP-Related Partner Interest other than as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by operation of law,
transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General
Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust,
limited partnership, or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate Planning Vehicle will
be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the Partnership
(including the obligation to make additional GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning Vehicle to
Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or
otherwise) of the whole or any portion of any Partner’s GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be
given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner
Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the Partnership Act, the General Partner may not
transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the prior written approval of a Majority in
Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law
or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person
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who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or
indirectly, the principal part of the business then conducted by the General Partner in connection with any winding up, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the
obligations of the General Partner under this Agreement and the filing of a statement pursuant to Section 10 of the Partnership Act, such person shall be admitted as the General Partner. A person who is so admitted as an additional or
substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired. The General Partner shall
file, or cause to be filed, any statement required to be filed pursuant to Section 10 of the Partnership Act with the Cayman Islands Registrar of Exempted Limited Partnerships to give effect to the provisions of this Section 6.4(a). The
General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall
not commence the winding up of or dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining
Partners being hereby authorized to continue the business of the Partnership without commencement of the winding up of or dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall
be no remaining Limited Partners, the Partnership shall be wound up and subsequently dissolved unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the
Partnership and to the appointment, effective to the maximum extent permissible by the Partnership Act, as of the date of such Withdrawal, of one or more Limited Partners satisfying the requirements of, and in accordance with, the Partnership Act.
(c) The Partnership shall not commence winding up or be dissolved, in and of itself, by the Withdrawal of any Partner, but shall continue
with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related
Partner Interests.
(a) The terms of this Section 6.5 shall apply to the GP-Related
Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term
“Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding
the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Special Partner, shall be considered a Withdrawn Partner for
all purposes hereof.
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(b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that
if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the
interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions,
interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partner’s
GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partner’s Settlement Date (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date
in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General
Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise
determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner
Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or
not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn
Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided
in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such
Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss), or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or
other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related
Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment)
and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in
paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of
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paragraphs (a)-(r) of this Section 6.5. If the amount determined pursuant to clause (x) above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the
Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment
shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner
who was solely a Special Partner, upon the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other
Partners’ GP-Related Capital Accounts in accordance with their respective GP-Related Profit Sharing Percentages in the categories of
GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the
Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this
Section 6.5(e), in the case of a Partner whose Withdrawal with respect to such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s
estate or legal representative, as the case may be, may elect, at the time described below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5.
(f) For purposes of
clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s “percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn
Partner”) shall become and remain a Special Partner for such purpose (and, if the General Partner so designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner
Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms
and conditions as are established by the General Partner. At the option of the General Partner in its sole discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to
this sentence.
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(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a
Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to (ii) distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro
rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other
investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the
Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted.]
(i)
Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the
Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership
(e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by
the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other
inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future
creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment
(x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal
Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the
General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn
Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(k)
Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable
by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner
to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The
“due date” of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in
respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The “due date” of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
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(l) At the time of the settlement of any Withdrawn Partner’s
GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the
assignment, pledge, grant of security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other
investments distributed in kind to such Withdrawn Partner or such Withdrawn Partner’s right to any payment from the Partnership.
(m)
If a Partner is required to Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not
be required) to apply any or all the following terms and conditions to such settlement:
(i) In settling the Withdrawn
Partner’s interest in any GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the
GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate
balance of such Withdrawn Partner’s GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his
or her GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply
the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any
GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The
Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in
right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or
distribution.
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(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on
the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a
period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph
(n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such
restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the
General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to
any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance
to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such
professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent,
representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and
all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including,
without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney shall be irrevocable and is given to secure a proprietary interest of
the donee of the power or the performance of an obligation owed to the donee and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the
death, disability or incapacity of such Partner. This power of attorney may be exercised by such attorney-in-fact for each of the Partners (or any of them) by a single
signature of the General Partner acting as attorney-in-fact with or without listing all of the Partners executing an instrument.
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Section 6.6. Dissolution of the Partnership. The General Partner may wind up
and subsequently dissolve the Partnership prior to the expiration of its term at any time on not less than sixty (60) days’ notice commencement of winding up to the other Partners and, upon completion of the winding up of the Partnership,
by filing a notice pursuant to Section 36(2) of the Partnership Act. Upon the commencement of winding up, the Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5.
Section 6.7. Certain Tax Matters. (a) The General Partner shall determine all matters concerning
allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared
all U.S. federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General
Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant
jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such
tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit
relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the
Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any
tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings
arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding
upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including,
without limitation, attorneys’, accountants’ and other experts’ fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax
return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the
Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of
such claim, or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or
the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any Partner selected by the General Partner as the
“partnership representative” (as defined under the Code) (the “Tax Matters Partner”). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other
Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys’ fees and disbursements, incident to any such breach or violation.
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(c) Each individual Partner shall provide to the Partnership copies of each U.S. federal, state
and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent
the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf
of or with respect to any Partner, or as a result of a Partner’s participation in the Partnership or as a result of a Partner’s failure to provide requested tax information, including pursuant to Section 6225 or Section 1446(f)
of the Code (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be
promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such
Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon winding-up or dissolution of the Partnership otherwise payable to such Partner. Whenever the General
Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon
dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability
(including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this
Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
(e) To
the extent that any taxes are imposed on the Partnership (or any entity in which the Partnership invests that is treated as a flow-through entity for relevant tax purposes) with respect to income of the Partnership (or such entity) in lieu of taxes
imposed directly on a Partner with respect to such income (including any state or local income taxes), whether by election of the Partnership or the General Partner or otherwise, such amounts shall be deemed to have been distributed to such Partner.
To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to
tax or interest) with respect to any such tax payments. The obligations of a Partner set forth in this Section 6.7(e) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the
terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election
to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
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ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc. (a) This Article VII and Article VIII hereof set forth certain terms
and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BCP Asia II Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BCP Asia II Interest. Except as
otherwise expressly provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BCP Asia II Interest.
(b) Each Partner, severally, agrees to make contributions of capital to
the Partnership (“Capital Commitment-Related Capital Contributions”) as required to fund the Partnership’s capital contributions to BCP Asia II or Associates Asia II in respect of the Capital Commitment BCP Asia II Interest, if
any, and the related Capital Commitment BCP Asia II Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Capital Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital
Contributions to the Partnership in an amount in excess of such Partner’s Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters.
It is understood that a Partner will not necessarily participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital
Commitment Profit Sharing Percentage with respect to (i) the Partnership’s portion of the Blackstone Capital Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that
this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest,
and nothing contained herein shall limit or dictate the terms upon which the Partnership and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of
funds equal to such Partner’s Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its Affiliates (in such capacity, the “Advancing Party”) may in its sole discretion advance to
any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital
Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Partner shall pay interest to the Advancing Party on each Firm Advance from the date of such Firm
Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon
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prior written notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive
evidence of each such Firm Advance, binding on the Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of
the making of such Firm Advance. The Advancing Party shall inform any Partner of such rate upon such Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided
further, that amounts that are otherwise payable to such Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm
Advances (including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest
rate applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
Section 7.2. Capital Commitment Capital Accounts. (a) There shall be established for each Partner in the books of the
Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital
Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be
credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer
of a Partner’s interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital
Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment
Investment and in whole upon the winding-up or dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption
except with the consent of the General Partner.
Section 7.3. Allocations. (a) Capital Commitment Net Income (Loss) of
the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to
their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which
such Partner’s aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment
Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election
in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment.
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(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7
shall be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as
it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4. Distributions.
(a) Each Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments,
distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests)
during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the
General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected
by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
(i) First, to the
payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all
interest payments due, the selection of those of such Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Partner of an amount equal to the U.S. federal, state and local income taxes on income of
the Partnership allocated to such Partner for such year in respect of such Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that
the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were all allocated to an individual subject to the
then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character of such taxable income allocated by the
Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause (ii) to the extent that such amount
reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant partnership or other entity; provided
further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant to provisions in such other BE Agreements
that are comparable to this clause (ii);
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(iii) Third, to the payment in full of the principal amount of the Investor Note
financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid
from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all Capital Commitment-Related Capital
Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any Blackstone Entity (other than the
Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related Investor Notes), to the extent not
repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to
the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid
and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50%
of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the
Partnership), the selection of those of such Partner’s Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the
Lender or Guarantor; and
(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment Net Income
remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in
clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted
to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to
clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partner’s Capital Commitment
Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed
to such Partner.
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Distributions of Capital Commitment Net Income may be made at any other time at the discretion of
the General Partner. At the General Partner’s discretion, any amounts distributed to a Partner in respect of such Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes
for the full period in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy
any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining
principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a
Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e)
The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment is being considered by the
Partnership or BCP Asia II (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect to such Capital Commitment Investment shall be vertically
divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class B Interest”), and a
Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class A Interest”). Distributions
(including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class B Interests
with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions (including those resulting from the
direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class A
Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.
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(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a
Giveback Amount to BCP Asia II in respect of any Capital Commitment BCP Asia II Interest that may be held by the Partnership or (y) Associates Asia II is obligated under the Giveback Provisions to contribute to BCP Asia II a Giveback Amount
with respect to any Capital Commitment BCP Asia II Interest that may be held by Associates Asia II and the Partnership is obligated to contribute any such amount to Associates Asia II in respect of the Partnership’s Capital Commitment
Associates Asia II Partner Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a “Capital Commitment Giveback Amount”), the
General Partner shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and
as called by the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment BCP Asia II Interest (the “Capital Commitment Recontribution Amount”) which equals such
Partner’s pro rata share of prior distributions in connection with (a) the Capital Commitment BCP Asia II Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause
(a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BCP Asia II Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to an
applicable BCP Asia II Agreement is unrelated to a specific Capital Commitment BCP Asia II Investment, all Capital Commitment BCP Asia II Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s
Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partner’s discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential
obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
(ii) (A) In the event any Partner (a “Capital Commitment Defaulting Party”) fails to recontribute all or any
portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of
their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital Commitment Defaulting Party’s Capital Commitment
Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such amount in cash from such Capital Commitment
Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount; provided, that no Partner shall as a
result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested from such Partner in respect of such default.
Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors
considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting
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Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right
(effective upon such Capital Commitment Defaulting Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital
Commitment Recontribution Amount any amounts otherwise payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner
becoming a Capital Commitment Defaulting Party, in all accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General
Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful
attorney-in-fact with full irrevocable power and authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to
accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment
Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B)
Any Partner’s failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount.
(iii) A Partner’s obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the
termination of the Partnership.
(h) If a Limited Partner is obligated pursuant to section 34 of the Partnership Act to return a
distribution made to it where the Partnership is insolvent, the simple rate of interest on such repayment shall be 0 per centum per annum (0%).
Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the end of each year (and at such other
times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates Asia II (or any other Affiliate of the Partnership that is a general partner of BCP Asia II ) in valuing investments of BCP Asia II or, in
the case of investments not held by BCP Asia II , in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment Interest as of any date (the
“Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an earlier date if determined
appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment Interest (as compared
to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment Investment. To the full extent
permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a person who is or was at any
time a direct member or partner of a General Partner of the Partnership.
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Section 7.6. Disposition Election. (a) At any time prior to the date of the
Partnership’s execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital
Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to
such date (i) not to dispose of all or any portion of such Partner’s pro rata share of such Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such
Partner on the closing date of such disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such
Retained Portion to such Partner. Such Partner’s Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other
Partners’ pro rata shares of such Capital Commitment Investment; provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of
proceeds with respect to a subsequent disposition thereof by the Partnership.
(b) No distribution of such Retained Portion shall occur
unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such distribution.
Section 7.7. Capital Commitment Special Distribution Election. (a) From time to time during the term of this Agreement, the
General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partner’s Capital Commitment
Profit Sharing Percentage in such Capital Commitment Investment) (a “Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment
Special Distribution.
(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating thereto shall have
been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL, ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests. (a) Capital Commitment Interests (or a portion
thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not
financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with
respect to such Capital Commitment Interest, the original principal amount of such
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Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion of any outstanding principal
on the Investor Notes; provided, that in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an employee or officer of
Holdings or an Affiliate thereof, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such
prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase price of a Partner’s Contingent Capital Commitment Interests as
set forth in paragraph (b) below. Prepayments made by a Partner shall apply pro rata against all of such Partner’s Investor Notes; provided, that such Partner may request that such prepayments be applied only to Investor
Notes related to BE Investments that are related to one or more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be
treated as Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an
officer or employee of the Partnership or any of its Affiliates, other than as a result of such Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the
right (exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the
obligation, to require the Partnership (subject to the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn
Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
(ii) The purchase price for each such Contingent Capital Commitment Interest shall be an amount equal to (A) the
outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the “Adjustment Amount”)
equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus (y) all
Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on the Contingent portion of such
Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount, in the General
Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment Net Income
received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the holders of
the purchased Capital Commitment Interest by the Withdrawn Partner (A) from
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the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partner’s Capital Commitment Interests at the time such Capital
Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, in
cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so
paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partner’s Contingent Capital Commitment Interests, his or her related Investor Note shall be payable in full.
(iii) Upon such Partner ceasing to be such an officer or employee, all Investor Notes shall become fully recourse to the
Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn Partner’s Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the Partnership nor its designee(s) exercises the right to require repurchase of such
Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor Notes shall remain outstanding, shall become fully recourse to the Withdrawn Partner
in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the Withdrawn Partner at his or her option, and the Partnership shall apply such prepayments
against outstanding Investor Notes on a pro rata basis.
(v) To the extent that another Partner purchases a portion
of a Capital Commitment Interest of a Withdrawn Partner, the purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall thereupon cease to be a Partner with respect to
such Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership
and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Partner’s Capital Commitment Partner Interest
pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the
manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or
otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until distribution of any such Partner’s interest in the
Partnership upon the winding up of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption without the consent of the General Partner.
The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partner’s Capital Commitment Partner Interest.
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(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests
of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partner’s death or Total Disability) (and the purchase price for such
Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partner’s estate, personal representative or other Successor in Interest, in
cash)), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partner’s death or Total Disability, any Investor Note(s) financing such Contingent
Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within
180 days after the Partner’s death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership
or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnership’s then current
Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of
this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General
Partner knows or has reason to know of such Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the
Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital
Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership or any of its Affiliates, or at any time thereafter, upon
30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership
or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another person designated by the General Partner (who may be itself
another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital
Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase). The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph
(d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
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(f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or
portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General
Partner’s designee(s), Holdings may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s),
as applicable (excluding any of the foregoing who is an executive officer of Blackstone Inc. or any Affiliate thereof). To the extent that a Withdrawn Partner’s Capital Commitment Interests (or portions thereof) are repurchased by the
Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in
the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment, and/or
(iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital Commitment Interests”). To the extent that a
Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment
Interests allocated to Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Partners receiving
such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this Section 8.1 and except as such Partners and the
General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be non-recourse or so limited, the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such
Partners; provided, that a Partner shall not, except as set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1), unless his or her prior consent
is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the
Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an
Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such
related financing will be an expense of the Partnership allocable to all Partners in such proportions.
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(g) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s
Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if
such Partner was not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent
Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital
Commitment Interest);
(ii) allow the Withdrawn Partner to retain such
Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment
shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof;
or
(iii) in lieu of cash, purchase such Non-Contingent Capital Commitment
Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn
Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners
or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the
Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements,
instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without
limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney shall be irrevocable and is given to secure a proprietary interest of the donee
of the power or the performance of an obligation owed to the donee and shall
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survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of
such Partner. This power of attorney may be exercised by such attorney-in-fact for each of the Partners (or any of them) by a single signature of the General Partner
acting as attorney-in-fact with or without listing all of the Partners executing an instrument.
Section 8.2. Transfer of Partner’s Capital Commitment Interest. Except as otherwise agreed by the General
Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment
Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or Deceased or Totally
Disabled Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of
Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any
reason therefor) and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it
being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in
connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). The General Partner shall
designate that each Estate Planning Vehicle shall not have voting rights (any such Partner being called a “Nonvoting Partner”). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such
Nonvoting Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate
Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such
Partner’s right to participate in the affairs of the Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or
the pledging or granting of a security interest in, its entire Interest in the Partnership in accordance with the provisions of this Agreement.
Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the contrary, no sale or Transfer of a Capital
Commitment Interest in the Partnership may be made except in compliance with the Partnership Act, the laws of the Cayman Islands and all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution. The Partnership shall commence winding up and be subsequently dissolved pursuant to this Article IX and
Section 36(1) of the Partnership Act:
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(a) pursuant to Section 6.6;
(b) the making of an order by the courts of the Cayman Islands to commence the winding up of the Partnership; or
(c) upon the expiration of the term of the Partnership.
Section 9.2. Final Distribution. Upon the commencement of winding up of the Partnership, and following the payment of creditors of
the Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account
balances of the Partners; and
(b) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such
Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment
Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment;
and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for
each Capital Commitment Investment from which such cash or Securities are derived.
The General Partner shall be the liquidator. In the
event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any Securities or other
property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing
a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment
Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be
paid or distributed until such time as the liquidator shall determine.
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(b) If there is any pending transaction, contingent liability or claim by or against the
Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the liquidator, be then ascertained, the value thereof or probable loss therefrom
may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or such earlier time as the
liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest an amount which the liquidator estimates to be sufficient to cover the share of
such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon determination by the liquidator that
circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest practicable time, distribute as
provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
(d) When the General Partner or other liquidator has complied with and completed the winding up of the Partnership, the General Partner or such
other liquidator, on behalf of all Partners, shall execute, acknowledge and cause to be filed with the Registrar a notice of dissolution in accordance with the Partnership Act.
ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including
the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the winding up or dissolution of the Partnership), whether arising during the existence of the
Partnership during or after the winding up or dissolution of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance with the then-existing Rules of Arbitration of the
International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the
appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the Partnership to bring, on behalf of the
General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an
arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this Section 10.1 to any such action or proceeding,
(ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the General
Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such Partner of any such service of process, shall be
deemed in every respect effective service of process upon the Partner in any such action or proceeding.
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(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW
YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR
RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award.
The parties acknowledge that the forum(s) designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may
have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible
to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it shall be determined
by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable
law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware
Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C.
(“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and
that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors,
successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM. All services rendered by the
Partnership under the BLACKSTONE mark and name will be rendered in a
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manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership understands that
TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to change its
partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
Section 10.3. Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken
without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements;
Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered into separate letter agreements with individual Partners, officers or employees with respect to
GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or
supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement,
including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules
which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the
General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD
Agreement.
Section 10.5. Governing Law; Separability of Provisions. Except for the interpretation of the terns
“gross negligence,” “fraud” and “implied contractual covenant of good faith and fair dealing,” which shall be interpreted in accordance with the laws of the State of Delaware, this Agreement shall be governed by and
construed in accordance with the laws of the Cayman Islands, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as
provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement
shall not be affected thereby.
Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be
binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a
party hereto; provided, that no person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a
Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall
remain liable for the obligations under this Agreement (including any
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Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partner’s or
Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and
Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from the transferee with respect to
any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal representatives, heirs, successors and
permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BCP Asia II Agreements, (x) the limited partners in BCP Asia II shall be third-party beneficiaries of the provisions of Section 5.8(d)(i)(A) and
Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in paragraph 9.2.8(b) of the BCP Asia II Partnership Agreement), and (y) the amendment of
the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in paragraph 9.2.8(c) of the BCP Asia II
Partnership Agreement), shall be effective against such limited partners only with the 66 2/3% Combined Limited Partner Consent (as such term is used in the BCP Asia II Partnership Agreement) unless such amendment does not adversely affect the
LPs’ rights under paragraph 9.2.8 of the BCP Asia II Partnership Agreement.
Section 10.7. Confidentiality. (a) By
executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any
person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall
not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any
corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations
Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate
thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information
relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations
of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other
disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such communications and disclosures are consistent with applicable
law. Each Partner understands and
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acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made
(i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the
trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Moreover, a Partner shall not be required to give
prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any
information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone.
Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing
(including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnership’s books and records or, if given to the General
Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery, when delivered to the address of such Partner,
the General Partner or the Partnership specified as aforesaid. Sections 8 and 19(3) of the Electronic Transactions Act (As Revised) of the Cayman Islands shall not apply to this Agreement.
Section 10.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and
all of which together shall constitute a single instrument. For the avoidance of doubt, a Person’s execution and delivery of this Agreement by electronic signature and electronic transmission (jointly, an “Electronic
Signature”), including via DocuSign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such Person and shall bind such Person to the terms of this Agreement. The
parties hereto agree that this Agreement and any additional information incidental hereto may be maintained as electronic records. Any Person executing and delivering this Agreement by an Electronic Signature further agrees to take any and all
reasonable additional actions, if any, evidencing its intent to be bound by the terms of this Agreement, as may be reasonably requested by the General Partner.
Section 10.10. Power of AttorneyEach Partner hereby irrevocably appoints the General Partner as such Partner’s true and
lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file all instruments, documents
and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the Cayman Islands or any other state in which the
Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney shall be irrevocable and is given to secure
a proprietary interest of the donee of the power or the performance of an obligation owed to the donee, and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any
reason and not be affected by the death, disability or incapacity of such Partner. This power of attorney may be exercised by such attorney-in-fact for each of the
Partners (or any of them) by a single signature of the General Partner acting as attorney-in-fact with or without listing all of the Partners executing an instrument.
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Section 10.11. Partner’s Will. Each Partner and Withdrawn Partner
shall include in his or her will a provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm
annually to the Partnership, in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partner’s or Withdrawn Partner’s
Interest is transferred shall include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust.
In the event any Partner or Withdrawn Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not
cured within 30 days of such notice, the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other
rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided herein,
in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this
Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount
or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such dispute (such
determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue
interest at the Default Interest Rate.
Section 10.14. Entire Agreement; Modifications. This Agreement embodies
the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any
time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
81
IN WITNESS WHEREOF, the parties have executed and unconditionally delivered this Agreement as a
deed on the date first above written.
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| GENERAL PARTNER: |
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| BMA ASIA II L.L.C. |
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| By: Blackstone Holdings IV L.P., its Managing Member |
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| By: Blackstone Holdings IV GP L.P., its General Partner |
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| By: Blackstone Holdings IV GP Management (Delaware) L.P., its General Partner |
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| By: Blackstone Holdings IV GP Management L.L.C., its General Partner |
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| By: |
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/s/ John G. Finley |
| Name: John G. Finley |
| Title: Chief Legal Officer and Secretary |
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/s/ Rhonda Coleman |
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Witnessed by: Rhonda Coleman |
[Signature Page to Amended and Restated Limited Partnership Agreement of BMA Asia II GP L.P.]
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| LIMITED PARTNERS AND SPECIAL PARTNERS: |
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| Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to BMA ASIA II L.L.C. |
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| BMA ASIA II L.L.C. |
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| By: |
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Blackstone Holdings IV L.P., its Managing Member |
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| By: |
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Blackstone Holdings IV GP L.P., its General Partner |
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| By: Blackstone Holdings IV GP Management (Delaware) L.P., its general partner |
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| By: Blackstone Holdings IV GP Management L.L.C., its general partner |
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| By: |
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/s/ John G. Finley |
| Name: John G. Finley |
| Title: Chief Legal Officer and Secretary |
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/s/ Rhonda Coleman |
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Witnessed by: Rhonda Coleman |
[Signature Page to Amended and Restated Limited Partnership Agreement of BMA Asia II GP L.P.]
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| INITIAL LIMITED PARTNER: |
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| Mapcal Limited |
| As Initial Limited Partner, solely to reflect its withdrawal from the Partnership |
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| By: |
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/s/ Stef Dimitriou |
| Name: Stef Dimitriou |
| Title: Authorized Signatory |
[Signature Page to Amended and Restated Limited Partnership Agreement of BMA Asia II GP L.P.]
Exhibit 10.3
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BLACKSTONE CLARUS GP L.P.
SECOND
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
DATED AS OF NOVEMBER 3, 2023
EFFECTIVE AS OF NOVEMBER 30, 2018
THE
LIMITED PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BLACKSTONE CLARUS GP L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND
MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE
TERMS AND CONDITIONS OF THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THEREFORE,
PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
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Page |
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| ARTICLE I DEFINITIONS |
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1 |
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| Section 1.1. |
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Definitions |
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1 |
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| Section 1.2. |
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Terms Generally |
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16 |
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| ARTICLE II GENERAL PROVISIONS |
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17 |
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| Section 2.1. |
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General Partner, Limited Partner, Special Partner |
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17 |
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| Section 2.2. |
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Formation; Name; Foreign Jurisdictions |
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17 |
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| Section 2.3. |
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Term |
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17 |
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| Section 2.4. |
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Purposes; Powers |
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18 |
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| Section 2.5. |
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Place of Business |
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20 |
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| Section 2.6. |
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[Intentionally omitted.] |
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20 |
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| ARTICLE III MANAGEMENT |
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21 |
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| Section 3.1. |
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General Partner |
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21 |
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| Section 3.2. |
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Partner Voting, etc. |
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21 |
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| Section 3.3. |
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Management |
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21 |
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| Section 3.4. |
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Responsibilities of Partners |
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24 |
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| Section 3.5. |
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Exculpation and Indemnification |
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24 |
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| Section 3.6. |
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Representations of Partners |
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26 |
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| Section 3.7. |
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Tax Representation and Further Assurances |
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27 |
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| ARTICLE IV CAPITAL OF THE PARTNERSHIP |
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28 |
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| Section 4.1. |
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Capital Contributions by Partners |
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28 |
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| Section 4.2. |
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Interest |
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36 |
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| Section 4.3. |
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Withdrawals of Capital |
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36 |
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| ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
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36 |
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| Section 5.1. |
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General Accounting Matters |
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36 |
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| Section 5.2. |
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GP-Related Capital Accounts |
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38 |
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| Section 5.3. |
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GP-Related Profit Sharing Percentages |
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38 |
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| Section 5.4. |
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Allocations of GP-Related Net Income (Loss) |
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39 |
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| Section 5.5. |
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Liability of Partners |
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40 |
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| Section 5.6. |
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[Intentionally omitted.] |
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40 |
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| Section 5.7. |
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Repurchase Rights, etc. |
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40 |
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| Section 5.8. |
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Distributions |
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41 |
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| Section 5.9. |
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Business Expenses |
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48 |
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| Section 5.10. |
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Tax Capital Accounts; Tax Allocations |
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48 |
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| ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION |
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49 |
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| Section 6.1. |
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Additional Partners |
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49 |
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| Section 6.2. |
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Withdrawal of Partners |
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50 |
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-i-
TABLE OF CONTENTS
(Continued)
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Page |
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| Section 6.3. |
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GP-Related Partner Interests Not Transferable |
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51 |
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| Section 6.4. |
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Consequences upon Withdrawal of a Partner |
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52 |
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| Section 6.5. |
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Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests |
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52 |
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| Section 6.6. |
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Dissolution of the Partnership |
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58 |
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| Section 6.7. |
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Certain Tax Matters |
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58 |
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| Section 6.8. |
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Special Basis Adjustments |
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59 |
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| ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS;
DISTRIBUTIONS |
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60 |
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| Section 7.1. |
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Capital Commitment Interests, etc. |
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60 |
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| Section 7.2. |
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Capital Commitment Capital Accounts |
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61 |
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| Section 7.3. |
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Allocations |
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61 |
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| Section 7.4. |
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Distributions |
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62 |
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| Section 7.5. |
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Valuations |
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66 |
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| Section 7.6. |
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Disposition Election |
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66 |
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| Section 7.7. |
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Capital Commitment Special Distribution Election |
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67 |
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| ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
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67 |
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| Section 8.1. |
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Partner Withdrawal; Repurchase of Capital Commitment Interests |
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67 |
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| Section 8.2. |
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Transfer of Partner’s Capital Commitment Interest |
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72 |
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| Section 8.3. |
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Compliance with Law |
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73 |
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| ARTICLE IX DISSOLUTION |
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73 |
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| Section 9.1. |
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Dissolution |
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73 |
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| Section 9.2. |
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Final Distribution |
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73 |
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| Section 9.3. |
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Amounts Reserved Related to Capital Commitment Partner Interests |
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74 |
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| ARTICLE X MISCELLANEOUS |
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75 |
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| Section 10.1. |
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Submission to Jurisdiction; Waiver of Jury Trial |
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75 |
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| Section 10.2. |
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Ownership and Use of the Blackstone Name |
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76 |
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| Section 10.3. |
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Written Consent |
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76 |
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| Section 10.4. |
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Letter Agreements; Schedules |
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77 |
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| Section 10.5. |
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Governing Law; Separability of Provisions |
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77 |
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| Section 10.6. |
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Successors and Assigns; Third Party Beneficiaries |
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77 |
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| Section 10.7. |
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Confidentiality |
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78 |
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| Section 10.8. |
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Notices |
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79 |
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| Section 10.9. |
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Counterparts |
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79 |
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| Section 10.10. |
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Power of Attorney |
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79 |
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| Section 10.11. |
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Partner’s Will |
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79 |
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| Section 10.12. |
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Cumulative Remedies |
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80 |
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| Section 10.13. |
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Legal Fees |
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80 |
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| Section 10.14. |
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Entire Agreement; Modifications |
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80 |
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| Section 10.15. |
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Headings |
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80 |
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-ii-
BLACKSTONE CLARUS GP L.P.
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of BLACKSTONE CLARUS GP L.P., a Delaware limited partnership
(the “Partnership”), dated as of November 3, 2023, and effective as of November 30, 2018, by and among Blackstone Clarus GP L.L.C., a Delaware limited liability company, as general partner of the Partnership (in its
capacity as general partner of the Partnership) and the parties listed in the books and records of the Partnership as limited partners of the Partnership.
W I T N E S S E T H
WHEREAS, the Partnership was formed upon the filing of a Certificate of Limited Partnership with the Secretary of State of the State of
Delaware on November 20, 2018 pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101 et seq., as it may be amended from time to time (the
“Partnership Act”);
WHEREAS, the Limited Partnership Agreement, dated as of November 20, 2018, between the
General Partner (as defined below) and Blackstone Holdings II L.P. (the “Initial Limited Partner”) constitutes the original limited partnership agreement of the Partnership (the “Original Agreement”);
WHEREAS, the Original Agreement was amended and restated in its entirety by that certain Amended and Restated Limited Partnership Agreement
(the “Existing Agreement”) of the Partnership dated as of September 3, 2019 and effective as of November 30, 2018, between the General Partner, the Initial Limited Partner and the parties listed in the books and records of
the Partnership as limited partners of the Partnership; and
WHEREAS, the parties hereto desire to enter into this Agreement, and hereby
amend and restate the Existing Agreement in its entirety, effective as of November 30, 2018.
NOW, THEREFORE, in consideration of the
mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree that the Existing Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for
purposes of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(ii).
“Advancing Party” has the meaning set forth in Section 7.1(c).
1
“Affiliate” when used with reference to another person means any
person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires,
endowment funds, estate planning vehicles (including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts
associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees and/or related persons.
“Agreement” means this Second Amended and Restated Limited Partnership Agreement, as it may be further
amended, supplemented, restated or otherwise modified from time to time.
“Applicable Collateral
Percentage” with respect to any Firm Collateral or Special Firm Collateral, has the meaning set forth in the books and records of the Partnership with respect thereto.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the
filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay
his or her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to,
or defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of
an order, judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order,
judgment or decree unstayed and in effect for a period of 60 consecutive days.
“BE Agreement” means the
limited partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of “Blackstone Entity,” as such limited
partnership agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other
governing document may be further amended, supplemented, restated or otherwise modified from time to time.
“BE
Investment” means any direct or indirect investment by any Blackstone Entity.
“Blackstone”
means, collectively, The Blackstone Group Inc., a Delaware corporation, and any predecessor or successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any
Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of The Blackstone Group Inc.)).
2
“Blackstone Capital Commitment” means the aggregate capital
commitments the Clarus IV GP and its affiliates, the Managing Directors (as defined in the Clarus IV Partnership Agreements) and other investment professionals and employees of the Clarus IV GP and its affiliates, and other associated persons are
required to make to the Clarus IV Partnerships pursuant to Section 6.1.7 of the Clarus IV Partnership Agreements.
“Blackstone Entity” means any partnership, limited liability company or other entity (excluding any natural
persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of The Blackstone Group Inc., as designated by the General Partner in its sole discretion.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or
required by law to be closed in New York, New York.
“Capital Commitment Clarus IV GP Partner
Interest” means the interest of the Partnership, if any, as a limited partner of the Clarus IV GP with respect to any Capital Commitment Clarus IV Interest that may be held by the Clarus IV GP.
“Capital Commitment Clarus IV Commitment” means the Subscription (as defined in the Clarus IV
Partnership Agreements), if any, of the Partnership or the Clarus IV GP to Clarus IV that relates solely to the Capital Commitment Clarus IV Interest, if any.
“Capital Commitment Clarus IV Interest” means the direct or indirect limited partner
interest, if any, of the Partnership or the Clarus IV GP as a capital partner in Clarus IV.
“Capital Commitment
Clarus IV Investment” means the Partnership’s interest in a specific investment of Clarus IV, which interest may be held by the Partnership (i) through the Partnership’s direct interest in Clarus IV through the
Partnership’s Capital Commitment Clarus IV Interest, if the Partnership holds the Capital Commitment Clarus IV Interest, or (ii) through the Partnership’s interest in the Clarus IV GP and the Clarus IV GP’s interest in Clarus IV
through the Clarus IV GP’s Capital Commitment Clarus IV Interest, if the Clarus IV GP holds the Capital Commitment Clarus IV Interest.
“Capital Commitment Capital Account” means, with respect to each Capital Commitment Investment for each
Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3
with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment
Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable
transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
3
“Capital Commitment Class A Interest”
has the meaning set forth in Section 7.4(f).
“Capital Commitment Class B
Interest” has the meaning set forth in Section 7.4(f).
“Capital Commitment Defaulting
Party” has the meaning set forth in Section 7.4(g)(ii)(A).
“Capital Commitment Deficiency
Contribution” has the meaning set forth in Section 7.4(g)(ii)(A).
“Capital Commitment Disposable
Investment” has the meaning set forth in Section 7.4(f).
“Capital Commitment Distributions”
means, with respect to each Capital Commitment Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment Clarus IV Interest, if any, less any
costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate
to all or any portion of such Capital Commitment Investment as it may determine in good faith is appropriate.
“Capital Commitment Giveback Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment Interest” means the interest of a Partner in a specific Capital Commitment Investment as
provided herein.
“Capital Commitment Investment” means any Capital Commitment Clarus IV Investment, but
shall exclude any GP-Related Investment.
“Capital Commitment Liquidating
Share” means, with respect to each Capital Commitment Investment, in the case of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3)
immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” means, with respect to each
Capital Commitment Investment, all amounts of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital
Commitment Investment, less any costs, fees and expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
4
“Capital Commitment Partner Carried Interest” means, with
respect to any Partner, the aggregate amount of distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest.” Capital Commitment Partner Carried
Interest includes any amount initially received by an Affiliate of the Partnership from any fund (including Clarus IV, any similar funds formed after November 30, 2018, whether or not in existence as of the date hereof) to which such Affiliate
serves as general partner (or in another similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make the investment of such
fund giving rise to such “carried interest”).
“Capital Commitment Partner Interest” means a
Partner’s interest in the Partnership which relates (i) to any Capital Commitment Clarus IV Interest held by the Partnership or (ii) through the Partnership and the Clarus IV GP, to any Capital Commitment Clarus IV Interest that may
be held by the Clarus IV GP.
“Capital Commitment Profit Sharing Percentage” means, with respect to each
Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
“Capital Commitment Recontribution Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the
meaning set forth in Section 7.1(b).
“Capital
Commitment-Related Commitment” means, with respect to any Partner, such Partner’s commitment to the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set
forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any, or otherwise.
“Capital Commitment Special Distribution” has the meaning set forth in Section 7.7(a).
“Capital Commitment Value” has the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest Distributions” as defined in the Clarus
IV Partnership Agreements, and (ii) any other carried interest distribution to a Fund GP pursuant to any Clarus IV Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be
less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may
allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
5
“Carried Interest Give Back Percentage” means, for any Partner
or Withdrawn Partner, subject to Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates
in respect of Carried Interest by (B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried
Interest. For purposes of determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust
Income thereon) shall be deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
“Carried Interest Sharing Percentage” means, with respect to each
GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
“Cause” means the occurrence or existence of any of the following with respect to any Partner, as
determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any
material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its
Affiliates, or (z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in
the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”) within 15 days after the General Partner becomes aware of such action and such
Partner fails to cure such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required
for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; or (iii) conviction
(on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false statements or
misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority
with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner of
the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event
described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
“Clarus IV” means the collective reference to: (i) the Clarus IV Partnerships, (ii) any parallel
fund or alternative or other related investment vehicles of the Clarus IV Partnerships and (iii) any investment vehicle formed to co-invest with the Clarus IV Partnerships using third party capital.
6
“Clarus IV Agreements” means the collective reference to
(i) the Clarus IV Partnership Agreements and (ii) any other Clarus IV partnership, limited liability company or other governing agreements, as each may be amended, supplemented, restated or otherwise modified from time to time.
“Clarus IV GP” means Clarus IV GP, L.P., a Delaware limited partnership and the general partner of
Clarus IV, or any other entity that serves as the general partner or managing member of a vehicle indicated in the definition of Clarus IV.
“Clarus IV GP Agreement” means the limited partnership agreement, dated as of the date set forth
therein, of the Clarus IV GP, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Clarus IV Partnerships” means the collective reference to Clarus
IV-A, L.P., a Delaware limited partnership, Clarus IV-B, L.P., a Delaware limited partnership, Clarus IV-C, L.P., a Delaware
limited partnership and Clarus IV-D, L.P., a Delaware limited partnership.
“Clarus IV Partnership Agreements” means the partnership agreements of the limited partnerships
named in clause (i) of the definition of “Clarus IV,” as such partnership agreements may be amended, supplemented, restated or otherwise modified from time to time.
“Clawback Adjustment Amount” has the meaning set forth in Section 5.8(e)(ii)(C).
“Clawback Amount” means the amount the Clarus IV GP is required to return to the limited partners of Clarus IV
pursuant to paragraph 10.5.3 of the Clarus IV Partnership Agreements, and any other clawback amount payable to the limited partners of Clarus IV or to Clarus IV pursuant to any Clarus IV Agreement, as applicable.
“Clawback Provisions” means paragraph 10.5.3 of the Clarus IV Partnership Agreements and any other
similar provisions in any other Clarus IV Agreement existing heretofore or hereafter entered into.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreements” means the agreements between the Partnership or an Affiliate thereof and Partners,
pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the
Partnership and the relevant Partner.
“Contingent” means subject to repurchase rights and/or other
requirements.
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The term “control” when used with reference to any person means
the power to direct the management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding
(written or oral) with one or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the
foregoing.
“Controlled Entity” when used with reference to another person means any person controlled by
such other person.
“Covered Person” has the meaning set forth in Section 3.5(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For
purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partner’s
interest in the Partnership.
“Default Interest Rate” means the lower of (i) the sum of (a) the
Prime Rate and (b) 5% or (ii) the highest rate of interest permitted under applicable law.
“Delaware
Arbitration Act” has the meaning set forth in Section 10.1(d).
“Electronic Signature” has
the meaning set forth in Section 10.9.
“Estate Planning Vehicle” has the meaning set forth in
Section 6.3(a).
“Excess Holdback” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the meaning set forth in
Section 5.8(e).
“Existing Agreement” has the meaning set forth in the recitals.
“Existing Partner” means any Partner who is neither a Retaining Withdrawn Partner nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence, Bankruptcy, liquidation, dissolution or
Withdrawal from the Partnership of any person who is a Partner.
“Firm Advances” has the meaning set forth
in Section 7.1(c).
“Firm Collateral” means a Partner’s or Withdrawn Partner’s interest in
one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged or made available to the Trustee(s) to satisfy
all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnership’s books and records; provided, that for all purposes hereof (and any other agreement (e.g., the Trust
Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding references to “Firm Collateral” in
Section 4.1(d)(v) and Section 4.1(d)(viii).
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“Firm Collateral Realization” has the meaning set forth in
Section 4.1(d)(v)(B).
“Fiscal Year” means a calendar year, or any other period chosen by the General
Partner.
“Fund GP” means the Partnership (only with respect to the
GP-Related Clarus IV Interest) and the Other Fund GPs.
“GAAP”
means U.S. generally accepted accounting principles.
“General Partner” means Blackstone Clarus GP L.L.C.,
a Delaware limited liability company, and any person admitted to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a
general partner of the Partnership as provided herein or in the Partnership Act).
“Giveback Amount(s)”
means the amount(s) payable by partners of Clarus IV pursuant to the Giveback Provisions.
“Giveback
Provisions” means paragraph 7.6 of the Clarus IV Partnership Agreements and any other similar provisions in any other Clarus IV Agreement existing heretofore or hereafter entered into.
“Governmental Entity” has the meaning set forth in Section 10.7(b).
“GP-Related Clarus IV GP Interest” means the
interest of the Partnership as a limited partner of the Clarus IV GP with respect to the GP-Related Clarus IV Interest, but does not include any interest of the Partnership in the Clarus IV GP with respect to
any Capital Commitment Clarus IV Interest that may be held by the Clarus IV GP.
“GP-Related Clarus IV Interest” means the interest of the Clarus IV GP in Clarus IV as general partner of Clarus IV, excluding any Capital Commitment Clarus IV Interest that may be held by the
Clarus IV GP.
“GP-Related Clarus IV
Investment” means the Partnership’s indirect interest in the Clarus IV GP’s indirect interest in a Portfolio Investment (for purposes of this definition, as defined in the Clarus IV Partnership Agreements) in the Clarus IV
GP’s capacity as general partner of Clarus IV, but does not include any Capital Commitment Investment.
“GP-Related Capital Account” has the meaning set forth in
Section 5.2(a).
“GP-Related Capital Contributions”
has the meaning set forth in Section 4.1(a).
“GP-Related
Class A Interest” has the meaning set forth in Section 5.8(a)(ii).
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“GP-Related
Class B Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Commitment”, with respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner
Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any, or otherwise.
“GP-Related Defaulting Party” has the meaning set forth in
Section 5.8(d)(ii)(A).
“GP-Related Deficiency
Contribution” has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related Disposable Investment” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback Amount” has the meaning set forth in
Section 5.8(d)(i)(A).
“GP-Related Investment” means
any investment (direct or indirect) of the Partnership in respect of the GP-Related Clarus IV Interest (including, without limitation, any GP-Related Clarus IV
Investment, but excluding any Capital Commitment Investment).
“GP-Related Net Income (Loss)” has the meaning set forth in
Section 5.1(b).
“GP-Related Partner Interest” of a
Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect to the GP-Related Clarus IV Interest and with respect to all GP-Related Investments.
“GP-Related Profit Sharing Percentage” means
the “Carried Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.
“GP-Related Recontribution Amount” has the
meaning set forth in Section 5.8(d)(i)(A).
“GP-Related
Required Amounts” has the meaning set forth in Section 4.1(a).
“GP-Related Unallocated Percentage” has the meaning set forth in Section 5.3(b).
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“GP-Related Unrealized Net
Income (Loss)” attributable to any GP-Related Clarus IV Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the
Partnership with respect to such GP-Related Clarus IV Investment if Clarus IV’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date
(determined in accordance with Section 5.1(e)) and all distributions payable by Clarus IV to the Partnership (indirectly through the general partner of Clarus IV) pursuant to any Clarus IV Partnership Agreements with respect to such GP-Related Clarus IV Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other
GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with
respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in
accordance with Section 5.1(e)).
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
“Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A).
“Holdings” means Blackstone Holdings I L.P., a Delaware limited partnership.
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole
discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Initial Limited Partner” has the meaning set forth in the recitals.
“Interest” means a partnership interest (as defined in
§17-101(13) of the Partnership Act) in the Partnership, including any interest that is held by a Retaining Withdrawn Partner and including any Partner’s
GP-Related Partner Interest and Capital Commitment Partner Interest.
“Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner
from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to
purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such
Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net
Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating
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to Other Sources; provided further, that references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment
Investments or other BE Investments, and references to an “Investor Note” refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in
Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
“Investor Special Partner” means any Special Partner so designated at the time of its admission by the General
Partner as a Partner of the Partnership.
“Issuer” means the issuer of any Security comprising part of an
Investment.
“L/C” has the meaning set forth in Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
“Lender or Guarantor” means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the
Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
“Limited Partner” means each of the parties listed as Limited Partners in the books and records of the
Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of
doubt, the term “Limited Partner” does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited partners of the Partnership).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
“Losses” has the meaning set forth in Section 3.5(b)(i).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more
persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or
prior to the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account
balances of all the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“Net Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(C).
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“Net Carried Interest Distribution Recontribution
Amount” has the meaning set forth in Section 5.8(e).
“Net
GP-Related Recontribution Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such
GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated
with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
“Non-Carried Interest Sharing Percentage” means, with respect
to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set
forth in the books and records of the Partnership.
“Non-Contingent” means generally not subject to repurchase
rights or other requirements.
“Nonvoting Partner” has the meaning set forth in Section 8.2.
“Nonvoting Special Partner” has the meaning set forth in Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Other Fund GPs” means the Clarus IV GP and any other entity (other than the Partnership) through which any
Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates
that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither Blackstone Clarus GP L.L.C. nor Holdings nor any Estate Planning Vehicle established for the
benefit of family members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
“Other Sources” means (i) distributions or payments of Capital Commitment Partner Carried Interest (which
shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto),
and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
“Partner” means any person who is a partner of the Partnership, including the Limited Partners, the General
Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter
relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
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“Partner Category” means the General Partner, Existing Partners,
Retaining Withdrawn Partners or Deceased Partners, each referred to as a group for purposes hereof.
“Partnership” has the meaning set forth in the preamble hereto.
“Partnership Act” has the meaning set forth in the preamble hereto.
“Partnership Affiliate” has the meaning set forth in Section 3.3(b).
“Partnership Affiliate Governing Agreement” has the meaning set forth in Section 3.3(b).
“Pledgable Blackstone Interests” has the meaning set forth in Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank,
N.A. as its prime rate.
“Qualifying Fund” means any fund designated by the General Partner as
a “Qualifying Fund”.
“Repurchase Period” has the meaning set forth in Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
“Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a
GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
“S&P” means Standard & Poor’s Ratings Group, and any successor thereto.
“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled
Entities constituting part of an Investment, including without limitation, common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market
investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor
statute.
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“Settlement Date” has the meaning set forth in
Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of
its Affiliates and certain of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership
and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets
that have been pledged to the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnership’s books and records.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Partner” means any person shown in the books and records of the Partnership as a Special Partner of
the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
“Subject
Investment” has the meaning set forth in Section 5.8(e)(i).
“Subject Partner” has the
meaning set forth in Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder
of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or
receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or
assign of, any Partner, whether by operation of law or otherwise.
“Tax Advances” has the meaning set
forth in Section 6.7(d).
“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“TM” has the meaning set forth in Section 10.2.
“Total Disability” means the inability of a Limited Partner substantially to perform the services required of
such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of
sickness, accident or otherwise.
“Transfer” has the meaning set forth in Section 8.2.
“Trust Account” has the meaning set forth in the Trust Agreement.
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“Trust Agreement” means the Trust Agreement, dated as of the
date set forth therein, as amended, supplemented, restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time
to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“U.S.” means the United States of America.
“W-8BEN” has the meaning set forth in Section 3.7.
“W-8BEN-E” has
the meaning set forth in Section 3.7.
“W-8IMY” has
the meaning set forth in Section 3.7.
“W-9” has the
meaning set forth in Section 3.7.
“Withdraw” or “Withdrawal” means, with
respect to a Partner, such Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary),
unless the context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
“Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner
Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal
representatives of any such Partner.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships
(including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
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ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special
Partners. The General Partner as of the date hereof is Blackstone Clarus GP L.L.C. and the Limited Partners as of the date hereof are those persons shown as Limited Partners in the books and records of the Partnership and the Special Partners as of
the date hereof are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the Partnership contain the GP-Related Profit Sharing
Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership
as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without
limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital
Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing
Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the admission of additional Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant
to the terms of this Agreement. At the time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in
which such Partner shall participate and such Partner’s GP-Related Commitment, Capital Commitment-Related Commitment,
GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital
Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership is hereby continued as a limited partnership pursuant to the
Partnership Act and shall conduct its activities on and after the date hereof under the name of Blackstone Clarus GP L.P. The certificate of limited partnership of the Partnership may be amended and/or restated from time to time by the General
Partner, as an “authorized person” (within the meaning of the Partnership Act). The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof)
necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3. Term. The term of the Partnership shall continue until December 31, 2069, unless earlier dissolved and its
affairs wound up in accordance with this Agreement and the Partnership Act.
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Section 2.4. Purposes; Powers. (a) The purposes of the Partnership shall be,
directly or indirectly through subsidiaries or Affiliates:
(i) to serve as a limited partner or general partner of the
Clarus IV GP and perform the functions of a limited partner or general partner of the Clarus IV GP specified in the Clarus IV GP Agreement and, if applicable, the Clarus IV Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment Clarus IV Interest as, a capital partner (and, if applicable,
a limited partner and/or a general partner) of Clarus IV and perform the functions of a capital partner (and, if applicable, a limited partner and/or a general partner) of Clarus IV specified in the Clarus IV Agreements;
(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and
acquire and invest in Securities or other property directly or indirectly through the Clarus IV GP and/or Clarus IV;
(iv)
to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in
Securities or other property either directly or indirectly through the Clarus IV GP or another entity;
(v) to serve as a
general partner or limited partner of Clarus IV and/or other partnerships and perform the functions of a general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement,
limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such partnership;
(vi) to serve as a member, shareholder or other equity interest owner of limited liability companies, other companies,
corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing documents, as amended, supplemented,
restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by
the General Partner and as are permitted under the Partnership Act, the Clarus IV GP Agreement, the Clarus IV Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to
in clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
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(b) In furtherance of its purposes, the Partnership shall have all powers necessary, suitable or
convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of
common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed
appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common
and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and
Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or
other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other
short-term investments;
(v) to hold, receive, mortgage, pledge, grant security
interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or
owned by the Partnership;
(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by
mortgage, pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and
to buy, sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its
property or funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and
maintain one or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection
with the maintenance of such office or offices;
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(ix) to open, maintain and close accounts, including margin accounts, with
brokers and futures commission merchants;
(x) to open, maintain and close bank accounts and draw checks and other orders
for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and
all other agents and assistants, both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or
cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all contracts, agreements and other undertakings as may be necessary, convenient,
advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all
claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or
investments or other property of the Partnership, or any combination thereof; and
(xvi) to take such other actions
necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
Section 2.5. Place of Business. The Partnership shall maintain a registered office at c/o Corporation Service Company, 251
Little Falls Drive, Wilmington, Delaware 19808. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time to time and as set forth in the books and records of the
Partnership. The name and address of the Partnership’s registered agent is Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808. The General Partner may from time to time change the registered agent or office by
an amendment to the certificate of limited partnership of the Partnership.
Section 2.6. [Intentionally omitted.]
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ARTICLE III
MANAGEMENT
Section 3.1.
General Partner. (a) Blackstone Clarus GP L.L.C. is the General Partner as of the date hereof. The General Partner shall cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it
consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or
more other General Partners is admitted to the Partnership as such, all references herein to the “General Partner” in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative
rights and responsibilities of such General Partners will be as agreed upon from time to time between them.
(b) Upon the Withdrawal from
the Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested therein pursuant to this Agreement and the Partnership Act shall be exercised by a Majority in Interest of the Partners.
Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be
expressly required by the Partnership Act, Partners (including Special Partners), other than General Partners, as such shall have no right to, and shall not, take part in the management or control of the Partnership’s business or act for or
bind the Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a
Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such
Partner (or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided
by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent
or approval thereto.
Section 3.3. Management. (a) The management, control and operation of the Partnership and the
formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership, including those
enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its sole discretion, subject
only to the express terms and conditions of this Agreement.
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(b) Notwithstanding any provision in this Agreement to the contrary, the Partnership is hereby
authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a partner of the Clarus
IV GP on the Clarus IV GP’s own behalf or in the Clarus IV GP’s capacity as general partner, capital partner and/or limited partner of Clarus IV or as general partner or limited partner, member, shareholder or other equity interest owner
of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of Clarus IV or as general or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (i) to
execute and deliver, and to perform the Partnership’s obligations under the Clarus IV GP Agreement, including, without limitation, serving as a partner of the Clarus IV GP, (ii) to execute and deliver, and to cause the Clarus IV GP to
perform the Clarus IV GP’s obligations under, the Clarus IV Agreements, including, without limitation, serving as a general partner of Clarus IV and, if applicable, a capital partner of Clarus IV, (iii) if applicable, to execute and
deliver, and to perform the Partnership’s obligations under, the Clarus IV Agreements, including, without limitation, serving as a capital partner of Clarus IV, (iv) to execute and deliver, and to perform, or, if applicable, to cause the
Clarus IV GP to perform, the Partnership’s or the Clarus IV GP’s obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a “Partnership Affiliate Governing
Agreement”), of any other partnership, limited liability company, other company, corporation or other entity (each a “Partnership Affiliate”) of which the Partnership or the Clarus IV GP is, or is to become, a general
partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate, and
(v) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the Clarus IV GP Agreement, the Clarus IV Agreements or each Partnership Affiliate Governing Agreement (and any amendment, supplement,
restatement and/or other modification of any of the foregoing).
(c) The General Partner and any other person designated by the General
Partner, each acting individually, is hereby authorized and empowered, as an authorized person of the Partnership within the meaning of the Partnership Act, or otherwise, or as an authorized representative of the General Partner (the General Partner
hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver and/or file (including any such
action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a partner of the Clarus IV GP on the Clarus IV GP’s own behalf, or in the Clarus IV
GP’s capacity as general partner, special general partner, capital partner and/or limited partner of Clarus IV or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if
applicable, in the Partnership’s capacity as a capital partner of Clarus IV or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, the Clarus IV GP, Clarus IV or any Partnership
Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Clarus IV GP Agreement, the Clarus IV Agreements and each Partnership Affiliate Governing
Agreement, (II) subscription agreements and documents on behalf of Clarus IV or the Clarus IV GP, (III) side letters issued in connection with investments in Clarus IV, and
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(IV) such other agreements, certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, the Clarus IV GP, Clarus IV or
any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General
Partner in its sole discretion;
(B) the certificates of formation, certificates of limited partnership and/or other
organizational documents of the Partnership, the Clarus IV GP, Clarus IV and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
(C) any other certificates, notices, applications and other documents (and any amendments, supplements, restatements and/or
other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, the Clarus IV GP, Clarus IV or any Partnership Affiliate to
qualify to do business in a jurisdiction in which the Partnership, the Clarus IV GP, Clarus IV or such Partnership Affiliate desires to do business;
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or
indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a partner of the Clarus IV GP on the Clarus IV GP’s own behalf or in the Clarus IV GP’s capacity as
general partner, capital partner and/or limited partner of Clarus IV, or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as
a capital partner of Clarus IV or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications and other documents to be filed with
any government or governmental or regulatory body on behalf of the Partnership, the Clarus IV GP, Clarus IV and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications and other documents that may be necessary or
advisable in connection with any bank account of the Partnership, the Clarus IV GP, Clarus IV or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, the Clarus IV GP, Clarus IV or any Partnership
Affiliate, and all checks, notes, drafts and other documents of the Partnership, the Clarus IV GP, Clarus IV or any Partnership Affiliate that may be required in connection with any such bank account or banking facilities or services and
(C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to have been duly adopted by the General
Partner, the Partnership, the Clarus IV GP, Clarus IV or any Partnership Affiliate, as applicable, for all purposes).
(d) The authority
granted to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
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Section 3.4. Responsibilities of Partners. (a) Unless otherwise determined by
the General Partner in a particular case, each Limited Partner (other than a Special Partner) shall devote substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not
be required to devote any time or attention to the businesses of the Partnership or its Affiliates.
(b) All outside business or investment
activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the
General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent
permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually,
a “Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related
document or any transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable
judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the
authority granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by
any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities
relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by
law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement
and its duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
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(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership
shall indemnify and hold harmless (but only to the extent of the Partnership’s assets (including, without limitation, the remaining capital commitments of the Partners)) each Covered Person from and against any and all claims, damages, losses,
costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against
any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), “Losses”), arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of
the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out
of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the
best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such
Losses in accordance with such Covered Person’s GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent
permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time
to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the
extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered
Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes litigation against a
Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partner’s Interests and remaining capital commitments, for such Partner’s pro rata share of the
Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by
the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority to enter into separate agreements with any Covered
Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A)
Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the
indemnification, advancement of expenses and related provisions under applicable law governing Clarus IV and/or a particular portfolio company through which an Investment is indirectly held. It is further understood and/or agreed that a Covered
Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio company and/or
Clarus IV; second, by the applicable portfolio company through which such investment is indirectly held; third, by Clarus IV; and fourth by the Clarus IV GP (only to the extent the foregoing sources are exhausted).
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(B) The Partnership’s obligation, if any, to indemnify or advance expenses
to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from Clarus IV and/or the applicable portfolio company (including by virtue of any applicable insurance policies maintained
thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by the Clarus IV GP, Clarus IV and/or the applicable portfolio company (including by virtue of any applicable
insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against the Clarus IV GP and/or Clarus IV and/or such portfolio company in respect of such advancement or payments. The
General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of The Blackstone Group Inc. or any of its Affiliates, which
shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
Section 3.6. Representations of Partners. (a) Each Limited Partner and Special Partner by execution of this Agreement (or by
otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Partner is
acquiring each of such Partner’s Interests for such Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the
rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms hereof). Each Limited Partner and
Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without registration under the Securities Act or exemption from
such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner represents that such Partner has such knowledge and
experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic risk of such investment. Each Limited Partner and
Special Partner represents that such Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partner’s net worth and the Partner has no need for liquidity in the
Partner’s investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such Partner has requested relating to the Partnership, any
Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and
to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the Partner with the Partner’s own advisers as to the financial,
tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
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(b) Each Limited Partner and Special Partner agrees that the representations and warranties
contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any
Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall
serve as confirmation thereof.
Section 3.7. Tax Representation and Further Assurances. (a) Each Limited Partner
and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the
Partnership’s obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner and Special
Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partner’s name, social security number (or, if applicable, employer
identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W- 9, Request for Taxpayer Identification Number Certification (“W-9”) or otherwise are correct and (ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited Partner or Special
Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or
(B) if the Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status
of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (“W-8BEN”), IRS
Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)
(“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY,
Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting
(“W-8IMY”), or otherwise is correct and (ii) the Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not
a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation
and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
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(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the
General Partner may release confidential information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partner’s investment in the Partnership if the Partnership or the General
Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be
treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their
Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading,
or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any
remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s or Special Partner’s action or inaction
from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the
Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as
are required to satisfy the Partnership’s obligation to make capital contributions to the Clarus IV GP in respect of the GP-Related Clarus IV GP Interest to fund the Clarus IV GP’s capital
contributions with respect to any GP-Related Clarus IV Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partner’s Commitment
Agreement or SMD Agreement, if any, the books and records of the Partnership or otherwise; provided, that additional GP-Related Capital Contributions in excess of the
GP-Related Required Amounts may be made pro rata among the Partners based upon each Partner’s Carried Interest Sharing Percentage. GP-Related Capital
Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including
those specifically set forth in Section 4.1(d) and Section 5.8(d))) shall be determined by the General Partner. Special Partners shall not be required to make additional GP-Related Capital
Contributions to the Partnership in excess of the GP-Related Required Amounts, except (i) as a condition of an increase in such Special Partner’s GP-Related
Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate
level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the
GP-Related Clarus IV Interest.
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(b) Each GP-Related Capital Contribution by a Partner
shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional
Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) the amount of any GP-Related
Capital Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The
Blackstone Group Inc. or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions
relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The General Partner shall
determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such withheld percentage constituting the General Partner’s and
such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining Withdrawn Partners
(other than the General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner and/or
Holdings shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The
Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the
Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%,
respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such reduction.
(iii) The Holdback Percentage may not be increased for any individual Partner as compared to the other Partners in his or her
Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners’
Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to
24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall
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apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the
Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces
the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial
Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase
or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to a majority vote of the Limited Partners (a “Holdback Vote”);
provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a
Subject Partner’s Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and
(y) has, if requested by such Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such
decrease occurs subsequent to an increase in a Subject Partner’s Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject
Partner’s Holdback Percentage is less than the prevailing Holdback Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage
unless such voting Partner determines, in such Partner’s good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns
(including such Subject Partner’s estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be
capable of satisfying any GP-Related Recontribution Amounts that may become due.
(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Limited Partners shall be entitled to cast one vote
with respect to the Holdback Vote regardless of such Limited Partner’s interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback Percentage, such Subject
Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually
satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided further,
that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject Partner
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that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses
(i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs
leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of
such arbitration, such “losing” party shall then provide any additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership if the
Holdback Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject
Partner shall be the “victorious” party. The party that is not the “victorious” party shall be the “losing” party.
(D) In the event of a decrease in a Subject Partner’s Holdback Percentage (1) pursuant to a Holdback Vote under this
clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as
expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback Percentage) as though such reduced Holdback
Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting
the “Excess Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess
Holdback”), and such Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may
obtain the release of the Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or Withdrawn Partner’s Excess Holdback
obligation, by pledging, granting a security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess
Holdback obligation. Any Partner seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the
General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in
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the Partnership’s books and records in which Partners are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital
contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to
utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a
first priority nor a second priority security interest is available, or (y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not
necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the
Partnership’s books and records to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of
any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.
(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a “Firm Collateral
Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn
Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such Excess Holdback
requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such Excess Holdback
requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any valuation or revaluation of Firm
Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including upon a Firm Collateral Realization,
if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership shall provide notice of the foregoing to such Partner or Withdrawn
Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If any such
Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a default
under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where
such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
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(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any
Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn
Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the
benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C
from a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moody’s (if the L/C is
for a term of 1 year or less), or (y) long-term deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required
Rating”). If the relevant rating of the commercial bank issuing such L/C drops below the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose
relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of Clarus IV, the Trustee(s) shall be
permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing
L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to
satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the
relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as
directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C
Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder), or (3) the release, by the Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the Partners
or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts
in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent
permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any
amount.
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(vii) (A) Any in-kind distributions by
the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind
distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnership’s books and records; provided, that the initial contribution of such Special Firm Collateral
shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent
such Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess
Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not
the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding any Excess Holdback) by pledging or otherwise
granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or
Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the
good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm
Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an
Excess Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in
the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying
Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for
purposes hereunder. Any net proceeds from
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such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To
the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partner’s or Withdrawn
Partner’s deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any valuation or revaluation of
the Special Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnership’s books and records), if such Partner’s or Withdrawn Partner’s Special Firm
Collateral is valued at less than such Partner’s Holdback (excluding any Excess Holdback) as provided in the Partnership’s books and records, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership
shall provide notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in
an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of
Section 5.8(d)(ii)(A) shall be deemed inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the
term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms
“Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be
construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time
thereafter the General Partner may revoke the ability of such Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the
provisions of clause (C) above shall apply to the Withdrawn Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to
satisfy any portion of the Holdback (excluding any Excess Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall
prevent any Partner or Withdrawn Partner from using any amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
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Section 4.2. Interest. Interest on the balances of the Partners’ capital related
to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital
invested in any other investment of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time
as determined by the General Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s
GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or
(iii) as determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be
determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b)
“GP-Related Net Income (Loss)” means:
(i) from any
activity of the Partnership related to the GP-Related Clarus IV Interest for any accounting period (other than GP-Related Net Income (Loss) from GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items that
are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such
GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related
Investment (determined as provided below); and
(iii) from any GP-Related
Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period
less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall be
determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not
otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its
adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference
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to such value; (iii) upon an adjustment to the value of any asset in the books of the Partnership pursuant to Treasury Regulations
Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing
taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any
income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the
General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of
income and expense (including interest income and overhead and other indirect expenses) of the Partnership, Holdings and other Affiliates of the Partnership shall be allocated among the Partnership, Holdings and such Affiliates, among various
Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net
Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual
or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the option of the General Partner, an accounting period will terminate and a
new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the
General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners’ GP-Related
Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to
GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing Percentages during such accounting
period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from
GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
(e) In establishing
GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it
deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this
Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn
Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any
successor thereto.
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Section 5.2. GP-Related Capital
Accounts. (a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of
accounting for such Partner’s interests in the capital of the Partnership related to the GP-Related Clarus IV Interest and the GP-Related Net Income (Loss) of the
Partnership (each a “GP-Related Capital Account”).
(b) As of the end
of each accounting period or, in the case of a contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by
the Partnership to one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership
related to such Partner’s GP-Related Partner Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such
accounting period and (C) the interest credited on the balance of such Partner’s capital related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to
Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated
promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partner’s
GP-Related Partner Interest and (y) the GP-Related Net Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related Profit Sharing Percentages. (a) Prior to the beginning
of each annual accounting period, the General Partner shall establish the profit sharing percentage (the “GP-Related Profit Sharing Percentage”) of each Partner in each category of
GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, that (i) the
General Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related
Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (c) below and
(ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the
GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former
Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of
any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the
GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partner’s GP-Related Profit Sharing
Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the
General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
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(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit
Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”);
provided, that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the
General Partner within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit
Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and
shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss). (a) Except as provided in
Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related
Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in
proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest
distributed to the Partners; second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or
Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a
return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the
Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have
been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net
Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by Clarus IV and allocated to the Partnership with respect to its pro rata share
thereof (based on capital contributions made by the Partnership to Clarus IV with respect to the GP-Related Clarus IV Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by Clarus IV and
(ii) GP-Related Net Loss relating to realized losses suffered by Clarus IV and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s
(including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)).
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(c) Notwithstanding Section 5.4(a) above, GP-Related
Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest
Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related
Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried
Interest.
(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any
accounting period unrelated to Clarus IV, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the
beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners (including any
additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such
allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this
Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to
make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or
Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6. [Intentionally omitted.]
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase
rights and/or other requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related Clarus IV Investments as the General Partner may
determine. The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to
any Partner that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other
requirements from time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
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Section 5.8. Distributions. (a) (i) The Partnership shall make distributions of
available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as
are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of
GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made
among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with
respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by Clarus IV of a portion of a GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each
Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate
GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a
Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related
Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by Clarus IV) relating to a GP-Related Disposable Investment (with
respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B
Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by Clarus IV) relating to a GP-Related Investment excluding such
GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of
GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related
Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of
GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall
make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such
Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an
individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account
(x) the limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or
short-term capital gain or ordinary or exempt) of the applicable income) and (iii) taking into account any differential in applicable rates due to the type and character of
GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of
the General Partner, such distribution is prohibited by applicable law.
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(c) The General Partner may provide that the GP-Related
Partner Interest of any Partner or employee (including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the
General Partner shall determine (a “Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will
be distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent
(by virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of
whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any
GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined
otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage
interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner;
provided, that the General Partner may allocate the Withdrawn Partner’s share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn
Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor
Special Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
(d) (i) (A) If the Clarus IV GP is obligated under the Clawback Provisions or Giveback Provisions to contribute to Clarus IV a Clawback
Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such amount to the Clarus IV GP in respect of the Partnership’s GP-Related
Clarus IV GP Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a “GP-Related Giveback Amount”), the General
Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as
called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related Recontribution Amount”) which equals (I) the product of (a) a Partner’s
or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of Clawback Amounts and (II) with respect to a
GP-Related Giveback Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with
(a) the GP-Related Clarus IV Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are
insufficient to satisfy such GP-Related Giveback Amount, GP-Related Clarus IV Investments other than the
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one giving rise to such obligation, but only those amounts received by the Partners with an interest in the GP-Related Clarus IV Investment referred to in
clause (II)(a) above, and (c) if the GP-Related Giveback Amount pursuant to an applicable Clarus IV Agreement is unrelated to a specific GP-Related Clarus IV
Investment, all GP-Related Clarus IV Investments. Each Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs,
if any, upon such call such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the
Trustee(s) pursuant to written instructions from the Partnership, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related Recontribution Amount”), irrespective of the fact that the amounts in the Trust
Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’ obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partner’s or Withdrawn
Partner’s share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such
excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partner’s
and Withdrawn Partner’s GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General
Partner’s judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount
from a Partner’s Trust Account used to pay any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partner’s
Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount.
(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral, such Partner or
Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of the Holdback
obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such
Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if
any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnership’s and the Other Fund GPs’ obligation
to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment
hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the Clarus IV Partnership Agreements, each partner of the General Partner shall have
the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under Section 5.8(d)(ii)(A) with respect to such partner’s pro rata
share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the Clarus IV Partnership Agreements.
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(ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net GP-Related
Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried Interest Give Back Percentages in the case of
Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully described in clause (II) of
Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such GP-Related Defaulting
Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”) if the General Partner determines in its good
faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related
Deficiency Contribution be required to contribute an amount in excess of its Carried Interest Pro Rata Portion (as defined in Appendix III of the Clarus IV GP Agreement) of the Net GP-Related Recontribution
Amount initially requested from such Partner or Withdrawn Partner in respect of such default.
(B) Thereafter, the General
Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the
good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a
Partnership expense to the extent not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such
GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting
Party by the Partnership or any Affiliate thereof (including amounts unrelated to Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest,
effective upon such Partner or Withdrawn Partner becoming a GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that,
upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn
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Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and
authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to
collect interest on the Net GP-Related Recontribution Amount of a GP-Related Defaulting Party from the date such Net GP-Related
Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(C)
Any Partner’s or Withdrawn Partner’s failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related
Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s
obligation to make a GP-Related Deficiency Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to
make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or
Withdrawn Partner initially fails to recontribute all or any portion of such Partner or Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to
collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partner’s or Withdrawn
Partner’s obligation to make contributions to the Partnership under this Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is hereby authorized to) take such steps as it deems appropriate, in its good
faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Net Loss (as defined in the Clarus IV Agreements) on GP-Related Clarus IV
Investments or other items of loss or expense (each, a “Loss Investment”) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners
receive or have received Carried Interest distributions from other GP-Related Clarus IV Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest
distributions shall be made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried
Interest distributions in connection with a GP-Related Clarus IV Investment (the “Subject Investment”) that have been reduced under any Clarus IV Agreement as a result of one or more Loss
Investments, the General Partner shall calculate amounts distributable to or due from each such Partner as follows:
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(A) determine each Partner’s share of each such Loss Investment based on his
or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all Partners (indirectly through
the Partnership from Clarus IV) from the Subject Investment (such reduction, the “Loss Amount”);
(B)
determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from Clarus IV) before any reduction in respect of the amount determined in
clause (A) above (the “Unadjusted Carried Interest Distributions”); and
(C) subtract
(I) the Loss Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net
Carried Interest Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this
clause (i) is a negative number, the General Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership
prior Carried Interest distributions (a “Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts
recontributed pursuant to clause (I) are insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net
Carried Interest Distribution. If a Partner’s (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the
tax rate referenced in clause (b) of paragraph 7.3.1 of the Clarus IV Partnership Agreements in effect in the Fiscal Years of such distributions (the “Excess Tax-Related
Amount”), then such Partner may, in lieu of paying such Partner’s Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate.
Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be
payable in full upon the earlier of (i) such time as the Clawback Amount is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of
this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest
Sharing Percentages in the Subject Investment.
A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount
promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
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A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from
cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such
Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as
provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so
distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to
date).
(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided
herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partner’s share of Net Loss (as defined in the Clarus IV Agreements) in any GP-Related Clarus IV Investments which gave rise to the Clawback Amount (i.e., the Net Loss that followed the last GP-Related Clarus IV Investment with respect to which
Carried Interest distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related Clarus IV Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest
Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from
the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to
the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a
positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the
extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount
was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
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Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General
Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all
Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners
and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the Clarus IV Agreements.
Section 5.9. Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and
miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner from time to time.
Section 5.10. Tax Capital Accounts; Tax Allocations. (a) For U.S. federal income tax purposes, there shall be
established for each Partner a single capital account combining such Partner’s Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines
are appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and
local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable
law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and
1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to
its respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so
allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided
in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that
allocations are in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S.
federal, state and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which
corresponding items are allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are
appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing
authority to any item of income, gain, loss, deduction or credit of the Partnership (or an adjustment to any Partner’s distributive share thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as
determined by the General Partner) in accordance with the final resolution of such audit adjustment.
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ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners. (a) Effective on the first day of any month (or on such other date as shall be determined
by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the
representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute
Partner) all terms of such additional Partner’s participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital
Commitment-Related Capital Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such
voting rights as may be determined by the General Partner from time to time unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any
such Special Partner being called a “Nonvoting Special Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement.
If Blackstone or another or subsequent holder of an Investor Note approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s
purchase of his or her Capital Commitment Interests, Blackstone or such other or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any
additional Partner may have a GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of
the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the
General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all
other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for
any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners
admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
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(c) An additional Partner shall be required to contribute to the Partnership his or her pro rata
share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and
in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission
of an additional Partner will be evidenced by (i) the execution of a counterpart copy of this Agreement by such additional Partner, (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, as
determined by the General Partner and/or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to be bound by the terms of this Agreement and such writing
being acceptable to the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust
Agreement that is acceptable to the General Partner on behalf of the Partnership.
Section 6.2. Withdrawal of Partners.
(a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner, including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual
obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary
Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days’ prior written notice by such Partner to the General Partner (or on such
shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may Withdraw from the Partnership with respect to such Partner’s
GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to
such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any
Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a
Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such person’s GP-Related Partner Interest; provided, that the General Partner may elect to admit such
Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such person’s GP-Related Partner Interest, with such GP-Related Partner Interest
as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of
agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
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(d) If the General Partner determines that it shall be in the best interests of the Partnership
for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with
respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after
the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital
Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue
the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the
fullest extent provided by law.
Section 6.3. GP-Related Partner Interests Not
Transferable. (a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partner’s GP-Related Partner Interest other than
as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the
death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for
estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust, limited partnership, or limited liability company with respect to which a Limited Partner
controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special
Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the Partnership (including the obligation to make additional
GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning Vehicle to Withdraw from the Partnership on the terms of
this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any
Partner’s GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be given or withheld in its sole discretion without
giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner
Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
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Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the
Partnership Act, the General Partner may not transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the
prior written approval of a Majority in Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with
regard to compliance with applicable law or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to
itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection
with any liquidation, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the General
Partner. A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in
the Partnership so acquired. The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall
not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby
authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall be no remaining Limited Partners, the Partnership shall be
dissolved and shall be wound up unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such
Withdrawal, of one or more Limited Partners.
(c) The Partnership shall not be dissolved, in and of itself, by the Withdrawal of any
Partner, but shall continue with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s
GP-Related Partner Interests. (a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but,
except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term “Settlement Date” means the
date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who
Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Special Partner, shall be considered a Withdrawn Partner for all purposes hereof.
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(b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that
if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the
interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions,
interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partner’s
GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partner’s Settlement Date (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date
in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the
General Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise
determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner
Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or
not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn
Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided
in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such
Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss), or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or
other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related
Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment)
and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in
paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this Section 6.5. If the amount determined
pursuant to clause (x) above is an aggregate
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negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i)
below; provided, that if the Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5.
Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partner’s
GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital Accounts in
accordance with their respective GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as
determined by the General Partner as of such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be
ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to
such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described
below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than
all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to
above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership
pursuant to this Section 6.5.
(f) For purposes of clause (y) of paragraph 6.5(e)(i) above, a Withdrawn Partner’s
“percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn
Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable
to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Partner for such purpose (and, if the General
Partner so designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the
terms and conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its
sole discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided,
that the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
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(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a
Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to (ii) distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro
rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other
investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the
Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted.]
(i)
Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the
Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership
(e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by
the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other
inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future
creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in
right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and
whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves
established by the General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to
pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding
Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner
to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate
equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a
Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage
interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The “due date” of any other amounts payable by a Withdrawn Partner
shall be 60 days after the date such amounts are determined to be payable.
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(l) At the time of the settlement of any Withdrawn Partner’s
GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the
assignment, pledge, grant of security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other
investments distributed in kind to such Withdrawn Partner or such Withdrawn Partner’s right to any payment from the Partnership.
(m)
If a Partner is required to Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not
be required) to apply any or all the following terms and conditions to such settlement:
(i) In settling the Withdrawn
Partner’s interest in any GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the
GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate
balance of such Withdrawn Partner’s GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his
or her GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply
the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any
GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The
Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in
right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or
distribution.
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(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on
the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a
period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph
(n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such
restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the
General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to
any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance
to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such
professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent,
representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and
all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including,
without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force
and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
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Section 6.6. Dissolution of the Partnership. The General Partner may dissolve
the Partnership prior to the expiration of its term at any time on not less than 60 days’ notice of the dissolution date given to the other Partners. Upon the dissolution of the Partnership, the Partners’ respective interests in the
Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5.
Section 6.7. Certain Tax
Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such
returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and
credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the
preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of
such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such
item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any
claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection
with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of
such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be
excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys’, accountants’ and other experts’ fees and disbursements)
shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain,
loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by
the Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or otherwise protest any adverse findings in any such audit
conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the
Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any Partner selected by the General Partner as the “partnership representative” (as defined under the Code) (the “Tax Matters
Partner”). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and
expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys’ fees and
disbursements, incident to any such breach or violation.
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(c) Each individual Partner shall provide to the Partnership copies of each federal, state and
local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the
General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or
with respect to any Partner, or as a result of a Partner’s participation in the Partnership or as a result of a Partner’s failure to provide requested tax information, including pursuant to Section 6225 or Section 1446(f) of the
Code (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly
paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or,
if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence
for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax
Advance. To the extent that any taxes are imposed on the Partnership (or any entity in which the Partnership invests that is treated as a flow-through entity for relevant tax purposes) with respect to income of the Partnership (or such entity) in
lieu of taxes imposed directly on a Partner with respect to such income (including any state or local income taxes), whether by election of the Partnership or the General Partner or otherwise, such amounts shall be deemed to have been distributed to
such Partner. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties,
additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the Withdrawal of any Partner from the
Partnership or any Transfer of a Partner’s interest.
Section 6.8. Special Basis Adjustments. In connection with any
assignment or transfer of a Partnership interest permitted by the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
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ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc. (a) This Article VII and Article VIII hereof set forth
certain terms and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment Clarus IV Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment Clarus IV Interest. Except
as otherwise expressly provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or
the GP-Related Clarus IV Interest.
(b) Each Partner, severally, agrees to make contributions of
capital to the Partnership (“Capital Commitment-Related Capital Contributions”) as required to fund the Partnership’s capital contributions to Clarus IV or the Clarus IV GP in
respect of the Capital Commitment Clarus IV Interest, if any, and the related Capital Commitment Clarus IV Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Capital Commitment). No Partner shall be
obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such Partner’s Capital Commitment-Related
Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily participate in each Capital Commitment Investment
(which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital Commitment Profit Sharing Percentage with respect to (i) the Partnership’s portion of the
Blackstone Capital Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing
contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the Partnership and its
Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital
Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its Affiliates (in such capacity, the “Advancing Party”) may in its sole discretion advance
to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital
Commitment-Related Capital Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Partner shall pay interest to
the Advancing Party on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written
notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Partner and the
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Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of
such Firm Advance. The Advancing Party shall inform any Partner of such rate upon such Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further,
that amounts that are otherwise payable to such Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances
(including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate
applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
Section 7.2. Capital Commitment Capital Accounts. (a) There shall be established for each Partner in the books of the
Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital
Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related
Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the
Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partner’s interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital
Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment
Investment and in whole upon the dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the consent of the General Partner.
Section 7.3. Allocations. (a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment
shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing
Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s aggregate Capital Commitment
Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each
Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital
Commitment Profit Sharing Percentages for such Capital Commitment Investment.
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(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7
shall be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as
it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4. Distributions.
(a) Each Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments,
distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests)
during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the
General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected
by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
(i) First, to the
payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all
interest payments due, the selection of those of such Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Partner of an amount equal to the U.S. federal, state and local income taxes on income of
the Partnership allocated to such Partner for such year in respect of such Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that
the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were all allocated to an individual subject to the then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character of such
taxable income allocated by the Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause
(ii) to the extent that such amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant
partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant
to provisions in such other BE Agreements that are comparable to this clause (ii);
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(iii) Third, to the payment in full of the principal amount of the Investor Note
financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid
from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all Capital
Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all
capital contributions made to any Blackstone Entity (other than the Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all
principal paid on the related Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of
such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v)
above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid, the division of
payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment Net Income remaining after making the
distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in
clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted
to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to
clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partner’s Capital Commitment
Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed
to such Partner.
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Distributions of Capital Commitment Net Income may be made at any other time at the discretion of
the General Partner. At the General Partner’s discretion, any amounts distributed to a Partner in respect of such Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes
for the full period in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy
any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining
principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a
Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e)
The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment is being considered by the
Partnership or Clarus IV (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect to such Capital Commitment Investment shall be
vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class B
Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment Class A
Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital
Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions
(including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to
holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.
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(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a
Giveback Amount to Clarus IV in respect of any Capital Commitment Clarus IV Interest that may be held by the Partnership or (y) the Clarus IV GP is obligated under the Giveback Provisions to contribute to Clarus IV a Giveback Amount with
respect to any Capital Commitment Clarus IV Interest that may be held by the Clarus IV GP and the Partnership is obligated to contribute any such amount to the Clarus IV GP in respect of the Partnership’s Capital Commitment Clarus IV GP Partner
Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a “Capital Commitment Giveback Amount”), the General Partner
shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by
the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment Clarus IV Interest (the “Capital Commitment Recontribution Amount”) which equals such
Partner’s pro rata share of prior distributions in connection with (a) the Capital Commitment Clarus IV Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above
are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment Clarus IV Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to an applicable Clarus
IV Agreement is unrelated to a specific Capital Commitment Clarus IV Investment, all Capital Commitment Clarus IV Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s Capital Commitment
Recontribution Amount. Prior to such time, the General Partner may, at the General Partner’s discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of
the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
(ii) (A) In the event any Partner (a “Capital Commitment Defaulting Party”) fails to recontribute all or
any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of
their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital Commitment Defaulting Party’s Capital Commitment
Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such amount in cash from such Capital Commitment
Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount; provided, that no Partner shall as a
result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested from such Partner in respect of such default.
Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors
considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting Party, the cost of which shall be a Partnership
expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a Capital Commitment Defaulting
Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any
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amounts otherwise payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective
upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security
interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the
immediately preceding sentence. The General Partner shall be entitled to collect interest on the Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was
required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partner’s failure
to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount.
(iii) A Partner’s obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the
termination of the Partnership.
Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the
end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by the Clarus IV GP (or any other Affiliate of the Partnership that is a general partner of Clarus IV) in valuing
investments of Clarus IV or, in the case of investments not held by Clarus IV, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment
Interest as of any date (the “Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of
an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment
Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment
Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a
person who is or was at any time a direct member or partner of a General Partner of the Partnership.
Section 7.6. Disposition
Election. (a) At any time prior to the date of the Partnership’s execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any
portion of its pro rata share of such Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall
instruct the General Partner in writing prior to such date (i) not to dispose of all or any portion of such Partner’s pro rata share of such Capital Commitment
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Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or
(B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such Retained Portion to such Partner. Such Partner’s
Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other Partners’ pro rata shares of such Capital Commitment
Investment; provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the
Partnership.
(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in
full prior to or simultaneously with such distribution.
Section 7.7. Capital Commitment Special Distribution Election.
(a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment
Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a “Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital
Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
(b) No Capital Commitment Special
Distributions shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL,
ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests. (a) Capital
Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest
which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that in the event that a Partner prepays all or any portion of
the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an employee or officer of Holdings or an Affiliate thereof, the Partnership (or its designee) shall have the right, in its sole
discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be
determined in accordance with the determination of the purchase price of a Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made by a Partner shall apply pro rata against all of such
Partner’s Investor Notes; provided, that such Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or more Blackstone Entities specified by such Partner. Except as
expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests.
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(b) (i) Upon a Partner ceasing to be an officer or employee of the Partnership or any of its
Affiliates, other than as a result of such Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within
30 days and by the Partnership or its designee(s) within 45 days after such Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the obligation, to require the Partnership (subject to
the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the
case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
(ii) The purchase price for each such Contingent Capital Commitment Interest shall be an amount equal to (A) the
outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the “Adjustment Amount”)
equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus (y) all
Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on the Contingent portion of such
Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount, in the
General Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment Net
Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the
holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partner’s Capital
Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partner’s
Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a
Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partner’s Contingent Capital Commitment
Interests, his or her related Investor Note shall be payable in full.
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(iii) Upon such Partner ceasing to be such an officer or employee, all Investor
Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn Partner’s
Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the Partnership nor its designee(s)
exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor Notes shall remain outstanding,
shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the Withdrawn Partner at his or her
option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis.
(v) To the extent that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the
purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall thereupon cease to be a Partner with respect to such
Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership and
the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Partner’s Capital Commitment Partner Interest pursuant
to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the
manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or
otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until distribution of any such Partner’s interest in the
Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption without the consent of the General Partner.
The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partner’s Capital Commitment Partner Interest.
(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests of such Partner shall be purchased by the
Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partner’s death or Total Disability) (and the purchase price for such Contingent Capital Commitment Interests shall be
determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partner’s estate, personal representative or other Successor in Interest, in cash)), and any Investor Notes financing such
Contingent Capital Commitment
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Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partner’s death or Total Disability, any Investor Note(s) financing such Contingent Capital Commitment
Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within 180 days after the
Partner’s death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership or its designee
may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnership’s then current Fiscal Year at a
price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of this Agreement. In
addition, the Partnership may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General Partner knows or
has reason to know of such Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the
Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital
Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership or any of its Affiliates, or at any time thereafter, upon
30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership
or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another person designated by the General Partner (who may be itself
another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital
Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase). The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph
(d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as
described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General Partner’s designee(s), Holdings may loan all or
a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is
an executive officer of The Blackstone Group Inc. or any
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Affiliate thereof). To the extent that a Withdrawn Partner’s Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by
another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the
repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself
as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital Commitment Interests”). To the extent that a Capital Commitment Interest is allocated to Partners as
provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be
Contingent and shall become Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Partners receiving such allocations shall be responsible for such related
indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this Section 8.1 and except as such Partners and the General Partner shall otherwise agree; provided, that
such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be non-recourse or so limited,
the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such Partners; provided, that a Partner shall not, except as
set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the
Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an
obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated
to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such related financing will be an expense of the Partnership
allocable to all Partners in such proportions.
(g) If a Partner is required to Withdraw from the Partnership with respect to such
Partner’s Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1;
provided, that if such Partner was not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent
Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital
Commitment Interest);
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(ii) allow the Withdrawn Partner to retain such
Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment
shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof;
or
(iii) in lieu of cash, purchase such Non-Contingent Capital Commitment
Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn
Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners
or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the
Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements,
instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without
limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and
effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 8.2. Transfer of Partner’s Capital Commitment Interest. Except as otherwise agreed by the General
Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital
Commitment Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or Deceased or
Totally Disabled Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of
Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the
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General Partner (which consent may be granted or withheld in its sole discretion without giving any reason therefor) and (iv) with the prior written consent of the General Partner, which
shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it being understood that it shall not be unreasonable for the General Partner to condition any
Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in connection with any such Transfer, including, for example, a requirement that any transferee of
an Interest hold such Interest as a passive, non-voting interest in the Partnership). The General Partner shall designate that each Estate Planning Vehicle shall not have voting rights (any such Partner being
called a “Nonvoting Partner”). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such Nonvoting Partner with respect to the interest transferred (including the obligation to make
additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the
terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such Partner’s right to participate in the affairs of the
Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its
entire Interest in the Partnership in accordance with the provisions of this Agreement.
Section 8.3. Compliance with Law.
Notwithstanding any provision hereof to the contrary, no sale or Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with all U.S. federal, state and other applicable laws, including U.S. federal and state
securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1.
Dissolution. The Partnership shall be dissolved and subsequently terminated:
(a) pursuant to Section 6.6; or
(b) upon the expiration of the term of the Partnership.
Section 9.2. Final Distribution. Upon the dissolution of the Partnership, and following the payment of creditors of the
Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account
balances of the Partners; and
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(b) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be
paid to such Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital
Commitment Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment
Investment; and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing
Percentages for each Capital Commitment Investment from which such cash or Securities are derived.
The General Partner shall be the
liquidator. In the event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special
Partners).
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any
Securities or other property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in the case of dissolution,
without sacrificing a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related
Capital Commitment Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so
excluded shall not be paid or distributed until such time as the liquidator shall determine.
(b) If there is any pending transaction,
contingent liability or claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the liquidator, be then
ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or
claim until its final settlement or such earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest an amount which the
liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of
sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized
from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including
the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, liquidation or winding up of the Partnership), whether arising during the
existence of the Partnership or at or after its termination or during or after the liquidation or winding up of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance
with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the
receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if
reasonably possible during any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), the General Partner may
bring, or may cause the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to
arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph
(c) of this Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law
would be inadequate and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall
promptly advise such Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL
PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such
ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s)
designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
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(ii) The parties hereby waive, to the fullest extent permitted by applicable law,
any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties
agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be
construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration
Act”). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable
under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or
enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C.
(“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name of each of
BLACKSTONE and CLARUS and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE and/or CLARUS, shall belong exclusively to TM,
which company (or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE and CLARUS in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE and CLARUS for various services and that the
Partnership is using the BLACKSTONE and CLARUS marks and names on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of
TM. All services rendered by the Partnership under the BLACKSTONE and/or CLARUS marks and names will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE and CLARUS
marks by TM and its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE and/or CLARUS at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly
following any such termination, the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE and CLARUS or any confusingly similar term and cease all use of BLACKSTONE and CLARUS or any term
confusingly similar thereto as a service mark or otherwise.
Section 10.3. Written Consent. Any action required or permitted
to be taken by a vote of Partners at a meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
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Section 10.4. Letter Agreements; Schedules. The General Partner may, or may cause the
Partnership to, enter, or has previously entered, into separate letter agreements with individual Partners, officers or employees with respect to GP-Related Profit Sharing Percentages, Capital Commitment
Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties
hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement, including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner
notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules which set forth the then current capital balances, GP-Related
Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of
this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD Agreement.
Section 10.5. Governing Law; Separability of Provisions. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided
therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be
affected thereby. In furtherance of the foregoing and in accordance with Treasury Regulations Section 1.1061-3(c)(3)(ii)(B), the Partnership shall, (i) calculate separate allocations attributable to (A) the Carried Interest and any other
distribution entitlements that are not commensurate with capital contributed to the Partnership, and (B) any distribution entitlements of the Partners that are commensurate with capital contributed to the Partnership (in each case,
within the meaning of Treasury Regulations Section 1.1061-3(c)(3)(ii)(B) and as reasonably determined by the General Partner), and (ii) consistently reflect each such allocation in its books and records.
Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and shall, subject to the
penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto; provided, that no
person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner (including the right to approve or
vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall remain liable for the
obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partner’s or
Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and
Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from the transferee with respect to
any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal representatives, heirs, successors and
permitted assigns. Notwithstanding the foregoing, solely to the extent required by the Clarus IV Agreements, (x) the limited partners in Clarus IV shall be third-party beneficiaries of the provisions of
Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount, and (y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A)
(and the definitions relating thereto), solely as they relate to any Clawback Amount, shall be effective against such limited partners only with the consent of a
majority-in-interest of the Clarus Investors (as defined in the Clarus IV Partnership Agreements) unless such amendment does not adversely affect such limited
partners’ rights under paragraph 10.5.3 of the Clarus IV Partnership Agreements.
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Section 10.7. Confidentiality. (a) By executing this Agreement, each Partner
expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another
Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally known to the public or the
securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate Partner may disclose any such information
it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and
any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this
purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the
Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute
such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating,
cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not
limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such
communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the
disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to
the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.
Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no
circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without
the prior written consent of Blackstone.
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Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to
be given, such notice shall be in writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnership’s books
and records or, if given to the General Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery, when
delivered to the address of such Partner, the General Partner or the Partnership specified as aforesaid.
Section 10.9.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument. For the avoidance of doubt, a Person’s execution and delivery
of this Agreement by electronic signature and electronic transmission (jointly, an “Electronic Signature”), including via DocuSign or other similar method, shall constitute the execution and delivery of a counterpart of this
Agreement by or on behalf of such Person and shall bind such Person to the terms of this Agreement. The parties hereto agree that this Agreement and any additional information incidental hereto may be maintained as electronic records. Any Person
executing and delivering this Agreement by an Electronic Signature further agrees to take any and all reasonable additional actions, if any, evidencing its intent to be bound by the terms of this Agreement, as may be reasonably requested by the
General Partner.
Section 10.10. Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such
Partner’s true and lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file all
instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other
state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is coupled with an
interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall survive and shall not be affected by the subsequent disability or incapacity of
such Partner.
Section 10.11. Partner’s Will. Each Partner and Withdrawn Partner shall include in his or
her will a provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership,
in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partner’s or Withdrawn Partner’s Interest is transferred shall
include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or
Withdrawn Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of
such notice, the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
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Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are
cumulative and do not preclude use of other rights and remedies available under applicable law.
Section 10.13. Legal Fees.
Except as more specifically provided herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce
Section 4.1(d) or any other provision of this Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable
legal fees and expenses incurred in connection with such dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to
be paid and such amounts remaining unpaid after such date shall accrue interest at the Default Interest Rate.
Section 10.14.
Entire Agreement; Modifications. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject
matter. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
Section 10.15. Headings. The headings contained in this Agreement are for convenience and reference purposes only and shall not be
deemed to alter or affect in any way the meaning or interpretation of any provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year
first above written.
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| GENERAL PARTNER: |
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| BLACKSTONE CLARUS GP L.L.C. |
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| By: Blackstone Holdings I L.P., its managing member |
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| By: Blackstone Holdings I/II GP L.L.C., its general partner |
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| By: |
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/s/ John G. Finley |
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Name: John G. Finley |
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Title: Chief Legal Officer and Secretary |
[Signature Page to Second Amended and Restated Limited Partnership Agreement of Blackstone Clarus GP
L.P.]
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| LIMITED PARTNERS AND SPECIAL PARTNERS: |
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| Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to Blackstone Clarus GP L.L.C. |
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| BLACKSTONE CLARUS GP L.L.C. |
|
| By: Blackstone Holdings I L.P., its managing member |
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| By: Blackstone Holdings I/II GP L.L.C., its general partner |
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| By: |
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/s/ John G. Finley |
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Name: John G. Finley |
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Title: Chief Legal Officer and Secretary |
[Signature Page to Second Amended and Restated Limited Partnership Agreement of Blackstone Clarus GP
L.P.]
Exhibit 10.4
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BREA ASIA III (CAYMAN) L.P.
AMENDED AND RESTATED EXEMPTED
LIMITED PARTNERSHIP AGREEMENT
DATED NOVEMBER 3, 2023
EFFECTIVE FROM SEPTEMBER 27, 2021
THE
EXEMPTED LIMITED PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BREA ASIA III (CAYMAN) L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE
SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY
NOT BE OFFERED FOR SALE, PLEDGED, 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 EXEMPTED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT. THEREFORE,
PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
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Page |
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| ARTICLE I DEFINITIONS |
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1 |
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| Section 1.1 |
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Definitions |
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1 |
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| Section 1.2 |
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Terms Generally |
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17 |
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| ARTICLE II GENERAL PROVISIONS |
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17 |
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| Section 2.1 |
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General Partner, Limited Partner, Special Partner |
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17 |
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| Section 2.2 |
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Formation; Name; Foreign Jurisdictions |
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18 |
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| Section 2.3 |
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Term |
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18 |
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| Section 2.4 |
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Purposes; Powers |
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18 |
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| Section 2.5 |
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Place of Business |
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21 |
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| Section 2.6 |
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Withdrawal of Initial Limited Partner |
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21 |
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| Section 2.7 |
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Reorganization or Reconstitution and De-Registration of the Partnership |
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21 |
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| ARTICLE III MANAGEMENT |
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21 |
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| Section 3.1 |
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General Partner |
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21 |
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| Section 3.2 |
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Partner Voting, etc. |
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22 |
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| Section 3.3 |
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Management |
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22 |
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| Section 3.4 |
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Responsibilities of Partners |
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24 |
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| Section 3.5 |
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Exculpation and Indemnification |
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25 |
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| Section 3.6 |
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Representations of Partners |
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27 |
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| Section 3.7 |
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Tax Representation and Further Assurances |
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28 |
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| ARTICLE IV CAPITAL OF THE PARTNERSHIP |
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29 |
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| Section 4.1 |
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Capital Contributions by Partners |
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29 |
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| Section 4.2 |
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Interest |
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36 |
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| Section 4.3 |
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Withdrawals of Capital |
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37 |
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| ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
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37 |
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| Section 5.1 |
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General Accounting Matters |
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37 |
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| Section 5.2 |
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GP-Related Capital Accounts |
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39 |
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| Section 5.3 |
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GP-Related Profit Sharing Percentages |
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39 |
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| Section 5.4 |
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Allocations of GP-Related Net Income (Loss) |
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40 |
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| Section 5.5 |
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Liability of Partners |
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41 |
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TABLE OF CONTENTS
(Continued)
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| Section 5.6 |
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[Intentionally omitted.] |
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41 |
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| Section 5.7 |
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Repurchase Rights, etc. |
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41 |
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| Section 5.8 |
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Distributions |
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42 |
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| Section 5.9 |
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Business Expenses |
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49 |
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| Section 5.10 |
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Tax Capital Accounts; Tax Allocations |
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49 |
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| ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION |
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50 |
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| Section 6.1 |
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Additional Partners |
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50 |
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| Section 6.2 |
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Withdrawal of Partners |
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51 |
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| Section 6.3 |
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GP-Related Partner Interests Not Transferable |
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52 |
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| Section 6.4 |
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Consequences upon Withdrawal of a Partner |
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53 |
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| Section 6.5 |
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Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests |
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54 |
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| Section 6.6 |
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Dissolution of the Partnership |
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59 |
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| Section 6.7 |
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Certain Tax Matters |
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59 |
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| Section 6.8 |
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Special Basis Adjustments |
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61 |
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| ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS;
DISTRIBUTIONS |
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61 |
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| Section 7.1 |
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Capital Commitment Interests, etc. |
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61 |
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| Section 7.2 |
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Capital Commitment Capital Accounts |
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62 |
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| Section 7.3 |
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Allocations |
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63 |
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| Section 7.4 |
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Distributions |
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63 |
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| Section 7.5 |
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Valuations |
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68 |
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| Section 7.6 |
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Disposition Election |
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68 |
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| Section 7.7 |
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Capital Commitment Special Distribution Election |
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68 |
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| ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
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69 |
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| Section 8.1 |
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Partner Withdrawal; Repurchase of Capital Commitment Interests |
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69 |
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| Section 8.2 |
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Transfer of Partner’s Capital Commitment Interest |
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74 |
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| Section 8.3 |
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Compliance with Law |
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75 |
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| ARTICLE IX DISSOLUTION |
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75 |
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| Section 9.1 |
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Dissolution |
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75 |
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| Section 9.2 |
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Final Distribution |
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75 |
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| Section 9.3 |
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Amounts Reserved Related to Capital Commitment Partner Interests |
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76 |
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TABLE OF CONTENTS
(Continued)
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| ARTICLE X MISCELLANEOUS |
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77 |
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| Section 10.1 |
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Submission to Jurisdiction; Waiver of Jury Trial |
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77 |
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| Section 10.2 |
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Ownership and Use of the Blackstone Name |
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78 |
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| Section 10.3 |
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Written Consent |
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78 |
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| Section 10.4 |
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Letter Agreements; Schedules |
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78 |
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| Section 10.5 |
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Governing Law; Separability of Provisions |
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79 |
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| Section 10.6 |
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Successors and Assigns; Third Party Beneficiaries |
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79 |
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| Section 10.7 |
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Confidentiality |
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79 |
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| Section 10.8 |
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Notices |
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80 |
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| Section 10.9 |
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Counterparts |
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81 |
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| Section 10.10 |
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Power of Attorney |
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81 |
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| Section 10.11 |
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Partner’s Will |
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81 |
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| Section 10.12 |
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Cumulative Remedies |
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81 |
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| Section 10.13 |
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Legal Fees |
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82 |
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| Section 10.14 |
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Entire Agreement; Modifications |
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82 |
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iii
BREA ASIA III (CAYMAN) L.P.
AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT dated November 3, 2023, but with an effective date as between the parties
hereto of September 27, 2021, of BREA Asia III (Cayman) L.P., a Cayman Islands exempted limited partnership (the “Partnership”), by and among BREP Asia III L.L.C., a Delaware limited liability company, as general partner of the
Partnership (in its capacity as general partner of the Partnership) (the “General Partner”), Mapcal Limited (the “Initial Limited Partner”), as initial limited partner, the limited partners listed as Limited
Partners in the books and records of the Partnership and such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS, the General Partner, as general partner, and the Initial Limited Partner, as initial limited partner have formed an exempted limited
partnership under the laws of the Cayman Islands under the name of BREP Asia III (Cayman) L.P. pursuant to an Initial Exempted Limited Partnership Agreement dated April 22, 2021 (the “Original Agreement”) and registered such
partnership pursuant to the filing of a statement under Section 9(1) of the Partnership Act with the Registrar on April 22, 2021;
WHEREAS, a statement under Section 10(1) of the Partnership Act (a “Section 10 Statement”) was filed
with the Registrar on May 5, 2021, pursuant to which the name of the Partnership was changed to BREA Asia III (Cayman) L.P.; and
WHEREAS, the parties hereto desire to enter into this Agreement, effective on September 27, 2021, and hereby amend and restate the
Original Agreement in its entirety and reflect the withdrawal of the Initial Limited Partner from the Partnership and the admission of certain limited partners to the Partnership and to further make the modifications hereinafter set forth, in each
case effective on September 27, 2021;
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and
intending to be legally bound hereby, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes
of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(ii).
“Advancing Party” has the meaning set forth in Section 7.1(c).
“Affiliate” when used with reference to another person means any
person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires,
endowment funds, estate planning vehicles (including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts
associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees and/or related persons.
“Agreement” means this Amended and Restated Exempted Limited Partnership Agreement, as it may be further
amended, supplemented, restated or otherwise modified from time to time.
“Applicable Collateral
Percentage” with respect to any Firm Collateral or Special Firm Collateral, has the meaning set forth in the books and records of the Partnership with respect thereto.
“Associates Asia III” means Blackstone Real Estate Associates Asia III L.P., a Cayman Islands exempted limited
partnership and the general partner of BREP Asia III, or any other entity that serves as the general partner, special general partner or managing member of a vehicle indicated in the definition of BREP Asia III.
“Associates Asia III LP Agreement” means the exempted limited partnership agreement, dated the date set forth
therein, of Associates Asia III, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the
filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or
her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or
defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment
or decree unstayed and in effect for a period of 60 consecutive days.
2
“BREP Asia III” means (i) Blackstone Real Estate Partners
Asia III L.P., a Cayman Islands exempted limited partnership, (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clauses (i) and (iii) of this definition,
(iii) any parallel fund, managed account or other capital vehicle relating to, or formed in connection with, the partnership referred to in clause (i) of this definition and (iv) any other limited partnership, limited liability
company or other entity (in each case, whether now or hereafter established) of which Associates Asia III or the General Partner serves, directly or indirectly, as the general partner, special general partner, manager, managing member or in a
similar capacity.
“BREP Asia III Agreements” means the collective reference to (i) the BREP Asia III
Partnership Agreement and (ii) any other BREP Asia III partnership, limited liability company or other governing agreements, as each may be amended, supplemented, restated or otherwise modified from time to time.
“BREP Asia III Partnership Agreement” means the exempted limited partnership agreement of the limited
partnership named in clause (i) of the definition of “BREP Asia III,” as it may be amended, supplemented, restated or otherwise modified from time to time.
“BE Agreement” means the limited partnership agreement, limited liability company agreement or other governing
document of any limited partnership, limited liability company or other entity referred to in the definition of “Blackstone Entity,” as such limited partnership agreement, limited liability company agreement or other governing document may
be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from
time to time.
“BE Investment” means any direct or indirect investment by any Blackstone Entity.
“Blackstone” means, collectively, Blackstone Inc., a Delaware corporation, and any predecessor or successor
thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of Blackstone Inc.)).
“Blackstone Capital Commitment” has the meaning set forth in the BREP Asia III Partnership Agreement.
“Blackstone Entity” means any partnership, limited liability company or other entity (excluding any natural
persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of Blackstone Inc., as designated by the General Partner in its sole discretion.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or
required by law to be closed in New York, New York.
“Capital Commitment Associates Asia III Partner
Interest” means the interest of the Partnership, if any, as a limited partner of Associates Asia III with respect to any Capital Commitment BREP Asia III Interest that may be held by Associates Asia III.
3
“Capital Commitment BREP Asia III Commitment” means the Capital
Commitment (as defined in the BREP Asia III Partnership Agreement), if any, of the Partnership or Associates Asia III to BREP Asia III that relates solely to the Capital Commitment BREP Asia III Interest, if any.
“Capital Commitment BREP Asia III Interest” means the Interest (as defined in the BREP Asia III Partnership
Agreement), if any, of the Partnership or Associates Asia III as a capital partner in BREP Asia III.
“Capital
Commitment BREP Asia III Investment” means the Partnership’s interest in a specific investment of BREP Asia III, which interest may be held by the Partnership (i) through the Partnership’s direct interest in BREP Asia III
through the Partnership’s Capital Commitment BREP Asia III Interest, if the Partnership holds the Capital Commitment BREP Asia III Interest, or (ii) through the Partnership’s interest in Associates Asia III and Associates Asia
III’s interest in BREP Asia III through Associates Asia III’s Capital Commitment BREP Asia III Interest, if Associates Asia III holds the Capital Commitment BREP Asia III Interest.
“Capital Commitment Capital Account” means, with respect to each Capital Commitment Investment for each
Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3
with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment
Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable
transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
“Capital Commitment Class A Interest” has the meaning set forth in Section 7.4(f).
“Capital Commitment Class B Interest” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Defaulting Party” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Deficiency Contribution” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Disposable Investment” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Distributions” means, with respect to each Capital Commitment
Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BREP Asia III Interest, if any, less any costs, fees and expenses of the Partnership
with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital
Commitment Investment as it may determine in good faith is appropriate.
4
“Capital Commitment Giveback Amount” has the meaning set forth
in Section 7.4(g)(i).
“Capital Commitment Interest” means the interest of a Partner in a specific
Capital Commitment Investment as provided herein.
“Capital Commitment Investment” means any Capital
Commitment BREP Asia III Investment, but shall exclude any GP-Related Investment.
“Capital Commitment Liquidating Share” means, with respect to each Capital Commitment Investment, in the case
of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” means, with respect to each Capital Commitment Investment, all amounts
of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and
expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
“Capital Commitment Partner Carried Interest” means, with respect to any Partner, the aggregate amount of
distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest.” Capital Commitment Partner Carried Interest includes any amount initially received by
an Affiliate of the Partnership from any fund (including BREP Asia III, any similar funds formed after the date hereof, and any Other Blackstone Clients (as defined in the BREP Asia III Partnership Agreement), whether or not in existence as of the
date hereof) to which such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital
contributions to make the investment of such fund giving rise to such “carried interest”).
“Capital
Commitment Partner Interest” means a Partner’s interest in the Partnership which relates (i) to any Capital Commitment BREP Asia III Interest held by the Partnership or (ii) through the Partnership and Associates Asia III, to
any Capital Commitment BREP Asia III Interest that may be held by Associates Asia III.
“Capital Commitment Profit
Sharing Percentage” means, with respect to each Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the
Partnership.
5
“Capital Commitment Recontribution Amount” has the meaning set
forth in Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the meaning set
forth in Section 7.1(b).
“Capital Commitment-Related Commitment” means, with respect to any Partner,
such Partner’s commitment to the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth
in such Partner’s Commitment Agreement or SMD Agreement, if any.
“Capital Commitment Special
Distribution” has the meaning set forth in Section 7.7(a).
“Capital Commitment Value” has
the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest
Distributions” as defined in the BREP Asia III Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BREP Asia III Agreement. In the case of each of (i) and (ii) above, except as
determined by the General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with
respect thereto (in each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
“Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to
Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by
(B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of
determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be
deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
“Carried Interest Sharing Percentage” means, with respect to each
GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
6
“Cause” means the occurrence or existence of any of the
following with respect to any Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any
non-competition agreement, (x) any material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s
deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or (z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates
in a material way as determined by the General Partner; provided, that, in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”)
within 15 days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such
longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar
conduct against the Partnership or any of its Affiliates; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including
any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a
self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or
any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner of the
Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event
described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
“Clawback Adjustment
Amount” has the meaning set forth in Section 5.8(e)(ii)(C).
“Clawback Amount” means the
“Clawback Amount” and the “Interim Clawback Amount”, each as defined in the BREP Asia III Partnership Agreement, and any other clawback amount payable to the limited partners of BREP Asia III or to BREP Asia III pursuant to any
BREP Asia III Agreement, as applicable.
“Clawback Provisions” means paragraphs 4.2.9 and 9.2.8 of
the BREP Asia III Partnership Agreement and any other similar provisions in any other BREP Asia III Agreement existing heretofore or hereafter entered into.
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreements” means the agreements between the Partnership or an Affiliate thereof and Partners,
pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the
Partnership and the relevant Partner.
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“Contingent” means subject to repurchase rights and/or
other requirements.
The term “control” when used with reference to any person means the power to direct
the management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with
one or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
“Controlled Entity” when used with reference to another person means any person controlled by such other
person.
“Covered Person” has the meaning set forth in Section 3.5(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For
purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partner’s
interest in the Partnership.
“Default Interest Rate” means the lower of (i) the sum of (a) the
Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
“Delaware
Arbitration Act” has the meaning set forth in Section 10.1(d).
“Electronic Signature” has
the meaning set forth in Section 10.9.
“Estate Planning Vehicle” has the meaning set forth in
Section 6.3(a).
“Excess Holdback” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the meaning set forth in
Section 5.8(e).
“Existing Partner” means any Partner who is neither a Retaining Withdrawn Partner
nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence, Bankruptcy,
winding up, dissolution or Withdrawal from the Partnership of any person who is a Partner.
“Firm
Advances” has the meaning set forth in Section 7.1(c).
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“Firm Collateral” means a Partner’s or Withdrawn
Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged or made available
to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnership’s books and records; provided, that for all purposes hereof (and any other agreement
(e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding references to
“Firm Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).
“Firm Collateral
Realization” has the meaning set forth in Section 4.1(d)(v)(B).
“Fiscal Year” means a
calendar year, or any other period chosen by the General Partner.
“Fund GP” means the Partnership (only
with respect to the GP-Related BREP Asia III Interest) and the Other Fund GPs.
“GAAP” means U.S. generally accepted accounting principles.
“General Partner” means BREP Asia III L.L.C. and any person admitted to the Partnership as an additional or
substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act).
“Giveback Amount(s)” means the amount(s) payable by partners of BREP Asia III pursuant to the Giveback
Provisions.
“Giveback Provisions” means paragraph 3.4.3 of the BREP Asia III Partnership Agreement and
any other similar provisions in any other BREP Asia III Agreement existing heretofore or hereafter entered into.
“Governmental Entity” has the meaning set forth in Section 10.7(b).
“GP-Related Associates Asia III Interest” means the interest of the
Partnership as a limited partner of Associates Asia III with respect to the GP-Related BREP Asia III Interest, but does not include any interest of the Partnership in Associates Asia III with respect to any
Capital Commitment BREP Asia III Interest that may be held by Associates Asia III.
“GP-Related BREP Asia III Interest” means the interest of Associates
Asia III in BREP Asia III as general partner of BREP Asia III, excluding any Capital Commitment BREP Asia III Interest that may be held by Associates Asia III.
“GP-Related BREP Asia III Investment” means the Partnership’s
indirect interest in Associates Asia III’s indirect interest in an Investment (for purposes of this definition, as defined in the BREP Asia III Partnership Agreement) in Associates Asia III’s capacity as general partner and/or special
general partner of BREP Asia III, but does not include any Capital Commitment Investment.
“GP-Related Capital Account” has the meaning set forth in Section 5.2(a).
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“GP-Related Capital
Contributions” has the meaning set forth in Section 4.1(a).
“GP-Related Class A Interest” has the meaning set
forth in Section 5.8(a)(ii).
“GP-Related Class B
Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Commitment”, with respect to any Partner, means such
Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such
commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“GP-Related Defaulting Party” has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related Deficiency Contribution” has the meaning set forth in
Section 5.8(d)(ii)(A).
“GP-Related Disposable Investment”
has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback
Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“GP-Related Investment” means any investment (direct or indirect) of
the Partnership in respect of the GP-Related BREP Asia III Interest (including, without limitation, any GP-Related BREP Asia III Investment, but excluding any Capital
Commitment Investment).
“GP-Related Net Income (Loss)” has the
meaning set forth in Section 5.1(b).
“GP-Related Partner
Interest” of a Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect
to the GP-Related BREP Asia III Interest and with respect to all GP-Related Investments.
“GP-Related Profit Sharing Percentage” means the “Carried
Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to
GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the
term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.
“GP-Related Recontribution Amount” has the meaning set forth in
Section 5.8(d)(i)(A).
“GP-Related Required Amounts” has the
meaning set forth in Section 4.1(a).
“GP-Related Unallocated
Percentage” has the meaning set forth in Section 5.3(b).
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“GP-Related Unrealized Net Income
(Loss)” attributable to any GP-Related BREP Asia III Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership
with respect to such GP-Related BREP Asia III Investment if BREP Asia III’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date
(determined in accordance with Section 5.1(e)) and all distributions payable by BREP Asia III to the Partnership (indirectly through the general partner of BREP Asia III) pursuant to any BREP Asia III Partnership Agreement with respect to such GP-Related BREP Asia III Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other
GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with
respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in
accordance with Section 5.1(e)).
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
“Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A).
“Holdings” means Blackstone Holdings IV L.P., a Québec société en commandite.
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole
discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Initial Limited Partner” has the meaning set forth in the preamble hereto.
“Interest” means a Partner’s exempted limited partnership interest in the Partnership, including any
interest that is held by a Retaining Withdrawn Partner and including any Partner’s GP-Related Partner Interest and Capital Commitment Partner Interest.
“Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner
from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to
purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such
Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net
Income (whether
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or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources;
provided further, that references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an
“Investor Note” refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for
purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
“Investor Special
Partner” means any Special Partner so designated at the time of its admission by the General Partner as a Partner of the Partnership.
“Issuer” means the issuer of any Security comprising part of an Investment.
“L/C” has the meaning set forth in Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
“Lender or Guarantor” means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the
Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
“Limited Partner” means each of the parties admitted as limited partners of the Partnership in accordance with
the terms hereof and listed as Limited Partners in the books and records of the Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each
in its capacity as a limited partner of the Partnership. For the avoidance of doubt, the term “Limited Partner” does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited
partners of the Partnership).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
“Losses” has the meaning set forth in Section 3.5(b)(i).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more persons
who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to
the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all
the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
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“Net Carried Interest Distribution” has the meaning set forth in
Section 5.8(e)(i)(C).
“Net Carried Interest Distribution Recontribution Amount” has the meaning set
forth in Section 5.8(e).
“Net GP-Related Recontribution
Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such
GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated
with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
“Non-Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the
books and records of the Partnership.
“Non-Contingent” means
generally not subject to repurchase rights or other requirements.
“Nonvoting Partner” has the meaning set
forth in Section 8.2.
“Nonvoting Special Partner” has the meaning set forth in Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Other Fund GPs” means Associates Asia III and any other entity (other than the Partnership) through which any
Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates
that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither BREP Asia III L.L.C. nor Holdings nor any Estate Planning Vehicle established for the benefit of
family members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
“Other Sources” means (i) distributions or payments of Capital Commitment Partner Carried Interest (which
shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto),
and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
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“Partner” means any person who is a partner of the Partnership,
including the Limited Partners, the General Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have
any right to vote as a class on any matter relating to the Partnership, including, but not limited to, any merger, reorganization, winding up or dissolution.
“Partner Category” means the General Partner, Existing Partners, Retaining Withdrawn Partners or Deceased
Partners, each referred to as a group for purposes hereof.
“Partnership” has the meaning set forth in the
preamble hereto.
“Partnership Act” means the Exempted Limited Partnership Act (As Revised) of the Cayman
Islands, as amended from time to time, or any successor statute.
“Partnership Affiliate” has the meaning
set forth in Section 3.3(b).
“Partnership Affiliate Governing Agreement” has the meaning set forth
in Section 3.3(b).
“Pledgable Blackstone Interests” has the meaning set forth in
Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate.
“Qualifying Fund” means any fund designated by
the General Partner as a “Qualifying Fund”.
“Registrar” shall have the meaning specified in
Section 2.3.
“Repurchase Period” has the meaning set forth in Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
“Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a
GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
“S&P” means Standard & Poor’s Ratings Group, and any successor thereto.
“Section 10 Statement” as the meaning set forth in the preamble hereto.
“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled
Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market
investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
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“Securities Act” means the U.S. Securities Act of 1933, as
amended from time to time, or any successor statute.
“Settlement Date” has the meaning set forth in
Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of
its Affiliates and certain of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership
and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets
that have been pledged to the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnership’s books and records.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Partner” means any person shown in the books and records of the Partnership as a Special Partner of
the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
“Subject
Investment” has the meaning set forth in Section 5.8(e)(i).
“Subject Partner” has the
meaning set forth in Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder
of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or
receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the termination, winding up or dissolution of; or (vi) other executor, administrator, committee, legal representative or other successor or
assign of, any Partner, whether by operation of law or otherwise.
“Tax Advances” has the meaning set
forth in Section 6.7(d).
“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“Third Party Rights Law” shall have the meaning specified in Section 3.5(b)(iii).
“TM” has the meaning set forth in Section 10.2.
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“Total Disability” means the inability of a Limited Partner
substantially to perform the services required of such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness
or incapacity and whether arising out of sickness, accident or otherwise.
“Transfer” has the meaning set
forth in Section 8.2.
“Trust Account” has the meaning set forth in the Trust Agreement.
“Trust Agreement” means the Trust Agreement, dated as of the date set forth therein, as amended, supplemented,
restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“U.S.” means the United States of America.
“W-8BEN” has the meaning set forth in Section 3.7.
“W-8BEN-E” has the meaning set
forth in Section 3.7.
“W-8IMY” has the meaning set forth in
Section 3.7.
“W-9” has the meaning set forth in
Section 3.7.
“Withdraw” or “Withdrawal” means, with respect to a Partner, such
Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation, retirement or pursuant to the Partnership Act, whether such is voluntary or involuntary),
unless the context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
“Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner
Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal
representatives of any such Partner.
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Section 1.2 Terms Generally. The definitions in Section 1.1 shall apply equally
to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships
(including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
ARTICLE II
GENERAL PROVISIONS
Section 2.1 General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or
Special Partners. The General Partner as of the date hereof is BREP Asia III L.L.C. and the Limited Partners as of the date hereof are those persons admitted as limited partners of the Partnership in accordance with the terms hereof and shown as
Limited Partners in the books and records of the Partnership and the Special Partners as of the date hereof are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the
Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect
to the GP-Related Investments of the Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related
Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General
Partner from time to time in accordance with the Partnership Act and this Agreement to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without
limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the admission of additional
Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement. At the time of admission of each additional Partner, the General Partner shall determine in its sole
discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partner’s GP-Related Commitment, Capital
Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with
respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest. Each Limited Partner and each Special Partner hereby waives
any and all rights under section 22 of the Partnership Act or otherwise to demand information regarding the Partnership, its business or financial condition, or to inspect the Partnership’s books, records or registers, except as expressly
provided for in this Agreement or as otherwise agreed to by the General Partner in its sole discretion.
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Section 2.2 Formation; Name; Foreign Jurisdictions. The Partnership is hereby
continued as an exempted limited partnership pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of BREA Asia III (Cayman) L.P. The General Partner shall have the power to change the name of
the Partnership at any time, subject to compliance with the requirements of the Partnership Act, and shall thereupon file the requisite notice with the Registrar pursuant to the Partnership Act. The General Partner is further authorized to execute
and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business, and the General Partner
shall make the filings required pursuant to the Partnership Act in relation thereto.
Section 2.3 Term. The Partnership
commenced upon the filing of the Section 9 Statement with the Registrar of Exempted Limited Partnerships in the Cayman Islands (the “Registrar”), and shall continue unless earlier terminated, wound up and dissolved and its
affairs wound up in accordance with this Agreement and the Partnership Act.
Section 2.4 Purposes; Powers. (a) The
purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates:
(i) to serve as a limited
partner or general partner of Associates Asia III and perform the functions of a limited partner, special general partner or general partner of Associates Asia III specified in the Associates Asia III LP Agreement and, if applicable, the BREP Asia
III Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BREP Asia III Interest as, a capital
partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BREP Asia III and perform the functions of a capital partner (and, if applicable, a limited partner, special general partner and/or a general
partner) of BREP Asia III specified in the BREP Asia III Agreements;
(iii) to invest in Capital Commitment Investments
and/or GP-Related Investments and acquire and invest in Securities or other property directly or indirectly through Associates Asia III and/or BREP Asia III or otherwise;
(iv) to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through Associates Asia III or another entity;
(v) to serve as a general partner or limited partner of BREP Asia III and/or other partnerships and perform the functions of a
general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement, charter or other governing documents, as amended, supplemented, restated
or otherwise modified from time to time, of any such partnership;
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(vi) to serve as a member, shareholder or other equity interest owner of limited
liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing
documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by
the General Partner and as are permitted under the Partnership Act, the Associates Asia III LP Agreement, the BREP Asia III Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing
document referred to in clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership (acting by the General Partner) shall have all powers necessary, suitable or convenient for
the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to be and
become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the
making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection
therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company
interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether
such Investments and Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments
or Securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other
short-term investments;
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(v) to hold, receive, mortgage, pledge, grant security interests over, lease,
transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the
Partnership;
(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage,
pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy,
sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or
funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one
or more offices within or without the Cayman Islands, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the
maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants,
both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or
cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and
be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all
contracts, agreements and other undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept
judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or
investments or other property of the Partnership, or any combination thereof; and
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(xvi) to take such other actions necessary, desirable, convenient or incidental
thereto and to engage in such other businesses as may be permitted under Cayman Islands and other applicable law.
Section 2.5
Place of Business. The Partnership shall maintain a registered office at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The
Partnership shall maintain an office and place of business at such place or places as the General Partner specifies from time to time and as set forth in the books and records of the Partnership. The General Partner may from time to time change the
registered office.
Section 2.6 Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited
Partners to the Partnership, the Initial Limited Partner shall (a) Withdraw as the Initial Limited Partner of the Partnership and (b) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership;
provided, that the effective date of such Withdrawal shall be deemed as between the parties hereto to be September 27, 2021.
Section 2.7 Reorganization or Reconstitution and De-Registration of the Partnership.
Notwithstanding any other provision of this Agreement, to the fullest extent permitted by law, the Partnership may, at the election of the General Partner in its sole discretion, be reorganized or reconstituted and/or registered by way of
consolidation as a limited partnership (or other similar entity) under the laws of a jurisdiction outside of the Cayman Islands (and therefore de-register the Partnership by filing an application to de-register the Partnership with the Registrar).
ARTICLE III
MANAGEMENT
Section 3.1
General Partner. (a) BREP Asia III L.L.C. is the “General Partner” as of the date hereof. The General Partner shall cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it
consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or
more other General Partners is admitted to the Partnership as such, all references herein to the “General Partner” in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights
and responsibilities of such General Partners will be as agreed upon from time to time between them.
(b) Upon the Withdrawal from the
Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested therein pursuant to this Agreement and the Partnership Act shall be exercised by a person admitted as a replacement general partner of the
Partnership in accordance with the Partnership Act duly appointed by a Majority in Interest of the Partners.
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Section 3.2 Partner Voting, etc. (a) Except as otherwise expressly provided
herein and except as may be expressly required by the Partnership Act, Partners (including Special Partners), other than General Partners, as such shall have no right to, and shall not, take part in the management, conduct or control of the
Partnership’s business or act for or bind the Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to
abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided
by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent
or approval thereto.
Section 3.3 Management. (a) The management, conduct of business, control and operation of the
Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership,
including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its sole
discretion, subject only to the express terms and conditions of this Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, the Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in the
Partnership’s capacity as a partner of Associates Asia III on Associates Asia III’s own behalf or in Associates Asia III’s capacity as general partner, special general partner, capital partner and/or limited partner of BREP Asia III
or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BREP Asia III or as general or limited partner,
member, shareholder or other equity interest owner of any Partnership Affiliate): (i) to execute and deliver, and to perform the Partnership’s obligations under the Associates Asia III LP Agreement, including, without limitation, serving as a
partner of Associates Asia III, (ii) to execute and deliver, and to cause Associates Asia III to perform Associates Asia III’s obligations under the BREP Asia III Agreements, including, without limitation, serving as a general partner or
special general partner of BREP Asia III and, if applicable, a capital partner of BREP Asia III, (iii) if applicable, to execute and deliver, and to perform the Partnership’s obligations under, the BREP Asia III Agreements, including,
without limitation, serving as a capital partner of BREP Asia III, (iv) to execute and deliver, and to perform, or, if applicable, to cause Associates Asia III to perform, the Partnership’s or Associates Asia III’s obligations under,
the governing agreement, as amended, supplemented, restated or otherwise modified (each a “Partnership Affiliate Governing Agreement”), of any other partnership, limited liability company, other company, corporation or other entity
(each a “Partnership Affiliate”) of which the
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Partnership or Associates Asia III is, or is to become, a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a
general partner, special general partner, or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate, and (v) to take any action, in the applicable capacity, contemplated by or arising out of this
Agreement, the Associates Asia III LP Agreement, the BREP Asia III Agreements or each Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
(c) The General Partner and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered,
as an authorized person of the Partnership, or otherwise, or as an authorized representative of the General Partner (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities,
in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a limited partner or general partner of Associates Asia III on Associates Asia III’s own behalf, or in Associates Asia III’s capacity as general
partner, special general partner, capital partner and/or limited partner of BREP Asia III or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the
Partnership’s capacity as a capital partner of BREP Asia III or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates Asia III, BREP Asia III or any
Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates Asia III LP Agreement, the BREP Asia III Agreements and each Partnership
Affiliate Governing Agreement, (II) subscription agreements and documents on behalf of BREP Asia III or Associates Asia III, (III) side letters issued in connection with investments in BREP Asia III and (IV) such other agreements,
certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, Associates Asia III, BREP Asia III or any Partnership Affiliate (and any amendments, supplements, restatements and/or
other modifications of any of the foregoing referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of exempted limited partnership and/or other organizational documents of the
Partnership, Associates Asia III, BREP Asia III and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
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(C) any other certificates, notices, applications and other documents (and any
amendments, supplements, restatements and/or other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates Asia
III, BREP Asia III or any Partnership Affiliate to qualify to do business in a jurisdiction in which the Partnership, Associates Asia III, BREP Asia III or such Partnership Affiliate desires to do business;
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or
indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a limited partner or general partner of Associates Asia III on Associates Asia III’s own behalf or in
Associates Asia III’s capacity as general partner, special general partner, capital partner and/or limited partner of BREP Asia III, or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership
Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BREP Asia III or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any certificates,
forms, notices, applications and other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, Associates Asia III, BREP Asia III and/or any Partnership Affiliate, (B) any certificates, forms,
notices, applications and other documents that may be necessary or advisable in connection with any bank account of the Partnership, Associates Asia III, BREP Asia III or any Partnership Affiliate or any banking facilities or services that may be
utilized by the Partnership, Associates Asia III, BREP Asia III or any Partnership Affiliate, and all checks, notes, drafts and other documents of the Partnership, Associates Asia III, BREP Asia III or any Partnership Affiliate that may be required
in connection with any such bank account or banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each
acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, Associates Asia III, BREP Asia III or any Partnership Affiliate, as applicable, for all purposes).
(d) The authority granted to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General
Partner by an instrument in writing signed by the General Partner.
Section 3.4 Responsibilities of Partners.
(a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner (other than a Special Partner) shall devote
substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to the businesses of the Partnership or its Affiliates.
Notwithstanding the foregoing no Partner other than General Partner is permitted to take part in the business of Partnership for the purposes of the Partnership Act.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such
rules and regulations as are established by the General Partner from time to time.
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(c) The General Partner may from time to time establish such other rules and regulations
applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
Section 3.5 Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent
permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a
“Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any
transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial
determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority
granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any
Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating
thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of
this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to
modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its
duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the
extent of the Partnership’s assets (including, without limitation, the remaining capital commitments of the Partners)) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without
limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of
any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out
of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person
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constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final
and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed
to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its
share of such Losses in accordance with such Covered Person’s GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the
fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General
Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such
amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against
such Covered Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes
litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partner’s Interests and remaining capital commitments, for such Partner’s pro
rata share of the Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or
liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority to enter into separate
agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the
Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BREP Asia III and/or a
particular portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority:
first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BREP Asia III; second, by the applicable portfolio entity through which such investment is indirectly
held; third, by BREP Asia III and fourth by Associates Asia III (only to the extent the foregoing sources are exhausted).
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(B) The Partnership’s obligation, if any, to indemnify or advance expenses
to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BREP Asia III and/or the applicable portfolio entity (including by virtue of any applicable insurance policies
maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates Asia III, BREP Asia III and/or the applicable portfolio entity (including by virtue of
any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against Associates Asia III and/or BREP Asia III and/or such portfolio entity in respect of such advancement
or payments. The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of Blackstone Inc. or any of its Affiliates,
which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
(iii) A Person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act (As
Revised), as amended, modified, re-enacted or replaced, (the “Third Party Rights Law”) to enforce directly any term of this Agreement save (i) that, each Indemnitee may enforce directly
its rights pursuant to Section 3.5 of this Agreement subject to and in accordance with the provisions of the Third Party Rights Law and (ii) as contemplated by Section 10.6. Notwithstanding any other term of this Agreement, the
consent of any Person who is not a party to this Agreement (including, without limitation, any Indemnitee) is not required for any variation of, amendment to, or release, rescission, or termination of, this Agreement.
Section 3.6 Representations of Partners. (a) Each Limited Partner and Special Partner by execution of this Agreement (or by
otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Partner is
acquiring each of such Partner’s Interests for such Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the
rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms hereof). Each Limited Partner and
Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without registration under the Securities Act or exemption from
such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner represents that such Partner has such knowledge and
experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic risk of such investment. Each Limited Partner and
Special Partner represents that such Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partner’s net worth and the Partner has no need for liquidity in the
Partner’s investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such Partner has requested relating to the Partnership, any
Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and
to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the Partner with the Partner’s own advisers as to the financial,
tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
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(b) Each Limited Partner and Special Partner agrees that the representations and warranties
contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any
Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall
serve as confirmation thereof.
Section 3.7 Tax Representation and Further Assurances.
(a) Each Limited Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute,
acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the Partnership’s obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner and Special Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as
defined in the Code) (x) (i) the Limited Partner or Special Partner’s name, social security number (or, if applicable, employer identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W-9, Request for Taxpayer Identification Number Certification (“W-9”) or otherwise are correct and (ii) the Limited Partner or Special Partner
will complete and return a W-9 and (y) (i) the Limited Partner or Special Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the
Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the
information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
(“W-8BEN”), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and
Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY,
Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and (ii) the
Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN,
W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the
Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not
limited to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
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(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the
General Partner may release confidential information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partner’s investment in the Partnership if the Partnership or the General
Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be
treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their
Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading,
or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any
remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s or Special Partner’s action or inaction
from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1 Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the
Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as are required
to satisfy the Partnership’s obligation to make capital contributions to Associates Asia III in respect of the GP-Related Associates Asia III Interest to fund Associates Asia III’s capital
contributions with respect to any GP-Related BREP Asia III Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partner’s Commitment
Agreement or SMD Agreement, if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be
made pro rata among the Partners based upon each Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related
Required Amounts which are to be used for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d))) shall
be determined by the General Partner. Special Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess of the
GP-Related Required Amounts, except (i) as a condition of an increase in such Special Partner’s GP-Related Profit Sharing Percentage or (ii) as
specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital
Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BREP Asia III Interest.
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(b) Each GP-Related Capital Contribution by a Partner
shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional
Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) the amount of any GP-Related Capital
Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc.
or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions
relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The General Partner shall
determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such withheld percentage constituting the General Partner’s and
such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining Withdrawn Partners
(other than the General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner and/or Holdings
shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback
Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner
Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively.
Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such reduction.
(iii) The Holdback Percentage may not be increased for any individual Partner as compared to the other Partners in his or her
Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners’
Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to
24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall apply only to
distributions relating to Carried Interest made after the date of such increase. The
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foregoing shall in no way prevent the General Partner from proportionately increasing the Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the
Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to
12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase or decrease the Holdback
Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to a majority vote of the Limited Partners (a “Holdback Vote”); provided, that, notwithstanding anything
to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partner’s Holdback Percentage
shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and (y) has, if requested by such Subject Partner,
been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject
Partner’s Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partner’s Holdback Percentage is less than the
prevailing Holdback Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage unless such voting Partner determines, in such
Partner’s good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns (including such Subject Partner’s estate or heirs)
who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any
GP-Related Recontribution Amounts that may become due.
(B) A Holdback Vote shall
take place at a Partnership meeting. Each of the Limited Partners shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Limited Partner’s interest in the Partnership. Such vote may be cast by any such Partner
in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback
Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree
upon a mutually satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates;
provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the
arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote
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to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating
thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses (i.e., both the Subject Partner’s and the Partnership’s
expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs leading thereto) and to return to the “victorious” party the
entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such arbitration, such “losing” party shall then provide any
additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership if the Holdback Percentage ultimately determined by the arbitrator is closer to the
percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject Partner shall be the “victorious” party. The party that is not the
“victorious” party shall be the “losing” party.
(D) In the event of a decrease in a Subject
Partner’s Holdback Percentage (1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such
Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject
Partner’s reduced Holdback Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the “Excess
Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess Holdback”), and such
Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or Withdrawn Partner’s Excess Holdback obligation, by pledging, granting a
security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner
seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a
first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnership’s books and records in which
Partners are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital
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contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority security interest is unavailable because of an existing lien on such Firm
Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further, that (x) in the case
of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or (y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm
Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited
liability company or other entity listed in the Partnership’s books and records to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause
(B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided
hereunder.
(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a “Firm
Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such Partner or
Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such Excess
Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such Excess
Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any valuation or revaluation of
Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including upon a Firm Collateral
Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership shall provide notice of the foregoing to such Partner or
Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If
any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a
default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party”
where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
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(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any
Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn
Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the
benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from
a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moody’s (if the L/C is for a term of 1 year or less), or
(y) long-term deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”). If the relevant rating of the commercial bank issuing such L/C drops below
the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient
L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BREP Asia III, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial
bank whose relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s)
may (as directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback
Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted
hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the
Trust Account and satisfaction of the Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted
hereunder), or (3) the release, by the Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or
Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the
L/C of an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided,
that in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount.
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(vii) (A) Any in-kind distributions by
the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind
distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnership’s books and records; provided, that the initial contribution of such Special Firm Collateral
shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such
Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess
Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not
the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding any Excess Holdback) by pledging or granting a
security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn
Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith
judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, winding up or other realization of all or any portion of any Special Firm
Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess
Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust
Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or
other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes
hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a
Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partner’s or Withdrawn Partner’s
deficiency with respect to his or her Holdback in cash or an L/C.
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(C) Upon any valuation or revaluation of the Special Firm Collateral and/or any
adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnership’s books and records), if such Partner’s or Withdrawn Partner’s Special Firm Collateral is valued at less than such
Partner’s Holdback (excluding any Excess Holdback) as provided in the Partnership’s books and records, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to
such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such
deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed
inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party”
where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such
Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn
Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess
Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any
amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2 Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment
of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General
Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
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Section 4.3 Withdrawals of Capital. No Partner may withdraw capital related to such
Partner’s GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement
or (iii) as determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1 General Accounting Matters. (a) GP-Related Net Income (Loss) shall be
determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b)
“GP-Related Net Income (Loss)” means:
(i) from any activity of
the Partnership related to the GP-Related BREP Asia III Interest for any accounting period (other than GP-Related Net Income (Loss) from
GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items
that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such
GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related
Investment (determined as provided below); and
(iii) from any GP-Related
Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period
less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall be
determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not
otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its
adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference
37
to such value; (iii) upon an adjustment to the value of any asset in the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment
shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in
computing GP-Related Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable
to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of
the Partnership, Holdings and other Affiliates of the Partnership shall be allocated among the Partnership, Holdings and such Affiliates, among various Partnership activities and GP-Related Investments and
between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not
yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other
appropriate items shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the option of the General Partner, an accounting period will terminate and a
new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the
General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners’ GP-Related
Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to
GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing Percentages during such accounting
period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from
GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
(e) In establishing
GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it
deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this
Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn
Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any
successor thereto.
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Section 5.2 GP-Related Capital Accounts.
(a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or
more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partner’s interests in the capital of the Partnership related to the GP-Related BREP Asia III
Interest and the GP-Related Net Income (Loss) of the Partnership (each a “GP-Related Capital Account”).
(b) As of the end of each accounting period or, in the case of a contribution to the Partnership by one or more of the Partners with respect to
such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or Partners’
GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall be credited
with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to such Partner’s GP-Related Partner Interest
during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partner’s capital related
to such Partner’s GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of
each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property
distributed to such Partner during such accounting period with respect to such Partner’s GP-Related Partner Interest and (y) the GP-Related Net Loss allocated
to such Partner for such accounting period.
Section 5.3 GP-Related Profit Sharing
Percentages.
(a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing
percentage (the “GP-Related Profit Sharing Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting
period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, that (i) the General Partner may elect to establish GP-Related Profit
Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (c) below and (ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment
established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General
Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing
Percentages of the other Partners shall be reduced by an amount equal to the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other
Partner’s GP-Related Profit Sharing Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately
prior to the admission of the new Partner. Notwithstanding the foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end
of such annual accounting period in its sole discretion.
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(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit
Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”); provided,
that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner
within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit
Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and
shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4 Allocations of GP-Related Net Income (Loss).
(a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners
participating in such GP-Related Investment (including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than
amounts representing a return of GP-Related Capital Contributions) or Carried Interest distributed to the Partners; second, to Partners that received Non-Carried
Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is
being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts
representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BREP Asia III and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the
Partnership to BREP Asia III with respect to the GP-Related BREP Asia III Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried
Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BREP Asia III and (ii) GP-Related Net Loss relating to
realized losses suffered by BREP Asia III and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s (including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as
of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)).
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(c) Notwithstanding Section 5.4(a) above, GP-Related
Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest
Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related
Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried
Interest.
(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any
accounting period unrelated to BREP Asia III, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at
the beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners (including any
additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) against their allocable shares of
GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such
allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5 Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this Agreement,
no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to make any
capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or
Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6 [Intentionally omitted.]
Section 5.7 Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other
requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BREP Asia III Investments as the General Partner may determine. The
General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that
is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from
time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
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Section 5.8 Distributions.
(a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other
property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it
appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a).
Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest
Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing
Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by BREP Asia III of a portion of a GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each
Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate
GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a
Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such
GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related
Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BREP Asia III) relating to a GP-Related Disposable Investment
(with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B
Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by BREP Asia III) relating to a GP-Related Investment excluding such GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of
GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related
Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of
GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall
make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such
Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an
individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account (x) the
limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income) and (iii) taking into
account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General
Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
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(c) The General Partner may provide that the GP-Related
Partner Interest of any Partner or employee (including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the
General Partner shall determine (a “Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be
distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by
virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of
whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any
GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined
otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage
interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner;
provided, that the General Partner may allocate the Withdrawn Partner’s share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn
Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor
Special Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
(d) (i) (A) If Associates Asia III is obligated under the Clawback Provisions or Giveback Provisions to contribute to BREP Asia III a
Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such amount to Associates Asia III, in respect of the Partnership’s
GP-Related Associates Asia III Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a
“GP-Related Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the General Partner, in which
case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest
(and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related Recontribution
Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of Clawback Amounts
and (II) with respect to a GP-Related Giveback Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried
Interest in connection with (a) the GP-Related BREP Asia III Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant
to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BREP Asia III Investments other than the one giving rise to such
obligation, but only those amounts received by the Partners with an interest in the GP-Related BREP Asia III Investment referred to in clause (II)(a) above, and (c) if the
GP-Related Giveback Amount pursuant to an
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applicable BREP Asia III Agreement is unrelated to a specific GP-Related BREP Asia III Investment, all GP-Related
BREP Asia III Investments. Each Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call, such Partner’s or Withdrawn
Partner’s GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the
Partnership, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the
“Net GP-Related Recontribution Amount”), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other
Fund GPs’ obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably
practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partner’s and Withdrawn Partner’s GP-Related
Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Clawback Provisions
or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount from a Partner’s Trust Account used to pay any
GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partner’s Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount.
(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral, such Partner or
Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of the Holdback
obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such
Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if
any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnership’s and the Other Fund GPs’ obligation
to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment
hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BREP Asia III Partnership Agreement, each partner of the General Partner shall
have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under Section 5.8(d)(ii)(A) with respect to such partner’s pro
rata share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BREP Asia III Partnership Agreement.
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(ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net
GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried
Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully
described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such
GP-Related Defaulting Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”)
if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the
Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the
Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Net GP-Related Recontribution Amount initially requested from
such Partner or Withdrawn Partner in respect of such default.
(B) Thereafter, the General Partner shall determine in its
good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the
General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent
not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party
becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to
Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a
GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General
Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the
intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related
Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
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(C) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first
seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency
Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or
Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this
Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is
hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns (as
defined in the BREP Asia III Agreements) and Losses (as defined in the BREP Asia III Agreements) on GP-Related BREP Asia III Investments that have been the subject of a writedown and/or Net Loss (as defined in
the BREP Asia III Agreements) (each, a “Loss Investment”) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have
received Carried Interest distributions from other GP-Related BREP Asia III Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be
made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in
connection with a GP-Related BREP Asia III Investment (the “Subject Investment”) that have been reduced under any BREP Asia III Agreement as a result of one or more Loss Investments, the
General Partner shall calculate amounts distributable to or due from each such Partner as follows:
(A) determine each
Partner’s share of each such Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise
available for distribution to all Partners (indirectly through the Partnership from BREP Asia III) from the Subject Investment (such reduction, the “Loss Amount”);
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(B) determine the amount of Carried Interest distributions otherwise
distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from BREP Asia III) before any reduction in respect of the amount determined in clause (A) above (the “Unadjusted Carried Interest
Distributions”); and
(C) subtract (I) the Loss Amounts relating to all Loss Investments from (II) the
Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General
Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a
“Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to clause (I) are
insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a
Partner’s (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the
BREP Asia III Agreements) in effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of paying such Partner’s Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise
distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is determined
(as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of negative Net
Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be
allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A
Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all
purposes hereof.
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A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from
cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such
Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as
provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so
distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to
date).
(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided
herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partner’s share of any Net Losses (as defined in the BREP Asia III Agreements) in any GP-Related BREP Asia III Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BREP Asia III Investment with
respect to which Carried Interest distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related BREP Asia III Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest
Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from
the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to
the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a
positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the
extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount
was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
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Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General
Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all
Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners
and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the BREP Asia III Agreements.
Section 5.9 Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous
expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner from time to time.
Section 5.10 Tax Capital Accounts; Tax Allocations.
(a) For U.S. federal income tax purposes, there shall be established for each Partner a single capital account combining such Partner’s
Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such single capital account is maintained in compliance with
the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder. In furtherance of the foregoing and in accordance with Treasury Regulations
Section 1.1061-3(c)(3)(ii)(B), the Partnership shall (i) calculate separate allocations attributable to (A) the Carried Interest and any other distribution entitlements that are not commensurate
with capital contributed to the Partnership, and (B) any distribution entitlements of the Partners that are commensurate with capital contributed to the Partnership (in each case, within the meaning of Treasury Regulations Section 1.1061-3(c)(3)(ii)(B) and as reasonably determined by the General Partner), and (ii) consistently reflect each such allocation in its books and records.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and
local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable
law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its
respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated
shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are in accordance with the interests of the
Partners within the meaning of the Code and the Treasury Regulations.
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(c) For U.S. federal, state and local income tax purposes only, Partnership income, gain, loss,
deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are allocated among the Partners pursuant to the other provisions of
this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the
interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain, loss, deduction or credit of the Partnership (or an adjustment
to any Partner’s distributive share thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in accordance with the final resolution of such audit adjustment.
ARTICLE VI
ADDITIONAL
PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1 Additional Partners.
(a) Effective on the first day of any month (or on such other date as shall be determined by the General Partner in its sole discretion), the
General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the representations and certifications with respect to itself set
forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute Partner) all terms of such additional Partner’s
participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital Contribution,
GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time to time
unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a “Nonvoting Special
Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to adhere to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved
by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s purchase of his or her Capital Commitment Interests, Blackstone or such other
or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a GP-Related
Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The
GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other
Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be
allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be
established by the General
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Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for any further act, vote or consent of any person, to make
adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners admitted to the Partnership, adjustments with respect to
other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
(c) An additional Partner shall be
required to contribute to the Partnership his or her pro rata share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in
which such Partner does not acquire any interests, at such times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission of an additional Partner will be evidenced by (i) the execution of a counterpart copy of this Agreement by such
additional Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, as determined by the General Partner, or (iii) the execution by such additional Partner of any other writing
evidencing the intent of such person to become an additional Partner and to adhere to and be bound by the terms of this Agreement and such writing being acceptable to the General Partner on behalf of the Partnership. In addition, each additional
Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is acceptable to the General Partner on behalf of the Partnership.
Section 6.2 Withdrawal of Partners.
(a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner, including if such
Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business. Without
limiting the foregoing sentence, the General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less
than 15 days’ prior written notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may Withdraw from the
Partnership with respect to such Partner’s GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may
Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any
Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
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(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a
Limited Partner with respect to such person’s GP-Related Partner Interest; provided, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Special
Partner with respect to such person’s GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of
whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party
shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
(d) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has
given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such person’s GP-Related Partner Interest and/or
with respect to such person’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such person’s
GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after the date of such notice. If the
General Partner requires any Partner to Withdraw for Cause with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such
notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal
from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the
Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law.
Section 6.3 GP-Related Partner Interests Not Transferable.
(a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such
Partner’s GP-Related Partner Interest other than as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by
operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written
consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any
estate planning trust, limited partnership or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate
Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to
the Partnership (including the obligation to make additional GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate
Planning Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance,
operation of law or otherwise) of the whole or any portion of any Partner’s GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which
consent may be given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
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(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
Section 6.4 Consequences upon Withdrawal of a Partner. (a) Subject to the Partnership Act, the General Partner may not
transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the prior written approval of a Majority in
Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law
or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner deems necessary
or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any winding up, dissolution or
reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement and the filing of a Section 10 Statement, such person shall be admitted as the
General Partner. A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the
interest in the Partnership so acquired. The General Partner shall file, or cause to be filed, any Section 10 Statement with the Cayman Islands Registrar of Exempted Limited Partnerships to give effect to the provisions of this
Section 6.4(a). The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall
not commence the winding up of or dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining
Partners being hereby authorized to continue the business of the Partnership without commencement of the winding up of or dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall
be no remaining Limited Partners, the Partnership shall be wound up and subsequently dissolved unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the
Partnership and to the appointment, effective to the maximum extent permissible by the Partnership Act, as of the date of such Withdrawal, of one or more Limited Partners satisfying the requirements of, and in accordance with, the Partnership Act.
(c) The Partnership shall not commence winding up or be dissolved, in and of itself, by the Withdrawal of any Partner, but shall continue
with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
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Section 6.5 Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests.
(a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For
purposes of this Section 6.5, the term “Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined
under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Special
Partner, shall be considered a Withdrawn Partner for all purposes hereof.
(b) Except where a later date for the settlement of a Withdrawn
Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date;
provided, that if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal
Date occurs. During the interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related
Capital Contributions, interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such
period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partner’s
GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partner’s Settlement Date (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date
in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General
Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise
determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner
Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or
not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn
Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided
in paragraph (f) below).
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(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s
GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such
Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss), or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or
other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related
Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment)
and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in
paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this Section 6.5. If the amount determined pursuant to clause (x) above is an
aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the
Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the
GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partner’s GP-Related Partner Interest in
the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital Accounts in accordance with their respective
GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of
such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or
the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to
such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described
below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than
all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to
above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership
pursuant to this Section 6.5.
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(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s
“percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn
Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable
to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Partner for such purpose (and, if the General Partner so
designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and
conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole
discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that
the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
(g)
The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to
(ii) distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be
reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General
Partner.
(h) [Intentionally omitted.]
(i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such
Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to
such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of
his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments
to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the
Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment
and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution;
provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of
the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
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(j) If the aggregate reserves established by the General Partner as of the Settlement Date in
making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or
to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(k) Any amounts owed by the Withdrawn Partner to
the Partnership at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner
at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this
Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts
payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The “due date” of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(l) At the time of the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, grant of security interest, encumbrance or other
transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such
Withdrawn Partner’s right to any payment from the Partnership.
(m) If a Partner is required to Withdraw from the Partnership with
respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in
accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such
settlement:
(i) In settling the Withdrawn Partner’s interest in any
GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized
Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn
Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partner’s
GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her
GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn
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Partner or (C) apply the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to
such Withdrawn Partner with respect to any GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any,
attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the
General Partner). The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in
right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or
distribution.
(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such
Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two
years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (n) may elect to forfeit the
principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the General Partner) a
discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The
provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to any transferee of any GP-Related Partner Interest of such Partner
pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or
his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing
this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably
determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner
or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and
when it can so as not to interfere with the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the
Partners.
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(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner
as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute,
sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or
provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney shall be irrevocable
and is given to secure a proprietary interest of the donee of the power or the performance of an obligation owed to the donee and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner
for any reason and shall not be affected by the death, disability or incapacity of such Partner. This power of attorney may be exercised by such attorney-in-fact for
each of the Partners (or any of them) by a single signature of the General Partner acting as attorney-in-fact with or without listing all of the Partners executing an
instrument.
Section 6.6 Dissolution of the Partnership. The General Partner may wind up and subsequently dissolve the
Partnership prior to the expiration of its term at any time on not less than sixty (60) days’ notice commencement of winding up to the other Partners and, upon completion of the winding up of the Partnership, by filing a notice pursuant to
Section 36(2) of the Partnership Act. Upon the commencement of winding up, the Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5.
Section 6.7 Certain Tax Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes
not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all U.S. federal, state and
local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the
appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the
treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner
agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her
interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner
for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the
Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or
in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership
and all Partners except to the extent a Partner shall properly elect to
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be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys’,
accountants’ and other experts’ fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return
or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate
in any administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or
otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such
administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any Partner selected by the General Partner as the “partnership representative”
(as defined under the Code) (the “Tax Matters Partner”). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all
liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and
expenses, including reasonable attorneys’ fees and disbursements, incident to any such breach or violation.
(c) Each individual
Partner shall provide to the Partnership copies of each U.S. federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is
or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner, or as a result of a Partner’s participation in the Partnership or as a result of a
Partner’s failure to provide requested tax information, including pursuant to Section 6225 or Section 1446(f) of the Code (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as
so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the
amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon winding-up or dissolution of the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner,
for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law,
each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income
attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
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(e) To the extent that any taxes are imposed on the Partnership (or any entity in which the
Partnership invests that is treated as a flow-through entity for relevant tax purposes) with respect to income of the Partnership (or such entity) in lieu of taxes imposed directly on a Partner with respect to such income (including any state or
local income taxes), whether by election of the Partnership or the General Partner or otherwise, such amounts shall be deemed to have been distributed to such Partner. To the fullest extent permitted by law, each Partner hereby agrees to indemnify
and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to any such tax payments. The obligations of a
Partner set forth in this Section 6.7(e) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
Section 6.8 Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the
terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election to adjust the basis of the
Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1 Capital Commitment Interests, etc.
(a) This Article VII and Article VIII hereof set forth certain terms and conditions with respect to the Capital Commitment Partner Interests
and the Capital Commitment BREP Asia III Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BREP Asia III Interest. Except as otherwise expressly provided in this Article VII or in Article VIII, the
terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BREP Asia III Interest.
(b) Each Partner, severally, agrees to make contributions of capital to the Partnership (“Capital Commitment-Related Capital
Contributions”) as required to fund the Partnership’s capital contributions to BREP Asia III or Associates Asia III, in respect of the Capital Commitment BREP Asia III Interest, if any, and the related Capital Commitment BREP Asia III
Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Capital Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of
such Partner’s Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily
participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital Commitment Profit Sharing Percentage with respect to
(i) the Partnership’s portion of the Blackstone Capital Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment
Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect
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to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the Partnership and its Affiliates may provide such financing. The
acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such
appropriate documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its
Affiliates (in such capacity, the “Advancing Party”) may in its sole discretion advance to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also
executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such
Partner shall pay interest to the Advancing Party on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such
repayment, upon prior written notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance,
binding on the Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The
Advancing Party shall inform any Partner of such rate upon such Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are
otherwise payable to such Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms
contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm
Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
Section 7.2 Capital
Commitment Capital Accounts.
(a) There shall be established for each Partner in the books of the Partnership as of the date of
formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital
Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate
Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partner’s
interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
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(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore
any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership
of the related Capital Commitment Investment and in whole upon the winding-up or dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be
subject to withdrawal or redemption except with the consent of the General Partner.
Section 7.3 Allocations.
(a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital
Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment
Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s aggregate Capital Commitment Capital Accounts bear to the aggregate
Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be
allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital Commitment Profit Sharing Percentages for
such Capital Commitment Investment.
(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7 shall
be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as it
deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4 Distributions.
(a) Each Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments,
distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests)
during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the
General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected
by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
(i) First, to the
payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all
interest payments due, the selection of those of such Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
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(ii) Second, to distribution to the Partner of an amount equal to the U.S.
federal, state and local income taxes on income of the Partnership allocated to such Partner for such year in respect of such Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by
the General Partner, subject to the limitation that the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were
all allocated to an individual subject to the then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character
of such taxable income allocated by the Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause
(ii) to the extent that such amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant
partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant to
provisions in such other BE Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the
principal amount of the Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such
Fiscal Year, to the extent not repaid from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all
Capital Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any
Blackstone Entity (other than the Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related
Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of
such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v)
above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid, the division
of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
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(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment
Net Income remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in
clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted
to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to
clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partner’s Capital Commitment
Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed
to such Partner.
Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner.
At the General Partner’s discretion, any amounts distributed to a Partner in respect of such Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period
in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy
any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining
principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a
Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e)
The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
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(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital
Commitment Investment is being considered by the Partnership or BREP Asia III (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect
to such Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital
Commitment Class B Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment
Class A Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made
only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B
Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment
shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment
Class A Interests.
(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a Giveback Amount to
BREP Asia III in respect of any Capital Commitment BREP Asia III Interest that may be held by the Partnership or (y) Associates Asia III is obligated under the Giveback Provisions to contribute to BREP Asia III a Giveback Amount with respect to
any Capital Commitment BREP Asia III Interest that may be held by Associates Asia III and the Partnership is obligated to contribute any such amount to Associates Asia III in respect of the Partnership’s Capital Commitment Associates Asia III
Partner Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a “Capital Commitment Giveback Amount”), the General Partner
shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by
the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment BREP Asia III Interest (the “Capital Commitment Recontribution Amount”) which equals such
Partner’s pro rata share of prior distributions in connection with (a) the Capital Commitment BREP Asia III Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause
(a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BREP Asia III Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to
the applicable BREP Asia III Agreement is unrelated to a specific Capital Commitment BREP Asia III Investment, all Capital Commitment BREP Asia III Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such
Partner’s Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partner’s discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the
potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
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(ii) (A) In the event any Partner (a “Capital Commitment Defaulting
Party”) fails to recontribute all or any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to
contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital
Commitment Defaulting Party’s Capital Commitment Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect
such amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback
Amount; provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested
from such Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the
likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting
Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting
Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any amounts otherwise
payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all
accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such
collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and
authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the
Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partner’s failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital
Commitment Defaulting Party with respect to such amount.
(iii) A Partner’s obligation to make contributions to the
Partnership under this Section 7.4(g) shall survive the termination of the Partnership.
(h) If a Limited Partner is obligated
pursuant to section 34 of the Partnership Act to return a distribution made to it where the Partnership is insolvent, the simple rate of interest on such repayment shall be 0 per centum per annum (0%).
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Section 7.5 Valuations. Capital Commitment Investments shall be valued annually as of
the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates Asia III (or any other Affiliate of the Partnership that is a general partner of BREP Asia III) in
valuing investments of BREP Asia III or, in the case of investments not held by BREP Asia III, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any
Capital Commitment Interest as of any date (the “Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be
determined as of an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a
Capital Commitment Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital
Commitment Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment
Interests held by a person who is or was at any time a direct member or partner of a General Partner of the Partnership.
Section 7.6
Disposition Election.
(a) At any time prior to the date of the Partnership’s execution of a definitive agreement to dispose of
a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such Partner’s Capital Commitment
Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to such date (i) not to dispose of all or any portion of such Partner’s
pro rata share of such Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or (B) retain such
Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such Retained Portion to such Partner. Such Partner’s Capital Commitment
Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other Partners’ pro rata shares of such Capital Commitment Investment;
provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the
Partnership.
(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in
full prior to or simultaneously with such distribution.
Section 7.7 Capital Commitment Special Distribution Election.
(a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from
a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a
“Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
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(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating
thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL, ADMISSION OF NEW PARTNERS
Section 8.1 Partner Withdrawal; Repurchase of Capital Commitment Interests.
(a) Capital Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as
Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment
Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount
of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that
in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an employee or officer of Holdings or an Affiliate thereof, the Partnership
(or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the
purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase price of a Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made
by a Partner shall apply pro rata against all of such Partner’s Investor Notes; provided, that such Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or
more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as
Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an officer or
employee of the Partnership or any of its Affiliates, other than as a result of such Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the right
(exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the
obligation, to require the Partnership (subject to the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn
Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
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(ii) The purchase price for each such Contingent Capital Commitment Interest
shall be an amount equal to (A) the outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the
“Adjustment Amount”) equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to
be repurchased, plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on
the Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the
Adjustment Amount, in the General Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next
Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall
be payable to the holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn
Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a
Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partner’s Contingent Capital Commitment
Interests, his or her related Investor Note shall be payable in full.
(iii) Upon such Partner ceasing to be such an
officer or employee, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of
the Withdrawn Partner’s Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the
Partnership nor its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor
Notes shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the
Withdrawn Partner at his or her option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis.
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(v) To the extent that another Partner purchases a portion of a Capital
Commitment Interest of a Withdrawn Partner, the purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall thereupon cease to be a Partner with respect to such
Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership and
the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Partner’s Capital Commitment Partner Interest pursuant
to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the manner and
in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or otherwise
and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until distribution of any such Partner’s interest in the Partnership upon
the winding up of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption without the consent of the General Partner. The General
Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partner’s Capital Commitment Partner Interest.
(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests of such Partner shall be purchased by the
Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partner’s death or Total Disability) (and the purchase price for such Contingent Capital Commitment Interests shall be
determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partner’s estate, personal representative or other Successor in Interest, in cash)), and any Investor Notes financing such
Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partner’s death or Total Disability, any Investor Note(s) financing such Contingent Capital Commitment Interests shall become fully
recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within 180 days after the Partner’s death or ceasing
to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership or its designee may but is not obligated to
purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnership’s then current Fiscal Year at a price equal to the Capital
Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of this Agreement. In addition, the Partnership
may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General Partner knows or has reason to know of such
Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such
Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the
Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
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(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership
or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her
Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its
sole discretion), the Partnership or another person designated by the General Partner (who may be itself another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase).
The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate
irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently
transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital
Commitment Interest or portion thereof by the General Partner’s designee(s), Holdings may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of Blackstone Inc. or any Affiliate thereof). To the extent that a Withdrawn Partner’s Capital Commitment
Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner,
(i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already
participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital
Commitment Interests”). To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be
allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such
related indebtedness is repaid. The Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this
Section 8.1 and except as such Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at
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the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be non-recourse or so limited, the
Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such Partners; provided, that a Partner shall not, except as set forth in
his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the Unallocated
Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an obligation of the
Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in
the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such related financing will be an expense of the Partnership allocable to all Partners
in such proportions.
(g) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s Capital Commitment
Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if such Partner was
not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent
Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital
Commitment Interest);
(ii) allow the Withdrawn Partner to retain such
Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment
shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof;
or
(iii) in lieu of cash, purchase such Non-Contingent Capital Commitment
Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn
Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
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(i) The General Partner may reasonably determine in good faith to retain outside professionals to
provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be,
prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the
Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements,
instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without
limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney shall be irrevocable and is given to secure a proprietary interest of the donee
of the power or the performance of an obligation owed to the donee and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death,
disability or incapacity of such Partner. This power of attorney may be exercised by such attorney-in-fact for each of the Partners (or any of them) by a single
signature of the General Partner acting as attorney-in-fact with or without listing all of the Partners executing an instrument.
Section 8.2 Transfer of Partner’s Capital Commitment Interest. Except as otherwise agreed by the General
Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment
Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or Deceased or
Totally Disabled Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of Non-Contingent Capital
Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any reason therefor) and (iv) with the prior written
consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it being understood that it shall not be unreasonable for
the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in connection with any such Transfer, including, for
example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). The General Partner shall designate that each Estate Planning Vehicle shall not have voting rights (any such Partner
being called a “Nonvoting Partner”). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such Nonvoting Partner with respect to the interest transferred (including the obligation to make
additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI.
No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such Partner’s right to participate in the affairs of the Partnership, unless such person shall be
admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its entire Interest in the Partnership in
accordance with the provisions of this Agreement.
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Section 8.3 Compliance with Law. Notwithstanding any provision hereof to the
contrary, no sale or Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with the Partnership Act, the laws of the Cayman Islands and all U.S. federal, state and other applicable laws, including U.S. federal
and state securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1
Dissolution. The Partnership shall commence winding up and be subsequently dissolved pursuant to this Article IX and Section 36(1) of the Partnership Act:
(a) pursuant to Section 6.6;
(b) the making of an order by the courts of the Cayman Islands to commence the winding up of the Partnership; or
(c) upon the expiration of the term of the Partnership.
Section 9.2 Final Distribution. Upon the commencement of winding up of the Partnership, and following the payment of creditors of
the Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account
balances of the Partners; and
(b) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such
Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment
Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment;
and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for
each Capital Commitment Investment from which such cash or Securities are derived.
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(c) The General Partner shall be the liquidator. In the event that the General Partner is unable
to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
Section 9.3 Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any Securities or other
property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing
a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment
Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be
paid or distributed until such time as the liquidator shall determine.
(b) If there is any pending transaction, contingent liability or
claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the liquidator, be then ascertained, the value thereof or
probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or
such earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest an amount which the liquidator estimates to be
sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon
determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest
practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other
property were withheld.
(d) When the General Partner or other liquidator has complied with and completed the winding up of the
Partnership, the General Partner or such other liquidator, on behalf of all Partners, shall execute, acknowledge and cause to be filed with the Registrar a notice of dissolution in accordance with the Partnership Act.
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ARTICLE X
MISCELLANEOUS
Section 10.1
Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution,
interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the winding up or
dissolution of the Partnership), whether arising during the existence of the Partnership during or after the winding up or dissolution of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York
U.S.A., in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for
arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during
any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the
Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking
temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this
Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate,
and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such
Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL
PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such
ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s)
designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may
have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
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(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall
be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless,
it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act,
or other applicable law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements
of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2 Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C.
(“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and
that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors,
successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM. All services rendered by the
Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership
understands that TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to
change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
Section 10.3 Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken without
a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4 Letter Agreements;
Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered, into separate letter agreements with individual Partners, officers or employees with respect to
GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or
supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement,
including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules
which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the
General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD
Agreement.
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Section 10.5 Governing Law; Separability of Provisions. Except for the
interpretation of the terns “gross negligence,” “fraud” and “implied contractual covenant of good faith and fair dealing,” which shall be interpreted in accordance with the laws of the State of Delaware, this Agreement
shall be governed by and construed in accordance with the laws of the Cayman Islands, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of
the Partners shall be as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the
remainder of this Agreement shall not be affected thereby.
Section 10.6 Successors and Assigns; Third Party Beneficiaries.
This Agreement shall be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust
which is or becomes a party hereto; provided, that no person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in
respect to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn
Partner shall remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partner’s or Withdrawn
Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and Section
7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from the transferee with respect to any such obligations. Nothing in this Agreement is
intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing,
solely to the extent required by the BREP Asia III Agreements, (x) the limited partners in BREP Asia III shall be third-party beneficiaries of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto),
solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.8(b), as applicable, of the BREP Asia III Partnership Agreement), and (y) the amendment of the provisions
of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.8(b), as
applicable, of the BREP Asia III Partnership Agreement), shall be effective against such limited partners only with a Combined Limited Partner Consent (as such term is defined in the BREP Asia III Partnership Agreement) unless such amendment does
not adversely affect such LPs’ rights under paragraph 9.2.8 of the BREP Asia III Partnership Agreement.
Section 10.7
Confidentiality. (a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality
of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs
of the Partnership that shall not be generally known to the public or the securities
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industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate
Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations
Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate
thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information
relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations
of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other
disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such communications and disclosures are consistent with applicable law. Each
Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S.
federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is
made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the
court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Moreover, a Partner shall not be required to give prior notice to (or get prior
authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any information covered by Blackstone
or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone.
Section 10.8 Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing
(including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnership’s books and records or, if given to the General
Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery, when delivered to the address of such Partner,
the General Partner or the Partnership specified as aforesaid. Sections 8 and 19(3) of the Electronic Transactions Act (As Revised) of the Cayman Islands shall not apply to this Agreement.
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Section 10.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall constitute a single instrument. For the avoidance of doubt, a Person’s execution and delivery of this Agreement by electronic signature and electronic transmission
(jointly, an “Electronic Signature”), including via DocuSign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such Person and shall bind such Person to the
terms of this Agreement. The parties hereto agree that this Agreement and any additional information incidental hereto may be maintained as electronic records. Any Person executing and delivering this Agreement by an Electronic Signature further
agrees to take any and all reasonable additional actions, if any, evidencing its intent to be bound by the terms of this Agreement, as may be reasonably requested by the General Partner.
Section 10.10 Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and
lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file all instruments, documents
and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the Cayman Islands or any other state in which the
Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney shall be irrevocable and is given to secure
a proprietary interest of the donee of the power or the performance of an obligation owed to the donee, and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any
reason and not be affected by the death, disability or incapacity of such Partner. This power of attorney may be exercised by such attorney-in-fact for each of the
Partners (or any of them) by a single signature of the General Partner acting as attorney-in-fact with or without listing all of the Partners executing an instrument.
Section 10.11 Partner’s Will. Each Partner and Withdrawn Partner shall include in his or her will a
provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing,
that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partner’s or Withdrawn Partner’s Interest is transferred shall include a
provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or Withdrawn
Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice,
the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
Section 10.12 Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other rights
and remedies available under applicable law.
81
Section 10.13 Legal Fees. Except as more specifically provided herein, in the event
of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this Agreement
relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount or the
Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such dispute (such determination
to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue interest at the
Default Interest Rate.
Section 10.14 Entire Agreement; Modifications. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject
to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner
in its sole discretion, upon notification thereof to the Limited Partners.
82
IN WITNESS WHEREOF, the parties have executed and unconditionally delivered this Agreement as a
deed on the date first above written.
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| GENERAL PARTNER: |
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| BREP ASIA III L.L.C. |
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| By: Blackstone Holdings IV L.P., its Managing Member |
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| By: Blackstone Holdings IV GP L.P., its General Partner |
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| By: Blackstone Holdings IV GP Management (Delaware) L.P., its General Partner |
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| By: Blackstone Holdings IV GP Management L.L.C., its General Partner |
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| By: |
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/s/ John G. Finley |
| Name: |
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John G. Finley |
| Title: |
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Chief Legal Officer and Secretary |
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/s/ Rhonda Coleman |
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Witnessed by: Rhonda Coleman |
[BREA Asia III (Cayman) L.P. – A&R LPA – Signature Page]
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| LIMITED PARTNERS AND SPECIAL PARTNERS: |
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| Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to BREP Asia III L.L.C. |
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| By: Blackstone Holdings IV L.P., its Managing Member |
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| By: Blackstone Holdings IV GP L.P., its General Partner |
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| By: Blackstone Holdings IV GP Management (Delaware) L.P., its general partner |
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| By: Blackstone Holdings IV GP Management L.L.C., its general partner |
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| By: |
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/s/ John G. Finley |
| Name: John G. Finley |
| Title: |
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Chief Legal Officer and Secretary |
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/s/ Rhonda Coleman |
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Witnessed by: Rhonda Coleman |
[BREA Asia III (Cayman) L.P. – A&R LPA – Signature Page]
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| INITIAL LIMITED PARTNER: |
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| Mapcal Limited |
| As Initial Limited Partner, solely to reflect its withdrawal from the Partnership |
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| By: |
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/s/ Stef Dimitriou |
| Name: Stef Dimitriou |
| Title: Authorized Signatory |
[BREA Asia III (Cayman) L.P. – A&R LPA – Signature Page]
Exhibit 10.5
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BREA X (DELAWARE) L.P.
AMENDED AND RESTATED
LIMITED
PARTNERSHIP AGREEMENT
DATED AS OF NOVEMBER 3, 2023
EFFECTIVE AS OF MAY 4, 2022
THE LIMITED
PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BREA X (DELAWARE) L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE
IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE
REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
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Page |
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| ARTICLE I DEFINITIONS |
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1 |
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| Section 1.1. Definitions |
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1 |
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| Section 1.2. Terms Generally |
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17 |
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| ARTICLE II GENERAL PROVISIONS |
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17 |
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| Section 2.1. General Partner, Limited Partner, Special Partner |
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17 |
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| Section 2.2. Formation; Name; Foreign Jurisdictions |
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18 |
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| Section 2.3. Term |
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18 |
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| Section 2.4. Purposes; Powers |
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18 |
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| Section 2.5. Place of Business |
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21 |
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| Section 2.6. Withdrawal of Initial Limited Partner |
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21 |
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| ARTICLE III MANAGEMENT |
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21 |
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| Section 3.1. General Partner |
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21 |
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| Section 3.2. Partner Voting, etc. |
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21 |
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| Section 3.3. Management |
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22 |
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| Section 3.4. Responsibilities of Partners |
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24 |
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| Section 3.5. Exculpation and Indemnification |
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25 |
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| Section 3.6. Representations of Partners |
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27 |
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| Section 3.7. Tax Representation and Further Assurances |
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27 |
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| ARTICLE IV CAPITAL OF THE PARTNERSHIP |
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29 |
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| Section 4.1. Capital Contributions by Partners |
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29 |
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| Section 4.2. Interest |
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36 |
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| Section 4.3. Withdrawals of Capital |
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36 |
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| ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
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37 |
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| Section 5.1. General Accounting Matters |
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37 |
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| Section 5.2. GP-Related Capital
Accounts |
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38 |
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| Section 5.3. GP-Related Profit Sharing
Percentages |
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39 |
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| Section 5.4. Allocations of GP-Related Net
Income (Loss) |
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40 |
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| Section 5.5. Liability of Partners |
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41 |
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| Section 5.6. [Intentionally omitted.] |
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41 |
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| Section 5.7. Repurchase Rights, etc. |
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41 |
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| Section 5.8. Distributions |
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41 |
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| Section 5.9. Business Expenses |
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48 |
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| Section 5.10. Tax Capital Accounts; Tax Allocations |
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49 |
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| ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP
INTERESTS; TERMINATION |
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50 |
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| Section 6.1. Additional Partners |
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50 |
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| Section 6.2. Withdrawal of Partners |
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51 |
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| Section 6.3. GP-Related Partner Interests Not
Transferable |
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52 |
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i
TABLE OF CONTENTS
(continued)
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Page |
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| Section 6.4. Consequences upon Withdrawal of a Partner |
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53 |
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| Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests |
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53 |
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| Section 6.6. Dissolution of the Partnership |
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59 |
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| Section 6.7. Certain Tax Matters |
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59 |
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| Section 6.8. Special Basis Adjustments |
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61 |
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| ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS;
DISTRIBUTIONS |
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61 |
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| Section 7.1. Capital Commitment Interests, etc. |
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61 |
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| Section 7.2. Capital Commitment Capital Accounts |
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62 |
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| Section 7.3. Allocations |
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63 |
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| Section 7.4. Distributions |
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63 |
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| Section 7.5. Valuations |
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68 |
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| Section 7.6. Disposition Election |
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68 |
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| Section 7.7. Capital Commitment Special Distribution Election |
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68 |
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| ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
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69 |
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| Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests |
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69 |
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| Section 8.2. Transfer of Partner’s Capital Commitment Interest |
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74 |
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| Section 8.3. Compliance with Law |
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75 |
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| ARTICLE IX DISSOLUTION |
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75 |
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| Section 9.1. Dissolution |
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75 |
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| Section 9.2. Final Distribution |
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75 |
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| Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests |
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76 |
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| ARTICLE X MISCELLANEOUS |
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76 |
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| Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial |
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76 |
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| Section 10.2. Ownership and Use of the Blackstone Name |
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77 |
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| Section 10.3. Written Consent |
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78 |
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| Section 10.4. Letter Agreements; Schedules |
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78 |
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| Section 10.5. Governing Law; Separability of Provisions |
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78 |
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| Section 10.6. Successors and Assigns; Third Party Beneficiaries |
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79 |
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| Section 10.7. Confidentiality |
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79 |
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| Section 10.8. Notices |
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80 |
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| Section 10.9. Counterparts |
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80 |
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| Section 10.10. Power of Attorney |
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81 |
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| Section 10.11. Partner’s Will |
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81 |
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| Section 10.12. Cumulative Remedies |
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81 |
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| Section 10.13. Legal Fees |
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81 |
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| Section 10.14. Entire Agreement; Modifications |
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82 |
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ii
BREA X (DELAWARE) L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of BREA X (Delaware) L.P., a Delaware limited partnership (the
“Partnership”), dated as of November 3, 2023, and effective as of May 4, 2022, by and among BREA X L.L.C., a Delaware limited liability company, as general partner of the Partnership (in its capacity as general partner of
the Partnership (the “General Partner”), Madeleine Russo, as initial limited partner (the “Initial Limited Partner”), the limited partners listed as Limited Partners in the books and records of the Partnership), and
such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W
I T N E S S E T H
WHEREAS, the Partnership was formed pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq., as it may be amended from time to time (the “Partnership Act”), pursuant to a certificate of limited
partnership filed in the office of the Secretary of State of the State of Delaware on April 1, 2022;
WHEREAS, the General Partner
and the Initial Limited Partner entered into a Limited Partnership Agreement dated as of April 1, 2022 (the “Original Agreement”); and
WHEREAS, the parties hereto desire to enter into this Agreement, effective on May 4, 2022, and hereby amend and restate the Original
Agreement in its entirety and reflect the withdrawal of the Initial Limited Partner from the Partnership and the admission of certain limited partners to the Partnership and to further make the modifications hereinafter set forth, in each case
effective on May 4, 2022;
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be
legally bound hereby, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for
purposes of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(ii).
“Advancing Party” has the meaning set forth in Section 7.1(c).
“Affiliate” when used with reference to another person means any person (other than the Partnership), directly
or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires, endowment funds, estate planning vehicles
(including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone
and/or its affiliates, partners and current and/or former employees and/or related persons.
1
“Agreement” means this Amended and Restated Limited Partnership
Agreement, as it may be further amended, supplemented, restated or otherwise modified from time to time.
“Applicable Collateral Percentage” with respect to any Firm Collateral or Special Firm Collateral, has the
meaning set forth in the books and records of the Partnership with respect thereto.
“Associates X” means
Blackstone Real Estate Associates X L.P., a Delaware limited partnership and the general partner of BREP X, or any other entity that serves as the general partner, special general partner or managing member of a vehicle indicated in the definition
of BREP X.
“Associates X LP Agreement” means the limited partnership agreement, dated as of the date set
forth therein, of Associates X, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the
filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or
her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or
defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment
or decree unstayed and in effect for a period of 60 consecutive days.
“BE Agreement” means the limited
partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of “Blackstone Entity,” as such limited partnership
agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing
document may be further amended, supplemented, restated or otherwise modified from time to time.
2
“BE Investment” means any direct or indirect investment by any
Blackstone Entity.
“Blackstone” means, collectively, Blackstone Inc., a Delaware corporation (and any
predecessor and successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of
Blackstone Inc.)).
“Blackstone Capital Commitment” has the meaning set forth in the BREP X Partnership
Agreement.
“Blackstone Entity” means any partnership, limited liability company or other entity
(excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of Blackstone Inc., as designated by the General Partner in its sole discretion.
“BREP X” means (i) Blackstone Real Estate Partners X L.P., Blackstone Real Estate Partners X.TE.1 L.P.,
Blackstone Real Estate Partners X.TE.2 L.P., Blackstone Real Estate Partners X.TE.3 L.P., Blackstone Real Estate Partners X.TE.4 L.P. and Blackstone Real Estate Partners X.F L.P., each a Delaware limited partnership and Blackstone Real Estate
Partners X (LUX) SCSp, a Luxembourg special limited partnership (société en commandite spéciale) established under the laws of the Grand Duchy of Luxembourg, (ii) any other Alternative Vehicles, Parallel Funds or
other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) of this definition), (iii) any other investment vehicle established pursuant to Article II of the
respective partnership agreements for any of the partnerships referred to in clause (i) of this definition, and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter
established) of which Associates X or the Partnership serves, directly or indirectly, as the general partner, special general partner, manager, managing member or in a similar capacity.
“BREP X Agreements” is the collective reference to the BREP X Partnership Agreement and any governing
agreement of any of the partnerships or other entities referred to in clauses (ii), (iii) or (iv) of the definition of “BREP X.”
“BREP X Partnership Agreement” means the partnership agreements of the limited partners named in clause
(i) of the definition of “BREP X,” as they may be amended, supplemented, restated or otherwise modified from time to time.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or
required by law to be closed in New York, New York.
“Capital Commitment Associates X Partner Interest”
means the interest of the Partnership, if any, as a limited partner of Associates X with respect to any Capital Commitment BREP X Interest that may be held by Associates X.
3
“Capital Commitment BREP X Commitment” means the Capital
Commitment (as defined in the BREP X Partnership Agreement), if any, of the Partnership or Associates X to BREP X that relates solely to the Capital Commitment BREP X Interest, if any.
“Capital Commitment BREP X Interest” means the Interest (as defined in the BREP X Partnership Agreement), if
any, of the Partnership or Associates X as a capital partner in BREP X.
“Capital Commitment BREP X
Investment” means the Partnership’s interest in a specific investment of BREP X, which interest may be held by the Partnership (i) through the Partnership’s direct interest in BREP X through the Partnership’s Capital
Commitment BREP X Interest, if the Partnership holds the Capital Commitment BREP X Interest, or (ii) through the Partnership’s interest in Associates X and Associates X’s interest in BREP X through Associates X’s Capital
Commitment BREP X Interest, if Associates X holds the Capital Commitment BREP X Interest.
“Capital Commitment
Capital Account” means, with respect to each Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital
Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to
such Partner and any net losses allocated to such Partner with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital
Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such
Capital Commitment Investment pursuant to Section 7.3.
“Capital Commitment Class A
Interest” has the meaning set forth in Section 7.4(f).
“Capital Commitment
Class B Interest” has the meaning set forth in Section 7.4(f).
“Capital
Commitment Defaulting Party” has the meaning set forth in Section 7.4(g)(ii)(A).
“Capital Commitment
Deficiency Contribution” has the meaning set forth in Section 7.4(g)(ii)(A).
“Capital Commitment
Disposable Investment” has the meaning set forth in Section 7.4(f).
4
“Capital Commitment Distributions” means, with respect to each
Capital Commitment Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BREP X Interest, if any, less any costs, fees and expenses of the
Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such
Capital Commitment Investment as it may determine in good faith is appropriate.
“Capital Commitment Giveback
Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment Interest” means
the interest of a Partner in a specific Capital Commitment Investment as provided herein.
“Capital Commitment
Investment” means any Capital Commitment BREP X Investment, but shall exclude any GP-Related Investment.
“Capital Commitment Liquidating Share” means, with respect to each Capital Commitment Investment, in the case
of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” means, with respect to each Capital Commitment Investment, all amounts
of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and
expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
“Capital Commitment Partner Carried Interest” means, with respect to any Partner, the aggregate amount of
distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest.” Capital Commitment Partner Carried Interest includes any amount initially received by
an Affiliate of the Partnership from any fund (including BREP X, any similar funds formed after the date hereof, and any Other Blackstone Funds (as defined in the BREP X Partnership Agreement), whether or not in existence as of the date hereof) to
which such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make
the investment of such fund giving rise to such “carried interest”).
“Capital Commitment Partner
Interest” means a Partner’s interest in the Partnership which relates (i) to any Capital Commitment BREP X Interest held by the Partnership or (ii) through the Partnership and Associates X, to any Capital Commitment BREP X
Interest that may be held by Associates X.
“Capital Commitment Profit Sharing Percentage” means, with
respect to each Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
5
“Capital Commitment Recontribution Amount” has the meaning set
forth in Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the meaning set
forth in Section 7.1(b).
“Capital Commitment-Related Commitment” means, with respect to any Partner,
such Partner’s commitment to the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth
in such Partner’s Commitment Agreement or SMD Agreement, if any.
“Capital Commitment Special
Distribution” has the meaning set forth in Section 7.7(a).
“Capital Commitment Value” has
the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest
Distributions” as defined in the BREP X Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BREP X Agreement. In the case of each of (i) and (ii) above, except as determined by the
General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in
each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
“Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to
Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by
(B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of
determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be
deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
“Carried Interest Sharing Percentage” means, with respect to each
GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
6
“Cause” means the occurrence or existence of any of the
following with respect to any Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material
breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or
(z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that, in the case of any
of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”) within 15 days after the General Partner becomes aware of such action and such Partner fails to cure
such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure;
provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; or (iii) conviction (on the basis of a
trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery,
wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable
securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such
conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the
Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
“Clawback Adjustment Amount” has the meaning set forth in Section 5.8(e)(ii)(C).
“Clawback Amount” means the “Clawback Amount” and the “Interim Clawback Amount”, each as
defined in the BREP X Partnership Agreement, and any other clawback amount payable to the limited partners of BREP X or to BREP X pursuant to any BREP X Agreement, as applicable.
“Clawback Provisions” means paragraphs 4.2.9 and 9.2.8 of the BREP X Partnership Agreement and any other
similar provisions in any other BREP X Agreement existing heretofore or hereafter entered into.
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreements” means the agreements between the Partnership or an Affiliate thereof and Partners,
pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the
Partnership and the relevant Partner.
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“Contingent” means subject to repurchase rights and/or other
requirements.
The term “control” when used with reference to any person means the power to direct the
management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one
or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
“Controlled Entity” when used with reference to another person means any person controlled by such other
person.
“Covered Person” has the meaning set forth in Section 3.5(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For
purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partner’s
interest in the Partnership.
“Default Interest Rate” means the lower of (i) the sum of (a) the
Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
“Delaware
Arbitration Act” has the meaning set forth in Section 10.1(d).
“Electronic Signature” has
the meaning set forth in Section 10.9.
“Estate Planning Vehicle” has the meaning set forth in
Section 6.3(a).
“Excess Holdback” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the meaning set forth in
Section 5.8(e).
“Existing Partner” means any Partner who is neither a Retaining Withdrawn Partner
nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence, Bankruptcy,
liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
“Firm
Advances” has the meaning set forth in Section 7.1(c).
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“Firm Collateral” means a Partner’s or Withdrawn
Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged or made available
to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnership’s books and records; provided, that for all purposes hereof (and any other agreement
(e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding references to “Firm
Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).
“Firm Collateral Realization”
has the meaning set forth in Section 4.1(d)(v)(B).
“Fiscal Year” means a calendar year, or any other
period chosen by the General Partner.
“Fund GP” means the Partnership (only with respect to the GP-Related BREP X Interest) and the Other Fund GPs.
“GAAP” means U.S.
generally accepted accounting principles.
“General Partner” means BREA X L.L.C. and any person admitted
to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the
Partnership Act).
“Giveback Amount(s)” means the amount(s) payable by partners of BREP X pursuant to the
Giveback Provisions.
“Giveback Provisions” means paragraph 3.4.3 of the BREP X Partnership Agreement and
any other similar provisions in any other BREP X Agreement existing heretofore or hereafter entered into.
“Governmental Entity” has the meaning set forth in Section 10.7(b).
“GP-Related Associates X Interest” means the interest of the
Partnership as a limited partner of Associates X with respect to the GP-Related BREP X Interest, but does not include any interest of the Partnership in Associates X with respect to any Capital Commitment BREP
X Interest that may be held by Associates X.
“GP-Related BREP X
Interest” means the interest of Associates X in BREP X as general partner of BREP X, excluding any Capital Commitment BREP X Interest that may be held by Associates X.
“GP-Related BREP X Investment” means the Partnership’s indirect
interest in Associates X’s indirect interest in an Investment (for purposes of this definition, as defined in the BREP X Partnership Agreement) in Associates X’s capacity as general partner and/or special general partner of BREP X, but
does not include any Capital Commitment Investment.
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“GP-Related Capital
Account” has the meaning set forth in Section 5.2(a).
“GP-Related Capital Contributions” has the meaning set forth in
Section 4.1(a).
“GP-Related Class A
Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Class B Interest” has the meaning set
forth in Section 5.8(a)(ii).
“GP-Related Commitment”, with
respect to any Partner, means such Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership, including,
without limitation, any such commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“GP-Related Defaulting Party” has the meaning set forth in
Section 5.8(d)(ii)(A).
“GP-Related Deficiency Contribution”
has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related
Disposable Investment” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“GP-Related Investment” means any investment (direct or indirect) of
the Partnership in respect of the GP-Related BREP X Interest (including, without limitation, any GP-Related BREP X Investment, but excluding any Capital Commitment
Investment).
“GP-Related Net Income (Loss)” has the meaning set
forth in Section 5.1(b).
“GP-Related Partner Interest” of a
Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect to the GP-Related BREP X Interest and with respect to all GP-Related Investments.
“GP-Related Profit Sharing Percentage” means the “Carried
Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to
GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the
term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.
“GP-Related Recontribution Amount” has the meaning set forth in
Section 5.8(d)(i)(A).
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“GP-Related Required
Amounts” has the meaning set forth in Section 4.1(a).
“GP-Related Unallocated Percentage” has the meaning set forth in
Section 5.3(b).
“GP-Related Unrealized Net Income (Loss)”
attributable to any GP-Related BREP X Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BREP X Investment if BREP X’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with
Section 5.1(e)) and all distributions payable by BREP X to the Partnership (indirectly through the general partner of BREP X) pursuant to any BREP X Partnership Agreement with respect to such GP-Related
BREP X Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other GP-Related Investment (other than any Capital
Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such
GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(e)).
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
“Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A).
“Holdings” means Blackstone Holdings II L.P., a Delaware limited partnership.
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole
discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Initial Limited Partner” has the meaning set forth in the preamble hereto.
“Interest” means a partnership interest (as defined in
§17-101(13) of the Partnership Act) in the Partnership, including any interest that is held by a Retaining Withdrawn Partner and including any Partner’s
GP-Related Partner Interest and Capital Commitment Partner Interest.
“Investment” means any investment (direct or indirect) of the Partnership designated by the General Partner
from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
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“Investor Note” means a promissory note of a Partner evidencing
indebtedness incurred by such Partner to purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such
Partner and all other interests of such Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be
prepayable with Capital Commitment Net Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources;
provided further, that references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an
“Investor Note” refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for
purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
“Investor Special
Partner” means any Special Partner so designated at the time of its admission by the General Partner as a Partner of the Partnership.
“Issuer” means the issuer of any Security comprising part of an Investment.
“L/C” has the meaning set forth in Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
“Lender or Guarantor” means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the
Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
“Limited Partner” means each of the parties listed as Limited Partners in the books and records of the
Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of
doubt, the term “Limited Partner” does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited partners of the Partnership).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
“Losses” has the meaning set forth in Section 3.5(b)(i).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more persons
who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to
the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all
the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
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“Moody’s” means Moody’s Investors Service, Inc., or
any successor thereto.
“Net Carried Interest Distribution” has the meaning set forth in
Section 5.8(e)(i)(C).
“Net Carried Interest Distribution Recontribution Amount” has the meaning set
forth in Section 5.8(e).
“Net GP-Related Recontribution
Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such
GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated
with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
“Non-Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the
books and records of the Partnership.
“Non-Contingent” means
generally not subject to repurchase rights or other requirements.
“Nonvoting Partner” has the
meaning set forth in Section 8.2.
“Nonvoting Special Partner” has the meaning set forth in
Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Other Fund GPs” means Associates X and any other entity (other than the Partnership) through which any
Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates
that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither BREA X L.L.C. nor Holdings nor any Estate Planning Vehicle established for the benefit of family
members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
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“Other Sources” means (i) distributions or payments of
Capital Commitment Partner Carried Interest (which shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any
“holdback” obligation with respect thereto), and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
“Parallel Fund” means any additional collective investment vehicle (or other similar arrangement) formed
pursuant to paragraph 2.8 of the BREP X Partnership Agreement.
“Partner” means any person who is a
partner of the Partnership, including the Limited Partners, the General Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same
Partner Category, shall have any right to vote as a class on any matter relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
“Partner Category” means the General Partner, Existing Partners, Retaining Withdrawn Partners or Deceased
Partners, each referred to as a group for purposes hereof.
“Partnership” has the meaning set forth in the
preamble hereto.
“Partnership Act” has the meaning set forth in the preamble hereto.
“Partnership Affiliate” has the meaning set forth in Section 3.3(b).
“Partnership Affiliate Governing Agreement” has the meaning set forth in Section 3.3(b).
“Pledgable Blackstone Interests” has the meaning set forth in Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank,
N.A. as its prime rate.
“Qualifying Fund” means any fund designated by the General Partner as a
“Qualifying Fund”.
“Repurchase Period” has the meaning set forth in Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
“Retaining Withdrawn Partner” means a Withdrawn Partner who has retained a
GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
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“S&P” means Standard & Poor’s Ratings Group,
and any successor thereto.
“Securities” means any debt or equity securities of an Issuer and its
subsidiaries and other Controlled Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put
and call options and other options relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly
regarded as securities, interests in real property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor
statute.
“Settlement Date” has the meaning set forth in Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of its Affiliates and certain
of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets that have been pledged to
the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnership’s books and records.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Partner” means any person shown in the books and records of the Partnership as a Special Partner of
the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
“Subject
Investment” has the meaning set forth in Section 5.8(e)(i).
“Subject Partner” has the
meaning set forth in Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder
of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or
receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or
assign of, any Partner, whether by operation of law or otherwise.
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“Tax Advances” has the meaning set forth in Section 6.7(d).
“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“TM” has the meaning set forth in Section 10.2.
“Total Disability” means the inability of a Limited Partner substantially to perform the services required of
such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of
sickness, accident or otherwise.
“Transfer” has the meaning set forth in Section 8.2.
“Trust Account” has the meaning set forth in the Trust Agreement.
“Trust Agreement” means the Trust Agreement, dated as of the date set forth therein, as amended, supplemented,
restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“U.S.” means the United States of America.
“W-8BEN” has the meaning set forth in Section 3.7.
“W-8BEN-E” has the meaning set
forth in Section 3.7.
“W-8IMY” has the meaning set forth in
Section 3.7.
“W-9” has the meaning set forth in
Section 3.7.
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“Withdraw” or “Withdrawal” means, with respect
to a Partner, such Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary), unless the
context shall limit the type of withdrawal to a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
“Withdrawal Date” means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner
Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal
representatives of any such Partner.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals,
partnerships (including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited
Partners or Special Partners. The General Partner as of the date hereof is BREA X L.L.C. and the Limited Partners as of the date hereof are those persons shown as Limited Partners in the books and records of the Partnership and the Special Partners
as of the date hereof are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the Partnership contain the GP-Related Profit
Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the
Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with
respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional
GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital
Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing
Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the admission of additional Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant
to the terms of this Agreement.
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At the time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital
Commitment Investments in which such Partner shall participate and such Partner’s GP-Related Commitment, Capital Commitment-Related Commitment, GP-Related Profit
Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership is hereby continued as a limited partnership
pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of BREA X (Delaware) L.P. The certificate of limited partnership of the Partnership may be amended and/or restated from time to time by the
General Partner, as an “authorized person” (within the meaning of the Partnership Act). The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof)
necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3. Term. The term of the Partnership shall continue until December 31, 2072, unless earlier dissolved and its
affairs wound up in accordance with this Agreement and the Partnership Act.
Section 2.4. Purposes; Powers. (a) The
purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates:
(i) to serve as a limited partner or
general partner of Associates X and perform the functions of a limited partner, special general partner or general partner of Associates X specified in the Associates X LP Agreement and, if applicable, the BREP X Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BREP X Interest as, a capital partner (and, if applicable, a limited partner,
special general partner and/or a general partner) of BREP X and perform the functions of a capital partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BREP X specified in the BREP X Agreements;
(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and acquire and invest
in Securities or other property directly or indirectly through Associates X and/or BREP X or otherwise;
(iv) to make the Blackstone
Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other
property either directly or indirectly through Associates X or another entity;
(v) to serve as a general partner or limited partner of
BREP X and/or other investment vehicles and perform the functions of a general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement,
charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such partnership;
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(vi) to serve as a member, shareholder or other equity interest owner of limited liability
companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing documents, as
amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by the General
Partner and as are permitted under the Partnership Act, the Associates X LP Agreement, the BREP X Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to in clause
(v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii)
any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its
purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a general partner or
limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the
acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common
and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and
Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or
other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other
short-term investments;
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(v) to hold, receive, mortgage, pledge, grant security interests over, lease,
transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the
Partnership;
(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage,
pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy,
sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or
funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one
or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the
maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants,
both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or
cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and
be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all
contracts, agreements and other undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept
judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or
investments or other property of the Partnership, or any combination thereof; and
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(xvi) to take such other actions necessary, desirable, convenient or incidental
thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
Section 2.5. Place of Business. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services
Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time
to time and as set forth in the books and records of the Partnership. The name and address of the Partnership’s registered agent is Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center,
Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the certificate of limited partnership of the Partnership.
Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the
Partnership, the Initial Limited Partner shall (a) Withdraw as the Initial Limited Partner of the Partnership and (b) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided,
that the effective date of such Withdrawal shall be deemed as between the parties hereto to be May 4, 2022.
ARTICLE III
MANAGEMENT
Section 3.1. General Partner. (a) BREA X L.L.C. is the “General Partner” as of the date hereof. The General
Partner shall cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs.
The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or more other General Partners is admitted to the Partnership as such, all references herein to the “General
Partner” in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights and responsibilities of the General Partners will be as agreed upon from time to time between them.
(b) Upon the Withdrawal from the Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested
therein pursuant to this Agreement and the Partnership Act shall be exercised by a Majority in Interest of the Partners.
Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be expressly
required by the Partnership Act, Partners (including Special Partners), other than the General Partner, as such shall have no right to, and shall not, take part in the management or control of the Partnership’s business or act for or bind the
Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a Partner is
entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner
(or any Affiliate thereof) in such matter.
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(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided
by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent
or approval thereto.
Section 3.3. Management. (a) The management, control and operation of the Partnership and the
formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership, including those
enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its sole discretion, subject
only to the express terms and conditions of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary, the
Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in the
Partnership’s capacity as a partner of Associates X on Associates X’s own behalf or in Associates X’s capacity as general partner, special general partner, capital partner and/or limited partner of BREP X or as a general partner or
limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BREP X or as general or limited partner, member, shareholder or other
equity interest owner of any Partnership Affiliate): (i) to execute and deliver, and to perform the Partnership’s obligations under the Associates X LP Agreement, including, without limitation, serving as a partner of Associates X, (ii) to
execute and deliver, and to cause Associates X to perform Associates X’s obligations under the BREP X Agreements, including, without limitation, serving as a general partner or special general partner of BREP X and, if applicable, a capital
partner of BREP X, (iii) if applicable, to execute and deliver, and to perform the Partnership’s obligations under, the BREP X Agreements, including, without limitation, serving as a capital partner of BREP X, (iv) to execute and
deliver, and to perform, or, if applicable, to cause Associates X to perform, the Partnership’s or Associates X’s obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a
“Partnership Affiliate Governing Agreement”), of any other partnership, limited liability company, other company, corporation or other entity (each a “Partnership Affiliate”) of which the Partnership or
Associates X is, or is to become, a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner, special general partner, or limited partner, member, shareholder
or other equity interest owner of each Partnership Affiliate, and (v) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the Associates X LP Agreement, the BREP X Agreements or each Partnership
Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
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(c) The General Partner, and any other person designated by the General Partner, each acting
individually, is hereby authorized and empowered, as an authorized person of the Partnership, or otherwise, or as an authorized representative of the General Partner (within the meaning of the Delaware Limited Liability Company Act, 6 Del. C.
§§ 18-101 et seq., as amended, or otherwise) (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities,
in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a limited partner or general partner of Associates X on Associates X’s own behalf, or in Associates X’s capacity as general partner, special general
partner, capital partner and/or limited partner of BREP X or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital
partner of BREP X or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates X, BREP X or any Partnership
Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates X LP Agreement, the BREP X Agreements and each Partnership Affiliate Governing
Agreement, (II) subscription agreements and documents on behalf of BREP X or Associates X, (III) side letters issued in connection with investments in BREP X and (IV) such other agreements, certificates, instruments and other
documents as may be necessary or desirable in furtherance of the purposes of the Partnership, Associates X, BREP X or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing
referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the
Partnership, Associates X, BREP X and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
(C) any other certificates, notices, applications and other documents (and any amendments, supplements, restatements and/or
other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates X, BREP X or any Partnership Affiliate to qualify
to do business in a jurisdiction in which the Partnership, Associates X, BREP X or such Partnership Affiliate desires to do business;
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(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or
file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a limited partner or general partner of Associates X on Associates
X’s own behalf or in Associates X’s capacity as general partner, special general partner, capital partner and/or limited partner of BREP X, or as general partner or limited partner, member, shareholder or other equity interest owner of any
Partnership Affiliate or, if applicable, in the Partnership’s capacity as a capital partner of BREP X or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any
certificates, forms, notices, applications and other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, Associates X, BREP X and/or any Partnership Affiliate, (B) any certificates, forms,
notices, applications and other documents that may be necessary or advisable in connection with any bank account of the Partnership, Associates X, BREP X or any Partnership Affiliate or any banking facilities or services that may be utilized by the
Partnership, Associates X, BREP X or any Partnership Affiliate, and all checks, notes, drafts and other documents of the Partnership, Associates X, BREP X or any Partnership Affiliate that may be required in connection with any such bank account or
banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to
have been duly adopted by the General Partner, the Partnership, Associates X, BREP X or any Partnership Affiliate, as applicable, for all purposes).
(d) The authority granted to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General
Partner by an instrument in writing signed by the General Partner.
Section 3.4. Responsibilities of Partners.
(a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner (other than a Special Partner) shall devote
substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to the businesses of the Partnership or its Affiliates.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such
rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish
such other rules and regulations applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other
obligations.
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Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent
permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a
“Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any
transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial
determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority
granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any
Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating
thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of
this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to
modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its
duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the
extent of the Partnership’s assets (including, without limitation, the remaining capital commitments of the Partners)) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without
limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of
any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out
of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person
constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and
non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to,
the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its
share of such Losses in
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accordance with such Covered Person’s GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave
rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the
approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the
Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a
continuing right of offset against such Covered Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment
obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partner’s Interests and remaining capital commitments,
for such Partner’s pro rata share of the Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover
losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority
to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the
Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BREP X and/or a particular
portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out
of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BREP X; second, by the applicable portfolio entity through which such investment is indirectly held; and third, by
BREP X and fourth by Associates X (only to the extent the foregoing sources are exhausted).
(B) The Partnership’s obligation,
if any, to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BREP X and/or the applicable portfolio entity (including by virtue of any
applicable insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates X, BREP X and/or the applicable portfolio entity
(including by virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against Associates X and/or BREP X and/or such portfolio entity in respect of such
advancement or payments. The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of Blackstone Inc. or any of its
Affiliates, which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
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Section 3.6. Representations of Partners. (a) Each Limited Partner and
Special Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be
waived by the General Partner, that such Partner is acquiring each of such Partner’s Interests for such Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person
has any interest in any such Interest or in the rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance
with the terms hereof). Each Limited Partner and Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without
registration under the Securities Act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner
represents that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic
risk of such investment. Each Limited Partner and Special Partner represents that such Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partner’s net
worth and the Partner has no need for liquidity in the Partner’s investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such
Partner has requested relating to the Partnership, any Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of
Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the
Partner with the Partner’s own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and warranties contained in paragraph (a) above shall be true
and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that such
capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
Section 3.7. Tax Representation and Further Assurances.
(a) Each Limited Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute,
acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the Partnership’s obligations under applicable law or to carry out the provisions of this Agreement.
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(b) Each Limited Partner and Special Partner certifies that (A) if the Limited Partner or
Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partner’s name, social security number (or, if applicable, employer identification number) and address provided to the Partnership
and its Affiliates pursuant to an IRS Form W-9, Request for Taxpayer Identification Number Certification (“W-9”) or otherwise are correct and
(ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited Partner or Special Partner is a United States person (as defined in the Code) and (ii) the
Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner or Special Partner is not a United States
person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
(“W-8BEN”), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and
Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY,
Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and (ii) the
Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN,
W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the
Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited
to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the General Partner may release confidential
information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partner’s investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion,
determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon
the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability
as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading,
or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any
remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s or Special Partner’s action or inaction
from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
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ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the
Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as are required
to satisfy the Partnership’s obligation to make capital contributions to Associates X in respect of the GP-Related Associates X Interest to fund Associates X’s capital contributions with respect to
any GP-Related BREP X Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partner’s Commitment Agreement or SMD Agreement, if any, or
otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among the Partners
based upon each Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used
for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d))) shall be determined by the General Partner.
Special Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess of the GP-Related Required Amounts, except
(i) as a condition of an increase in such Special Partner’s GP-Related Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, that the General Partner
and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital Contribution to the Partnership; provided further, that each Investor
Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time
to time and (ii) the total capital of the Partnership related to the GP-Related BREP X Interest.
(b) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional
Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) the amount of any GP-Related Capital
Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc.
or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the
distributions relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The General Partner
shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such withheld percentage constituting the General Partner’s
and such Partner Category’s “Holdback Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining
Withdrawn Partners (other than the General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner
and/or Holdings shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
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(ii) The Holdback Percentage may not be reduced for any individual Partner as
compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the
Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner
shall apply only to distributions relating to Carried Interest made after the date of such reduction.
(iii) The Holdback
Percentage may not be increased for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’
Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners’ Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the
General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies
equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner
from proportionately increasing the Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For
example, if the General Partner reduces the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the
Holdback Percentages to the Initial Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the
contrary, the General Partner may increase or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to a majority vote of the Limited Partners (a
“Holdback Vote”); provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent;
provided further, that a Subject Partner’s Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject
Partner’s Holdback Percentage and (y) has, if requested by such Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration
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before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject Partner’s Holdback Percentage
pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partner’s Holdback Percentage is less than the prevailing Holdback Percentage for the
Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage unless such voting Partner determines, in such Partner’s good faith judgment, that
the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns (including such Subject Partner’s estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related Recontribution Amounts that
may become due.
(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Limited Partners shall be
entitled to cast one vote with respect to the Holdback Vote regardless of such Limited Partner’s interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback Percentage, such Subject
Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually
satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided
further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject
Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected
out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator,
pay the total of such estimated expenses (i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses
associated with such arbitration (including costs leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing
party is insufficient to cover the expenses of such arbitration, such “losing” party shall then provide any additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the
“victorious” party shall be the Partnership if the Holdback Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the
Subject Partner’s Partner Category; otherwise, the Subject Partner shall be the “victorious” party. The party that is not the “victorious” party shall be the “losing” party.
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(D) In the event of a decrease in a Subject Partner’s Holdback Percentage
(1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and
the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback
Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the
“Excess Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess
Holdback”), and such Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may
obtain the release of the Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or Withdrawn Partner’s Excess Holdback
obligation, by pledging, granting a security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess
Holdback obligation. Any Partner seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the
General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnership’s
books and records in which Partners are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (“Pledgable Blackstone Interests”), to the
extent a first priority security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security
interest therein in the manner provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or
(y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in
the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the Partnership’s books and records to remit any and all net proceeds resulting from
a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking
such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.
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(B) If upon a sale or other realization of all or any portion of any Firm
Collateral (a “Firm Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise
distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to
fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary
to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any
valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including
upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership shall provide notice of the
foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her
Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii)
shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term
“GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the
amount due pursuant to this clause (C).
(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or
(B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the benefit of the
Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial
bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moody’s (if the L/C is for a term of 1 year or less), or (y) long-term
deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”). If the relevant rating of the commercial bank issuing such L/C drops below the relevant
Required Rating, the L/C Partner shall supply to the Trustee(s), within
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30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has
a term expiring on a date earlier than the latest possible termination date of BREP X, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least
equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in
the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback Provisions or (II) an L/C Partner
has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least 30 days prior to the
stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the
Partnership’s obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder), or (3) the release, by the
Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted
hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an
amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release
of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnership’s books and records; provided, that the initial contribution of such Special Firm Collateral
shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such
Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
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(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any
portion of his or her Holdback (excluding any Excess Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided
herein, obtain a release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or Withdrawn Partner’s Holdback (excluding
any Excess Holdback) by pledging or granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the
Holdback distributed to the Partner or Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as
is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm
Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess
Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust
Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or
other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes
hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a
Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partner’s or Withdrawn Partner’s
deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any valuation or revaluation of the Special
Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnership’s books and records), if such Partner’s or Withdrawn Partner’s Special Firm Collateral is
valued at less than such Partner’s Holdback (excluding any Excess Holdback) as provided in the Partnership’s books and records, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide
notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner
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shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or
her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed inapplicable to such default; provided further, that for
purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed
as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution
Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such
Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn
Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess
Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any
amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment
of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General
Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s GP-Related Partner Interests from the Partnership except (i) for distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or (iii) as
determined by the General Partner.
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ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall
be determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b)
“GP-Related Net Income (Loss)” means:
(i) from any activity of
the Partnership related to the GP-Related BREP X Interest for any accounting period (other than GP-Related Net Income (Loss) from
GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items
that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such
GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related
Investment (determined as provided below); and
(iii) from any GP-Related
Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period
less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall be
determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not
otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its
adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in
the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any
expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this
definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment,
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and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership, Holdings and other Affiliates of the Partnership shall be
allocated among the Partnership, Holdings and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner.
Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid,
unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with GAAP; provided, that the
General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the
option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal
Year. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to
the Partners’ GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated
Percentages or adjustments to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing
Percentages during such accounting period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such
GP-Related Investment was acquired.
(e) In establishing
GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it
deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this
Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn
Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any
successor thereto.
Section 5.2. GP-Related Capital Accounts.
(a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or
more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partner’s interests in the capital of the Partnership related to the GP-Related BREP X Interest
and the GP-Related Net Income (Loss) of the Partnership (each a “GP-Related Capital Account”).
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(b) As of the end of each accounting period or, in the case of a contribution to the Partnership
by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or
Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall
be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to such Partner’s GP-Related Partner
Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partner’s capital
related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital
Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of
any property distributed to such Partner during such accounting period with respect to such Partner’s GP-Related Partner Interest and (y) the GP-Related Net
Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related
Profit Sharing Percentages.
(a) Prior to the beginning of each annual accounting period, the General Partner shall establish the
profit sharing percentage (the “GP-Related Profit Sharing Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual
accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, that (i) the General Partner may elect to establish GP-Related
Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (c) below and (ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment
established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General
Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing
Percentages of the other Partners shall be reduced by an amount equal to the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other
Partner’s GP-Related Profit Sharing Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately
prior to the admission of the new Partner. Notwithstanding the foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end
of such annual accounting period in its sole discretion.
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(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit
Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”);
provided, that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the
General Partner within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit
Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and
shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss).
(a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners
participating in such GP-Related Investment (including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than
amounts representing a return of GP-Related Capital Contributions) or Carried Interest distributed to the Partners; second, to Partners that received Non-Carried
Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is
being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts
representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BREP X and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the Partnership
to BREP X with respect to the GP-Related BREP X Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried Interest Sharing
Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BREP X and (ii) GP-Related Net Loss relating to realized losses suffered
by BREP X and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s (including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss)
(subject to adjustment pursuant to Section 5.8(e)).
(c) Notwithstanding Section 5.4(a) above,
GP-Related Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be
allocated in accordance with such Carried Interest Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such
GP-Related Net Loss with respect to Carried Interest.
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(d) To the extent the Partnership has any GP-Related Net
Income (Loss) for any accounting period unrelated to BREP X, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages
prevailing at the beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners
(including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such
allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this
Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to
make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or
Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6. [Intentionally omitted.]
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other
requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BREP X Investments as the General Partner may determine. The General
Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that is
Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from
time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
Section 5.8. Distributions.
(a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other
property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it
appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a).
Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest
Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing
Percentages.
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(ii) At any time that a sale, exchange, transfer or other disposition by BREP X of a portion of a
GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each
Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate
GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a
Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such
GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related
Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BREP X) relating to a GP-Related Disposable Investment (with
respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B
Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by BREP X) relating to a GP-Related Investment excluding such
GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of
GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related
Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of
GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall
make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such
Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an
individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account (x) the
limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income) and (iii) taking into
account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General
Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
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(c) The General Partner may provide that the GP-Related
Partner Interest of any Partner or employee (including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the
General Partner shall determine (a “Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be
distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by
virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of
whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any
GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined
otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage
interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner;
provided, that the General Partner may allocate the Withdrawn Partner’s share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn
Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor
Special Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
(d) (i) (A) If Associates X is obligated under the Clawback Provisions or Giveback Provisions to contribute to BREP X a Clawback Amount or
a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such amount to Associates X, in respect of the Partnership’s GP-Related Associates X
Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a “GP-Related Giveback Amount”), the General Partner shall call for
such amounts as are necessary to satisfy such obligations of the Partnership as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General
Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest (and/or Non-Carried Interest in the case of a
GP-Related Giveback Amount) (the “GP-Related Recontribution Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn
Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of Clawback Amounts and (II) with respect to a GP-Related Giveback
Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with (a) the GP-Related BREP
X Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such
GP-Related Giveback Amount, GP-Related BREP X Investments other than the one giving rise to such obligation, but only those amounts received by the Partners with an
interest in the GP-Related BREP X Investment referred to in clause (II)(a) above, and (c) if the GP-Related Giveback Amount pursuant to an applicable BREP X
Agreement is unrelated to a specific GP-Related BREP X Investment, all GP-Related BREP X Investments. Each Partner and Withdrawn Partner shall promptly contribute to the
Partnership, along with
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satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call, such Partner’s or Withdrawn Partner’s GP-Related
Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the Partnership, or if applicable, any of the Other Fund GPs with respect to
Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related
Recontribution Amount”), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’ obligation under the Clawback Provisions and/or
Giveback Provisions; provided, that to the extent a Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his
or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided
further, that such written instructions from the General Partner shall specify each Partner’s and Withdrawn Partner’s GP-Related Recontribution Amount. Prior to such time, the General Partner
may, in its discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an
estimate of the aggregate amount of such obligations); provided further, that any amount from a Partner’s Trust Account used to pay any GP-Related Giveback Amount (or such lesser amount as
may be required by the General Partner) shall be contributed by such Partner to such Partner’s Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to
such GP-Related Giveback Amount.
(B) To the extent any Partner or Withdrawn Partner has satisfied
any Holdback obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the
Trust Account in an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of
(I) such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the
Trustee(s) shall take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such
Partner or Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the
satisfaction of the Partnership’s and the Other Fund GPs’ obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall
constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BREP
X Partnership Agreement, each partner of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under
Section 5.8(d)(ii)(A) with respect to such partner’s pro rata share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BREP X Partnership
Agreement.
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(ii) (A) In the event any Partner or Withdrawn Partner (a “GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net
GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried
Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully
described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such
GP-Related Defaulting Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”)
if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the
Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the
Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Net GP-Related Recontribution Amount initially requested from
such Partner or Withdrawn Partner in respect of such default.
(B) Thereafter, the General Partner shall determine in its
good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the
General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent
not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party
becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to
Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a
GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General
Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the
intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related
Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
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(C) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first
seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency
Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or
Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this
Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is
hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns (as
defined in the BREP X Agreements) and Losses (as defined in the BREP X Agreements) on GP-Related BREP X Investments that have been the subject of a writedown and/or Net Loss (as defined in the BREP X
Agreements) (each, a “Loss Investment”) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried
Interest distributions from other GP-Related BREP X Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in
this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a GP-Related BREP X Investment (the “Subject Investment”) that have been reduced under any BREP X Agreement as a result of one or more Loss Investments, the General Partner shall calculate amounts
distributable to or due from each such Partner as follows:
(A) determine each Partner’s share of each such Loss
Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all
Partners (indirectly through the Partnership from BREP X) from the Subject Investment (such reduction, the “Loss Amount”);
(B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject
Investment (indirectly through the Partnership from BREP X) before any reduction in respect of the amount determined in clause (A) above (the “Unadjusted Carried Interest Distributions”); and
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(C) subtract (I) the Loss Amounts relating to all Loss Investments from
(II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General
Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a
“Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to clause (I) are insufficient to
satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a Partner’s (x) Net
Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the BREP X Agreements) in
effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of paying such Partner’s Excess
Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest
otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is
determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of
negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution
shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as
provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
A Partner
may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to
the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as
provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so
distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to
date).
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(ii) In the case of Clawback Amounts which are required to be contributed to the
Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partner’s share of any Net Losses (as defined in the BREP X Agreements) in any GP-Related BREP X Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BREP X Investment with respect to which
Carried Interest distributions were made), based on such Partner’s Carried Interest Sharing Percentage in such GP-Related BREP X Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest
Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from
the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to
the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a
positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the
extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount
was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith
judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of
each Partner regarding the Clawback Amount as provided in the BREP X Agreements.
Section 5.9. Business Expenses. The
Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner
from time to time.
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Section 5.10. Tax Capital Accounts; Tax Allocations
(a) For U.S. federal income tax purposes, there shall be established for each Partner a single capital account combining such Partner’s
Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such single capital account is maintained in compliance with
the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder. In furtherance of the foregoing and in accordance with Treasury Regulations
Section 1.1061-3(c)(3)(ii)(B), the Partnership shall (i) calculate separate allocations attributable to (A) the Carried Interest and any other distribution entitlements that are not commensurate
with capital contributed to the Partnership, and (B) any distribution entitlements of the Partners that are commensurate with capital contributed to the Partnership (in each case, within the meaning of Treasury Regulations Section 1.1061-3(c)(3)(ii)(B) and as reasonably determined by the General Partner), and (ii) consistently reflect each such allocation in its books and records.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and
local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable
law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its
respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated
shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a “qualified income offset” as provided in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are
in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S. federal, state
and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are
allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations
have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain,
loss, deduction or credit of the Partnership (or an adjustment to any Partner’s distributive share thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in
accordance with the final resolution of such audit adjustment.
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ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners.
(a) Effective on the first day of any month (or on such other date as shall be determined by the General Partner in its sole discretion), the
General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the representations and certifications with respect to itself set
forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute Partner) all terms of such additional Partner’s
participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital Contribution,
GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time to time
unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a “Nonvoting Special
Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note
approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited Partner’s purchase of his or her Capital Commitment Interests, Blackstone or
such other or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a
GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of
the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the
General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction
in all other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the
need for any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional
Partners admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
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(c) An additional Partner shall be required to contribute to the Partnership his or her pro
rata share of the Partnership’s total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such
times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The
admission of an additional Partner will be evidenced by (i) the execution of a counterpart copy of this Agreement by such additional Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional
Partner, as determined by the General Partner, or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to be bound by the terms of this Agreement and such
writing being acceptable to the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to
the Trust Agreement that is acceptable to the General Partner on behalf of the Partnership.
Section 6.2. Withdrawal of
Partners.
(a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner,
including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its
business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole
discretion), on not less than 15 days’ prior written notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner
may Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner
Interest, and a Partner may Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s
GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence
of any withdrawal event under the Partnership Act with respect to any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such
person’s GP-Related Partner Interest; provided, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such
person’s GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of whether any Partner has
suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a
qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
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(d) If the General Partner determines that it shall be in the best interests of the Partnership
for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with
respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after
the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital
Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue
the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the
fullest extent provided by law.
Section 6.3. GP-Related Partner Interests Not
Transferable.
(a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any
portion of such Partner’s GP-Related Partner Interest other than as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair
transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior
written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to
any estate planning trust, limited partnership or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each
Estate Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with
respect to the Partnership (including the obligation to make additional GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any
Estate Planning Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance,
operation of law or otherwise) of the whole or any portion of any Partner’s GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which
consent may be given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
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(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the Partnership Act, the General Partner may not
transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the prior written approval of a Majority in
Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law
or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner
deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any liquidation,
dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the General Partner. A person who is so
admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired.
The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall
not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby
authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall be no remaining Limited Partners, the Partnership shall be
dissolved and shall be wound up unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such
Withdrawal, of one or more Limited Partners.
(c) The Partnership shall not be dissolved, in and of itself, by the Withdrawal of any
Partner, but shall continue with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s
GP-Related Partner Interests.
(a) The terms of this Section 6.5 shall apply to the
GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For
purposes of this Section 6.5, the term “Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined
under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Special
Partner, shall be considered a Withdrawn Partner for all purposes hereof.
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(b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that
if a Withdrawn Partner’s Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the
interval, if any, between a Withdrawn Partner’s Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions,
interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partner’s
GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partner’s Settlement Date (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date
in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General
Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise
determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner
Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or
not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn
Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided
in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such
Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income
(Loss), or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related Partner Interest for any reason other than for Cause
pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in
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satisfaction and discharge in full of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate
credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion
thereof attributable to any GP-Related Investment) and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the
Withdrawn Partner has an interest as of the Settlement Date as provided in paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this
Section 6.5. If the amount determined pursuant to clause (x) above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the
statement referred to in Section 6.5(i) below; provided, that if the Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn
Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn
Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital
Accounts in accordance with their respective GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance
as determined by the General Partner as of such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be
ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to
such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described
below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than
all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to
above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership
pursuant to this Section 6.5.
(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s
“percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn
Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable
to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Partner for such purpose (and, if the General Partner so
designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and
conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole
discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that
the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
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(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a
Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to (ii) distribute in kind to the Withdrawn Partner such Withdrawn Partner’s
pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other
investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the
Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted.]
(i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such
Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to
such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of
his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments
to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the
Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment
and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution;
provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn
Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove,
in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her
estate such deficiency, as the case may be.
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(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the
Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date
or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to
the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts payable by a Withdrawn Partner pursuant to
Section 6.5(i) above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for
which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The “due
date” of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(l) At the time of the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the
Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, grant of a security interest, encumbrance or other
transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such
Withdrawn Partner’s right to any payment from the Partnership.
(m) If a Partner is required to Withdraw from the Partnership with
respect to such Partner’s GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in
accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such
settlement:
(i) In settling the Withdrawn Partner’s interest in any
GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized
Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn
Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partner’s
GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her
GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply
the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any
GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The
Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
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(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to
this Section 6.5 shall be subordinate in right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after
the applicable date of payment or distribution.
(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be
conditioned on the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and
Affiliates for a period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this
paragraph (n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound
by such restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than
the General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to
any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn
Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If
the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnership’s
day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
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(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner
as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute,
sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or
provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an
interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 6.6. Dissolution of the Partnership. The General Partner may dissolve the Partnership prior to the expiration
of its term at any time on not less than sixty (60) days’ notice of the dissolution date given to the other Partners. Upon the dissolution of the Partnership, the Partners’ respective interests in the Partnership shall be valued and
settled in accordance with the procedures set forth in Section 6.5.
Section 6.7. Certain Tax Matters. (a) The
General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all U.S. federal, state and local tax returns of the Partnership for each year for which
such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss,
deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the treatment of any such item or any other method or procedure
related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides
prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the
treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or
(ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for
refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim
for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall
properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys’, accountants’ and other experts’
fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item
of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings
conducted by the
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Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or otherwise
protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative
or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any Partner selected by the General Partner as the “partnership representative” (as defined under the Code)
(the “Tax Matters Partner”). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations,
damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable
attorneys’ fees and disbursements, incident to any such breach or violation.
(c) Each individual Partner shall provide to the
Partnership copies of each U.S. federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is
or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner, or as a result of a Partner’s participation in the Partnership or as o result of a
Partner’s failure to provide requested tax information, including pursuant to Section 6225 or Section 1466(f) of the Code (“Tax Advances”), the General Partner may withhold or escrow such amounts or make such tax
payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by
reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of
the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be
treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the
Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such
Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
(e) To the extent that any taxes are imposed on the Partnership (or any entity in which the Partnership invests that is treated as a
flow-through entity for relevant tax purposes) with respect to income of the Partnership (or such entity) in lieu of taxes imposed directly on a Partner with respect to such income (including any state or local income taxes), whether by election of
the Partnership or the General Partner or otherwise, such amounts shall be deemed to have been distributed to such Partner. To the fullest extent permitted by law, each Partner
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hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to
tax or interest) with respect to any such tax payments. The obligations of a Partner set forth in this Section 6.7(e) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by
the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an
election to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
ARTICLE
VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc.
(a) This Article VII and Article VIII hereof set forth certain terms and conditions with respect to the Capital Commitment Partner Interests
and the Capital Commitment BREP X Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BREP X Interest. Except as otherwise expressly provided in this Article VII or in Article VIII, the terms and
provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BREP X Interest.
(b) Each Partner, severally, agrees to make contributions of capital to the Partnership (“Capital Commitment-Related Capital
Contributions”) as required to fund the Partnership’s capital contributions to BREP X or Associates X, in respect of the Capital Commitment BREP X Interest, if any, and the related Capital Commitment BREP X Commitment, if any
(including, without limitation, funding all or a portion of the Blackstone Capital Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such Partner’s
Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily participate in each
Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital Commitment Profit Sharing Percentage with respect to (i) the
Partnership’s portion of the Blackstone Capital Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or
SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms
upon which the Partnership and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital Commitment-Related
Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
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(c) The Partnership or one of its Affiliates (in such capacity, the “Advancing
Party”) may in its sole discretion advance to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any
portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Partner shall pay interest to the Advancing
Party on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written notice by the
Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Partner and the Advancing Party
absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party shall inform any Partner of such
rate upon such Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise payable to such Partner pursuant to
Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein) and/or discontinue the making of
Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue amounts thereon shall not exceed
the maximum interest rate allowable by applicable law.
Section 7.2. Capital Commitment Capital Accounts
(a) There shall be established for each Partner in the books of the Partnership as of the date of formation of the Partnership, or such later
date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital
Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such
Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partner’s interest in the Partnership related to his or her
Capital Commitment Partner Interest as provided in this Agreement.
(b) A Partner shall not have any obligation to the Partnership or to
any other Partner to restore any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the
disposition by the Partnership of the related Capital Commitment Investment and in whole upon the dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or
redemption except with the consent of the General Partner.
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Section 7.3. Allocations
(a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital
Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment
Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s aggregate Capital Commitment Capital Accounts bear to the aggregate
Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be
allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital Commitment Profit Sharing Percentages for
such Capital Commitment Investment.
(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7 shall
be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as it
deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4. Distributions.
(a) Each Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments,
distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests)
during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the
General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected
by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
(i) First, to the
payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all
interest payments due, the selection of those of such Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
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(ii) Second, to distribution to the Partner of an amount equal to the U.S.
federal, state and local income taxes on income of the Partnership allocated to such Partner for such year in respect of such Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by
the General Partner, subject to the limitation that the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were
all allocated to an individual subject to the then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character
of such taxable income allocated by the Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause
(ii) to the extent that such amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant
partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant to
provisions in such other BE Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the
principal amount of the Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such
Fiscal Year, to the extent not repaid from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all
Capital Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any
Blackstone Entity (other than the Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related
Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of
such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v)
above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid, the division
of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
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(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment
Net Income remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in
clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted
to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to
clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partner’s Capital Commitment
Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed
to such Partner.
Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner.
At the General Partner’s discretion, any amounts distributed to a Partner in respect of such Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period
in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy
any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining
principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a
Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e)
The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
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(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital
Commitment Investment is being considered by the Partnership or BREP X (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with respect to such
Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment
Class B Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment
Class A Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made
only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B
Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment
shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment
Class A Interests.
(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a Giveback Amount to
BREP X in respect of any Capital Commitment BREP X Interest that may be held by the Partnership or (y) Associates X is obligated under the Giveback Provisions to contribute to BREP X a Giveback Amount with respect to any Capital Commitment BREP
X Interest that may be held by Associates X and the Partnership is obligated to contribute any such amount to Associates X in respect of the Partnership’s Capital Commitment Associates X Partner Interest (the amount of any such obligation of
the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a “Capital Commitment Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy
such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions
by the Partnership with respect to the Capital Commitment BREP X Interest (the “Capital Commitment Recontribution Amount”) which equals such Partner’s pro rata share of prior distributions in connection with (a) the
Capital Commitment BREP X Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment
BREP X Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to the applicable BREP X Agreement is unrelated to a specific Capital Commitment BREP X Investment, all Capital
Commitment BREP X Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partner’s
discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate
amount of such obligations).
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(ii) (A) In the event any Partner (a “Capital Commitment Defaulting
Party”) fails to recontribute all or any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to
contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital
Commitment Defaulting Party’s Capital Commitment Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect
such amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback
Amount; provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Capital Commitment Recontribution Amount initially requested
from such Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the
likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting
Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting
Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any amounts otherwise
payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all
accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such
collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and
authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the
Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partner’s failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital
Commitment Defaulting Party with respect to such amount.
(iii) A Partner’s obligation to make contributions to the
Partnership under this Section 7.4(g) shall survive the termination of the Partnership.
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Section 7.5. Valuations. Capital Commitment Investments shall be valued annually
as of the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates X (or any other Affiliate of the Partnership that is a general partner of BREP X) in valuing
investments of BREP X or, in the case of investments not held by BREP X, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment
Interest as of any date (the “Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an
earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment
Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment
Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by
a person who is or was at any time a direct member or partner of a General Partner of the Partnership.
Section 7.6. Disposition Election
(a) At any time prior to the date of the Partnership’s execution of a definitive agreement to dispose of a Capital Commitment Investment,
the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such
Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to such date (i) not to dispose of all or any portion of such Partner’s pro rata share of such
Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or (B) retain such Retained Portion in the
Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such Retained Portion to such Partner. Such Partner’s Capital Commitment Capital Account shall not
be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other Partners’ pro rata shares of such Capital Commitment Investment; provided, that such
Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the Partnership.
(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or
simultaneously with such distribution.
Section 7.7. Capital Commitment Special Distribution Election
(a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from
a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a
“Capital Commitment Special Distribution”). Such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
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(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating
thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL, ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests.
(a) Capital Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as
Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment
Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount
of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that
in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an employee or officer of Holdings or an Affiliate thereof, the Partnership
(or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the
purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase price of a Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made
by a Partner shall apply pro rata against all of such Partner’s Investor Notes; provided, that such Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or
more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as
Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an officer
or employee of the Partnership or any of its Affiliates, other than as a result of such Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the right
(exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the
obligation, to require the Partnership (subject to the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn
Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
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(ii) The purchase price for each such Contingent Capital Commitment Interest shall be an amount
equal to (A) the outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the “Adjustment
Amount”) equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus
(y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on the Contingent
portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount,
in the General Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment
Net Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the
holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partner’s Capital
Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partner’s
Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a
Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partner’s Contingent Capital Commitment
Interests, his or her related Investor Note shall be payable in full.
(iii) Upon such Partner ceasing to be such an officer or employee,
all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn
Partner’s Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the Partnership nor its designee(s)
exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor Notes shall remain outstanding,
shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the Withdrawn Partner at his or her
option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis.
(v) To the extent
that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment
Investment shall be correspondingly increased.
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(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall
thereupon cease to be a Partner with respect to such Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a
Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such
Partner’s Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or
Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in
Interest to such Partner, whether by operation of law or otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until
distribution of any such Partner’s interest in the Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal
or redemption without the consent of the General Partner. The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such
Partner’s Capital Commitment Partner Interest.
(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment
Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partner’s death or Total Disability) (and the purchase price for such
Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partner’s estate, personal representative or other Successor in Interest, in
cash)), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partner’s death or Total Disability, any Investor Note(s) financing such Contingent
Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within
180 days after the Partner’s death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership
or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnership’s then current
Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of
this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General
Partner knows or has reason to know of such Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the
Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
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(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership
or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her
Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its
sole discretion), the Partnership or another person designated by the General Partner (who may be itself another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase).
The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate
irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently
transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital
Commitment Interest or portion thereof by the General Partner’s designee(s), Holdings may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of Blackstone Inc. or any Affiliate thereof). To the extent that a Withdrawn Partner’s Capital Commitment
Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner,
(i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already
participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated Capital
Commitment Interests”). To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be
allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such
related indebtedness is repaid. The Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this
Section 8.1 and except as such Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing
such repurchased interests is not to be non-recourse or so limited, the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the
related Capital Commitment Interests to such Partners;
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provided, that a Partner shall not, except as set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this
Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to
the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness.
Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital
Accounts of all Partners; debt service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.
(g) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest for
Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a
direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such Withdrawn Partner’s Non-Contingent Capital
Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent
Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital
Commitment Interest);
(ii) allow the Withdrawn Partner to retain such
Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment
shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof;
or
(iii) in lieu of cash, purchase such Non-Contingent Capital Commitment
Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn
Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
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(i) The General Partner may reasonably determine in good faith to retain outside professionals to
provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be,
prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the
Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements,
instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without
limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and
effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 8.2. Transfer of Partner’s Capital Commitment Interest. Except as otherwise agreed by the General Partner, no
Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment Partner
Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or Deceased or Totally Disabled
Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of
Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any
reason therefor) and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it
being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in
connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). The General Partner shall
designate that each Estate Planning Vehicle shall not have voting rights (any such Partner being called a “Nonvoting Partner”). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such
Nonvoting Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate
Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such
Partner’s right to participate in the affairs of the Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or
the pledging or granting of a security interest in, its entire Interest in the Partnership in accordance with the provisions of this Agreement.
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Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the
contrary, no sale or Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution. The Partnership shall be dissolved and subsequently terminated:
(a) pursuant to Section 6.6; or
(b) upon the expiration of the term of the Partnership.
Section 9.2. Final Distribution. Upon the dissolution of the Partnership, and following the payment of creditors of the
Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account
balances of the Partners; and
(b) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such
Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment
Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment;
and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for
each Capital Commitment Investment from which such cash or Securities are derived.
(c) The General Partner shall be the liquidator. In the
event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
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Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests.
(a) If there are any Securities or other property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in
the case of dissolution, without sacrificing a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners
participating in the related Capital Commitment Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other
investments or securities so excluded shall not be paid or distributed until such time as the liquidator shall determine.
(b) If there is
any pending transaction, contingent liability or claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the
liquidator, be then ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any
such transaction or claim until its final settlement or such earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest
an amount which the liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of
sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized
from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including
the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, liquidation or winding up of the Partnership), whether arising during the
existence of the Partnership or at or after its termination or during or after the liquidation or winding up of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance
with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within thirty (30) days of the receipt of the request for arbitration, the
International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration
proceedings.
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(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause
the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking
temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this
Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate,
and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such
Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY
JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT.
Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s)
designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may
have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible
to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it shall be determined by a court of
competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such
invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act
or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C.
(“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and
that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any
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abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the
Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a
non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the
permission of TM. All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and
its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination,
the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or
otherwise.
Section 10.3. Written Consent. Any action required or permitted to be taken by a vote of Partners at a
meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements; Schedules. The General Partner may, or may cause the Partnership to, enter or has previously
entered, into separate letter agreements with individual Partners, officers or employees with respect to GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any
other matter, which letter agreements have the effect of establishing rights under, or altering or supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or
any terms of this Agreement altered or supplemented, in any such separate letter agreement, including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement.
The General Partner may from time to time execute and deliver to the Partners schedules which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit
Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever;
provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD Agreement.
Section 10.5. Governing Law; Separability of Provisions. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided
therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be
affected thereby.
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Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement
shall be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or
becomes a party hereto; provided, that no person claiming by, through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect
to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner
shall remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of
such Partner’s or Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in
Section 5.8(d)(ii)(A) and Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from
the transferee with respect to any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal
representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BREP X Agreements, (x) the limited partners in BREP X shall be third-party beneficiaries of the provisions of
Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.8(b), as
applicable, of the BREP X Partnership Agreement), and (y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount or
Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.8(b), as applicable, of the BREP X Partnership Agreement), shall be effective against such limited partners only with a Combined Limited Partner Consent
(as such term is defined in the BREP X Partnership Agreement) unless such amendment does not adversely affect such limited partners’ rights under paragraph 9.2.8 of the BREP X Partnership Agreement.
Section 10.7. Confidentiality. (a) By executing this Agreement, each Partner expressly agrees, at all times during the
term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the
Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally known to the public or the securities industry, except as
otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate Partner may disclose any such information it is required by law, rule,
regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative
or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of,
or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any
performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax
structure information.
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(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating,
cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not
limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such
communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the
disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to
the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.
Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no
circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone.
Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in
writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnership’s books and records or, if given to the
General Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch and (ii) if given by hand delivery, when delivered to the address of such
Partner, the General Partner or the Partnership specified as aforesaid.
Section 10.9. Counterparts. This Agreement may
be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument. For the avoidance of doubt, a Person’s execution and delivery of this Agreement by electronic
signature and electronic transmission (jointly, an “Electronic Signature”), including via DocuSign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such
Person and shall bind such Person to the terms of this Agreement. The parties hereto agree that this Agreement and any additional information incidental hereto may be maintained as electronic records. Any Person executing and delivering this
Agreement by an Electronic Signature further agrees to take any and all reasonable additional actions, if any, evidencing its intent to be bound by the terms of this Agreement, as may be reasonably requested by the General Partner.
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Section 10.10. Power of Attorney. Each Partner hereby irrevocably appoints the
General Partner as such Partner’s true and lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make,
execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State
of Delaware or any other state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney
is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of
such Partner.
Section 10.11. Partner’s Will. Each Partner and Withdrawn Partner shall include in his or her will a
provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing,
that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partner’s or Withdrawn Partner’s Interest is transferred shall include a
provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or Withdrawn
Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice,
the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other
rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided
herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision
of this Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related
Recontribution Amount or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such
dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date
shall accrue interest at the Default Interest Rate.
81
Section 10.14. Entire Agreement; Modifications. This Agreement embodies
the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any
time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
* * *
82
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year
first above written. In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
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| GENERAL PARTNER: |
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| BREA X L.L.C. |
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| By: Blackstone Holdings II L.P., its Managing Member |
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| By: Blackstone Holdings I/II GP L.L.C., its General Partner |
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| By: |
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/s/ John G. Finley |
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Name: John G. Finley |
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Title: Chief Legal Officer and Secretary |
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| LIMITED PARTNERS AND SPECIAL PARTNERS: |
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| Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to BREA X L.L.C. |
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| BREA X L.L.C. |
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| By: Blackstone Holdings II L.P., its Managing Member |
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| By: Blackstone Holdings I/II GP L.L.C., its General Partner |
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| By: |
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/s/ John G. Finley |
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Name: John G. Finley |
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Title: Chief Legal Officer and Secretary |
[BREA X (Delaware) L.P. – A&R LPA – Signature Page]
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| INITIAL LIMITED PARTNER: |
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| /s/ Madeleine Russo |
| Madeleine Russo, as Initial Limited Partner, to reflect her withdrawal from the Partnership |
[BREA X (Delaware) L.P. – A&R LPA – Signature Page]
Exhibit 10.6
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BTOA IV L.P.
AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT
DATED AS OF NOVEMBER 3, 2023
EFFECTIVE AS OF AUGUST 2, 2021
THE LIMITED
PARTNERSHIP INTERESTS (THE “INTERESTS”) OF BTOA IV L.P. (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF
ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE
REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
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Page |
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| ARTICLE I DEFINITIONS |
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1 |
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| Section 1.1. |
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Definitions |
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1 |
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| Section 1.2. |
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Terms Generally |
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17 |
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| ARTICLE II GENERAL PROVISIONS |
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17 |
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| Section 2.1. |
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General Partner, Limited Partner, Special Partner |
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17 |
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| Section 2.2. |
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Formation; Name; Foreign Jurisdictions |
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18 |
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| Section 2.3. |
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Term |
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18 |
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| Section 2.4. |
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Purposes; Powers |
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18 |
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| Section 2.5. |
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Place of Business |
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21 |
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| Section 2.6. |
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Withdrawal of Initial Limited Partner |
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21 |
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| ARTICLE III MANAGEMENT |
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21 |
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| Section 3.1. |
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General Partner |
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21 |
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| Section 3.2. |
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Partner Voting, etc. |
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22 |
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| Section 3.3. |
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Management |
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22 |
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| Section 3.4. |
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Responsibilities of Partners |
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24 |
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| Section 3.5. |
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Exculpation and Indemnification |
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25 |
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| Section 3.6. |
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Representations of Partners |
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27 |
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| Section 3.7. |
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Tax Representation and Further Assurances |
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27 |
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| ARTICLE IV CAPITAL OF THE PARTNERSHIP |
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29 |
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| Section 4.1. |
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Capital Contributions by Partners |
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29 |
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| Section 4.2. |
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Interest |
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36 |
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| Section 4.3. |
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Withdrawals of Capital |
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36 |
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| ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
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36 |
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| Section 5.1. |
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General Accounting Matters |
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36 |
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| Section 5.2. |
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GP-Related Capital Accounts |
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38 |
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| Section 5.3. |
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GP-Related Profit Sharing Percentages |
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39 |
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| Section 5.4. |
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Allocations of GP-Related Net Income (Loss) |
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40 |
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| Section 5.5. |
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Liability of Partners |
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41 |
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| Section 5.6. |
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[Intentionally omitted.] |
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41 |
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| Section 5.7. |
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Repurchase Rights, etc. |
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41 |
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| Section 5.8. |
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Distributions |
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41 |
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| Section 5.9. |
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Business Expenses |
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48 |
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| Section 5.10. |
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Tax Capital Accounts; Tax Allocations |
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48 |
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| ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION |
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49 |
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| Section 6.1. |
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Additional Partners |
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49 |
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| Section 6.2. |
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Withdrawal of Partners |
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50 |
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TABLE OF CONTENTS
(continued)
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Page |
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| Section 6.3. |
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GP-Related Partner Interests Not Transferable |
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51 |
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| Section 6.4. |
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Consequences upon Withdrawal of a Partner |
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52 |
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| Section 6.5. |
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Satisfaction and Discharge of a Withdrawn Partner’s GP-Related Partner Interests |
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53 |
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| Section 6.6. |
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Dissolution of the Partnership |
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58 |
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| Section 6.7. |
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Certain Tax Matters |
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58 |
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| Section 6.8. |
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Special Basis Adjustments |
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60 |
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| ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS;
DISTRIBUTIONS |
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60 |
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| Section 7.1. |
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Capital Commitment Interests, etc. |
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60 |
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| Section 7.2. |
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Capital Commitment Capital Accounts |
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61 |
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| Section 7.3. |
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Allocations |
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62 |
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| Section 7.4. |
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Distributions |
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62 |
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| Section 7.5. |
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Valuations |
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67 |
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| Section 7.6. |
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Disposition Election |
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67 |
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| Section 7.7. |
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Capital Commitment Special Distribution Election |
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67 |
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| ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
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68 |
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| Section 8.1. |
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Partner Withdrawal; Repurchase of Capital Commitment Interests |
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68 |
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| Section 8.2. |
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Transfer of Partner’s Capital Commitment Interest |
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73 |
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| Section 8.3. |
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Compliance with Law |
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74 |
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| ARTICLE IX DISSOLUTION |
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74 |
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| Section 9.1. |
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Dissolution |
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74 |
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| Section 9.2. |
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Final Distribution |
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74 |
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| Section 9.3. |
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Amounts Reserved Related to Capital Commitment Partner Interests |
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75 |
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| ARTICLE X MISCELLANEOUS |
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75 |
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| Section 10.1. |
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Submission to Jurisdiction; Waiver of Jury Trial |
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75 |
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| Section 10.2. |
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Ownership and Use of the Blackstone Name |
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76 |
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| Section 10.3. |
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Written Consent |
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77 |
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| Section 10.4. |
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Letter Agreements; Schedules |
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77 |
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| Section 10.5. |
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Governing Law; Separability of Provisions |
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77 |
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| Section 10.6. |
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Successors and Assigns; Third Party Beneficiaries |
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77 |
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| Section 10.7. |
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Confidentiality |
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78 |
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| Section 10.8. |
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Notices |
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79 |
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| Section 10.9. |
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Counterparts |
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79 |
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| Section 10.10. |
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Power of Attorney |
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79 |
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| Section 10.11. |
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Partner’s Will |
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80 |
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| Section 10.12. |
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Cumulative Remedies |
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80 |
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| Section 10.13. |
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Legal Fees |
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80 |
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| Section 10.14. |
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Entire Agreement |
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80 |
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-ii-
BTOA IV L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of BTOA IV L.P., a Delaware limited partnership (the “Partnership”), dated
as of November 3, 2023, and effective as of August 2, 2021, by and among BTO DE GP – NQ L.L.C., a Delaware limited liability company, as general partner of the Partnership (in its capacity as general partner of the Partnership (the
“General Partner”), Christopher J. James, as initial limited partner (the “Initial Limited Partner”), the limited partners listed as Limited Partners in the books and records of the Partnership), and such other
persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS, the Partnership was formed pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C.
§ 17-101, et seq., as it may be amended from time to time (the “Partnership Act”), pursuant to a certificate of limited partnership filed in the office of the Secretary of State of
the State of Delaware (as amended, the “Certificate of Limited Partnership”) on October 29, 2020;
WHEREAS, BTO GP
L.L.C. (the “Original General Partner”) and the Initial Limited Partner entered into a Limited Partnership Agreement dated as of October 29, 2020 (the “Original Agreement”); and
WHEREAS, on November 2, 2021, the Original General Partner assigned and transferred its interest as general partner in the Partnership to
the General Partner pursuant to the Assignment Agreement, dated as of November 2, 2021 (the “Assignment”); and
WHEREAS, the parties hereto desire to enter into this Amended and Restated Limited Partnership Agreement, and hereby amend and restate the
Original Agreement in its entirety and reflect the withdrawal of the Initial Limited Partner, in each case effective on October 30, 2020.
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties
hereto agree to continue the existence of the Company in the form of the Partnership, and as follows:
ARTICLE I
DEFINITIONS
Section 1.1.
Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:
“Adjustment Amount” has the meaning set forth in Section 8.1(b)(ii).
“Advancing Party” has the meaning set forth in Section 7.1(c).
“Affiliate” when used with reference to another person means any
person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires,
endowment funds, estate planning vehicles (including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts
associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees and/or related persons.
“Agreement” means this Amended and Restated Limited Partnership Agreement, as it may be further amended,
supplemented, restated or otherwise modified from time to time.
“Alternative Vehicle” means any
investment vehicle or structure formed pursuant to Section 2.9 of the BTO IV Partnership Agreement or any other “Alternative Vehicle” (as defined in any other BTO IV Agreements).
“Applicable Collateral Percentage” with respect to any Firm Collateral or Special Firm Collateral, has the
meaning set forth in the books and records of the Partnership with respect thereto.
“Associates IV” means
Blackstone Tactical Opportunities Associates IV L.P., a Delaware limited partnership and the general partner of BTO IV, or any other entity that serves as the general partner or managing member of a vehicle indicated in the definition of BTO IV.
“Associates IV LP Agreement” means the limited partnership agreement, dated as of the date set forth
therein, of Associates IV, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Bankruptcy” means, with respect to any person, the occurrence of any of the following events: (i) the
filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or
her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or
defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment
or decree unstayed and in effect for a period of 60 consecutive days.
2
“BE Agreement” means the limited partnership agreement, limited
liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of “Blackstone Entity,” as such limited partnership agreement, limited liability
company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended,
supplemented, restated or otherwise modified from time to time.
“BE Investment” means any direct or
indirect investment by any Blackstone Entity.
“Blackstone” means, collectively, Blackstone Inc., a
Delaware corporation, and any successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise
an Affiliate of Blackstone Inc.)).
“Blackstone Commitment” has the meaning set forth in the BTO IV
Partnership Agreement.
“Blackstone Entity” means any partnership, limited liability company or other
entity (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of Blackstone Inc., as designated by the General Partner in its sole discretion.
“Blackstone Holdings IV L.P.” means Blackstone Holdings IV L.P., a Delaware limited partnership.
“BTO” means (i) the investment funds, vehicles and/or managed accounts managed on a day-to-day basis primarily by personnel in the Blackstone Tactical Opportunities Program (including, without limitation, Blackstone Tactical Opportunities Fund L.P., a
Delaware limited partnership, and its successors), (ii) any alternative investment vehicles relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, (iii) any parallel fund, managed
account or other capital vehicle relating to, or formed in connection with, any of the partnerships referred to in clause (i) of this definition, and (iv) any other limited partnership, limited liability company or other entity (in each
case, whether now or hereafter established) of which Associates IV or the Partnership serves, directly or indirectly, as the general partner, manager, managing member or in a similar capacity.
“BTO IV” means (i) Blackstone Tactical Opportunities Fund IV L.P., a Delaware limited partnership,
(ii) any Alternative Vehicle relating thereto and any Parallel Fund relating thereto, (iii) any managed account or other capital vehicle relating to, or formed in connection with, Blackstone Tactical Opportunities Fund IV L.P. and
(iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which Associates IV or the Partnership serves, directly or indirectly, as the general partner, manager,
managing member or in a similar capacity.
3
“BTO IV Agreements” means the collective reference to the BTO IV
Partnership Agreement and any governing agreement of any of the partnerships or other entities referred to in clauses (ii), (iii) or (iv) of the definition of “BTO IV.”
“BTO IV Partnership Agreement” means the partnership agreements of the limited partners named in clause
(i) of the definition of “BTO IV,” as they may be amended, supplemented, restated or otherwise modified from time to time.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are authorized or
required by law to be closed in New York, New York.
“Capital Commitment Associates IV Partner Interest”
means the interest of the Partnership, if any, as a limited partner of Associates IV with respect to any Capital Commitment BTO IV Interest that may be held by Associates IV.
“Capital Commitment BTO IV Commitment” means the Capital Commitment (as defined in the BTO IV Partnership
Agreement), if any, of the Partnership or Associates IV to BTO IV that relates solely to the Capital Commitment BTO IV Interest, if any.
“Capital Commitment BTO IV Interest” means the Interest (as defined in the BTO IV Partnership
Agreement), if any, of the Partnership or Associates IV as a capital partner in BTO IV.
“Capital Commitment BTO IV
Investment” means the Partnership’s interest in a specific investment of BTO IV, which interest may be held by the Partnership (i) through the Partnership’s direct interest in BTO IV through the Partnership’s Capital
Commitment BTO IV Interest, if the Partnership holds the Capital Commitment BTO IV Interest, or (ii) through the Partnership’s interest in Associates IV and Associates IV’s interest in BTO IV through Associates IV’s Capital
Commitment BTO IV Interest, if Associates IV holds the Capital Commitment BTO IV Interest.
“Capital Commitment
Capital Account” means, with respect to each Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partner’s contributions to the Partnership with respect to such Capital
Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to
such Partner and any net losses allocated to such Partner with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital
Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such
Capital Commitment Investment pursuant to Section 7.3.
“Capital Commitment Class A
Interest” has the meaning set forth in Section 7.4(f).
“Capital Commitment
Class B Interest” has the meaning set forth in Section 7.4(f).
4
“Capital Commitment Defaulting Party” has the meaning set forth
in Section 7.4(g)(ii)(A).
“Capital Commitment Deficiency Contribution” has the meaning set forth in
Section 7.4(g)(ii)(A).
“Capital Commitment Disposable Investment” has the meaning set forth in
Section 7.4(f).
“Capital Commitment Distributions” means, with respect to each Capital Commitment
Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BTO IV Interest, if any, less any costs, fees and expenses of the Partnership with
respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital Commitment
Investment as it may determine in good faith is appropriate.
“Capital Commitment Giveback Amount” has the
meaning set forth in Section 7.4(g)(i).
“Capital Commitment Interest” means the interest of a
Partner in a specific Capital Commitment Investment as provided herein.
“Capital Commitment Investment”
means any Capital Commitment BTO IV Investment, but shall exclude any GP-Related Investment.
“Capital Commitment Liquidating Share” means, with respect to each Capital Commitment Investment, in the case
of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
“Capital Commitment Net Income (Loss)” means, with respect to each Capital Commitment Investment, all amounts
of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and
expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
“Capital Commitment Partner Carried Interest” means, with respect to any Partner, the aggregate amount of
distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to “carried interest.” “Capital Commitment Partner Carried Interest” includes any amount
initially received by an Affiliate of the Partnership from any fund (including BTO IV, any similar funds formed after the date hereof, and any other private equity merchant banking, real estate or mezzanine funds, whether or not in existence as of
the date hereof) to which such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliate’s pro rata share of distributions from such fund based upon capital contributions thereto (or the
capital contributions to make the investment of such fund giving rise to such “carried interest”).
5
“Capital Commitment Partner Interest” means a Partner’s
interest in the Partnership which relates (i) to any Capital Commitment BTO IV Interest held by the Partnership or (ii) through the Partnership and Associates IV, to any Capital Commitment BTO IV Interest that may be held by Associates IV.
“Capital Commitment Profit Sharing Percentage” means, with respect to each Capital Commitment Investment,
the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
“Capital Commitment Recontribution Amount” has the meaning set forth in Section 7.4(g)(i).
“Capital Commitment-Related Capital Contributions” has the meaning set forth in Section 7.1(b).
“Capital Commitment-Related Commitment” means, with respect to any Partner, such Partner’s commitment to
the Partnership relating to such Partner’s Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partner’s Commitment
Agreement or SMD Agreement, if any.
“Capital Commitment Special Distribution” has the meaning set forth
in Section 7.7(a).
“Capital Commitment Value” has the meaning set forth in Section 7.5.
“Carried Interest” means (i) “Carried Interest” as defined in the BTO IV Partnership Agreement, and
(ii) any other carried interest distribution to a Fund GP pursuant to any BTO IV Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be less any costs, fees and expenses
of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may allocate among all or any portion
of the GP-Related Investments as it determines in good faith is appropriate).
“Carried Interest Give Back Percentage” means, for any Partner or Withdrawn Partner, subject to
Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by
(B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of
determining any “Carried Interest Give Back Percentage” hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be
deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
6
“Carried Interest Sharing Percentage” means, with respect to
each GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the
Partnership.
“Cause” means the occurrence or existence of any of the following with respect to any
Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any
material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partner’s deliberate failure to perform his or her duties to the Partnership or any of its
Affiliates, or (z) such Partner’s committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided,
that in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a “Notice of Breach”) within 15 days after the General Partner becomes aware of such action and
such Partner fails to cure such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably
required for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates;
(iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false
statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities
laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without
limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partner’s ability to function as a Partner of the Partnership, taking into account the services required of such Partner
and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities
Act.
“Certificate of Limited Partnership” has the meaning set forth in the preamble hereto.
“Clawback Adjustment Amount” has the meaning set forth in Section 5.8(e)(ii)(C).
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“Clawback Amount” means the “Clawback Amount” and (to
the extent applicable to any limited partnership, limited liability company or other entity named or referred to in the definition of “BTO IV”) the “Interim Clawback Amount,” each as defined in the BTO IV Partnership
Agreement, and any other clawback amount payable to the limited partners of BTO IV or to BTO IV pursuant to any BTO IV Agreement, as applicable.
“Clawback Provisions” means Section 3.5 and Section 9.4 of the BTO IV Partnership Agreement and any
other similar provisions in any other BTO IV Agreement existing heretofore or hereafter entered into.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any
reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
“Commitment Agreements” means the agreements between the Partnership or an Affiliate thereof and Partners,
pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the
Partnership and the relevant Partner.
“Contingent” means subject to repurchase rights and/or other
requirements.
The term “control” when used with reference to any person means the power to direct the
management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one
or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
“Controlled Entity” when used with reference to another person means any person controlled by such other
person.
“Covered Person” has the meaning set forth in Section 3.5(a).
“Deceased Partner” means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For
purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partner’s
interest in the Partnership.
“Default Interest Rate” means the lower of (i) the sum of (a) the
Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
“Delaware
Arbitration Act” has the meaning set forth in Section 9.1(d).
“Electronic Signature”
has the meaning set forth in Section 10.9.
“Estate Planning Vehicle” has the meaning set forth in
Section 6.3(a).
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“Excess Holdback” has the meaning set forth in
Section 4.1(d)(v)(A).
“Excess Holdback Percentage” has the meaning set forth in
Section 4.1(d)(v)(A).
“Excess Tax-Related Amount” has the
meaning set forth in Section 5.8(e).
“Existing Partner” means any Partner who is neither a Retaining
Withdrawn Partner nor a Deceased Partner.
“Final Event” means the death, Total Disability, Incompetence,
Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
“Firm
Advances” has the meaning set forth in Section 7.1(c).
“Firm Collateral” means a
Partner’s or Withdrawn Partner’s interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been
pledged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnership’s books and records; provided, that for all purposes hereof
(and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term “Firm Collateral” by reference), references to “Firm Collateral” shall include “Special Firm Collateral”, excluding
references to “Firm Collateral” in Section 4.1(d)(v) and Section 4.1(d)(viii).
“Firm
Collateral Realization” has the meaning set forth in Section 4.1(d)(v)(B).
“Fiscal Year”
means a calendar year, or any other period chosen by the General Partner.
“Fund GP” means the Partnership
(only with respect to the GP-Related BTO IV Interest) and the Other Fund GPs.
“GAAP” means U.S. generally accepted accounting principles.
“General Partner” means BTO DE GP – NQ L.L.C. and any person admitted to the Partnership as an additional
or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act).
“Giveback Amount(s)” means the amount(s) payable by partners of BTO IV pursuant to the Giveback Provisions.
“Giveback Provisions” means Section 5.2 of the BTO IV Partnership Agreement and any other similar
provisions in any other BTO IV Agreement existing heretofore or hereafter entered into.
“Governmental
Entity” has the meaning set forth in Section 10.7(b).
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“GP-Related Associates IV
Interest” means the interest of the Partnership as a limited partner of Associates IV with respect to the GP-Related BTO IV Interest, but does not include any interest of the Partnership in Associates
IV with respect to any Capital Commitment BTO IV Interest that may be held by Associates IV.
“GP-Related BTO IV Interest” means the interest of Associates IV in BTO IV as general partner of BTO IV, excluding any Capital Commitment BTO IV Interest that may be held by Associates IV.
“GP-Related BTO IV Investment” means the Partnership’s indirect
interest in Associates IV’s indirect interest in an Investment (for purposes of this definition, as defined in the BTO IV Partnership Agreement) in Associates IV’s capacity as general partner of BTO IV, but does not include any Capital
Commitment Investment.
“GP-Related Capital Account” has the
meaning set forth in Section 5.2(a).
“GP-Related Capital
Contributions” has the meaning set forth in Section 4.1(a).
“GP-Related Class A Interest” has the meaning set
forth in Section 5.8(a)(ii).
“GP-Related Class B
Interest” has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Commitment”, with respect to any Partner, means such
Partner’s commitment to the Partnership relating to such Partner’s GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such
commitment that may be set forth in such Partner’s Commitment Agreement or SMD Agreement, if any.
“GP-Related Defaulting Party” has the meaning set forth in Section 5.8(d)(ii)(A).
“GP-Related Deficiency Contribution” has the meaning set forth in
Section 5.8(d)(ii)(A).
“GP-Related Disposable Investment”
has the meaning set forth in Section 5.8(a)(ii).
“GP-Related Giveback
Amount” has the meaning set forth in Section 5.8(d)(i)(A).
“GP-Related Investment” means any investment (direct or indirect) of
the Partnership in respect of the GP-Related BTO IV Interest (including, without limitation, any GP-Related BTO IV Investment, but excluding any Capital Commitment
Investment).
“GP-Related Net Income (Loss)” has the meaning set
forth in Section 5.1(b).
“GP-Related Partner Interest” of a
Partner means all interests of such Partner in the Partnership (other than such Partner’s Capital Commitment Partner Interest), including, without limitation, such Partner’s interest in the Partnership with respect to the GP-Related BTO IV Interest and with respect to all GP-Related Investments.
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“GP-Related Profit Sharing
Percentage” means the “Carried Interest Sharing Percentage” and “Non-Carried Interest Sharing Percentage” of each Partner; provided, that any references in this Agreement to
GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the “Non-Carried Interest Sharing Percentage” of each Partner; provided further, that the
term “GP-Related Profit Sharing Percentage” shall not include any Capital Commitment Profit Sharing Percentage.
“GP-Related Recontribution Amount” has the meaning set forth in
Section 5.8(d)(i)(A).
“GP-Related Required Amounts” has the
meaning set forth in Section 4.1(a).
“GP-Related Unallocated
Percentage” has the meaning set forth in Section 5.3(b).
“GP-Related Unrealized Net Income (Loss)” attributable to any GP-Related BTO IV Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BTO IV Investment if BTO IV’s entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with
Section 5.1(e)) and all distributions payable by BTO IV to the Partnership (indirectly through the general partner of BTO IV) pursuant to any BTO IV Partnership Agreement with respect to such GP-Related
BTO IV Investment were made on such date. “GP-Related Unrealized Net Income (Loss)” attributable to any other GP-Related Investment (other than any Capital
Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such
GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(e)).
“Holdback” has the meaning set forth in Section 4.1(d)(i).
“Holdback Percentage” has the meaning set forth in Section 4.1(d)(i).
“Holdback Vote” has the meaning set forth in Section 4.1(d)(iv)(A).
“Incompetence” means, with respect to any Partner, the determination by the General Partner in its sole
discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
“Initial Holdback Percentages” has the meaning set forth in Section 4.1(d)(i).
“Initial Limited Partner” has the meaning set forth in the preamble hereto.
“Interest” means a partnership interest (as defined in
§17-101(13) of the Partnership Act) in the Partnership, including any interest that is held by a Retaining Withdrawn Partner and including any Partner’s
GP-Related Partner Interest and Capital Commitment Partner Interest.
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“Investment” means any investment (direct or indirect) of the
Partnership designated by the General Partner from time to time as an investment in which the Partners’ respective interests shall be established and accounted for on a basis separate from the Partnership’s other businesses, activities and
investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
“Investor Note” means a promissory note of a Partner evidencing indebtedness incurred by such Partner to
purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such
Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net
Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources; provided further, that
references to “Investor Notes” herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an “Investor Note” refer to one such
loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not
the lender or guarantor with respect thereto.
“Investor Special Partner” means any Special Partner so
designated at the time of its admission by the General Partner as a Partner of the Partnership.
“Issuer”
means the issuer of any Security comprising part of an Investment.
“L/C” has the meaning set forth in
Section 4.1(d)(vi).
“L/C Partner” has the meaning set forth in Section 4.1(d)(vi).
“Lender or Guarantor” means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the
Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
“Limited Partner” means each of the parties listed as Limited Partners in the books and records of the
Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of
doubt, the term “Limited Partner” does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited partners of the Partnership).
“Loss Amount” has the meaning set forth in Section 5.8(e)(i)(A).
“Loss Investment” has the meaning set forth in Section 5.8(e).
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“Losses” has the meaning set forth in Section 3.5(b)(i).
“Majority in Interest of the Partners” on any date (a “vote date”) means one or more
persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or
prior to the vote date selected by the General Partner as of which the Partners’ capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account
balances of all the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“Net Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(C).
“Net Carried Interest Distribution Recontribution Amount” has the meaning set forth in Section 5.8(e).
“Net GP-Related Recontribution Amount” has the meaning set forth
in Section 5.8(d)(i)(A).
“Non-Carried Interest” means, with
respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with
respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
“Non-Carried Interest Sharing Percentage” means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the
books and records of the Partnership.
“Non-Contingent” means
generally not subject to repurchase rights or other requirements.
“Nonvoting Partner” has
the meaning set forth in Section 8.2.
“Nonvoting Special Partner” has the meaning set forth in
Section 6.1(a).
“Original Agreement” has the meaning set forth in the recitals.
“Original General Partner” has the meaning set forth in the recitals.
“Other Fund GPs” means Associates IV and any other entity (other than the Partnership) through which any
Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which
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indicates that it is a “Fund GP” or an “Other Fund GP”; provided further, that notwithstanding any of the foregoing, neither BTO DE GP – NQ L.L.C. nor
Blackstone Holdings IV L.P. nor any Estate Planning Vehicle established for the benefit of family members of any Partner or of any member or partner of any Other Fund GP shall be considered an “Other Fund GP” for purposes hereof.
“Other Sources” means (i) distributions or payments of Capital Commitment Partner Carried Interest (which
shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any “holdback” obligation with respect thereto),
and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
“Parallel
Fund” means any additional collective investment vehicle (or other similar arrangement) formed pursuant to Section 2.10 of the BTO IV Partnership Agreement.
“Partner” means any person who is a partner of the Partnership, including the Limited Partners, the General
Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter
relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
“Partner Category” means the General Partner, Existing Partners, Retaining Withdrawn Partners or Deceased
Partners, each referred to as a group for purposes hereof.
“Partnership” has the meaning set forth in the
preamble hereto.
“Partnership Act” has the meaning set forth in the preamble hereto.
“Partnership Affiliate” has the meaning set forth in Section 3.3(b).
“Partnership Affiliate Governing Agreement” has the meaning set forth in Section 3.3(b).
“Pledgable Blackstone Interests” has the meaning set forth in Section 4.1(d)(v)(A).
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank,
N.A. as its prime rate.
“Qualifying Fund” means any fund designated by the General Partner as a
“Qualifying Fund”.
“Repurchase Period” has the meaning set forth in Section 5.8(c).
“Required Rating” has the meaning set forth in Section 4.1(d)(vi).
“Retained Portion” has the meaning set forth in Section 7.6(a).
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“Retaining Withdrawn Partner” means a Withdrawn Partner who has
retained a GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
“Securities” means any debt or equity securities of an Issuer and its subsidiaries and other Controlled
Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market
investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, or any successor
statute.
“Settlement Date” has the meaning set forth in Section 6.5(a).
“SMD Agreements” means the agreements between the Partnership and/or one or more of its Affiliates and certain
of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner.
“Special Firm Collateral” means interests in a Qualifying Fund or other assets that have been pledged to
the Trustee(s) to satisfy all or any portion of a Partner’s or Withdrawn Partner’s Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnership’s books and records.
“Special Firm Collateral Realization” has the meaning set forth in Section 4.1(d)(viii)(B).
“Special Partner” means any person shown in the books and records of the Partnership as a Special Partner of
the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
“S&P”
means Standard & Poor’s Ratings Group, and any successor thereto.
“Subject Investment” has
the meaning set forth in Section 5.8(e)(i).
“Subject Partner” has the meaning set forth in
Section 4.1(d)(iv)(A).
“Successor in Interest” means any (i) shareholder of; (ii) trustee,
custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or former
officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or assign of, any Partner,
whether by operation of law or otherwise.
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“Tac Opps Program” is the collective reference to (i) BTO
and BTO IV, (ii) any Alternative Vehicles, Parallel Funds or Comparable Funds (each as defined in the partnership agreements for the partnerships referred to in clause (i) above) or (iii) any other investment vehicle established
pursuant to Article II of the partnership agreements for the partnerships referred to in clause (i) above.
“Tax Advances” has the meaning set forth in Section 6.7(d).
“Tax Matters Partner” has the meaning set forth in Section 6.7(b).
“TM” has the meaning set forth in Section 10.2.
“Total Disability” means the inability of a Limited Partner substantially to perform the services required of
such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of
sickness, accident or otherwise.
“Transfer” has the meaning set forth in Section 8.2.
“Trust Account” has the meaning set forth in the Trust Agreement.
“Trust Agreement” means the Trust Agreement, dated as of the date set forth therein, as amended, supplemented,
restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
“Trust Amount” has the meaning set forth in the Trust Agreement.
“Trust Income” has the meaning set forth in the Trust Agreement.
“Trustee(s)” has the meaning set forth in the Trust Agreement.
“Unadjusted Carried Interest Distribution” has the meaning set forth in Section 5.8(e)(i)(B).
“Unallocated Capital Commitment Interests” has the meaning set forth in Section 8.1(f).
“U.S.” means the United States of America.
“Withdraw” or “Withdrawal” means, with respect to a Partner, such Partner ceasing to be a
partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary), unless the context shall limit the type of withdrawal to
a specific reason, and “Withdrawn” with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
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“Withdrawal Date” means the date of the Withdrawal from the
Partnership of a Withdrawn Partner.
“Withdrawn Partner” means a Limited Partner whose GP-Related Partner Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless
the context requires otherwise, the estate or legal representatives of any such Partner.
“W-8BEN” has the meaning set forth in Section 3.7.
“W-8BEN-E” has the meaning set forth in Section 3.7.
“W-8IMY” has the meaning set forth in Section 3.7.
“W-9” has the meaning set forth in Section 3.7.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term “person” includes individuals, partnerships (including limited liability partnerships),
companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”.
ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special
Partners. The General Partner as of the date hereof is BTO DE GP – NQ L.L.C. and the Limited Partners as of the date hereof are those persons shown as Limited Partners in the books and records of the Partnership and the Special Partners as of
the date hereof are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the Partnership contain the GP-Related Profit Sharing
Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership
as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to
the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional GP-Related
Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General
17
Partner), as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the
admission of additional Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement. At the time of admission of each additional Partner, the General Partner shall
determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partner’s GP-Related
Commitment, Capital Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit
Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership is hereby continued as a limited partnership pursuant to the
Partnership Act and shall conduct its activities on and after the date hereof under the name of BTOA IV L.P. The Certificate of Limited Partnership of the Partnership may be amended and/or restated from time to time by the General Partner, as an
“authorized person” (within the meaning of the Partnership Act). The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the
Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3.
Term. The term of the Partnership shall continue until December 31, 2069, unless earlier dissolved and its affairs wound up in accordance with this Agreement and the Partnership Act.
Section 2.4. Purposes; Powers. (a) The purposes of the Partnership shall be, directly or indirectly through subsidiaries or
Affiliates:
(i) to serve as a limited partner or general partner of Associates IV and perform the functions of a limited
partner or general partner of Associates IV specified in the Associates IV LP Agreement and, if applicable, the BTO IV Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BTO IV Interest as, a capital partner (and, if applicable, a
limited partner or a general partner) of BTO IV and perform the functions of a capital partner (and, if applicable, a limited partner or a general partner) of BTO IV specified in the BTO IV Agreements;
(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and
acquire and invest in Securities or other property directly or indirectly through Associates IV and/or BTO IV (including any Alternative Vehicle or Parallel Fund);
(iv) to make the Blackstone Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through Associates IV or another entity;
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(v) to serve as a general partner or limited partner of BTO IV and/or other
vehicles and perform the functions of a general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement, charter or other governing
documentsas amended, supplemented, restated or otherwise modified from time to time, of any such partnership;
(vi) to
serve as a member, shareholder or other equity interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a general partner, limited partner, member, shareholder or other equity
interest owner specified in the respective limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company,
corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other
investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act, the Associates IV LP Agreement, the BTO IV Agreements, and any applicable partnership agreement, limited liability company agreement, charter
or other governing document referred to in clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its
purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a general partner or
limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the
acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnership’s business, and to take any action in connection therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common
and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and
Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or
other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
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(iii) to buy, sell and otherwise acquire investments, whether such investments
are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other short-term investments;
(v) to hold, receive, mortgage, pledge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant
options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership;
(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge,
conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell,
pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or
funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one
or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the
maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants,
both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or
cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and
be a member or manager or both of one or more limited liability companies;
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(xiii) to enter into, make and perform all contracts, agreements and other
undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
(xiv) to sue and be
sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection
therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners
cash or investments or other property of the Partnership, or any combination thereof; and
(xvi) to take such other actions
necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
Section 2.5. Place of Business. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services Delaware
Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time to time
and as set forth in the books and records of the Partnership. The name and address of the Partnership’s registered agent is Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center,
Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the Certificate of Limited Partnership of the Partnership.
Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the
Partnership, the Initial Limited Partner shall (a) Withdraw as the Initial Limited Partner of the Partnership and (b) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided,
that the effective date of such Withdrawal shall be deemed as between the parties hereto to be October 30, 2020.
ARTICLE III
MANAGEMENT
Section 3.1.
General Partner. (a) BTO DE GP – NQ L.L.C. is the General Partner as of the date hereof. The General Partner shall cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it
consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or
more other General Partners is admitted to the Partnership as such, all references herein to the “General Partner” in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights
and responsibilities of the General Partners will be as agreed upon from time to time between them.
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(b) Upon the Withdrawal from the Partnership or voluntary resignation of the last remaining
General Partner, all of the powers formerly vested therein pursuant to this Agreement and the Partnership Act shall be exercised by a Majority in Interest of the Partners.
Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be expressly required
by the Partnership Act, Partners (including Special Partners), other than the General Partner, as such shall have no right to, and shall not, take part in the management or control of the Partnership’s business or act for or bind the
Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a Partner is
entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner
(or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided
by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent
or approval thereto.
Section 3.3. Management. (a) The management, control and operation of the Partnership and the
formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership, including those
enumerated in Section 2.5, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its sole discretion, subject
only to the express terms and conditions of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary, the
Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in the
Partnership’s capacity as a partner of Associates IV on Associates IV’s own behalf or in Associates IV’s capacity as general partner, capital partner and/or limited partner of BTO IV, or as a general partner or limited partner,
member, shareholder or other equity interest owner of any Partnership Affiliate (as hereinafter defined) or, if applicable, in the Partnership’s capacity as a capital partner of BTO IV or as general or limited partner, member, shareholder or
other equity interest owner of any Partnership Affiliate): (i) to execute and deliver, and to perform the Partnership’s obligations under the Associates IV LP Agreement, including, without limitation, serving as a limited partner or general
partner of Associates IV, (ii) to execute and deliver, and to cause Associates IV to perform Associates IV’s obligations under, the BTO IV Agreements, including, without limitation, serving as a general partner of BTO IV and, if
applicable, a capital partner of BTO IV, (iii) if applicable, to execute and deliver, and to perform the Partnership’s obligations under, the BTO IV Agreements, including, without limitation, serving as a capital partner of BTO IV,
(iv) to execute and deliver, and to perform, or, if applicable,
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to cause Associates IV to perform, the Partnership’s or Associates IV’s obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a
“Partnership Affiliate Governing Agreement”), of any other partnership, limited liability company, other company, corporation or other entity (each a “Partnership Affiliate”) of which the Partnership or Associates
IV is, or is to become, a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner, limited partner, member, shareholder or other equity interest owner of
each Partnership Affiliate, and (v) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the Associates IV LP Agreement, the BTO IV Agreements or each Partnership Affiliate Governing Agreement (and
any amendment, supplement, restatement and/or other modification of any of the foregoing).
(c) The General Partner, and any other person
designated by the General Partner, each acting individually, is hereby authorized and empowered, as an authorized person of the Partnership within the meaning of the Partnership Act, or otherwise, or as an authorized representative of the General
Partner (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver
and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a limited or general partner of Associates IV on Associates
IV’s own behalf, or in Associates IV’s capacity as general partner, capital partner and/or limited partner of BTO IV or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate
or, if applicable, in the Partnership’s capacity as a capital partner of BTO IV or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates IV, BTO IV or any Partnership
Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates IV LP Agreement, the BTO IV Agreements and each Partnership Affiliate Governing
Agreement (II) subscription agreements and documents on behalf of BTO IV or Associates IV, (III) side letters issued in connection with investments in BTO IV, and (IV) such other agreements, certificates, instruments and other
documents as may be necessary or desirable in furtherance of the purposes of the Partnership, Associates IV, BTO IV or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing
referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the
Partnership, Associates IV, BTO IV and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
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(C) any other certificates, notices, applications and other documents (and any
amendments, supplements, restatements and/or other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates IV,
BTO IV or any Partnership Affiliate to qualify to do business in a jurisdiction in which the Partnership, Associates IV, BTO IV or such Partnership Affiliate desires to do business;
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or
indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a limited partner or general partner of Associates IV on Associates IV’s own behalf or in Associates IV’s
capacity as general partner, capital partner and/or limited partner of BTO IV, or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate (as hereinafter defined) or, if applicable, in
the Partnership’s capacity as a capital partner of BTO IV or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications and other
documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, Associates IV, BTO IV and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications and other documents that may
be necessary or advisable in connection with any bank account of the Partnership, Associates IV, BTO IV or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, Associates IV, BTO IV or any
Partnership Affiliate, and all checks, notes, drafts and other documents of the Partnership, Associates IV, BTO IV or any Partnership Affiliate that may be required in connection with any such bank account, or banking facilities or services and
(C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to have been duly adopted by the General
Partner, the Partnership, Associates IV, BTO IV or any Partnership Affiliate, as applicable, for all purposes).
(d) The authority granted
to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
Section 3.4. Responsibilities of Partners. (a) Unless otherwise determined by the General Partner in a particular case, each
Limited Partner (other than a Special Partner) shall devote substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to
the businesses of the Partnership or its Affiliates.
(b) All outside business or investment activities of the Partners (including outside
directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the
General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
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Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent
permitted by law, no Partner nor any of such Partner’s representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a
“Covered Person” and collectively, the “Covered Persons”) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any
transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial
determination and/or determination of an arbitrator that such Covered Person did not act in good faith. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or
professional advisors, and no action taken by any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other
Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the
Partners, to the fullest extent permitted by law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in
good faith for the purposes of this Agreement and its duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the
extent of the Partnership’s assets (including, without limitation, the remaining capital commitments of the Partners) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without
limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of
any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), “Losses”), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Person’s management of the affairs of the Partnership or which relate to or arise out
of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person
constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and
non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith; provided further, that if such Covered Person is a Partner or a Withdrawn
Partner,
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such Covered Person shall bear its share of such Losses in accordance with such Covered Person’s GP-Related Profit Sharing Percentage in the
Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in
defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by
the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this
Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered Person’s interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts
otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the
amount of such Partner’s Interests and remaining capital commitment, for such Partner’s pro rata share of the Partnership’s expenses related to such indemnity obligation, as determined by the General Partner. The Partnership
may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification
pursuant to this Section 3.5(b). The General Partner shall have the authority to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the
Partnership’s obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BTO IV and/or a particular
portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of
proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BTO IV; second, by the applicable portfolio entity through which such investment is indirectly held; and third, by BTO IV and fourth
by Associates IV (only to the extent the foregoing sources are exhausted).
(B) The Partnership’s obligation, if any,
to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BTO IV and/or the applicable portfolio entity (including by virtue of any applicable
insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates IV, BTO IV and/or the applicable portfolio entity (including by
virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against Associates IV and/or BTO IV and/or such portfolio entity in respect of such advancement or
payments. The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of Blackstone Inc. or any of its Affiliates,
which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
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Section 3.6. Representations of Partners. (a) Each Limited Partner and Special
Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by
the General Partner, that such Partner is acquiring each of such Partner’s Interests for such Partner’s own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any
interest in any such Interest or in the rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance
with the terms hereof). Each Limited Partner and Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without
registration under the Securities Act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner
represents that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic
risk of such investment. Each Limited Partner and Special Partner represents that such Partner’s overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partner’s net
worth and the Partner has no need for liquidity in the Partner’s investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such
Partner has requested relating to the Partnership, any Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of
Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the
Partner with the Partner’s own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and warranties contained in paragraph (a) above shall be
true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that
such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
Section 3.7. Tax Representation and Further Assurances. (a) Each Limited Partner and Special Partner, upon the request
of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partner’s or the Partnership’s obligations under applicable law or
to carry out the provisions of this Agreement.
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(b) Each Limited Partner and Special Partner certifies that (A) if the Limited Partner or
Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partner’s name, social security number (or, if applicable, employer identification number) and address provided to the Partnership
and its Affiliates pursuant to an IRS Form W- 9, Request for Taxpayer Identification Number Certification (“W-9”) or otherwise are correct and
(ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited Partner or Special Partner is a United States person (as defined in the Code) and (ii) the
Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner or Special Partner is not a United States
person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
(“W-8BEN”), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and
Reporting (Entities) (“W-8BEN-E”), or other applicable form, including but not limited to IRS Form W-8IMY,
Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (“W-8IMY”), or otherwise is correct and (ii) the
Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN,
W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the
Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited
to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the General Partner may release confidential
information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partner’s investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion,
determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon
the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability
as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading,
or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnership’s obligations, the General Partner reserves the right to take any action and pursue any
remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partner’s action or inaction from amounts otherwise
distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
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ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Limited Partner shall be required to make capital contributions to
the Partnership (“GP-Related Capital Contributions”) at such times and in such amounts (the “GP-Related Required Amounts”) as are
required to satisfy the Partnership’s obligation to make capital contributions to Associates IV in respect of the GP-Related Associates IV Interest to fund Associates IV’s capital contributions with
respect to any GP-Related BTO IV Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partner’s Commitment Agreement or SMD Agreement,
if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among
the Limited Partners based upon each Limited Partner’s Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required
Amounts which are to be used for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d))) shall be
determined by the General Partner. Special Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess of the
GP-Related Required Amounts, except (i) as a condition of an increase in such Special Partner’s GP-Related Profit Sharing Percentage or (ii) as
specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital
Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BTO IV Interest.
(b) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional
Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any Affiliate thereof) the amount of any GP-Related Capital
Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc.
or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions
relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a “Holdback”). The General Partner shall
determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Blackstone Holdings IV L.P. and each Partner Category (such withheld percentage constituting the General
Partner’s and such Partner Category’s “Holdback
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Percentage”). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining
Withdrawn Partners (other than the General Partner) and 24% for Deceased Partners (the “Initial Holdback Percentages”). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner
and/or Blackstone Holdings IV L.P. shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her
Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is
decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating
to Carried Interest made after the date of such reduction.
(iii) The Holdback Percentage may not be increased for any
individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners’ Holdback Percentage beyond 21% unless the
General Partner concurrently increases the Existing Partners’ Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners’ Holdback Percentage beyond 24% unless the General Partner increases the Holdback
Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any
increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the
Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces
the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial
Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase
or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the “Subject Partner”) pursuant to a majority vote of the Limited Partners (a “Holdback Vote”); provided, that,
notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partner’s
Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partner’s Holdback Percentage and (y) has, if requested by such
Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase
in a Subject Partner’s Holdback Percentage
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pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partner’s Holdback Percentage is less
than the prevailing Holdback Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partner’s Holdback Percentage unless such voting Partner determines,
in such Partner’s good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partner’s successors or assigns (including such Subject Partner’s estate
or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related Recontribution Amounts that may become due.
(B) A Holdback Vote shall take
place at a Partnership meeting. Each of the Limited Partners shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Limited Partner’s interest in the Partnership. Such vote may be cast by any such Partner in
person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partner’s Holdback
Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree
upon a mutually satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates;
provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the
arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses
(i.e., both the Subject Partner’s and the Partnership’s expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs
leading thereto) and to return to the “victorious” party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such
arbitration, such “losing” party shall then provide any additional funds necessary to cover such costs to such “victorious” party. For purposes hereof, the “victorious” party shall be the Partnership if the Holdback
Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partner’s Partner Category; otherwise, the Subject Partner
shall be the “victorious” party. The party that is not the “victorious” party shall be the “losing” party.
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(D) In the event of a decrease in a Subject Partner’s Holdback Percentage
(1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and
the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partner’s reduced Holdback
Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partner’s Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partner’s Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the “Excess
Holdback Percentage”), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partner’s “Excess Holdback”), and such
Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partner’s or Withdrawn Partner’s Excess Holdback obligation, by pledging, granting a
security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner
seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a
first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnership’s books and records in which
Partners are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (“Pledgable Blackstone Interests”), to the extent a first priority
security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner
provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or (y) if the General Partner
otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause
(x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the Partnership’s books and records to remit any and all net proceeds resulting from a Firm Collateral
Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is
necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.
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(B) If upon a sale or other realization of all or any portion of any Firm
Collateral (a “Firm Collateral Realization”), the remaining Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement, then up to 100% of the net proceeds otherwise
distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to
fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary
to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any
valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement (including
upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partner’s or Withdrawn Partner’s Excess Holdback requirement), the Partnership shall provide notice of the
foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her
Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii)
shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term
“GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the
amount due pursuant to this clause (C).
(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any Trust
Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or
(B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an “L/C”) for the benefit of the
Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an “L/C Partner”) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial
bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moody’s (if the L/C is for a term of 1 year or less), or (y) long-term
deposits are rated at least A+ by S&P or A1 by Moody’s (if the L/C is for a term of 1 year or more) (each a “Required Rating”). If the relevant rating of the commercial bank issuing such L/C drops below the relevant
Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In
addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BTO IV, the
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Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating,
at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in the case of clause (I) below) draw
down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partner’s obligation relating to the Partnership’s obligations under the Clawback Provisions or (II) an L/C Partner has not provided a new L/C from a
commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least 30 days prior to the stated expiration of an existing L/C
in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the Partnership’s obligations, if any, in
respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder) or (3) the release, by the Trustee(s), as directed by the Partnership,
of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed
by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion
satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C
Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any
in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose
of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnership’s books and records; provided, that the initial contribution of such Special Firm Collateral
shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such
Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess
Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein,
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obtain a release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partner’s or
Withdrawn Partner’s Holdback (excluding any Excess Holdback) by pledging or otherwise granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at
all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partner’s Holdback utilizing Special Firm Collateral shall sign such
documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if
required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, liquidation or other realization of
all or any portion of any Special Firm Collateral (a “Special Firm Collateral Realization”), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is
being used in connection with an Excess Holdback) is insufficient to cover any Partner’s or Withdrawn Partner’s Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to
the Trust Account or an L/C in the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral
that consists of a Qualifying Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed
thereafter to be Trust Amounts for purposes hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or
Withdrawn Partner. To the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such
Partner’s or Withdrawn Partner’s deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any
valuation or revaluation of the Special Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnership’s books and records), if such Partner’s or Withdrawn
Partner’s Special Firm Collateral is valued at less than such Partner’s Holdback (excluding any Excess Holdback) as provided in the Partnership’s books and records, taking into account other permitted means of satisfying the Holdback
hereunder, the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm
Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto;
provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed
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inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term “GP-Related Defaulting Party” where such term appears in such Section 5.8(d)(ii) shall be construed as “defaulting party” for purposes hereof and (II) the terms “Net GP-Related Recontribution Amount” and “GP-Related Recontribution Amount” where such terms appear in such Section 5.8(d)(ii) shall be construed as the
amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the
General Partner may revoke the ability of such Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause
(C) above shall apply to the Withdrawn Partner’s obligation to satisfy the Holdback (except that 30 days’ notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion
of the Holdback (excluding any Excess Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner
or Withdrawn Partner from using any amount of such Partner’s interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners’ capital related to the Partners’ GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment
of the Partnership) shall be credited to the Partners’ GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General
Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partner’s
GP-Related Partner Interests from the Partnership except (i) by way of distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or
(iii) as determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be
determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b)
“GP-Related Net Income (Loss)” means:
(i) from any activity of
the Partnership related to the GP-Related BTO IV Interest for any accounting period (other than GP-Related Net Income (Loss) from
GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items
that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
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(ii) from any GP-Related Investment for
any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment
(determined as provided below); and
(iii) from any GP-Related Investment for the
accounting period in which such GP-Related Investment is sold or otherwise disposed of (x) the sum of the gross proceeds from the sale or other disposition of such
GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting
period less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall
be determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not
otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its
adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in
the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any
expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this
definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of “phantom interests” in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership, Blackstone Holdings IV L.P. and other Affiliates of the
Partnership shall be allocated among the Partnership, Blackstone Holdings IV L.P. and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each
case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains,
items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in
accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
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(d) An accounting period shall be a Fiscal Year, except that, at the option of the General
Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event
referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners’
GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments
to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners’ average GP-Related Profit Sharing Percentages during such accounting
period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from
GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
(e) In establishing
GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it
deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under
this Agreement shall be made by the General Partner and approved by the Partnership’s independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn
Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any
successor thereto.
Section 5.2. GP-Related Capital Accounts. (a) There shall be
established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partner’s
interests in the capital of the Partnership related to the GP-Related BTO IV Interest and the GP-Related Net Income (Loss) of the Partnership (each a “GP-Related Capital Account”).
(b) As of the end of each accounting period or, in the case of a
contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners’ GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners
with respect to such Partner or Partners’ GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related
Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to such Partner’s GP-Related Partner Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest
credited on the balance of such Partner’s capital related to such Partner’s GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in
Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partner’s GP-Related Partner Interest and
(y) the GP-Related Net Loss allocated to such Partner for such accounting period.
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Section 5.3. GP-Related Profit Sharing
Percentages. (a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing percentage (the “GP-Related Profit Sharing
Percentage”) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner
deems appropriate; provided, that (i) the General Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from
any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph
(c) below and (ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former
Partner’s GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of
any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the
GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partner’s GP-Related Profit Sharing
Percentage shall be pro rata based upon such Partner’s GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the
General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit
Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a “GP-Related Unallocated Percentage”); provided, that any
GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90
days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related
Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners’ respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and
shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
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Section 5.4. Allocations of GP-Related Net Income
(Loss). (a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment
(including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related
Capital Contributions) or Carried Interest distributed to the Partners; second, to Partners that received Non-Carried Interest (other than amounts representing a return of
GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest exceeded
GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts
representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BTO IV and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the Partnership
to BTO IV with respect to the GP-Related BTO IV Interest) shall be allocated to the Partners in accordance with each Partner’s Non-Carried Interest Sharing
Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BTO IV and (ii) GP-Related Net Loss relating to realized losses suffered
by BTO IV and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partner’s (including a Withdrawn Partner’s) Carried Interest Give Back Percentage (as of the date of such loss)
(subject to adjustment pursuant to Section 5.8(e)).
(c) Notwithstanding Section 5.4(a) above,
GP-Related Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be
allocated in accordance with such Carried Interest Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such
GP-Related Net Loss with respect to Carried Interest.
(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any accounting period unrelated to BTO IV, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the beginning of such accounting period.
(e) The
General Partner may authorize from time to time advances to Partners (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of Blackstone Inc. or any
Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f)
Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems
reasonably necessary for this purpose.
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Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership
Act or as expressly provided in this Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn
Partner (i) be obligated to make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically
provided in Section 4.1(d) or Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6. [Intentionally omitted.]
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other
requirements with respect to the Partners’ GP-Related Partner Interests relating to GP-Related BTO IV Investments as the General Partner may determine. The General
Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that is
Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from
time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
Section 5.8.
Distributions. (a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners’ GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and
distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and
Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by BTO IV of a portion of a GP-Related Investment is being considered by the Partnership (a “GP-Related Disposable Investment”), at the election of the General Partner each
Partner’s GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate
GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a
Partner’s “GP-Related Class B Interest”), and a GP-Related Partner Interest attributable to such
GP-Related Investment excluding the GP-Related Disposable Investment (a Partner’s “GP-Related
Class A Interest”). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BTO IV) relating to a GP-Related Disposable Investment (with
respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment
in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B Interests,
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and distributions (including those resulting from the sale, transfer, exchange or other disposition by BTO IV) relating to a GP-Related Investment
excluding such GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related Profit
Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of
GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnership’s having sufficient available cash in the reasonable judgment of the General Partner, the Partnership
shall make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such
Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an
individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other applicable income taxes (including, without limitation, taxes under Section 1401 and 1411 of the Code), (ii) taking into account
(x) the limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income) and
(iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing
sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
(c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee
(including such Partner’s or employee’s right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a
“Repurchase Period”). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof
(together with interest thereon at rates determined by the General Partner from time to time) as the recipient’s rights to such distributions become Non-Contingent (by virtue of the expiration of the
applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase
Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains
Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be
allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage interests in such GP-Related Investment,
or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partner’s share of
unrealized investment income from a repurchased GP-Related Investment attributable to the period
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after the Withdrawn Partner’s Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor Special Partner shall be allocated a share of such unrealized investment income equal to its respective
GP-Related Profit Sharing Percentage of such unrealized investment income.
(d) (i) (A) If
Associates IV is obligated under the Clawback Provisions or Giveback Provisions to contribute to BTO IV a Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such
amount to Associates IV, directly or indirectly, in respect of the Partnership’s GP-Related Associates IV Interest (the amount of any such obligation of the Partnership with respect to such a Giveback
Amount being herein called a “GP-Related Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the
General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect
to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the “GP-Related
Recontribution Amount”) which equals (I) the product of (a) a Partner’s or Withdrawn Partner’s Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of
Clawback Amounts and (II) with respect to a GP-Related Giveback Amount, such Partner’s pro rata share of prior distributions of Carried Interest and/or
Non-Carried Interest in connection with (a) the GP-Related BTO IV Investment giving rise to the GP-Related Giveback Amount,
(b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BTO IV Investments other
than the one giving rise to such obligation, but only those amounts received by the Partners with an interest in the GP-Related BTO IV Investment referred to in clause (II)(a) above, and (c) if the
GP-Related Giveback Amount pursuant to an applicable BTO IV Agreement is unrelated to a specific GP-Related BTO IV Investment, all GP-Related BTO IV Investments. Each
Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call such Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the Partnership, or if
applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the “Net GP-Related Recontribution Amount”), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnership’s and the Other Fund GPs’
obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partner’s or Withdrawn Partner’s share of the amount paid with respect to the Clawback Amount or the
GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as
reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partner’s and Withdrawn Partner’s
GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential
obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount from a Partner’s Trust Account
used to pay any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partner’s Trust Account no later than 30 days
after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount.
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(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback
obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partner’s call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in
an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such
Partner’s or Withdrawn Partner’s GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall
take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or
Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the
Partnership’s and the Other Fund GPs’ obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default
under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BTO IV Partnership
Agreement, each partner of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under
Section 5.8(d)(ii)(A) with respect to such partner’s pro rata share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnership’s obligations under the BTO IV Partnership
Agreement.
(ii) (A) In the event any Partner or Withdrawn Partner (a
“GP-Related Defaulting Party”) fails to recontribute all or any portion of such GP-Related Defaulting Party’s Net
GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried
Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully
described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Party’s obligation to pay such
GP-Related Defaulting Party’s Net GP-Related Recontribution Amount (a “GP-Related Deficiency Contribution”)
if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the
Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the
Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such
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GP-Related Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Net
GP-Related Recontribution Amount initially requested from such Partner or Withdrawn Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the
Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or
(2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately
reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Party’s Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to
Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a
GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General
Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the
intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related
Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partner’s or Withdrawn Partner’s failure to make a GP-Related
Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust
Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution before seeking cash
contributions from such Partner or Withdrawn Partner in satisfaction of such Partner’s or Withdrawn Partner’s obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or
Withdrawn Partner’s pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partner’s or Withdrawn Partner’s obligation to make contributions to the Partnership under this
Section 5.8(d) shall survive the termination of the Partnership.
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(e) The Partners acknowledge that the General Partner will (and is hereby authorized to) take
such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns (as defined in the BTO IV
Agreements) and Losses (as defined in the BTO IV Agreements) on GP-Related BTO IV Investments that have been the subject of a writedown and/or Net Realized Loss (each, a “Loss Investment”) to
those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried Interest distributions from other
GP-Related BTO IV Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a
GP-Related BTO IV Investment (the “Subject Investment”) that have been reduced under any BTO IV Agreement as a result of one or more Loss Investments, the General Partner shall calculate
amounts distributable to or due from each such Partner as follows:
(A) determine each Partner’s share of each such
Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all
Partners (indirectly through the Partnership from BTO IV) from the Subject Investment (such reduction, the “Loss Amount”);
(B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject
Investment (indirectly through the Partnership from BTO IV) before any reduction in respect of the amount determined in clause (A) above (the “Unadjusted Carried Interest Distributions”); and
(C) subtract (I) the Loss Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest
Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (“Net Carried Interest Distribution”).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General
Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a
“Net Carried Interest Distribution Recontribution Amount”), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to clause (I) are insufficient to
satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a Partner’s (x) Net
Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Income Tax Rate (as defined in the BTO IV
46
Agreements) in effect in the Fiscal Years of such distributions (the “Excess Tax-Related Amount”), then such Partner may, in lieu of
paying such Partner’s Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by
the amount of Carried Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such
time as the Clawback Amount is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the
extent there is an amount of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net
Carried Interest Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as
provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
A Partner
may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to
the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as
provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so
distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to
date).
(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided
herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partner’s share of any Net Realized Losses in any GP-Related
BTO IV Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BTO IV Investment with respect to which Carried Interest distributions were made), based on
such Partner’s Carried Interest Sharing Percentage in such GP-Related BTO IV Investments;
(B) determine each Partner’s obligation with respect to the Clawback Amount based on such Partner’s Carried Interest
Give Back Percentage as otherwise provided herein; and
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(C) subtract the amount determined in clause (B) above from the amount
determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partner’s share of the Clawback Amount (a Partner’s “Clawback Adjustment Amount”).
A Partner’s share of the Clawback Amount shall for all purposes hereof be decreased by such Partner’s Clawback Adjustment Amount, to
the extent it is a negative number (except to the extent expressly provided below). A Partner’s share of the Clawback Amount shall for all purposes hereof be increased by such Partner’s Clawback Adjustment Amount (to the extent it is a
positive number); provided, that in no way shall a Partner’s aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the
extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount
was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith
judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of
each Partner regarding the Clawback Amount as provided in the BTO IV Agreements.
Section 5.9. Business Expenses. The
Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnership’s business in accordance with rules and regulations established by the General Partner
from time to time.
Section 5.10. Tax Capital Accounts; Tax Allocations. (a) For U.S. federal income tax purposes, there
shall be established for each Partner a single capital account combining such Partner’s Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such
single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder. In furtherance of the foregoing and in accordance with Treasury Regulations
Section 1.1061-3(c)(3)(ii)(B), the Partnership shall (i) calculate separate allocations attributable to (A) the Carried Interest and any other distribution entitlements that are not commensurate with capital
contributed to the Partnership, and (B) any distribution entitlements of the Partners that are commensurate with capital contributed to the Partnership (in each case, within the meaning of Treasury Regulations
Section 1.1061-3(c)(3)(ii)(B) and as reasonably determined by the General Partner), and (ii) consistently reflect each such allocation in its books and records.
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(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated
among the Partners for U.S. federal, state and local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be
provided herein or by the Code or other applicable law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to its respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and
1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be
considered to contain a “qualified income offset” as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion
shall make allocations for tax purposes as may be needed to ensure that allocations are in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S. federal, state and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for
each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the
General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of
the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain, loss, deduction or credit of the Partnership (or an adjustment to any Partner’s distributive share
thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in accordance with the final resolution of such audit adjustment.
ARTICLE VI
ADDITIONAL PARTNERS;
WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners. (a) Effective on the first day of any month (or on such other date as shall be determined
by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the
representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute
Partner) all terms of such additional Partner’s participation in the Partnership, including the additional Partner’s initial GP-Related Capital Contribution, Capital Commitment-Related Capital
Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time
to time unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a
49
“Nonvoting Special Partner”). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the
Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partner’s Investor Note issued to finance such Limited
Partner’s purchase of his or her Capital Commitment Interests, Blackstone or such other or subsequent holder shall succeed to such Limited Partner’s Capital Commitment Interests and shall be deemed to have become a Limited Partner to such
extent. Any additional Partner may have a GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of
the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners’ GP-Related Profit Sharing Percentages as of such date, shall be established by the
General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all
other Partners’ Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for
any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners
admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
(c) An additional Partner shall be required to contribute to the Partnership his or her pro rata share of the Partnership’s total
capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and in such amounts as shall be determined
by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission of an additional Partner will be
evidenced by (i) the execution of a counterpart copy of this Agreement by such additional Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, as determined by the General
Partner, and/or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to be bound by the terms of this Agreement and such writing being acceptable to the
General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is
acceptable to the General Partner on behalf of the Partnership.
Section 6.2. Withdrawal of Partners. (a) Any Partner may
Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner, including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the
reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary Withdrawals on the last day of any
calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days’ prior written notice by such Partner to the General Partner (or on such shorter notice period as may
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be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may Withdraw from the Partnership with respect to such Partner’s GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partner’s Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to such
Partner’s Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partner’s GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any
Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a
Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such person’s GP-Related Partner Interest; provided, that the General Partner may elect to admit such
Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such person’s GP-Related Partner Interest, with such GP-Related Partner Interest
as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of
agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
(d) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has
given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such person’s GP-Related Partner Interest and/or
with respect to such person’s Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such person’s
GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after the date of such notice. If the
General Partner requires any Partner to Withdraw for Cause with respect to such person’s GP-Related Partner Interest and/or with respect to such person’s Capital Commitment Partner Interest, such
notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal
from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the
Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law.
Section 6.3. GP-Related Partner Interests Not Transferable. (a) No Partner may sell,
assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partner’s GP-Related Partner Interest other than as permitted by written agreement between such
Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers
required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably
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withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning
trust, limited partnership, or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an “Estate Planning Vehicle”). Each Estate Planning
Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the
Partnership (including the obligation to make additional GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning
Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law
or otherwise) of the whole or any portion of any Partner’s GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be
given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related
Partner Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the Partnership Act, the General Partner may not
transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the prior written approval of a Majority in
Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law
or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner
deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any liquidation,
dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the General Partner. A person who is so
admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired.
The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall
not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby
authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall be no remaining Limited Partners, the Partnership shall be
dissolved and shall be wound up unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such
Withdrawal, of one or more Limited Partners.
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(c) The Partnership shall not be dissolved, in and of itself, by the Withdrawal of any Partner,
but shall continue with the surviving or remaining Partners as members thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partner’s GP-Related
Partner Interests. (a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this
Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term “Settlement Date” means the date as of which a Withdrawn Partner’s GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion
of whose GP-Related Partner Interest is retained as a Special Partner, shall be considered a Withdrawn Partner for all purposes hereof.
(b) Except where a later date for the settlement of a Withdrawn Partner’s GP-Related Partner
Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partner’s Settlement Date shall be his or her Withdrawal Date; provided, that if a Withdrawn Partner’s Withdrawal Date is not
the last day of a month, then the General Partner may elect for such Withdrawn Partner’s Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the interval, if any, between a Withdrawn Partner’s
Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions, interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partner’s
GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partner’s Settlement Date (i) determine and allocate to the Withdrawn Partner’s GP-Related Capital Accounts such Withdrawn Partner’s allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date
in accordance with Article V and (ii) credit the Withdrawn Partner’s GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General
Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise
determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner
Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or
not previously awarded) as of such Withdrawn Partner’s Withdrawal Date.
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(d) From and after the Settlement Date of the Withdrawn Partner, the Withdrawn Partner’s GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated
Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partner’s
GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such
Partner’s GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnership’s GP-Related Net Income (Loss), or in distributions related to such Partner’s GP-Related Partner Interest, GP-Related Investments or
other assets related to such Partner’s GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partner’s GP-Related
Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the
Withdrawn Partner’s GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partner’s GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment)
and (y) the Withdrawn Partner’s percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in
paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this Section 6.5. If the amount determined pursuant to clause (x) above is an
aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the
Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the
GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partner’s GP-Related Partner Interest in
the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners’ GP-Related Capital Accounts in accordance with their respective
GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of
such Withdrawn Partner’s Settlement Date. In the settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or
the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to
such Partner’s GP-Related Partner Interest resulted from such Partner’s death or Incompetence, such Partner’s estate or legal representative, as the case may be, may elect, at the time described
below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partner’s GP-Related Profit Sharing Percentage in all (but not less than
all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partner’s GP-Related Partner Interest. The election referred to
above shall be made within 60 days after the Withdrawn Partner’s Settlement Date, based on a statement of the settlement of such Withdrawn Partner’s GP-Related Partner Interest in the Partnership
pursuant to this Section 6.5.
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(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partner’s
“percentage interest” means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn
Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable
to such GP-Related Investment, in which case such Withdrawn Partner (a “Retaining Withdrawn Partner”) shall become and remain a Special Partner for such purpose (and, if the General Partner so
designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and
conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole
discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that
the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
(g)
The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to
(ii) distribute in kind to the Withdrawn Partner such Withdrawn Partner’s pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partner’s GP-Related Partner Interest. If any securities or other investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be
reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General
Partner.
(h) [Intentionally omitted.]
(i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of
such Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made
to such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement
of his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to
reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn
Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject
to the prior payment or provision for payment in full of claims of
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all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such
Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and
(y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove,
in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her
estate such deficiency, as the case may be.
(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the
Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall
be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date
of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The “due date” of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i)
above shall be 120 days after a Withdrawn Partner’s Settlement Date. The “due date” of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn
Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The “due date” of any other
amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(l) At the time of the
settlement of any Withdrawn Partner’s GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose
any restrictions it deems appropriate on the assignment, pledge, grant of a security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by
such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such Withdrawn Partner’s right to any payment from the Partnership.
(m) If a Partner is required to Withdraw from the Partnership with respect to such Partner’s
GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) In settling the Withdrawn Partner’s interest in any GP-Related Investment in
which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to
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the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related
Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partner’s GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit
or debit, as applicable, the Withdrawn Partner with the balance of his or her GP-Related Capital Account or portion thereof attributable to each such GP-Related
Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her
Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss)
allocable to such Withdrawn Partner with respect to any GP-Related Investment shall equal such Partner’s percentage interest of the GP-Related Unrealized Net
Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as
determined by the General Partner). The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in
right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or
distribution.
(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such
Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two
years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (n) may elect to forfeit the
principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the General Partner) a
discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The
provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to any transferee of any GP-Related Partner Interest of such Partner
pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or
his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partner’s GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing
this assistance will be borne by the Withdrawn Partner or his or her estate.
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(ii) The General Partner may reasonably determine in good faith to retain outside
professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the
case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with
the Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partner’s true and lawful
agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner,
any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5,
including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in
full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 6.6. Dissolution of the Partnership. The General Partner may dissolve the Partnership prior to the expiration of
its term at any time on not less than 60 days’ notice of the dissolution date given to the other Partners. Upon the dissolution of the Partnership, the Partners’ respective interests in the Partnership shall be valued and settled in
accordance with the procedures set forth in Section 6.5.
Section 6.7. Certain Tax Matters. (a) The General Partner
shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The
General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns
to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the
several States and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any
and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income,
gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information
statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of
an income tax audit
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of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of
the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to
act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the
Tax Matters Partner in connection therewith (including, without limitation, attorneys’, accountants’ and other experts’ fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to
(1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or
she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner arising out of or in connection with any such
audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended
return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any
Partner selected by the General Partner as the “partnership representative” (as defined under the Code) (the “Tax Matters Partner”). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and
hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from
all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys’ fees and disbursements, incident to any such breach or violation.
(c) Each individual Partner shall provide to the Partnership copies of each federal, state and local income tax return of such Partner
(including any amendment thereof) within 30 days after filing such return.
(d) To the extent the General Partner reasonably determines
that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner, or as a
result of a Partner’s participation in the Partnership or as a result of a Partner’s failure to provide requested tax information, including pursuant to Section 6225 or Section 1446(f) of the Code (“Tax
Advances”), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the
Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such
distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for
repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance.
To the fullest extent permitted by law, each Partner hereby agrees to
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indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest)
with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a
Partner’s interest.
(e) To the extent that any taxes are imposed on the Partnership (or any entity in which the Partnership invests
that is treated as a flow-through entity for relevant tax purposes) with respect to income of the Partnership (or such entity) in lieu of taxes imposed directly on a Partner with respect to such income (including any state or local income taxes),
whether by election of the Partnership or the General Partner or otherwise, such amounts shall be deemed to have been distributed to such Partner. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the
Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to any such tax payments. The obligations of a Partner set forth in this
Section 6.7(e) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partner’s interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the
terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election
to adjust the basis of the Partnership’s property in the manner provided in Sections 734(b) and 743(b) of the Code.
ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc. (a) This Article VII and Article VIII hereof set forth certain terms and
conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BTO IV Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BTO IV Interest. Except as otherwise expressly
provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the
GP-Related BTO IV Interest.
(b) Each Partner, severally, agrees to make contributions of capital
to the Partnership (“Capital Commitment-Related Capital Contributions”) as required to fund the Partnership’s capital contributions to BTO IV or Associates IV in respect of the Capital Commitment BTO IV Interest, if any, and
the related Capital Commitment BTO IV Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the
Partnership in an amount in excess of such Partner’s Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood
that a Partner will not necessarily participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the
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same Capital Commitment Profit Sharing Percentage with respect to (i) the Partnership’s portion of the Blackstone Commitment or (ii) the making of each Capital Commitment
Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain
financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the Partnership and its Affiliates may provide such financing. The acquisition of a Capital
Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partner’s Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate
documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its Affiliates (in such
capacity, the “Advancing Party”) may in its sole discretion advance to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive
officers of Blackstone) all or any portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (“Firm Advances”). Each such Partner shall
pay interest to the Advancing Party on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon
prior written notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the
Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party
shall inform any Partner of such rate upon such Partner’s request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise
payable to such Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein)
and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue
amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
Section 7.2. Capital Commitment Capital
Accounts. (a) There shall be established for each Partner in the books of the Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date
as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on
such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the
Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partner’s interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
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(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore
any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partner’s interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership
of the related Capital Commitment Investment and in whole upon the dissolution of the Partnership, neither such Partner’s Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the
consent of the General Partner.
Section 7.3. Allocations. (a) Capital Commitment Net Income (Loss) of the Partnership
for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective
Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partner’s
aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss)
of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to
their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment.
(b) Any special costs relating to
distributions pursuant to Section 7.6 or Section 7.7 shall be specially allocated to the electing Partner.
(c) Notwithstanding
the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary
for this purpose.
Section 7.4. Distributions.
(a) Each Partner’s allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments,
distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests)
during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the
General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected
by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
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(i) First, to the payment of interest then due on all Investor Notes (relating to
Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all interest payments due, the selection of those of such
Partner’s Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Partner of an amount equal to the U.S. federal, state and local income taxes on income of
the Partnership allocated to such Partner for such year in respect of such Partner’s Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that
the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners’ Capital Commitment Partner Interests were all allocated to an individual subject to the
then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Sections 1401 and 1411 of the Code), taking into account the type and character (e.g., long-term or short-term
capital gain or ordinary or exempt) of such taxable income allocated by the Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to
the Partner pursuant to this clause (ii) to the extent that such amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy
such provision from the relevant partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts
otherwise distributable to the Partner pursuant to provisions in such other BE Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the principal amount of the Investor Note financing (A) any Capital Commitment
Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all Capital Commitment-Related Capital Contributions made in respect of
the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any Blackstone Entity (other than the Partnership) in respect of
interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related Investor Notes), to the extent not repaid from amounts of Other
Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to the payment of principal
(including any previously deferred amounts) then owing under all other Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partner’s Investor Notes to be repaid and the division of
payments among such Investor Notes to be determined by the Lender or Guarantor;
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(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after
application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such
Partner’s Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment Net Income remaining after making the
distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in
clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted
to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Blackstone Holdings IV L.P. or its Affiliates, distributions shall be
made pursuant to clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partner’s
Capital Commitment Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partner’s Investor Notes have been repaid in full, with any such income or other distribution remaining
thereafter distributed to such Partner.
Distributions of Capital Commitment Net Income may be made at any other time at the discretion of
the General Partner. At the General Partner’s discretion, any amounts distributed to a Partner in respect of such Partner’s Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes
for the full period in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy
any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining
principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a
Partner that is no longer an employee or officer of Blackstone Holdings IV L.P. or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
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(e) The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any
distribution to such Partner pursuant to Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a
portion of a Capital Commitment Investment is being considered by the Partnership or BTO IV (a “Capital Commitment Disposable Investment”), at the election of the General Partner each Partner’s Capital Commitment Interest with
respect to such Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partner’s “Capital
Commitment Class B Interest”), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partner’s “Capital Commitment
Class A Interest”). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made
only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B
Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment
shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment
Class A Interests.
(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a Giveback Amount to
BTO IV in respect of any Capital Commitment BTO IV Interest that may be held by the Partnership or (y) Associates IV is obligated under the Giveback Provisions to contribute to BTO IV a Giveback Amount with respect to any Capital Commitment BTO
IV Interest that may be held by Associates IV and the Partnership is obligated to contribute any such amount to Associates IV in respect of the Partnership’s Capital Commitment Associates IV Partner Interest (the amount of any such obligation
of the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a “Capital Commitment Giveback Amount”), the General Partner shall call for such amounts as are necessary to satisfy
such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions
by the Partnership with respect to the Capital Commitment BTO IV Interest (the “Capital Commitment Recontribution Amount”) which equals such Partner’s pro rata share of prior distributions in connection with (a) the
Capital Commitment BTO IV Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment
BTO IV Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to an applicable BTO IV Agreement is unrelated to a specific Capital Commitment BTO IV Investment, all Capital
Commitment BTO IV Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partner’s Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partner’s
discretion (but shall be under no obligation to), provide notice that in the General Partner’s judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate
amount of such obligations).
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(ii) (A) In the event any Partner (a “Capital Commitment Defaulting
Party”) fails to recontribute all or any portion of such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to
contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Party’s obligation to pay such Capital Commitment
Defaulting Party’s Capital Commitment Recontribution Amount (a “Capital Commitment Deficiency Contribution”) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such
amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount;
provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 150% of the amount of the Capital Commitment Recontribution Amount initially requested from such
Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood
of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting Party, the cost
of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a
Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Party’s Capital Commitment Recontribution Amount any amounts otherwise payable to the
Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts
receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such
collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and
authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the
Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partner’s failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital
Commitment Defaulting Party with respect to such amount.
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(iii) A Partner’s obligation to make contributions to the Partnership under
this Section 7.4(g) shall survive the termination of the Partnership.
Section 7.5. Valuations. Capital Commitment
Investments shall be valued annually as of the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates IV (or any other Affiliate of the Partnership that is a
general partner of BTO IV) in valuing investments of BTO IV or, in the case of investments not held by BTO IV, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The
value of any Capital Commitment Interest as of any date (the “Capital Commitment Value”) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment
Value may be determined as of an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely
to the value of a Capital Commitment Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the
underlying Capital Commitment Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any
Capital Commitment Interests held by a person who is or was at any time a direct member or partner of a General Partner of the Partnership.
Section 7.6. Disposition Election. (a) At any time prior to the date of the Partnership’s execution of a definitive
agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such
Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to such date (i) not to dispose of all or
any portion of such Partner’s pro rata share of such Capital Commitment Investment (the “Retained Portion”) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such
disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days’ notice to distribute such Retained Portion to such Partner. Such
Partner’s Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnership’s disposition of other Partners’ pro rata shares of such
Capital Commitment Investment; provided, that such Partner’s Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent
disposition thereof by the Partnership.
(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating
thereto shall have been paid in full prior to or simultaneously with such distribution.
Section 7.7. Capital Commitment Special
Distribution Election. (a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share
of a Capital Commitment Investment (as measured by such Partner’s Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a “Capital Commitment Special Distribution”). Such Partner’s Capital
Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
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(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating
thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL, ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests. (a) Capital Commitment Interests (or a portion
thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not
financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with
respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion
of any outstanding principal on the Investor Notes; provided, that in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an
employee or officer of Blackstone Holdings IV L.P. or its Affiliates, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became
Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the
purchase price of a Partner’s Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made by a Partner shall apply pro rata against all of such Partner’s Investor Notes; provided, that
such Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment
Interests that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an officer or employee of the Partnership or any of its Affiliates, other than as a result of such
Partner dying or suffering a Total Disability, such Partner (the “Withdrawn Partner”) and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within
30 days and by the Partnership or its designee(s) within 45 days after such Partner’s ceasing to be such an officer or employee) or any time thereafter, upon 30 days’ notice, but not the obligation, to require the Partnership (subject to
the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the
case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partner’s Contingent Capital Commitment Interests.
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(ii) The purchase price for each such Contingent Capital Commitment Interest
shall be an amount equal to (A) the outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the
“Adjustment Amount”) equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to
be repurchased plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on
the Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the
Adjustment Amount, in the General Partner’s sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next
Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall
be payable to the holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn
Partner’s Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a
Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partner’s Contingent Capital Commitment
Interests, his or her related Investor Note shall be payable in full.
(iii) Upon such Partner ceasing to be such an
officer or employee, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of
the Withdrawn Partner’s Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the
Partnership nor its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor
Notes shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the
Withdrawn Partner at his or her option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis. To the extent that another Partner purchases a portion of a Capital Commitment Interest of a
Withdrawn Partner, the purchasing Partner’s Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
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(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall
thereupon cease to be a Partner with respect to such Partner’s Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a
Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such
Partner’s Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or
Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in
Interest to such Partner, whether by operation of law or otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until
distribution of any such Partner’s interest in the Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal
or redemption without the consent of the General Partner. The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such
Partner’s Capital Commitment Partner Interest.
(d) If a Partner dies or suffers a Total Disability, all Contingent Capital
Commitment Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partner’s death or Total Disability) (and the purchase
price for such Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partner’s estate, personal representative or other Successor in
Interest, in cash)) and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partner’s death or Total Disability, any Investor Note(s) financing such
Contingent Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner so requests in writing
within 180 days after the Partner’s death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the
Partnership or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnership’s
then current Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such
provisions of this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on
which the General Partner knows or has reason to know of such Partner’s death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest in
exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment
Interests to the Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value
thereof.
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(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership
or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partner’s Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her
Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its
sole discretion), the Partnership or another person designated by the General Partner (who may be itself another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partner’s Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase).
The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partner’s execution and delivery to the Partnership of an appropriate
irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently
transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital
Commitment Interest or portion thereof by the General Partner’s designee(s), Blackstone Holdings IV L.P. may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the
transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of Blackstone Inc. or any Affiliate thereof). To the extent that a Withdrawn Partner’s
Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the
General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not
already participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called “Unallocated
Capital Commitment Interests”). To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall
also be allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount
of such related indebtedness is repaid. The Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in
this Section 8.1 and except as such Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall
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become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be
non-recourse or so limited, the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to
such Partners; provided, that a Partner shall not, except as set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1) unless his or her prior
consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness
financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income
(Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt
service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.
(g) If a Partner
is required to Withdraw from the Partnership with respect to such Partner’s Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs
(a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not
be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such
Withdrawn Partner’s Non-Contingent Capital Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of
(A) the original cost of such Non-Contingent Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date
of the purchase of such Non-Contingent Capital Commitment Interest);
(ii) allow
the Withdrawn Partner to retain such Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to
any Capital Commitment Investment shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing
Capital Commitment Value thereof; or
(iii) in lieu of cash, purchase such
Non-Contingent Capital Commitment Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten
(10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or
guardian, as the case may be, in the settlement of the Withdrawn Partner’s Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner
or his or her estate.
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(i) The General Partner may reasonably determine in good faith to retain outside professionals to
provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be,
prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the
Partnership’s day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements,
instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without
limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and
effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 8.2. Transfer of Partner’s Capital Commitment Interest. Except as otherwise agreed by the General
Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (“Transfer”) all or part of any such Partner’s Capital Commitment
Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partner’s or Deceased or Totally
Disabled Partner’s Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of
Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any
reason therefor) and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partner’s Capital Commitment Partner Interest to an Estate Planning Vehicle (it
being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in
connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). Each Estate Planning
Vehicle shall not have voting rights (any such Partner being called a “Nonvoting Partner”). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such Nonvoting Partner with respect to the
interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the
Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such Partner’s right to participate in the
affairs of the Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security
interest in, its entire Interest in the Partnership in accordance with the provisions of this Agreement.
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Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the
contrary, no sale or Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution. The Partnership shall be dissolved and subsequently terminated:
(a) pursuant to Section 6.6; or
(b) upon the expiration of the term of the Partnership.
Section 9.2. Final Distribution. Upon the dissolution of the Partnership, and following the payment of creditors of the
Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners’ respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in
Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account
balances of the Partners; and
(b) With respect to each Partner’s Capital Commitment Partner Interest, an amount shall be paid to such
Partner in cash or Securities in an amount equal to such Partner’s respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment
Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment;
and the remaining assets of the Partnership related to the Partners’ Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for
each Capital Commitment Investment from which such cash or Securities are derived.
(c) The General Partner shall be the liquidator. In the
event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
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Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests.
(a) If there are any Securities or other property or other investments or securities related to the Partners’ Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in
the case of dissolution, without sacrificing a significant portion of the value thereof, the value of a Partner’s interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners
participating in the related Capital Commitment Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other
investments or securities so excluded shall not be paid or distributed until such time as the liquidator shall determine.
(b) If there is
any pending transaction, contingent liability or claim by or against the Partnership related to the Partners’ Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the
liquidator, be then ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any
such transaction or claim until its final settlement or such earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partner’s Capital Commitment Partner Interest
an amount which the liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention
of sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds
realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including
the validity, scope and enforceability of this arbitration provision, as well as any and all disputes arising out of, relating to or in connection with the termination, liquidation or winding up of the Partnership), whether arising during the
existence of the Partnership or at or after its termination or during or after the liquidation or winding up of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance
with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within 30 days of the receipt of the request for arbitration, the International
Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
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(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause
the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking
temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this
Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate,
and (iii) irrevocably appoints the General Partner as such Partner’s agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such
Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL
PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such
ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s)
designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may
have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible
to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it shall be determined
by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable
law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware
Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C.
(“TM”), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and
that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any
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abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the
Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a
non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the
permission of TM. All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and
its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TM’s sole discretion by giving the Partnership written notice of termination. Promptly following any such termination,
the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or
otherwise.
Section 10.3. Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may
be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements;
Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered, into separate letter agreements with individual Partners, officers or employees with respect to
GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or
supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement,
including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules
which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the
General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD
Agreement.
Section 10.5. Governing Law; Separability of Provisions. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided
therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be
affected thereby.
Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and
shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto;
provided, that no person claiming by,
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through or under a Partner (whether such Partner’s heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner
(including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article IX. Any Partner or Withdrawn Partner shall remain
liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such
Partner’s or Withdrawn Partner’s interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in
Section 5.8(d)(ii)(A) and Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from
the transferee with respect to any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal
representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BTO IV Agreements, (x) the limited partners in BTO IV shall be third-party beneficiaries of the provisions of
Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in Section 9.4(a) of the BTO IV Partnership Agreement), and
(y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount (for purpose of this sentence, as defined in
Section 9.4(a) of the BTO IV Partnership Agreement), shall be effective against such limited partners only with the 66 2/3% Combined Limited Partner Consent (as such term is used in the BTO IV Partnership Agreement) unless such amendment does
not adversely affect the limited partners’ rights under Section 9.4 of the BTO IV Partnership Agreement.
Section 10.7.
Confidentiality. (a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality
of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs
of the Partnership that shall not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction;
provided, that any corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate
thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information
relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
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(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating,
cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a “Governmental Entity”), including, but not
limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation, provided that in each case such
communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the
disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to
the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.
Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no
circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates’ attorney-client privilege or attorney work product or Blackstone’s trade secrets without the prior written consent of Blackstone.
Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in
writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnership’s books and records or, if given to the
General Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery, when delivered to the address of such
Partner, the General Partner or the Partnership specified as aforesaid.
Section 10.9. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument. For the avoidance of doubt, a person’s execution and delivery of this Agreement by electronic signature
and electronic transmission (jointly, an “Electronic Signature”), including via DocuSign or other similar method, shall constitute the execution and delivery of a counterpart of this Agreement by or on behalf of such person and
shall bind such person to the terms of this Agreement. The parties hereto agree that this Agreement and any additional information incidental hereto may be maintained as electronic records. Any person executing and delivering this Agreement by an
Electronic Signature further agrees to take any and all reasonable additional actions, if any, evidencing its intent to be bound by the terms of this Agreement, as may be reasonably requested by the General Partner.
Section 10.10. Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such Partner’s true and
lawful representative and attorney-in-fact, each acting alone, in such Partner’s name, place and stead, to make, execute, sign and file all instruments, documents
and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the
Partnership shall determine to do
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business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is coupled with an
interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of such Partner.
Section 10.11. Partner’s Will. Each Partner and Withdrawn Partner shall include in his or her will a provision
that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing, that such
provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partner’s or Withdrawn Partner’s Interest is transferred shall include a provision
substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or Withdrawn Partner fails
to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice, the
Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other
rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided herein,
in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this
Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount
or the Capital Commitment Recontribution Amount, the “losing” party to such dispute shall promptly reimburse the “victorious party” for all reasonable legal fees and expenses incurred in connection with such dispute (such
determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue
interest at the Default Interest Rate.
Section 10.14. Entire Agreement; Modifications. This Agreement embodies the
entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred
to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any time by
the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year
first above written. In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
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| GENERAL PARTNER:
BTO DE GP – NQ L.L.C. |
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| By: Blackstone Holdings II L.P. |
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| By: Blackstone Holdings I/II GP L.L.C., its general partner |
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| By: |
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/s/ John G. Finley |
| Name: |
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John G. Finley |
| Title: |
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Chief Legal Officer and Secretary |
[Signature Page to Amended and Restated Limited Partnership Agreement of BTOA IV L.P.]
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| LIMITED PARTNERS AND SPECIAL PARTNERS:
Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to BTO DE GP – NQ L.L.C. |
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| BTO DE GP – NQ L.L.C. |
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| By: Blackstone Holdings II L.P. |
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| By: Blackstone Holdings I/II GP L.L.C., its general partner |
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| By: |
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/s/ John G. Finley |
| Name: |
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John G. Finley |
| Title: |
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Chief Legal Officer and Secretary |
[Signature Page to Amended and Restated Limited Partnership Agreement of BTOA IV L.P.]
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| INITIAL LIMITED PARTNER (solely to reflect his withdrawal): |
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| Christopher J. James |
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| /s/ Christopher J. James |
[Signature Page to Amended and Restated Limited Partnership Agreement of BTOA IV L.P.]
Exhibit 31.1
Chief Executive Officer Certification
I, Stephen A. Schwarzman, certify that:
| 1. |
I have reviewed this Quarterly Report on
Form 10-Q for the quarter ended September 30, 2023 of Blackstone Inc.; |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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| 3. |
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
| 4. |
The Registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| |
a) |
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared; |
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b) |
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles; |
| |
c) |
Evaluated the effectiveness of the Registrant’s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
d) |
Disclosed in this report any change in the Registrant’s internal control
over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the Registrant’s internal control over financial reporting; and |
| 5. |
The Registrant’s other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
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| |
a) |
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
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b) |
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: November 3, 2023
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|
| /s/ Stephen A. Schwarzman |
| Stephen A. Schwarzman |
| Chief Executive Officer |
Exhibit 31.2
Chief Financial Officer Certification
I, Michael S. Chae, certify that:
| 1. |
I have reviewed this Quarterly Report on
Form 10-Q for the quarter ended September 30, 2023 of Blackstone Inc.; |
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
| 4. |
The Registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| |
a) |
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared; |
| |
b) |
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles; |
| |
c) |
Evaluated the effectiveness of the Registrant’s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
d) |
Disclosed in this report any change in the Registrant’s internal control
over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the Registrant’s internal control over financial reporting; and |
| 5. |
The Registrant’s other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
| |
a) |
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
| |
b) |
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: November 3, 2023
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| /s/ Michael S. Chae |
| Michael S. Chae |
| Chief Financial Officer |
Exhibit 32.1
Certification of the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Blackstone Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen A. Schwarzman, Chief Executive Officer
of the Company, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) |
The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and |
| (2) |
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. |
Date:
November 3, 2023
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|
| /s/ Stephen A. Schwarzman |
| Stephen A. Schwarzman |
| Chief Executive Officer |
| * |
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate disclosure document. |
Exhibit 32.2
Certification of the Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Blackstone Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael S. Chae, Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) |
The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and |
| (2) |
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. |
Date:
November 3, 2023
|
|
| /s/ Michael S. Chae |
| Michael S. Chae |
| Chief Financial Officer |
| * |
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate disclosure document. |
Exhibit 99.1
Section 13(r) Disclosure
Mundys S.p.A. (formerly “Atlantia S.p.A.”) provided the disclosure reproduced below in connection
with activities during the quarter ended September 30, 2023. We have not independently verified or participated in the preparation of this disclosure.
“Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934. Funds
affiliated with Blackstone first invested in Mundys S.p.A. on November 18, 2022 in connection with the voluntary public tender offer by Schema Alfa S.p.A. for all of the shares of Mundys S.p.A., pursuant to which such funds obtained a
minority non-controlling interest in Mundys S.p.A. Mundys S.p.A. owns and controls Aeroporti di Roma S.p.A. (“ADR”), an operator of airports in Italy including Leonardo da Vinci-Fiumicino Airport.
Iran Air has historically operated periodic flights to and from Leonardo da Vinci-Fiumicino Airport as authorized, from time to time, by an aviation-related bilateral agreement between Italy and Iran, scheduled in compliance with European Regulation
95/93, and approved by the Italian Civil Aviation Authority. ADR, as airport operator, is under a mandatory obligation to provide airport services to all air carriers (including Iran Air) authorized by the applicable Italian authority. The relevant
turnover attributable to these activities (whose consideration is calculated on the basis of general tariffs determined by such independent Italian authority) in the quarter ended September 30, 2023 was less than €65,000. Mundys S.p.A. does not track profits specifically attributable to these activities.”
