Och-Ziff Capital Management Group LLC (Form: 10-Q, Received: 05/02/2017 16:36:09)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2017

Commission File Number 001-33805

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

(Exact Name of Registrant as Specified in its Charter)



Delaware		26-0354783
(State of Incorporation)		(I.R.S. Employer Identification Number)

9 West 57th Street, New York, New York 10019

(Address of Principal Executive Offices)

Registrant’s telephone number: (212) 790-0000

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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:



Large accelerated filer	þ	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

		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 þ

As of April 27, 2017 , there were 185,127,575 Class A Shares and 267,489,478 Class B Shares outstanding.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

TABLE OF CONTENTS



		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4

	Consolidated Balance Sheets as of March 31, 2017, and December 31, 2016	4

	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2017 and 2016	5

	Consolidated Statement of Changes in Shareholders’ (Deficit) Equity for the Three Months Ended March 31, 2017	6

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016	7

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	64

Item 4.	Controls and Procedures	65

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	67

Item 1A.	Risk Factors	67

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67

Item 3.	Defaults upon Senior Securities	67

Item 4.	Mine Safety Disclosures	67

Item 5.	Other Information	67

Item 6.	Exhibits	68

Signatures		70

Defined Terms



2007 Offerings		Refers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited, a wholly owned indirect subsidiary of Dubai Holdings LLC

active executive managing directors		Executive managing directors who remain active in our business

Annual Report		Our annual report on Form 10-K for the year ended December 31, 2016, dated March 1, 2017 and filed with the SEC

Class A Shares		Our Class A Shares, representing Class A limited liability company interests of Och-Ziff Capital Management Group LLC, which are publicly traded and listed on the NYSE

Class B Shares		Class B Shares of Och-Ziff Capital Management Group LLC, which are not publicly traded, are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares

CLOs		Collateralized loan obligations

Exchange Act		Securities Exchange Act of 1934, as amended

executive managing directors		The current limited partners of the Och-Ziff Operating Group entities other than our intermediate holding companies, including our founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company

GAAP		U.S. generally accepted accounting principles

intermediate holding companies		Refers collectively to Och-Ziff Corp and Och-Ziff Holding, both of which are wholly owned subsidiaries of Och-Ziff Capital Management Group LLC

Institutional Credit Strategies		Our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs and other customized solutions

IPO		Our initial public offering of 36.0 million Class A Shares that occurred in November 2007

NYSE		New York Stock Exchange

Och-Ziff, the Company, the firm, we, us, our		Refers, unless the context requires otherwise, to Och-Ziff Capital Management Group LLC, a Delaware limited liability company, and its consolidated subsidiaries, including the Och-Ziff Operating Group

Och-Ziff Corp		Och-Ziff Holding Corporation, a Delaware corporation

Och-Ziff funds, funds		The multi-strategy, opportunistic credit, real estate and equity funds, Institutional Credit Strategies products and other alternative investment vehicles for which we provide asset management services

Och-Ziff Holding		Och-Ziff Holding LLC, a Delaware limited liability company



Och-Ziff Operating Group		Refers collectively to OZ Management, OZ Advisors I and OZ Advisors II, and their consolidated subsidiaries

Och-Ziff Operating Group A Units		Refers collectively to one Class A operating group unit in each of the Och-Ziff Operating Group entities. Och-Ziff Operating Group A Units are equity interests held by our executive managing directors.

Och-Ziff Operating Group B Units		Refers collectively to one Class B operating group unit in each of the Och-Ziff Operating Group entities. Och-Ziff Operating Group B Units are equity interests held by our intermediate holding companies.

Och-Ziff Operating Group D Units		Refers collectively to one Class D operating group unit in each of the Och-Ziff Operating Group entities. Och-Ziff Operating Group D Units are non-equity, limited partner profits interests held by our executive managing directors.

Och-Ziff Operating Group P Units		Refers collectively to one Class P operating group unit in each of the Och-Ziff Operating Group entities. Och-Ziff Operating Group P Units are equity interests held by our executive managing directors.

Partner Equity Units		Refers collectively to the Och-Ziff Operating Group A Units and Och-Ziff Operating Group P Units.

OZ Advisors I		OZ Advisors LP, a Delaware limited partnership

OZ Advisors II		OZ Advisors II LP, a Delaware limited partnership

OZ Management		OZ Management LP, a Delaware limited partnership

Preferred Units		One Class A cumulative preferred unit in each of the Och-Ziff Operating Group entities collectively represents one “Preferred Unit.” Certain of our executive managing directors collectively own 100% of the Preferred Units.

Registrant		Och-Ziff Capital Management Group LLC, a Delaware limited liability company

Reorganization		The reorganization of our business that took place prior to the IPO

SEC		U.S. Securities and Exchange Commission

Securities Act		Securities Act of 1933, as amended

Special Investments		Investments that we, as investment manager, believe lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance

Ziffs		Refers collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons

Available Information

Och-Ziff Capital Management Group LLC files annual, quarterly and current reports, proxy statements and other information required by the Exchange Act with the SEC. We make available free of charge on our website ( www.ozcap.com ) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and any amendments to those filings as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Also posted on our website in the “Public Investors – Corporate Governance” section are charters for our Audit Committee; Compensation Committee; and Nominating, Corporate Governance and Conflicts Committee, as well as our Corporate Governance Guidelines and Code of Business Conduct and Ethics governing our directors, officers and employees. Information on, or accessible through, our website is not a part of, and is not incorporated into, this report or any other SEC filing. Copies of our SEC filings or corporate governance materials are available without charge upon written request to Och-Ziff Capital Management Group LLC, 9 West 57 th Street, New York, New York 10019, Attention: Office of the Secretary.

Any materials we file with the SEC are also publicly available through the SEC’s website (www.sec.gov) or may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

No statements herein, available on our website or in any of the materials we file with the SEC constitute, or should be viewed as constituting, an offer of any Och-Ziff fund.

Forward-Looking Statements

Some of the statements under “Part I — Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which we refer to as the “MD&A,” “Part I — Item 3. Quantitative and Qualitative Disclosures About Market Risk,” “Part II — Item 1A. Risk Factors” and elsewhere in this quarterly report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that reflect our current views with respect to, among other things, future events and financial performance. We generally identify forward-looking statements by terminology such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve,” “see,” “think,” “position” or the negative version of those words or other comparable words.

Any forward-looking statements contained herein are based upon historical information and on our current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.

We caution that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; the outcome of third-party litigation involving us; the consequences of the Foreign Corrupt Practices Act (the “FCPA”) settlements with the SEC and the U.S. Department of Justice (the “DOJ”); conditions impacting the alternative asset management industry; our ability to retain existing fund investor capital; our ability to successfully compete for fund investors, assets, professional talent and investment opportunities; our ability to retain our active executive managing directors, managing directors and other investment professionals; our successful formulation and execution of our business and growth strategies; our ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to our business; and assumptions relating to our operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.

If one or more of these or other risks or uncertainties materialize, or if our assumptions or estimates prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in our filings with the SEC, including but not limited to our Annual Report.

There may be additional risks, uncertainties and factors that we do not currently view as material or that are not known. The forward-looking statements contained in this report are made only as of the date of this report. We do not undertake to update any forward-looking statement because of new information, future developments or otherwise.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

CONSOLIDATED BALANCE SHEETS — UNAUDITED



	March 31, 2017			December 31, 2016

	(dollars in thousands)
Assets
Cash and cash equivalents	$	351,810		$	329,813
Income and fees receivable	60,319			176,638
Due from related parties	19,352			20,494
Deferred income tax assets	684,788			695,441
Other assets, net (includes assets measured at fair value of $22,048 and $21,341 as of March 31, 2017 and December 31, 2016, respectively)	132,970			207,964
Assets of consolidated Och-Ziff funds:
Investments, at fair value	35,996			37,661
Other assets of Och-Ziff funds	21,314			17,544
Total Assets	$	1,306,549		$	1,485,555

Liabilities and Shareholders’ (Deficit) Equity
Liabilities
Compensation payable	$	39,031		$	206,106
Due to related parties	522,214			522,101
Debt obligations	410,612			577,128
Other liabilities (includes liabilities measured at fair value of $0 and $8,204 as of March 31, 2017 and December 31, 2016, respectively)	160,078			174,994
Liabilities of consolidated Och-Ziff funds:
Other liabilities of Och-Ziff funds	16,658			15,197
Total Liabilities	1,148,593			1,495,526

Commitments and Contingencies (Note 15)

Redeemable Noncontrolling Interests (Note 3)	441,971			284,121

Shareholders’ (Deficit) Equity
Class A Shares, no par value, 1,000,000,000 shares authorized, 185,126,953 and 184,843,255 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	—			—
Class B Shares, no par value, 750,000,000 shares authorized, 267,489,478 and 297,317,019 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	—			—
Paid-in capital	3,068,788			3,097,431
Accumulated deficit	(3,569,763		)	(3,563,452		)
Shareholders’ deficit attributable to Class A Shareholders	(500,975		)	(466,021		)
Shareholders’ equity attributable to noncontrolling interests	216,960			171,929
Total Shareholders’ (Deficit) Equity	(284,015		)	(294,092		)
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ (Deficit) Equity	$	1,306,549		$	1,485,555

See notes to consolidated financial statements.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — UNAUDITED



	Three Months Ended March 31,
	2017			2016

	(dollars in thousands)
Revenues
Management fees	$	86,255		$	156,910
Incentive income	51,626			30,587
Other revenues	776			579
Income of consolidated Och-Ziff funds	495			366
Total Revenues	139,152			188,442

Expenses
Compensation and benefits	69,943			54,261
Interest expense	6,280			5,386
General, administrative and other	45,928			267,669
Expenses of consolidated Och-Ziff funds	84			266
Total Expenses	122,235			327,582

Other Income
Changes in tax receivable agreement liability	—			145
Net gains on investments in Och-Ziff funds and joint ventures	721			249
Net gains of consolidated Och-Ziff funds	235			545
Total Other Income	956			939

Income (Loss) Before Income Taxes	17,873			(138,201		)
Income taxes	12,056			18,539
Consolidated and Comprehensive Net Income (Loss)	5,817			(156,740		)
Less: (Income) loss attributable to noncontrolling interests	(9,778		)	87,845
Less: (Income) loss attributable to redeemable noncontrolling interests	(350		)	(461		)
Net Loss Attributable to Och-Ziff Capital Management Group LLC	(4,311		)	(69,356		)
Less: Change in redemption value of Preferred Units	(2,853		)	—
Net Loss Attributable to Class A Shareholders	$	(7,164	)	$	(69,356	)

Loss per Class A Share
Loss per Class A Share - basic	$	(0.04	)	$	(0.38	)
Loss per Class A Share - diluted	$	(0.04	)	$	(0.38	)
Weighted-average Class A Shares outstanding - basic	186,226,675			182,548,852
Weighted-average Class A Shares outstanding - diluted	186,226,675			182,548,852

Dividends Paid per Class A Share	$	0.01		$	—

See notes to consolidated financial statements.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) — UNAUDITED



	Och-Ziff Capital Management Group LLC
	Number of Class A Shares	Number of Class B Shares		Paid-in Capital			Accumulated Deficit			Shareholders' Deficit Attributable to Class A Shareholders			Shareholders' Equity Attributable to Noncontrolling Interests			Total Shareholders’ Equity (Deficit)

				(dollars in thousands)
As of December 31, 2016	184,843,255	297,317,019		$	3,097,431		$	(3,563,452	)	$	(466,021	)	$	171,929		$	(294,092	)
Capital contributions	—	—		—			—			—			251			251
Capital distributions	—	—		—			—			—			(4,563		)	(4,563		)
Cash dividends declared on Class A Shares	—	—		—			(1,849		)	(1,849		)	—			(1,849		)
Dividend equivalents on Class A restricted share units	—	—		151			(151		)	—			—			—
Relinquishment of Och-Ziff Operating Group A Units (Note 3)	—	(30,000,000	)	—			—			—			—			—
Equity-based compensation, net of taxes	283,698	172,459		7,451			—			7,451			10,766			18,217
Impact of changes in Och-Ziff Operating Group ownership (Note 3)	—	—		(12,173		)	—			(12,173		)	12,173			—
Dilution of proceeds from tax receivable agreement waiver (Note 3)	—	—		(21,219		)	—			(21,219		)	21,219			—
Change in redemption value of Preferred Units	—	—		(2,853		)	—			(2,853		)	(4,593		)	(7,446		)
Comprehensive net (loss) income, excluding amounts attributable to redeemable noncontrolling interests	—	—		—			(4,311		)	(4,311		)	9,778			5,467
As of March 31, 2017	185,126,953	267,489,478		$	3,068,788		$	(3,569,763	)	$	(500,975	)	$	216,960		$	(284,015	)

See notes to consolidated financial statements.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED



	Three Months Ended March 31,
	2017			2016

	(dollars in thousands)
Cash Flows from Operating Activities
Consolidated net income (loss)	$	5,817		$	(156,740	)
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Amortization of equity-based compensation	18,478			18,542
Depreciation and amortization and loss on disposal of fixed assets	4,212			3,402
Deferred income taxes	10,609			15,531
Operating cash flows due to changes in:
Income and fees receivable	116,319			49,274
Due from related parties	1,142			(1,328		)
Other assets, net	18,070			4,257
Due to related parties	113			(341		)
Compensation payable	(166,951		)	(163,749		)
Other liabilities	(14,902		)	222,831
Consolidated Och-Ziff funds related items:
Net gains of consolidated Och-Ziff funds	(235		)	(545		)
Purchases of investments	(47,831		)	(48,974		)
Proceeds from sale of investments	49,750			50,700
Other assets of consolidated Och-Ziff funds	(3,789		)	(2,163		)
Other liabilities of consolidated Och-Ziff funds	1,456			1,741
Net Cash Used in Operating Activities	(7,742		)	(7,562		)

Cash Flows from Investing Activities
Purchases of fixed assets	(1,335		)	(1,331		)
Proceeds from sale of fixed asset (Note 7)	51,724			—
Purchases of United States government obligations	—			(29,915		)
Maturities of United States government obligations	—			18,500
Investment in Och-Ziff funds	(212		)	(1,569		)
Return of investment in Och-Ziff funds	3,373			554
Net Cash Provided by (Used in) Investing Activities	53,550			(13,761		)

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS — (continued)



	Three Months Ended March 31,
	2017			2016

	(dollars in thousands)
Cash Flows from Financing Activities
Issuance and sale of Preferred Units, net of issuance costs	150,054			—
Contributions from noncontrolling and redeemable noncontrolling interests	251			233
Distributions to noncontrolling and redeemable noncontrolling interests	(4,563		)	(1,821		)
Dividends on Class A Shares	(1,849		)	—
Repayment of debt obligations	(167,319		)	(905		)
Withholding taxes paid on vested RSUs	(385		)	(1,628		)
Other, net	—			100
Net Cash Used in Financing Activities	(23,811		)	(4,021		)
Net Change in Cash and Cash Equivalents	21,997			(25,344		)
Cash and Cash Equivalents, Beginning of Period	329,813			254,070
Cash and Cash Equivalents, End of Period	$	351,810		$	228,726


Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest	$	1,960		$	419
Income taxes	$	1,149		$	545

See notes to consolidated financial statements.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

1. OVERVIEW

Och-Ziff Capital Management Group LLC (the “Registrant”), a Delaware limited liability company, together with its consolidated subsidiaries (collectively, the “Company”), is a global alternative asset management firm with offices in New York, London, Hong Kong, Mumbai, Beijing, Shanghai and Houston. The Company provides asset management services to its investment funds (the “Och-Ziff funds” or the “funds”), which pursue a broad range of global investment opportunities. The Company currently manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”) and other customized solutions for its clients.

The Company’s primary sources of revenues are management fees, which are based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of its funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the Och-Ziff funds.

The Company currently has two operating segments: the Och-Ziff Funds segment and the Company ’ s real estate business. T he Och-Ziff Funds segment is currently the Company’s only reportable operating segment under U.S. generally accepted accounting principles (“GAAP”) and provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles. The Company’s real estate business, which provides asset management services to its real estate funds, is included within Other Operations, as it does not meet the threshold of a reportable operating segment under GAAP.

The Company generates substantially all of its revenues in the United States. The liability of the Company’s Class A Shareholders is limited to the extent of their capital contributions.

The Company conducts its operations through OZ Management LP (“OZ Management”), OZ Advisors LP (“OZ Advisors I”) and OZ Advisors II LP (“OZ Advisors II”) (collectively, the “Operating Partnerships,” and collectively with their consolidated subsidiaries, the “Och-Ziff Operating Group”). References to the Company’s “executive managing directors” refer to the current limited partners of OZ Management, OZ Advisors and OZ Advisors II other than the Company’s intermediate holding companies, including the Company’s founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business. References to the “Ziffs” refer collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons. References to the Company’s “intermediate holding companies” refer, collectively, to Och-Ziff Holding Corporation (“Och-Ziff Corp”) and Och-Ziff Holding LLC, both of which are wholly owned subsidiaries of the Registrant.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited, interim, consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 (the “Annual Report”). In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year, primarily because of the majority of incentive income and actual amounts of discretionary cash bonuses being recorded in the fourth quarter each year. All significant intercompany transactions and balances have been eliminated in consolidation.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Interim Accrual of Annual Discretionary Cash Bonus

In the first quarter of 2017, the Company decided to provide a minimum annual discretionary cash bonus. As a result of this decision, the Company will accrue the minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year.

Reclassification of Changes in Tax Receivable Agreement Liability

In the first quarter of 2017, the Company reclassified the changes in tax receivable agreement liability from general, administrative and other expenses to other income (loss) in the consolidated statements of comprehensive income (loss). Prior period amounts have been reclassified to conform to the current year presentation. The reclassification had no impact on the Company’s results of operations.

Recently Adopted Accounting Pronouncements

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting . The requirements of ASU 2016-09 were effective for the Company beginning in the first quarter of 2017. As permitted under the new guidance, the Company has made an accounting policy election to account for forfeitures on share-based compensation arrangements as they occur. Prior to the adoption of ASU 2016-09, the Company was required to estimate forfeitures. The decision to no longer estimate forfeitures was not material to the financial statements. Additionally, the Company will recognize all income tax effects of awards within consolidated and comprehensive net income when the awards vest or are settled. Prior to the adoption of ASU 2016-09, excess tax benefits were recorded to paid-in capital, while tax deficiencies were recorded in consolidated and comprehensive net income to the extent in excess of previously recorded excess tax benefits. The amendments related to the recognition of excess tax benefits and tax deficiencies in the statement of comprehensive income were applied prospectively.

In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties that Are under Common Control. The guidance was effective for the Company beginning in the first quarter of 2017. ASU 2016-17 amended the consolidation guidance with respect to a single decision maker’s evaluation of interests held through related parties that are under common control when it is determining whether it is the primary beneficiary of a variable interest entity (“VIE”). Under the amended guidance, a reporting entity considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. The adoption of ASU 2016-17 did not have a material impact on the Company’s consolidated financial statements.

None of the other changes to GAAP that went into effect in the three months ended March 31, 2017 has had a material effect on the Company’s consolidated financial statements.

Future Adoption of Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 -Revenue Recognition and most industry-specific revenue recognition guidance throughout the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company is in the process of implementing the new revenue guidance and is continuing to evaluate the effect the ASU will have on its consolidated financial statements, including, whether the Company: (a) will be required to recognize incentive income earlier than as prescribed under current guidance, (b) should present certain revenue streams on a gross or net basis depending on whether it is identified as principal or agent in a transaction where the standard’s core principle is one of control and not risks and rewards, as is the cash with the current guidance, and (c) whether certain costs associated with

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

business development and deal origination, which are currently recognized as an expense as incurred, should be initially deferred and subsequently recognized as an expense over a specified period. The ASU also introduces new qualitative and quantitative disclosure requirements and requires disaggregation of revenue information beyond that which is currently required, that will significantly impact the information presented in the notes to the Company’s consolidated financial statements. The Company expects to adopt ASU 2014-09 using a modified retrospective application approach in the first quarter of 2018 .

In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 significantly changes accounting for lease arrangements, in particular from the perspective of the lessee. The Company is not currently a lessor in any significant lease arrangements, but is a lessee in several lease arrangements that would be impacted by the ASU. The Company has determined that most of its operating leases will be reported as lease obligations, along with offsetting right to use assets on its consolidated balance sheet at their present value, and will continue to recognize associated expenses within consolidated net income (loss) in a manner similar to the existing accounting for leases (i.e., on a straight-line basis over the lease term). Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The requirements of ASU 2016-02 are effective for the Company beginning in the first quarter of 2019. See Note 17 of the Company’s Annual Report for details related to the Company’s existing operating lease obligations.

None of the other changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements.

3. NONCONTROLLING INTERESTS AND OCH-ZIFF OPERATING GROUP OWNERSHIP

Noncontrolling interests represent ownership interests in the Company’s subsidiaries held by parties other than the Company, and primarily relate to the Och-Ziff Operating Group A Units held by the Company’s executive managing directors and fund investors’ interests in the consolidated Och-Ziff funds.

Net income (loss) attributable to the Och-Ziff Operating Group A Units is driven by the earnings (losses) of the Och-Ziff Operating Group. Net income attributable to fund investors’ interests in consolidated Och-Ziff funds is driven by the earnings of those funds.

As of March 31, 2017 , Och-Ziff Operating Group P Units (as defined below) do not participate in the economics of the Och-Ziff Operating Group and will remain non-participating until certain service and performance conditions are met, as described below.

The following table presents the components of the net income (loss) attributable to noncontrolling interests:



	Three Months Ended March 31,
	2017		2016

	(dollars in thousands)
Och-Ziff Operating Group A Units	$	9,635	$	(88,019	)
Consolidated Och-Ziff funds	—		262
Other	143		(88		)
	$	9,778	$	(87,845	)

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

The following table presents the components of the shareholders’ equity attributable to noncontrolling interests:



	March 31, 2017		December 31, 2016

	(dollars in thousands)
Och-Ziff Operating Group A Units	$	212,738	$	166,521
Consolidated Och-Ziff funds	—		—
Other	4,222		5,408
	$	216,960	$	171,929

The Preferred Units and fund investors’ interests in certain consolidated Och-Ziff funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests:



	Three Months Ended March 31, 2017
	Consolidated Funds		Preferred Units		Total

	(dollars in thousands)
Beginning balance	$	21,621	$	262,500	$	284,121
Change in redemption value of Preferred Units	—		7,446		7,446
Preferred Units issuance, net of issuance costs	—		150,054		150,054
Comprehensive income	350		—		350
Ending Balance	$	21,971	$	420,000	$	441,971

Och-Ziff Operating Group Ownership

The Company’s equity interest in the Och-Ziff Operating Group increased to 40.9% as of March 31, 2017 , from 38.3% as of December 31, 2016 . Changes in the Company’s interest in the Och-Ziff Operating Group have historically been, and in the future may be, driven by the following: (i) the exchange of Och-Ziff Operating Group A and P Units for an equal number of Class A Shares, at which time the related Class B Shares are also canceled; (ii) the issuance of Class A Shares under the Company’s Amended and Restated 2007 Equity Incentive Plan and 2013 Incentive Plan, primarily related to the settlement of RSUs; (iii) the forfeiture of Och-Ziff Operating Group A Units and related Class B Shares by a departing executive managing director; and (iv) the repurchase of Class A Shares and Och-Ziff Operating Group A Units. The Company’s interest in the Och-Ziff Operating Group is expected to continue to increase over time as additional Class A Shares are issued upon the exchange of Och-Ziff Operating Group A Units and settlement of RSUs. These increases will be offset upon any conversion by an executive managing director of Och-Ziff Operating Group D Units, which are not considered equity for GAAP purposes, into Och-Ziff Operating Group A Units, at which time an equal number of Class B Shares is also issued to the executive managing director.

Och-Ziff Operating Group P Units, 2017 Incentive Program and Limited Partnership Agreements Amendments

On February 13, 2017, the Company’s board of directors approved the Och-Ziff Capital Management Group LLC 2017 Incentive Program (the “2017 Incentive Program”). Under the terms of the 2017 Incentive Program, the Company granted Class P common units in each Operating Partnership (an “Incentive Award”) to certain executive managing directors. One Class P common unit in each Operating Partnership, collectively, is referred to as an “Och-Ziff Operating Group P Unit.”

The Company granted 71.9 million Och-Ziff Operating Group P Units in March 2017, at the average fair value of $1.25 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 35.7% , dividend rate of 10.0% , and risk-free discount rate of 2.2% . The requisite service period for these Incentive Awards was estimated to be 3.9 years at the time of the grant. Total unrecognized stock-based compensation expense related to

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

unvested awards was $89.5 million . There were 71.9 million Och-Ziff Operating Group P Units outstanding as of March 31, 2017 .

A grant of Och-Ziff Operating Group P Units will conditionally vest upon the applicable executive managing directors satisfying a service condition (the “Service Condition”) and certain market performance-based targets, expressed as percentages (the “Performance Condition”) being satisfied, as follows: 20% of Units vest upon a Performance Condition of 25% being achieved (i.e., total shareholder return from the contractually determined reference price of $3.21 ); an additional 40% (for a total of 60% ) of Units vest upon a Performance Condition of 50% being achieved; an additional 20% (for a total of 80% ) of Units vest upon a Performance Condition of 75% being achieved; and an additional 20% (for a total of 100% ) of the Units vest upon a Performance Condition of 125% being achieved. Achievement of the applicable Performance Conditions earlier than estimated can materially affect the amount of equity-based compensation expense recognized by the Company in any given period.

Executive managing directors will be entitled to receive distributions on their Och-Ziff Operating Group P Units only after satisfaction of the Service Condition and the Performance Condition, from which time the executive managing director will be entitled to receive the same distributions per Unit on each Och-Ziff Operating Group P Unit as holders of Och-Ziff Operating Group A Units and Och-Ziff Operating Group D Units.

If a holder of an Incentive Award has not satisfied both the Service Condition and the applicable Performance Condition has not been met with respect to the units comprising such Incentive Award by the sixth anniversary of the respective grant date, such units will be forfeited and canceled immediately.

Upon satisfaction of the Service Condition and the Performance Condition, Och-Ziff Operating Group P Units may be exchanged at the executive managing director’s discretion for Class A Shares (or the cash value thereof, as determined by the Board) provided that (i) sufficient Appreciation (as defined in the Limited Partnership Agreements) has occurred for each Och-Ziff Operating Group P Unit to have become economically equivalent to an Och-Ziff Operating Group A Unit, and (ii) shareholders approve an amendment to the Company’s 2013 Incentive Plan to reserve a sufficient number of Class A Shares under the 2013 Incentive Plan. Upon the exchange of an Och-Ziff Operating Group P Unit for a Class A Share (or the cash equivalent), the exchanging executive managing director will have a right to potential future payments owed to him or her under the tax receivable agreement.

Effective March 1, 2017, the Board of Directors approved amendments to the Limited Partnership Agreements of the Operating Partnerships that, in addition to the events discussed above, adjust the measurement thresholds used in determining whether sufficient Appreciation has taken place for Och-Ziff Operating Group D Units issued prior to March 1, 2017, to have become economically equivalent to Och-Ziff Operating Group A Units. This amendment makes it more likely that outstanding Och-Ziff Operating Group D Units will convert to Och-Ziff Operating Group A Units.

Relinquishment of Och-Ziff Operating Group A Units

Och-Ziff Corp and Och-Ziff Holding, as the general partners of the Operating Partnerships, entered into a Relinquishment Agreement with Daniel S. Och and certain family trusts over which Mr. Och has investment control (the “Och Trusts”) effective as of March 1, 2017 (the “Relinquishment Agreement”). Pursuant to the Relinquishment Agreement, Mr. Och and the Och Trusts agreed to cancel, in the aggregate, 30.0 million of their vested Och-Ziff Operating Group A Units. The Relinquishment Agreement provides that if any of the Och-Ziff Operating Group D Units granted to James S. Levin on March 1, 2017 are forfeited, such forfeited units (up to an aggregate amount of 30.0 million ) shall be reallocated to Mr. Och and the Och Trusts pursuant to the terms of the Limited Partnership Agreements. The Company accounted for the transaction as a repurchase of Och-Ziff Operating Group A Units for no consideration. A corresponding number of Class B Shares were also canceled.

Dilution of Proceeds from Tax Receivable Agreement Waiver

In September 2016, the Company amended the tax receivable agreement to provide that no amounts will be due or payable under the tax receivable agreement by Och-Ziff Corp, one of the Company’s wholly owned intermediate holding

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

companies, with respect to the 2015 and 2016 taxable years. During the first quarter of 2017, Och-Ziff Corp contributed to the Och-Ziff Operating Group the cash previously set aside for such payments, which resulted in a reallocation of such contribution between the Company’s paid-in capital and the paid-in capital of the Och-Ziff Operating Group A Units (including within noncontrolling interests).

4. FAIR VALUE DISCLOSURES

Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material.

Assets and liabilities measured at fair value are classified into one of the following categories:


•	Level I – Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives.

•

Level II – Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives.

•

Level III – Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations, and investments in affiliated credit funds.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Fair Value Measurements Categorized within the Fair Value Hierarchy

The following table summarizes assets measured at fair value on a recurring basis within the fair value hierarchy as of March 31, 2017 :



	As of March 31, 2017
	Level I		Level II		Level III		Total

	(dollars in thousands)
Investments of Och-Ziff, Excluding the Investments of Consolidated Och-Ziff Funds
United States government obligations included within cash and cash equivalents	$	19,977	$	—	$	—	$	19,977
Investments in CLO included within other assets, net ^{(1) (2)}	—		—		22,048		22,048
	$	19,977	$	—	$	22,048	$	42,025

Investments of Consolidated Och-Ziff Funds
Bank debt	$	—	$	19,333	$	16,663	$	35,996

_______________

(1) As of March 31, 2017 , investments in CLO had contractual principal amounts of $21.6 million outstanding.

(2) The Company elected to measure its investments in CLO at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net gains on investments in Och-Ziff funds and joint ventures in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLO using the effective interest method.

The following table summarizes assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2016 :



	As of December 31, 2016
	Level I		Level II		Level III		Total

	(dollars in thousands)
Investments of Och-Ziff, Excluding the Consolidated Funds
United States government obligations included within cash and cash equivalents	$	139,974	$	—	$	—	$	139,974
Investments in CLO included within other assets, net ^{(1) (2)}	—		—		21,341		21,341
	$	139,974	$	—	$	21,341	$	161,315

Investments of Consolidated Och-Ziff Funds
Bank debt	$	—	$	19,534	$	18,127	$	37,661

Liabilities of Och-Ziff, Excluding the Consolidated Funds
Obligation to deliver loans subject to forward sale agreement included within other liabilities	$	—	$	8,204	$	—	$	8,204

_______________

(1) As of December 31, 2016 , investments in CLO had contractual principal amounts of $21.3 million outstanding.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Reconciliation of Fair Value Measurements Categorized within Level III

The Company assumes that any transfers between Level I, Level II or Level III occur at the beginning of the reporting period presented. Gains and losses of Och-Ziff, excluding the consolidated funds are recorded within net gains on investments in Och-Ziff funds and joint ventures in the consolidated statements of comprehensive income (loss), and gains and losses of the consolidated Och-Ziff funds are recorded within net gains (losses) of consolidated Och-Ziff funds. Amounts related to the deconsolidation of the Company’s funds upon the adoption of ASU 2015-02 on January 1, 2016 are included within investment sales.

The following table summarizes the changes in the Company’s Level III assets and liabilities for the three months ended March 31, 2017 :



	December 31, 2016		Transfers In		Transfers Out			Investment Purchases / Issuances		Investment Sales / Settlements			Derivative Settlements		Gains (Losses)		March 31, 2017

	(dollars in thousands)
Investments of Och-Ziff, Excluding the Consolidated Funds
Investments in CLO	$	21,341	$	—	$	—		$	—	$	—		$	—	$	707	$	22,048

Investments of Consolidated Och-Ziff Funds
Bank debt	$	18,127	$	771	$	(4,878	)	$	27,497	$	(25,120	)	$	—	$	266	$	16,663

The following table summarizes the changes in the Company’s Level III assets and liabilities for the three months ended March 31, 2016 :



	December 31, 2015		Transfers In		Transfers Out			Investment Purchases / Issuances		Investment Sales / Settlements			Derivative Settlements		Gains (Losses)		March 31, 2016

	(dollars in thousands)
Bank debt	$	1,998,423	$	460	$	(489	)	$	19,614	$	(2,014,334	)	$	—	$	307	$	3,981
Real estate investments	719,957		—		—			—		(719,957		)	—		—		—
Residential mortgage-backed securities	323,571		—		—			—		(323,571		)	—		—		—
Collateralized debt obligations	83,759		—		—			—		(83,759		)	—		—		—
Energy and natural resources limited partnerships	70,604		—		—			—		(70,604		)	—		—		—
Commercial real estate debt	18,295		—		—			—		(18,295		)	—		—		—
Corporate bonds	—		—		—			—		—			—		—		—
Asset-backed securities	23,739		—		—			—		(23,739		)	—		—		—
Commercial mortgage-backed securities	13,803		—		—			—		(13,803		)	—		—		—
Other investments (including derivatives, net)	1,938		—		—			—		(1,938		)	—		—		—
	$	3,254,089	$	460	$	(489	)	$	19,614	$	(3,270,000	)	$	—	$	307	$	3,981

Transfers out of Level III presented in the tables above resulted from the fair values of certain securities becoming market observable, with fair value determined using independent pricing services. Transfers into Level III presented in the table above resulted from the valuation of certain investments with decreased market observability, with fair values determined using broker quotes or independent pricing services.

There were no transfers between Levels I and II during the periods presented above.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

The table below summarizes the net change in unrealized gains and losses on the Company’s Level III assets and liabilities held as of the reporting date. These gains and losses are included within net gains of consolidated Och-Ziff funds in the Company’s consolidated statements of comprehensive income (loss):



	Three Months Ended March 31,
	2017		2016

	(dollars in thousands)
Investments of Och-Ziff, Excluding the Consolidated Funds
Investments in CLO	$	707	$	—

Investments of Consolidated Och-Ziff Funds
Bank Debt	$	113	$	36

Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III

Investments in CLO and bank debt are valued using independent pricing services and thus there are no unobservable valuation inputs used in determining their fair value to disclose. For valuation methodologies of investments that were deconsolidated on January 1, 2016, please refer to the Company’s Annual Report.

Valuation Process for Fair Value Measurements Categorized within Level III

The Company has established an internal control infrastructure over the valuation of financial instruments that includes ongoing oversight by its Financial Controls Group and Valuation Committee, as well as periodic audits by the Company’s Internal Audit Group. These control functions are segregated from the trading and investing functions.

The Valuation Committee is responsible for establishing the valuation policy and monitors compliance with the valuation policy, ensuring that all of the funds’ investments reflect fair value, as well as providing oversight of the valuation process. The valuation policy includes, but is not limited to the following: determining the pricing sources used to value specific investment classes; the selection of independent pricing services; performing due diligence of independent pricing services; and the classification of investments within the fair value hierarchy. The Valuation Committee reviews a variety of reports on a monthly basis, which include, but are not limited to the following: summaries of the sources used to determine the value of the funds’ investments; summaries of the fair value hierarchy of the funds’ investments; methodology changes and variance reports that compare the values of investments to independent pricing services. The Valuation Committee is independent from the investment professionals and may obtain input from investment professionals for consideration in carrying out its responsibilities.

The Valuation Committee has assigned the responsibility of performing price verification and related quality controls in accordance with the valuation policy to the Financial Controls Group. The Financial Controls Group’s other responsibilities include, but are not limited to the following: overseeing the collection and evaluation of counterparty prices, broker-dealer quotations, exchange prices and pricing information provided by independent pricing services. Additionally, the Financial Control Group is responsible for performing back testing by comparing prices observed in executed transactions to valuations and/or valuations provided by independent pricing service providers on a bi-weekly and monthly basis; performing stale pricing analysis on a monthly basis; performing due diligence reviews on independent pricing services on an annual basis; and recommending changes in valuation policies to the Valuation Committee. The Financial Controls Group also verifies that indicative broker quotations used to value certain investments are representative of fair value through procedures such as comparison to independent pricing services, back testing procedures, review of stale pricing reports and performance of other due diligence procedures as may be deemed necessary.

When pricing or verification sources cannot be obtained from external sources or if external prices are deemed unreliable, additional procedures are performed by the Financial Controls Group, which may include comparing unobservable inputs to observable inputs for similar positions, reviewing subsequent market activities, performing comparisons of actual versus

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

projected performance indicators, and reviewing the valuation methodology and key inputs. Independent third party valuation firms may be used to corroborate internal valuations.

Investment professionals and members of the Financial Controls Group review a daily profit and loss report, as well as other periodic reports that analyze the profit and loss and related asset class exposure of the funds’ investments.

The Internal Audit Group employs a risk-based program of audit coverage that is designed to provide an assessment of the design and effectiveness of controls over the Company’s operations, regulatory compliance, valuation of financial instruments and reporting. Additionally, the Internal Audit Group meets periodically with management and the Audit Committee of the Company’s Board of Directors to evaluate and provide guidance on the existing risk framework and control environment assessments.

Fair Value of Other Financial Instruments

Management estimates that the carrying value of the Company’s other financial instruments, including its debt obligations, approximated their fair values as of March 31, 2017 . The Senior Notes are categorized as Level II and the CLO Investment Loan is categorized as Level III within the fair value hierarchy. The fair value of the Senior Notes and the CLO Investment Loan were determined using independent pricing services.

5. TRANSFERS OF FINANCIAL ASSETS

Investment in CLO and Related Transactions

In the fourth quarter of 2016, the Company purchased $27.4 million of Euro-denominated loans in the open market and contemporaneously entered into a forward sale agreement to sell the loans at cost to a European CLO managed by the Company. As of March 31, 2017 , the entire balance of $27.4 million of the loans subject to the forward sale agreement was transferred and the criteria for derecognition met. The Company sold the derecognized loans to the CLO at cost, and therefore there were no realized gains or losses recognized on the sale.

In the fourth quarter of 2016, the Company purchased $21.5 million of senior secured and subordinated notes issued by the CLO to which it sold the loans discussed above. These investments in the CLO represent retained interests to the Company. The retained interest is reported as investment in CLO, at fair value, within other assets, net in the Company’s consolidated balance sheet (see Note 7 ).

The Company uses independent pricing services to value its investments in the CLO, and therefore the only key assumption is the price provided by such service. A corresponding adverse change of 10% or 20% on price would have a corresponding impact on the fair value of the Company’s investment. The Company has not yet received payments from its investment in the CLO nor any management fees from the CLO and does not expect to receive any payments until July 2017, in accordance with the underlying contractual agreements.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

6. VARIABLE INTEREST ENTITIES

In the ordinary course of business, the Company sponsors the formation of funds that are considered VIEs. See Note 2 of the Company’s Annual Report for a discussion of entities that are VIEs and the evaluation of those entities for consolidation by the Company.

The table below presents the assets and liabilities of VIEs consolidated by the Company:



	March 31, 2017		December 31, 2016

	(dollars in thousands)
Assets
Assets of consolidated Och-Ziff funds:
Investments, at fair value	$	35,996	$	37,661
Other assets of Och-Ziff funds	21,314		17,544
Total Assets	$	57,310	$	55,205

Liabilities
Liabilities of consolidated Och-Ziff funds:
Other liabilities of Och-Ziff funds	16,658		15,197
Total Liabilities	$	16,658	$	15,197

The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability.

The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 15 . The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated.

The table below presents the net assets of VIEs in which the Company has variable interests:



	March 31, 2017		December 31, 2016
	(dollars in thousands)
Net assets of unconsolidated VIEs in which the Company has a variable interest	$	3,988,814	$	4,069,617

Maximum risk of loss as a result of the Company's involvement with VIEs:
Unearned revenues	101,260		96,409
Income and fees receivable	27,165		13,074
Investments in Och-Ziff funds	34,423		35,868
Maximum Exposure to Loss	$	162,848	$	145,351

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

7. OTHER ASSETS, NET

The following table presents the components of other assets, net as reported in the consolidated balance sheets:



	March 31, 2017			December 31, 2016

	(dollars in thousands)
Fixed Assets:
Corporate aircraft held for sale	$	4,571		$	56,251
Leasehold improvements	52,415			54,414
Computer hardware and software	40,996			40,093
Furniture, fixtures and equipment	8,909			8,919
Accumulated depreciation and amortization	(51,666		)	(49,890		)
Fixed assets, net	55,225			109,787
Investments in Och-Ziff funds:
Investments in CLO, at fair value	22,048			21,341
Investments in other funds, equity method	14,301			16,453
Investments in Och-Ziff funds	36,349			37,794
Goodwill	22,691			22,691
Prepaid expenses	13,329			12,753
Trades receivable for loans subject to forward sale agreement	—			10,391
Loans held for sale	—			8,204
Other	5,376			6,344
Total Other Assets, Net	$	132,970		$	207,964

In March 2017, the Company sold one of its corporate aircraft for $51.7 million . The Company expects to sell the remaining corporate aircraft held for sale in the second quarter of 2017.

8. OTHER LIABILITIES

The following table presents the components of other liabilities as reported in the consolidated balance sheets:



	March 31, 2017		December 31, 2016

	(dollars in thousands)
Unearned incentive income	$	100,870	$	96,079
Accrued expenses	28,286		30,728
Deferred rent credit	9,951		15,046
Interest payable	6,608		2,654
Loan trades payable	—		10,391
Obligation to deliver loans subject to forward sale agreement, at fair value	—		8,204
Other	14,363		11,892
Total Other Liabilities	$	160,078	$	174,994

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

9. DEBT OBLIGATIONS

As of March 31, 2017 , the Company’s outstanding indebtedness was primarily comprised of senior notes (the “Senior Notes”) and a secured loan to finance the purchase of the Company’s investments in a CLO (“CLO Investment Loan”). The table below presents scheduled principal payments on the Company’s debt obligations for each of the next five years:



	Scheduled Payments ⁽¹⁾

	(dollars in thousands)
April 1, 2017 - December 31, 2017	$	—
2018	$	—
2019	$	400,000
2020	$	—
2021	$	—

_______________

(1) The Company is not currently able to make a reasonable estimate of the timing of payments in individual years in connection with the CLO Investment Loan (as defined below), as the timing of those payments is contingent on principal payments made to the Company on the Investments in CLO, and therefore the Company did not include those principal payments in the table above.

Senior Notes

On November 20, 2014, the Company issued $400.0 million of Senior Notes due November 20, 2019 , unless earlier redeemed or repurchased. The Senior Notes were issued at a price of 99.417% of the aggregate principal amount and bear interest at a rate per annum of 4.50% payable semiannually in arrears. The Senior Notes are unsecured and unsubordinated obligations issued by a subsidiary of the Company, Och-Ziff Finance Co. LLC (“Och-Ziff Finance”), and are fully and unconditionally guaranteed, jointly and severally, on an unsecured and unsubordinated basis by OZ Management, OZ Advisors I and OZ Advisors II (collectively, the “Senior Notes Guarantors”).

The Senior Notes may be redeemed from time to time at the Company’s option, in whole or in part, at a redemption price equal to the greater of 100% of the principal amount to be redeemed and a make-whole redemption price (as defined in the Senior Notes indenture), in either case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the Company will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount, plus any accrued and unpaid interest.

The Senior Notes do not have any financial maintenance covenants. However, the Senior Notes include certain covenants, including limitations on Och-Ziff Finance’s and, as applicable, the Senior Notes Guarantors’ ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of their respective subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all assets. The Senior Notes also provide for customary events of default, bankruptcy, insolvency or reorganization that may cause the Senior Notes to become immediately due and payable, plus any accrued and unpaid interest.

Revolving Credit Facility

On November 20, 2014, the Company entered into a $150.0 million , 5 -year unsecured Revolving Credit Facility, which was subsequently amended on December 29, 2015, the proceeds of which may be used for working capital, general corporate purposes or other liquidity needs. The facility matures on November 20, 2019 . The borrower under the Revolving Credit Facility is OZ Management and the facility is guaranteed by OZ Advisors I, OZ Advisors II and Och-Ziff Finance. The Company is able to increase the maximum amount of credit available under the facility to $225.0 million if certain conditions are satisfied.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

The Company is subject to a fee of 0.10% to 0.25% per annum on undrawn commitments during the term of the Revolving Credit Facility. Outstanding borrowings will bear interest at a rate per annum of LIBOR plus 1.00% to 2.00% , or a base rate plus 0% to 1.00% . The commitment fees and the spreads over LIBOR or the base rate are based on OZ Management’s credit rating throughout the term of the facility. The interest rate on the drawn portion of the commitment during the quarter ended March 31, 2017 was LIBOR plus 2.00% , and the undrawn commitment fee was 0.25% .

In March 2017, the Company repaid its outstanding obligation under the Revolving Credit Facility in full, and as a result has $150.0 million available under the facility as of March 31, 2017 .

The Revolving Credit Facility includes two financial maintenance covenants. The first covenant prohibits total fee-paying assets under management as of the last day of any fiscal quarter to be less than $22.0 billion for two successive quarters. The second covenant prohibits the economic income leverage ratio (as defined in the Revolving Credit Facility) as of the last day of any fiscal quarter from exceeding 4.0 to 1.0. The Revolving Credit Facility allows a limited right to cure an event of default resulting from noncompliance with the economic income leverage ratio test with an equity contribution made to the borrower, OZ Management. Such cure right may not be used more than two times in any four-quarter period or more than three times during the term of the facility.

The Revolving Credit Facility includes provisions that restrict or limit, among other things, the ability of Och-Ziff Operating Group from:


•	Incurring certain additional indebtedness or issuing certain equity interest.


•	Creating liens.


•	Paying dividends or making certain other payments when there is a default or event of default under the Revolving Credit Facility.


•	Merging, consolidating, selling or otherwise disposing of its assets.


•	Engaging in certain transactions with shareholders or affiliates.


•	Engaging in a substantially different line of business.


•	Amending its organizational documents in a manner materially adverse to the lenders.

The Revolving Credit Facility permits the Och-Ziff Operating Group to incur, among other things, up to $150.0 million of indebtedness, up to an additional $200.0 million of indebtedness for financing of investments in CLOs in order to comply with risk retention regulatory requirements, and additional indebtedness so long as, after giving effect to the incurrence of such indebtedness, it is in compliance with an economic income leverage ratio of 4.0 to 1.0 and no default or event of default has occurred and is continuing. The facility also permits the Och-Ziff Operating Group to create liens to, among other things, secure indebtedness related to financing of CLO risk retention investments, as well as other indebtedness and obligations of up to $50.0 million .

Aircraft Loan

In February 2014, the Company entered into the Aircraft Loan to finance installment payments towards the purchase of a corporate aircraft. In March 2017, the Company sold the aircraft and repaid the outstanding principal balance in the amount of $46.4 million .

CLO Investment Loan

On November 28, 2016, the Company entered into a $16.0 million loan to finance 75% of its investment in the CLO (see Note 5 ). The CLO Investment Loan is collateralized by the notes of the CLO held by the Company and is subject to an interest rate of EURIBOR plus 2.23% . In general, the Company will make interest and principal payments on the CLO

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Investment Loan at such time interest payments are received on its investment in the CLO and will make principal payments on the CLO Investment Loan to the extent principal payments are received on its investment in the CLO. Any remaining unpaid principal balance is due on December 15, 2023 . The CLO Investment Loan is subject to customary events of default and covenants and includes terms that require the Company’s continued involvement with the CLO. As of March 31, 2017 , $16.2 million of principal was outstanding under the CLO Investment Loan.

10. PREFERRED UNITS

Pursuant to a securities purchase agreement, dated September 29, 2016 (the “Purchase Agreement”), certain of the Company’s executive managing directors, including Daniel S. Och (the “EMD Purchasers”), agreed to purchase up to a total of 400,000 Preferred Units for an aggregate amount of up to $400.0 million . On October 5, 2016, the Company completed a $250.0 million issuance and sale of 250,000 Preferred Units. On January 23, 2017, the Company completed an additional $150.0 million issuance and sale of 150,000 Preferred Units.

Distributions on the Preferred Units are payable on the liquidation preference amount and on a cumulative basis at an initial distribution rate of 0% per annum until February 19, 2020 (the “Step-up Date”), after which the distribution rate will increase in stages thereafter to a maximum of 10% per annum on and after the eighth anniversary of the Step-up Date. Subject to certain exceptions, unless distributions on the Preferred Units are declared and paid in cash for the then current distribution period and all preceding periods after the initial closing, the Och-Ziff Operating Group entities may not declare or pay distributions on or repurchase any of their equity securities that rank equal with or junior to the Preferred Units.

Following the occurrence of a change of control event, the Och-Ziff Operating Group entities will redeem the Preferred Units at a redemption price equal to the liquidation preference plus all accumulated but unpaid distributions (collectively, the “liquidation value”). For so long as the Och-Ziff Operating Group entities do not redeem all of the outstanding Preferred Units, the distribution rate will increase by 7% per annum, beginning on the 31 st day following such change in control. The Och-Ziff Operating Group entities will not be required to effect such redemption until the earlier of (i) 91 days after the maturity date of the Revolving Credit Facility and (ii) the payment in full of all loans and other obligations and the termination of all commitments thereunder.

The Och-Ziff Operating Group entities may, at their option, redeem the Preferred Units at a price equal to: (i) 105% of the liquidation value until the day immediately prior to the Step-up Date; (ii) 103% of the liquidation value thereafter until the day immediately prior to the first anniversary of the Step-up Date; (iii) 101% of the liquidation value thereafter until the day immediately prior to the second anniversary of the Step-up Date; and (iv) thereafter at a price equal to the liquidation value. In addition, from and after March 31, 2020, if the amounts that were distributed to partners of the Och-Ziff Operating Group entities in respect of their equity interests in the Och-Ziff Operating Group entities (other than amounts distributed in respect of tax distributions or certain other distributions) or utilized for repurchase of units by such entities (or which were available but not used for such purposes) for the immediately preceding fiscal year were in excess of $100 million in the aggregate, then an amount equal to 20% of such excess shall be utilized to redeem Preferred Units on a pro rata basis for an amount equal to the liquidation value.

Furthermore, if the average closing price of the Company’s Class A Shares exceeds $15.00 per share for the previous 20 trading days, the Och-Ziff Operating Group entities have agreed to use their reasonable best efforts to redeem all of the outstanding Preferred Units as promptly as practicable. If such event occurs prior to February 19, 2020, the Company has agreed to use its reasonable best efforts to obtain consents from its lenders in order to redeem the Preferred Units as promptly as practicable.

Although the Preferred Units do not have voting rights, the consent of the holders’ committee, which initially consists of Daniel S. Och as sole member, is required to effect (i) any amendment to or waiver of the terms of the Preferred Units or (ii) any amendment to the limited partnership agreement of an Och-Ziff Operating Group entity that would have an adverse effect on any holder of the Preferred Units. Under the terms of the Preferred Units, each Och-Ziff Operating Group entity is

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

prohibited from issuing any equity securities (or any debt or other securities convertible into equity securities of such entity) that rank equally with, or senior to, the Preferred Units, without the prior written consent of the holders’ committee.

As of March 31, 2017 , the Company had 400,000 Preferred Units issued and outstanding.

11. INCOME TAXES

The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as tax laws and regulations change. Additionally, the amount of incentive income and discretionary cash bonuses recorded in any given quarter can have a significant impact on the Company’s effective tax rate. Accordingly, the effective tax rate for interim periods is not indicative of the tax rate expected for a full year.

The Registrant and each of the Och-Ziff Operating Group entities are partnerships for U.S. federal income tax purposes. Due to the Company’s legal structure, only a portion of the income earned by the Company is subject to corporate-level tax rates in the United States and in foreign jurisdictions.

The provision for income taxes includes federal, state and local taxes in the United States and foreign taxes at an approximate effective tax rate of 67.5% and -13.4% for the three months ended March 31, 2017 and 2016 , respectively. The reconciling items from the Company’s statutory rate to the effective tax rate were driven primarily by the following: (i) a portion of the Company’s consolidated net income is not subject to federal, state and local corporate income taxes in the United States, as these amounts are allocated to the executive managing directors on their Och-Ziff Operating Group A Units or to fund investors in the Company’s consolidated funds (each of which is included within noncontrolling interests); (ii) a portion of the income earned by the Company is subject to the New York City unincorporated business tax; (iii) certain foreign subsidiaries are subject to foreign corporate income taxes; and (iv) the valuation allowance on the Company’s foreign tax credits increased during the quarter.

In accordance with GAAP, the Company recognizes tax benefits for amounts that are “more likely than not” to be sustained upon examination by tax authorities. For uncertain tax positions in which the benefit to be realized does not meet the “more likely than not” threshold, the Company establishes a liability, which is included within other liabilities in the consolidated balance sheets.

As of March 31, 2017 and December 31, 2016 , the Company had a liability for unrecognized tax benefits of $7.0 million . As of and for the three months ended March 31, 2017 , the Company did not accrue interest or penalties related to uncertain tax positions. As of March 31, 2017 , the Company does not believe that there will be a significant change to the uncertain tax positions during the next 12 months. The Company’s total unrecognized tax benefits that, if recognized, would affect its effective tax rate was $4.6 million as of March 31, 2017 .

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

12. GENERAL, ADMINISTRATIVE AND OTHER

The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss):



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Professional services	$	13,148	$	23,375
Occupancy and equipment	10,903		9,328
Information processing and communications	7,029		10,349
Recurring placement and related service fees	5,444		12,531
Business development	2,757		4,669
Insurance	1,960		4,004
Other expenses	4,687		3,413
	45,928		67,669
FCPA settlements expense	—		200,000
Total General, Administrative and Other	$	45,928	$	267,669

13. (LOSS) EARNINGS PER CLASS A SHARE

Basic (loss) earnings per Class A Share is computed by dividing the net (loss) income attributable to Class A Shareholders by the weighted-average number of Class A Shares outstanding for the period. For the three months ended March 31, 2017 and 2016 the Company included 1,326,320 and 1,364,560 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted (loss) earnings per Class A Share.

The Company did not include the Och-Ziff Operating Group P Units in the calculations of dilutive earnings per share, as the equity awards are not yet participating in the economics of the Company as the Performance Conditions have not been met as of March 31, 2017 (see Note 3 ).

The following tables present the computation of basic and diluted (loss) earnings per Class A Share:



Three Months Ended March 31, 2017	Net Loss Attributable to Class A Shareholders			Weighted-Average Class A Shares Outstanding	Loss Per Class A Share			Number of Antidilutive Units Excluded from Diluted Calculation

	(dollars in thousands, except per share amounts)
Basic	$	(7,164	)	186,226,675	$	(0.04	)
Effect of dilutive securities:
Och-Ziff Operating Group A Units	—			—				287,004,764
RSUs	—			—				19,730,352
Diluted	$	(7,164	)	186,226,675	$	(0.04	)

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017



Three Months Ended March 31, 2016	Net Loss Attributable to Class A Shareholders			Weighted-Average Class A Shares Outstanding	Loss Per Class A Share			Number of Antidilutive Units Excluded from Diluted Calculation

	(dollars in thousands, except per share amounts)
Basic	$	(69,356	)	182,548,852	$	(0.38	)
Effect of dilutive securities:
Och-Ziff Operating Group A Units	—			—				297,317,019
RSUs	—			—				14,758,228
Diluted	$	(69,356	)	182,548,852	$	(0.38	)

14. RELATED PARTY TRANSACTIONS

Due from Related Parties

Amounts due from related parties relate primarily to amounts due from the Och-Ziff funds for expenses paid on their behalf. These amounts are reimbursed to the Company on an ongoing basis.

Due to Related Parties

Amounts due to related parties relate primarily to future payments owed to the Company’s executive managing directors and the Ziffs under the tax receivable agreement, as discussed further in Note 15 .

Management Fees and Incentive Income Earned from the Och-Ziff Funds

The Company earns substantially all of its management fees and incentive income from the Och-Ziff funds, which are considered related parties as the Company manages the operations of and makes investment decisions for these funds.

Management Fees and Incentive Income Earned from Related Parties and Waived Fees

As of March 31, 2017 and 2016 , respectively, approximately $2.5 billion , of the Company’s assets under management represented investments by the Company, its executive managing directors, employees and certain other related parties in the Company’s funds. As of March 31, 2017 and 2016 , approximately 65% and 49% , respectively, of these affiliated assets under management were not charged management fees and were not subject to an incentive income calculation.

The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds:



	Three Months Ended March 31,
	2017		2016

	(dollars in thousands)
Fees charged on investments held by related parties:
Management fees	$	2,691	$	4,767
Incentive income	$	1,878	$	920

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Corporate Aircraft

The Company’s corporate aircraft are used for business purposes. From time to time, certain executive managing directors use the aircraft for personal use. For the three months ended March 31, 2017 and 2016 the Company charged $291 thousand and $321 thousand , respectively, for personal use of the aircraft by certain executive managing directors.

15. COMMITMENTS AND CONTINGENCIES

Tax Receivable Agreement

The purchase of Och-Ziff Operating Group A Units from the executive managing directors and the Ziffs with the proceeds from the 2007 Offerings, and subsequent taxable exchanges by them of Partner Equity Units for Class A Shares on a one-for-one basis (or, at the Company’s option, a cash equivalent), resulted, and, in the case of future exchanges, are anticipated to result, in an increase in the tax basis of the tangible and intangible assets of the Och-Ziff Operating Group that would not otherwise have been available. As a result, the Company expects that its future tax liability will be reduced. Pursuant to the tax receivable agreement entered into among the Company, the executive managing directors and the Ziffs, the Company has agreed to pay to the executive managing directors and the Ziffs 85% of the amount of tax savings, if any, actually realized by the Company.

The Company recorded its initial estimate of future payments under the tax receivable agreement as a decrease to paid-in capital and an increase in amounts due to related parties in the consolidated financial statements. Subsequent adjustments to the liability for future payments under the tax receivable agreement related to changes in estimated future tax rates or state income tax apportionment are recognized through current period earnings in the consolidated statements of comprehensive income (loss).

In connection with the departure of certain former executive managing directors since the IPO, the right to receive payments under the tax receivable agreement by those former executive managing directors was contributed to the Och-Ziff Operating Group. As a result, the Company expects to pay to the remaining executive managing directors and the Ziffs approximately 78% (from 85% at the time of the IPO) of the amount of cash savings, if any, in federal, state and local income taxes in the United States that the Company actually realizes as a result of the increases in tax basis.

The estimate of the timing and the amount of future payments under the tax receivable agreement involves several assumptions that do not account for the significant uncertainties associated with these potential payments, including an assumption that Och-Ziff Corp will have sufficient taxable income in the relevant tax years to utilize the tax benefits that would give rise to an obligation to make payments. The actual timing and amount of any actual payments under the tax receivable agreement will vary based upon these and a number of other factors. As of March 31, 2017 , the estimated future payment under the tax receivable agreement was $520.8 million , which is recorded in due to related parties on the consolidated balance sheets.

Lease Obligations

The Company has non-cancelable operating leases for its headquarters in New York expiring in 2029 and various other operating leases for its offices in London, Hong Kong, Mumbai, Beijing, Shanghai and Houston expiring on various dates through 2024 . The Company also has operating leases for other locations, as well as operating leases on computer hardware. The Company recognizes expense related to its operating leases on a straight-line basis over the lease term taking into account any rent holiday periods. The related lease commitments have not changed materially since December 31, 2016.

Litigation

From time to time, the Company is involved in litigation and claims incidental to the conduct of the Company’s business. The Company is also subject to extensive scrutiny by regulatory agencies globally that have, or may in the future have, regulatory authority over the Company and its business activities. This has resulted, or may in the future result, in regulatory agency investigations, litigation and subpoenas and costs related to each.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

On May 5, 2014, a purported class of shareholders filed a lawsuit against the Company in the U.S. District Court for the Southern District of New York ( Menaldi v. Och-Ziff Capital Mgmt., et al. ). The amended complaint asserted claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from February 9, 2012 to August 22, 2014. Daniel Och, Joel Frank and Michael Cohen were also named as defendants. On March 16, 2015, all defendants moved to dismiss the amended complaint. On February 17, 2016, the court entered an order granting in part the motion to dismiss filed by the Company and Messrs. Och and Frank and dismissing Mr. Cohen from the action. On March 23, 2016, the Company and Messrs. Och and Frank filed their answer to the amended complaint. On November 18, 2016, plaintiffs filed a second amended complaint asserting claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from November 18, 2011 to April 11, 2016. The second amended complaint alleges, among other things, breaches of certain disclosure obligations with respect to matters that were under investigation by the SEC and the DOJ, and names the Company and Messrs. Och, Frank and Cohen as defendants. On November 23, 2016, Mr. Cohen objected to being named as a defendant in the second amended complaint on procedural grounds. On December 21, 2016, the court directed the plaintiffs to file a motion for permission to renew their claims against Mr. Cohen. Plaintiffs filed their motion on January 7, 2017, and Mr. Cohen filed his opposition on January 21, 2017. On January 11, 2017, the Company and Messrs. Och and Frank filed motions to dismiss those portions of the second amended complaint that seek to revive dismissed claims or assert new claims against them. On March 24, 2017, plaintiffs filed their opposition to the motion to dismiss.

The Company believes the pending case is without merit and intends to defend it vigorously. The Company is unable to reasonably estimate the amount of loss or range of loss possible for this case.

Unearned Incentive Income

The Company receives incentive income distributions from certain real estate funds that are subject to clawback in the event of future losses in the respective fund. The Company recognizes this incentive income when it is no longer subject to clawback. These clawback contingencies will be resolved as remaining investments in the respective funds are realized, the timing of which is uncertain. The following table summarizes the activity in the Company’s unearned incentive income liability as of March 31, 2017 :



	Unearned Incentive Income
	(dollars in thousands)
Balance as of December 31, 2016	$	96,079
Incentive income collected but subject to clawback	5,995
Incentive income recognized	(1,204		)
Balance as of March 31, 2017	$	100,870

Investment Commitments

From time to time, certain funds consolidated by the Company may have commitments to fund investments. These commitments are funded through contributions from investors in those funds, including the Company if it is an investor in the relevant fund.

The Company has unfunded capital commitments of $21.9 million to certain funds it manages. It expects to fund these commitments over the next five years. In addition, certain of the Company’s executive managing directors, collectively, have capital commitments to funds managed by the Company of up to $39.9 million . The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company’s executive managing directors individually.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

The Company has committed to fund a portion of the operating budget for a joint venture. The amount of the commitment will be equal to the actual costs incurred in the projects the joint venture manages, as determined by the Company and its joint venture partner. The joint venture periodically returns substantially all of the cash that is contributed by the Company, as expenses incurred by the joint venture are generally reimbursed by the projects it manages.

Other Contingencies

In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.

16. SEGMENT INFORMATION

The Company’s operating segments are the Och-Ziff Funds segment and the Company’s real estate business. The Och-Ziff Funds, which provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles, is currently the Company’s only reportable operating segment under GAAP. The Company’s real estate business, which provides asset management services to its real estate funds, is included in the Other Operations, as it does not meet the threshold of a reportable operating segment under GAAP.

In addition to analyzing the Company’s results on a GAAP basis, management also reviews its results on an “Economic Income” basis. Economic Income excludes the adjustments described below that are required for presentation of the Company’s results on a GAAP basis, but that management does not consider when evaluating operating performance in any given period. Management uses Economic Income as the basis on which it evaluates the Company’s financial performance and makes resource allocation and other operating decisions. Management considers it important that investors review the same operating information that it uses.

Economic Income is a measure of pre-tax operating performance that excludes the following from the Company’s results on a GAAP basis:


•	Income allocations to the Company’s executive managing directors on their direct interests in the Och-Ziff Operating Group. Management reviews operating performance at the Och-Ziff Operating Group level, where the Company’s operations are performed, prior to making any income allocations.


•	Equity-based compensation expenses, depreciation and amortization expenses, and gains and losses on assets held for sale, as management does not consider these non-cash expenses to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement.


•	Changes in the tax receivable agreement liability and gains and losses on investments in Och-Ziff funds, as management does not consider these to be reflective of operating performance.


•	Amounts related to the consolidated Och-Ziff funds, including the related eliminations of management fees and incentive income, as management reviews the total amount of management fees and incentive income earned in relation to total assets under management and fund performance.

In addition, expenses related to incentive income profit-sharing arrangements are generally recognized at the same time the related incentive income revenue is recognized, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Deferred cash compensation is expensed in full in the year granted for Economic Income, rather than over the service period for GAAP.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Finally, management reviews Economic Income revenues by presenting management fees net of recurring placement and related service fees, rather than considering these fees an expense, and by excluding the impact of eliminations related to the consolidated Och-Ziff funds.

Management does not regularly review assets by operating segment in assessing operating segment performance and the allocation of company resources; therefore, the Company does not present total assets by operating segment. Substantially all interest income and all interest expense related to outstanding indebtedness is allocated to the Och-Ziff Funds segment. The Company’s FCPA settlements were all allocated to the Och-Ziff Funds segment.

Och-Ziff Funds Segment Results



	Three Months Ended March 31,
	2017		2016

	(dollars in thousands)
Och-Ziff Funds Segment:
Economic Income Revenues	$	126,724	$	166,769
Economic Income	$	43,446	$	(119,939	)

Reconciliation of Och-Ziff Funds Segment Revenues to Consolidated Revenues



	Three Months Ended March 31,
	2017			2016

	(dollars in thousands)
Total consolidated revenues	$	139,152		$	188,442
Adjustment to management fees ⁽¹⁾	(5,444		)	(12,531		)
Adjustment to incentive income ⁽²⁾	—			—
Other Operations revenues	(6,489		)	(8,776		)
Income of consolidated Och-Ziff funds	(495		)	(366		)
Economic Income Revenues - Och-Ziff Funds Segment	$	126,724		$	166,769

_______________


(1)	Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated Och-Ziff funds is also removed.


(2)	Adjustment to exclude the impact of eliminations related to the consolidated Och-Ziff funds.

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

MARCH 31, 2017

Reconciliation of Och-Ziff Funds Segment Economic Income to Loss Attributable to Class A Shareholders



	Three Months Ended March 31,
	2017			2016

	(dollars in thousands)
Net Loss Attributable to Class A Shareholders—GAAP	$	(7,164	)	$	(69,356	)
Change in redemption value of Preferred Units	2,853			—
Net Loss Attributable to Och-Ziff Capital Management Group LLC—GAAP	$	(4,311	)	$	(69,356	)
Net income (loss) attributable to the Och-Ziff Operating Group A Units	9,635			(88,019		)
Equity-based compensation, net of RSUs settled in cash	18,478			18,542
Income taxes	12,056			18,539
Allocations to Och-Ziff Operating Group D Units	3,360			875
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance	1,979			1,264
Changes in tax receivable agreement liability	—			(145		)
Depreciation and amortization and loss on disposal of fixed assets	4,212			3,402
Other adjustments	(1,011		)	(431		)
Other Operations	(952		)	(4,610		)
Economic Income - Och-Ziff Funds Segment	$	43,446		$	(119,939	)

17. SUBSEQUENT EVENTS

Dividend

On May 2, 2017 , the Company announced a cash dividend of $0.02 per Class A Share. The dividend is payable on May 19, 2017 , to holders of record as of the close of business on May 12, 2017 .

Item 2 . Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Part II—Item 1A. Risk Factors” of this report. Actual results may differ materially from those contained in any forward-looking statements. This MD&A should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this quarterly report . An investment in our Class A Shares is not an investment in any of our funds.

Overview

Preferred Units Offering

As discussed in Note 10 to our consolidated financial statements, on September 29, 2016, we entered into the Purchase Agreement with the EMD Purchasers. Pursuant to the Purchase Agreement, the EMD Purchasers agreed to purchase up to $400.0 million of Preferred Units. In October 2016, we issued $250.0 million of the Preferred Units to the EMD Purchasers. An additional $150.0 million of Preferred Units were issued to the EMD Purchasers in January 2017. We used the proceeds from the Preferred Units issued in October 2016, as well as cash on hand, to pay the $412.1 million in penalties and disgorgement related to the settlements with the SEC and the DOJ discussed above. We used the proceeds from the second sale of the Preferred Units in January 2017 to pay the outstanding balance under our Revolving Credit Facility.

Overview of Our Financial Results

We reported GAAP net loss attributable to Class A Shareholders of $7.2 million for the 2017 first quarter , compared to net loss of $69.4 million for the 2016 first quarter , primarily due to the $200.0 million FCPA settlements expense taken in the first quarter of 2016, as well as higher incentive income and lower income taxes year-over-year, partially offset by lower management fees. Also partially offsetting the year-over-year improvement in net loss was higher bonus expense, which was driven by our decision to provide a minimum annual discretionary cash bonus. As a result of this decision, we will accrue the minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year.

We reported Economic Income of $44.4 million for the 2017 first quarter , compared to net loss of $115.3 million for the 2016 first quarter , primarily due to the $200.0 million FCPA settlements expense taken in the first quarter of 2016, as well as higher incentive income. These improvements were partially offset by lower management fees, as well as higher bonus expense due to our decision to provide a minimum annual discretionary cash bonus.

Economic Income is a non-GAAP measure. For additional information regarding non-GAAP measures, as well as for a discussion of the drivers of the year over year change in Economic Income, please see “—Economic Income Analysis.”

Overview of Assets Under Management and Fund Performance

Assets under management totaled $33.9 billion as of March 31, 2017 . Longer-dated assets under management, which are those subject to initial commitment periods of three years or longer, were $16.9 billion , comprising 50% of our total assets under management as of March 31, 2017 .

Assets under management in our multi-strategy funds totaled $17.7 billion as of March 31, 2017 , decreasing 36% , or $9.8 billion , year-over-year. This change was driven by net capital outflows of $12.1 billion , primarily in the OZ Master Fund, our largest multi-strategy fund, partially offset by performance-related appreciation of $2.3 billion . Our multi-strategy funds experienced elevated redemptions and reduced inflows during 2016 and into early 2017 as a result of the FCPA matter, the related inability to rely on Regulation D, and the overall redemption cycle currently affecting the hedge fund industry.

OZ Master Fund generated a gross return of 5.5% and a net return of 4.1% year-to-date through March 31, 2017 . These returns were driven by the fund’s long/short equity special situations, merger arbitrage, credit-related and convertible and derivative arbitrage strategies. Please see “—Assets Under Management and Fund Performance—Multi-Strategy Funds” for additional information regarding the returns of the OZ Master Fund.

Assets under management in our dedicated credit products totaled $13.3 billion as of March 31, 2017 , increasing $920.0 million , or 7% , year-over-year. This change was driven by capital net inflows of $591.2 million and performance-related appreciation of $893.0 million , partially offset by $564.1 million of distributions and other reductions in our closed-end opportunistic credit funds.

Assets under management in our opportunistic credit funds were $5.3 billion as of March 31, 2017 . OZ Credit Opportunities Master Fund, our global opportunistic credit fund, generated a gross return of 4.6% and a net return of 3.2% year-to-date through March 31, 2017 . These returns were driven in part by realizations in corporate credit, structured credit and successful resolutions in various distressed situations. Assets under management for the fund were $1.7 billion as of March 31, 2017 .

Assets under management in Institutional Credit Strategies were $8.0 billion as of March 31, 2017 , increasing $771.6 million , or 11% , year-over-year. The increase was primarily driven by two additional CLOs that closed in the 2016 fourth quarter, including our first European CLO. We also refinanced three existing CLOs totaling $1.3 billion of par value during the first quarter.

Assets under management in our real estate funds totaled $2.2 billion as of March 31, 2017 , increasing $121.8 million year-over-year. Since inception through March 31, 2017 , the net internal rate of return (“IRR”) was 21.0% for Och-Ziff Real Estate Fund II (for which the investment period ended in 2014), and 15.7% for Och-Ziff Real Estate Fund I (for which the investment period ended in 2010).

Assets Under Management and Fund Performance

Our financial results are primarily driven by the combination of our assets under management and the investment performance of our funds. Both of these factors directly affect the revenues we earn from management fees and incentive income. Growth in assets under management due to capital placed with us by investors in our funds and positive investment performance of our funds drive growth in our revenues and earnings. Conversely, poor investment performance slows our growth by decreasing our assets under management and increasing the potential for redemptions from our funds, which would have a negative effect on our revenues and earnings.

We typically accept capital from new and existing investors in our funds on a monthly basis on the first day of each month. Investors in our multi-strategy and our open-end opportunistic credit funds (other than with respect to capital invested in Special Investments) typically have the right to redeem their interests in a fund following an initial lock-up period of one to three years. Following the expiration of these lock-up periods, subject to certain limitations, investors may redeem capital generally on a quarterly or annual basis upon giving 30 to 90 days’ prior written notice. However, upon the payment of a redemption fee to the applicable fund and upon giving 30 days’ prior written notice, certain investors may redeem capital during the lock-up period. The lock-up requirements for our funds may generally be waived or modified at the sole discretion of each fund’s general partner or board of directors, as applicable.

With respect to investors with quarterly redemption rights, requests for redemptions submitted during a quarter generally reduce assets under management on the first day of the following quarter. Accordingly, quarterly redemptions generally will have no impact on management fees during the quarter in which they are submitted. Instead, these redemptions will reduce management fees in the following quarter. With respect to investors with annual redemption rights, redemptions paid prior to the end of a quarter impact assets under management in the quarter in which they are paid, and therefore impact management fees for that quarter.

Investors in our closed-end credit funds, Institutional Credit Strategies products, real estate and certain other funds are not able to redeem their investments. In those funds, investors generally make a commitment that is funded over an investment period (or at launch for our CLOs). Upon the expiration of the investment period, the investments are then sold or realized over time, and distributions are made to the investors in the fund.

In a declining market, during periods when the hedge fund industry generally experiences outflows, or in response to specific company events, we could experience increased redemptions and a consequent reduction in our assets under management. Recently, our assets under management have declined and we believe this trend will likely continue to some extent

for some period of time in light of the recently settled FCPA matter, the related inability to rely on Regulation D, and the current redemption trend in the hedge fund industry.

Information with respect to our assets under management throughout this report, including the tables set forth below, includes investments by us, our executive managing directors, employees and certain other related parties. As of March 31, 2017 , approximately 7% of our assets under management represented investments by us, our executive managing directors, employees and certain other related parties in our funds. As of that date, approximately 65% of these affiliated assets under management are not charged management fees and are not subject to an incentive income calculation. Additionally, to the extent that an Och-Ziff fund is an investor in another Och-Ziff fund, we waive or rebate a corresponding portion of the management fees charged to the fund.

As further discussed below in “—Understanding Our Results—Revenues,” we generally calculate management fees based on assets under management as of the beginning of each quarter. The assets under management in the tables below are presented net of management fees and incentive income as of the end of the period. Accordingly, the assets under management presented in the tables below are not the amounts used to calculate management fees for the respective periods.

Summary of Changes in Assets Under Management

The tables below present the changes to our assets under management for the respective periods based on the type of funds or investment vehicles we manage.



	Three Months Ended March 31, 2017
	December 31, 2016		Inflows / (Outflows)			Distributions / Other Reductions			Appreciation / (Depreciation)			March 31, 2017

	(dollars in thousands)
Multi-strategy funds	$	21,084,548	$	(4,159,118	)	$	—		$	777,041		$	17,702,471
Credit
Opportunistic credit funds	5,417,498		(211,182		)	(19,769		)	140,457			5,327,004
Institutional Credit Strategies	8,019,510		3,453			—			(8,602		)	8,014,361
Real estate funds	2,171,946		33,474			(16,432		)	642			2,189,630
Other	1,186,801		(495,048		)	(30,016		)	22,631			684,368
Total	$	37,880,303	$	(4,828,421	)	$	(66,217	)	$	932,169		$	33,917,834



	Three Months Ended March 31, 2016
	December 31, 2015		Inflows / (Outflows)			Distributions / Other Reductions			Appreciation / (Depreciation)			March 31, 2016

	(dollars in thousands)
Multi-strategy funds	$	29,510,248	$	(1,054,252	)	$	—		$	(944,866	)	$	27,511,130
Credit
Opportunistic credit funds	5,383,629		(60,316		)	(141,000		)	(3,785		)	5,178,528
Institutional Credit Strategies	7,241,680		5,379			—			(4,255		)	7,242,804
Real estate funds	2,048,559		75,039			(54,293		)	(1,435		)	2,067,870
Other	1,310,745		(43,372		)	—			(55,647		)	1,211,726
Total	$	45,494,861	$	(1,077,522	)	$	(195,293	)	$	(1,009,988	)	$	43,212,058

In the first quarter of 2017 , our funds experienced performance-related appreciation of $932.2 million and net outflows of $4.8 billion , which was comprised of $149.5 million of gross inflows and $5.0 billion of gross outflows due to redemptions. We also had $66.2 million in distributions and other reductions related to investors in our other funds, closed-end opportunistic credit and real estate funds. We experienced elevated redemptions and reduced inflows in our multi-strategy funds during the first quarter of 2017 as a result of the FCPA matter, the related inability to rely on Regulation D, and the overall redemption cycle

currently affecting the hedge fund industry. In the first quarter of 2017 , excluding CLOs, related parties and corporate, institutional and other investors were the largest sources of our gross inflows, while pensions and private banks were our largest sources of gross outflows. Our assets under management were $31.9 billion as of April 1, 2017, as capital net outflows are decreasing as compared to the previous three quarters.

In the first quarter of 2016, our funds experienced performance-related depreciation of $1.0 billion and net outflows of $1.1 billion, which was comprised of $303.0 million of gross inflows and $1.4 billion of gross outflows due to redemptions. We also had $195.3 million in distributions to investors in our closed-end opportunistic credit and real estate funds. Excluding CLOs, private banks and fund-of-funds were the largest sources of our gross inflows, while pensions, private banks and fund-of-funds were our largest sources of gross outflows during the first quarter of 2016.

Weighted-Average Assets Under Management and Average Management Fee Rates

The table below presents our weighted-average assets under management and average management fee rates. Weighted-average assets under management exclude the impact of first quarter investment performance for the periods presented, as these amounts generally do not impact management fees calculated for those periods. The average management fee rates presented below take into account the effect of non-fee paying assets under management. Please see the respective sections below for average management fee rates by fund type.



	Three Months Ended March 31,
	2017			2016

	(dollars in thousands)
Weighted-average assets under management	$	33,163,162		$	44,386,712
Average management fee rates	0.99		%	1.31		%

The decline in our average management fee rate for the periods presented occurred primarily because of a change in the mix of products that comprise our assets under management, as well as due to reductions in the management fee rates in our multi-strategy assets under management that took effect during the fourth quarter of 2016. Our average management fee will vary from period to period based on the mix of products that comprise our assets under management.

Fund Performance Information

The tables below present performance information for the funds we manage. All of our funds are managed by the Och-Ziff Funds segment with the exception of our real estate funds, which are managed by the real estate management business included in Other Operations.

The performance information presented in this report is not indicative of the performance of our Class A Shares and is not necessarily indicative of the future results of any particular fund, including the accrued unrecognized amounts of incentive income. An investment in our Class A Shares is not an investment in any of our funds. There can be no assurance that any of our existing or future funds will achieve similar results. The timing and amount of incentive income generated from our funds are inherently uncertain. Incentive income is a function of investment performance and realizations of investments, which vary period-to-period based on market conditions and other factors. We cannot predict when, or if, any realization of investments will occur. Incentive income recognized for any particular period is not a reliable indicator of incentive income that may be earned in subsequent periods.

The return information presented in this report represents, where applicable, the composite performance of all feeder funds that comprise each of the master funds presented. Gross return information is generally calculated using the total return of all feeder funds, net of all fees and expenses except management fees and incentive income of such feeder funds and master funds and the returns of each feeder fund include the reinvestment of all dividends and other income. Net return information is generally calculated as the gross returns less management fees and incentive income (except incentive income on unrealized gains attributable to Special Investments in certain funds that could reduce returns on these investments at the time of realization). Return information also includes realized and unrealized gains and losses attributable to Special Investments and initial public

offering investments that are not allocated to all investors in the feeder funds. Investors that were not allocated Special Investments and initial public offering investments may experience materially different returns.

Multi-Strategy Funds

The table below presents assets under management and investment performance for our multi-strategy funds. Assets under management are generally based on the net asset value of these products. Management fees generally range from 1.00% to 2.50% of assets under management. For the first quarter of 2017 , our multi-strategy funds had an average management fee rate of 1.32% .

We generally crystallize incentive income from the majority of our multi-strategy funds on an annual basis. Incentive income is generally equal to 20% of the realized and unrealized profits attributable to each investor. A portion of the assets under management in each of the OZ Master Fund and our other multi-strategy funds is subject to initial commitment periods of three years, and certain of these assets are subject to hurdle rates (generally equal to the 3-month T-bill or LIBOR rate). However, once the investment performance has exceeded the hurdle rate for a portion of these assets, we may receive a preferential “catch-up” allocation, resulting in a potential recognition by us of a full 20% of the net profits attributable to investors in these assets.



	Assets Under Management as of March 31,				Returns for the Three Months Ended March 31,								Annualized Returns Since Inception Through March 31, 2017
					2017				2016				Annualized Returns Since Inception Through March 31, 2017
	2017		2016		Gross		Net		Gross		Net		Gross			Net

Fund	(dollars in thousands)
OZ Master Fund ⁽¹⁾	$	14,712,330	$	22,576,072	5.5	%	4.1	%	-3.0	%	-3.4	%	16.9	%	⁽¹⁾	11.9	%	⁽¹⁾
OZ Asia Master Fund	791,304		1,156,795		7.4	%	6.4	%	-2.7	%	-3.2	%	9.4	%		5.4	%
OZ Europe Master Fund	372,548		861,950		3.3	%	2.4	%	-2.0	%	-2.4	%	11.7	%		7.7	%
OZ Enhanced Master Fund	654,120		1,055,923		8.7	%	6.6	%	-5.3	%	-5.8	%	13.4	%		9.0	%
Och-Ziff European Multi-Strategy UCITS Fund	21,419		277,361		2.4	%	2.1	%	-4.5	%	-4.9	%	4.9	%		2.2	%
Other funds	1,150,750		1,583,029		n/m		n/m		n/m		n/m		n/m			n/m
	$	17,702,471	$	27,511,130

_______________

n/m not meaningful

(1)

The annualized returns since inception are those of the Och-Ziff Multi-Strategy Composite, which represents the composite performance of all accounts that were managed in accordance with our broad multi-strategy mandate that were not subject to portfolio investment restrictions or other factors that limited our investment discretion since inception on April 1, 1994. Performance is calculated using the total return of all such accounts net of all investment fees and expenses of such accounts, except incentive income on unrealized gains attributable to Special Investments that could reduce returns in these investments at the time of realization, and the returns include the reinvestment of all dividends and other income. The performance calculation for the OZ Master Fund excludes realized and unrealized gains and losses attributable to currency hedging specific to certain investors investing in OZ Master Fund in currencies other than the U.S. Dollar. For the period from April 1, 1994 through December 31, 1997, the returns are gross of certain overhead expenses that were reimbursed by the accounts. Such reimbursement arrangements were terminated at the inception of the OZ Master Fund on January 1, 1998. The size of the accounts comprising the composite during the time period shown vary materially. Such differences impacted our investment decisions and the diversity of the investment strategies followed. Furthermore, the composition of the investment strategies we follow is subject to our discretion, has varied materially since inception and is expected to vary materially in the future. As of March 31, 2017 , the gross and net annualized returns since the OZ Master Fund’s inception on January 1, 1998 were 13.1% and 8.9% , respectively.

The $9.8 billion , or 36% , year over year decrease in assets under management in our multi-strategy funds was primarily due to capital net outflows of $12.1 billion , primarily from the OZ Master Fund, our largest multi-strategy fund, partially offset by performance-related appreciation of $2.3 billion . We continued to experience redemptions in early 2017 as a result of the FCPA matter, the related inability to rely on Regulation D, as well as the overall redemption cycle currently affecting the hedge fund industry. In the first quarter of 2017 , the largest sources of gross outflows from our multi-strategy funds were attributable to pensions, private banks and corporate, institutional and other investors.

For the first quarter of 2017 , the OZ Master Fund generated a gross return of 5.5% and a net return of 4.1% . These returns were driven by the fund’s long/short equity special situations, merger arbitrage, credit-related and convertible and derivative arbitrage strategies.

For the first quarter of 2016, the OZ Master Fund generated a gross return of -3.0% and a net return of -3.4% . On a gross basis, U.S. long/short equity special situations was the largest contributor to the performance-related depreciation, partially offset by positive performance in merger arbitrage, credit-related strategies and convertible and derivative arbitrage.

Credit



	Assets Under Management as of March 31,
	2017		2016

	(dollars in thousands)
Opportunistic credit funds	$	5,327,004	$	5,178,528
Institutional Credit Strategies	8,014,361		7,242,804
	$	13,341,365	$	12,421,332

Opportunistic Credit Funds

Our opportunistic credit funds seek to generate risk-adjusted returns by capturing value in mispriced investments across disrupted, dislocated and distressed corporate, structured and private credit markets globally.

Certain of our opportunistic credit funds are open-end and allow for contributions and redemptions (subject to initial lock-up and notice periods) on a periodic basis similar to our multi-strategy funds. Our remaining opportunistic credit funds are closed-end, whereby investors make a commitment that is funded over an investment period. Upon the expiration of an investment period, the investments are then sold or realized over a period of time, and distributions are made to the investors in the fund.

Assets under management for our opportunistic credit funds are generally based on the net asset value of those funds plus any unfunded commitments. Management fees for our opportunistic credit funds generally range from 0.50% to 1.75% of the net asset value of these funds. For the first quarter of 2017 , our opportunistic credit funds had an average management fee rate of 0.85% .

The table below presents assets under management and investment performance information for certain of our opportunistic credit funds. Incentive income related to these funds (excluding the closed-end opportunistic fund, which is explained further below) is generally equal to 20% of realized and unrealized profits attributable to each investor, and a portion of these assets under management is subject to hurdle rates (generally 5% to 8%). However, once the investment performance has exceeded the hurdle rate, we may receive a preferential “catch-up” allocation, resulting in a potential recognition by us of a full 20% of the net profits attributable to investors in these funds. The measurement periods for these assets under management generally range from one to five years.



	Assets Under Management as of March 31,				Returns for the Three Months Ended March 31,								Annualized Returns Since Inception Through March 31, 2017
	2017		2016		2017				2016				Annualized Returns Since Inception Through March 31, 2017
					Gross		Net		Gross		Net		Gross		Net

Fund	(dollars in thousands)
OZ Credit Opportunities Master Fund	$	1,698,229	$	1,499,382	4.6	%	3.2	%	1.3	%	1.0	%	17.6	%	13.1	%
Customized Credit Focused Platform	2,807,683		2,466,215		1.6	%	1.2	%	0.5	%	0.4	%	20.1	%	15.2	%
Closed-end opportunistic credit funds	346,779		756,196		See below for return information on our closed-end opportunistic credit funds.
Other funds	474,313		456,735		n/m		n/m		n/m		n/m		n/m		n/m
	$	5,327,004	$	5,178,528

_______________

n/m not meaningful

Assets under management in our opportunistic credit funds increase d by $148.5 million , or 3% , year-over-year. This change was driven by $903.6 million of performance-related appreciation , partially offset by $564.1 million of distributions and other reductions in our closed-end opportunistic credit funds.

For the first quarter of 2017 , the OZ Credit Opportunities Master Fund, our global opportunistic credit fund, generated a gross return of 4.6% and a net return of 3.2% . These returns were driven in part by realizations in corporate credit, structured credit and successful resolutions in various distressed situations. For the first quarter of 2016, OZ Credit Opportunities Master Fund generated a gross return of 1.3% and a net return of 1.0% , which was driven by the fund’s U.S. portfolio.

The table below presents assets under management, investment performance and other information for our closed-end opportunistic credit funds. Incentive income related to these funds is generally equal to 20% of the cumulative realized profits attributable to each investor over the life of the fund, subject to hurdle rates (generally 5% to 10%), and is recognized at or near the end of the life of the fund when it is no longer subject to clawback. However, once the investment performance has exceeded the hurdle rate, we may receive a preferential “catch-up” allocation, resulting in a potential recognition by us of a full 20% of the net profits attributable to investors in these funds. The investment periods for these funds may generally be extended for an additional one to two years.



	Assets Under Management as of March 31,				Inception to Date as of March 31, 2017
									IRR
	2017		2016		Total Commitments		Total Invested Capital ⁽¹⁾		Gross ⁽²⁾		Net ⁽³⁾		Gross MOIC ⁽⁴⁾

Fund (Investment Period)	(dollars in thousands)
OZ European Credit Opportunities Fund (2012-2015) ⁽⁵⁾	$	68,272	$	175,664	$	459,600	$	305,487	16.6	%	12.5	%	1.48x
OZ Structured Products Domestic Fund II (2011-2014) ⁽⁵⁾	112,238		257,261		326,850		326,850		19.6	%	15.3	%	1.94x
OZ Structured Products Offshore Fund II (2011-2014) ⁽⁵⁾	110,596		237,353		304,531		304,531		16.9	%	12.9	%	1.74x
OZ Structured Products Offshore Fund I (2010-2013) ⁽⁵⁾	5,258		22,976		155,098		155,098		24.0	%	19.2	%	2.1x
OZ Structured Products Domestic Fund I (2010-2013) ⁽⁵⁾	4,698		14,240		99,986		99,986		22.9	%	18.2	%	1.99x
Other funds	45,717		48,702		346,250		313,250		n/m		n/m		n/m
	$	346,779	$	756,196	$	1,692,315	$	1,505,202

_______________

n/m not meaningful


(1)	Represents funded capital commitments net of recallable distributions to investors.

(2)

Gross IRR for our closed-end opportunistic credit funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the fund as of March 31, 2017 , including the fair value of unrealized investments as of such date, together with any appreciation or depreciation from related hedging activity. Gross IRR does not include the effects of management fees or incentive income, which would reduce the return, and includes the reinvestment of all fund income.

(3)

Net IRR is calculated as described in footnote (2), but is reduced by all management fees, as well as paid incentive and accrued incentive income that will be payable upon the distribution of each fund’s capital in accordance with the terms of the relevant fund. Accrued incentive income may be higher or lower at such time. The net IRR represents a composite rate of return for a fund and does not reflect the net IRR specific to any individual investor.


(4)	Gross MOIC for our closed-end opportunistic credit funds is calculated by dividing the sum of the net asset value of the fund, accrued incentive income, life-to-date incentive income and management fees paid and any non-recallable distributions made from the fund by the invested capital.


(5)	These funds have concluded their investment periods, and therefore we expect assets under management for these funds to decrease as investments are sold and the related proceeds are distributed to the investors in these funds.

Institutional Credit Strategies

Institutional Credit Strategies is our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs and other customized solutions for clients.

Assets under management for our CLOs are generally based on the par value of the collateral and cash held in the CLOs. However, assets under management are reduced for any investments in our CLOs held by our other funds in order to avoid double counting these assets. Management fees for the CLOs are generally 0.50% of assets under management. For the first quarter of 2017 , our Institutional Credit Strategies products had an average management fee rate of 0.41% .

Incentive income from our CLOs is generally equal to 20% of the excess cash flows due to the holders of the subordinated notes issued by the CLOs, and is generally subject to a 12% hurdle rate. Because of the hurdle rate and structure of our CLOs, we do not expect to earn a meaningful amount of incentive income from these entities, and therefore no return information is presented for these vehicles. The OZLM CLOs presented below are our U.S. CLOs, and OZLME is our European CLO.



				Assets Under Management as of March 31,
	Initial Closing Date	Initial Deal Size		2017		2016

		(dollars in thousands)
CLOs
OZLM I	July 19, 2012	$	510,700	$	497,432	$	498,801
OZLM II	November 1, 2012	560,100		509,369		515,767
OZLM III	February 20, 2013	653,250		609,470		612,179
OZLM IV	June 27, 2013	600,000		539,900		541,469
OZLM V	December 17, 2013	501,250		468,015		469,582
OZLM VI	April 16, 2014	621,250		596,721		598,395
OZLM VII	June 26, 2014	824,750		795,840		796,872
OZLM VIII	September 9, 2014	622,250		596,892		596,764
OZLM IX	December 22, 2014	510,208		495,000		496,009
OZLM XI	March 12, 2015	510,500		490,609		491,528
OZLM XII	May 28, 2015	565,650		549,966		548,328
OZLM XIII	August 6, 2015	511,600		496,038		496,471
OZLM XIV	December 21, 2015	507,420		503,377		495,798
OZLM XV	December 20, 2016	409,250		396,489		—
OZLME I	December 15, 2016	430,490		426,009		—
		8,338,668		7,971,127		7,157,963
Other funds	n/a	n/a		43,234		84,841
		$	8,338,668	$	8,014,361	$	7,242,804

The year-over-year increase in assets under management was driven primarily by the closing of two new CLOs, including our first European CLO. Institutional Credit Strategies also refinanced three existing CLOs totaling $1.3 billion of par value during the first quarter of 2017. Refinancing CLOs produces further returns for the CLO equity holders, generates excess spread for bond investors, and extends the duration of the given CLO’s management fees.

Real Estate Funds

Our real estate funds generally make investments in commercial and residential real estate, including real property, multi-property portfolios, real estate-related joint ventures, real estate operating companies and other real estate-related assets.

Assets under management for our real estate funds are generally based on the amount of capital committed by our fund investors during the investment period and the amount of actual capital invested for periods following the investment period. However, assets under management are reduced for unfunded commitments by our executive managing directors that will be funded through transfers from other funds in order to avoid double counting these assets. Management fees for our real estate funds generally range from 0.75% to 1.50% of assets under management; however, management fees for Och-Ziff Real Estate Credit Fund I are based on invested capital. For the first quarter of 2017 , our real estate funds had an average management fee rate of 0.99% .

The tables below present assets under management, investment performance and other information for our real estate funds. Incentive income related to these funds is equal to 20% of the cumulative realized profits attributable to each investor over the life of the fund, subject to hurdle rates (generally 6% to 10%). However, once the investment performance has exceeded the hurdle rate, we may receive a preferential “catch-up” allocation, resulting in a potential recognition by us of a full 20% of the net profits attributable to investors in these funds.



	Assets Under Management as of December 31,
	2017		2016

Fund	(dollars in thousands)
Och-Ziff Real Estate Fund I	$	14,179	$	33,122
Och-Ziff Real Estate Fund II	323,915		346,558
Och-Ziff Real Estate Fund III	1,457,963		1,450,927
Och-Ziff Real Estate Credit Fund I	286,449		130,150
Other funds	107,124		107,113
	$	2,189,630	$	2,067,870



	Inception to Date as of March 31, 2017
			Total Investments									Realized/Partially Realized Investments ⁽¹⁾
	Total Commitments		Invested Capital ⁽²⁾		Total Value ⁽³⁾		Gross IRR ⁽⁴⁾		Net IRR ⁽⁵⁾		Gross MOIC ⁽⁶⁾	Invested Capital		Total Value		Gross IRR ⁽⁴⁾		Gross MOIC ⁽⁶⁾

Fund (Investment Period)	(dollars in thousands)
Och-Ziff Real Estate Fund I ⁽⁷⁾ (2005-2010)	$	408,081	$	385,636	$	801,903	25.2	%	15.7	%	2.1x	$	372,720	$	798,259	26.5	%	2.1x
Och-Ziff Real Estate Fund II ⁽⁷⁾ (2011-2014)	839,508		780,945		1,391,674		32.7	%	21.0	%	1.8x	552,240		1,131,411		39.4	%	2.0x
Och-Ziff Real Estate Fund III ⁽⁸⁾ (2014-2019)	1,500,000		500,159		633,791		n/m		n/m		n/m	—		—		n/m		n/m
Och-Ziff Real Estate Credit Fund I ⁽⁸⁾ (2015-2019)	323,225		97,044		109,179		n/m		n/m		n/m	22,419		26,483		n/m		n/m
Other funds	241,590		141,175		197,909		n/m		n/m		n/m	38,090		92,838		n/m		n/m
	$	3,312,404	$	1,904,959	$	3,134,456						$	985,469	$	2,048,991



	Unrealized Investments as of March 31, 2017
	Invested Capital		Total Value		Gross MOIC ⁽⁶⁾

Fund (Investment Period)	(dollars in thousands)
Och-Ziff Real Estate Fund I (2005-2010) ⁽⁷⁾	$	12,916	$	3,644	0.3x
Och-Ziff Real Estate Fund II (2011-2014) ⁽⁷⁾	228,705		260,263		1.1x
Och-Ziff Real Estate Fund III (2014-2019) ⁽⁸⁾	500,159		633,791		n/m
Och-Ziff Real Estate Credit Fund I (2015-2019) ⁽⁸⁾	74,625		82,696		n/m
Other funds	103,085		105,071		n/m
	$	919,490	$	1,085,465

_______________

n/m not meaningful


(1)	An investment is considered partially realized when the total amount of proceeds received, including dividends, interest or other distributions of income and return of capital, represents at least 50% of invested capital.


(2)	Invested capital represents total aggregate contributions made for investments by the fund.


(3)	Total value represents the sum of realized distributions and the fair value of unrealized and partially realized investments as of March 31, 2017 . Total value will be impacted (either positively or negatively) by future economic and other factors. Accordingly, the total value ultimately realized will likely be higher or lower than the amounts presented as of March 31, 2017 .

(4)

Gross IRR for our real estate funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the aggregated investments as of March 31, 2017 , including the fair value of unrealized and partially realized investments as of such date, together with any unrealized appreciation or depreciation from related hedging activity. Gross IRR is not adjusted for estimated management fees, incentive income or other fees or expenses to be paid by the fund, which would reduce the return.

(5)

Net IRR is calculated as described in footnote (4), but is reduced by all management fees and other fund-level fees and expenses not adjusted for in the calculation of gross IRR. Net IRR is further reduced by paid incentive and accrued incentive income that will be payable upon the distribution of each fund’s capital in accordance with the terms of the relevant fund. Accrued incentive income may be higher or lower at such time. The net IRR represents a composite rate of return for a fund and does not reflect the net IRR specific to any individual investor.


(6)	Gross MOIC for our real estate funds is calculated by dividing the value of a fund’s investments by the invested capital, prior to adjustments for incentive income, management fees or other expenses to be paid by the fund.


(7)	These funds have concluded their investment periods, and therefore we expect assets under management for these funds to decrease as investments are sold and the related proceeds are distributed to the investors in these funds.


(8)	These funds recently launched and have only invested a small portion of their committed capital; therefore, IRR and MOIC information is not presented, as it is not meaningful.

Other

Our other assets under management are comprised of funds that are generally strategy-specific, including our equity, Africa and energy funds. Management fees for these funds range from 0.75% to 2.25% of assets under management, generally based on the amount of capital committed to these platforms by our fund investors. For the first quarter of 2017 , our other funds had an average management fee rate of 0.69% .

Incentive income for our equity funds is generally 20% of realized and unrealized annual profits attributable to each investor. Incentive income related to the Africa and energy funds is generally 20% of cumulative realized profits attributable to each investor, and is subject to hurdle rates (generally 3% to 8%). Incentive income for the Africa and energy funds is generally not recognized as revenue until near the end of the life of the fund when it is no longer subject to clawback.

Longer-Term Assets Under Management

As of March 31, 2017 , approximately 50% of our assets under management were subject to initial commitment periods of three years or longer. We earn incentive income on these assets based on the cumulative investment performance generated over this commitment period. The table below presents the amount of these assets under management, as well as the gross amount of incentive income accrued at the fund level but for which the commitment period has not concluded. These amounts have not yet been recognized in our revenues, as we recognize incentive income at the end of the commitment period when amounts are no longer subject to clawback. Further, these amounts may ultimately not be recognized as revenue by us in the event of future losses in the respective funds. See “—Understanding Our Results—Incentive Income” for additional information.



	March 31, 2017
	Longer-Term Assets Under Management		Accrued Unrecognized Incentive Income

	(dollars in thousands)
Multi-strategy funds	$	2,311,335	$	40,146
Credit
Opportunistic credit funds	4,197,122		181,845
Institutional Credit Strategies	7,973,531		—
Real estate funds	2,189,630		126,394
Other	276,855		1,660
	$	16,948,473	$	350,045

We recognize incentive income on our longer-term assets under management in our multi-strategy funds and open-end opportunistic credit funds at the end of their respective commitment periods, which are generally three to five years. Incentive income related to assets under management in our closed-end opportunistic credit funds and our real estate funds is generally recognized near the end of the life of each fund. These funds generally begin to make distributions after the conclusion of their respective investment period, as presented in the tables above. However, these investment periods may generally be extended for an additional one to two years.

Understanding Our Results

Revenues

Our operations historically have been financed primarily by cash flows generated by our business. Our principal sources of revenues are management fees and incentive income. For any given period, our revenues are influenced by the amount of our assets under management, the investment performance of our funds and the timing of when we recognize incentive income for certain assets under management as discussed below.

The ability of investors to contribute capital to and redeem capital from our funds causes our assets under management to fluctuate from period to period. Fluctuations in assets under management also result from our funds’ investment performance. Both of these factors directly impact the revenues we earn from management fees and incentive income. For example, a $1 billion increase or decrease in assets under management subject to a 2% management fee would generally increase or decrease annual management fees by $20 million. If net profits attributable to a fee-paying fund investor were $10 million in a given year, we generally would earn incentive income equal to $2 million, assuming a 20% incentive income rate, a one-year commitment period, no hurdle rate and no high-water marks from prior years.

For any given quarter, our revenues are influenced by the combination of assets under management and the investment performance of our funds. For the first three quarters of each year, our revenues are primarily comprised of the management fees we have earned for each respective quarter. In addition, we may recognize incentive income for assets under management for which the measurement period expired in that quarter, such as assets subject to three-year commitment periods, or incentive income related to fund investor redemptions, and these amounts may be significant. In the fourth quarter, our revenues are primarily comprised of the management fees we have earned for the quarter, as well as incentive income related to the full-year investment performance generated on assets under management that are subject to one-year commitment periods, or for other assets under management for which the commitment period expired in that quarter.

Management Fees. Management fees are generally calculated and paid to us on a quarterly basis in advance, based on the amount of assets under management at the beginning of the quarter. Management fees are prorated for capital inflows and redemptions during the quarter. Accordingly, changes in our management fee revenues from quarter to quarter are driven by changes in the quarterly opening balances of assets under management, the relative magnitude and timing of inflows and redemptions during the respective quarter, as well as the impact of differing management fee rates charged on those inflows and redemptions. See “—Weighted-Average Assets Under Management and Average Management Fee Rates” for information on our average management fee rate.

Incentive Income. We earn incentive income based on the cumulative performance of our funds over a commitment period. Incentive income is typically equal to 20% of the net realized and unrealized profits attributable to each fund investor in our multi-strategy funds, open-end opportunistic credit funds and certain other funds, but it excludes unrealized gains and losses attributable to Special Investments. For our closed-end opportunistic credit funds, real estate funds and certain other funds, incentive income is typically equal to 20% of the realized profits attributable to each fund investor. For our CLOs, incentive income is typically 20% of the excess cash flows available to the holders of the subordinated notes. Our ability to earn incentive income from some of our funds may be impacted by hurdle rates as further discussed below.

For funds that we consolidate, incentive income is recognized by allocating a portion of the net income of the consolidated Och-Ziff funds to us rather than to the fund investors (noncontrolling interests). Incentive income allocated to us is not reflected as incentive income in our consolidated revenues, as these amounts are eliminated in consolidation. The allocation of incentive income to us is based on the contractual terms of the relevant fund agreements. As a result, we may recognize earnings related to our incentive income allocation from the consolidated Och-Ziff funds prior to the end of their respective commitment periods, and therefore we may recognize earnings that are subject to clawback to the extent a consolidated fund generates subsequent losses. For Economic Income purposes, we defer recognition of these earnings until they are no longer subject to clawback.

For funds that we do not consolidate, incentive income is recognized at the end of the applicable commitment period when the amounts are contractually payable, or “crystallized,” and when no longer subject to clawback. Additionally, all of our multi-strategy funds and open-end opportunistic credit funds are subject to a perpetual loss carry forward, or a perpetual “high-water mark,” meaning we would not be able to earn incentive income with respect to positive investment performance we

generate for a fund investor in any year following negative investment performance until that loss is recouped, at which point a fund investor’s investment surpasses the high-water mark. We earn incentive income on any net profits in excess of the high-water mark.

The commitment period for most of our multi-strategy assets under management is for a period of one year on a calendar-year basis, and therefore we generally crystallize incentive income annually on December 31. We may also recognize incentive income related to fund investor redemptions at other times during the year, as well as on assets under management subject to commitment periods that are longer than one year. We may also recognize incentive income for tax distributions related to these assets. Tax distributions are amounts distributed to us to cover tax liabilities related to incentive income that has been accrued at the fund level but will not be recognized by us until the end of the relevant commitment period (if at all). These tax distributions are not subject to clawback once distributed to us.

Approximately $16.9 billion , or 50% , of our assets under management as of March 31, 2017 were subject to initial commitment periods of three years or longer. These assets under management include assets subject to three-year commitment periods in the OZ Master Fund and certain other multi-strategy funds, as well as assets in our opportunistic credit funds, CLOs, real estate funds and certain other funds. Incentive income related to these assets is based on the cumulative investment performance over a specified commitment period (in the case of CLOs, based on the excess cash flows available to the holders of the subordinated notes), and, to the extent a fund is not consolidated, is not earned until it is no longer subject to repayment to the respective fund. Our ability to earn incentive income on these longer-term assets is also subject to hurdle rates whereby we do not earn any incentive income until the investment returns exceed an agreed upon benchmark. However, for a portion of these assets subject to hurdle rates, once the investment performance has exceeded the hurdle rate, we may receive a preferential “catch-up” allocation, resulting in a potential recognition by us of a full 20% of the net profits attributable to investors in these assets.

Income of Consolidated Och-Ziff Funds. Revenues recorded as income of consolidated Och-Ziff funds consist of interest income, dividend income and other miscellaneous items.

Expenses

Compensation and Benefits. Compensation and benefits consist of salaries, benefits, payroll taxes, and discretionary and guaranteed cash bonus expenses. On an annual basis, compensation and benefits comprise a significant portion of total expenses, with discretionary cash bonuses generally comprising a significant portion of total compensation and benefits. These cash bonuses are based on total annual revenues, which are significantly influenced by the amount of incentive income we earn in the year. Through 2016, annual discretionary cash bonuses were generally determined and expensed in the fourth quarter of each year. In the first quarter of 2017, we decided to provide a minimum annual discretionary cash bonus. As a result of this decision, we will accrue the minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonus ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year.

Compensation and benefits also includes equity-based compensation expense, which is primarily in the form of RSUs granted to our independent board members, employees and executive managing directors, as well as Partner Equity Units granted to executive managing directors. See Note 3 to our consolidated financial statements included in this report for a description of these units.

We also issue Och-Ziff Operating Group D Units to executive managing directors. The Och-Ziff Operating Group D Units are not considered equity under GAAP, and therefore no equity-based compensation expense is recognized related to these units when they are granted. Distributions to holders of Och-Ziff Operating Group D Units are included within compensation and benefits in the consolidated statements of comprehensive income (loss). These distributions are accrued in the quarter in which the related income was earned and are paid out the following quarter at the same time distributions on the Och-Ziff Operating Group A Units and dividends on the Company’s Class A Shares are paid.

An Och-Ziff Operating Group D Unit converts into an Och-Ziff Operating Group A Unit to the extent the Company determines that it has become economically equivalent to an Och-Ziff Operating Group A Unit, at which point it is considered a grant of equity-based compensation for GAAP purposes. Upon the conversion of Och-Ziff Operating Group D Units into Och-

Ziff Operating Group A Units, we recognize a one-time charge for the grant-date fair value of the vested units and begin to amortize the grant-date fair value of the unvested units over the vesting period. As additional Och-Ziff Operating Group D Units are converted into Och-Ziff Operating Group A Units in the future, we may see increasing non-cash equity-based compensation expense related to these units.

Effective March 1, 2017, the Board of Directors approved amendments to the Limited Partnership Agreements of the Och-Ziff Operating Group entities to adjust the measurement thresholds used in calculating the appreciation necessary to permit a determination that Och-Ziff Operating Group D Units issued prior to March 1, 2017 have become economically equivalent to Och-Ziff Operating Group A Units, making it more likely that outstanding Och-Ziff Operating Group D Units (and, due to the fact that economic equivalence is determined chronologically based on order of issuance, subsequently issued Och-Ziff Operating Group D Units) will convert to Och-Ziff Operating Group A Units. This adjustment had no impact on the combined total number of Och-Ziff Operating Group A, D and P Units outstanding, which was 417,072,691 as of March 31, 2017 .

We also have profit-sharing arrangements whereby certain employees or executive managing directors are entitled to a share of incentive income distributed by certain funds. This incentive income is typically paid to us, and a portion is paid to the participant, as investments held by these funds are realized. We defer the recognition of any portion of this incentive income to the extent it is subject to clawback and relates to a fund that is not consolidated. See “—Incentive Income” above. To the extent that the payments to the employees or executive managing directors are probable and reasonably estimable, we accrue these payments as compensation expense for GAAP purposes, which may occur prior to the recognition of the related incentive income.

In August 2012, we adopted the Och-Ziff Capital Management Group LLC 2012 Partner Incentive Plan (the “PIP”), under which certain of our executive managing directors at the time of the IPO may be eligible to receive discretionary cash awards and discretionary grants of Och-Ziff Operating Group D Units over a five-year period that commenced in 2013. Each year, an aggregate of up to 2,770,749 Och-Ziff Operating Group D Units may be granted under the PIP to the participating executive managing directors. Aggregate discretionary cash awards for each year under the PIP will be capped at 10% of our incentive income earned during such year, up to a maximum of $39.6 million per year. In addition to awards under the PIP, we may also issue additional performance-related Och-Ziff Operating Group D Units or make discretionary performance cash payments to our executive managing directors.

Interest Expense. Amounts included within interest expense relate primarily to indebtedness outstanding under our Senior Notes, Aircraft Loan, Revolving Credit Facility and CLO Investment Loan (as defined below). See “—Liquidity and Capital Resources—Debt Obligations” for a summary of the terms related to these borrowings. We repaid the outstanding balance under our Revolving Credit Facility and our Aircraft Loan in the first quarter of 2017.

General, Administrative and Other. General, administrative and other expenses are comprised of recurring placement and related service fees, occupancy and equipment, professional services, information processing and communications, insurance, business development, and other miscellaneous expenses. In addition, the FCPA settlements expense incurred in 2016 is also included in this line item.

Expenses of Consolidated Och-Ziff Funds. Expenses recorded as expenses of consolidated Och-Ziff funds consist of interest expense and other miscellaneous expenses.

Other Income

Changes in Tax Receivable Agreement Liability. Changes in tax receivable agreement liability primarily consists of changes in our estimate of the future payments related to the tax receivable agreement, described in detail in Note 15 .

Net Gains on Investments in Och-Ziff Funds and Joint Ventures. Net gains on investments in Och-Ziff funds and joint ventures primarily consist of net gains and losses on investments in our funds made by us and net gains and losses on investments in joint ventures established to expand certain of our private investments platforms.

Net Gains of Consolidated Och-Ziff Funds. Net gains of consolidated Och-Ziff funds consist of net realized and unrealized gains on investments held by the consolidated Och-Ziff funds.

Income Taxes

Income taxes consist of our provision for federal, state and local income taxes in the United States and foreign income taxes, including provisions for deferred income taxes resulting from temporary differences between the tax and GAAP bases. The computation of the provision requires certain estimates and significant judgment, including, but not limited to, the expected taxable income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences between the tax and GAAP bases and the likelihood of being able to fully utilize deferred income tax assets existing as of the end of the period.

The Registrant and the Och-Ziff Operating Group entities are partnerships for U.S. federal income tax purposes. Due to our legal structure, only a portion of the income we earn is subject to corporate-level income taxes in the United States and foreign jurisdictions. The amount of incentive income we earn in a given year, the resultant flow of revenues and expenses through our legal entity structure, the effect that changes in our Class A Share price may have on the ultimate deduction we are able to take related to the settlement of RSUs, and any changes in future enacted income tax rates may have a significant impact on our income tax provision and effective income tax rate.

Net Income (Loss) Attributable to Noncontrolling Interests

Noncontrolling interests represent ownership interests in our subsidiaries held by parties other than us and are primarily made up of Och-Ziff Operating Group A Units and fund investors’ interests in the consolidated Och-Ziff funds. Increases or decreases in net income (loss) attributable to the Och-Ziff Operating Group A Units are driven by the earnings of the Och-Ziff Operating Group. Increases or decreases in the net income attributable to fund investors’ interests in consolidated Och-Ziff funds are driven by the earnings of those funds as allocated under the contractual terms of the relevant fund agreements.

Our interest in the Och-Ziff Operating Group is expected to continue to increase over time as additional Class A Shares are issued upon the exchange of Och-Ziff Operating Group A and P Units and settlement of RSUs. These increases will be offset upon the conversion of Och-Ziff Operating Group D Units, which are not considered equity for GAAP purposes, into Och-Ziff Operating Group A Units.

Additionally, we consolidate certain of our opportunistic credit funds, wherein investors are able to redeem their interests after an initial lock-up period of up to three years. Allocations of earnings to these interests are reflected within net income attributable to redeemable noncontrolling interests in the consolidated statements of comprehensive income (loss).

Results of Operations

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016

Revenues



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Management fees	$	86,255	$	156,910
Incentive income	51,626		30,587
Other revenues	776		579
Income of consolidated Och-Ziff funds	495		366
Total Revenues	$	139,152	$	188,442

Total revenues for the quarter-to-date period decreased by $49.3 million , primarily due to the following:


•	A $70.7 million decrease in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates. See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate.


•	A $21.0 million increase in incentive income, primarily due to the following:

• Multi-strategy funds. A $12.8 million increase in incentive income from our multi-strategy funds was due to: (i) a $5.9 million increase related to assets subject to a one-year measurement period; (ii) a $3.4 million increase related to longer-term assets under management; (iii) a $2.4 million increase related to tax distributions taken to cover tax liabilities on incentive income that has been accrued on certain longer-term assets under management, but that will not be realized until the end of the relevant commitment period; and (iv) a $1.1 million increase due to crystallization of incentive related to fund investor redemptions.

• Opportunistic credit funds. A $9.2 million increase in incentive income from our opportunistic credit funds, primarily due to a $15.0 million increase in incentive income from our open-end opportunistic credit funds, primarily drive by tax distributions. This increase was partially offset by a $5.8 million decrease from our closed-end opportunistic funds, due to a lower amount of realizations as these funds continue to wind down.

These increases were partially offset by:

• Real estate funds. A $2.1 million decrease in incentive income from our real estate funds, primarily due to a lower amount of realizations from Och-Ziff Real Estate Fund I as this fund continues to wind down.



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Compensation and benefits	$	69,943	$	54,261
Interest expense	6,280		5,386
General, administrative and other	45,928		267,669
Expenses of consolidated Och-Ziff funds	84		266
Total Expenses	$	122,235	$	327,582

Total expenses for the quarter-to-date period decreased by $205.3 million , primarily due to the following:

•

A $221.7 million decrease in general, administrative and other expenses driven primarily by a $200.0 million decrease in FCPA settlements expense accrued in the first quarter of 2016, which did not reoccur in the first quarter of 2017, as well as reductions across various other categories of operating expenses, including a $10.2 million decrease in professional services, which was driven primarily by lower legal fees.

•

A $15.7 million increase in compensation and benefits expenses, primarily driven by the following: (i) a $17.7 million increase in bonus expense primarily due to the decision to provide and accrue for minimum discretionary bonuses; and (ii) a $2.5 million increase due to distributions accrued on the Och-Ziff Operating Group D Units in the first quarter of 2017 (no corresponding distributions were declared from the Och-Ziff Operating Group in the first quarter of 2016). These increases were partially offset by a $4.4 million decrease in salaries and benefits expense driven by lower headcount. Our global headcount was 505 as of March 31, 2017 , as compared to 638 as of March 31, 2016 .


•	An $894 thousand increase in interest expense primarily due to the drawdown on the Revolving Credit Facility in April 2016 and the CLO Investment Loan financing that we entered into in November 2016.

Other Income



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Changes in tax receivable agreement liability	$	—	$	145
Net gains on investments in Och-Ziff funds and joint ventures	721		249
Net gains of consolidated Och-Ziff funds	235		545
Total Other Income	$	956	$	939

Total other income remained relatively flat period over period.

Income Taxes



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Income taxes	$	12,056	$	18,539

Income tax expense for the quarter-to-date period decreased by $6.5 million , although our GAAP income was higher period over period, our taxable income was lower primarily as a result of the non-deductible $200.0 million FCPA settlements expense incurred in the first quarter of 2016.

Net Income (Loss) Allocated to Noncontrolling Interests

The following table presents the components of the net income (loss) allocated to noncontrolling interests and to redeemable noncontrolling interests:



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Och-Ziff Operating Group A Units	$	9,635	$	(88,019	)
Consolidated Och-Ziff funds	—		262
Other	143		(88		)
Total	$	9,778	$	(87,845	)

Redeemable noncontrolling interests	$	350	$	461

Net income (loss) allocated to noncontrolling interests increased by $97.6 million , primarily due to the $200.0 million FCPA settlements expense taken in the first quarter of 2016, as well as higher incentive income and lower income taxes year-over-year, partially offset by lower management fees. Also partially offsetting the year-over-year improvement in net loss was higher discretionary cash bonus expense allocable to the Och-Ziff Operating Group A Units, which was due to our decision to provide and accrue for a minimum annual discretionary cash bonus.

Net Loss Attributable to Class A Shareholders



	Three Months Ended March 31,
	2017			2016
	(dollars in thousands)
Net Loss Attributable to Class A Shareholders	$	(7,164	)	$	(69,356	)

Net loss attributable to Class A Shareholders for the quarter-to-date period improved by $62.2 million , primarily due to the $200.0 million FCPA settlements expense taken in the first quarter of 2016, as well as higher incentive income and lower income taxes year-over-year, partially offset by lower management fees. Also partially offsetting the year-over-year improvement in net loss was higher bonus expense, which was due to the decision to provide and accrue for minimum discretionary bonuses.

Economic Income Analysis

In addition to analyzing our results on a GAAP basis, management also reviews our results on an “Economic Income” basis. Economic Income excludes the adjustments described below that are required for presentation of our results on a GAAP basis, but that management does not consider when evaluating operating performance in any given period. Management uses Economic Income as the basis on which it evaluates our financial performance and makes resource allocation and other operating decisions. Management considers it important that investors review the same operating information that it uses.

Economic Income is a measure of pre-tax operating performance that excludes the following from our results on a GAAP basis:


•	Income allocations to our executive managing directors on their direct interests in the Och-Ziff Operating Group. Management reviews operating performance at the Och-Ziff Operating Group level, where our operations are performed, prior to making any income allocations.


•	Equity-based compensation expenses and depreciation and amortization expenses, as well as any losses on disposal of fixed assets, as management does not consider these non-cash expenses to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement.


•	Changes in the tax receivable agreement liability and net gains on investments in Och-Ziff funds, as management does not consider these items to be reflective of operating performance.


•	Amounts related to the consolidated Och-Ziff funds, including the related eliminations of management fees and incentive income, as management reviews the total amount of management fees and incentive income earned in relation to total assets under management and fund performance.

In addition, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant commitment period, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund.

As a result of the adjustments described above, as well as an adjustment to present management fees net of recurring placement and related service fees (rather than considering these fees an expense), management fees, incentive income, compensation and benefits, non-compensation expenses and net income (loss) allocated to noncontrolling interests as presented on an Economic Income basis are also non-GAAP measures. No adjustments to the GAAP basis have been made for other revenues and net gains (losses) on joint ventures. For reconciliations of our non-GAAP measures to the respective GAAP measures, please see “—Economic Income Reconciliations” at the end of this MD&A.

Our non-GAAP financial measures should not be considered as alternatives to our GAAP net income allocated to Class A Shareholders or cash flow from operations, or as indicative of liquidity or the cash available to fund operations. Our non-GAAP measures may not be comparable to similarly titled measures used by other companies.

We currently have two operating segments: the Och-Ziff Funds segment and our real estate business. The Och-Ziff Funds segment, which provides asset management services to our multi-strategy funds, dedicated credit funds and other alternative investment vehicles, is currently our only reportable operating segment under GAAP. Our real estate business, which provides asset management services to our real estate funds, is included within Other Operations as it does not meet the threshold of a reportable operating segment under GAAP.

Economic Income Revenues (Non-GAAP)



	Three Months Ended March 31, 2017						Three Months Ended March 31, 2016
	Och-Ziff Funds Segment		Other Operations		Total Company		Och-Ziff Funds Segment		Other Operations		Total Company
	(dollars in thousands)
Economic Income Basis
Management fees	$	75,552	$	5,259	$	80,811	$	139,244	$	5,135	$	144,379
Incentive income	50,422		1,204		51,626		26,953		3,634		30,587
Other revenues	750		26		776		572		7		579
Total Economic Income Revenues	$	126,724	$	6,489	$	133,213	$	166,769	$	8,776	$	175,545

Economic Income revenues for the quarter-to-date period decreased by $42.3 million , primarily due to the following:


•	A $63.6 million decrease in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates. See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate.


•	A $21.0 million increase in incentive income, primarily due to the following:

Economic Income Expenses (Non-GAAP)



	Three Months Ended March 31, 2017						Three Months Ended March 31, 2016
	Och-Ziff Funds Segment		Other Operations		Total Company		Och-Ziff Funds Segment		Other Operations		Total Company
	(dollars in thousands)
Economic Income Basis
Compensation and benefits	$	41,365	$	4,899	$	46,264	$	31,059	$	2,697	$	33,756
Non-compensation expenses	41,913		638		42,551		255,651		1,469		257,120
Total Economic Income Expenses	$	83,278	$	5,537	$	88,815	$	286,710	$	4,166	$	290,876

Economic Income expenses for the quarter-to-date period decreased by $202.1 million , primarily due to the following:

•

A $214.6 million decrease in non-compensation expenses driven primarily by a $200.0 million decrease in FCPA settlements expense accrued in the first quarter of 2016, which did not reoccur in the first quarter of 2017, as well as reductions across various other categories of operating expenses, including a $10.2 million decrease in professional services, which was driven primarily by lower legal fees.


•	A $12.5 million increase in compensation and benefit expenses primarily driven by a $16.9 million increase in bonus expense due to the decision to provide and accrue for minimum discretionary bonuses, discussed above, partially offset by a $4.4 million decrease in salaries and benefits expense driven by lower headcount.

Economic Income (Non-GAAP)



	Three Months Ended March 31,
	2017		2016
	(dollars in thousands)
Economic Income:
Och-Ziff Funds segment	$	43,446	$	(119,939	)
Other Operations	952		4,610
Total Company	$	44,398	$	(115,329	)

Economic Income for the quarter-to-date period increased by $159.7 million , primarily due to the $200.0 million FCPA settlements expense taken in the first quarter of 2016, as well as higher incentive income. These improvements were partially offset by lower management fees, as well as higher bonus expense due to our decision to provide a minimum annual discretionary cash bonus. As a result of this decision, we will accrue the minimum annual discretionary cash bonus on a straight-line basis during the year.

Liquidity and Capital Resources

In September 2016, we entered into the Purchase Agreement with the EMD Purchasers, including Daniel S. Och, to issue up to $400.0 million of Preferred Units. Pursuant to the agreement, in October 2016, we completed a $250.0 million issuance and sale of Preferred Units to the EMD Purchasers and completed an additional $150.0 million issuance and sale of Preferred Units to EMD Purchasers in January 2017. We used the proceeds from the Preferred Units issued in October 2016, as well as cash on hand, to pay the $412.1 million in penalties and disgorgement related to the settlements with the SEC and the DOJ discussed above. We used the proceeds from the second sale of the Preferred Units in January 2017 to pay the outstanding balance under our Revolving Credit Facility. See Note 10 to our consolidated financial statements included in this report for details regarding the terms of the Preferred Units.

The working capital needs of our business have historically been met, and we anticipate will continue to be met, through cash generated from management fees and incentive income earned by the Och-Ziff Operating Group from our funds, as well as other sources of liquidity noted above and below.

Over the next 12 months, we expect that our primary liquidity needs will be to:


•	Pay our operating expenses, primarily consisting of compensation and benefits, as well as any related tax withholding obligations, and non-compensation expenses.


•	Pay interest on our debt obligations.


•	Provide capital to facilitate the growth of our business.


•	Pay income taxes.


•	Make cash distributions in accordance with our distribution policy as discussed below under “—Dividends and Distributions.”

Historically, management fees have been sufficient to cover all of our “fixed” operating expenses, which we define as salaries, benefits and a minimum discretionary bonus and our non-compensation costs incurred in the ordinary course of business. We recently reduced our management fee rates for existing investors in virtually all of our multi-strategy assets under management. And while we are making every effort to scale our operations so that management fees are sufficient to cover our fixed operating expenses, no assurances can be given that our management fees ultimately will be sufficient for these purposes.

We cannot predict the amount of incentive income, if any, which we may earn in any given year. Accordingly, we historically have not relied on incentive income to meet our fixed operating expenses. Total annual revenues, which are heavily influenced by the amount of annual incentive income we earn, historically have been sufficient to fund all of our other working capital needs, including annual discretionary cash bonuses. These cash bonuses, which historically have comprised our largest cash operating expense, are variable such that in any year where total annual revenues are greater or less than the prior year, cash bonuses may be adjusted accordingly. Our ability to scale our largest cash operating expense to our total annual revenues helps us manage our cash flow and liquidity position from year to year.

Executive managing directors participating in the PIP may be eligible to receive discretionary annual cash awards each year for a five-year period that commenced in 2013, if we earn incentive income in the relevant year. The maximum aggregate amount of cash that may be awarded for each year under the PIP to the participating executive managing directors, collectively, will be capped at 10% of our incentive income earned during that year, up to a maximum aggregate amount of $39.6 million per year. Whether any cash is awarded under the PIP in a particular year, and the amount of such awards, will be determined by the Compensation Committee of the Board in its sole discretion, based on recommendations from Mr. Och for that year.

Based on our past results, management’s experience and our current level of assets under management, we believe that our existing cash resources, together with the cash generated from management fees, will be sufficient to meet our anticipated fixed operating expenses and other working capital needs for at least the next 12 months.

Historically, we have determined the amount of discretionary cash bonuses, including discretionary annual cash awards under the PIP described above, during the fourth quarter of each year, based on our total annual revenues. We have historically funded these amounts through fourth quarter management fees and incentive income crystallized on December 31, which represents the majority of the incentive income we typically earn each year. Starting in the first quarter of 2017, we began to accrue a minimum amount of discretionary cash bonuses on a pro rata basis throughout the year. To the extent our funds generate incentive income in the fourth quarter, we may elect to increase the amount of cash bonuses paid to employees over the amount already accrued, with any incremental amounts recognized as expense in the fourth quarter. Although we cannot predict the amount, if any, of incentive income we may earn, we are able to regularly monitor expected management fees and we believe that we will be able to adjust our expense infrastructure, including discretionary cash bonuses, as needed to meet the requirements of our business and in order to maintain positive operating cash flows. Nevertheless, if we generate insufficient cash flows from operations to meet our short-term liquidity needs, we may have to borrow funds or sell assets, subject to existing contractual arrangements.

We may use cash on hand to repay all or a portion of our outstanding indebtedness prior to their respective maturity dates, which would reduce amounts available to distribute to our Class A Shareholders. For any amounts unpaid as of a maturity date, we will be required to repay the remaining balance by using cash on hand, refinancing the remaining balance by issuing new notes or entering into new credit facilities, which could result in higher borrowing costs, or by issuing equity or other securities, which would dilute existing shareholders. No assurance can be given that we will be able to issue new notes, enter into new credit facilities or issue equity or other securities in the future on attractive terms or at all. Any new notes or new credit facilities that we may be able to issue or enter into may have covenants that impose additional limitations on us, including with respect to making distributions, entering into business transactions or other matters, and may result in increased interest expense. If we are unable to meet our debt obligations on terms that are favorable to us, our business may be adversely impacted. See “—Debt Obligations” for more information.

For our other longer-term liquidity requirements, we expect to continue to fund our fixed operating expenses through management fees and to fund discretionary cash bonuses and the repayment of our debt obligations through a combination of management fees and incentive income. We may also decide to meet these requirements by borrowing funds under our Revolving Credit Facility or by issuing additional debt, equity or other securities.

Over the long term, we believe we will be able to grow our assets under management and generate positive investment performance in our funds, which we expect will allow us to grow our management fees and incentive income in amounts sufficient to cover our long-term liquidity requirements.

To maintain maximum flexibility to meet demands and opportunities both in the short and long term, and subject to existing contractual arrangements, we may want to retain cash, issue additional equity or borrow additional funds to:


•	Support the future growth in our business.


•	Create new or enhance existing products and investment platforms.


•	Repay borrowings.


•	Pursue new investment opportunities.


•	Develop new distribution channels.


•	Cover potential costs incurred in connection with the legal and regulatory matters described in the notes to our consolidated financial statements included in this report.

Market conditions and other factors may make it more difficult or costly to raise or borrow additional funds. Excessive costs or other significant market barriers may limit or prevent us from maximizing our growth potential and flexibility.

Debt Obligations

Senior Notes

On November 20, 2014, we issued $400.0 million of 4.50% Senior Notes due November 20, 2019 , unless earlier redeemed or repurchased. Please see Note 9 to our consolidated financial statements included in this report for additional details on the Senior Notes.

Revolving Credit Facility

On November 20, 2014, we entered into the $150.0 million , five-year unsecured Revolving Credit Facility, which was subsequently amended on December 29, 2015, the proceeds of which may be used for working capital, general corporate purposes or other liquidity needs. The facility matures on November 20, 2019. In March 2017, we repaid our outstanding obligation under the Revolving Credit Facility, and as a result we currently have $150.0 million available to us under the facility as of March 31, 2017 . Please see Note 9 to our consolidated financial statements included in this report for additional details on the Revolving Credit Facility.

Aircraft Loan

In February 2014, we entered into the Aircraft Loan to finance installment payments towards the purchase of a corporate aircraft. In March 2017, we sold the aircraft and repaid the outstanding balance of the loan in the amount of $46.4 million .

CLO Investment Loan

In November 2016, we entered into a $16.0 million loan to finance 75% of our investment into a CLO we manage (the “CLO Investment Loan”). We will make interest and principal payments on the CLO Investment Loan at such time interest and principal payments are received on our investment in the CLO. Any remaining unpaid principal is due on December 15, 2023 . Please see Note 9 to our consolidated financial statements included in this report for additional details on the CLO Investment Loan.

Tax Receivable Agreement

We have made, and may in the future be required to make, payments under the tax receivable agreement that we entered into with our executive managing directors and the Ziffs. The purchase by the Och-Ziff Operating Group of Och-Ziff Operating Group A Units from our executive managing directors and the Ziffs with proceeds from the IPO and concurrent private Class A Share offering in 2007 (collectively, the “2007 Offerings”), and subsequent taxable exchanges by them of Och-Ziff Operating Group A Units for our Class A Shares on a one-for-one basis (or, at our option, a cash equivalent), resulted, and, in the case of

future exchanges, are anticipated to result, in an increase in the tax basis of the assets of the Och-Ziff Operating Group that would not otherwise have been available. We anticipate that any such tax basis adjustment resulting from an exchange will be allocated principally to certain intangible assets of the Och-Ziff Operating Group, and we will derive our tax benefits principally through amortization of these intangibles over a 15-year period from the date of the 2007 Offerings or the date of any subsequent exchange. Consequently, these tax basis adjustments will increase, for tax purposes, our depreciation and amortization expenses and will therefore reduce the amount of tax that Och-Ziff Corp and any other corporate taxpaying entities that hold Och-Ziff Operating Group B Units in connection with an exchange, if any, would otherwise be required to pay in the future. Accordingly, pursuant to the tax receivable agreement, such corporate taxpaying entities (including Och-Ziff Capital Management Group LLC if it is treated as a corporate taxpayer) have agreed to pay our executive managing directors and the Ziffs 85% of the amount of cash savings, if any, in federal, state and local income taxes in the United States that these entities actually realize related to their units as a result of such increases in tax basis.

In connection with the departure of certain former executive managing directors since the IPO, the right to receive payments under the tax receivable agreement by those former executive managing directors was contributed to the Och-Ziff Operating Group. As a result, we expect to pay to the other executive managing directors and the Ziffs approximately 78% (from 85% at the time of the IPO) of the amount of cash savings, if any, in federal, state and local income taxes in the United States that we actually realize as a result of such increases in tax basis. To the extent that we do not realize any cash savings, we would not be required to make corresponding payments under the tax receivable agreement.

Payments under the tax receivable agreement are anticipated to increase the tax basis adjustment of intangible assets resulting from a prior exchange, with such increase being amortized over the remainder of the amortization period applicable to the original basis adjustment of such intangible assets resulting from such prior exchange. It is anticipated that this will result in increasing annual amortization deductions in the taxable years of and after such increases to the original basis adjustments, and potentially will give rise to increasing tax savings with respect to such years and correspondingly increasing payments under the tax receivable agreement.

As of March 31, 2017 , assuming no material changes in the relevant tax law and that we generate sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of our assets, we expect to pay our executive managing directors and the Ziffs approximately $520.8 million as a result of the cash savings to our intermediate holding companies from the purchase of Och-Ziff Operating Group A Units from our executive managing directors and the Ziffs with proceeds from the 2007 Offerings and the exchange of Och-Ziff Operating Group A Units for Class A Shares. Future cash savings and related payments to our executive managing directors under the tax receivable agreement in respect of subsequent exchanges would be in addition to these amounts. The obligation to make payments under the tax receivable agreement is an obligation of Och-Ziff Corp, and any other corporate taxpaying entities that hold Och-Ziff Operating Group B Units, and not of the Och-Ziff Operating Group entities. We may need to incur debt to finance payments under the tax receivable agreement to the extent the entities within the Och-Ziff Operating Group do not distribute cash to our intermediate corporate tax paying entities in an amount sufficient to meet our obligations under the tax receivable agreement.

The actual increase in tax basis of the Och-Ziff Operating Group assets resulting from an exchange or from payments under the tax receivable agreement, as well as the amortization thereof and the timing and amount of payments under the tax receivable agreement, will vary based upon a number of factors, including the following:


•	The amount and timing of the income of Och-Ziff Corp will impact the payments to be made under the tax receivable agreement. To the extent that Och-Ziff Corp does not have sufficient taxable income to utilize the amortization deductions available as a result of the increased tax basis in the Och-Ziff Operating Group assets, payments required under the tax receivable agreement would be reduced.


•	The price of our Class A Shares at the time of any exchange will determine the actual increase in tax basis of the Och-Ziff Operating Group assets resulting from such exchange; payments under the tax receivable agreement resulting from future exchanges, if any, will be dependent in part upon such actual increase in tax basis.


•	The composition of the Och-Ziff Operating Group’s assets at the time of any exchange will determine the extent to which Och-Ziff Corp may benefit from amortizing its increased tax basis in such assets and thus will impact the amount of future payments under the tax receivable agreement resulting from any future exchanges.


•	The extent to which future exchanges are taxable will impact the extent to which Och-Ziff Corp will receive an increase in tax basis of the Och-Ziff Operating Group assets as a result of such exchanges, and thus will impact the benefit derived by Och-Ziff Corp and the resulting payments, if any, to be made under the tax receivable agreement.


•	The tax rates in effect at the time any potential tax savings are realized, which would affect the amount of any future payments under the tax receivable agreement.

Depending upon the outcome of these factors, payments that we may be obligated to make to our executive managing directors and the Ziffs under the tax receivable agreement in respect of exchanges could be substantial. In light of the numerous factors affecting our obligation to make payments under the tax receivable agreement, the timing and amounts of any such actual payments are not reasonably ascertainable.

Dividends and Distributions

The table below presents the cash dividends paid on our Class A Shares in 2017, and the related cash distributions to our executive managing directors on their Och-Ziff Operating Group A Units and Och-Ziff Operating Group D Units.



	Class A Shares
Payment Date	Record Date	Dividend per Share		Related Distributions to Executive Managing Directors (dollars in thousands)
March 6, 2017	February 27, 2017	$	0.01	$	3,228

We intend to distribute to our Class A Shareholders substantially all of their pro rata share of our annual Economic Income (as described above under “—Economic Income Analysis”) in excess of amounts determined by us to be necessary or appropriate to provide for the conduct of our business, to pay income taxes, to pay any amounts owed under the tax receivable agreement, to make appropriate investments in our business and our funds, to make payments on any of our other obligations, to fund the repurchase of Class A Shares or interests in the Och-Ziff Operating Group, as well as to fund distributions on the Preferred Units starting in 2020. Subject to certain exceptions, unless distributions on the Preferred Units are declared and paid in cash for the then current distribution period and all preceding periods after the initial closing of the Preferred Units, the Och-Ziff Operating Group entities may not declare or pay distributions on or repurchase any of their equity securities that rank equal with or junior to the Preferred Units. See Note 10 to our consolidated financial statements included in this report for additional information regarding the terms of the Preferred Units.

When we pay dividends on our Class A Shares, we also intend to make distributions to our executive managing directors on their interests in the Och-Ziff Operating Group, subject to the terms of the limited partnership agreements of the Och-Ziff Operating Group entities.

The declaration and payment of future distributions will be at the sole discretion of our Board of Directors, which may change our distribution policy or reduce or eliminate our distributions at any time in its discretion. Our Board of Directors will take into account such factors as it may deem relevant, including general economic and business conditions; our strategic plans and prospects; our business and investment opportunities; our financial condition and operating results; working capital requirements and anticipated cash needs; contractual restrictions and obligations, including payment obligations pursuant to the tax receivable agreement and restrictions pursuant to our term loan; legal, tax and regulatory restrictions; other restrictions and limitations on the payment of distributions by us to our Class A Shareholders or by our subsidiaries to us; and such other factors as our Board of Directors may deem relevant.

The declaration and payment of any distribution may be subject to legal, contractual or other restrictions. For example, as a Delaware limited liability company, Och-Ziff Capital Management Group LLC is not permitted to make distributions if and to the extent that after giving effect to such distributions, its liabilities would exceed the fair value of its assets. Our cash needs and payment obligations may fluctuate significantly from quarter to quarter, and we may have material unexpected expenses in any period. This may cause amounts available for distribution to significantly fluctuate from quarter to quarter or may reduce or eliminate such amounts.

Additionally, RSUs outstanding accrue dividend equivalents equal to the dividend amounts paid on our Class A Shares. To date, these dividend equivalents have been awarded in the form of additional RSUs, which accrue additional dividend equivalents. The dividend equivalents will only be paid if the related RSUs vest and will be settled at the same time as the underlying RSUs. Our Board of Directors has the right to determine whether the RSUs and any related dividend equivalents will be settled in Class A Shares or in cash. We currently withhold shares to satisfy the tax withholding obligations related to vested RSUs and dividend equivalents held by our employees, which results in the use of cash from operations or borrowings to satisfy these tax-withholding payments.

In accordance with the Och-Ziff Operating Group entities’ limited partnership agreements, we may cause the applicable Och-Ziff Operating Group entities to distribute cash to the intermediate holding companies and our executive managing directors in an amount at least equal to the presumed maximum tax liabilities arising from their direct ownership in these entities. The presumed maximum tax liabilities are based upon the presumed maximum income allocable to any such unit holder at the maximum combined U.S. federal, New York State and New York City tax rates. Holders of our Class A Shares may not always receive distributions at a time when our intermediate holding companies and our executive managing directors are receiving distributions on their interests, as distributions to our intermediate holding companies may be used to settle tax liabilities, if any, or other obligations. Such tax distributions will take into account the disproportionate income allocation (but not a disproportionate cash allocation) to the unit holders with respect to “built-in gain assets,” if any, at the time of the IPO. Consequently, Och-Ziff Operating Group tax distributions may be greater than if such assets had a tax basis equal to their value at the time of the IPO.

Our cash distribution policy has certain risks and limitations, particularly with respect to our liquidity. Although we expect to pay distributions according to our policy, we may not make distributions according to our policy, or at all, if, among other things, we do not have the cash necessary to pay the distribution. Moreover, if the Och-Ziff Operating Group’s cash flows from operations are insufficient to enable it to make required minimum tax distributions discussed above, the Och-Ziff Operating Group may have to borrow funds or sell assets, and thus our liquidity and financial condition could be materially adversely affected. Furthermore, by paying cash distributions rather than investing that cash in our businesses, we might risk slowing the pace of our growth, or not having a sufficient amount of cash to fund our obligations, operations, new investments or unanticipated capital expenditures, should the need arise. In such event, we may not be able to execute our business and growth strategy to the extent intended.

Our Funds’ Liquidity and Capital Resources

Our funds have access to liquidity from our prime brokers and other counterparties. Additionally, our funds may have committed facilities in addition to regular financing from our counterparties. These sources of liquidity provide our funds with additional financing resources, allowing them to take advantage of opportunities in the global marketplace.

Our funds’ current liquidity position could be adversely impacted by any substantial, unanticipated investor redemptions from our funds that are made within a short time period. As discussed above in “—Assets Under Management and Fund Performance,” capital contributions from investors in our multi-strategy and open-end opportunistic credit funds generally are subject to initial lock-up periods of one to three years. Following the expiration of these lock-up periods, subject to certain limitations, investors may redeem capital generally on a quarterly or annual basis upon giving 30 to 90 days’ prior written notice. These lock-ups and redemption notice periods help us to manage our liquidity position. However, upon the payment of a redemption fee to the applicable fund and upon giving 30 days’ prior written notice, certain investors may redeem capital during the lock-up period. Investors in our other funds are generally not allowed to redeem until the end of the life of the fund.

We also follow a rigorous risk management process and regularly monitor the liquidity of our funds’ portfolios in relation to economic and market factors and the timing of potential investor redemptions. As a result of this process, we may determine to reduce exposure or increase the liquidity of our funds’ portfolios at any time, whether in response to global economic and market conditions, redemption requests or otherwise. For these reasons, we believe we will be well prepared to address market conditions and redemption requests, as well as any other events, with limited impact on our funds’ liquidity position. Nevertheless, significant redemptions made during a single quarter could adversely affect our funds’ liquidity position, as we may meet redemptions by using our funds’ available cash or selling assets (possibly at a loss). Such actions would result in lower assets under management, which would reduce the amount of management fees and incentive income we may earn. Our

funds could also meet redemption requests by increasing leverage, provided we are able to obtain financing on reasonable terms, if at all. We believe our funds have sufficient liquidity to meet any anticipated redemptions for the foreseeable future.

Cash Flows Analysis

Operating Activities. Net cash from operating activities for the three months ended March 31, 2017 and 2016 was $(7.7) million and $(7.6) million , respectively. Our net cash flows from operating activities are generally comprised of current-year management fees, the collection of incentive income earned during the fourth quarter of the previous year, less cash used for operating expenses.

The net cash outflow from operating activities remained relatively flat period over period.

Investing Activities. Net cash from investing activities for the three months ended March 31, 2017 and 2016 was $53.6 million and $(13.8) million , respectively. Investing cash flows in the first quarter of 2017 primarily related to the sale of one of our corporate aircraft. Investing cash flows in the first quarter of 2016 primarily related to the purchases and maturities of U.S. government obligations to manage excess liquidity.

Financing Activities. Net cash from financing activities for the three months ended March 31, 2017 and 2016 was $(23.8) million and $(4.0) million , respectively. Our net cash from financing activities is generally comprised of proceeds from Preferred Units offerings, dividends paid to our Class A Shareholders and borrowings and repayments related to our debt obligations. Contributions from noncontrolling interests, which relate to fund investor contributions into the consolidated funds, and distributions to noncontrolling interests, which relate to fund investor redemptions and distributions to our executive managing directors on their Och-Ziff Operating Group A Units, are also included in net cash from financing activities.

In March 2017, we repaid $120.0 million outstanding on our Revolving Credit Facility using proceeds from the second offering of Preferred Units and $46.4 million outstanding on our Aircraft Loan using proceeds from the sale of one of our corporate aircraft. We also paid dividends of $1.8 million to our Class A Shareholders and $3.0 million of distributions to our executive managing directors on their Och-Ziff Operating Group A Units in the first quarter of 2017. We did not make dividend or distribution payments in 2016.

Contractual Obligations

During the first quarter of 2017, we repaid the $120.0 million outstanding on our Revolving Credit Facility and $46.4 million outstanding on our Aircraft Loan. Other than these items, our contractual obligations have not changed significantly from what was reported in our Annual Report.

Off-Balance Sheet Arrangements

In the normal course of business, we enter into various off-balance sheet arrangements including sponsoring and owning general partner interests in our funds and retained interests in a CLO we manage. We also have ongoing capital commitment arrangements with certain of our funds. None of our off-balance sheet arrangements require us to fund losses or guarantee target returns to investors in any of our other investment funds. See Notes 5 and 6 of our consolidated financial statements included in this report for information on our retained and variable interests in our funds and CLO.

Critical Accounting Policies and Estimates

Critical accounting policies are those that require us to make significant judgments, estimates or assumptions that affect amounts reported in our financial statements or the notes thereto. We base our judgments, estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable and prudent. Actual results may differ materially from these estimates. See Note 2 to our consolidated financial statements included in this report for a description of our accounting policies. Set forth below is a summary of what we believe to be our most critical accounting policies and estimates.

Fair Value of Investments

The valuation of investments held by our funds is the most critical estimate made by management impacting our results. Pursuant to specialized accounting for investment companies under GAAP, investments held by the Och-Ziff funds are carried at their estimated fair values. The valuation of investments held by our funds has a significant impact on our results, as our management fees and incentive income are generally determined based on the fair value of these investments.

GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices (Level I) or for which fair value can be measured from actively quoted prices (Level II) generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value than those measured using pricing inputs that are unobservable in the market (Level III). See Note 4 to our consolidated financial statements included in this report for additional information regarding fair value measurements.

As of March 31, 2017 , the absolute values of our funds’ invested assets and liabilities (excluding the notes and loans payable of our CLOs) were classified within the fair value hierarchy as follows: approximately 46% within Level I; approximately 32% within Level II; and approximately 22% within Level III. As of December 31, 2016 , the absolute values of our funds’ invested assets and liabilities (excluding the notes and loans payable of our CLOs) were classified within the fair value hierarchy as follows: approximately 46% within Level I; approximately 32% within Level II; and approximately 22% within Level III. The percentage of our funds’ assets and liabilities within the fair value hierarchy will fluctuate based on the investments made at any given time and such fluctuations could be significant. A portion of our funds’ Level III assets relate to Special Investments or other investments on which we do not earn any incentive income until such investments are sold or otherwise realized. Upon the sale or realization event of these assets, any realized profits are included in the calculation of incentive income for such year. Accordingly, the estimated fair value of our funds’ Level III assets may not have any relation to the amount of incentive income actually earned with respect to such assets.

Valuation of Investments. Fair value represents the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants as of the measurement date. The fair value of our funds’ investments is based on observable market prices when available. Such values are generally based on the last sales price. We, as the investment manager of the Och-Ziff funds, determine the fair value of investments that are not actively traded on a recognized securities exchange or otherwise lack a readily ascertainable market value. The methods and procedures to value these investments may include, but are not limited to: (i) performing comparisons with prices of comparable or similar securities; (ii) obtaining valuation-related information from the issuers; (iii) calculating the present value of future cash flows; (iv) assessing other analytical data and information relating to the investment that is an indication of value; (v) obtaining information provided by third parties; and (vi) evaluating financial information provided by the management of these investments. See Note 4 to our consolidated financial statements included in this report for additional information.

Significant judgment and estimation goes into the assumptions that drive our valuation methodologies and procedures for assets that are not actively traded on a recognized securities exchange or otherwise lack a readily ascertainable market value. The actual amounts ultimately realized could differ materially from the values estimated based on the use of these methodologies. Realizations at values significantly lower than the values at which investments have been reflected could result in losses at the fund level and a decline in future management fees and incentive income. Such situations may also negatively impact fund investor perception of our valuation policies and procedures, which could result in redemptions and difficulties in raising additional capital.

We have established an internal control infrastructure over the valuation of financial instruments that includes ongoing oversight by our Financial Controls Group and Valuation Committee, as well as periodic audits by our Internal Audit Group. These management control functions are segregated from the trading and investing functions. See Note 4 to our consolidated financial statements included in this report for additional information regarding our valuation procedures and related oversight and controls.

Impact of Fair Value Measurement on Our Results. A 10% change in the estimate of fair value of the investments held by our funds would generally have a 10% change in management fees in the period subsequent to the change in fair value, as

management fees are charged based on the assets under management at the beginning of the period. For our real estate funds and certain other funds, there would be no impact as management fees are generally charged based on committed capital during the original investment period and invested capital thereafter. The impact of a 10% change in unrealized gains and losses of the investments held by our funds would generally have an immediate 10% impact on the amount of profit on which we earn our 20% incentive income if the change continues at the end of the commitment period, and assuming no hurdle rates and no high-water marks from any prior-year losses. For certain opportunistic credit, real estate and certain other funds, there would be no impact, as incentive income is recognized based on realized profits and when no longer subject to clawback.

For additional information regarding the impact that the fair value measurement of assets under management has on our results, please see “ Part I—Item 3. Quantitative and Qualitative Disclosures about Market Risk .”

Variable Interest Entities

The determination of whether or not to consolidate a variable interest entity under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests. To make these judgments, management has conducted an analysis, on a case-by-case basis, of whether we are the primary beneficiary and are therefore required to consolidate the entity. Management continually reconsiders whether we should consolidate a variable interest entity. Upon the occurrence of certain events, such as investor redemptions or modifications to fund organizational documents and investment management agreements, management will reconsider its conclusion regarding the status of an entity as a variable interest entity.

Income Taxes

We use the asset and liability method of accounting for deferred income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established when management believes it is more likely than not that a deferred income tax asset will not be realized.

Substantially all of our deferred income tax assets relate to the goodwill and other intangible assets deductible for tax purposes by Och-Ziff Corp that arose in connection with the purchase of Och-Ziff Operating Group A Units from our executive managing directors and the Ziffs with proceeds from the 2007 Offerings, subsequent exchanges of Och-Ziff Operating Group A Units for Class A Shares and subsequent payments to our executive managing directors and the Ziffs made under the tax receivable agreement, in addition to any related net operating loss carryforward. In accordance with relevant provisions of the Internal Revenue Code, we expect to take these goodwill and other intangible deductions over the 15-year period following the 2007 Offerings, as well as an additional 20-year loss carryforward period available to us in any year a net operating loss is generated as a result. Our analysis of whether we expect to have sufficient future taxable income to realize these deductions is based solely on estimates over this period.

Och-Ziff Corp generated taxable income of $17.0 million for the three months ended March 31, 2017 , before taking into account deductions related to the amortization of the goodwill and other intangible assets. We determined that we would need to generate taxable income of at least $1.7 billion over the remaining seven -year weighted-average amortization period, as well as an additional 20-year loss carryforward period available to us if a net operating loss is generated, in order to fully realize the deferred income tax assets. Using the estimates and assumptions discussed below, we expect to generate sufficient taxable income over the remaining amortization and loss carryforward periods available to us in order to fully realize these deferred income tax assets.

To generate $1.7 billion in taxable income over the remaining amortization and loss carryforward periods available to us, we estimated that, based on estimated assets under management of $31.9 billion as of April 1, 2017 , we would need to generate a minimum compound annual growth rate in assets under management of less than 1% , assuming no performance-related growth, and therefore no incentive income. The assumed nature and amount of this estimated growth rate are not based on historical results or current expectations of future growth; however, the other assumptions underlying the taxable income estimate, such as general maintenance of current expense ratios and cost allocation percentages among the Och-Ziff Operating Group entities, which impact the amount of taxable income flowing through our legal structure, are based on our near-term operating budget. If our actual growth rate in assets under management falls below this minimum threshold for any extended time during the period

for which these estimates relate and we do not otherwise experience offsetting growth rates in other periods, we may not generate taxable income sufficient to realize the deferred income tax assets and may need to record a valuation allowance.

Management regularly reviews the model used to generate the estimates, including the underlying assumptions. If it determines that a valuation allowance is required for any reason, the amount would be determined based on the relevant circumstances at that time. To the extent we record a valuation allowance against our deferred income tax assets related to the goodwill and other intangible assets, we would record a corresponding decrease in the liability to our executive managing directors and the Ziffs under the tax receivable agreement equal to approximately 78% of such amount; therefore, our net income allocated to Class A Shareholders would only be impacted by 22% of any valuation allowance recorded against the deferred income tax assets.

Actual taxable income may differ from the estimate described above, which was prepared solely for determining whether we currently expect to have sufficient future taxable income to realize the deferred income tax assets. Furthermore, actual or estimated future taxable income may be materially impacted by significant changes in assets under management, whether as a result of fund investment performance or fund investor contributions or redemptions, significant changes to the assumptions underlying our estimates, future changes in income tax law, state income tax apportionment or other factors.

As of March 31, 2017 , we had $224.9 million of net operating losses available to offset future taxable income for federal income tax purposes that will expire between 2030 and 2037 , and $103.7 million of net operating losses available to offset future taxable income for state income tax purposes and $96.1 million for local income tax purposes that will expire between 2035 and 2036 . Based on the analysis set forth above, as of March 31, 2017 , we have determined that it is not necessary to record a valuation allowance with respect to our deferred income tax assets related to the goodwill and other intangible assets deductible for tax purposes, and any related net operating loss carryforward. However, we have determined that we may not realize certain foreign income tax credits and certain foreign net operating losses. Accordingly, a valuation allowance of $14.3 million has been established for these items.

Impact of Recently Adopted Accounting Pronouncements on Recent and Future Trends

The Financial Accounting Standards Board (the “FASB”) has issued various Accounting Standards Updates (“ASUs”) that could impact our future trends. For additional details regarding these ASUs, including methods of adoption (e.g., full retrospective or modified retrospective), see Note 2 to our consolidated financial statements included in this report for additional information.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . ASU 2016-09. The requirements of ASU 2016-09 were effective for us beginning in the first quarter of 2017. As a result of adopting ASU 2016-09 we elected not to estimate forfeiture rates when calculating its equity-based compensation expense and will account for forfeitures as they occur. Additionally, we no longer maintain and track our APIC pool account, and recognize all excess tax benefits and tax deficiencies as income tax expenses or benefits in the statement of operations. This guidance was adopted on prospective basis and does not have a material impact on our recent and future trends.

None of the other changes to GAAP that went into effect during the three months ended March 31, 2017 are expected to impact our future trends.

Expected Impact of Future Adoption of New Accounting Pronouncements on Future Trends

Listed below are ASUs that have been issued but that we have not yet adopted that may impact our future trends. For additional details regarding these ASUs, including methods of adoption (e.g., full retrospective or modified retrospective), see Note 2 to our consolidated financial statements included in this report.

ASU 2014-09 , Revenue from Contracts with Customers . ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 —Revenue Recognition and most industry-specific revenue recognition guidance throughout the ASC. The requirements of ASU 2014-09 are effective for us beginning in the first quarter of 2018. We are still in the process of evaluating the effect that ASU 2014-09 may have on our revenue trends. We expect to adopt ASU 2014-09 using a modified retrospective application approach.

ASU 2016-02 , Leases . ASU 2016-02 significantly changes accounting for lease arrangements, in particular from the perspective of the lessee. Upon adoption of the ASU, where we are the lessee, we will likely be required to recognize certain lease arrangements on our balance sheet for the first time, but will continue to recognize associated expenses on our statement of comprehensive income in a manner similar to existing accounting principles. The requirements of ASU 2016-02 are effective for us beginning in the first quarter of 2019. We have determined that most of our operating leases will be reported on our consolidated balance sheet at their present value. We do not expect the adoption of ASU 2016-02 to have a material effect on our future expense trends. See Note 15 to our consolidated financial statements included in this report for details related to our existing operating lease obligations as of March 31, 2017 .

None of the other changes to GAAP that have been issued but that we have not yet adopted are expected to impact our future trends.

Economic Income Reconciliations

The tables below present the reconciliations of Economic Income and its components to the respective GAAP measures for the periods presented in this MD&A.

Economic Income



	Three Months Ended March 31, 2017
	Och-Ziff Funds Segment			Other Operations			Total Company

	(dollars in thousands)
Loss Attributable to Class A Shareholders—GAAP	$	(5,480	)	$	(1,684	)	$	(7,164	)
Change in redemption value of Preferred Units	2,853			—			2,853
Net Loss Allocated to Och-Ziff Capital Management Group LLC—GAAP	(2,627		)	(1,684		)	(4,311		)
Net income allocated to the Och-Ziff Operating Group A Units	9,635			—			9,635
Equity-based compensation	17,698			780			18,478
Income taxes	12,052			4			12,056
Allocations to Och-Ziff Operating Group D Units	3,310			50			3,360
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance	—			1,979			1,979
Changes in tax receivable agreement liability	—			—			—
Depreciation and amortization and loss on disposal of fixed assets	4,212			—			4,212
Other adjustments	(834		)	(177		)	(1,011		)
Economic Income—Non-GAAP	$	43,446		$	952		$	44,398



	Three Months Ended March 31, 2016
	Och-Ziff Funds Segment			Other Operations		Total Company

	(dollars in thousands)
(Loss) Income Attributable to Class A Shareholders—GAAP	$	(71,722	)	$	2,366	$	(69,356	)
Change in redemption value of Preferred Units	—			—		—
Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC—GAAP	(71,722		)	2,366		(69,356		)
Net (loss) allocated to the Och-Ziff Operating Group A Units	(88,019		)	—		(88,019		)
Equity-based compensation, net of RSUs settled in cash	17,968			574		18,542
Income taxes	18,539			—		18,539
Adjustment for incentive income allocations from consolidated funds subject to clawback	—			—		—
Allocations to Och-Ziff Operating Group D Units	875			—		875
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance	—			1,264		1,264
Changes in tax receivable agreement liability	(145		)	—		(145		)
Depreciation and amortization and loss on disposal of fixed assets	3,215			187		3,402
Other adjustments	(650		)	219		(431		)
Economic Income—Non-GAAP	$	(119,939	)	$	4,610	$	(115,329	)

Economic Income Revenues



	Three Months Ended March 31, 2017								Three Months Ended March 31, 2016
	Och-Ziff Funds Segment			Other Operations		Total Company			Och-Ziff Funds Segment			Other Operations		Total Company

	(dollars in thousands)
Management fees—GAAP	$	80,996		$	5,259	$	86,255		$	151,775		$	5,135	$	156,910
Adjustment to management fees ⁽¹⁾	(5,444		)	—		(5,444		)	(12,531		)	—		(12,531		)
Management Fees—Economic Income Basis—Non-GAAP	75,552			5,259		80,811			139,244			5,135		144,379

Incentive income—GAAP	50,422			1,204		51,626			26,953			3,634		30,587
Adjustment to incentive income ⁽²⁾	—			—		—			—			—		—
Incentive Income—Economic Income Basis—Non-GAAP	50,422			1,204		51,626			26,953			3,634		30,587
Other revenues	750			26		776			572			7		579
Total Revenues—Economic Income Basis—Non-GAAP	$	126,724		$	6,489	$	133,213		$	166,769		$	8,776	$	175,545

_______________


(1)	Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated Och-Ziff funds is also removed.


(2)	Adjustment to exclude the impact of eliminations related to the consolidated Och-Ziff funds.

Economic Income Expenses



	Three Months Ended March 31, 2017									Three Months Ended March 31, 2016
	Och-Ziff Funds Segment			Other Operations			Total Company			Och-Ziff Funds Segment			Other Operations			Total Company

	(dollars in thousands)
Compensation and benefits—GAAP	$	62,235		$	7,708		$	69,943		$	49,726		$	4,535		$	54,261
Adjustment to compensation and benefits ⁽¹⁾	(20,870		)	(2,809		)	(23,679		)	(18,667		)	(1,838		)	(20,505		)
Compensation and Benefits—Economic Income Basis—Non-GAAP	$	41,365		$	4,899		$	46,264		$	31,059		$	2,697		$	33,756

Interest expense and general, administrative and other expenses—GAAP	$	51,570		$	638		$	52,208		$	271,399		$	1,656		$	273,055
Adjustment to interest expense and general, administrative and other expenses ⁽²⁾	(9,657		)	—			(9,657		)	(15,748		)	(187		)	(15,935		)
Non-Compensation Expenses—Economic Income Basis—Non-GAAP	$	41,913		$	638		$	42,551		$	255,651		$	1,469		$	257,120

_______________

(1)

Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of our operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant commitment period, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Distributions to the Och-Ziff Operating Group D Units are also excluded, as management reviews operating performance at the Och-Ziff Operating Group level, where our operations are performed, prior to making any income allocations.


(2)	Adjustment to exclude depreciation, amortization, gains and losses on assets held for sale and changes in the tax receivable agreement liability, as management does not consider these items to be reflective of our operating performance. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense.

Other Economic Income Items



	Three Months Ended March 31, 2017									Three Months Ended March 31, 2016
	Och-Ziff Funds Segment			Other Operations			Total Company			Och-Ziff Funds Segment			Other Operations			Total Company

	(dollars in thousands)
Net gains on investments in Och-Ziff funds and joint ventures—GAAP	$	389		$	332		$	721		$	83		$	166		$	249
Adjustment to net gains on investments in Och-Ziff funds and joint ventures ⁽¹⁾	(389		)	(332		)	(721		)	(83		)	(166		)	(249		)
Net Gains on Joint Ventures—GAAP	$	—		$	—		$	—		$	—		$	—		$	—

Net income (loss) attributable to noncontrolling interests—GAAP	$	9,623		$	155		$	9,778		$	(88,021	)	$	176		$	(87,845	)
Adjustment to net income (loss) attributable to noncontrolling interests ⁽²⁾	(9,623		)	(155		)	(9,778		)	88,019			(176		)	87,843
Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP	$	—		$	—		$	—		$	(2	)	$	—		$	(2	)

_______________


(1)	Adjustment to exclude gains and losses on investments in Och-Ziff funds, as management does not consider these items to be reflective of our operating performance.

(2)

Adjustment to exclude amounts allocated to our executive managing directors on their interests in the Och-Ziff Operating Group, as management reviews operating performance at the Och-Ziff Operating Group level. We conduct substantially all of our activities through the Och-Ziff Operating Group. Additionally, the impact of the consolidated Och-Ziff funds, including the allocation of earnings to investors in those funds, is also removed.

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 manager for the Och-Ziff funds, and the sensitivities to movements in the fair value of their investments that may adversely affect our management fees and incentive income.

Fair value of the financial assets and liabilities of the Och-Ziff funds may fluctuate in response to changes in the value of investments, foreign currency exchange rates, commodity prices and interest rates. The fair value changes in the assets and liabilities of the Och-Ziff funds affect the management fees and incentive income we may earn from the funds.

With regards to the consolidated Och-Ziff funds, the net effect of these fair value changes primarily impacts the net gains of consolidated Och-Ziff funds in our consolidated statements of comprehensive income (loss); however, a large portion of these fair value changes is absorbed by the investors of these funds (noncontrolling interests). We may also be entitled to a portion of these earnings through our incentive income allocation as general partner of these funds.

Impact on Management Fees

Management fees for our multi-strategy and opportunistic credit funds are generally based on the net asset value of those funds. Accordingly, management fees will generally change in proportion to changes in the fair value of investments held by these funds. Management fees for our real estate funds and certain other funds are generally based on committed capital during the original investment period and invested capital thereafter; therefore, management fees are not impacted by changes in the fair value of investments held by those funds.

Impact on Incentive Income

Incentive income for our funds is generally based on a percentage of profits generated by our funds over a commitment period, which is impacted by global market conditions and other factors. Major factors that influence the degree of impact include how the investments held by our funds are impacted by changes in the market and the extent to which any high-water marks impact our ability to earn incentive income. Consequently, incentive income cannot be readily predicted or estimated.

Market Risk

The amount of our assets under management is generally based on the net asset value of multi-strategy and opportunistic credit funds (plus unfunded commitments for certain closed-end opportunistic credit funds), and committed or invested capital for our real estate funds and certain other funds. A 10% change in the fair value of the net assets held by our funds as of March 31, 2017 and December 31, 2016 , would have resulted in a change of approximately $2.2 billion and $2.6 billion , respectively, in our assets under management.

A 10% change in the fair value of the net assets held by our funds as of April 1, 2017 (the date management fees are calculated for the second quarter of 2017 ) would impact management fees charged on that day by approximately $5.0 million . A 10% change in the fair value of the net assets held by our funds as of January 1, 2017 , would have impacted management fees charged on that day by approximately $5.6 million .

A 10% change in the fair value of the net assets held by our funds as of the end of any year (excluding unrealized gains and losses in Special Investments or other investments on which we do not earn any incentive income until such investments are sold or otherwise realized), could significantly affect our incentive income, as incentive income is generally based on a percentage of annual profits generated by our funds. We do not earn incentive income on unrealized gains attributable to Special Investments and certain other investments, and therefore a change in the fair value of those investments would have no effect on incentive income.

Exchange Rate Risk

Our funds hold investments denominated in non-U.S. dollar currencies, which may be affected by movements in the rate of exchange between the U.S. dollar and foreign currencies. We estimate that as of March 31, 2017 and 2016 , a 10% weakening or

strengthening of the U.S. dollar against all or any combination of currencies to which our funds have exposure to exchange rates would not have a material effect on our revenues, net income attributable to Class A Shareholders or Economic Income.

Interest Rate Risk

Our Senior Notes and Aircraft Loan are fixed-rate borrowings. Our borrowings under the Revolving Credit Facility, CLO Investment Loan and investments in CLO accrue interest at variable rates. Our funds also have financing arrangements and hold credit instruments that accrue interest at variable rates. Interest rate changes may therefore impact the amount of interest income and interest expense, future earnings and cash flows.

We estimate that as of March 31, 2017 and 2016 , a 100 basis point increase or decrease in variable rates would not have a material effect on our annual interest income, interest expense, net income attributable to Class A Shareholders or Economic Income. A tightening of credit and an increase in prevailing interest rates could make it more difficult for us to raise capital and sustain the growth rate of the funds.

Credit Risk

Credit risk is the risk that counterparties or debt issuers may fail to fulfill their obligations or that the collateral value may become inadequate to cover our exposure. We manage credit risk by monitoring the credit exposure to and the creditworthiness of counterparties, requiring additional collateral where appropriate.

Item 4. Controls and Procedures

Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s 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 for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of March 31, 2017 , we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and were operating at a reasonable assurance level as of March 31, 2017 .

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act, that occurred in the first quarter of 2017 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control

issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is based in part on 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. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any pending judicial, administrative or arbitration proceedings that we expect to have a material impact on our consolidated financial statements. We are from time to time involved in litigation and claims incidental to the conduct of our business. Like other businesses in our industry, we are subject to extensive scrutiny by regulatory agencies globally that have, or may in the future have, regulatory authority over us and our business activities. This has resulted in, or may in the future result in, regulatory agency investigations, litigation and subpoenas, and related sanctions and costs. See “Item 1A. Risk Factors” below and “Item 1A. Risk Factors—Risks Related to Our Business—Recent regulatory changes in jurisdictions outside the United States could adversely affect our business” in our Annual Report. See Note 15 to our consolidated financial statements included in this report for additional information.

Item 1A. Risk Factors

Please see “Item 1A. Risk Factors” in our Annual Report for a discussion of the risks material to our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits



Exhibit No.		Description
10.1		Partner Agreement between OZ Management LP and James Levin, dated as of February 14, 2017.
10.2		Partner Agreement between OZ Advisors LP and James Levin, dated as of February 14, 2017.
10.3		Partner Agreement between OZ Advisors II LP and James Levin, dated as of February 14, 2017.
10.4		Amended and Restated Agreement of Limited Partnership of OZ Management LP, dated as of March 1, 2017.
10.5		Amended and Restated Agreement of Limited Partnership of OZ Advisors LP, dated as of March 1, 2017.
10.6		Amended and Restated Agreement of Limited Partnership of OZ Advisors II LP, dated as of March 1, 2017.
10.7		Class P Exchange Agreement by and among the Och-Ziff Capital Management Group LLC, Och-Ziff Corp, Och-Ziff Holding, OZ Management, OZ Advisors, OZ Advisors II, and the Och-Ziff Limited Partners, effective as of March 1, 2017.
10.8		Relinquishment Agreement among Och-Ziff Holding Corporation, Och-Ziff Holding LLC, Daniel S. Och, the Family Trust created under Article IV of the Daniel S. Och 2014 Descendants’ Trust Agreement, the Family Trust created under Article III of the Jane C. Och 2011 Descendants’ Trust Agreement and the Family Trust created under Article IV of the Och Children’s Trust 2012 Agreement, effective as of March 1, 2017.
10.9		Partner Agreement between OZ Management LP and Wayne Cohen, dated as of November 10, 2010.
10.10		Partner Agreement between OZ Advisors LP and Wayne Cohen, dated as of November 10, 2010.
10.11		Partner Agreement between OZ Advisors II LP and Wayne Cohen, dated as of November 10, 2010.
10.12		Partner Agreement between OZ Management LP and Wayne Cohen, dated as of June 22, 2011.
10.13		Partner Agreement between OZ Advisors LP and Wayne Cohen, dated as of June 22, 2011.
10.14		Partner Agreement between OZ Advisors II LP and Wayne Cohen, dated as of June 22, 2011.
10.15		Partner Agreement between OZ Management LP and Wayne Cohen, dated as of December 13, 2011.
10.16		Partner Agreement between OZ Advisors LP and Wayne Cohen, dated as of December 13, 2011.
10.17		Partner Agreement between OZ Advisors II LP and Wayne Cohen, dated as of December 13, 2011.
10.18		Partner Agreement between OZ Management LP and Wayne Cohen, dated as of April 15, 2013.
10.19		Partner Agreement between OZ Advisors LP and Wayne Cohen, dated as of April 15, 2013.
10.20		Partner Agreement between OZ Advisors II LP and Wayne Cohen, dated as of April 15, 2013.
10.21		Partner Agreement between OZ Management LP and Wayne Cohen, dated as of February 22, 2017.
10.22		Partner Agreement between OZ Advisors LP and Wayne Cohen, dated as of February 22, 2017.
10.23		Partner Agreement between OZ Advisors II LP and Wayne Cohen, dated as of February 22, 2017.
31.1		Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.
31.2		Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document



101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

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

Dated: May 2, 2017



	OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

	By:		/s/ Alesia J. Haas
			Alesia J. Haas
			Chief Financial Officer and Executive Managing Director

Exhibit 10.1

Partner Agreement Between
OZ Management LP and James Levin

This Partner Agreement (as amended, modified, supplemented or restated from time to time, this " Agreement ") dated as of February 14, 2017 reflects the agreement of OZ Management LP (the " Partnership ") and James Levin (the " Limited Partner ") with respect to certain matters concerning (i) the conditional grant by the Partnership to the Limited Partner on a date determined by the General Partner that shall be no later than March 1, 2017 (such date, the " Incentive Grant Date ") of Class D Common Units under the Och-Ziff Capital Management Group LLC 2013 Incentive Plan (as amended, modified, supplemented or restated from time to time, the " Plan ") as a retention and long-term incentive compensation award, (ii) the conditional grant by the Partnership to the Limited Partner on the Incentive Grant Date of Class P Common Units under the Plan as an additional element of such retention and long-term compensation incentive award, and (iii) his rights and obligations under (A) an Amended and Restated Agreement of Limited Partnership of the Partnership dated as of December 14, 2015 (as amended, modified, supplemented or restated from time to time, including on or prior to the Incentive Grant Date substantially in the form of the draft agreement provided to the Limited Partner on January 25, 2017 other than provisions relating to the issuance of Class B Shares in respect of Class P Common Units, the " Limited Partnership Agreement "), (B) the Partner Agreement dated as of November 10, 2010 that was entered into between the Limited Partner and the Partnership in connection with his admission to the Partnership (the " 2010 Partner Agreement ") and the Partner Agreement dated as of January 28, 2013 entered into between the Limited Partner and the Partnership (the " 2013 Partner Agreement " and together with the 2010 Partner Agreement, the " Existing Partner Agreements "), and (C) an Exchange Agreement relating to exchanges of Class P Common Units to be dated on or prior to the Incentive Grant Date substantially in the form of the draft agreement provided to the Limited Partner on January 25, 2017 (as amended, modified, supplemented or restated from time to time, the " Class P Exchange Agreement ") and the Amended and Restated Exchange Agreement dated as of August 1, 2012 relating to exchanges of Class A Common Units (as amended, modified, supplemented or restated from time to time, the " Class A Exchange Agreement " and together with the Class P Exchange Agreement, the " Exchange Agreements "). This Agreement shall be a "Partner Agreement" (as defined in the Limited Partnership Agreement). The General Partner confirms that the Limited Partner has been designated as an "Original Partner" (for purposes of the Limited Partnership Agreement). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Limited Partnership Agreement. The Board of Directors (the " Board ") of Och-Ziff Capital Management Group LLC (the " Company "), including a majority of the independent directors, has approved the conditional awards of Class D Common Units and the Class P Common Units described in Sections 1 and 2 of this Agreement after receiving the recommendation of the Compensation Committee of the Board (the " Compensation Committee ").

In consideration of such conditional awards and other benefits to be provided by the Partnership and its Affiliates to the Limited Partner, the Limited Partner hereby commits to remain with the Partnership and its Affiliates for at least ten years following the Incentive Grant Date, subject to the terms and conditions of this Agreement.

1. Grant of Class D Common Units to the Limited Partner . The Partnership shall conditionally issue to the Limited Partner 39,000,000 Class D Common Units (the " Incentive D Units ") on the Incentive Grant Date. Upon such conditional issuance, the General Partner shall designate the Incentive D Units as a new series of Class D Common Units (" Class D-31 ") pursuant to the provisions of Section 3.1(f) of the Limited Partnership Agreement and the General Partner shall cause the Limited Partner to be named as the holder of the Incentive D Units in the books of the Partnership. Upon issuance, the portion of the Limited Partner's Capital Account balance attributable to the Incentive D Units shall be $0 (zero dollars). Upon issuance, the Incentive D Units shall be designated as "Original Common Units" of the Limited Partner (for purposes of the Limited Partnership Agreement) by the General Partner and the rights, duties and obligations of the Limited Partner with respect to the Incentive D Units under the Limited Partnership Agreement shall be the same as those applicable thereunder to the Common Units he owns immediately prior to the Incentive Grant Date, except to the extent modified by the terms of this Agreement.

2. Grant of Class P Common Units to the Limited Partner . The Partnership shall conditionally issue to the Limited Partner 39,000,000 Class P Common Units (the " Incentive P Units " and, together with the Incentive D Units, the " Incentive Units ") on the Incentive Grant Date. Upon such conditional issuance, the General Partner shall designate the Incentive P Units as a new series of Class P Common Units (" Class P-1 ") pursuant to the provisions of Section 3.1(j) of the Limited Partnership Agreement and the General Partner shall cause the Limited Partner to be named as the holder of the Incentive P Units in the books of the Partnership. Upon issuance, the portion of the Limited Partner's Capital Account balance attributable to the Incentive P Units shall be $0 (zero dollars). Upon issuance, the rights, duties and obligations of the Limited Partner with respect to the Incentive P Units under the Limited Partnership Agreement shall be the same as those applicable thereunder to other Class P Common Units of the Partnership, except to the extent modified by the terms of this Agreement.

3. Withdrawal, Vesting and Non-Compete Provisions .

(a) Withdrawal and Vesting Provisions . Notwithstanding any provisions of the Limited Partnership Agreement to the contrary, the following provisions shall apply with respect to the Limited Partner and any Related Trusts and their Incentive Units:

(i) Vesting of Incentive D Units . Except as set forth in Section 3(a)(ii) below, the Incentive D Units shall conditionally vest commencing upon the third anniversary of the Incentive Grant Date, subject to the Limited Partner's continued service and the other terms hereof, such that (i) on the third anniversary of the Incentive Grant Date, 30% of the Incentive D Units shall become conditionally vested and (ii) on each subsequent anniversary of the Incentive Grant Date through and including the tenth anniversary of the Incentive Grant Date, an additional 10% of the Incentive D Units shall become conditionally vested in accordance with the following vesting schedule (the " D Unit Vesting Schedule "):



Anniversary of Incentive Grant Date	Cumulative Percentage of Vested Incentive D Units
3	30%
4	40%
5	50%
6	60%
7	70%
8	80%
9	90%
10	100%

(ii) Exceptions to D Unit Vesting Schedule . Upon the Limited Partner ceasing to be an Active Individual LP, all Incentive D Units that have conditionally vested in accordance with the D Unit Vesting Schedule shall be retained and all of the unvested Incentive D Units shall be forfeited, with the following exceptions:

(1) Withdrawal for Contract Cause . If, prior to the tenth anniversary of the Incentive Grant Date, the Limited Partner is subject to a Withdrawal pursuant to clause (A) ( Cause ) of Section 8.3(a)(i) of the Limited Partnership Agreement that resulted from an act or omission by the Limited Partner constituting a Cause Condition (as defined below) (such Withdrawal, a " Withdrawal for Contract Cause "), subject to any additional forfeiture or reallocation of the Incentive D Units as set forth herein (including pursuant to Section 3(b)(ii)), (i) all of the unvested Incentive D Units as of such date shall be forfeited on the date of the Withdrawal for Contract Cause, and (ii) 50% of the then-vested Incentive D Units shall be forfeited on the date of the Withdrawal for Contract Cause. On and after the tenth anniversary of the Incentive Grant Date, no Incentive D Units shall be forfeited or reallocated upon a Withdrawal for Contract Cause.

(2) For purposes of this Agreement, a " Cause Condition " shall mean that the Limited Partner (i) has committed an act of fraud, or has committed an act or omission, other than a de minimis act or omission, of dishonesty, misrepresentation or breach of trust (other than an act or omission constituting a good faith dispute relating to business expense reimbursement); (ii) has been convicted of a felony or any offense involving moral turpitude; (iii) has been found by any regulatory body or self-regulatory organization having jurisdiction over the Och-Ziff Group to have, or has entered into a consent decree determining that the Limited Partner, violated any applicable regulatory requirement or a rule of a self-regulatory organization; (iv) has committed an act constituting gross negligence or willful misconduct; (v) has violated in any material respect any agreement relating to the Och-Ziff Group; (vi) has become subject to any proceeding seeking to adjudicate the Limited Partner bankrupt or insolvent, or seeking liquidation, reorganization, arrangement, adjustment, protection, relief or composition of the debts of the Limited Partner under any law relating to

bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for the Limited Partner or for any substantial part of the property of the Limited Partner, or the Limited Partner has taken any action authorizing such proceeding; or (vii) has breached any of the non-competition, non-solicitation or non-disparagement covenants in Section 2.13 of the Limited Partnership Agreement ((A) other than an inadvertent and de minimis breach of (x) the restriction on solicitation of employees set forth in Section 2.13(d) thereof (the " Employee Solicitation Restriction "), excluding for this purpose the restriction on hiring employees, which shall continue to apply without regard to whether the violation is inadvertent or de minimis, so that any violation of the restriction on hiring shall be a breach of such provision (including an inadvertent or de minimis violation) for all purposes, or (y) the non-disparagement covenant set forth in Section 2.13(e) thereof, and (B) also excluding in the case of the non-disparagement covenant set forth in Section 2.13(e) thereof, statements made in the good faith performance of the Limited Partner's duties to the Partnership and its Affiliates).

(3) Termination without Cause . If the Limited Partner is subject to a Special Withdrawal pursuant to Section 8.3(b)(i) of the Limited Partnership Agreement, a Withdrawal pursuant to clause (B) ( PPC Termination ) of Section 8.3(a)(i) of the Limited Partnership Agreement, or a Withdrawal pursuant to clause (A) ( Cause ) of Section 8.3(a)(i) of the Limited Partnership Agreement that is not a Withdrawal for Contract Cause (an " Excused Cause Termination ") (such Special Withdrawal, Withdrawal or Excused Cause Termination, a " Termination without Cause "), subject to any additional forfeiture or reallocation of the Incentive D Units as set forth herein (including pursuant to Section 3(b)(ii)), any then-vested Incentive D Units shall be retained and an additional percentage of the Incentive D Units shall conditionally vest on the date of the Termination without Cause in accordance with the following vesting schedule (and any Incentive D Units remaining unvested shall be forfeited on such date):



Termination without Cause Date relative to indicated Anniversary of Incentive Grant Date	Additional Percentage of Total Incentive D Units To Become Vested	Total Percentage of Incentive D Units to be Retained as Vested Incentive D Units
prior to the 3rd	30.00%	30.00%
on or after the 3rd but prior to 4th	9.75%	39.75%
on or after 4th but prior to 5th	12.00%	52.00%
on or after 5th but prior to 6th	13.75%	63.75%
on or after 6th but prior to 7th	15.00%	75.00%
on or after 7th but prior to 8th	15.75%	85.75%
on or after 8th but prior to 9th	12.00%	92.00%
on or after 9th but prior to 10th	10.00%	100.00%
on or after 10 ^th	0%	100.00%

(4) Resignation . If the Limited Partner is subject to a Withdrawal pursuant to clause (C) ( Resignation ) of Section 8.3(a)(i) of the Limited Partnership Agreement (including due to Retirement) (a " Withdrawal due to Resignation "): (i) all then-unvested Incentive D Units shall be forfeited on the date of such Withdrawal, and (ii) a percentage of the then-vested Incentive D Units shall be forfeited on such date, and the remainder of the vested Incentive D Units shall be retained, in accordance with the following vesting schedule:



Withdrawal Date relative to indicated Anniversary of Incentive Grant Date	Percentage of Vested Incentive D Units To be Forfeited	Total Percentage of Incentive D Units to be Retained as Vested Incentive D Units
prior to the 3rd	[N/A]	0%
on or after the 3rd but prior to 4th	32.5%	20.25%
on or after 4th but prior to 5th	30.0%	28.00%
on or after 5th but prior to 6th	27.5%	36.25%
on or after 6th but prior to 7th	25.0%	45.00%
on or after 7th but prior to 8th	22.5%	54.25%
on or after 8th but prior to 9th	15.0%	68.00%
on or after 9th but prior to 10th	12.5%	78.75%
on or after 10th	0%	100.00%

(5) Death or Disability . In the event of the Limited Partner ceasing to be an Active Individual LP due to death or Disability, 100% of the unvested Incentive D Units as of such date shall continue to vest in accordance with the D Unit Vesting Schedule without any service requirements.

(iii) Vesting of Incentive P Units . Except as set forth in Section 3(a)(iv) below, the Incentive P Units shall conditionally vest or be forfeited as provided in the Limited Partnership Agreement, subject to the other terms hereof.

(iv) Exceptions to P Unit Vesting Schedule . Notwithstanding any provision of the Limited Partnership Agreement to the contrary:

(1) Withdrawal for Contract Cause . If the Limited Partner is subject to a Withdrawal for Contract Cause at any time, all of the vested and unvested Incentive P Units shall be forfeited on the date of such Withdrawal.

(2) Termination Without Cause Prior to Third Anniversary of Incentive Grant Date . If the Limited Partner is subject to a Termination without Cause prior to the third anniversary of the Incentive Grant Date, then:

P Units shall consist of 75% of the Incentive P Units with each Class P Performance Threshold applicable to the Incentive P Units; and

(B) the continued retention of each Continuing P Unit shall be subject to the Class P Performance Condition applicable to such Continuing P Unit being satisfied prior to the later of (i) the third anniversary of the Incentive Grant Date, and (ii) the first anniversary of the date of the Termination without Cause; provided, that in no event shall the Class P Performance Condition be measured prior to the third anniversary of the Incentive Grant Date. Any Continuing P Units that do not satisfy the applicable Class P Performance Conditions on or before the last day of the foregoing period shall be forfeited as of such date.

(3) Resignation . If the Limited Partner is subject to a Withdrawal due to Resignation at any time (regardless of whether or not the Class P Service Condition has been satisfied at the time of such Withdrawal), all unvested Incentive P Units (including any that have satisfied the Class P Service Condition) shall be forfeited as of the date of such Withdrawal.

(v) Effect of Forfeiture . Any unvested or conditionally vested Incentive P Units forfeited by the Limited Partner or his Related Trusts in accordance with this Section 3(a) shall be cancelled. Any Incentive D Units (or any Class A Common Units into which such Incentive D Units have converted) forfeited by the Limited Partner and his Related Trusts in accordance with this Section 3(a) shall be reallocated in accordance with the terms of the Limited Partnership Agreement.

(vi) Continued Compliance with Restrictive Covenants . If the Limited Partner ceases to be an Active Individual LP, regardless of the reason, including any termination or resignation (whether, for the avoidance of doubt, due to the failure of the Buyer to offer a Comparable Position or otherwise in connection with or following a Change of Control, and in such case irrespective of whether the Limited Partner remains in service in a Comparable Position through the COC Vesting Period (as defined below)), the retention of any conditionally vested Incentive Units by the Limited Partner and his Related Trusts in accordance with this Section 3(a) or Section 4 (including any unvested Incentive Units that become vested in accordance with this Section 3(a) or Section 4) shall be subject to (A) the Limited Partner complying in all respects with the Limited Partnership Agreement including, without limitation, the restrictions regarding Confidentiality, Intellectual Property, Non-Solicitation, Non-Disparagement, Non-Interference, Short Selling, Hedging Transactions, and Compliance with Policies, each as set forth in Sections 2.12, 2.13, 2.18, and 2.19 of the Limited Partnership Agreement; provided, however, that an inadvertent and de minimis breach of (w) Section 2.12(a) thereof (and in the event that the Limited Partner is aware or becomes aware of any such breach or any other breach of Section 2.12 thereof, the Limited Partner immediately notifies the Partnership of such breach and immediately returns (or if so directed by the Partnership, destroys) any confidential information implicated in such breach which is in

the Limited Partner's possession), (x) Section 2.13(d) thereof, but solely in respect of the Employee Solicitation Restriction, (y) Section 2.13(e) thereof, or (z) Section 2.19 thereof, but solely in respect of policies and procedures that do not relate to requirements of law, any recognized stock exchange or other regulatory body or authority, in each case, shall not be deemed to be a breach of the Limited Partnership Agreement solely for purposes of this Section 3(a)(vi), and (B) the Limited Partner executing and not revoking a general release agreement. Such general release agreement shall be in the form set forth in Exhibit A to the Limited Partnership Agreement, subject only to revisions necessary to reflect changes in applicable law.

(b) Non-Competition Provisions .

(i) Non-Competition Covenant . Notwithstanding any provisions of the Existing Partner Agreements to the contrary, the Restricted Period with respect to the Limited Partner shall, for purposes of Section 2.13(b) of the Limited Partnership Agreement, conclude on the last day of the 24-month period immediately following the date of the Limited Partner's Special Withdrawal or Withdrawal, regardless of the reason for the Special Withdrawal or Withdrawal, including any termination or resignation (whether, for the avoidance of doubt, due to the failure of the Buyer to offer a Comparable Position or otherwise in connection with or following a Change of Control, and in any such case irrespective of whether the Limited Partner remains in service in a Comparable Position through the COC Vesting Period).

(ii) Consequences of Breach . The Incentive Units hereunder shall be conditionally granted subject to the Limited Partner's compliance with the covenants set forth in Section 2.13(b) of the Limited Partnership Agreement. Without limitation or contradiction of the foregoing, and in addition to the applicability of Section 2.13(g) of the Limited Partnership Agreement, the Limited Partner agrees that it would be impossible to compute the actual damages resulting from a breach of any such covenants, and that the amounts set forth in this Section 3(b)(ii) are reasonable and do not operate as a penalty, but are a genuine pre-estimate of the anticipated loss that the Partnership and other members of the Och-Ziff Group would suffer from breach of any such covenants. In the event the Limited Partner breaches any such covenants, then the Limited Partner shall have failed to satisfy the condition subsequent to the grants of Incentive Units and the Limited Partner agrees that:

(1) on or after the date of such breach, any Incentive P Units shall be forfeited and cancelled;

(2) on or after the date of such breach, any Incentive D Units (or any Class A Common Units into which such Incentive D Units have converted) shall thereafter be reallocated from the Limited Partner and his Related Trusts and shall be reallocated in accordance with the Limited Partnership Agreement;

(3) on or after the date of such breach, all allocations and distributions on the Common Units described in paragraph (2) above that would otherwise

have been received by the Limited Partner or his Related Trusts on or after the date of such breach shall thereafter be reallocated from them in accordance with the reallocations of such Common Units described above;

(4) on or after the date of such breach, no allocations shall be made to the Limited Partner's Capital Accounts and no distributions shall be made to the Limited Partner or his Related Trusts in respect of any Incentive Units (or any Class A Common Units into which such Incentive Units have converted);

(5) on or after the date of such breach, no Transfer (including any exchange pursuant to the Exchange Agreements) of any Incentive Units (or any Class A Common Units into which such Incentive Units have converted) of the Limited Partner or his Related Trusts shall be permitted under any circumstances notwithstanding anything to the contrary in any other agreement;

(6) on or after the date of such breach, no sale, exchange, assignment, pledge, hypothecation, bequest, creation of an encumbrance, or any other transfer or disposition of any kind may be made of any of the Class A Shares acquired by the Limited Partner or his Related Trusts through (x) an exchange of any Incentive P Units pursuant to the Class P Exchange Agreement or (y) an exchange of any Class A Common Units into which any Incentive D Units have converted pursuant to the Class A Exchange Agreement (any Class A Shares referenced in clause (x) or (y), collectively, "Exchanged Class A Shares "); and

(7) on the Reallocation Date, the Limited Partner and his Related Trusts shall immediately:

(A) pay to the Continuing Partners, in accordance with Section 2.13(g) of the Limited Partnership Agreement, a lump-sum cash amount equal to the sum of: (i) the total after-tax proceeds received by the Limited Partner and his Related Trusts for any Exchanged Class A Shares that were transferred during the 24-month period prior to the date of such breach; and (ii) any distributions received by the Limited Partner or his Related Trusts during such 24-month period on Exchanged Class A Shares;

(B) transfer any Exchanged Class A Shares held by the Limited Partner or his Related Trusts on and after the date of such breach to the Continuing Partners in accordance with Section 2.13(g) of the Limited Partnership Agreement; and

(C) pay to the Continuing Partners in accordance with Section 2.13(g) of the Limited Partnership Agreement a lump-sum cash amount equal to the sum of: (i) the total after-tax proceeds received by the Limited Partner or his Related Trusts for any Exchanged Class A Shares that were transferred on or after the date of such breach; and (ii) all distributions

received by the Limited Partner or his Related Trusts on or after the date of such breach on Exchanged Class A Shares.

(c) Cross-References . References in the Limited Partnership Agreement to Sections thereof (including Sections 2.13(b) and 2.13(g)) (as modified by the Existing Partner Agreements, if applicable) that are modified by this Agreement shall be deemed to refer to such Sections as modified hereby; provided, that the modifications to the restrictive covenants of the Limited Partnership Agreement as set forth in Section 3(a)(vi) shall not modify such covenants other than for purposes of Section 3(a)(vi).

4. Change of Control; Liquidity .

(a) Generally .

(i) Any Incentive P Units held by the Limited Partner and his Related Trusts are entitled to participate in any Class P Liquidity Event or other liquidity event in which Class P Common Units of other Limited Partners are entitled to participate pursuant to the Limited Partnership Agreement (including a Tag-Along Sale or a Drag-Along Sale), in each case subject to the terms and conditions that are applicable to the other Limited Partners with respect to their Class P Common Units (as modified by the Limited Partner's Existing Partner Agreements in respect of the Limited Partner's Units other than the Incentive Units); provided, that in the case of a Change of Control, unvested Incentive P Units shall only participate in such Change of Control on the terms and to the extent provided in this Section 4.

(ii) Any Incentive D Units (or Class A Common Units into which they have converted) held by the Limited Partner and his Related Trusts shall participate in any liquidity event in which Class D Common Units (or Class A Common Units into which they have converted, as applicable) of other Limited Partners are entitled to participate pursuant to the Limited Partnership Agreement (including a Tag-Along Sale or a Drag-Along Sale), in each case subject to the terms and conditions that are applicable to the other Limited Partners with respect to their Class D Common Units (or Class A Common Units into which they have converted, as applicable) (as modified by the Limited Partner's Existing Partner Agreements in respect of the Limited Partner's Units other than the Incentive Units); provided, that in the case of a Change of Control, unvested Incentive D Units shall only participate in such Change of Control on the terms and to the extent provided in this Section 4.

(iii) Any other Common Units held by the Limited Partner or his Related Trusts shall participate in such events to the extent described in the Limited Partnership Agreement (as modified by the Limited Partner's Existing Partner Agreements in respect of the Limited Partner's Units other than the Incentive Units) and such terms shall not be modified by this Agreement, it being understood that in the event of a Change of Control the Incentive Units of the Limited Partner or his Related Trusts shall not be taken into account for purposes of Sections 3(c) or 3(d) of the 2013 Partner Agreements.

(b) Unvested Incentive D Units . The following provisions shall apply with respect to the unvested Incentive D Units upon a Change of Control (the date of the consummation of any such event, the " Change of Control Date "):

(i) 50% of the total then-unvested Incentive D Units shall become conditionally vested on the Change of Control Date, and such Incentive D Units shall participate in the Change of Control to the extent provided in, and subject to the terms of, the Limited Partnership Agreement (including the provisions of Section 3.1(f) thereof).

(ii) The remaining 50% of the total then-unvested Incentive D Units shall be converted into the same form of consideration paid to the other Individual Limited Partners in connection with the Change of Control (such Incentive D Units, as converted and together with any dividends, distributions or other earnings thereon, the " COC Incentive D Units "), and treated in accordance with Section 4(d).

(iii) Any unvested Incentive D Units that do not become vested or converted to COC Incentive D Units following a Change of Control in accordance with this Section 4(b) shall be forfeited by the Limited Partner and his Related Trusts and shall be reallocated in accordance with the Limited Partnership Agreement.

(iv) For clarity, all vested Incentive D Units shall participate in the Change of Control to the extent provided in, and subject to the terms of, the Limited Partnership Agreement.

(c) Incentive P Units Prior to Third Anniversary of the Incentive Grant Date . The following provisions shall apply with respect to the Incentive P Units upon a Change of Control that occurs before the third anniversary of the Incentive Grant Date:

(i) 75% of the Incentive P Units that would otherwise be permitted to participate in the Change of Control transaction in accordance with Section 3.1(j)(iv) of the Limited Partnership Agreement shall become conditionally vested on the Change of Control Date and shall participate in the Change of Control to the extent provided in, and subject to the terms of, Section 3.1(j)(iv) of the Limited Partnership Agreement.

(ii) The remaining 25% of the Incentive P Units that would otherwise have been permitted to participate in the Change of Control transaction in accordance with Section 3.1(j)(iv) of the Limited Partnership Agreement shall be converted into the same form of consideration paid to the other Individual Limited Partners in connection with the Change of Control (such Incentive P Units, as converted and together with any dividends, distributions or other earnings thereon, the " COC Incentive P Units " and, together with the COC Incentive D Units, the " COC Incentive Units "), and treated in accordance with Section 4(d).

(iii) Any unvested Incentive P Units that do not become vested or converted into COC Incentive P Units following a Change of Control in accordance with this Section 4(c) shall be forfeited.

(iv) For clarity, upon a Change of Control that occurs on or after the third anniversary of the Incentive Grant Date, all Incentive P Units shall participate in the Change of Control to the extent provided in, and subject to the terms of, the Limited Partnership Agreement.

(d) COC Incentive Units .

(i) The COC Incentive Units shall become conditionally vested on the second anniversary of the Change of Control Date (such period from the Change of Control Date to the second anniversary thereof, the " COC Vesting Period "). Such vesting shall be conditioned on the Limited Partner continuing to provide service to the buyer or successor entity or entities (collectively, the " Buyer ") in a Comparable Position (as defined in Section 4(e) below) through the COC Vesting Period; provided, that if during the COC Vesting Period, the Limited Partner's service in a Comparable Position is terminated by the Buyer without Cause, or by the Limited Partner because his position ceases to be a Comparable Position, 100% of the COC Incentive Units shall vest as of the date of such termination. The Partnership will cooperate with any position taken by the Buyer and the Limited Partner to treat the transaction as an installment sale for U.S. federal income tax purposes, to the extent consistent with applicable law, in any situation where the transaction is a taxable sale or exchange.

(ii) Notwithstanding Section 4(d)(i) to the contrary, if the Buyer or ultimate parent thereof is an entity that is either (x) organized in a jurisdiction outside the United States or (y) has its principal place of business outside the United States, the Partnership shall use commercially reasonable efforts to cause the Buyer to establish an escrow for the COC Incentive Units on the terms set forth below in this Section 4(d)(ii), provided, that if the Partnership has used commercially reasonable efforts to cause the Buyer to establish such an escrow as required by this paragraph then in no event shall the failure to establish such an escrow constitute a breach of this Agreement.

(1) With respect to such COC Incentive Units, (i) the after-tax portion thereof (as calculated based on the Presumed Tax Rate, plus the marginal self-employment tax rate or the net investment income tax rate, as applicable (the " Aggregate Presumed Tax Rate ")) shall be placed into an escrow account with a nationally recognized independent fiduciary institution agreed to by the Limited Partner and the Buyer (with reasonable costs paid by the Partnership) until released as provided below, and (ii) the remainder paid over to the Limited Partner at the time of the Change of Control. The escrow account shall be deemed owned by the Limited Partner and shall be entitled to receive any dividends or earnings on the escrowed amounts and adjusted to reflect changes in the value of the escrowed amounts. An amount necessary to cover taxes at the Aggregate Presumed Tax Rate, on any dividends and earnings from the previous calendar quarter, shall be distributed to the Limited Partner on the fifth day of each calendar quarter.

(2) The remaining amounts in the escrow account shall be released to the Limited Partner on the expiration of the COC Vesting Period; provided, that the Limited Partner shall continue to provide service to the Buyer in a Comparable Position during the COC Vesting Period; and further provided, that if during the COC Vesting Period, the Limited Partner's service in a Comparable Position is terminated by the Buyer without Cause, or by the Limited Partner because his position ceases to be a Comparable Position, 100% of the remaining amount in the escrow account shall be released to the Limited Partner as of the date of such termination (and any requirement to escrow additional paid or released proceeds pursuant to Section 4(f) shall terminate). In the event that the Limited Partner does not satisfy the foregoing conditions for release of the aforementioned amounts from the escrow account, the remaining amounts in the escrow account shall be reallocated to Daniel S. Och in accordance with the provisions of the Limited Partnership Agreement as in effect on the Incentive Grant Date. The Limited Partner shall be considered the owner of the escrow account and subject to tax on its earnings unless and until the amounts therein become required to be paid to Daniel S. Och as described above.

(iii) Notwithstanding the foregoing, if the Limited Partner does not accept a written offer for a Comparable Position upon a Change of Control, then all of the COC Incentive Units shall be forfeited on such date; provided, that in the event that the Limited Partner does not respond to such offer within seven (7) business days he shall be deemed to have rejected such offer.

(e) Comparable Position .

(i) Notwithstanding the foregoing, if the Limited Partner is not offered a Comparable Position (as defined in Section 4(e)(ii) below) in writing upon the occurrence of such Change of Control, then (A) an additional 25% of the total then-unvested Incentive D Units shall become conditionally vested on the Change of Control Date and participate in such Change of Control in accordance with Section 4(b)(i) (and shall not be treated as COC Incentive D Units for purposes of this Agreement), and the remaining 25% of the total then-unvested Incentive D Units shall be forfeited, and (B) 100% of the Incentive P Units shall become conditionally vested on the Change of Control Date and shall participate in the Change of Control in accordance with Section 4(c)(i) (with no Incentive P Units being treated as COC Incentive P Units for purposes of this Agreement).

per year, (C) the Limited Partner's duties, responsibilities and reporting relationships are not materially diminished, provided that the Limited Partner ceasing to be an executive officer of a public company or ceasing to report to a board of directors of a public company, in each case as a result of the Change of Control, shall not constitute a material diminution for this purpose, and (D) the Limited Partner's employment is not conditioned (x) on a contractual agreement to remain in service for more than two years or (y) on compliance with any restrictive covenants other than those provided in (or any other restrictive covenants that are substantially similar in principle, scope and duration to those provided in) Sections 2.12, 2.13, 2.16, 2.18 and 2.19 of the Limited Partnership Agreement, or for any period longer than 24 months following the Limited Partner's Withdrawal, Special Withdrawal or any other termination of service with the Partnership. The Limited Partner agrees and acknowledges that, although the Buyer in its sole discretion may choose to offer equity or cash incentives or other compensation to the Limited Partner in respect of the Limited Partner's continued service during the period between the Change of Control Date and the second anniversary of the Change of Control Date, the provisions relating to the continued vesting of the COC Incentive Units pursuant to Section 4(d) in addition to payments at a rate of not less than $4 million per year shall be deemed to satisfy clause (B) of the definition of "Comparable Position" for the COC Vesting Period and the Buyer need not offer any such equity or cash incentives or other compensation to the Limited Partner in respect of the COC Vesting Period in order for the position offered by the Buyer to the Limited Partner to constitute a "Comparable Position."

(f) The Incentive Units shall participate in any earn-outs, escrows and other holdbacks on the same basis as the Class D Common Units or Class P Common Units of the other Limited Partners, as applied on a pro rata basis in respect of the Incentive Units. Any consideration that is released or otherwise becomes earned and payable in respect of the Incentive Units during the COC Vesting Period shall be paid or retained, as applicable, in accordance with the applicable vesting provisions set forth in Section 4(d), as applied on a pro rata basis in respect of the Incentive Units.

(g) In the event that the Limited Partner prevails in any action seeking to enforce any right provided to him in this Section 4 as finally determined by a court of competent jurisdiction, the Buyer shall pay to the Limited Partner all reasonable legal fees and expenses incurred by the Limited Partner in seeking such action. Such payments shall be made within five (5) business days after delivery of the Limited Partner's written request for payment accompanied by such evidence of reasonable fees and expenses incurred as the Buyer reasonably may require, in all events following such final judicial determination.

5. Additional Payments .

Operating Group Entities quarterly in advance, with an aggregate amount of $1 million to be paid by the Operating Group Entities to the Limited Partner on the first business day of each calendar quarter of such Fiscal Year; provided that the Additional Payment with respect to the first calendar quarter of Fiscal Year 2017 shall be made as soon as reasonably practicable but no later than the first business day of the calendar month following the date of this Agreement. Each quarterly Additional Payment shall reduce the excess (if any) of (i) the aggregate cash distributions in respect of such quarter of such Fiscal Year that would otherwise have been made by the Operating Group Entities to the Limited Partner and his Related Trusts in respect of all of their Common Units in the Operating Group Entities (each, a " Quarterly Distribution ") or other interests in the Operating Group Entities (other than Tax Liability Payments (as defined below)) (such distributions, including Quarterly Distributions, " Partnership Distributions ") over (ii) the Limited Partner's Presumed Tax Liability (as calculated for purposes of this Agreement based on the Aggregate Presumed Tax Rate rather than the Presumed Tax Rate) with respect to such quarter for all Operating Group Entities (such excess, the " After-Tax Distribution Amount "). Any Additional Payment not applied to reduce an After-Tax Distribution Amount shall be applied to reduce the next quarter's After-Tax Distribution Amount and each subsequent quarter's After-Tax Distribution Amount until the full aggregate amount of all prior Additional Payments have been applied to reduce After-Tax Distribution Amounts; provided, that (i) the quarterly Additional Payments made during one Fiscal Year may only be applied to reduce After-Tax Distribution Amounts with respect to the same Fiscal Year and (ii) to the extent the aggregate Additional Payments plus After-Tax Distribution Amounts with respect to a Fiscal Year equal at least $4 million, no further Additional Payments shall be made with respect to such Fiscal Year. For U.S. federal, state and local income tax purposes, Additional Payments shall be treated as advances of the applicable Quarterly Distributions. To the extent the aggregate amount of all Additional Payments for a Fiscal Year exceed applicable Partnership Distributions for such Fiscal Year (excluding any Partnership Distributions with respect to prior Fiscal Years), such excess shall be treated as a distributive share of profits with respect to the Limited Partner's Class C Non-Equity Interests of the relevant Operating Group Entity. To the extent that, following the end of any Fiscal Year, the General Partner determines that any After-Tax Distribution Amounts should be recalculated based on the actual taxable income allocated to the Limited Partner, the Partnership or one of the other Operating Group Entities will make a payment to the Limited Partner as an adjustment to the relevant prior Additional Payment(s) or Partnership Distributions for such Fiscal Year, or the Operating Group Entities shall reduce subsequent distributions or payments to the Limited Partner as provided above, as applicable, to effect the recalculation (and such adjustment shall be ignored for purposes of this Section 5(a) for the Fiscal Year for which the adjustment is made).

(excluding any tax liability associated with any Additional Payments) during the period commencing with January 1, 2017, and ending on the last day of the relevant Applicable Year (the " Measurement Period "), based on the Aggregate Presumed Tax Rate applicable to each Fiscal Year, exceeds (y) the aggregate Partnership Distributions (excluding advances of Additional Payments but including Tax Liability Payments for prior Fiscal Years net of the Presumed Tax Liability associated with such Tax Liability Payments) made to the Limited Partner and his Related Trusts in respect of the Measurement Period (any such excess, the " Tax Liability Shortfall "), the Operating Group Entities shall make an aggregate payment to the Limited Partner equal to the Tax Liability Shortfall divided by one minus the Aggregate Presumed Tax Rate (a " Tax Liability Payment "). The Tax Liability Payment with respect to each Applicable Year shall be paid to the Limited Partner by the Operating Group Entities no later than ten days prior to April 15 of the year after the relevant Applicable Year. The portion of the Tax Liability Payment made by the Partnership shall be treated as a distributive share of profits with respect to the Limited Partner's Class C Non-Equity Interests in the Partnership.

(c) If the Limited Partner is subject to a Withdrawal due to Resignation prior to December 31, 2019, the After-Tax Distribution Amount of Partnership Distributions to be made to the Limited Partner and his Related Trusts following the date of such Withdrawal shall be reduced by an aggregate amount equal to the sum of all of the Additional Payments and Tax Liability Payments made to the Limited Partner prior to such date.

(d) For purpose of this Section 5, (i) the Aggregate Presumed Tax Rate shall be determined based on the tax rates in effect with respect to the applicable year to which the relevant tax liability pertains and (ii) distributions or payments "in respect of" a Fiscal Year may include distributions or payments that occur after the end of such Fiscal Year (as in the case of the fourth quarter of the Fiscal Year).

6. No Other Compensation . The Limited Partner agrees that (a) except for the compensation to be provided to the Limited Partner pursuant to the terms of this Agreement or in respect of any equity interests in the Och-Ziff Group previously issued to the Limited Partner pursuant to existing agreements and for customary expense reimbursements, the Limited Partner shall not be entitled to any other compensation or distributions from, or have any interests in, any entity in the Och-Ziff Group or any Affiliates thereof, except for any capital investments made by the Limited Partner in any funds managed by the Och-Ziff Group, and (b) consistent with the restrictions set forth in Sections 2.16 and 2.19 of the Limited Partnership Agreement and the Och-Ziff Group's compliance policies that are generally applicable to Active Individual LPs that restrict outside investments, the Limited Partner shall not have any interests in, or receive compensation of any type from, businesses or entities other than the Operating Group Entities and their Affiliates.

Class A Common Units), and Incentive P Units, to the same extent as is provided to the Class B Shareholder Committee with respect to Class A Units pursuant to the Class B Shareholders Agreement dated as of November 13, 2007, as amended from time to time (the " Class B Shareholders Agreement "). The Limited Partner acknowledges and agrees that all such Class B Shares will be subject to the Class B Shareholder Agreement upon issuance thereof.

8. Distributions . Notwithstanding any provisions of the Limited Partnership Agreement to the contrary, the Limited Partner shall be entitled to receive distributions from the Partnership in respect of his unvested and vested Incentive D Units beginning with distributions with respect to the income earned by the Partnership on and after the Incentive Grant Date that are equivalent to those generally distributable to the Partners of the Partnership in respect of their Common Units. The Limited Partner shall be entitled to receive distributions from the Partnership in respect of any Participating Class P Common Units as provided in the Limited Partnership Agreement.

9. Compensation Clawback Policy . As a highly regulated, global alternative asset management firm, the Company has had a long-standing commitment to ensure that its partners, officers and employees adhere to the highest professional and personal standards. In the case of fraud, misconduct or malfeasance by any of its partners, officers or employees, including, without limitation any fraud, misconduct or malfeasance that leads to a restatement of the Company's financial results, or as required by law, the Compensation Committee would consider and likely pursue a disgorgement of prior compensation, where appropriate based on the facts and circumstances. The Compensation Committee will adopt and amend clawback policies as it determines to be appropriate, including, without limitation, to comply with the final implementing rules regarding compensation clawbacks mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and any other applicable law. The Compensation Committee may extend and apply such clawback provisions to similarly situated levels of partners that may not be required to be covered by applicable law as it determines to be necessary or appropriate in its discretion. Notwithstanding anything to the contrary herein, the Limited Partner hereby consents to comply with all of the terms and conditions of any such compensation clawback policy adopted by the Compensation Committee which may apply to the Limited Partner and other similarly situated partners on or after the date hereof, and also agrees to perform all further acts and execute, acknowledge and deliver any documents and to take any further action requested by the Company to give effect to the foregoing. No clawback policy shall directly expand the restrictive covenants set forth herein, except as required by law or as recommended as best practices by proxy advisory firm compensation or corporate governance guidelines.

10. Exchange Rights .

(a) Notwithstanding any terms of the Limited Partnership Agreement or the Class P Exchange Agreement to the contrary, the Limited Partner and his Related Trusts shall have no rights to exchange their Incentive P Units except as specifically provided in Section 10(b) below.

(b) Notwithstanding any terms of the Limited Partnership Agreement or the Class P Exchange Agreement to the contrary but subject to Section 10(c) below, to the extent that (i) the Incentive P Units have become Participating Class P Common Units and the same number of Class P Common Units granted to the Limited Partner in each of the other Operating Group Entities on the Incentive Grant Date have become Participating Class P Common Units (as defined in the limited partnership agreements of such other Operating Group Entities) and (ii) that sufficient Appreciation has occurred with respect to the Partnership and the other Operating Group Entities such that, in the determination of the General Partner, all such Participating Class P Common Units in each Operating Group Entity have each become economically equivalent to a Class A Common Unit in such Operating Group Entity as described in Section 3(j)(ii) of the limited partnership agreement of the Operating Group Entity, then such Participating Class P Common Units may participate, in one or more exchanges in the Limited Partner's discretion as follows: (A) at any time thereafter, up to 60% of the Class P Common Units in each Operating Group Entity may be exchanged in the aggregate, and (B) on and after each of the fifth, sixth, seventh and eighth anniversaries of the Incentive Grant Date, an additional 10% of the Class P Common Units in each Operating Group Entity in the aggregate may be exchanged (so that up to a cumulative percentage of the Class P Common Units in each Operating Group Entity equal to 70%, 80%, 90% and 100%, respectively, in the aggregate, may be exchanged on and after such anniversary), in each case as provided in, and in accordance with and subject to the terms of, the Class P Exchange Agreement.

(c) Notwithstanding any provision of this Agreement, the Limited Partnership Agreement or the Exchange Agreements to the contrary, unless and until shareholders of the Company approve an amendment to the Plan to reserve a sufficient number of Class A Shares under the Plan, the Limited Partner and his Related Trusts shall not be permitted to exchange (i) any Class A Common Units into which the Incentive D Units have converted pursuant to the Class A Exchange Agreement or (ii) any Incentive P Units pursuant to the Class P Exchange Agreement. The Company agrees to promptly take all actions necessary to pursue shareholder approval of such an amendment.

11. Acknowledgment . The Limited Partner acknowledges that he has been given the opportunity to ask questions of the Partnership and has consulted with counsel concerning this Agreement to the extent the Limited Partner deems necessary in order to be fully informed with respect thereto.

term deferral period" as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid an accelerated or additional tax under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Limited Partner's separation from service shall instead be paid on the first business day after the date that is six months following the Limited Partner's separation from service (or, if earlier, the Limited Partner's date of death). To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to the Limited Partner shall be paid to the Limited Partner on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to the Limited Partner) during one year may not affect amounts reimbursable or provided in any subsequent year, and no reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit.

13. Miscellaneous .

(a) Any notice required or permitted under this Agreement shall be given in accordance with Section 10.10 of the Limited Partnership Agreement.

(b) Except as specifically provided herein, this Agreement cannot be amended or modified except by a writing signed by both parties hereto. Daniel S. Och (or, following the death, Disability or Withdrawal of Daniel S. Och, the Partner Management Committee (excluding the Limited Partner for purposes of such decisions)) in his (or their) sole discretion may amend the provisions of this Agreement relating to the Incentive Units or the terms of any Existing Partner Agreements, in whole or in part, at any time, if he (or they) determine in his (or their) sole discretion that the adoption of any such amendments are necessary or desirable to comply with applicable law; provided, however, that, if any such amendment would require the approval of the Compensation Committee, then any such determinations or amendments shall be made by the Compensation Committee in its sole discretion, based on recommendations from Daniel S. Och (or, following the death, Disability or Withdrawal of Daniel S. Och, the Partner Management Committee (excluding the Limited Partner for purposes of such decisions)). The following shall apply in respect of a class of Units for so long as the Limited Partner has not forfeited or exchanged or otherwise disposed of at least 50% of the grant of that Unit class under this Agreement:

economic enhancements to holders of Incentive D Units or Incentive P Units in exchange for their agreement to vote in favor of an amendment that adversely affects the economic terms of the Limited Partner's Incentive D Units or Incentive P Units unless the Limited Partner is offered the same rights to exchange or new Units or economic enhancements as is offered to other holders of such Units.

(ii) No amendment to the Limited Partnership Agreement or the Exchange Agreements may materially and adversely affect the economic terms of the Limited Partner's Incentive D Units or Incentive P Units without his prior written consent (subject to Sections 10.2(b) of the Limited Partnership Agreement), unless such amendment affects the economic terms of the Class A Common Units in a similar manner and except that any amendment to the economic terms of the Class D Common Units or the Class P Common Units that relates to terms or structural provisions that are not applicable to the Class A Common Units shall not be restricted by or subject to this provision.

(c) This Agreement and any amendment hereto made in accordance with Section 13(b) shall be binding as to executors, administrators, estates, heirs and legal successors, or nominees or representatives, of the Limited Partner, and may be executed in several counterparts with the same effect as if the parties executing the several counterparts had all executed one counterpart.

(d) If any provision of this Agreement shall be deemed invalid or unenforceable as written, it shall be construed, to the greatest extent possible, in a manner which shall render it valid and enforceable, and any limitations on the scope or duration of any such provision necessary to make it valid and enforceable shall be deemed to be part thereof, and no invalidity or unenforceability of any provision shall affect any other portion of this Agreement unless the provision deemed to be so invalid or unenforceable is a material element of this Agreement, taken as a whole.

(e) The failure by any party hereto to enforce at any time any provision of this Agreement, or to require at any time performance by any party hereto of any provision hereof, shall in no way be construed as a waiver of such provision, nor in any way affect the validity of this Agreement or any part hereof, or the right of any party hereto thereafter to enforce each and every such provision in accordance with its terms.

(f) This Agreement amends the Limited Partnership Agreement to the extent specifically provided herein. The parties hereto acknowledge and agree that, in the event of any conflict with respect to the rights and obligations of the Limited Partner between (i) the terms of the Limited Partnership Agreement and (ii) the terms of this Agreement, the terms of this Agreement shall control. Except as specifically provided herein, this Agreement shall not otherwise affect any of the terms of the Limited Partnership Agreement or the Existing Partner Agreements. For the avoidance of doubt, the parties hereto acknowledge and agree that the non-competition, non-solicitation and other restrictive covenants and other obligations that apply to the Limited Partner under the Limited Partnership Agreement and the Existing Partner Agreements as currently in effect shall remain unchanged as a result of this Agreement and shall continue in full force and effect after the date hereof.

(g) The Limited Partner acknowledges and agrees that an attempted or threatened breach by the Limited Partner of the provisions of this Agreement would cause irreparable injury to the Partnership and the other members of the Och-Ziff Group not compensable in money damages and the Partnership shall be entitled, without limitation of Section 13(i), to obtain a temporary, preliminary or permanent injunction prohibiting any breaches of the provisions of this Agreement without being required to prove damages or furnish any bond or other security.

(h) Solely with respect to any action or determination that may result in the forfeiture of the Incentive Units:

(i) if there is a dispute between the Limited Partner and the Partnership with respect to (A) whether a Cause Condition has occurred (other than pursuant to clause (vii) thereof), or (B) whether an offer as to a Comparable Position has been made, then such dispute shall be resolved pursuant to a determination made by judicial review on a "de novo" basis, without regard to any determination made by the Partnership or any person or entity entitled to make determinations hereunder; and

(ii) if there is a dispute between the Limited Partner and the Partnership with respect to whether a Cause Condition has occurred pursuant to clause (vii) thereof, or whether there has been a breach of the restrictive covenants in Section 2.13(b)(ii) of the Limited Partnership Agreement, then such dispute shall be resolved pursuant to a determination made by a three-quarters vote of all of the independent members of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Limited Partner and the Limited Partner has been given an opportunity, together with counsel, to be heard before the independent members of the Board).

Nothing in this Section 13(h) shall limit or otherwise affect or reduce the Partnership's or the Limited Partner's rights to seek injunctive relief, damages or any other remedies in respect of any event described in this Section 13(h) or any underlying or related act or event.

(i) Any remedies provided for in this Agreement shall be cumulative in nature and shall be in addition to any other remedies whatsoever (whether by operation of law, equity, contract or otherwise) which any party may otherwise have.

(j) To the extent in the future additional or different taxes or rates are applied to amounts due or income allocated under this Agreement or the Limited Partnership Agreement, the after tax calculation herein shall be appropriately adjusted to reflect the after tax intention to the extent applicable.

control that are or were owned and/or leased by members of the Och-Ziff Capital Management Group in connection with the conduct of the business of the Operating Group Entities and their Affiliates, and including in each case any and all information stored or included on or in the foregoing or otherwise in the Limited Partner's possession or control that relates to Investors or OZ counterparties, Investor or OZ counterparty contact information, Investor or OZ counterparty lists or other Confidential Information.

(l) Any breach of the ten-year commitment set forth in the recitals hereto shall not entitle either party to any additional rights, entitlements or obligations in respect of such breach or result in any such damages other than as described in this Agreement, the Existing Partner Agreements and the Limited Partnership Agreement.

IN WITNESS WHEREOF, this Partner Agreement is executed and delivered as of the date first written above by the undersigned, and the undersigned do hereby agree to be bound by the terms and provisions set forth in this Partner Agreement.



	GENERAL PARTNER:

	OCH-ZIFF HOLDING CORPORATION
	a Delaware corporation

By:	/s/ Wayne Cohen
Name:	Wayne Cohen
Title:	President and Chief Operating Officer



	THE LIMITED PARTNER:

	/s/ James Levin
Name:	James Levin

Exhibit 10.2

Partner Agreement Between
OZ Advisors LP and James Levin

This Partner Agreement (as amended, modified, supplemented or restated from time to time, this " Agreement ") dated as of February 14, 2017 reflects the agreement of OZ Advisors LP (the " Partnership ") and James Levin (the " Limited Partner ") with respect to certain matters concerning (i) the conditional grant by the Partnership to the Limited Partner on a date determined by the General Partner that shall be no later than March 1, 2017 (such date, the " Incentive Grant Date ") of Class D Common Units under the Och-Ziff Capital Management Group LLC 2013 Incentive Plan (as amended, modified, supplemented or restated from time to time, the " Plan ") as a retention and long-term incentive compensation award, (ii) the conditional grant by the Partnership to the Limited Partner on the Incentive Grant Date of Class P Common Units under the Plan as an additional element of such retention and long-term compensation incentive award, and (iii) his rights and obligations under (A) an Amended and Restated Agreement of Limited Partnership of the Partnership dated as of December 14, 2015 (as amended, modified, supplemented or restated from time to time, including on or prior to the Incentive Grant Date substantially in the form of the draft agreement provided to the Limited Partner on January 25, 2017 other than provisions relating to the issuance of Class B Shares in respect of Class P Common Units, the " Limited Partnership Agreement "), (B) the Partner Agreement dated as of November 10, 2010 that was entered into between the Limited Partner and the Partnership in connection with his admission to the Partnership (the " 2010 Partner Agreement ") and the Partner Agreement dated as of January 28, 2013 entered into between the Limited Partner and the Partnership (the " 2013 Partner Agreement " and together with the 2010 Partner Agreement, the " Existing Partner Agreements "), and (C) an Exchange Agreement relating to exchanges of Class P Common Units to be dated on or prior to the Incentive Grant Date substantially in the form of the draft agreement provided to the Limited Partner on January 25, 2017 (as amended, modified, supplemented or restated from time to time, the " Class P Exchange Agreement ") and the Amended and Restated Exchange Agreement dated as of August 1, 2012 relating to exchanges of Class A Common Units (as amended, modified, supplemented or restated from time to time, the " Class A Exchange Agreement " and together with the Class P Exchange Agreement, the " Exchange Agreements "). This Agreement shall be a "Partner Agreement" (as defined in the Limited Partnership Agreement). The General Partner confirms that the Limited Partner has been designated as an "Original Partner" (for purposes of the Limited Partnership Agreement). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Limited Partnership Agreement. The Board of Directors (the " Board ") of Och-Ziff Capital Management Group LLC (the " Company "), including a majority of the independent directors, has approved the conditional awards of Class D Common Units and the Class P Common Units described in Sections 1 and 2 of this Agreement after receiving the recommendation of the Compensation Committee of the Board (the " Compensation Committee ").

3. Withdrawal, Vesting and Non-Compete Provisions .



Anniversary of Incentive Grant Date	Cumulative Percentage of Vested Incentive D Units
3	30%
4	40%
5	50%
6	60%
7	70%
8	80%
9	90%
10	100%



Termination without Cause Date relative to indicated Anniversary of Incentive Grant Date	Additional Percentage of Total Incentive D Units To Become Vested	Total Percentage of Incentive D Units to be Retained as Vested Incentive D Units
prior to the 3rd	30.00%	30.00%
on or after the 3rd but prior to 4th	9.75%	39.75%
on or after 4th but prior to 5th	12.00%	52.00%
on or after 5th but prior to 6th	13.75%	63.75%
on or after 6th but prior to 7th	15.00%	75.00%
on or after 7th but prior to 8th	15.75%	85.75%
on or after 8th but prior to 9th	12.00%	92.00%
on or after 9th but prior to 10th	10.00%	100.00%
on or after 10 ^th	0%	100.00%



Withdrawal Date relative to indicated Anniversary of Incentive Grant Date	Percentage of Vested Incentive D Units To be Forfeited	Total Percentage of Incentive D Units to be Retained as Vested Incentive D Units
prior to the 3rd	[N/A]	0%
on or after the 3rd but prior to 4th	32.5%	20.25%
on or after 4th but prior to 5th	30.0%	28.00%
on or after 5th but prior to 6th	27.5%	36.25%
on or after 6th but prior to 7th	25.0%	45.00%
on or after 7th but prior to 8th	22.5%	54.25%
on or after 8th but prior to 9th	15.0%	68.00%
on or after 9th but prior to 10th	12.5%	78.75%
on or after 10th	0%	100.00%

(iv) Exceptions to P Unit Vesting Schedule . Notwithstanding any provision of the Limited Partnership Agreement to the contrary:

P Units shall consist of 75% of the Incentive P Units with each Class P Performance Threshold applicable to the Incentive P Units; and

(b) Non-Competition Provisions .

(1) on or after the date of such breach, any Incentive P Units shall be forfeited and cancelled;

(3) on or after the date of such breach, all allocations and distributions on the Common Units described in paragraph (2) above that would otherwise

(7) on the Reallocation Date, the Limited Partner and his Related Trusts shall immediately:

received by the Limited Partner or his Related Trusts on or after the date of such breach on Exchanged Class A Shares.

4. Change of Control; Liquidity .

(a) Generally .

(iv) For clarity, all vested Incentive D Units shall participate in the Change of Control to the extent provided in, and subject to the terms of, the Limited Partnership Agreement.

(iii) Any unvested Incentive P Units that do not become vested or converted into COC Incentive P Units following a Change of Control in accordance with this Section 4(c) shall be forfeited.

(d) COC Incentive Units .

(e) Comparable Position .

5. Additional Payments .

10. Exchange Rights .

13. Miscellaneous .

(a) Any notice required or permitted under this Agreement shall be given in accordance with Section 10.10 of the Limited Partnership Agreement.

(h) Solely with respect to any action or determination that may result in the forfeiture of the Incentive Units:



	GENERAL PARTNER:

	OCH-ZIFF HOLDING CORPORATION
	a Delaware corporation

By:	/s/ Wayne Cohen
Name:	Wayne Cohen
Title:	President and Chief Operating Officer



	THE LIMITED PARTNER:

	/s/ James Levin
Name:	James Levin

Exhibit 10.3

Partner Agreement Between
OZ Advisors II LP and James Levin

This Partner Agreement (as amended, modified, supplemented or restated from time to time, this " Agreement ") dated as of February 14, 2017 reflects the agreement of OZ Advisors II LP (the " Partnership ") and James Levin (the " Limited Partner ") with respect to certain matters concerning (i) the conditional grant by the Partnership to the Limited Partner on a date determined by the General Partner that shall be no later than March 1, 2017 (such date, the " Incentive Grant Date ") of Class D Common Units under the Och-Ziff Capital Management Group LLC 2013 Incentive Plan (as amended, modified, supplemented or restated from time to time, the " Plan ") as a retention and long-term incentive compensation award, (ii) the conditional grant by the Partnership to the Limited Partner on the Incentive Grant Date of Class P Common Units under the Plan as an additional element of such retention and long-term compensation incentive award, and (iii) his rights and obligations under (A) an Amended and Restated Agreement of Limited Partnership of the Partnership dated as of December 14, 2015 (as amended, modified, supplemented or restated from time to time, including on or prior to the Incentive Grant Date substantially in the form of the draft agreement provided to the Limited Partner on January 25, 2017 other than provisions relating to the issuance of Class B Shares in respect of Class P Common Units, the " Limited Partnership Agreement "), (B) the Partner Agreement dated as of November 10, 2010 that was entered into between the Limited Partner and the Partnership in connection with his admission to the Partnership (the " 2010 Partner Agreement ") and the Partner Agreement dated as of January 28, 2013 entered into between the Limited Partner and the Partnership (the " 2013 Partner Agreement " and together with the 2010 Partner Agreement, the " Existing Partner Agreements "), and (C) an Exchange Agreement relating to exchanges of Class P Common Units to be dated on or prior to the Incentive Grant Date substantially in the form of the draft agreement provided to the Limited Partner on January 25, 2017 (as amended, modified, supplemented or restated from time to time, the " Class P Exchange Agreement ") and the Amended and Restated Exchange Agreement dated as of August 1, 2012 relating to exchanges of Class A Common Units (as amended, modified, supplemented or restated from time to time, the " Class A Exchange Agreement " and together with the Class P Exchange Agreement, the " Exchange Agreements "). This Agreement shall be a "Partner Agreement" (as defined in the Limited Partnership Agreement). The General Partner confirms that the Limited Partner has been designated as an "Original Partner" (for purposes of the Limited Partnership Agreement). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Limited Partnership Agreement. The Board of Directors (the " Board ") of Och-Ziff Capital Management Group LLC (the " Company "), including a majority of the independent directors, has approved the conditional awards of Class D Common Units and the Class P Common Units described in Sections 1 and 2 of this Agreement after receiving the recommendation of the Compensation Committee of the Board (the " Compensation Committee ").

3. Withdrawal, Vesting and Non-Compete Provisions .



Anniversary of Incentive Grant Date	Cumulative Percentage of Vested Incentive D Units
3	30%
4	40%
5	50%
6	60%
7	70%
8	80%
9	90%
10	100%

seeking liquidation, reorganization, arrangement, adjustment, protection, relief or composition of the debts of the Limited Partner under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for the Limited Partner or for any substantial part of the property of the Limited Partner, or the Limited Partner has taken any action authorizing such proceeding; or (vii) has breached any of the non-competition, non-solicitation or non-disparagement covenants in Section 2.13 of the Limited Partnership Agreement ((A) other than an inadvertent and de minimis breach of (x) the restriction on solicitation of employees set forth in Section 2.13(d) thereof (the " Employee Solicitation Restriction "), excluding for this purpose the restriction on hiring employees, which shall continue to apply without regard to whether the violation is inadvertent or de minimis, so that any violation of the restriction on hiring shall be a breach of such provision (including an inadvertent or de minimis violation) for all purposes, or (y) the non-disparagement covenant set forth in Section 2.13(e) thereof, and (B) also excluding in the case of the non-disparagement covenant set forth in Section 2.13(e) thereof, statements made in the good faith performance of the Limited Partner's duties to the Partnership and its Affiliates).



Termination without Cause Date relative to indicated Anniversary of Incentive Grant Date	Additional Percentage of Total Incentive D Units To Become Vested	Total Percentage of Incentive D Units to be Retained as Vested Incentive D Units
prior to the 3rd	30.00%	30.00%
on or after the 3rd but prior to 4th	9.75%	39.75%
on or after 4th but prior to 5th	12.00%	52.00%
on or after 5th but prior to 6th	13.75%	63.75%
on or after 6th but prior to 7th	15.00%	75.00%
on or after 7th but prior to 8th	15.75%	85.75%
on or after 8th but prior to 9th	12.00%	92.00%
on or after 9th but prior to 10th	10.00%	100.00%
on or after 10 ^th	0%	100.00%



Withdrawal Date relative to indicated Anniversary of Incentive Grant Date	Percentage of Vested Incentive D Units To be Forfeited	Total Percentage of Incentive D Units to be Retained as Vested Incentive D Units
prior to the 3rd	[N/A]	0%
on or after the 3rd but prior to 4th	32.5%	20.25%
on or after 4th but prior to 5th	30.0%	28.00%
on or after 5th but prior to 6th	27.5%	36.25%
on or after 6th but prior to 7th	25.0%	45.00%
on or after 7th but prior to 8th	22.5%	54.25%
on or after 8th but prior to 9th	15.0%	68.00%
on or after 9th but prior to 10th	12.5%	78.75%
on or after 10th	0%	100.00%

(iv) Exceptions to P Unit Vesting Schedule . Notwithstanding any provision of the Limited Partnership Agreement to the contrary:

(A) 75% of the Incentive P Units shall be conditionally retained (the " Continuing P Units ") and the remaining Incentive P Units shall be forfeited on the date of such Termination without Cause. The Continuing P Units shall consist of 75% of the Incentive P Units with each Class P Performance Threshold applicable to the Incentive P Units; and

retention of any conditionally vested Incentive Units by the Limited Partner and his Related Trusts in accordance with this Section 3(a) or Section 4 (including any unvested Incentive Units that become vested in accordance with this Section 3(a) or Section 4) shall be subject to (A) the Limited Partner complying in all respects with the Limited Partnership Agreement including, without limitation, the restrictions regarding Confidentiality, Intellectual Property, Non-Solicitation, Non-Disparagement, Non-Interference, Short Selling, Hedging Transactions, and Compliance with Policies, each as set forth in Sections 2.12, 2.13, 2.18, and 2.19 of the Limited Partnership Agreement; provided, however, that an inadvertent and de minimis breach of (w) Section 2.12(a) thereof (and in the event that the Limited Partner is aware or becomes aware of any such breach or any other breach of Section 2.12 thereof, the Limited Partner immediately notifies the Partnership of such breach and immediately returns (or if so directed by the Partnership, destroys) any confidential information implicated in such breach which is in the Limited Partner's possession), (x) Section 2.13(d) thereof, but solely in respect of the Employee Solicitation Restriction, (y) Section 2.13(e) thereof, or (z) Section 2.19 thereof, but solely in respect of policies and procedures that do not relate to requirements of law, any recognized stock exchange or other regulatory body or authority, in each case, shall not be deemed to be a breach of the Limited Partnership Agreement solely for purposes of this Section 3(a)(vi), and (B) the Limited Partner executing and not revoking a general release agreement. Such general release agreement shall be in the form set forth in Exhibit A to the Limited Partnership Agreement, subject only to revisions necessary to reflect changes in applicable law.

(b) Non-Competition Provisions .

In the event the Limited Partner breaches any such covenants, then the Limited Partner shall have failed to satisfy the condition subsequent to the grants of Incentive Units and the Limited Partner agrees that:

(1) on or after the date of such breach, any Incentive P Units shall be forfeited and cancelled;

(3) on or after the date of such breach, all allocations and distributions on the Common Units described in paragraph (2) above that would otherwise have been received by the Limited Partner or his Related Trusts on or after the date of such breach shall thereafter be reallocated from them in accordance with the reallocations of such Common Units described above;

(7) on the Reallocation Date, the Limited Partner and his Related Trusts shall immediately:

and (ii) any distributions received by the Limited Partner or his Related Trusts during such 24-month period on Exchanged Class A Shares;

4. Change of Control; Liquidity .

(a) Generally .

Partner's Existing Partner Agreements in respect of the Limited Partner's Units other than the Incentive Units); provided, that in the case of a Change of Control, unvested Incentive D Units shall only participate in such Change of Control on the terms and to the extent provided in this Section 4.

(iv) For clarity, all vested Incentive D Units shall participate in the Change of Control to the extent provided in, and subject to the terms of, the Limited Partnership Agreement.

(iii) Any unvested Incentive P Units that do not become vested or converted into COC Incentive P Units following a Change of Control in accordance with this Section 4(c) shall be forfeited.

(d) COC Incentive Units .

" Aggregate Presumed Tax Rate ")) shall be placed into an escrow account with a nationally recognized independent fiduciary institution agreed to by the Limited Partner and the Buyer (with reasonable costs paid by the Partnership) until released as provided below, and (ii) the remainder paid over to the Limited Partner at the time of the Change of Control. The escrow account shall be deemed owned by the Limited Partner and shall be entitled to receive any dividends or earnings on the escrowed amounts and adjusted to reflect changes in the value of the escrowed amounts. An amount necessary to cover taxes at the Aggregate Presumed Tax Rate, on any dividends and earnings from the previous calendar quarter, shall be distributed to the Limited Partner on the fifth day of each calendar quarter.

(e) Comparable Position .

Incentive P Units shall become conditionally vested on the Change of Control Date and shall participate in the Change of Control in accordance with Section 4(c)(i) (with no Incentive P Units being treated as COC Incentive P Units for purposes of this Agreement).

(ii) A " Comparable Position " means a position in which (A) the Limited Partner's primary office remains located in the New York metropolitan area, (B) the Limited Partner receives compensation that is comparable in the aggregate to the compensation he was receiving immediately prior to the Change of Control (excluding for purposes of such comparison any equity compensation and any compensation based on equity ownership, including distributions on equity, the Limited Partner receives prior to or following the Change of Control), and which is not less than the rate of $4 million per year, (C) the Limited Partner's duties, responsibilities and reporting relationships are not materially diminished, provided that the Limited Partner ceasing to be an executive officer of a public company or ceasing to report to a board of directors of a public company, in each case as a result of the Change of Control, shall not constitute a material diminution for this purpose, and (D) the Limited Partner's employment is not conditioned (x) on a contractual agreement to remain in service for more than two years or (y) on compliance with any restrictive covenants other than those provided in (or any other restrictive covenants that are substantially similar in principle, scope and duration to those provided in) Sections 2.12, 2.13, 2.16, 2.18 and 2.19 of the Limited Partnership Agreement, or for any period longer than 24 months following the Limited Partner's Withdrawal, Special Withdrawal or any other termination of service with the Partnership. The Limited Partner agrees and acknowledges that, although the Buyer in its sole discretion may choose to offer equity or cash incentives or other compensation to the Limited Partner in respect of the Limited Partner's continued service during the period between the Change of Control Date and the second anniversary of the Change of Control Date, the provisions relating to the continued vesting of the COC Incentive Units pursuant to Section 4(d) in addition to payments at a rate of not less than $4 million per year shall be deemed to satisfy clause (B) of the definition of "Comparable Position" for the COC Vesting Period and the Buyer need not offer any such equity or cash incentives or other compensation to the Limited Partner in respect of the COC Vesting Period in order for the position offered by the Buyer to the Limited Partner to constitute a "Comparable Position."

(g) In the event that the Limited Partner prevails in any action seeking to enforce any right provided to him in this Section 4 as finally determined by a court of competent

jurisdiction, the Buyer shall pay to the Limited Partner all reasonable legal fees and expenses incurred by the Limited Partner in seeking such action. Such payments shall be made within five (5) business days after delivery of the Limited Partner's written request for payment accompanied by such evidence of reasonable fees and expenses incurred as the Buyer reasonably may require, in all events following such final judicial determination.

5. Additional Payments .

(a) For each of Fiscal Years 2017, 2018 and 2019, the Limited Partner shall receive cash payments from one or more of the Partnership or the other Operating Group Entities in the aggregate amount of $4 million per Fiscal Year (" Additional Payments "). The aggregate Additional Payments with respect to each such Fiscal Year shall be paid by one or more of the Operating Group Entities quarterly in advance, with an aggregate amount of $1 million to be paid by the Operating Group Entities to the Limited Partner on the first business day of each calendar quarter of such Fiscal Year; provided that the Additional Payment with respect to the first calendar quarter of Fiscal Year 2017 shall be made as soon as reasonably practicable but no later than the first business day of the calendar month following the date of this Agreement. Each quarterly Additional Payment shall reduce the excess (if any) of (i) the aggregate cash distributions in respect of such quarter of such Fiscal Year that would otherwise have been made by the Operating Group Entities to the Limited Partner and his Related Trusts in respect of all of their Common Units in the Operating Group Entities (each, a " Quarterly Distribution ") or other interests in the Operating Group Entities (other than Tax Liability Payments (as defined below)) (such distributions, including Quarterly Distributions, " Partnership Distributions ") over (ii) the Limited Partner's Presumed Tax Liability (as calculated for purposes of this Agreement based on the Aggregate Presumed Tax Rate rather than the Presumed Tax Rate) with respect to such quarter for all Operating Group Entities (such excess, the " After-Tax Distribution Amount "). Any Additional Payment not applied to reduce an After-Tax Distribution Amount shall be applied to reduce the next quarter's After-Tax Distribution Amount and each subsequent quarter's After-Tax Distribution Amount until the full aggregate amount of all prior Additional Payments have been applied to reduce After-Tax Distribution Amounts; provided, that (i) the quarterly Additional Payments made during one Fiscal Year may only be applied to reduce After-Tax Distribution Amounts with respect to the same Fiscal Year and (ii) to the extent the aggregate Additional Payments plus After-Tax Distribution Amounts with respect to a Fiscal Year equal at least $4 million, no further Additional Payments shall be made with respect to such Fiscal Year. For U.S. federal, state and local income tax purposes, Additional Payments shall be treated as advances of the applicable Quarterly Distributions. To the extent the aggregate amount of all Additional Payments for a Fiscal Year exceed applicable Partnership Distributions for such Fiscal Year (excluding any Partnership Distributions with respect to prior Fiscal Years), such excess shall be treated as a distributive share of profits with respect to the Limited Partner's Class C Non-Equity Interests of the relevant Operating Group Entity. To the extent that, following the end of any Fiscal Year, the General Partner determines that any After-Tax Distribution Amounts should be recalculated based on the actual taxable income allocated to the Limited Partner, the Partnership or one of the other Operating Group Entities will make a payment to the Limited Partner as an adjustment to the relevant prior Additional Payment(s) or Partnership Distributions for such Fiscal Year, or the Operating Group Entities shall reduce subsequent distributions or payments to

the Limited Partner as provided above, as applicable, to effect the recalculation (and such adjustment shall be ignored for purposes of this Section 5(a) for the Fiscal Year for which the adjustment is made).

(b) In respect of each Fiscal Year (each, an " Applicable Year ") during the period commencing with calendar year 2017 and ending with the earlier of (i) the last day of the calendar year during which 60% of the Incentive P Units in each Operating Group Entity become exchangeable in accordance with Section 10 below and (ii) the last day of calendar year 2022, if (x) the Presumed Tax Liability (as calculated for purposes of this Agreement based on the Aggregate Presumed Tax Rate rather than the Presumed Tax Rate) associated with cumulative allocations of income made by all Operating Group Entities to the Limited Partner in respect of all of the Common Units in the Operating Group Entities held by him and his Related Trusts (excluding any tax liability associated with any Additional Payments) during the period commencing with January 1, 2017, and ending on the last day of the relevant Applicable Year (the " Measurement Period "), based on the Aggregate Presumed Tax Rate applicable to each Fiscal Year, exceeds (y) the aggregate Partnership Distributions (excluding advances of Additional Payments but including Tax Liability Payments for prior Fiscal Years net of the Presumed Tax Liability associated with such Tax Liability Payments) made to the Limited Partner and his Related Trusts in respect of the Measurement Period (any such excess, the " Tax Liability Shortfall "), the Operating Group Entities shall make an aggregate payment to the Limited Partner equal to the Tax Liability Shortfall divided by one minus the Aggregate Presumed Tax Rate (a " Tax Liability Payment "). The Tax Liability Payment with respect to each Applicable Year shall be paid to the Limited Partner by the Operating Group Entities no later than ten days prior to April 15 of the year after the relevant Applicable Year. The portion of the Tax Liability Payment made by the Partnership shall be treated as a distributive share of profits with respect to the Limited Partner's Class C Non-Equity Interests in the Partnership.

by the Limited Partner in any funds managed by the Och-Ziff Group, and (b) consistent with the restrictions set forth in Sections 2.16 and 2.19 of the Limited Partnership Agreement and the Och-Ziff Group's compliance policies that are generally applicable to Active Individual LPs that restrict outside investments, the Limited Partner shall not have any interests in, or receive compensation of any type from, businesses or entities other than the Operating Group Entities and their Affiliates.

7. Delegation to Class B Shareholder Committee . Notwithstanding any provisions of the Limited Partnership Agreement, any Existing Partner Agreement or this Agreement to the contrary, the Limited Partner hereby irrevocably delegates all power and authority to the Class B Shareholder Committee to exercise, on his behalf, any and all of his rights in respect of Class B Shares issued in connection with his Incentive D Units (upon such Incentive D Units becoming Class A Common Units), and Incentive P Units, to the same extent as is provided to the Class B Shareholder Committee with respect to Class A Units pursuant to the Class B Shareholders Agreement dated as of November 13, 2007, as amended from time to time (the " Class B Shareholders Agreement "). The Limited Partner acknowledges and agrees that all such Class B Shares will be subject to the Class B Shareholder Agreement upon issuance thereof.

further action requested by the Company to give effect to the foregoing. No clawback policy shall directly expand the restrictive covenants set forth herein, except as required by law or as recommended as best practices by proxy advisory firm compensation or corporate governance guidelines.

10. Exchange Rights .

12. Section 409A . This Agreement as well as payments and benefits under this Agreement are intended to be exempt from, or to the extent subject thereto, to comply with Code Section 409A (" Section 409A "), and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted in accordance therewith. Notwithstanding anything contained herein to the contrary, the Limited Partner shall not be considered to have terminated employment with the Partnership for purposes of any payments under this Agreement which are subject to Section 409A until the Limited Partner has incurred a "separation from service" from the Partnership within the meaning of Section 409A. Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A and any payments described in this Agreement that are due within the "short term deferral period" as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid an accelerated or additional tax under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Limited Partner's separation from service shall instead be paid on the first business day after the date that is six months following the Limited Partner's separation from service (or, if earlier, the Limited Partner's date of death). To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to the Limited Partner shall be paid to the Limited Partner on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to the Limited Partner) during one year may not affect amounts reimbursable or provided in any subsequent year, and no reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit.

13. Miscellaneous .

(a) Any notice required or permitted under this Agreement shall be given in accordance with Section 10.10 of the Limited Partnership Agreement.

(i) no amendment to the Limited Partnership Agreement or the Exchange Agreements may materially and adversely affect the economic terms of the Limited Partner's Incentive D Units or Incentive P Units in a manner that is disproportionate to the effect on the economic terms of other units of such class without his prior written consent (subject to Section 10.2(b) of the Limited Partnership Agreement). In addition, any issuances of a majority of interests of a class of Units for the purpose of evading the provisions in Section 10.2 of the Limited Partnership Agreement that relate to voting by Unit holders shall be disregarded for the purposes of obtaining a consent to amendment pursuant to such section. The Company will not offer to exchange or issue new Units or economic enhancements to holders of Incentive D Units or Incentive P Units in exchange for their agreement to vote in favor of an amendment that adversely affects the economic terms of the Limited Partner's Incentive D Units or Incentive P Units unless the Limited Partner is offered the same rights to exchange or new Units or economic enhancements as is offered to other holders of such Units.

(f) This Agreement amends the Limited Partnership Agreement to the extent specifically provided herein. The parties hereto acknowledge and agree that, in the event of any

conflict with respect to the rights and obligations of the Limited Partner between (i) the terms of the Limited Partnership Agreement and (ii) the terms of this Agreement, the terms of this Agreement shall control. Except as specifically provided herein, this Agreement shall not otherwise affect any of the terms of the Limited Partnership Agreement or the Existing Partner Agreements. For the avoidance of doubt, the parties hereto acknowledge and agree that the non-competition, non-solicitation and other restrictive covenants and other obligations that apply to the Limited Partner under the Limited Partnership Agreement and the Existing Partner Agreements as currently in effect shall remain unchanged as a result of this Agreement and shall continue in full force and effect after the date hereof.

(h) Solely with respect to any action or determination that may result in the forfeiture of the Incentive Units:

(k) In the event of the Limited Partner's Special Withdrawal or Withdrawal for any reason, the Limited Partner will promptly return to the Operating Group Entities all known equipment, data, material, books, records, documents (whether stored electronically or on computer hard drives or disks or on any other media), computer disks, credit cards, keys, I.D. cards, and other property, including, without limitation, standalone computers, fax machines, printers, telephones, and other electronic devices in the Limited Partner's possession, custody, or control that are or were owned and/or leased by members of the Och-Ziff Capital Management Group in connection with the conduct of the business of the Operating Group Entities and their Affiliates, and including in each case any and all information stored or included on or in the foregoing or otherwise in the Limited Partner's possession or control that relates to Investors or OZ counterparties, Investor or OZ counterparty contact information, Investor or OZ counterparty lists or other Confidential Information.



	GENERAL PARTNER:

	OCH-ZIFF HOLDING CORPORATION
	a Delaware corporation

By:	/s/ Wayne Cohen
Name:	Wayne Cohen
Title:	President and Chief Operating Officer



	THE LIMITED PARTNER:

	/s/ James Levin
Name:	James Levin

Exhibit 10.4

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OZ MANAGEMENT LP

Dated as of March 1, 2017

TABLE OF CONTENTS


		Page
ARTICLE I DEFINITIONS			1
Section 1.1	Definitions		1

ARTICLE II GENERAL PROVISIONS			20
Section 2.1	Organization		20
Section 2.2	Partnership Name		20
Section 2.3	Registered Office, Registered Agent		20
Section 2.4	Certificates		20
Section 2.5	Nature of Business; Permitted Powers		20
Section 2.6	Fiscal Year		20
Section 2.7	Perpetual Existence		20
Section 2.8	Limitation on Partner Liability		20
Section 2.9	Indemnification		21
Section 2.10	Exculpation		22
Section 2.11	Fiduciary Duty		22
Section 2.12	Confidentiality; Intellectual Property		23
Section 2.13	Non-Competition; Non-Solicitation; Non-Disparagement; Non-Interference; and Remedies		24
Section 2.14	Insurance		30
Section 2.15	Representations and Warranties		30
Section 2.16	Devotion of Time		31
Section 2.17	Partnership Property; Partnership Interest		31
Section 2.18	Short Selling and Hedging Transactions		31
Section 2.19	Compliance with Policies		31

ARTICLE III INTERESTS AND ADMISSION OF PARTNERS			32
Section 3.1	Units and other Interests		32
Section 3.2	Issuance of Additional Units and other Interests		42

ARTICLE IV VOTING AND MANAGEMENT			43
Section 4.1	General Partner: Power and Authority		43
Section 4.2	Partner Management Committee		45
Section 4.3	Partner Performance Committee		46
Section 4.4	Books and Records; Accounting		47
Section 4.5	Expenses		48
Section 4.6	Partnership Tax and Information Returns		48

ARTICLE V CONTRIBUTIONS AND CAPITAL ACCOUNTS			49
Section 5.1	Capital Contributions		49
Section 5.2	Capital Accounts		50
Section 5.3	Determinations by General Partner		51


ARTICLE VI ALLOCATIONS		51
Section 6.1	Allocations for Capital Account Purposes	51
Section 6.2	Allocations for Tax Purposes	56

ARTICLE VII DISTRIBUTIONS		58
Section 7.1	Distributions	58
Section 7.2	Distributions in Kind	59
Section 7.3	Tax Distributions	59
Section 7.4	Expense Amount Distributions	60
Section 7.5	Borrowing	60
Section 7.6	Restrictions on Distributions	60

ARTICLE VIII TRANSFER OR ASSIGNMENT OF INTEREST; CESSATION OF PARTNER STATUS		61
Section 8.1	Transfer and Assignment of Interest	61
Section 8.2	Withdrawal by General Partner	62
Section 8.3	Withdrawal and Special Withdrawal of Limited Partners	63
Section 8.4	Vesting	65
Section 8.5	Tag-Along Rights	65
Section 8.6	Drag-Along Rights	66
Section 8.7	Reallocation of Common Units pursuant to Partner Agreements	66

ARTICLE IX DISSOLUTION		67
Section 9.1	Duration and Dissolution	67
Section 9.2	Notice of Liquidation	68
Section 9.3	Liquidator	68
Section 9.4	Liquidation	68
Section 9.5	Capital Account Restoration	70

ARTICLE X MISCELLANEOUS		70
Section 10.1	Incorporation of Agreements	70
Section 10.2	Amendment to the Agreement	70
Section 10.3	Successors, Counterparts	71
Section 10.4	Applicable Law; Submission to Jurisdiction; Severability	71
Section 10.5	Arbitration	72
Section 10.6	Filings	73
Section 10.7	Power of Attorney	74
Section 10.8	Headings and Interpretation	74
Section 10.9	Additional Documents	74
Section 10.10	Notices	74
Section 10.11	Waiver of Right to Partition	74
Section 10.12	Partnership Counsel	75
Section 10.13	Survival	75
Section 10.14	Ownership and Use of Name	75
Section 10.15	Remedies	75
Section 10.16	Entire Agreement	75

This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF OZ MANAGEMENT LP, a Delaware limited partnership (the “ Partnership ”), is made as of March 1, 2017, by and among Och-Ziff Holding Corporation, a Delaware corporation, as general partner (the “ Initial General Partner ”) and the Limited Partners (as defined below).

WHEREAS, OZ Management, L.L.C. (the “ Original Company ”) was originally organized as a Delaware limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et seq. (the “ LLC Act ”) on December 12, 1997;

WHEREAS, on June 25, 2007, the Original Company was converted from a Delaware limited liability company to a Delaware limited partnership organized pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §17-101, et seq. (the “ Act ”), and an Agreement of Limited Partnership of OZ Management LP dated as of June 25, 2007 (the “ Initial Partnership Agreement ”); and

WHEREAS, the Initial Partnership Agreement was amended and restated on November 13, 2007 (the Initial Partnership Agreement, as amended and restated, the “ Prior Partnership Agreement ”), on February 11, 2008, on April 10, 2008, on September 30, 2009, on August 1, 2012, and on December 14, 2015, and is hereby amended and restated again.

NOW THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used herein, the following terms shall have the following meanings:

“ 4Q Distribution Date ” means the date on which distributions are made by the Operating Group Entities in respect of Common Units with respect to Net Income earned by the Operating Group Entities during the fourth quarter of any Fiscal Year.

“ Act ” has the meaning specified in the Preamble to this Agreement.

“ Active Individual LP ” means each of the Individual Limited Partners that is an Executive Managing Director of the General Partner, prior to the Withdrawal or Special Withdrawal of such Individual Limited Partner or such Individual Limited Partner ceasing to be actively involved with the Partnership and its Affiliates due to death or Disability.

“ Additional Limited Partner ” has the meaning specified in Section 3.2(a).

“ Adjusted Capital Account ” means the Capital Account maintained for each Partner as of the end of each Fiscal Year, (a) increased by any amounts that such Partner is

obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such Fiscal Year, are reasonably expected to be allocated to such Partner in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such Fiscal Year, are reasonably expected to be made to such Partner in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Partner’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or Section 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“ Adjusted Property ” means any property the Carrying Value of which has been adjusted pursuant to Section 5.2(b)(iii).

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

“ Agreed Value ” of any Contributed Property means the fair market value of such property or other consideration at the time of contribution as determined by the General Partner, without taking into account any liabilities to which such Contributed Property was subject at such time. The General Partner shall use such method as it determines to be appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Partnership in a single or integrated transaction among each separate property on a basis proportional to the fair market value of each Contributed Property.

“ Agreement ” means this Amended and Restated Agreement of Limited Partnership of the Partnership, as amended, modified, supplemented or restated from time to time.

“ Appreciation ” shall mean: (i) with respect to any Existing Class D Common Units, the excess, if any, of the fair market value of the Partnership on the date of a Sale or liquidation over its fair market value on February 28, 2017, and (ii) with respect to any other Units, the excess, if any, of the fair market value of the Partnership on the date of a Sale or liquidation over its fair market value on the date immediately prior to the Issue Date(s) of such Units (as equitably adjusted, in each case, for contributions and distributions that alter the fair market value of the Partnership).

“ Average Share Price ” for any period shall mean the average closing price on the New York Stock Exchange of one Class A Share for each of the trading days that occur during such period.

“ Book-Tax Disparity ” means, with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for U.S. federal income tax purposes as of such date.

“ Business Day ” means any day other than Saturday, Sunday or any other day on which commercial banks in the State of New York are authorized or required by law or executive order to remain closed.

“ Capital Account ” means the capital account maintained for a Partner pursuant to Section 5.2.

“ Capital Contribution ” means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes to the Partnership pursuant to this Agreement.

“ Carrying Value ” means (a) with respect to a Contributed Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Partners’ Capital Accounts in respect of such Contributed Property, and (b) with respect to any other Partnership property, the adjusted basis of such property for U.S. federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted to equal its respective gross fair market value (taking Section 7701(g) of the Code into account) upon an adjustment to the Capital Accounts of the Partners in accordance with Section 5.2(b)(iii) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, in the sole and absolute discretion of the General Partner.

“ Cause ” means, in respect of an Individual Limited Partner, that such Partner (i) has committed an act of fraud, dishonesty, misrepresentation or breach of trust; (ii) has been convicted of a felony or any offense involving moral turpitude; (iii) has been found by any regulatory body or self-regulatory organization having jurisdiction over the Och-Ziff Group to have, or has entered into a consent decree determining that such Partner, violated any applicable regulatory requirement or a rule of a self-regulatory organization; (iv) has committed an act constituting gross negligence or willful misconduct; (v) has violated in any material respect any agreement relating to the Och-Ziff Group; (vi) has become subject to any proceeding seeking to adjudicate such Partner bankrupt or insolvent, or seeking liquidation, reorganization, arrangement, adjustment, protection, relief or composition of the debts of such Partner under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for such Partner or for any substantial part of the property of such Partner, or such Partner has taken any action authorizing such proceeding; or (vii) has breached any of the non-competition, non-solicitation or non-disparagement covenants in Section 2.13 or, if applicable, any of those provided in such Partner’s Partner Agreement, the breach of any of which shall be deemed to be a material breach of this Agreement.

“ Certificate of Limited Partnership ” means the Certificate of Limited Partnership executed and filed in the office of the Secretary of State of the State of Delaware on June 25, 2007 (and any and all amendments thereto and restatements thereof) on behalf of the Partnership pursuant to the Act.

“ Certificate of Ownership ” has the meaning set forth in Section 3.1.

“ Change of Control ” means the occurrence of the following: (i) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties and assets of the Operating Group Entities, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act or any successor provision), other than to a Continuing OZ Person; or (ii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act or any successor provision), other than a Continuing OZ Person, becomes (A) the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act or any successor provision) of a majority of the voting interests in (1) Och-Ziff or (2) one or more of the Operating Group Entities comprising all or substantially all of the assets of the Operating Group Entities or (B) entitled to receive a Majority Economic Interest in connection with such transaction.

“ Class A Common Units ” has the meaning set forth in Section 3.1.

“ Class A Cumulative Preferred Units ” has the meaning set forth in Section 3.2(b).

“ Class A Share ” means a common share representing a limited liability company interest in Och-Ziff designated as a “Class A Share.”

“ Class B Common Units ” has the meaning set forth in Section 3.1.

“ Class B Share ” means a common share representing a limited liability company interest in Och-Ziff designated as a “Class B Share.”

“ Class B Shareholder Committee ” means the Class B Shareholder Committee established pursuant to the Class B Shareholders Agreement.

“ Class B Shareholders Agreement ” means the Class B Shareholders Agreement to be entered into by and among Och-Ziff and the holders of Class B Shares on or prior to the Closing Date in connection with the IPO, as amended, modified, supplemented or restated from time to time.

“ Class C Approval ” means, in respect of the determinations to be made in Sections 6.1(a) and 7.1(b)(iii), a prior determination made in writing at the sole and absolute discretion: (i) of the Chairman of the Partner Management Committee (or, with respect to distributions to such Chairman or in the event there is no such Chairman, the full Partner Management Committee acting by majority vote); or (ii) of the General Partner in the event that the Class B Shareholders collectively Beneficially Own Voting Securities (as each such term is defined in the Class B Shareholders Agreement) representing less than 40% of the Total Voting Power of Och-Ziff; provided, however, in the case of each of the foregoing clauses (i) and (ii), that any such determination with respect to distributions to a Partner who is also the Chief Executive Officer or other executive officer of Och-Ziff in respect of such Partner’s Class C Non-Equity Interests shall be made by the compensation committee of Och-Ziff in its sole and absolute discretion after consultation with the Partner Management Committee.

“ Class C Non-Equity Interests ” means a fractional non-equity share of the Interests in the Partnership that may be issued to a Limited Partner as consideration for the provision of services to the Partnership solely for the purpose of making future allocations of Net Income to such Limited Partner. Class C Non-Equity Interests shall not constitute Common Units or other Units of the Partnership.

“ Class D Common Units ” has the meaning set forth in Section 3.1(f).

“ Class D Limited Partner ” has the meaning set forth in Section 3.1(f).

“ Class P Common Units ” has the meaning set forth in Section 3.1(j).

“ Class P Limited Partner ” has the meaning set forth in Section 3.1(j).

“ Class P Liquidity Event ” means (i) a Change of Control, or (ii) a similar event, provided that the holders of other classes of Common Units are participating in the proceeds from such similar event in respect of their Common Units and the PMC Chairman in his sole discretion determines such similar event to be a Class P Liquidity Event.

“ Class P Performance Condition ” for any Class P Common Unit held by a Class P Limited Partner means that the Total Shareholder Return since the grant date of such Class P Common Unit has equalled or exceeded the Class P Performance Threshold relating to such Class P Common Unit on or after the third anniversary of the grant date of such Class P Common Unit, or such other performance condition as may be specified in such Class P Limited Partner’s Partner Agreement.

“ Class P Performance Period ” means, with respect to the Class P Common Units issued to any Class P Limited Partner on any grant date, the period ending on the sixth anniversary of such grant date, or such other performance period as may be specified in such Class P Limited Partner’s Partner Agreement.

“ Class P Performance Threshold ” means, with respect to the Class P Common Units issued to any Class P Limited Partner on any grant date, the required threshold of Total Shareholder Return that must be achieved for a portion of such Class P Common Units to vest, which shall be expressed as a percentage, and set forth in a Partner Agreement of the Class P Limited Partner. With respect to Class P Common Units issued on the date hereof, the required Class P Performance Thresholds shall be as follows: (i) the Class P Performance Threshold is 25% for 20% of such Class P Common Units to vest; (ii) the Class P Performance Threshold is 50% for an additional 40% of such Class P Common Units to vest; (iii) the Class P Performance Threshold is 75% for an additional 20% of such Class P Common Units to vest; and (iv) the Class P Performance Threshold is 125% for an additional 20% of such Class P Common Units to vest.

“ Class P Service Condition ” for any Class P Common Unit held by a Class P Limited Partner means that such Class P Limited Partner has continued in the uninterrupted service of the Operating Group Entities until the third anniversary of the grant date of such Class P Common Unit, or such other service condition as may be specified in such Class P Limited Partner’s Partner Agreement.

“ Closing Date ” means November 19, 2007.

“ Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

“ Common Units ” means Class A Common Units, Class B Common Units, Class D Common Units, Class P Common Units and any other class of Units hereafter designated as Common Units by the General Partner, but shall not include the Class C Non-Equity Interests, PSIs or Class A Cumulative Preferred Units.

“ Company Securities ” means outstanding Class A Shares and Related Securities, as applicable.

“ Competing Business ” means any Person, or distinct portion thereof, that engages in: (a) the alternative asset management business (including, without limitation, any hedge or private equity fund management business) or (b) any other business in which the Och-Ziff Group or any member thereof (1) is actively involved, or (2) in the twelve-month period prior to the relevant Individual Limited Partner’s Withdrawal or Special Withdrawal, planned, developed, or undertook efforts to become actively involved and, in the case of the foregoing clause (b), in which the relevant Individual Limited Partner actively participated or was materially involved or about which the relevant Individual Limited Partner possesses Confidential Information.

“ Confidential Information ” means the confidential matters and information described in Section 2.12.

“ Continuing OZ Person ” means, immediately prior to and immediately following any relevant date of determination, (i) an individual who is an executive managing director of the Intermediate Holding Companies (or the equivalent officers at the relevant time) or previously served in such capacity, (ii) any Person in which any one or more of such individuals directly or indirectly, singly or as a group, holds a majority of the voting interests, (iii) any Person that is a family member of such individual or individuals or (iv) any trust, foundation or other estate planning vehicle for which such individual or any descendant of such individual is a trustee, beneficiary, director or other fiduciary, as the case may be. Notwithstanding the foregoing, each of the executive managing directors of the Intermediate Holding Companies as of the date on which any Class P Common Units are issued and any Person related to such Person as described in clauses (ii), (iii) or (iv) of the foregoing sentence shall be deemed to be a Continuing OZ Person.

“ Continuing Partners ” means the group of Partners comprised of each Individual Original Partner (or, where applicable, his estate or legal or personal representative) who has not Withdrawn, been subject to a Special Withdrawal or breached Section 2.13(b).

“ Contributed Property ” means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed to the Partnership. If the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.2(b)(iii), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property.

“ Control ” means, in respect of a Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise. “Controlled by,” “Controls” and “under common Control with” have the correlative meanings.

“ Covered Person ” means (a) the General Partner, the Withdrawn General Partner and their respective Affiliates and the directors, officers, shareholders, members, partners, employees, representatives and agents of the General Partner, the Withdrawn General Partner and their respective Affiliates and any Person who was at the time of any act or omission described in Section 2.9 or 2.10 such a Person, and (b) any other Person the General Partner designates as a “Covered Person” for the purposes of this Agreement.

“ Damages ” has the meaning set forth in Section 2.9(a).

“ DCI Plan ” means the Och-Ziff Deferred Cash Interest Plan, as amended from time to time.

“ Deferred Cash Interests ” shall mean an award made under the DCI Plan.

“ Disability ” means that a Person is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as determined by the General Partner with PMC Approval in its sole and absolute discretion and in accordance with applicable law.

“ Disabling Conduct ” has the meaning set forth in Section 2.9(a).

“ Drag-Along Purchaser ” means, in respect of a Drag-Along Sale, the third-party purchaser or purchasers proposing to acquire the Company Securities to be transferred in such Drag-Along Sale.

“ Drag-Along Right ” has the meaning set forth in Section 8.6(a).

“ Drag-Along Sale ” means any proposed transfer (other than a pledge, hypothecation, mortgage or encumbrance) pursuant to a bona fide offer from a Drag-Along Purchaser, in one or a series of related transactions, by any Limited Partner or a group of Limited Partners of Company Securities representing in the aggregate at least 50% of all then-outstanding Company Securities (calculated as if all Related Securities had been converted into, exercised or exchanged for, or repaid with, Class A Shares).

“ Drag-Along Securities ” means, with respect to a Limited Partner, that number of Company Securities equal to the product of (A) the total number of Company Securities to be acquired by the Drag-Along Purchaser pursuant to a Drag-Along Sale and (B) a fraction, the numerator of which is the number of Company Securities then held by such Limited Partner and the denominator of which is the total number of Company Securities then held by all Limited Partners (calculated, in the case of both the numerator and denominator, as if all Related Securities held by the relevant Limited Partners had been converted into, exercised or exchanged for, or repaid with, Class A Shares).

“ Drag-Along Sellers ” means the Limited Partner or group of Limited Partners proposing to dispose of or sell Company Securities in a Drag-Along Sale in accordance with Section 8.6.

“ Economic Capital Account Balance ” means, with respect to a Partner as of any date, the Partner’s Capital Account balance, increased by the Partner’s share of any Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain, computed on a hypothetical basis after taking into account all allocations through such date.

“ Economic Risk of Loss ” has the meaning set forth in Treasury Regulation Section 1.752-2(a).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder.

“ Exchange Agreement ” means one or more exchange agreements providing for the exchange of Class A Common Units or Class P Common Units (or other securities issued by the Operating Group Entities) for Class A Shares and/or cash, and the corresponding cancellation of applicable Class B Shares, if any, as such agreements are amended, modified, supplemented or restated from time to time.

“ Existing Class D Common Units ” means Class D Common Units outstanding immediately prior to the date hereof.

“ Existing Value ” means the difference between the fair market value of the Partnership and the aggregate Economic Capital Account Balances of outstanding Pre-Existing Units as of February 28, 2017.

“ Expense Allocation Agreement ” means any agreement entered into among the Operating Group Entities, Och-Ziff and the Intermediate Holding Companies that provides for allocations of certain expense amounts, as such agreement is amended, modified, supplemented or restated from time to time.

“ Expense Amount ” means any amount allocated to the Partnership pursuant to an Expense Allocation Agreement.

“ Expense Amount Distribution ” has the meaning set forth in Section 7.4.

“ First Quarterly Period ” means, with respect to any Fiscal Year, the period commencing on and including January 1 and ending on and including March 31 of such Fiscal Year unless and until otherwise determined by the General Partner.

“ Fiscal Year ” has the meaning set forth in Section 2.6.

“ Fourth Quarterly Period ” means, with respect to any Fiscal Year, the period commencing on and including January 1 and ending on and including December 31 of such Fiscal Year unless and until otherwise determined by the General Partner.

“ General Partner ” means the Initial General Partner and any successor general partner admitted to the Partnership in accordance with this Agreement.

“ Hypothetical Capital Account Balance ” means, with respect to any Partner as of any date, the sum of (i) such Partner’s Capital Account balance as of such date and (ii) if such Partner owns any Class P Common Units, Class D Common Units or PSIs as of such date, the excess, if any, of the Priority Allocation with respect to such Participating Class P Common Units or Class D Common Units (to the extent such Partner has not yet received allocations of Net Income under Section 6.1(c)(i)(B) or 6.1(c)(i)(C) with respect to such Priority Allocation) or PSIs (to the extent such Partner has not yet received allocations of Net Income under Section 6.1(c)(i)(D) with respect to such Priority Allocation) over the Appreciation with respect to such Class P Common Units, Class D Common Units or PSIs, respectively.

“ Hypothetical Capital Account Quotient ” has the meaning set forth in Section 9.4(d).

“ incur ” means to issue, assume, guarantee, incur or otherwise become liable for.

“ Individual Limited Partner ” means each of the Limited Partners that is a natural person.

“ Individual Original Partner ” means each of the Original Partners that is a natural person.

“ Initial General Partner ” has the meaning set forth in the Preamble to this Agreement.

“ Initial Partnership Agreement ” has the meaning set forth in the Preamble to this Agreement.

“ Intellectual Property ” means any of the following that are conceived of, developed, reduced to practice, created, modified, or improved by a Partner, either solely or with others, in whole or in part, whether or not in the course of, or as a result of, such Partner carrying out his responsibilities to the Partnership, whether at the place of business of the Partnership or any of its Affiliates or otherwise, and whether on the Partner’s own time or on the time of the Partnership or any of its Affiliates: (i) trademarks, service marks, brand names, certification marks, trade dress, assumed names, trade names, Internet domain names, and all other indications of source or origin, including, without limitation, all registrations and applications to register any of the foregoing; (ii) inventions, discoveries (whether or not patentable or reduced to practice), patents, including, without limitation, design patents and utility patents, provisional applications, reissues, reexaminations, divisions, continuations, continuations-in-part, and extensions thereof, in each case including, without limitation, all applications therefore and equivalent foreign applications and patents corresponding, or claiming priority, thereto; (iii) works of authorship, whether copyrightable or not, copyrights, registrations and applications for copyrights, and all renewals, modifications and extensions thereof, moral rights, and design rights, (iv) computer systems and software; and (v) trade secrets, know-how, and other confidential and protectable information.

“ Interest ” means a Partner’s interest in the Partnership, including the right of the holder thereof to any and all benefits to which a Partner may be entitled as provided in this Agreement, together with the obligations of a Partner to comply with all of the terms and provisions of this Agreement.

“ Intermediate Holding Companies ” means Och-Ziff Holding Corporation, a Delaware corporation, and Och-Ziff Holding LLC, a Delaware limited liability company.

“ International Dispute ” has the meaning set forth in Section 10.5(a).

“ International Partner ” means each Individual Limited Partner who either (i) has or had his principal business address outside the United States at the time any International Dispute arises or arose; or (ii) has his principal residence or business address outside of the United States at the time any proceeding with respect to such International Dispute is commenced.

“ Investment Company Act ” means the Investment Company Act of 1940, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder.

“ Investor ” means any client, shareholder, limited partner, member or other beneficial owner of the Och-Ziff Group, other than holders of Class A Shares solely in their capacity as such shareholders thereof.

“ IPO ” means the initial offering and sale of Class A Shares by Och-Ziff to the public, as described in the Registration Statement.

“ Issue Date ” has the meaning set forth in Section 6.1(c)(i)(A).

“ Levin 2017 Partner Agreement ” means the Partner Agreement between the Partnership and James Levin, dated as of February 14, 2017, as amended, modified, supplemented or restated from time to time.

“ Limited Partner ” means each of the Persons from time to time listed as a limited partner in the books and records of the Partnership.

“ Liquidator ” has the meaning set forth in Section 9.3.

“ LLC Act ” has the meaning set forth in the Preamble to this Agreement.

“ Majority Economic Interest ” means any right or entitlement to receive more than 50% of the equity distributions or partner allocations (whether such right or entitlement results from the ownership of partner or other equity interests, securities, instruments or agreements of any kind) made to all holders of partner or other equity interests in the Operating Group Entities.

“ Minimum Retained Ownership Requirements ” has the meaning set forth in Section 8.1(a).

“ Net Agreed Value ” means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and (b) in the case of any property distributed to a Partner by the Partnership, the fair market value of such property at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution, in either case, as determined under Section 752 of the Code.

“ Net Income ” means, for any taxable year, the excess, if any, of the Partnership’s items of income and gain for such taxable year over the Partnership’s items of loss and deduction for such taxable year. The items included in the calculation of Net Income shall be determined in accordance with Section 5.2(b) and shall not include any items specially allocated under Section 6.1(d).

“ Net Loss ” means, for any taxable year, the excess, if any, of the Partnership’s items of loss and deduction for such taxable year over the Partnership’s items of income and gain for such taxable year. The items included in the calculation of Net Loss shall be determined in accordance with Section 5.2(b) and shall not include any items specially allocated under Section 6.1(d).

“ New Partnership Audit Procedures ” means Subchapter C of Chapter 63 of the Code, as modified by Section 1101 of the Bipartisan Budget Act of 2015, Pub. L. No. 114-74, any amended or successor version, Treasury Regulations promulgated thereunder, official interpretations thereof, related notices, or other related administrative guidance.

“ Non-Participating Class P Common Units ” means all Class P Common Units other than Participating Class P Common Units.

“ Nonrecourse Deductions ” means any and all items of loss, deduction, or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.

“ Nonrecourse Liability ” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).

“ Notice ” has the meaning set forth in Section 8.6(a).

“ Och Relinquishment Agreement ” means the Relinquishment Agreement among Och-Ziff Holding Corporation, Och-Ziff Holding LLC, Daniel S. Och, the Family Trust created under Article IV of the Daniel S. Och 2014 Descendants’ Trust Agreement, the Family Trust created under Article III of the Jane C. Och 2011 Descendants’ Trust Agreement and the Family Trust created under Article IV of the Och Children’s Trust 2012 Agreement, effective as of March 1, 2017, as amended, modified, supplemented or restated from time to time.

“ Och-Ziff ” means Och-Ziff Capital Management Group LLC, a Delaware limited liability company.

“ Och-Ziff Group ” means Och-Ziff and its Subsidiaries (including the Operating Group Entities), their respective Affiliates, and any investment funds and accounts managed by any of the foregoing.

“ Och-Ziff Incentive Plan ” means the Och-Ziff Capital Management Group LLC 2013 Incentive Plan (as amended, modified, supplemented or restated from time to time), or any predecessor or successor plan.

“ Och-Ziff LLC Agreement ” means the Second Amended and Restated Limited Liability Company Agreement of Och-Ziff, dated November 13, 2007, as amended, modified, supplemented or restated from time to time.

“ Operating Group A Unit ” means, collectively, one Class A Common Unit in each of the Operating Group Entities.

“ Operating Group D Unit ” means, collectively, one Class D Common Unit in each of the Operating Group Entities.

“ Operating Group Entity ” means any Person that is directly Controlled by any of the Intermediate Holding Companies.

“ Operating Group P Unit ” means, collectively, one Class P Common Unit in each of the Operating Group Entities.

“ Original Common Units ” means the Common Units held by the Limited Partners as of the Closing Date or, if an Original Partner was admitted after the Closing Date, the Common Units held by such Original Partner upon the date of his admission.

“ Original Company ” has the meaning set forth in the Preamble to this Agreement.

“ Original Partners ” means, collectively, (i) each Individual Limited Partner that was a Limited Partner as of the Closing Date, (ii) each other Individual Limited Partner designated as an Original Partner in a Partner Agreement, and (iii) the Original Related Trusts; and each, individually, is an “Original Partner.”

“ Original Related Trust ” means any Related Trust of an Individual Original Partner that was a Limited Partner on the Closing Date.

“ Participating Class P Common Units ” means all Class P Common Units with respect to which the applicable Class P Performance Condition has been satisfied during the Class P Performance Period with respect to such Class P Common Units and the applicable Class P Service Condition has been satisfied or waived.

“ Partner ” means any Person that is admitted as a general partner or limited partner of the Partnership pursuant to the provisions of this Agreement and named as a general partner or limited partner of the Partnership in the books of the Partnership and includes any Person admitted as an Additional Limited Partner pursuant to the provisions of this Agreement, in each case, in such Person’s capacity as a partner of the Partnership.

“ Partner Agreement ” means, with respect to one or more Partners, any separate written agreement entered into between such Partner(s) and the Partnership or one of its Affiliates regarding the rights and obligations of such Partner(s) with respect to the Partnership or such Affiliate, as amended, modified, supplemented or restated from time to time.

“ Partner Management Committee ” has the meaning set forth in Section 4.2(a).

“ Partner Nonrecourse Debt ” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).

“ Partner Nonrecourse Debt Minimum Gain ” has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2).

“ Partner Nonrecourse Deductions ” means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.

“ Partner Performance Committee ” has the meaning set forth in Section 4.3(a).

“ Partnership ” has the meaning set forth in the Preamble to this Agreement.

“ Partnership Minimum Gain ” means that amount determined in accordance with the principles of Treasury Regulation Section 1.704-2(d).

“ Partnership Representative ” has the meaning set forth in Section 4.6(d).

“ Percentage Interest ” means, as of any date of determination, (a) as to each Common Unit (other than Non-Participating Class P Common Units), the percentage such Common Unit represents of all outstanding Common Units, as such Percentage Interest per Common Unit is reduced to take into account the Percentage Interests attributable to other Units such that the sum of the Percentage Interests of all Common Units and other Units is 100%; (b) as to any Non-Participating Class P Common Units, zero; (c) as to any PSIs, the aggregate PSI Percentage Interest with respect to such PSIs; and (d) as to any other Units, the percentage established for such Units by the General Partner as a part of such issuance, which percentage could be zero. References in this definition to a Partner’s Common Units, PSIs or other Units shall refer to all vested or unvested Common Units, PSIs or other Units of such Partner.

“ Permitted Transferee ” means, with respect to each Limited Partner and his Permitted Transferees, (a) a Charitable Institution (as defined below) Controlled by such Partner, (b) a trust (whether inter vivos or testamentary) or other estate planning vehicle, all of the current beneficiaries and presumptive remaindermen (as defined below) of which are lineal descendents (as defined below) of such Partner and his spouse, (c) a corporation, limited liability company or partnership, of which all of the outstanding shares of capital stock or interests therein are owned by no one other than such Partner, his spouse and his lineal descendents and (d) a legal or personal representative of such Partner in the event of his Disability. For purposes of this definition: (i) “lineal descendants” shall not include natural persons adopted after attaining the age of eighteen (18) years and such adopted Person’s descendants; (ii) “Charitable Institution”

shall refer to an organization described in section 501(c)(3) of the Code (or any corresponding provision of a future United State Internal Revenue law) which is exempt from income taxation under section 501(a) thereof; and (iii) “presumptive remaindermen” shall refer to those Persons entitled to a share of a trust’s assets if it were then to terminate.

“ Person ” means a natural person or a corporation, limited liability company, firm, partnership, joint venture, trust, estate, unincorporated organization, association (including any group, organization, co-tenancy, plan, board, council or committee), governmental entity or other entity (or series thereof).

“ PMC Approval ” means the prior written approval of (a) Daniel S. Och or any successor as Chairman of the Partner Management Committee or (b) if there is no such Chairman, by majority vote of the Partner Management Committee; provided, however, that “PMC Approval” shall mean the prior written approval by majority vote of the Partner Management Committee in the case of Transfers (and waivers of the requirements thereof), vesting requirements, the Minimum Retained Ownership Requirements, and the determination described in the definition of “Reallocation Date,” each by or with respect to the Chairman of the Partner Management Committee.

“ PMC Chairman ” means Daniel S. Och (or, following the death, Disability or Withdrawal of Daniel S. Och, the Partner Management Committee acting by majority vote).

“ Potential Tag-Along Seller ” means each Limited Partner not constituting a Tag-Along Seller.

“ Pre-Existing Units ” has the meaning set forth in Section 6.1(c)(i)(A).

“ Presumed Tax Liability ” means, with respect to the Capital Account of any Partner for any Quarterly Period ending after the date hereof, an amount equal to the product of (x) the amount of taxable income that, in the good faith judgment of the General Partner, would have been allocated to such Partner in respect of such Partner’s Units if allocations pursuant to the provisions of Article VI hereof were made in respect of such Quarterly Period and (y) the Presumed Tax Rate as of the end of such Quarterly Period.

“ Presumed Tax Rate ” means the effective combined federal, state and local income tax rate applicable to either a natural person or corporation, whichever is higher, residing in New York, New York, taxable at the highest marginal federal income tax rate and the highest marginal New York State and New York City income tax rates (taking into account the character of the income) and after giving effect to the federal income tax deduction for such state and local income taxes and taking into account the effects of Sections 67 and 68 of the Code (or successor provisions thereto).

“ Prior Distributions ” means distributions made to the Partners pursuant to Section 7.1 or 7.3.

“ Prior Partnership Agreement ” has the meaning set forth in the Preamble to this Agreement.

“ Priority Allocation ” means allocations of Net Income with respect to each Participating Class P Common Unit, Class D Common Unit or PSI described in Section 6.1(c)(i)(B), 6.1(c)(i)(C) or 6.1(c)(i)(D), respectively, in an aggregate amount such that, immediately after taking such allocations into account, the Economic Capital Account Balance attributable to ownership of such Participating Class P Common Unit, Class D Common Unit or PSI shall be in proportion to the relative Economic Capital Account Balances of all Partners (in each case based on relative Percentage Interests of all Partners attributable to Common Units or PSIs other than any series or classes of Common Units subordinate to such Participating Class P Common Unit, Class D Common Unit or PSI, respectively).

“ PSI ” has the meaning set forth in Section 3.1(i) with respect to the Partnership and the corresponding interests in each other Operating Group Entity with respect to such Operating Group Entity.

“ PSI Cash Distribution ” has the meaning set forth in Section 3.1(i)(iv)(A).

“ PSI Cash Percentage ” means the percentage of any PSI Distribution paid in the form of PSI Cash Distributions (other than Deferred Cash Interests).

“ PSI Class D Unit Distribution ” has the meaning set forth in Section 3.1(i)(iv)(B).

“ PSI Distribution ” has the meaning set forth in Section 3.1(i)(ii).

“ PSI Limited Partner ” has the meaning set forth in Section 3.1(i).

“ PSI Liquidity Event ” means (i) a Change of Control, or (ii) a similar event, provided in each case that the holders of Common Units are participating in the proceeds from such event in respect of their Common Units and the PMC Chairman in his sole discretion determines such event to be a PSI Liquidity Event.

“ PSI Number ” means the number of PSIs held by a PSI Limited Partner in each Operating Group Entity as of the first day of any Fiscal Year or, if later, the first day during such Fiscal Year on which the PSI Limited Partner held PSIs (as such number of PSIs are increased or reduced in accordance with the terms of this Agreement or any applicable Partner Agreement).

“ PSI Percentage Interest ” means, with respect to any PSI as of any date of determination, (a) solely for purposes of allocations under Article VI (other than Section 6.1(d)(v)) and distributions under Article VII for any Fiscal Year, a percentage equal to the product of (i) the PSI Cash Percentage applicable to such PSI and (ii) the Percentage Interest attributable to one Common Unit as of such date; and (b) for all other purposes, a percentage equal to the Percentage Interest attributable to one Common Unit as of such date.

in full with respect to amounts allocated pursuant to the provisions of Article VI (other than Section 6.2(d)), treating the Partner’s Presumed Tax Liability with respect to the relevant Quarterly Period (as such Quarterly Period is changed as provided above) as the amount of the Partner’s actual liability for the payment of estimated federal income taxes with respect to such Quarterly Period (as so changed).

“ Reallocation Date ” means, as to the Common Units (including all distributions received thereon after the relevant date of Withdrawal) to be reallocated to the Continuing Partners pursuant to Section 2.13(g), Section 8.3(a) or Section 8.7 or any Partner Agreement, the date which is the earlier of (a) the date that is six months after the date of the applicable breach of Section 2.13(b) or Withdrawal, as the case may be, and (b) the date on or after such date of breach or Withdrawal that is six months after the date of the latest publicly reported disposition of equity securities of Och-Ziff by any such Continuing Partner which disposition is not exempt from the application of the provisions of Section 16(b) of the Exchange Act, unless otherwise determined with PMC Approval.

“ Reference Price ” for a Class P Common Unit means the Average Share Price for the calendar month prior to the month in which the grant date of the Class P Common Unit occurred; provided that (i) for any Class P Common Units granted on March 1, 2017, the Reference Price shall be the Average Share Price for January 2017, and (ii) a Class P Limited Partner’s Partner Agreement may specify any other Reference Price for such Class P Common Unit.

“ Registration Rights Agreement ” means one or more Registration Rights Agreements providing for the registration of Class A Shares to be entered into among Och-Ziff and certain holders of Units on or prior to the Closing Date, as amended, modified, supplemented or restated from time to time.

“ Registration Statement ” means the Registration Statement on Form S-1 (Registration No. 333-144256) as it has been or as it may be amended or supplemented from time to time, filed by Och-Ziff with the United States Securities and Exchange Commission under the Securities Act to register the offering and sale of the Class A Shares in the IPO.

“ Related Security ” means any security convertible into, exercisable or exchangeable for or repayable with Class A Shares including, without limitation, any Class A Common Units, Class D Common Units, Participating Class P Common Units or other Class P Common Units deemed to be Participating Class P Common Units to the extent provided in Section 3.1(j), in each case that may be exchangeable for Class A Shares pursuant to the Exchange Agreement.

“ Related Trust ” means, in respect of any Individual Limited Partner, any other Limited Partner that is an estate, family limited liability company, family limited partnership of such Individual Limited Partner, a trust the grantor of which is such Individual Limited Partner, or any other estate planning vehicle or family member relating to such Individual Limited Partner.

“ Related Trust Supplementary Agreement ” means, in respect of any Original Related Trust, the Supplementary Agreement to which such Original Related Trust is a party.

“ Required Allocations ” means (a) any limitation imposed on any allocation of Net Loss under Section 6.1(b) and (b) any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i) - (viii).

“ Residual Gain ” or “ Residual Loss ” means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii), respectively, to eliminate Book-Tax Disparities.

“ Restricted Period ” means, with respect to any Partner, the period commencing on the later of the date of the Prior Partnership Agreement and the date of such Partner’s admission to the Partnership, and concluding on the last day of the 24-month period immediately following the date of Special Withdrawal or Withdrawal of such Partner.

“ Retirement ” of an Active Individual LP means a Withdrawal pursuant to clause (C) of Section 8.3(a)(i) ( Resignation ) after ten consecutive calendar years of service as an Active Individual LP or an employee of the Partnership or its Affiliates, provided that the Active Individual LP is over 55 years of age as of the effective date of such Withdrawal.

“ Rules ” has the meaning set forth in Section 10.5(a).

“ Sale ” means an actual or hypothetical sale of all or substantially all of the assets of the Partnership (including a revaluation of assets under Section 5.2(b)(iii)).

“ Second Quarterly Period ” means, with respect to any Fiscal Year, the period commencing on and including January 1 and ending on and including May 31 of such Fiscal Year, unless and until otherwise determined by the General Partner.

“ Securities Act ” means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute, and the rules and regulations promulgated thereunder.

“ Special Withdrawal ” (a) in respect of an Individual Limited Partner, has the meaning set forth in Section 8.3(b), and (b) in respect of any Related Trust, means the Special Withdrawal of such Related Trust in accordance with Section 8.3(b).

“ Subsequent Related Trust ” means, in respect of an Original Related Trust of an Individual Original Partner, the Related Trust of such Individual Original Partner to which the Interest of such Original Related Trust shall be Transferred in accordance with its Related Trust Supplementary Agreement.

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

“ Substitute Limited Partner ” means each Person who acquires an Interest of any Limited Partner in connection with a Transfer by a Limited Partner whose admission as a Limited Partner is approved by the General Partner.

“ Supplementary Agreement ” means, with respect to one or more Limited Partners, any supplementary agreement entered into prior to the date of the Prior Partnership Agreement between the Partnership and such Limited Partners regarding their rights and obligations with respect to the Partnership, as the same may be amended, supplemented, modified or replaced from time to time.

“ Tag-Along Offer ” has the meaning set forth in Section 8.5(b).

“ Tag-Along Purchaser ” means, in respect of a Tag-Along Sale, the Person or group of Persons proposing to acquire the Class A Shares and/or Class A Common Units to be transferred in such Tag-Along Sale.

“ Tag-Along Sale ” means any transfer (other than a pledge, hypothecation, mortgage or encumbrance), in one or a series of related transactions, by any Limited Partner or group of Limited Partners to a single Person or group of Persons (other than Related Trusts or Permitted Transferees of such Limited Partners) pursuant to any transaction exempt from registration under the Securities Act and any similar applicable state securities laws of Class A Shares and/or Class A Common Units representing in the aggregate at least 5% of the Class A Shares (calculated as if all Class A Common Units held by each Limited Partner had been exchanged for Class A Shares) then held by all of the Limited Partners, but only in the event that (i) such Person or group of Persons to which such transfer is made is a strategic buyer, or (ii) the Limited Partners participating in such transfer include Daniel S. Och or any of his Related Trusts. For the avoidance of doubt, sales of Class A Shares pursuant to the provisions of Rule 144 shall not constitute a Tag-Along Sale or any part thereof.

“ Tag-Along Securities ” means, with respect to a Potential Tag-Along Seller, such number of Class A Shares and/or vested and unvested Class A Common Units, as applicable, equal to the product of (i) the total number of Class A Shares (assuming the exchange for Class A Shares of any vested and unvested Class A Common Units) to be acquired by the Tag-Along Purchaser in a Tag-Along Sale and (ii) a fraction, the numerator of which is the total number of Class A Shares (assuming the exchange for Class A Shares of any vested and unvested Class A Common Units) then held by such Potential Tag-Along Seller and the denominator of which is the total number of Class A Shares (assuming the exchange for Class A Shares of any vested and unvested Class A Common Units) then held by all Limited Partners. If any other Potential Tag-Along Sellers do not accept the Tag-Along Offer, the foregoing shall also include each accepting Potential Tag-Along Seller’s pro rata share of the non-accepting Potential Tag-Along Sellers’ Class A Shares and/or vested and unvested Class A Common Units, determined as set forth in the preceding sentence.

“ Tag-Along Seller ” has the meaning set forth in Section 8.5(b).

“ Tax Distributions ” has the meaning set forth in Section 7.3.

“ Tax Matters Partner ” means the Person designated as such in Section 4.6(c).

“ Tax Receivable Agreement ” means the Tax Receivable Agreement entered into in connection with the IPO, by and among Och-Ziff, the Intermediate Holding Companies, the Operating Group Entities and each partner of any Operating Group Entity, as the same may be amended, supplemented, modified or replaced from time to time.

“ Third Quarterly Period ” means, with respect to any Fiscal Year, the period commencing on and including January 1 and ending on and including August 31 of such Fiscal Year, unless and until otherwise determined by the General Partner.

“ Total Shareholder Return ” for a Class P Common Unit as of any date means (i) a fraction, the numerator of which is the sum of (A) the increase in the Average Share Price for the previous 30 trading days compared to the Reference Price as of the grant date of such Class P Common Unit and (B) the aggregate amount of distributions per Class A Share made by Och-Ziff during the same period, and the denominator of which is the Reference Price, or (ii) as otherwise set forth in a Partner Agreement; in each case, subject to any equitable adjustments for stock splits and other capitalization changes.

“ Total Voting Power ” has the meaning ascribed to such term in the Class B Shareholders Agreement.

“ Transfer ” means, with respect to any Interest, any sale, exchange, assignment, pledge, hypothecation, bequeath, creation of an encumbrance, or any other transfer or disposition of any kind, whether voluntary or involuntary, of such Interest. “Transferred” shall have a correlative meaning.

“ Transfer Agent ” means, with respect to any class of Units or the Class C Non-Equity Interests, such bank, trust company or other Person (including the Partnership or one of its Affiliates) as shall be appointed from time to time by the Partnership to act as registrar and transfer agent for such class of Units or the Class C Non-Equity Interests; provided, however, that if no Transfer Agent is specifically designated for such class of Units or the Class C Non-Equity Interests, the Partnership shall act in such capacity.

“ Treasury Regulations ” means the regulations, including temporary regulations, promulgated under the Code, as amended from time to time, or any federal income tax regulations promulgated after the date of this Agreement. A reference to a specific Treasury Regulation refers not only to such specific Treasury Regulation but also to any corresponding provision of any federal tax regulation enacted after the date of this Agreement, as such specific Treasury Regulation or corresponding provision is in effect and applicable on the date of application of the provisions of this Agreement containing such reference.

“ Units ” means a fractional share of the Interests in the Partnership that entitles the holder thereof to such benefits as are specified in this Agreement or any Unit Designation and shall include the Common Units and PSIs but not the Class C Non-Equity Interests.

“ Unit Designation ” has the meaning set forth in Section 3.2(b).

“ Withdrawal ” (a) in respect of an Individual Limited Partner, has the meaning set forth in Section 8.3(a), and (b) in respect of any Related Trust, means the Withdrawal of such Related Trust in accordance with Section 8.3(a). “Withdrawn” has the correlative meaning.

“ Withdrawn General Partner ” has the meaning set forth in Section 4.1(a).

ARTICLE II

GENERAL PROVISIONS

Section 2.1 Organization . The Original Company was originally organized as a Delaware limited liability company under the LLC Act. The Original Company was converted to a Delaware limited partnership pursuant to the Act on June 25, 2007.

Section 2.2 Partnership Name . The name of the Partnership is “OZ Management LP.” The name of the Partnership may be changed from time to time by the General Partner.

Section 2.3 Registered Office, Registered Agent . The Partnership shall maintain a registered office in the State of Delaware at, and the name and address of the Partnership’s registered agent in the State of Delaware is, National Corporate Research, Ltd., 615 South DuPont Highway, Dover, Delaware 19901. Such office and such agent may be changed from time to time by the General Partner.

Section 2.4 Certificates . Any Person authorized by the General Partner shall execute, deliver and file any amendment to or restatements of the Certificate of Limited Partnership and 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 2.5 Nature of Business; Permitted Powers . The purposes of the Partnership shall be to engage in any lawful act or activity for which limited partnerships may be formed under the Act.

Section 2.6 Fiscal Year . Unless and until otherwise determined by the General Partner in its sole and absolute discretion, the fiscal year of the Partnership for federal income tax purposes shall, except as otherwise required in accordance with the Code, end on December 31 of each year (each, a “ Fiscal Year ”).

Section 2.7 Perpetual Existence . The Partnership shall have a perpetual existence unless dissolved in accordance with the provisions of Article IX of this Agreement.

Partnership solely by reason of being a Partner. No Partner shall have any obligation to restore any negative or deficit balance in its Capital Account, including any negative or deficit balance in its Capital Account upon liquidation and dissolution of the Partnership. For federal income tax purposes, the rules of Treasury Regulation Section 1.752-3 shall apply to determine a Partner’s share of any debt or obligation the terms of which provide that, in respect of the Partnership, the creditor has recourse only to the Partnership and its assets and not to any Partner.

Section 2.9 Indemnification .

(a) To the fullest extent permitted by applicable law, each Covered Person shall be indemnified and held harmless by the Partnership for and from any liabilities, demands, claims, actions or causes of action, regulatory, legislative or judicial proceedings or investigations, assessments, levies, judgments, fines, amounts paid in settlement, losses, fees, penalties, damages, costs and expenses, including, without limitation, reasonable attorneys’, accountants’, investigators’, and experts’ fees and expenses and interest on any of the foregoing (collectively, “ Damages ”) sustained or incurred by such Covered Person by reason of any act performed or omitted by such Covered Person or by any other Covered Person in connection with the affairs of the Partnership or the General Partner unless such act or omission constitutes fraud, gross negligence or willful misconduct (the “ Disabling Conduct ”); provided, however, that any indemnity under this Section 2.9 shall be provided out of and to the extent of Partnership assets only, and no Limited Partner or any Affiliate of any Limited Partner shall have any personal liability on account thereof. The right of indemnification pursuant to this Section 2.9 shall include the right of a Covered Person to have paid on his behalf, or be reimbursed by the Partnership for, the reasonable expenses incurred by such Covered Person with respect to any Damages, in each case in advance of a final disposition of any action, suit or proceeding, including expenses incurred in collecting such amounts from the Partnership; provided, however, that such Covered Person shall have given a written undertaking to reimburse the Partnership in the event it is subsequently determined that he is not entitled to such indemnification.

(b) The right of any Covered Person to the indemnification provided herein (i) shall be cumulative of, and in addition to, any and all rights to which such Covered Person may otherwise be entitled by contract or as a matter of law or equity, (ii) in the case of Covered Persons that are Partners, shall continue as to such Covered Person after any Withdrawal or Special Withdrawal of such Partner and after he has ceased to be a Partner, and (iii) shall extend to such Covered Person’s successors, assigns and legal representatives.

(c) The termination of any action, suit or proceeding relating to or involving a Covered Person by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that such Covered Person committed an act or omission that constitutes Disabling Conduct.

(d) For purposes of this Agreement, no action or failure to act on the part of any Covered Person in connection with the management or conduct of the business and affairs of such Covered Person and other activities of such Covered Person which involve a conflict of interest with the Partnership, any other Person in which the Partnership has a direct or indirect interest or any Partner (or any of their respective Affiliates) or in which such Covered Person realizes a profit or has an interest shall constitute, per se, Disabling Conduct.

Section 2.10 Exculpation .

(a) To the fullest extent permitted by applicable law, no Covered Person shall be liable to the Partnership or any Partner or any Affiliate of any Partner for any Damages incurred by reason of any act performed or omitted by such Covered Person unless such act or omission constitutes Disabling Conduct. In addition, no Covered Person shall be liable to the Partnership, any other Person in which the Partnership has a direct or indirect interest or any Partner (or any Affiliate thereof) for any action taken or omitted to be taken by any other Covered Person.

(b) A Covered Person shall be fully protected in relying upon the records of the Partnership and upon such information, opinions, reports or statements presented to the Partnership by any Person (other than such Covered Person) as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Partnership, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which distributions to Partners might properly be paid.

(c) The right of any Partner that is a Covered Person to the exculpation provided in this Section 2.10 shall continue as to such Covered Person after any Withdrawal or Special Withdrawal of such Partner and after he has ceased to be a Partner.

(d) The General Partner may consult with legal counsel and accountants and any act or omission suffered or taken by the General Partner on behalf of the Partnership in reliance upon and in accordance with the advice of such counsel or accountants will be full justification for any such act or omission, and the General Partner will be fully protected in so acting or omitting to act so long as such counsel or accountants were selected with reasonable care.

Section 2.11 Fiduciary Duty .

(a) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating to the Partnership or to any Limited Partner or any Affiliate of any Limited Partner (or other Person with any equity interest in the Partnership) or other Person bound by (or having rights pursuant to) the terms of this Agreement, a Covered Person acting pursuant to the terms, conditions and limitations of this Agreement shall not be liable to the Partnership or to any Limited Partner or any Affiliate of any Limited Partner (or other Person) for its 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 Covered Person otherwise existing at law or equity, are agreed by the Partners (and any other Person bound by or having rights pursuant to this Agreement) to modify to that extent such other duties and liabilities of the Covered Person to the extent permitted by law.

as the General Partner, the General Partner shall, except where an express standard is set forth, be entitled to make such decision in its sole and absolute discretion (and the words “in its sole and absolute discretion” should be deemed inserted therefor in each case in association with the words “General Partner,” whether or not the words “sole and absolute discretion” are actually included in the specific provisions of this Agreement), and in so acting in its sole and absolute discretion the General Partner shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Partnership, any of the Partnership’s Affiliates, any Limited Partner or any other Person. To the fullest extent permitted by applicable law, if pursuant to this Agreement the General Partner, acting solely in its capacity as the General Partner, is permitted or required to make a decision in its “good faith” or under another express standard, the General Partner shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or other applicable law.

Section 2.12 Confidentiality; Intellectual Property .

(a) Confidentiality . Each Partner acknowledges and agrees that the information contained in the books and records of the Partnership is confidential and, except in the course of such Partner performing such duties as are necessary for the Partnership and its Affiliates, as required by law or legal process or to enforce the terms of this Agreement, at all times such Partner shall keep and retain in the strictest confidence and shall not disclose to any Person any confidential matters of the Partnership or any Person included within the Och-Ziff Group and their respective Affiliates and successors and the other Partners, including, without limitation, the identity of any Investors, confidential information concerning the Partnership, any Person included within the Och-Ziff Group and their respective Affiliates and successors, the General Partner, the other Partners and any fund, account or investment managed by any Person included within the Och-Ziff Group, including marketing, investment, performance data, fund management, credit and financial information, and other business or personal affairs of the Partnership, any Person included within the Och-Ziff Group and their respective Affiliates and successors, the General Partner, the other Partners and any fund, account or investment managed directly or indirectly by any Person included within the Och-Ziff Group learned by the Partner heretofore or hereafter. This Section 2.12(a) shall not apply to (i) any information that has been made publicly available by the Partnership or any of its Affiliates or becomes public knowledge (except as a result of an act of any Partner in violation of this Agreement), (ii) the disclosure of information to the extent necessary for a Partner to prepare and file his tax returns, to respond to any inquiries regarding the same from any taxing authority or to prosecute or defend any action, proceeding or audit by any taxing authority with respect to such returns or (iii) the disclosure of information with the prior written consent of the General Partner. Notwithstanding anything to the contrary herein, each Partner (and each employee, representative or other agent of such Partner) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of (x) the Partnership and (y) any of its transactions, and all materials of any kind (including opinions or other tax analyses) that are provided to the Partners relating to such tax treatment and tax structure. In addition, nothing in this Agreement or any policies, rules and regulations of OZ Management LP, or any other agreement between a Limited Partner and any member of the Och-Ziff Group prohibits or restricts the Limited Partner from initiating communications with, or responding to any inquiry from, any regulatory or supervisory authority regarding any good faith concerns about possible violations of law or regulation.

(b) Intellectual Property . (i) Each Partner acknowledges and agrees that the Intellectual Property shall be the sole and exclusive property of the Partnership and such Partner shall have no right, title, or interest in or to the Intellectual Property.

(ii) All copyrightable material included in the Intellectual Property shall be deemed a “work made for hire” under the applicable copyright law, to the maximum extent permitted under such applicable copyright law, and ownership of all rights therein shall vest in the Partnership. To the extent that a Partner may retain any interest in any Intellectual Property by operation of law or otherwise, such Partner hereby assigns and transfers to the Partnership his or her entire right, title and interest in and to all such Intellectual Property.

(iii) Each Partner hereby covenants and binds himself and his successors, assigns, and legal representatives to cooperate fully and promptly with the Partnership and its designee, successors, and assigns, at the Partnership’s reasonable expense, and to do all acts necessary or requested by the Partnership and its designee, successors, and assigns, to secure, maintain, enforce, and defend the Partnership’s rights in the Intellectual Property. Each Partner further agrees, and binds himself and his successors, assigns, and legal representatives, to cooperate fully and assist the Partnership in every way possible in the application for, or prosecution of, all rights pertaining to the Intellectual Property.

(c) If a Partner commits a breach, or threatens to commit a breach, of any of the provisions of Section 2.12(a) or Section 2.12(b), the General Partner shall have the right and remedy to have the provisions of such Section specifically enforced by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Partnership, the other Partners, any Person included within the Och-Ziff Group, and the investments, accounts and funds managed by Persons included within the Och-Ziff Group and that money damages alone shall not provide an adequate remedy to such Persons. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at law or in equity.

Section 2.13 Non-Competition; Non-Solicitation; Non-Disparagement; Non-Interference; and Remedies .

(a) Each Individual Limited Partner acknowledges and agrees, in connection with such Individual Limited Partner’s participation in the Partnership on the terms described in the Prior Partnership Agreement and this amendment and restatement of the terms of the Prior Partnership Agreement or, in the case of an Individual Limited Partner admitted to the Partnership subsequent to the date of the Prior Partnership Agreement, on the terms described herein and in such Individual Limited Partner’s Partner Agreement, if any, that: (i) the alternative asset management business (including, without limitation, for purposes of this paragraph, any hedge or private equity fund management business) is intensely competitive, (ii) such Partner, for the benefit of and on behalf of the Partnership in his capacity as a Partner, has developed, and will continue to develop and have access to and knowledge of, Confidential Information (including, but not limited to, material non-public information of the Och-Ziff

Group and its Investors), (iii) the direct or indirect use of any such information for the benefit of, or disclosure of any such information to, any existing or potential competitors of the Och-Ziff Group would place the Och-Ziff Group at a competitive disadvantage and would do damage to the Och-Ziff Group, (iv) such Partner, for the benefit of and on behalf of the Partnership in his capacity as a Partner, has developed relationships with Investors and counterparties through investment by and resources of the Och-Ziff Group, while a Limited Partner of the Partnership, (v) such Partner, for the benefit of and on behalf of the Partnership in his capacity as a Partner, may continue to develop relationships with Investors and counterparties, through investment by and resources of the Och-Ziff Group, while a Limited Partner of the Partnership, (vi) such Partner engaging in any of the activities prohibited by this Section 2.13 would constitute improper appropriation and/or use of the Och-Ziff Group’s Confidential Information and/or Investor and counterparty relationships, (vii) such Partner’s association with the Och-Ziff Group has been critical, and such Partner’s association with the Och-Ziff Group is expected to continue to be critical, to the success of the Och-Ziff Group, (viii) the services to be rendered, and relationships developed, for the benefit of and on behalf of the Partnership in his capacity as a Partner, are of a special and unique character, (ix) the Och-Ziff Group conducts the alternative asset management business throughout the world, (x) the non-competition and other restrictive covenants and agreements set forth in this Agreement are fair and reasonable, and (xi) in light of the foregoing and of such Partner’s education, skills, abilities and financial resources, such Partner acknowledges and agrees that such Partner will not assert, and it should not be considered, that enforcement of any of the covenants set forth in this Section 2.13 would prevent such Partner from earning a living or otherwise are void, voidable or unenforceable or should be voided or held unenforceable.

(b) During the Restricted Period, each Individual Limited Partner will not, directly or indirectly, either on his own behalf or on behalf of or with any other Person:

(i) without the prior written consent of the General Partner, (A) engage or otherwise participate in any manner or fashion in any Competing Business, (B) render any services to any Competing Business, or (C) acquire a financial interest in or become actively involved with any Competing Business (other than as a passive investor holding less than 2% of the issued and outstanding stock of public companies); or

(ii) in any manner solicit or induce any of the Och-Ziff Group’s current or prospective Investors to (A) terminate (or diminish in any material respect) his investments with the Och-Ziff Group for the purpose of associating or doing business with any Competing Business, or otherwise encourage such Investors to terminate (or diminish in any respect) his investments with the Och-Ziff Group for any other reason or (B) invest in or otherwise participate in or support any Competing Business.

(c) During the Restricted Period, each Individual Limited Partner will not, directly or indirectly, either on his own behalf or on behalf of or with any other Person:

with any Competing Business, or otherwise encourage such financing sources, capital market intermediaries, consultants, suppliers, partners or other counterparties to terminate (or diminish in any respect) his relationship with the Och-Ziff Group for any other reason; or

(ii) in any manner interfere with the Och-Ziff Group’s business relationship with any Investors, financing sources, capital market intermediaries, consultants, suppliers, partners or other counterparties.

(d) During the Restricted Period, each Individual Limited Partner will not, directly or indirectly, either on his own behalf or on behalf of or with any other Person, in any manner solicit any of the owners, members, partners, directors, officers or employees of any member of the Och-Ziff Group to terminate their relationship or employment with the applicable member of the Och-Ziff Group, or hire any such Person (i) who is employed at the time of such solicitation by any member of the Och-Ziff Group, (ii) who is or was once an owner, member, partner, director, officer or employee of any member of the Och-Ziff Group as of the date of Special Withdrawal or Withdrawal of such Partner, or (iii) whose employment or relationship with any such member of the Och-Ziff Group terminated within the 24-month period prior to the date of Special Withdrawal or Withdrawal of such Partner or thereafter. Additionally, the Partner may not solicit or encourage to cease to work with any member of the Och-Ziff Group any consultant, agent or adviser that the Partner knows or should know is under contract with any member of the Och-Ziff Group.

(e) During the Restricted Period and at all times thereafter, each Individual Limited Partner will not, directly or indirectly, make, or cause to be made, any written or oral statement, observation, or opinion disparaging the business or reputation of the Och-Ziff Group, or any owners, partners, members, directors, officers, or employees of any member of the Och-Ziff Group. Notwithstanding any other provision of this Agreement or any other agreement entered into between an Individual Limited Partner and any member of the Och-Ziff Group and, in the case of any Individual Limited Partner that is an attorney, subject to such Individual Limited Partner’s compliance with any applicable obligations under the New York Rules of Professional Conduct and any similar rules applicable to such Individual Limited Partner: (a) pursuant to 18 U.S.C. § 1833(b), each Limited Partner understands that he will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Och-Ziff Group that (i) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to the Limited Partner’s attorney and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding; (b) the Limited Partner understands that if he files a lawsuit for retaliation by the Och-Ziff Group for reporting a suspected violation of law, the Limited Partner may disclose the trade secret to his attorney and use the trade secret information in the court proceeding if he (I) files any document containing the trade secret under seal, and (II) does not disclose the trade secret, except pursuant to court order; (c) nothing in this Agreement or any other agreement or arrangement with any member of the Och-Ziff Group is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section; and (d) nothing in this Agreement or any other agreement or arrangement with any member of the Och-Ziff Group shall prohibit or restrict the Limited Partner from making any voluntary disclosure of information or

documents pertaining to alleged violations of law to any governmental agency or legislative body, any self-regulatory organization, the legal departments of the Och-Ziff Group, and/or pursuant to the Dodd-Frank Act or Sarbanes-Oxley Act without prior notice to the Och-Ziff Group.

(f) Each Individual Limited Partner acknowledges and agrees that an attempted or threatened breach by such Person of this Section 2.13 would cause irreparable injury to the Partnership and the other members of the Och-Ziff Group not compensable in money damages and the Partnership shall be entitled, in addition to the remedies set forth in Sections 2.13(g) and 2.13(i), to obtain a temporary, preliminary or permanent injunction prohibiting any breaches of this Section 2.13 without being required to prove damages or furnish any bond or other security.

(g) Each Individual Limited Partner agrees that it would be impossible to compute the actual damages resulting from a breach of Section 2.13(b) or, if applicable, any of the non-competition covenants provided in such Partner’s Partner Agreement, and that the amounts set forth in this Section 2.13(g) are reasonable and do not operate as a penalty, but are a genuine pre-estimate of the anticipated loss that the Partnership and other members of the Och-Ziff Group would suffer from a breach of Section 2.13(b) or, if applicable, of any of the non-competition covenants provided in such Partner’s Partner Agreement. In the event an Individual Limited Partner breaches Section 2.13(b) or, if applicable, any of the non-competition covenants provided in such Partner’s Partner Agreement, then:

(i) on or after the date of such breach, all Class P Common Units of such Partner and its Related Trusts, if any, shall be forfeited and cancelled and any other unvested Common Units of such Partner and its Related Trusts, if any, shall cease to vest and thereafter shall be reallocated in accordance with this Section 2.13(g);

(ii) on or after the date of such breach, (x) any PSIs or Deferred Cash Interests of such Partner and its Related Trusts shall be forfeited and cancelled, and (y) and all allocations and distributions on such PSIs or in respect of such Deferred Cash Interests that would otherwise have been received by such Partner and its Related Trusts on or after the date of such breach shall not thereafter be made;

(iii) on or after the date of such breach, no other allocations shall be made to the respective Capital Accounts of such Partner and its Related Trusts, if any, and no other distributions shall be made to such Partners;

(iv) on or after the date of such breach, no Transfer (including any exchange pursuant to the Exchange Agreement) of any of the Common Units of such Partner or its Related Trusts, if any, shall be permitted under any circumstances notwithstanding anything to the contrary in this Agreement;

(v) on or after the date of such breach, no sale, exchange, assignment, pledge, hypothecation, bequeath, creation of an encumbrance, or any other transfer or disposition of any kind may be made of any of the Class A Shares acquired by such Partner or its Related Trusts, if any, through an exchange pursuant to the Exchange Agreement;

(vi) as of the applicable Reallocation Date, except as provided in Section 2.13(g)(i), all of the unvested and vested Common Units of such Partner and its Related Trusts, if any, and all allocations and distributions on such Common Units that would otherwise have been received by such Partners on or after the date of such breach shall be reallocated from such Partners to the Partnership and then subsequently reallocated from the Partnership to the Continuing Partners in proportion to the total number of Original Common Units owned by each such Continuing Partner and its Original Related Trusts; provided that, if any of the Class D Common Units granted to James S. Levin pursuant to the Levin 2017 Partner Agreement in connection with the conditional relinquishment by Daniel S. Och and certain of his Related Trusts of 30,000,000 vested Class A Common Units on the date hereof pursuant to the Och Relinquishment Agreement (or any Class A Common Units into which such Class D Common Units have converted, or any escrowed consideration into which such Common Units have converted) are forfeited in accordance with the terms of this Agreement or such Partner Agreement, such Common Units (or an equivalent amount of escrowed consideration), up to an aggregate amount of 30,000,000 Common Units (or an equivalent amount of escrowed consideration), shall be reallocated to the Partnership and then subsequently reallocated (in the case of Common Units, in the form of vested Class A Common Units) from the Partnership to Daniel S. Och and his Related Trusts in accordance with the Och Relinquishment Agreement. The provisions of this Section 2.13(g)(vi) relating to the Och Relinquishment Agreement and the Common Units granted under the Levin 2017 Partner Agreement may only be amended, supplemented or waived with the consent of Daniel S. Och or his successors in interest.

(vii) each of such Partner and its Related Trusts, if any, agrees that, on the Reallocation Date, it shall immediately:

(A) pay to the Continuing Partners, in proportion to the total number of Original Common Units owned by each such Continuing Partner and its Original Related Trusts, a lump-sum cash amount equal to the sum of: (i) the total after-tax proceeds received by such Individual Limited Partner or Related Trust thereof for any Class A Shares acquired at any time pursuant to the Exchange Agreement and that were subsequently transferred during the 24-month period prior to the date of such breach; and (ii) any distributions received by such Individual Limited Partner or Related Trust thereof during such 24-month period on Class A Shares acquired pursuant to the Exchange Agreement;

(B) transfer any Class A Shares that were acquired at any time pursuant to the Exchange Agreement and held by such Individual Limited Partner or Related Trust thereof on and after the date of such breach to the Partnership and then subsequently reallocated from the Partnership to the Continuing Partners in proportion to the total number of Original Common Units owned by each such Continuing Partner and its Original Related Trusts; and

(C) pay to the Continuing Partners in proportion to the total number of Original Common Units owned by each such Continuing Partner and its Original Related Trusts a lump-sum cash amount equal to the sum of: (i) the total after-tax proceeds received by such Individual Limited Partner or Related Trust thereof for any Class A Shares acquired at any time pursuant to the Exchange Agreement and that were subsequently transferred on or after the date of such breach; and (ii) all distributions received by such Individual Limited Partner or Related Trust thereof on or after the date of such breach on Class A Shares acquired pursuant to the Exchange Agreement;

(viii) each of such Partner and its Related Trusts, if any, agrees that, on the Reallocation Date, it shall immediately pay a lump-sum cash amount equal to the total after-tax amount received by them as PSI Cash Distributions (including cash distributions in respect of Deferred Cash Interests), in each case during the 24-month period prior to the date of such breach, with such lump-sum cash amount to be paid to the Continuing Partners in proportion to the total number of Original Common Units owned by such Continuing Partner and its Original Related Trusts; and

(ix) such Partner and its Related Trusts agrees that he shall receive no payments, if any, that he would have otherwise received under the Tax Receivable Agreement on or after the date of such breach, and shall have no further rights under the Tax Receivable Agreement, Exchange Agreement or Registration Rights Agreement after such date.

Any reallocated Common Units received by a Continuing Partner pursuant to this Section 2.13(g) shall be deemed for all purposes of this Agreement to be Common Units of such Continuing Partner and subject to the same vesting requirements, if any, in accordance with Section 8.4 as the transferring Limited Partner had been before his breach of Section 2.13(b) or, if applicable, of the relevant non-competition covenants provided in such Partner’s Partner Agreement. Any Continuing Partner receiving reallocated Class A Common Units pursuant to this Section 2.13(g) shall be permitted to exchange fifty percent (50%) of such number of Class A Common Units (and sell any Class A Shares issued in respect thereof), notwithstanding the transfer restrictions set forth in Section 8.1 in the event that the Exchange Committee (as defined in the Exchange Agreement) determines in its sole discretion that the reallocation is taxable; provided, however, that such exchange of Class A Common Units is made in accordance with the Exchange Agreement.

(h) Notwithstanding anything in Section 2.13(g) to the contrary, the General Partner may elect in its sole and absolute discretion to waive the application of any portion, all or none of the provisions of Section 2.13(g) in the case of the breach by any Partner of Section 2.13(b) or, if applicable, of the relevant non-competition covenants provided in such Partner’s Partner Agreement.

(i) Without limiting the right of the Partnership to obtain injunctive relief for any attempted or threatened breach of this Section 2.13, in the event a Partner breaches Section 2.13(c), (d) or (e), then at the election of the General Partner in its sole and absolute discretion the Partnership shall be entitled to seek any other available remedies including, but not limited to, an award of money damages.

Section 2.14 Insurance . The Partnership may purchase and maintain insurance, to the extent and in such amounts as the General Partner shall deem reasonable, on behalf of Covered Persons and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Person in connection with the activities of the Partnership and/or its Subsidiaries regardless of whether the Partnership would have the power or obligation to indemnify such Person against such liability under the provisions of this Agreement. The Partnership may enter into indemnity contracts with Covered Persons and such other Persons as the General Partner shall determine and adopt written procedures pursuant to which arrangements are made for the advancement of expenses and the funding of obligations under this Section 2.14, and containing such other procedures regarding indemnification as are appropriate and consistent with this Agreement.

Section 2.15 Representations and Warranties . Each Partner hereby represents and warrants to the others and to the Partnership as follows:

(a) Such Partner has all requisite power to execute, deliver and perform this Agreement; the performance of its obligations hereunder will not result in a breach or a violation of, or a default under, any material agreement or instrument by which such Partner or any of such Partner’s properties is bound or any statute, rule, regulation, order or other law to which it is subject, nor require the obtaining of any consent, approval, permit or license from or filing with, any governmental authority or other Person by such Person in connection with the execution, delivery and performance by such Partner of this Agreement.

(b) This Agreement constitutes (assuming its due authorization and execution by the other Partners) such Partner’s legal, valid and binding obligation.

(c) Each Limited Partner expressly agrees that the Partners may, subject to the restrictions set forth in Sections 2.12, 2.13, 2.16, 2.18 and 2.19 and, if applicable, any Partner Agreement, regarding Confidential Information, Intellectual Property, non-competition, non-solicitation, non-disparagement, non-interference, devotion of time, short selling and hedging transactions, and compliance with relevant policies and procedures, engage independently or with others, for its or their own accounts and for the accounts of others, in other business ventures and activities of every nature and description whether such ventures are competitive with the business of the Partnership or otherwise, including, without limitation, purchasing, selling or holding investments for the account of any other Person or enterprise or for its or his own account, regardless of whether or not any such investments are also purchased, sold or held for the direct or indirect account of the Partnership. Neither the Partnership nor any Limited Partner shall have any rights or obligations by virtue of this Agreement in and to such independent ventures and activities or the income or profits derived therefrom.

(d) Such Partner understands that (i) the Interests have not been registered under the Securities Act and applicable state securities laws and (ii) the Interests may not be sold, transferred, pledged or otherwise disposed of except in accordance with this Agreement and then only if they are subsequently registered in accordance with the provisions of the Securities Act and applicable state securities laws or registration under the Securities Act or any applicable state securities laws is not required.

(e) Such Partner understands that the Partnership is not obligated to register the Interests for resale under any applicable federal or state securities laws and that the Partnership is not obligated to supply such Partner with information or assistance in complying with any exemption under any applicable federal or state securities laws.

Section 2.16 Devotion of Time . Each Individual Limited Partner agrees to devote substantially all of his business time, skill, energies and attention to his responsibilities to the Och-Ziff Group in a diligent manner at all times prior to his Special Withdrawal or Withdrawal.

Section 2.17 Partnership Property; Partnership Interest . No real or other property of the Partnership shall be deemed to be owned by any Partner individually, but shall be owned by and title shall be vested solely in the Partnership. The Interests of the Partners shall constitute personal property.

Section 2.18 Short Selling and Hedging Transactions . While each Partner is a Limited Partner of the Partnership (irrespective of whether or not a Special Withdrawal or Withdrawal has occurred in respect of such Partner) and at all times thereafter, such Partner and its Affiliates shall not, without PMC Approval, directly or indirectly, (a) effect any short sale (as such term is defined in Regulation SHO under the Exchange Act) of Class A Shares or any short sale of any Related Security, or (b) enter into any swap or other transaction, other than a sale (which is not a short sale) of Class A Shares or any Related Security to the extent permitted by this Agreement, that transfers to another, in whole or in part, any of the economic risks, benefits or consequences of ownership of Class A Shares or any Related Security. The foregoing clause (b) is expressly agreed to preclude each Partner and its Affiliates, while such Partner is a Limited Partner of the Partnership (irrespective of whether or not a Special Withdrawal or Withdrawal has occurred in respect of such Partner) and at all times thereafter, from engaging in any hedging or other transaction (other than a sale, which is not a short sale, of Class A Shares or any Related Security to the extent permitted by this Agreement) which is designed to or which reasonably could be expected to lead to or result in a transfer of the economic risks, benefits or consequences of ownership of Class A Shares or any Related Security, or a disposition of Class A Shares or any Related Security, even if such transfer or disposition would be made by someone other than such Partner or Affiliate thereof or any Person contracting directly with such Partner or Affiliate. For purposes of this Section 2.18 only, “Related Securities” shall include PSIs and Deferred Cash Interests.

Section 2.19 Compliance with Policies . Each Individual Limited Partner hereby agrees that he shall comply with all policies and procedures adopted by any member of the Och-Ziff Group or which Limited Partners are required to observe by law, or by any recognized stock exchange, or other regulatory body or authority.

ARTICLE III

INTERESTS AND ADMISSION OF PARTNERS

Section 3.1 Units and other Interests .

(a) General . The Partners, as of the date of the Prior Partnership Agreement, agreed among themselves that: (i) beginning on the date of the Prior Partnership Agreement, Interests in the Partnership shall be designated as “Class A Common Units” (“ Class A Common Units ”), “Class B Common Units” (“ Class B Common Units ”) and Class C Non-Equity Interests; (ii) except as expressly provided herein, a Class A Common Unit and a Class B Common Unit shall entitle the holder thereof to equal rights under this Agreement; (iii) holders of Class B Common Units may include the Initial General Partner in its capacity as a Limited Partner, which is the holder of all Class B Common Units as of the date hereof; (iv) from and after the date of the Prior Partnership Agreement, the rights and obligations in respect of the Interests of each applicable Original Partner, as originally described in the Initial Partnership Agreement and such Partners’ respective Supplementary Agreements, shall be set forth exclusively within this Agreement, as amended and restated herein; and (v) the respective Interests of each applicable Original Partner in the Class A Common Units and the Initial General Partner in its capacity as a Limited Partner in the Class B Common Units shall be as recorded in the books of the Partnership as being owned by such Partner pursuant to this Section 3.1.

(b) Certificated and Uncertificated Units . From time to time, the General Partner may establish other classes or series of Units pursuant to Section 3.2. Units may (but need not, in the sole and absolute discretion of the General Partner) be evidenced by a certificate (a “ Certificate of Ownership ”) in such form as the General Partner may approve in writing in its sole and absolute discretion. The Certificate of Ownership may contain such legends as may be required by law or as may be appropriate to evidence, if approved by the General Partner pursuant to Section 8.1, the pledge of a Partner’s Units. Each Certificate of Ownership shall be signed by or on behalf of the General Partner by either manual or facsimile signature. The Certificates of Ownership of the Partnership shall be numbered and registered in the register or transfer books of the Partnership as they are issued. The Partnership or other Transfer Agent shall act as registrar and transfer agent for the purposes of registering the ownership and Transfer of Units. If a Certificate of Ownership is defaced, lost or destroyed it may be replaced on such terms, if any, as to evidence and indemnity as the General Partner determines in its sole and absolute discretion. Notwithstanding the foregoing, Class A Common Units, Class B Common Units, Class D Common Units, Class P Common Units and PSIs shall not be evidenced by Certificates of Ownership and a Partner’s interest in any such Units shall be reflected through appropriate entries in the books and records of the Partnership.

Partnership as the holder of such Units or Class C Non-Equity Interests, as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such Units or Class C Non-Equity Interests on the part of any other Person. The name and business address of each Partner shall be set forth in the books of the Partnership.

(d) Voting Rights relating to Common Units, PSIs and Class C Non-Equity Interests . Holders of Common Units (other than Class B Common Units) shall have no voting, consent or approval rights with respect to any matter submitted to holders of Units for their consent or approval, except as set forth in Sections 3.1(f)(i), 3.1(j)(vii) and 10.2. Holders of Class C Non-Equity Interests and PSI Limited Partners (other than as holders of Common Units) shall have no voting, consent or approval rights with respect to any matter.

(e) Automatic Conversion of Class A Common Units and Class P Common Units . If, as a result of an exchange pursuant to the Exchange Agreement, Och-Ziff or any of its Subsidiaries (excluding any Operating Group Entity and any Subsidiary of an Operating Group Entity) acquires (in any manner) any Class A Common Units or Class P Common Units, each such Common Unit will automatically convert into one Class B Common Unit, unless otherwise determined or cancelled.

(f) Class D Common Units . Interests in the Partnership shall include a class of Units designated as “ Class D Common Units .” Class D Common Units may be conditionally issued in one or more series of such class. Class D Common Units of the first such series shall be designated as “Class D-1 Common Units,” with each subsequent series of Class D Common Units to be designated with a consecutive number or as otherwise recorded in the books of the Partnership and the applicable Partner Agreement. The respective Interests in the Class D Common Units conditionally held by each Individual Limited Partner and his Related Trusts, if any, holding such Class D Common Units (each, a “ Class D Limited Partner ”) shall be as recorded in the books of the Partnership as being owned by such Partners pursuant to this Section 3.1. Except as otherwise set forth in this Agreement or the applicable Partner Agreement, if any, of any Class D Limited Partner, each series of Class D Common Units shall have the same rights, powers and duties, and the rights, powers and duties applicable to Class D Common Units shall be as set forth below and elsewhere in this Agreement:

(i) With respect to amendments (A) pursuant to Section 10.2(a)(ii), (x) the Class D Common Units shall be treated as Class A Common Units and shall vote together as a single class with the Class A Common Units in respect of any amendment that adversely affects the rights of the Class D Common Units and the rights of the Class A Common Units similarly and (y) the Class D Common Units shall vote separately in respect of any amendment that only adversely affects the rights of the Class D Common Units or otherwise adversely affects the rights of Class D Common Units and the rights of Class A Common Units dissimilarly (other than in a de minimis manner), and (B) pursuant to Section 10.2(a)(iii), the Class D Common Units shall be treated as Class A Common Units and shall vote together as a single class with the Class A Common Units in respect of any amendment requiring approval thereunder.

(ii) No Class D Limited Partner shall be permitted to exchange any Class D Common Unit pursuant to the Exchange Agreement except to the extent that the

General Partner determines that there has been sufficient Appreciation to result in such Class D Common Unit being economically equivalent to one Class A Common Unit consistent with the principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and Section 6.1(c) (including with respect to the order of priority set forth therein). Such determination shall be made in writing (A) prior to any sale (including, but not limited to, by merger or otherwise) of Class A Common Units, (B) prior to any exchange of Class A Common Units pursuant to the Exchange Agreement and (C) at any other time as determined by the General Partner in its sole discretion. To the extent that the General Partner determines that all Class D Common Units of a Class D Limited Partner, in aggregate, are not fully economically equivalent to Class A Common Units in connection with any determination described in clauses (A), (B) or (C) of the foregoing sentence, the General Partner shall make such determination with respect to as many of such Class D Limited Partner’s Class D Common Units as possible and shall continue to make such determinations at the time of each subsequent occurrence of any of the events described in clauses (A), (B) or (C) above. The Partners agree that, if the General Partner determines, in accordance with this Section 3.1(f)(ii), that any Class D Common Unit of a Class D Limited Partner has become economically equivalent to one Class A Common Unit, then such Class D Common Unit will automatically convert into a Class A Common Unit and such Class D Limited Partner shall be a Potential Tag-Along Seller for purposes of Sections 8.5(a) and 8.5(b) with respect to any proposed sale or exchange related to any such determination. The Partners further agree that any Class D Common Units and any Class A Common Units into which such Class D Common Units have converted shall be Company Securities for purposes of any Drag-Along Sale for purposes of Sections 8.6(a) and 8.6(b) with respect to any proposed sale or exchange related to any such determination.

(iii) Notwithstanding the provisions of Section 3.1(f)(ii) and the final sentence of Section 8.5(b), in circumstances wherein the General Partner shall permit other Limited Partners to participate in (i) a sale of Class A Common Units, or (ii) an exchange of Class A Common Units pursuant to the Exchange Agreement, the General Partner shall allow each Class D Limited Partner and his Related Trusts, if any, to make such Capital Contributions to the Partnership as would enable the relevant number of Class D Common Units of such Class D Limited Partner and his Related Trusts, if any, to become economically equivalent to Class A Common Units, in which case each such Class D Common Unit will automatically convert into a Class A Common Unit and such Class D Limited Partner and his Related Trusts, if any, will then be permitted to participate in such sale or exchange.

(iv) If any Class D Limited Partner does not participate in any sale or exchange of Common Units by the other Limited Partners occurring within two years after the applicable Issue Date of such Class D Limited Partner’s Class D Common Units and in which such Class D Limited Partner would have been entitled to participate in accordance with Sections 3.1(f)(ii) or 3.1(f)(iii), then, following the end of such two-year period, such Class D Limited Partner shall, subject to the satisfaction of the conditions set forth in Sections 3.1(f)(ii) or 3.1(f)(iii), be entitled to exchange the number of vested Common Units equal to such Class D Limited Partner’s pro rata share of the total number of vested Common Units that all Individual Limited Partners and their Related Trusts

were entitled to Transfer in such sale or exchange, provided that if such sale or exchange of Common Units by the other Limited Partners occurred in connection with a Tag-Along Sale, all unvested Common Units shall be treated as vested Common Units for purposes of this Section 3.1(f)(iv).

(v) Each Class D Limited Partner that is an Individual Limited Partner shall be issued one Class B Share in respect of any additional complete Operating Group A Unit conditionally owned by him and his Related Trusts, if any, with each such Class B Share to be issued to such Class D Limited Partner on the same date as the conversion of the relevant partnership unit(s) in the relevant Operating Group Entity(ies) that gives rise to such Class D Limited Partner’s entitlement to such Class B Share. Simultaneously with the first such issuance to such Class D Limited Partner of Class B Shares, such Class D Limited Partner shall be joined to the Class B Shareholders Agreement.

(g) Adjustments to Class D Common Units . The General Partner shall maintain a one-to-one correspondence between each Class D Common Unit and each Class A Common Unit into which each such Class D Common Unit may convert, and may make equitable adjustments to the Class D Common Units to take into account changes in the number of Common Units, reclassifications, recapitalizations and similar factors provided that such adjustments are consistent with the intent of Section 6.1(c) and the other relevant provisions of this Agreement; provided, however, that no such equitable adjustment may adversely affect the Class D Common Units’ rights to the allocations and distributions set forth in this Agreement and any applicable Partner Agreement.

(h) Reallocations of Common Units . In the event of any reallocation of Common Units to the Continuing Partners, the General Partner shall determine in its sole discretion the class and series of Common Units to which each such Common Unit shall belong upon its reallocation, notwithstanding anything to the contrary in any Partner Agreement entered into prior to the date hereof.

(i) Profit Sharing Interests . Interests in the Partnership shall include a class of Units designated as “ Profit Sharing Interests ,” which may be conditionally issued in one or more series of such class (each, a “ PSI ”). The first series of such class shall be designated as “Series 1 PSIs,” with each subsequent series of PSIs to be designated with consecutive numbers indicating the order in which series have been issued, or as otherwise recorded in the books of the Partnership and the applicable Partner Agreement. The respective Interests in the PSIs conditionally held by each Individual Limited Partner (each, a “ PSI Limited Partner ”) shall be as recorded in the books of the Partnership as being owned by such Partner pursuant to this Section 3.1, with each Person receiving a conditional grant of PSIs being admitted as a Limited Partner upon such grant if such Person was not previously a Limited Partner. Except as otherwise set forth in this Agreement or any applicable Partner Agreement and subject to Section 3.1(i)(ix), each PSI shall have the rights, powers and duties set forth below and elsewhere in this Agreement:

discretion conditionally grant any number of PSIs at any time to any existing Individual Limited Partners or other Person who becomes an Individual Limited Partner in connection with such grant. At any time, the PMC Chairman in his sole discretion may determine to (A) conditionally reallocate PSIs held by any PSI Limited Partner to any other Limited Partners, whether or not they are PSI Limited Partners, or (B) cancel any PSIs held by any PSI Limited Partner. PSIs forfeited by any PSI Limited Partner in accordance with this Agreement or the terms of any Partner Agreement shall automatically be cancelled.

(ii) PSI Distributions . Unless otherwise specified in any applicable Partner Agreement, a PSI Limited Partner shall conditionally receive distributions with respect to such PSI Limited Partner’s PSIs from the Partnership and the other Operating Group Entities in respect of any Fiscal Year in an aggregate annual amount equal to the product of (i) such PSI Limited Partner’s PSI Number in respect of such Fiscal Year, and (ii) the aggregate distributions made by the Operating Group Entities with respect to each Operating Group A Unit in respect of the Net Income earned by the Operating Group Entities during such Fiscal Year (the aggregate amounts to be distributed to any PSI Limited Partner with respect to such PSI Limited Partner’s PSIs by the Partnership and the other Operating Group Entities in respect of any Fiscal Year, such PSI Limited Partner’s “ PSI Distribution ” in respect of such Fiscal Year). In order to be eligible to receive any portion of the PSI Distribution in respect of any Fiscal Year, the PSI Limited Partner shall not have been subject to a Withdrawal or Special Withdrawal as of the applicable distribution date of such portion of such PSI Distribution.

(iii) Types of PSI Distributions . Unless otherwise specified in any applicable Partner Agreement and subject to Section 3.1(i)(ix), any PSI Distribution to be made to any PSI Limited Partner by the Partnership and the other Operating Group Entities with respect to the PSIs of such PSI Limited Partner shall be conditionally distributed at the times and in the amounts described in this Section 3.1(i) in a combination of (A) cash to be conditionally distributed to the Limited Partner by one or more of the Operating Group Entities, which may include a conditional grant of Deferred Cash Interests by the Partnership and/or the other Operating Group Entities in the sole discretion of the General Partner, and (B) a conditional grant by the Operating Group Entities of Operating Group D Units.

(iv) Proportions of Cash and Units . Unless otherwise specified in any applicable Partner Agreement and subject to Section 3.1(i)(ix), any PSI Distribution to be made to any PSI Limited Partner in respect of any Fiscal Year shall be conditionally distributed at the times specified in Section 3.1(i)(v) such that, on an aggregate basis, it shall be conditionally made:

(A) 75% in the form of cash distributions, to be satisfied by distributions from one or more of the Operating Group Entities in the proportions determined by the General Partner in its sole discretion (the “ PSI Cash Distribution ”), of which a portion equal to 60% of the PSI Distribution shall be distributed in accordance with clauses (A) and (B) of Section 3.1(i)(v) and the remainder shall be distributed in the form of Deferred Cash Interests in accordance with clause (C) of Section 3.1(i)(v) (the “ Deferred Cash Distribution ”); and

(B) 25% in the form of a grant of Operating Group D Units by the Operating Group Entities in accordance with clause (D) of Section 3.1(i)(v) (the “ PSI Class D Unit Distribution ”).

(v) Timing of PSI Distributions . Unless otherwise specified in any applicable Partner Agreement and subject to Article VII and Section 3.1(i)(ix), any PSI Distribution to be made to any PSI Limited Partner in respect of any Fiscal Year may be conditionally made during the subsequent Fiscal Year, on January 15 and the 4Q Distribution Date, provided that the PSI Limited Partner has not been subject to a Withdrawal or a Special Withdrawal as of the applicable date, as follows:

(A) as of such January 15, a portion of the PSI Cash Distribution for such Fiscal Year shall be distributed in cash to such PSI Limited Partner in an amount equal to 50% of such PSI Cash Distribution (not including any Deferred Cash Distribution); provided that, for purposes of this Clause (A), these amounts shall be determined by the PMC Chairman in his sole discretion taking into account the General Partner’s estimate of the aggregate distributions to be made by the Operating Group Entities with respect to each Operating Group A Unit in respect of the Net Income earned by the Operating Group Entities during such Fiscal Year, with such amount to be distributed by one or more of the Operating Group Entities in the proportions determined by the General Partner in its sole discretion;

(B) as of such 4Q Distribution Date, the amount of the PSI Cash Distribution in respect of such Fiscal Year, less the amounts of such PSI Cash Distribution to be distributed in accordance with Clause (A) above or Clause (C) below, shall be distributed in cash to such PSI Limited Partner, with such amount to be distributed by one or more of the Operating Group Entities in the proportions determined by the General Partner in its sole discretion;

(C) as of such 4Q Distribution Date, the Deferred Cash Distribution in respect of such Fiscal Year shall be distributed to such PSI Limited Partner in the form of Deferred Cash Interests relating to one or more OZ Funds (as defined in the DCI Plan) in accordance with the DCI Plan by the Partnership and/or the other Operating Group Entities in the sole discretion of the General Partner; and

(D) the PSI Class D Unit Distribution in respect of such Fiscal Year shall be satisfied by a grant of Operating Group D Units to be made by the Operating Group Entities as of the 4Q Distribution Date relating to such Fiscal Year, with the number of Operating Group D Units to be calculated in accordance with the applicable Partner Agreement.

(vi) Vesting; Transfer . PSIs shall not vest and may be reallocated or cancelled as provided in this Section 3.1(i) and any Partner Agreement. No PSI Limited Partner may Transfer any PSIs or Deferred Cash Interests under any circumstances, and any purported Transfer of PSIs or Deferred Cash Interests shall be null and void and of no force and effect.

(vii) PSI Liquidity Events . Notwithstanding the provisions of Section 3.1(i)(vi), in the PMC Chairman’s sole discretion, a PSI Limited Partner may participate in a PSI Liquidity Event with respect to such PSI Limited Partner’s PSIs on the same terms as Class A Common Units participate, provided that such PSI Limited Partner may only participate in such a PSI Liquidity Event to the extent that the PSIs held by such PSI Limited Partner have become economically equivalent to Class A Common Units, although PSIs shall not convert into Class A Common Units upon becoming economically equivalent to them. The General Partner in its sole discretion may permit any such PSI Limited Partner to make such Capital Contributions as would enable the relevant number of PSIs of such PSI Limited Partner to become economically equivalent to Class A Common Units, in which case such PSIs shall be permitted to participate in such PSI Liquidity Event.

(viii) Adjustments to PSIs . The General Partner may in its sole discretion make equitable adjustments to the PSIs to take into account changes in the number of Common Units, reclassifications, recapitalizations and similar factors.

(ix) Terms of the PSIs and PSI Distributions . The PMC Chairman at any time may determine in his sole discretion to amend, supplement, modify or waive the terms of this Section 3.1(i) and any other provisions in this Agreement or any Partner Agreement relating to PSIs, PSI Distributions, PSI Class D Unit Distributions or PSI Cash Distributions, including Deferred Cash Interests, including, without limitation, with respect to the terms of previously granted PSIs or distributions thereon; and such amendments, supplements, modifications or waivers shall not require the consent or approval of any Partner.

(x) Terms of Deferred Cash Interests . Anything herein to the contrary notwithstanding, any Deferred Cash Interests shall be paid pursuant to the terms of the DCI Plan and the applicable Partner Agreements and award agreements relating to individual grants of Deferred Cash Interests which shall set forth the applicable vesting and payment terms and all such terms shall be subject to the requirements of Section 409A of the Code.

(j) Class P Common Units . Interests in the Partnership shall include a class of Units designated as “ Class P Common Units .” Class P Common Units may be conditionally issued in one or more series of such class. Class P Common Units of the first such series shall be designated as “Class P-1 Common Units,” with each subsequent series of Class P Common Units to be designated with a consecutive number or as otherwise recorded in the books of the Partnership and the applicable Partner Agreement. Class P Common Units shall be issued to Active Individual LPs as and when determined by the General Partner with the approval of the PMC Chairman, and shall be issued pursuant to a Partner Agreement substantially in the form of award agreement attached to this Agreement as Exhibit B hereto or in such other form that is otherwise determined by the General Partner. The respective Interests in the Class P Common Units conditionally held by each Individual Limited Partner and his Related

Trusts, if any, holding such Class P Common Units (each, a “ Class P Limited Partner ”) shall be as recorded in the books of the Partnership as being owned by such Partners pursuant to this Section 3.1. Except as otherwise set forth in this Agreement or the applicable Partner Agreement of any Class P Limited Partner, each series of Class P Common Units shall have the same rights, powers and duties, and the rights, powers and duties applicable to Class P Common Units shall be as set forth below and elsewhere in this Agreement:

(i) Vesting; Forfeiture . Each Class P Common Unit of a Class P Limited Partner shall conditionally vest on the date that both the Class P Service Condition and the Class P Performance Condition applicable to such Class P Common Unit have been satisfied; provided, that, upon the earlier of (x) such Class P Limited Partner ceasing to be an Active Individual LP and (y) the last day of the Class P Performance Period, each such Class P Limited Partner’s unvested Class P Common Units shall be forfeited and cancelled except as follows:

(A) upon such Class P Limited Partner’s Withdrawal for Cause at any time pursuant to clause (A) of Section 8.3(a)(i) ( Cause ), all of the vested and unvested Class P Common Units held by such Class P Limited Partner shall be forfeited and cancelled;

(B) if the Class P Service Condition is satisfied on or prior to the effective date of any Withdrawal of such Class P Limited Partner resulting from Retirement but prior to the Class P Performance Condition being satisfied, all of the Class P Common Units held by such Class P Limited Partner shall be conditionally retained; provided that any Class P Common Units that have not satisfied the applicable Class P Performance Condition on or prior to the last day of the Class P Performance Period shall be forfeited and cancelled and any Class P Common Units that have satisfied the Class P Performance Condition on or prior to the last day of the Class P Performance Period shall be retained as Participating Class P Common Units;

(C) if the Class P Service Condition is satisfied on or prior to the effective date of such Class P Limited Partner’s Special Withdrawal or Withdrawal (other than any Withdrawal pursuant to clause (A) of Section 8.3(a)(i) ( Cause ) or pursuant to clause (C) of Section 8.3(a)(i) ( Resignation ) as a result of Retirement), all of the Class P Common Units held by such Class P Limited Partner shall be conditionally retained until the first anniversary of the effective date of such Withdrawal or Special Withdrawal; provided that any Class P Common Units that have not satisfied the applicable Class P Performance Condition on or prior to the earlier of (i) such first anniversary date or (ii) the last day of the Class P Performance Period shall be forfeited and cancelled; and provided, further, that any Class P Common Units that have satisfied the Class P Performance Condition on or prior to such date shall be retained as Participating Class P Common Units; and

satisfied); provided that any Class P Common Units that have not satisfied the applicable Class P Performance Condition on or prior to the last day of the Class P Performance Period shall be forfeited and cancelled and any Class P Common Units that have satisfied the Class P Performance Condition on or prior to the last day of the Class P Performance Period shall be retained as Participating Class P Common Units.

(ii) Exchange Rights . No Class P Limited Partner shall be permitted to exchange pursuant to the Exchange Agreement any Class P Common Unit issued on any grant date except to the extent that (A) both the Class P Service Condition and the Class P Performance Condition applicable to such Class P Common Unit have been satisfied or waived, (B) the General Partner determines that there has been sufficient Appreciation to result in such Class P Common Unit being economically equivalent to one Class A Common Unit consistent with the principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and Section 6.1(c) (including with respect to the order of priority set forth therein), and (C) one Class A Share has been reserved under the Och-Ziff Incentive Plan for each Class P Common Unit issued on such grant date.

(iii) Tag-Along Rights; Drag-Along Rights . Each Class P Limited Partner shall be a Potential Tag-Along Seller with respect to its Class P Common Units in connection with any proposed Tag-Along Sale and such Class P Common Units shall be deemed to be Class A Common Units for purposes of Section 8.5, but only to the extent that (A) the Class P Service Condition applicable to such Class P Common Unit has been satisfied or waived in the General Partner’s discretion, (B) the Class P Performance Condition applicable to such Class P Common Unit has already been satisfied or is deemed satisfied based on the price per Class A Share implied by the terms of the Tag-Along Offer, and (C) the General Partner determines that there has been sufficient Appreciation to result in such Class P Common Unit being economically equivalent to one Class A Common Unit consistent with the principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and Section 6.1(c) (including with respect to the order of priority set forth therein). Certain Class P Common Units may be deemed to be Participating Class P Common Units upon the occurrence of a proposed Drag-Along Sale to the extent and as provided in Section 3.1(j)(iv). Any Class P Common Units that are not Participating Class P Common Units upon the occurrence of a proposed Tag-Along Sale but are permitted to participate in such Tag-Along Sale in accordance with this Section 3.1(j)(iii) shall be deemed to be Participating Class P Common Units. Subject to the other terms of this Agreement, Class P Common Units that are Non-Participating Class P Common Units prior to the occurrence of a proposed Drag-Along Sale that is not subject to Section 3.1(j)(iv) shall be retained as Non-Participating Common Units following the Drag-Along Sale; provided, that any Class P Common Units that are Non-Participating Class P Common Units following a Drag-Along Sale subject to Section 3.1(j)(iv) shall be forfeited and cancelled upon the date of such event as provided in Section 3.1(j)(iv).

deemed satisfied based on the price per Class A Share implied by the relevant Class P Liquidity Event, and (B) the General Partner determines that there has been sufficient Appreciation to result in such Class P Common Unit being economically equivalent to one Class A Common Unit consistent with the principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and Section 6.1(c) (including with respect to the order of priority set forth therein). If the Total Shareholder Return upon the date of the applicable Class P Liquidity Event is greater than one Class P Performance Threshold and less than the next Class P Performance Threshold, a ratable portion of the Class P Common Units with the higher Class P Performance Threshold shall become entitled to participate pro rata in such Class P Liquidity Event. Any Class P Common Units that are not Participating Class P Common Units upon the occurrence of such Class P Liquidity Event but are permitted to participate in such Class P Liquidity Event in accordance with this Section 3.1(j)(iv) shall be deemed to be Participating Class P Common Units. Any Non-Participating Class P Common Unit that is not deemed to satisfy the relevant Class P Performance Condition immediately prior to such Class P Liquidity Event shall be forfeited and cancelled upon the date of such event.

(v) Reservation of Class A Shares; Issuance of Class B Shares . The Class P Limited Partners agree and acknowledge that the grants of Class P Common Units on any grant date are conditional upon a sufficient number of Class A Shares being reserved under the Och-Ziff Incentive Plan. If the Och-Ziff Incentive Plan does not have the capacity on the relevant grant date to reserve a sufficient number of Class A Shares then such Class P Common Units shall not become exchangeable unless and until the shareholders of Och-Ziff subsequently approve an amendment to the Och-Ziff Incentive Plan to permit such reservations to be made. Each Class P Limited Partner that is an Individual Limited Partner shall be issued one Class B Share in respect of each Operating Group P Unit conditionally owned by him and any Related Trusts, with each such Class B Share to be issued to such Class P Limited Partner as of the date on which shareholder approval to such amendment to the Och-Ziff Incentive Plan is received. Simultaneously with the first such issuance to such Class P Limited Partner of Class B Shares, such Class P Limited Partner shall be joined to the Class B Shareholders Agreement.

(vi) Adjustments to Class P Common Units . The General Partner shall maintain a one-to-one correspondence between each Operating Group P Unit and each Class A Share into which each such Operating Group P Unit may be exchanged, and may make equitable adjustments to the Class P Common Units to take into account changes in the number of Common Units, reclassifications, recapitalizations and similar factors provided that such adjustments are consistent with the intent of Section 6.1(c) and the other relevant provisions of this Agreement; provided, however, that no such equitable adjustment may adversely affect the Class P Common Units’ rights to the allocations and distributions set forth in this Agreement and any applicable Partner Agreement.

(B) that pursuant to Section 10.2(a)(ii), (x) the Class P Common Units shall be treated as Class A Common Units and shall vote together with Class A Common Units in respect of any amendment that adversely affects the rights of the Class P Common Units and the rights of the Class A Common Units similarly, and (y) the Class P Common Units shall vote separately in respect of any amendment that only adversely affects the rights of the Class P Common Units; and (C) that pursuant to Section 10.2(a)(iii), the Class P Common Units shall be treated as Class A Common Units and shall vote together as a single class with the Class A Common Units in respect of any amendment requiring approval thereunder.

Section 3.2 Issuance of Additional Units and other Interests .

(a) Additional Units . The General Partner may from time to time in its sole and absolute discretion admit any Person as an additional Limited Partner of the Partnership (each such Person, if so admitted, an “ Additional Limited Partner ” and, collectively, the “ Additional Limited Partners ”). A Person shall be deemed admitted as a Limited Partner at the time such Person (i) executes this Agreement or a counterpart of this Agreement and (ii) is named as a Limited Partner in the books of the Partnership. Each Substitute Limited Partner shall be deemed an Additional Limited Partner whose admission as an Additional Limited Partner has been approved in writing by the General Partner for all purposes hereunder. Subject to the satisfaction of the foregoing requirements and Section 4.1(c), the General Partner is hereby expressly authorized to cause the Partnership to issue additional Units for such consideration and on such terms and conditions, and to such Persons, including the General Partner, any Limited Partner or any of their Affiliates, as shall be established by the General Partner in its sole and absolute discretion, in each case without the approval of any other Partner or any other Person. Without limiting the foregoing, but subject to Section 4.1(c), the General Partner is expressly authorized to cause the Partnership to issue Units (A) upon the conversion, redemption or exchange of any debt or other securities issued by the Partnership, (B) for less than fair market value or no consideration, so long as the General Partner concludes that such issuance is in the best interests of the Partnership and its Partners, and (C) in connection with the merger of any other Person into the Partnership if the applicable merger agreement provides that Persons are to receive Units in exchange for their interests in the Person merging into the Partnership. The General Partner is hereby expressly authorized to take any action, including without limitation amending this Agreement without the approval of any other Partner, to reflect any issuance of additional Units. Subject to Section 4.1(c), additional Units may be Class A Common Units, Class B Common Units or other Units.

(b) Unit Designations . Any additional Units may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties (including, without limitation, rights, powers and duties that may be senior or otherwise entitled to preference over existing Units) as shall be determined by the General Partner, in its sole and absolute discretion without the approval of any Limited Partner or any other Person, and set forth in a written document thereafter attached to and made an exhibit to this Agreement, which exhibit shall be an amendment to this Agreement and shall be incorporated herein by this reference (each, a “ Unit Designation ”), including the Unit Designation attached as Exhibit C hereto pursuant to which the “Class A Cumulative Preferred Units” of the Partnership were created (the “ Class A Cumulative Preferred Units ”).

(c) Unit Rights . Without limiting the generality of the foregoing, but subject to Section 4.1(c), in respect of additional Units the General Partner shall have authority to specify (i) the allocations of items of Partnership income, gain, loss, deduction and credit to holders of each such class or series of Units; (ii) the right of holders of each such class or series of Units to share (on a pari passu , junior or preferred basis) in Partnership distributions; (iii) the rights of holders of each such class or series of Units upon dissolution and liquidation of the Partnership; (iv) the voting rights, if any, of holders of each such class or series of Units; and (v) the conversion, redemption or exchange rights applicable to each such class or series of Units. The total number of Units that may be created and issued pursuant to this Section 3.2 is not limited.

(d) Class C Non-Equity Interests . Class C Non-Equity Interests may only be issued to a Limited Partner as consideration for the provision of services to the Partnership in the form of future allocations of Net Income to such Limited Partner. No Partner may, under any circumstances, Transfer any Class C Non-Equity Interests, and any purported Transfer of Class C Non-Equity Interests shall be null and void and of no force and effect. Holders of Class C Non-Equity Interests shall have no right to receive any allocations thereon, and allocations, if any, made thereon to such Limited Partner need not be made in proportion to the number of Common Units or other Units held by such Limited Partner. Holders of Class C Non-Equity Interests shall have only the limited rights expressly set forth in this Agreement. The Partnership or other Transfer Agent shall act as registrar and transfer agent for the purposes of registering the ownership of Class C Non-Equity Interests.

(e) Additional Limited Partners . Subject to the other terms of this Agreement, the rights and obligations of an Additional Limited Partner to which Units are issued shall be set forth in such Additional Limited Partner’s Partner Agreement, the Unit Designation relating to the Units issued to such Additional Limited Partner or a written document thereafter attached to and made an exhibit to this Agreement, which exhibit shall be an amendment to this Agreement (but shall not require the approval of any Limited Partner) and shall be incorporated herein by this reference. Such rights and obligations may include, without limitation, provisions describing the vesting of the Units issued to such Additional Limited Partner and the reallocation of such Units or other consequences of the Withdrawal of such Additional Limited Partner other than due to a breach of any of the covenants in Section 2.13(b) or, if applicable, any of those provided in such Additional Limited Partner’s Partner Agreement.

ARTICLE IV

VOTING AND MANAGEMENT

Section 4.1 General Partner: Power and Authority .

Partnership from the date of the Prior Partnership Agreement. The business and affairs of the Partnership shall be managed exclusively by the General Partner; provided, however, that the General Partner may delegate such power and authority to the Partner Management Committee (or its Chairman), the Partner Performance Committee (or its Chairman) or such other committee (or its chairman) as it shall deem necessary, advisable or appropriate in its sole and absolute discretion from time to time, which delegation may be set forth in this Agreement, as an amendment hereto (which shall not require the vote or approval of any Limited Partner) or in a resolution duly adopted by the General Partner. Initially the General Partner has delegated certain power and authority to the Partner Management Committee and the Partner Performance Committee, as set forth elsewhere in this Agreement. The General Partner shall have the power and authority, on behalf of and in the name of the Partnership, to carry out any and all of the objects and purposes and exercise any and all of the powers of the Partnership and to perform all acts which it may deem necessary or advisable in connection therewith. Such acts include, but are not limited to, the approval of a merger or consolidation involving the Partnership, or of the conversion, transfer, domestication or continuance of the Partnership, or of the compromise of any obligation of a Partner to make a contribution or return money or other property to the Partnership, to the fullest extent permitted by applicable law, by the General Partner without the consent or approval of any of the other Partners. Appraisal rights permitted under Section 17-212 of the Act shall not apply or be incorporated into this Agreement, and no Partner or assignee of an Interest shall have any of the dissenter or appraisal rights described therein. The Limited Partners, in their capacity as limited partners (and not as officers of the General Partner or members of any committee established by the General Partner), shall have no part in the management of the Partnership and shall have no authority or right to act on behalf of or bind the Partnership in connection with any matter. The Partners agree that all determinations, decisions and actions made or taken by the General Partner, the Partner Management Committee (or its Chairman) or the Partner Performance Committee (or its Chairman) in accordance with this Agreement shall be conclusive and absolutely binding upon the Partnership, the Partners and their respective successors, assigns and personal representatives.

(b) Limited Partners holding a majority of the outstanding Class B Common Units shall have the right to remove the General Partner at any time, with or without cause. Upon the withdrawal or removal of the General Partner, Limited Partners holding a majority of the outstanding Class B Common Units shall have the right to appoint a successor General Partner; provided, however, that any successor General Partner must be a direct or indirect wholly owned Subsidiary of Och-Ziff. Any Person appointed as a successor General Partner by the Limited Partners holding a majority of the outstanding Class B Common Units shall become a successor General Partner for all purposes herein, and shall be vested with the powers and rights of the transferring General Partner, and shall be liable for all obligations of the General Partner arising from and after such date, and shall be responsible for all duties of the General Partner, once such Person has executed such instruments as may be necessary to effectuate its admission and to confirm its agreement to be bound by all the terms and provisions of this Agreement in its capacity as the General Partner.

(c) In order to protect the economic and legal rights of the Original Partners set forth in this Agreement and the Exchange Agreement, unless the General Partner has received PMC Approval, (i) the General Partner shall not take any action, and shall not permit any Subsidiary of the Partnership to take any action, that is prohibited under Section 2.9 of the Och-Ziff LLC Agreement and (ii) the General Partner shall cause the Partnership and its Subsidiaries to comply with the provisions of Section 2.9 of the Och-Ziff LLC Agreement.

(d) The General Partner may, from time to time, employ any Person or engage third parties to render services to the Partnership on such terms and for such compensation as the General Partner may determine in its sole and absolute discretion, including, without limitation, attorneys, investment consultants, brokers or finders, independent auditors and printers. Such employees and third parties may be Affiliates of the General Partner or of one or more of the Limited Partners. Persons retained, engaged or employed by the Partnership may also be engaged, retained or employed by and act on behalf of any Partner or any of their respective Affiliates.

Section 4.2 Partner Management Committee .

(a) Establishment . The General Partner has established a partner management committee (the “ Partner Management Committee ”) which, as of the date of this Agreement, consists of Daniel S. Och, David Windreich, Zoltan Varga, Harold Kelly, James-Keith Brown, James Levin, Wayne Cohen, Alesia J. Haas and David Levine, with Daniel S. Och serving as its Chairman. The Partner Management Committee’s membership may change in accordance with Section 4.2(b) and it shall have the powers and responsibilities described in Section 4.2(d).

(b) Membership . Each member of the Partner Management Committee shall serve until such member’s Special Withdrawal, Withdrawal, death, Disability or, other than with respect to Daniel S. Och, removal by a majority vote of the other members of the Partner Management Committee. The Chairman, or, if there is no Chairman, a majority of the Partner Management Committee, may appoint a new member of the Partner Management Committee at any time. Upon Mr. Och’s Withdrawal, death or Disability, the remaining members of the Partner Management Committee shall act by majority vote to either (1) replace Mr. Och with a Limited Partner to serve as Chairman, until such Limited Partner’s Special Withdrawal, Withdrawal, death, Disability or removal by a majority vote of the other members of the Partner Management Committee or (2) reduce the size of the committee to the remaining members (in which case, there shall be no Chairman of the Partner Management Committee). Upon a reconstitution as provided in clause (1) above, the Partner Management Committee shall have the rights of reconstitution described in the previous sentence in the event of the new Chairman’s Special Withdrawal, Withdrawal, death, Disability or removal by a majority vote of the other members of the Partner Management Committee. Upon the Special Withdrawal, Withdrawal, death, Disability or removal of any of the members of the Partner Management Committee other than the Chairman, the remaining members of the Partner Management Committee shall act by majority vote to fill such vacancy.

Agreement. Where the Chairman acts unilaterally, no meeting need be held. Members of the Partner Management Committee may participate in a meeting of the Partner Management Committee by means of telephone, video conferencing or other communications technology by means of which all Persons participating in the meeting can hear and be heard. Any member of the Partner Management Committee who is unable to attend a meeting of the Partner Management Committee may grant in writing to another member of the Partner Management Committee such member’s proxy to vote on any matter upon which action is to be taken at such meeting. No meeting may be held without the attendance of a majority of the members of the Partner Management Committee, including the Chairman (if any). Any decision or action that may be approved by a vote of the Partner Management Committee in a meeting held in accordance with this Section 4.2 shall be equally valid if approved, without a meeting being held, by the written consent of members of the Partner Management Committee who could together have approved such decision or action by their votes at a meeting. The Partner Management Committee shall conduct its business by such other procedures as approved in writing by a majority of its members including the Chairman.

(d) Powers and Responsibilities . The powers and responsibilities of the Partner Management Committee and its Chairman individually shall be limited to those powers and responsibilities set forth expressly in this Agreement (including, without limitation, in Sections 3.1, 4.1, 4.2, 7.1, 8.1, 8.3, 8.4 and 10.2), and to the reconstitution of the Class B Shareholder Committee (by majority vote of the Partner Management Committee) pursuant to the Class B Shareholders Agreement; provided, however, that the General Partner may delegate in writing such further power and responsibilities to the Partner Management Committee or its Chairman as it shall deem necessary, advisable or appropriate in its sole and absolute discretion from time to time, which delegation may be set forth in this Agreement, as an amendment hereto (which shall not require the vote or approval of any Limited Partner) or a resolution duly adopted by the General Partner.

Section 4.3 Partner Performance Committee .

(a) Establishment . The General Partner has established a partner performance committee (the “ Partner Performance Committee ”) which, as of the date of this Agreement, consists of Daniel S. Och, David Windreich, Zoltan Varga, Harold Kelly, James Levin and Wayne Cohen, with Daniel S. Och serving as its Chairman. The Partner Performance Committee’s membership may change in accordance with Section 4.3(b) and it shall have the powers and responsibilities described in Section 4.3(d).

Partner Performance Committee. The Partner Performance Committee shall have the rights of reconstitution described in the foregoing sentence in the event of the new Chairman’s Special Withdrawal, Withdrawal, death, Disability or removal by a majority vote of the other members of the Partner Performance Committee. Upon the Special Withdrawal, Withdrawal, death, Disability or removal of any of the members of the Partner Performance Committee other than the Chairman, the remaining members of the Partner Performance Committee shall act by majority vote to fill such vacancy.

(c) Procedure . Meetings of the Partner Performance Committee shall be held at such time, at such place and in such manner as the Chairman shall determine (or, in the case of there being no Chairman, at such times as a majority of the other members of the Partner Performance Committee request). When the Partner Performance Committee acts by full committee, each member shall have one vote and the vote of Daniel S. Och shall break any deadlock. The Chairman of the Partner Performance Committee shall have the ability to take action as expressly set forth in this Agreement. Where the Chairman acts unilaterally, no meeting need be held. Members of the Partner Performance Committee may participate in a meeting of the Partner Performance Committee by means of telephone, video conferencing or other communications technology by means of which all Persons participating in the meeting can hear and be heard. Any member of the Partner Performance Committee who is unable to attend a meeting of the Partner Performance Committee may grant in writing to another member of the Partner Performance Committee such member’s proxy to vote on any matter upon which action is to be taken at such meeting. No meeting may be held without the attendance of a majority of the members of the Partner Performance Committee, including the Chairman (if any). Any decision or action that may be approved by a vote of the Partner Performance Committee in a meeting held in accordance with this Section 4.3 shall be equally valid if approved, without a meeting being held, by the written consent of members of the Partner Performance Committee who could together have approved such decision or action by their votes at a meeting. The Partner Performance Committee shall conduct its business by such other procedures as approved in writing by a majority of its members including the Chairman.

(d) Powers and Responsibilities . The powers and responsibilities of the Partner Performance Committee and its Chairman individually shall be limited to those powers and responsibilities set forth expressly elsewhere in this Agreement (including, without limitation, in Sections 4.1, 4.3 and 8.3); provided, however, that the General Partner may delegate in writing such further power and responsibilities to the Partner Performance Committee or its Chairman as it shall deem necessary, advisable or appropriate in its sole and absolute discretion from time to time, which delegation may be set forth in this Agreement, as an amendment hereto (which shall not require the vote or approval of any Limited Partner) or a resolution duly adopted by the General Partner.

Section 4.4 Books and Records; Accounting . The General Partner shall have responsibility for the day-to-day management and general oversight of the accounting and finance function of the Partnership and shall keep at the principal office of the Partnership (or at such other place as the General Partner shall determine) true and complete books and records regarding the status of the business and financial condition and results of operations of the Partnership. The books and records of the Partnership shall be kept in accordance with the federal income tax accounting methods and rules determined by the General Partner, which

methods and rules shall reflect all transactions of the Partnership and shall be appropriate and adequate for the business of the Partnership. No Limited Partner shall have the right to request any information from the Partnership except as provided in Section 4.6.

Section 4.5 Expenses . Except as otherwise provided in this Agreement, the Partnership shall be responsible for and shall pay out of funds of the Partnership determined by the General Partner to be available for such purpose, all expenses and obligations of the Partnership, including, without limitation, those incurred by the Partnership or the General Partner or their Affiliates, or the Partner Management Committee or the Partner Performance Committee in connection with the formation, conversion, operation or management of the Partnership and the business conducted by the Partnership, in organizing the Partnership and preparing, negotiating, executing, delivering, amending and modifying this Agreement.

Section 4.6 Partnership Tax and Information Returns .

(a) The Partnership shall use commercially reasonable efforts to timely file all returns of the Partnership that are required for U.S. federal, state and local income tax purposes. The Tax Matters Partner shall use commercially reasonable efforts to furnish to all Partners necessary tax information as promptly as possible after the end of the Fiscal Year; provided, however, that delivery of such tax information may be subject to delay as a result of the late receipt of any necessary tax information from an entity in which the Partnership holds a direct or indirect interest. Each Partner agrees to file all U.S. federal, state and local tax returns required to be filed by it in a manner consistent with the information provided to it by the Partnership. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for U.S. federal, state and local income tax purposes.

(b) Except as otherwise provided herein, the General Partner, in its sole and absolute discretion, shall determine whether the Partnership should make any elections permitted by the tax laws of the United States, the several states and other relevant jurisdictions.

(c) The General Partner shall designate one Partner as the Tax Matters Partner (as defined in the Code). The Tax Matters Partner shall be the General Partner until the General Partner designates another Partner in writing. The Tax Matters Partner is authorized and required to represent the Partnership (at the Partnership’s expense) in connection with all examinations of the Partnership’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Partnership funds for professional services and costs associated therewith. Each Partner agrees to cooperate with the Tax Matters Partner and to do or refrain from doing any or all things reasonably required by the Tax Matters Partner to conduct such proceedings.

Representative is authorized to, in its sole discretion, make an election under the New Partnership Audit Procedures or otherwise take any legally permissible action so that, to the greatest extent possible, no Partner shall bear liability for taxes, interest, or penalties imposed on the Partnership under Section 6225 of the New Partnership Audit Procedures that such Partner would not have borne if the law in effect prior to the effective date of the New Partnership Audit Procedures continued to remain effective and Section 6225 were not effective. The Partnership Representative may, in its sole discretion, apportion any taxes (and related interest, penalties, claims, liabilities and expenses) imposed on the Partnership pursuant to the New Partnership Audit Procedures among the Partners and may withhold any such amounts from distributions made to any such Partner. Notwithstanding any other provision of this Agreement, the General Partner and the Partnership Representative are authorized to take any action that may be required to assist or cause the Partnership or any of its Subsidiaries to comply with any withholding requirements established under the Code or any other federal, state, local or foreign law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is required or elects to withhold or otherwise pays over to any taxing authority any amount resulting from the allocation or distribution of income to any Partner (including, without limitation, by reason of Section 1446 of the Code) or any amounts apportioned to a Partner with respect to the New Partnership Audit Procedures, the General Partner or the Partnership Representative may, in its sole and absolute discretion, treat the amount withheld as a distribution of cash pursuant to Section 7.1 or Article IX in the amount of such withholding from or with respect to such Partner or the amount paid over as an expense to be borne by the Partners generally. If distributions are insufficient to satisfy any amounts apportioned to any Partner with respect to the New Partnership Audit Rules, such Partner shall indemnify and hold harmless the General Partner, the Partnership Representative and the Partnership for such amounts, which indemnity obligation shall survive the exchange or assignment of an Interest and the termination of this Agreement.

(e) Partnership Division . In a series of transactions that comprised an “assets over” partnership division described in Treasury Regulation Section 1.708-1(d), OZ Advisors II LP succeeded to certain assets of the Partnership, including goodwill and other intangible assets. In that partnership division, the Partnership was the “prior partnership”/“divided partnership” and OZ Advisors II LP was the “recipient partnership.” The Partnership will file its federal, state, and local tax returns consistent with that characterization. Terms in quotations in this Section 4.6(e) have the meanings given thereto in Treasury Regulation Sections 1.708-1(d)(3) and (d)(4).

ARTICLE V

CONTRIBUTIONS AND CAPITAL ACCOUNTS

Section 5.1 Capital Contributions .

(a) Limited Partners may make Capital Contributions at such times and in such amounts as shall be determined by the General Partner in its sole and absolute discretion; provided, however, that (i) no Original Related Trust or Subsequent Related Trust shall be obligated to make Capital Contributions pursuant to this Section 5.1(a) and (ii) no other Related Trust shall be obligated to make Capital Contributions pursuant to this Section 5.1(a) unless otherwise determined by the General Partner.

(b) In the event that the Partnership is required at any time to return any distribution it has received from any fund or investment vehicle or other entity, each Partner who received a portion of such distribution agrees that upon request it will promptly make a Capital Contribution in proportion to the distribution amount such Partner received to enable the Partnership to return such distribution.

Section 5.2 Capital Accounts .

(a) The General Partner shall maintain, for each Partner owning Units or Class C Non-Equity Interests, a separate Capital Account with respect to such Partner in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made to the Partnership with respect to any such Units or Class C Non-Equity Interests pursuant to this Agreement and (ii) all items of Partnership income and gain (including, without limitation, income and gain exempt from tax) computed in accordance with Section 5.2(b) and allocated with respect to any such Units and Class C Non-Equity Interests pursuant to Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property made with respect to any such Units and Class C Non-Equity Interests pursuant to this Agreement and (y) all items of Partnership deduction and loss computed in accordance with Section 5.2(b) and allocated with respect to any such Units pursuant to Section 6.1. Except as otherwise indicated in this Agreement, the foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulation Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulation.

(b) For purposes of computing the amount of any item of income, gain, loss or deduction, which is to be allocated pursuant to Article VI and is to be reflected in the Partners’ Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for U.S. federal income tax purposes (including, without limitation, any method of depreciation, cost recovery or amortization used for that purpose); provided, however, that:

(i) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and deduction shall be made without regard to any election under Section 754 of the Code which may be made by the Partnership and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for U.S. federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.

(ii) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership’s Carrying Value with respect to such property as of such date.

(iii) The Capital Account balance of each Partner and the Carrying Value of all Partnership Property shall be adjusted in accordance with the rules set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(f) to reflect the Partner’s allocable share (as determined under Article VI) of the items of Net Income or Net Loss that would be realized by the Partnership if it sold all of its property at its fair market value (taking Code Section 7701(g) into account) on (a) the date of the acquisition of any additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (b) the date of the distribution of more than a de minimis amount of Partnership assets to a Partner; (c) the date any interest in the Partnership is relinquished to the Partnership; or (d) any other date specified in the Treasury Regulations or as otherwise determined by the General Partner; provided, however, that adjustments pursuant to clauses (a), (b) (c) and (d) above shall be made only if the General Partner, in its sole and absolute discretion, determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners.

(c) A transferee of Units shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Units so Transferred, unless otherwise determined by the General Partner.

(d) Notwithstanding anything expressed or implied to the contrary in this Agreement, no Partner shall have the right to request, demand, or receive any distribution in respect of such Partner’s Capital Account from the Partnership (other than as expressly provided in Article VII or Article IX).

Section 5.3 Determinations by General Partner . Notwithstanding anything expressed or implied to the contrary in this Agreement, in the event the General Partner shall determine, in its sole and absolute discretion, that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to effectuate the intended economic sharing arrangement of the Partners, the General Partner may make such modification.

ARTICLE VI

ALLOCATIONS

Section 6.1 Allocations for Capital Account Purposes . For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction (computed in accordance with Section 5.2(b)) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below.

(a) Net Income . Subject to the terms of any Unit Designation and Section 6.1(c), after giving effect to the special allocations set forth in Section 6.1(d), Net Income for each taxable year and all items of income, gain, loss and deduction taken into account in computing Net Income for such taxable year shall be allocated to the Partners: first, with respect to Partners that have Class C Non-Equity Interests, in amounts, if any, as determined by Class C Approval in respect of each such Partner for such taxable year and, second, in accordance with the respective Percentage Interests of the Partners.

(b) Net Loss . Subject to the terms of any Unit Designation and Section 6.1(c), after giving effect to the special allocations set forth in Section 6.1(d), Net Loss for each taxable period and all items of income, gain, loss and deduction taken into account in computing Net Loss for such taxable period shall be allocated to the Partners in accordance with their respective Percentage Interests; provided, however, that to the extent any allocation of Net Loss would cause any Partner to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account), such allocation of Net Loss shall be reallocated among the other Partners in accordance with their respective Percentage Interests.

(c) Net Income or Loss upon Sale . Notwithstanding any other provision of this Agreement to the contrary (subject to the terms of any Unit Designation, and after giving effect to the special allocations set forth in Section 6.1(d)):

(i) items of Net Income realized in connection with a Sale shall be specially allocated in the following order:

(A) first, pro rata among the Partners holding Units (“ Pre-Existing Units ”) that were outstanding immediately prior to the date of issuance (the “ Issue Date ”) of the first series of (i) Class P Common Units that become Participating Class P Common Units, if any, or (ii) Class D Common Units, in each case in accordance with the number of such Pre-Existing Units until the aggregate amount so allocated to such Pre-Existing Units equals the difference between the fair market value of the Partnership immediately prior to such Issue Date and the aggregate Economic Capital Account Balances of Pre-Existing Units immediately prior to such Issue Date; provided that the principles of this Section 6.1(c)(i)(A) shall be applied with respect to each subsequent series of Class P Common Units that have become Participating Class P Common Units, if any, and to each series of Class D Common Units so as to include Units that have been allocated their full Priority Allocation under Sections 6.1(c)(i)(B) and 6.1(c)(i)(C) as Pre-Existing Units and to take into account the difference between the fair market value of the Partnership and the aggregate Economic Capital Account Balances of Pre-Existing Units immediately prior to issuance of such subsequent series (or, with respect to the Existing Class D Common Units, to take into account the Existing Value);

receives such allocations of Net Income in an aggregate amount equal to the Priority Allocation with respect to any such series of Class P Common Units prior to any such allocations being made to any series of Class P Common Units issued on a subsequent date that have become Participating Class P Common Units; (ii) pro rata among all such Class P Limited Partners with respect to their Participating Class P Common Units that were issued on the same date in accordance with the Priority Allocations of such Participating Class P Common Units; and (iii) such that no such Class P Limited Partner shall receive aggregate allocations of Net Income under this Section 6.1(c)(i)(B) that would exceed such Class P Limited Partner’s Appreciation with respect to his Participating Class P Common Units;

(C) third, to the Class D Limited Partners, provided that such allocations shall be made: (i) so that each series of Class D Common Units issued on any date receives such allocations of Net Income in an aggregate amount equal to the Priority Allocation with respect to such series of Class D Common Units prior to any such allocations being made to any series of Class D Common Units that were issued on a subsequent date; (ii) pro rata among all such Class D Limited Partners with respect to their Class D Common Units that were issued on the same date in accordance with the Priority Allocations of such Class D Common Units; and (iii) such that no such Class D Limited Partner shall receive aggregate allocations of Net Income under this Section 6.1(c)(i)(C) that would exceed such Class D Limited Partner’s Appreciation with respect to his Class D Common Units;

(D) fourth, unless determined otherwise by the General Partner in its sole discretion, to the PSI Limited Partners, provided that such allocations shall be made: (i) so that each series of PSIs issued on any date receives such allocations of Net Income in an aggregate amount equal to the Priority Allocation with respect to such series of PSIs prior to any such allocations being made to any series of PSIs that were issued on a subsequent date; (ii) pro rata among all PSI Limited Partners with respect to their PSIs that were issued on the same date in accordance with the Priority Allocations of such PSIs; and (iii) such that no PSI Limited Partner shall receive aggregate allocations of Net Income under this Section 6.1(c)(i)(D) that would exceed such PSI Limited Partner’s Appreciation with respect to his PSIs; and

(E) thereafter, pro rata among the Partners in accordance with their respective aggregate Percentage Interests with respect to their Common Units (other than Non-Participating Class P Common Units) and, unless determined otherwise by the General Partner in its sole discretion, their PSIs; and

(ii) items of Net Loss realized in connection with such Sale shall be specially allocated in the following order:

(A) first, pro rata among the Partners receiving prior allocations of Net Income under Section 6.1(c)(i)(A), to the extent of such prior allocations of Net Income; and

(B) thereafter, as determined by the General Partner in a manner consistent with the intent of this Section 6.1(c), which is to make the Economic Capital Account Balance associated with each Class D Common Unit and Participating Class P Common Unit, and, thereafter, unless determined otherwise by the General Partner in its sole discretion, the Economic Capital Account Balance associated with each PSI, economically equivalent to the Economic Capital Account Balance associated with a Class A Common Unit, but only to the extent that the Partnership has recognized cumulative net gains with respect to its assets since the issuance of the relevant Class D Common Unit, Participating Class P Common Unit or PSI (or, with respect to the Existing Class D Common Units, since the date immediately prior to the date hereof).

(d) Special Allocations . Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:

(i) Partnership Minimum Gain Chargeback . Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(iii) and 6.1(d)(vi)). This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain . Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(v) and 6.1(d)(vi), with respect to such taxable period. This Section 6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(iii) Qualified Income Offset . In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i) or (ii). This Section 6.1(d)(iii) is intended to qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(iv) Gross Income Allocations . In the event any Partner has a deficit balance in its Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 6.1(d)(iv) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account as adjusted after all other allocations provided for in this Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were not in this Agreement.

(v) Nonrecourse Deductions . Nonrecourse Deductions for any taxable period shall be allocated to the Partners in accordance with their respective Percentage Interests. If the General Partner determines that the Partnership’s Nonrecourse Deductions should be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice to the other Partners, to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.

(vi) Partner Nonrecourse Deductions . Partner Nonrecourse Deductions for any taxable period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Partners in accordance with the ratios in which they share such Economic Risk of Loss.

(vii) Nonrecourse Liabilities . Nonrecourse Liabilities of the Partnership described in Treasury Regulation Section 1.752-3(a)(3) shall be allocated among the Partners in the manner chosen by the General Partner and consistent with such Treasury Regulation.

(viii) Code Section 754 Adjustments . To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.

(ix) Curative Allocation . The Required Allocations are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Partners that, to the extent possible, all Required Allocations shall be offset either with other Required Allocations or with special allocations of other items of Partnership income, gain, loss or deduction pursuant to this Section 6.1(d)(ix). Therefore, notwithstanding any other provision of this Article VI (other than the Required Allocations), the General Partner shall make such offsetting special allocations of Partnership income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Required Allocations were not part of this Agreement and all Partnership items were allocated pursuant to the economic agreement among the Partners.

(x) The General Partner shall, with respect to each taxable period, (1) apply the provisions of Section 6.1(d)(ix) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(ix) among the Partners in a manner that is likely to minimize such economic distortions.

(xi) The Partnership shall specially allocate an amount of gross income equal to the Expense Amount to the General Partner.

Section 6.2 Allocations for Tax Purposes .

(a) Except as otherwise provided herein, each item of income, gain, loss and deduction shall be allocated, for U.S. federal income tax purposes, among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1.

(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or an Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for U.S. federal income tax purposes among the Partners as follows:

property and its adjusted basis at the time of contribution; and (B) any item of Residual Gain or Residual Loss attributable to a Contributed Property shall be allocated among the Partners in the same manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1.

(ii) (A) In the case of an Adjusted Property, such items attributable thereto shall (1) first, be allocated among the Partners in a manner consistent with the principles of Section 704(c) of the Code to take into account the Book-Tax Disparity of such property, and (2) second, in the event such property was originally a Contributed Property, be allocated among the Partners in a manner consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners in the same manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1.

(iii) The General Partner may cause the Partnership to eliminate Book-Tax Disparities using any method or methods described in Treasury Regulation Section 1.704-3 or that it determines is appropriate, in its sole and absolute discretion.

(c) For the proper administration of the Partnership, the General Partner, as it determines in its sole and absolute discretion is necessary or appropriate to execute the provisions of this Agreement and to comply with U.S. federal, state and local tax law, may (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (ii) make special allocations for federal income tax purposes of income (including, without limitation, gross income) or deductions; (iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise to preserve or achieve uniformity of the Units (or any class or classes thereof); and (iv) adopt and employ methods for (A) the maintenance of Capital Accounts for book and tax purposes, (B) the determination and allocation of adjustments under Sections 704(c), 734 and 743 of the Code, (C) the determination and allocation of taxable income, tax loss and items thereof under this Agreement and pursuant to the Code, (D) the determination of the identities and tax classification of holders of Units, (E) the provision of tax information and reports to the holders of Units, (F) the adoption of reasonable conventions and methods for the valuation of assets and the determination of tax basis, (G) the allocation of asset values and tax basis, (H) the adoption and maintenance of accounting methods, (I) the recognition of the Transfer of Units and (J) tax compliance and other tax-related requirements, including without limitation, the use of computer software.

(d) All items of income, gain, loss, deduction and credit recognized by the Partnership for U.S. federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code that may be made by the Partnership; provided, however, that such allocations, once made, shall be adjusted (in the manner determined by the General Partner in its sole and absolute discretion) to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.

(e) For purposes of determining the items of Partnership income, gain, loss, deduction, or credit allocable to any Partner with respect to any period, such items shall be determined on a daily, monthly, quarterly or other basis, as determined by the General Partner in its sole and absolute discretion using any permissible method under Code Section 706 and the Regulations thereunder.

ARTICLE VII

DISTRIBUTIONS

Section 7.1 Distributions .

(a) No Partner shall have the right to withdraw capital or demand or receive distributions or other returns of any amount in his Capital Account, except as expressly provided in this Article VII or Article IX.

(b) Subject to the terms of any Unit Designation, distributions in respect of Units shall be made to the Partners in the following order:

(i) First, Tax Distributions shall be made pursuant to Section 7.3.

(ii) Second, an Expense Amount Distribution shall be made pursuant to Section 7.4.

(iii) Third, distributions, if any, shall be made to the relevant Limited Partners in respect of Class C Non-Equity Interests as and when determined by Class C Approval.

(iv) Fourth, distributions shall be made as and when determined by the General Partner, in its sole and absolute discretion, in respect of any amounts allocated to a Partner’s Capital Account pursuant to Section 5.3.

(v) Fifth, distributions shall be made to the relevant Limited Partners in respect of their Common Units (other than Non-Participating Class P Common Units) as and when determined by the General Partner in its sole and absolute discretion in accordance with the Partners’ respective Percentage Interests associated with such Common Units.

(vi) Sixth, distributions shall be made to the relevant Limited Partners in respect of PSIs as and when determined by the General Partner in its sole and absolute discretion in accordance with the Partners’ respective Percentage Interests associated with such PSIs.

(vii) Notwithstanding the foregoing, (A) the General Partner may, with the consent of the affected Partner, delay distribution of any amounts otherwise distributable to any Partner under this Section 7.1, and (B) in the event of the Partnership selling or otherwise disposing of substantially all of its assets or a dissolution of the Partnership, all distributions shall be made in accordance with Section 9.4.

(c) In the General Partner’s sole discretion and subject to the terms of any Partner Agreement, amounts received (including amounts withheld in respect of taxes or other governmental charges from such amounts so received) (i) by any International Partner pursuant to a Partner Agreement with any Subsidiary of the Partnership relating to the performance of services to or for the benefit of such Subsidiary by such Partner during any period beginning on or after the date of such Partner’s admission to the Partnership or (ii) by any PSI Limited Partner as a draw, for services or any comparable payment for an annual period pursuant to a Partner Agreement, in each case shall be treated as distributions made to such Partner with respect to such period (and, if required, future periods) for all purposes of this Agreement, and such amounts shall reduce amounts otherwise distributable to the Partner pursuant to this Agreement with respect to such period (or such future periods).

Section 7.2 Distributions in Kind . The General Partner may cause the Partnership to make distributions of assets in kind in its sole and absolute discretion. Whenever the distributions provided for in Section 7.1 shall be distributable in property other than cash, the value of such distribution shall be the fair market value of such property determined by the General Partner in good faith, and in the event of such a distribution there shall be allocated to the Partners in accordance with Article VI the amount of Net Income or Net Loss that would result if the distributed asset had been sold for an amount in cash equal to its fair market value at the time of the distribution. No Partner shall have the right to demand that the Partnership distribute any assets in kind to such Partner.

Section 7.3 Tax Distributions . Subject to §17-607 of the Act, and unless determined otherwise by the General Partner in its sole discretion, the Partnership shall make distributions to each Partner for each calendar quarter ending after the date hereof as follows (collectively, the “ Tax Distributions ”):

(a) On or before the 10th day following the end of the First Quarterly Period of each calendar year, an amount equal to such Partner’s Presumed Tax Liability for the First Quarterly Period less the aggregate amount of Prior Distributions previously made to such Partner during such calendar year, excluding any Tax Distribution with respect to a previous calendar year;

(b) On or before the 10th day following the end of the Second Quarterly Period of each calendar year, an amount equal to such Partner’s Presumed Tax Liability for the Second Quarterly Period less the aggregate amount of Prior Distributions previously made to such Partner during such calendar year, excluding any Tax Distribution with respect to a previous calendar year;

(c) On or before the 10th day following the end of the Third Quarterly Period of each calendar year, an amount equal to such Partner’s Presumed Tax Liability for the Third Quarterly Period less the aggregate amount of Prior Distributions previously made to such Partner during such calendar year, excluding any Tax Distribution with respect to a previous calendar year;

(d) On or before the 10th day following the end of the Fourth Quarterly Period of each calendar year, an amount equal to such Partner’s Presumed Tax

Liability for the Fourth Quarterly Period less the aggregate amount of Prior Distributions previously made to such Partner during such calendar year, excluding any Tax Distribution with respect to a previous calendar year; and

(e) Tax Distributions shall be made on the basis of a calendar year regardless of the Fiscal Year used by the Partnership. To the extent the General Partner determines in its sole and absolute discretion that the distributions made under the foregoing subsections (a) through (d) are insufficient to satisfy the Partners’ Presumed Tax Liability for the applicable calendar year, on or before the April 10th immediately following the applicable calendar year, an amount that the General Partner determines in its reasonable discretion will be sufficient to allow each Partner to satisfy his Presumed Tax Liability for the applicable calendar year, after taking into account all Prior Distributions made to the Partners with respect to the applicable calendar year, excluding any Tax Distribution with respect to a previous calendar year.

(f) Notwithstanding any other provision of this Agreement, other than Section 7.3(g), any Tax Distributions shall be made: (i) to all Limited Partners holding Common Units (other than Non-Participating Class P Common Units) pro rata in accordance with the Percentage Interests associated with their Common Units; (ii) to all PSI Limited Partners pro rata in accordance with the Percentage Interests associated with their PSIs; and (iii) as if each distributee Partner was allocated an amount of income in each Quarterly Period in respect of such Partner’s class of Units equal to the product of (x) the highest amount of income allocated to any Partner with respect to the same class of Units, calculated on a per-Unit basis, taking into account any income allocations pursuant to Section 6.2 hereof and disregarding any adjustment required by Section 734 or Section 743 of the Code, multiplied by (y) the amount of Units held by such distributee Partner.

(g) Subject to the limitations set forth in this Section 7.3, the Partnership shall make distributions in respect of the tax liability of a Partner arising from the allocation of any items hereunder to Class C Non-Equity Interests applying principles similar to the principles for determining Tax Distributions and Presumed Tax Liability, and amounts so allocated, determined or distributed with respect to Class C Non-Equity Interests of a Partner shall not be taken into account in determining any Tax Distributions in respect of Units.

Section 7.4 Expense Amount Distributions . The Partnership shall distribute any Expense Amount to the General Partner at such times as the General Partner shall determine in its sole discretion (an “ Expense Amount Distribution ”).

Section 7.5 Borrowing . Subject to Section 17-607 of the Act, the Partnership may borrow funds in order to make the Tax Distributions or Expense Amount Distributions.

Section 7.6 Restrictions on Distributions . The foregoing provisions of this Article VII to the contrary notwithstanding, no distribution shall be made: (a) if such distribution would violate any contract or agreement to which the Partnership is then a party or any law, rule, regulation, order or directive of any governmental authority then applicable to the Partnership; (b) to the extent that the General Partner, in its sole and absolute discretion, determines that any amount otherwise distributable should be retained by the Partnership to pay, or to establish a reserve for the payment of, any liability or obligation of the Partnership, whether liquidated, fixed, contingent or otherwise; or (c) to the extent that the General Partner, in its sole and absolute discretion, determines that the cash available to the Partnership is insufficient to permit such distribution.

ARTICLE VIII

TRANSFER OR ASSIGNMENT OF INTEREST; CESSATION OF PARTNER STATUS

Section 8.1 Transfer and Assignment of Interest .

(a) Transfers of Interests . Notwithstanding anything to the contrary herein, Transfers of Common Units may only be made by Limited Partners (x) in accordance with the other provisions of this Article VIII (including, without limitation, the vesting provisions in Section 8.4, except as expressly set forth in this Section 8.1(a) in respect of Transfers by Original Related Trusts), and (y) subject to Section 2.13(g). During the Restricted Period, no Limited Partner shall be permitted to Transfer Common Units unless, immediately following such Transfer, the relevant Individual Limited Partner continues to hold a number of Common Units (other than Class P Common Units) no less than 10% of such Common Units of such Partner that have vested on or before the date of such Transfer, without regard to dispositions, or such greater percentage determined by the General Partner in its sole discretion (such requirements, the “ Minimum Retained Ownership Requirements ”). A Limited Partner may not Transfer all or any of such Partner’s Units without the prior written approval of the General Partner, which approval may be granted or withheld, with or without reason, in the General Partner’s sole and absolute discretion; provided, however, that, without the prior written approval of the General Partner, (i) an Original Related Trust may Transfer its Interest (including any unvested Units) in accordance with its Related Trust Supplementary Agreement to the relevant Subsequent Related Trust (provided, however, that such Subsequent Related Trust remains subject to the same vesting requirements in accordance with Section 8.4 as the transferring Original Related Trust had been before its Withdrawal), (ii) the Related Trust of any Individual Limited Partner may, at any time, subject to Section 2.13(g), Transfer such Related Trust’s Common Units (including any unvested Units) to such Individual Limited Partner as authorized by the terms of the relevant trust agreement (provided, however, that such Individual Limited Partner remains subject to the same vesting requirements in accordance with Section 8.4 as the transferring Related Trust had been before the Transfer), and (iii) any Limited Partner may, at any time, subject to the Minimum Retained Ownership Requirements and Section 2.13(g), and provided further that the relevant Units have vested in accordance with Section 8.4 (other than in the case of any unvested Tag-Along Securities or unvested Drag-Along Securities) or become eligible to participate in a transaction in accordance with Section 3.1(j), (A) Transfer any of such Partner’s Units in accordance with the Exchange Agreement, (B) Transfer any of such Partner’s Units to a Permitted Transferee of such Partner with PMC Approval, which PMC Approval may not be unreasonably withheld, (C) Transfer the Common Units (including all distributions thereon that would otherwise be received after the relevant date of Withdrawal) received by such Partner pursuant to Sections 2.13(g) and 8.3(a) to the extent permitted thereby, (D) Transfer by operation of law upon the death of an Individual Limited Partner or (E) Transfer any of such Partner’s Units to the extent permitted or required by Sections 3.1(j), 8.5 or 8.6. In addition, subject to Section 2.13(g) and the Minimum Retained Ownership Requirements, with prior PMC Approval, each Limited Partner and such Limited Partner’s Permitted Transferees may Transfer

Units that have vested in accordance with applicable securities laws. The foregoing restrictions on Transfer and the Minimum Retained Ownership Requirements may be waived at any time with PMC Approval. A Limited Partner shall cease to be a Partner if, following a Transfer, he no longer has any Interest in the Partnership. An Original Related Trust shall cease to be a Partner, without the prior written consent of the General Partner, following the Transfer of such Original Related Trust’s Interest in accordance with its Related Trust Supplementary Agreement to the relevant Subsequent Related Trust. PSIs and Deferred Cash Interests shall not be Transferred under any circumstances as provided in Section 3.1(i)(vi).

(b) Transfer and Exchange . When a request to register a Transfer of Units, together with the relevant Certificates of Ownership, if any, is presented to the Transfer Agent, the Transfer Agent shall register the Transfer or make the exchange on the register or transfer books of the Transfer Agent if the requirements set forth in this Section 8.1 for such transactions are met; provided, however, that any Certificates of Ownership presented or surrendered for registration of Transfer or exchange shall be duly endorsed or accompanied by a written instrument of Transfer in form satisfactory to the Transfer Agent duly executed by the holder thereof or his attorney duly authorized in writing. The Transfer Agent shall not be required to register a Transfer of any Units or exchange any Certificate of Ownership if such purported Transfer would cause the Partnership to violate the Securities Act, the Exchange Act, the Investment Company Act (including by causing any violation of the laws, rules, regulations, orders and other directives of any governmental authority) or otherwise violate this Section 8.1. In the event of any Transfer, the transferring Partner shall provide the address and facsimile number for each transferee as contemplated by Section 10.10 and shall cause each transferee to agree in writing to comply with the terms of this Agreement.

(c) Publicly Traded Partnership . No Transfer shall be permitted (and, if attempted, shall be void ab initio) if the General Partner determines in its sole and absolute discretion that such a Transfer would pose a risk that the Partnership would be a “publicly traded partnership” as defined in Section 7704 of the Code.

(d) Securities Laws . Each Partner and each assignee thereof hereby agrees that it will not effect any Transfer of all or any part of its Interest in the Partnership (whether voluntarily, involuntarily or by operation of law) in any manner contrary to the terms of this Agreement or that violates or causes the Partnership or the Partners to violate the Securities Act, the Exchange Act, the Investment Company Act, or the laws, rules, regulations, orders and other directives of any governmental authority.

(e) Expenses . In addition to the other requirements of this Section 8.1, unless waived by the General Partner with respect to Transfers for estate planning purposes or as otherwise determined by the General Partner in its sole discretion, no Transfer of any Interest in the Partnership shall be permitted unless the transferor or the proposed transferee shall have undertaken to pay all reasonable expenses incurred by the Partnership or its Affiliates in connection therewith.

Section 8.2 Withdrawal by General Partner . The General Partner shall not cease to act as the General Partner of the Partnership without the prior written approval of the Limited Partners holding a majority of the outstanding Class B Common Units.

Section 8.3 Withdrawal and Special Withdrawal of Limited Partners .

(a) Withdrawal .

(i) An Individual Limited Partner (other than Daniel S. Och in the case of the following clauses (A) and (B)) shall immediately cease to be actively involved with the Partnership and its Affiliates (such event, a “ Withdrawal ”): (A) for Cause (as determined by the General Partner in its sole and absolute discretion) upon notice to the Individual Limited Partner from the General Partner; (B) for any reason or no reason upon a determination by majority vote of the Partner Performance Committee (which, if the Partner Performance Committee has a Chairman, may only be made upon the recommendation of such Chairman) and notice of such determination to the Individual Limited Partner from the Partner Performance Committee; or (C) upon the Individual Limited Partner otherwise (except as a result of death, Disability or a Special Withdrawal) ceasing to be, or providing notice to the General Partner of his intention to cease to be, actively involved with the Partnership and its Affiliates. In the event of the Withdrawal of an Individual Limited Partner, such Individual Limited Partner’s Related Trusts, if any, shall be subject to a required Withdrawal.

(ii) In the event of the Withdrawal of an Individual Original Partner prior to the fifth anniversary of the Closing Date (other than where the Withdrawal is due to a breach of any of the covenants in Section 2.13(b), in which case the provisions of Section 2.13(g) shall apply), all of the Class A Common Units (including all distributions thereon that would otherwise be received after the date of Withdrawal) of such Individual Original Partner and its Related Trusts, if any, that have not yet vested in accordance with Section 8.4 shall cease to vest with respect to such Partners and upon the Reallocation Date shall be reallocated to the Partnership and then subsequently reallocated from the Partnership to each Continuing Partner in such a manner that each such Continuing Partner receives Common Units in proportion to the total number of Original Common Units of such Continuing Partner and its Original Related Trusts. Any such reallocated Common Units received by a Continuing Partner pursuant to this Section 8.3(a) shall be deemed for all purposes of this Agreement to be Common Units of such Continuing Partner and subject to the same vesting requirements in accordance with Section 8.4 as the transferring Limited Partner had been before his Withdrawal; provided, however, that such Continuing Partner shall be permitted to exchange fifty percent (50%) of the number of Class A Common Units reallocated to it (and sell any Class A Shares issued in respect thereof), notwithstanding the transfer restrictions set forth in Section 8.1, in the event that the Exchange Committee (as defined in the Exchange Agreement) determines in its sole discretion that the reallocation of such Class A Common Units is taxable; provided, however, that such exchange of Class A Common Units is made in accordance with the Exchange Agreement.

(b) Special Withdrawal .

(i) An Individual Limited Partner (other than Daniel S. Och) may be required to no longer be actively involved with the Partnership and its Affiliates for any reason other than Cause, in the sole and absolute discretion of the General Partner (such

event, a “ Special Withdrawal ”), which shall not constitute a Withdrawal. Upon the Special Withdrawal of an Individual Limited Partner, such Individual Limited Partner’s Related Trusts, if any, shall also be subject to a Special Withdrawal.

(ii) In the event of the Special Withdrawal of any Limited Partner, such Limited Partner’s Common Units shall continue to vest in accordance with Section 8.4, except as otherwise set forth in Section 3.1(j) with respect to Class P Common Units or in any applicable Partner Agreement.

(i) have no right to access or use the property of the Partnership or its Affiliates;

(ii) not be permitted to provide services to, or on behalf of, the Partnership or its Affiliates; and

(iii) shall promptly return to the Operating Group Entities all known equipment, data, material, books, records, documents (whether stored electronically or on computer hard drives or disks or on any other media), computer disks, credit cards, keys, I.D. cards, and other property, including, without limitation, standalone computers, fax machines, printers, telephones, and other electronic devices in the Individual Limited Partner’s possession, custody, or control that are or were owned and/or leased by members of the Och-Ziff Group in connection with the conduct of the business of the Operating Group Entities and their Affiliates, and including in each case any and all information stored or included on or in the foregoing or otherwise in the Limited Partner’s possession or control that relates to Investors or OZ counterparties, Investor or OZ counterparty contact information, Investor or OZ counterparty lists or other Confidential Information.

(d) The provisions of Sections 8.3(a) and 8.3(b) may be amended, supplemented, modified or waived with PMC Approval.

(e) Except as expressly provided in this Agreement, no event affecting a Partner, including death, bankruptcy, insolvency or withdrawal from the Partnership, shall affect the Partnership.

(f) Following the Withdrawal of a Limited Partner, unless the General Partner in its sole discretion determines otherwise, from the applicable Reallocation Date such Limited Partner will be required to pay the same management fees and shall be subject to the same incentive allocation with respect to any remaining investments by such Limited Partner in any fund or account managed by Och-Ziff or any of its Subsidiaries as are applicable to other Investors that are not Affiliates of Och-Ziff in such funds or accounts.

(g) The continued ownership by any Individual Limited Partner and his Related Trusts of any Interests following the Individual Limited Partner’s Withdrawal or Special Withdrawal and their right to receive any distributions or allocations in respect of such

Interests in respect of any periods following such Withdrawal or Special Withdrawal are conditioned upon the Limited Partner’s execution of a general release in a form acceptable to the General Partner that is substantially in the form attached to this Agreement as Exhibit A (the “ General Release ”) which becomes effective no later than fifty-three (53) days following any such Withdrawal or Special Withdrawal. If the General Release is not executed, or if the Individual Limited Partner timely revokes the Limited Partner’s execution thereof, the Partnership shall have no further obligations under this Agreement or any Partner Agreement to make any distributions or allocations to the Individual Limited Partner or any Related Trusts and their Interests in the Partnership, if any, shall be forfeited.

Section 8.4 Vesting .

(a) [INTENTIONALLY OMITTED]

(b) Subject to Sections 2.13(g) and 8.3(a), all Original Common Units held by a Partner shall vest in equal installments on each anniversary date of the Closing Date for five years, beginning on the first anniversary date of the Closing Date; provided, however, that upon a Withdrawal (but not a Special Withdrawal), all unvested Units shall cease to vest and shall be reallocated pursuant to Section 8.3(a); and provided, however, that this Section 8.4(b) shall not prevent the Transfer of the unvested Interest of any Original Related Trust (including unvested Class A Common Units) in accordance with its Related Trust Supplementary Agreement to the relevant Subsequent Related Trust or the Transfer of unvested Class A Common Units of an Individual Limited Partner’s Related Trust to such Individual Limited Partner as authorized by the terms of the relevant trust agreement. In the event of the death or Disability of an Individual Limited Partner or in the event of a Transfer of any of such Individual Limited Partner’s Class A Common Units, such Class A Common Units shall continue to vest on the same schedule as set forth above. The provisions of this Section 8.4 may be amended, supplemented, modified or waived with PMC Approval.

(d) All Class C Non-Equity Interests held by an Individual Limited Partner and all PSIs held by an Individual Limited Partner or its Related Trusts shall be cancelled upon the death, Disability, Withdrawal or Special Withdrawal of such Individual Limited Partner. Class P Common Units shall vest or be subject to forfeiture as provided in Section 3.1(j), except as otherwise set forth in the applicable Partner Agreement of any Class P Limited Partner.

(e) Except as otherwise set forth in this Section 8.4, Units issued to Additional Limited Partners shall be subject to vesting, if at all, as described in Section 3.2(e).

Section 8.5 Tag-Along Rights .

(a) Notwithstanding anything to the contrary in this Agreement, prior to the consummation of a proposed Tag-Along Sale, the Potential Tag-Along Sellers shall be afforded the opportunity to participate in such Tag-Along Sale on a pro rata basis, as provided in Section 8.5(b) below.

(b) Prior to the consummation of a Tag-Along Sale, the Limited Partners participating in such Tag-Along Sale (the “ Tag-Along Sellers ”) shall cause the Tag-Along Purchaser to offer in writing (such offer, a “ Tag-Along Offer ”) to purchase each Potential Tag-Along Seller’s Tag-Along Securities. In addition, the Tag-Along Offer shall set forth the consideration for which the Tag-Along Sale is proposed to be made and all other material terms and conditions of the Tag-Along Sale. If the Tag-Along Offer is accepted by some or all of such Potential Tag-Along Sellers within five Business Days after its receipt then the number of Class A Shares and/or Class A Common Units to be sold to the Tag-Along Purchaser by the Tag-Along Sellers shall be reduced by the number of Class A Shares and/or Class A Common Units to be purchased by the Tag-Along Purchaser from such accepting Potential Tag-Along Sellers. The purchase from the accepting Potential Tag-Along Sellers shall be made on the same terms and conditions (including timing of receipt of consideration and choice of consideration, if any) as the Tag-Along Purchaser shall have offered to the Tag-Along Sellers, and the accepting Potential Tag-Along Sellers shall otherwise be required to transfer the Class A Shares and/or Class A Common Units to the Tag-Along Purchaser upon the same terms, conditions, and provisions as the Tag-Along Sellers, including making the same representations, warranties, covenants, indemnities and agreements that the Tag-Along Sellers agree to make.

Section 8.6 Drag-Along Rights .

(a) Prior to the consummation of a proposed Drag-Along Sale, the Drag-Along Sellers may, at their option, require each other Limited Partner to sell its Drag-Along Securities to the Drag-Along Purchaser by giving written notice (the “ Notice ”) to such other Limited Partners not later than ten Business Days prior to the consummation of the Drag-Along Sale (the “ Drag-Along Right ”); provided, however, that if the Drag Along Right is exercised by the Drag-Along Sellers, all Limited Partners shall sell their Drag-Along Securities to the Drag-Along Purchaser on the same terms and conditions, including the class of security, the consideration per Company Security and the date of sale, as applicable to the Drag-Along Sellers. The Notice shall contain written notice of the exercise of the Drag-Along Right pursuant to this Section 8.6, setting forth the consideration to be paid by the Drag-Along Purchaser and the other material terms and conditions of the Drag-Along Sale.

(b) Within five Business Days following the date of the Notice, the Drag-Along Sellers shall have delivered to them by the other Limited Partners their Drag-Along Securities together with a limited power-of-attorney authorizing such Drag-Along Sellers to sell such other Limited Partner’s Drag-Along Securities pursuant to the terms of the Drag-Along Sale and such other transfer instruments and other documents as are reasonably requested by the Drag-Along Sellers in order to effect such sale.

Section 8.7 Reallocation of Common Units pursuant to Partner Agreements .

(a) Subject to Section 8.7(b), in the event of any reallocation of Common Units to the Continuing Partners in respect of any Common Units granted pursuant to a Partner Agreement (including as a result of a Withdrawal, provided that in the case of any reallocation due to a breach of any of the covenants in Section 2.13(b) (as modified by any Partner Agreement), the provisions of Section 2.13(g) shall apply unless specified otherwise in any Partner Agreement), all of the Common Units (including all distributions thereon that would

otherwise be received after the event causing such reallocation) to be reallocated thereunder shall be reallocated upon the relevant Reallocation Date to the Partnership and then subsequently reallocated from the Partnership to each Continuing Partner in such a manner that each such Continuing Partner receives Common Units in proportion to the total number of Original Common Units of such Continuing Partner and its Original Related Trusts, unless specified otherwise in any Partner Agreement. Any such reallocated Common Units received by a Continuing Partner shall be deemed for all purposes of this Agreement to be Common Units of such Continuing Partner and subject to the same vesting requirements as the transferring Limited Partner had been prior to the date of the event causing such reallocation.

(b) If any of the Class D Common Units granted to James S. Levin pursuant to the Levin 2017 Partner Agreement in connection with the conditional relinquishment by Daniel S. Och and certain of his Related Trusts of 30,000,000 vested Class A Common Units on the date hereof pursuant to the Och Relinquishment Agreement (or any Class A Common Units into which such Class D Common Units have converted, or any escrowed consideration into which such Common Units have converted) are forfeited in accordance with the terms of this Agreement or such Partner Agreement, such Common Units (or an equivalent amount of escrowed consideration), up to an aggregate amount of 30,000,000 Common Units (or an equivalent amount of escrowed consideration), shall be reallocated to the Partnership and then subsequently reallocated (in the case of Common Units, in the form of vested Class A Common Units) from the Partnership to Daniel S. Och and his Related Trusts in accordance with the Och Relinquishment Agreement.

(c) The provisions of this Section 8.7 may be amended, supplemented, modified or waived with PMC Approval, provided that Section 8.7(b) may only be amended, supplemented or waived with the consent of Daniel S. Och or his successors in interest.

ARTICLE IX

DISSOLUTION

Section 9.1 Duration and Dissolution . The Partnership shall be dissolved and its affairs shall be wound up upon the first to occur of the following:

(a) the entry of a decree of judicial dissolution of the Partnership under Section 17-802 of the Act; and

(b) the determination of the General Partner to dissolve the Partnership.

Except as provided in this Agreement, the death, Disability, resignation, expulsion, bankruptcy or dissolution of any Partner or the occurrence of any other event which terminates the continued participation of any Partner in the Partnership shall not cause the Partnership to be dissolved or its affairs wound up; provided, however, that at any time after the bankruptcy of the General Partner, the holders of a majority of the outstanding Class B Common Units may, pursuant to prior written consent to such effect, replace the General Partner with another Person, who shall, after executing a written instrument confirming such Person’s agreement to be bound by all the terms and provisions of this Agreement, (i) become a successor General Partner for all

purposes hereunder, (ii) be vested with the powers and rights of the replaced General Partner, and (iii) be liable for all obligations and responsible for all duties of the replaced General Partner from the date of such replacement.

Section 9.2 Notice of Liquidation . The General Partner shall give each of the Partners prompt written notice of any liquidation, dissolution or winding up of the Partnership.

Section 9.3 Liquidator . Upon dissolution of the Partnership, the General Partner may select one or more Persons to act as a liquidating trustee for the Partnership (such Person, or the General Partner, the “ Liquidator ”). The Liquidator (if other than the General Partner) shall be entitled to receive such compensation for its services as may be approved by holders of a majority of the outstanding Class B Common Units (subject to the terms of any Unit Designation). The Liquidator (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior notice and may be removed at any time, with or without cause, by notice of removal approved by holders of a majority of the outstanding Class B Common Units (subject to the terms of any Unit Designation). Upon dissolution, death, incapacity, removal or resignation of the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator) shall within 30 days thereafter be approved by the General Partner (or, in the case of the removal of the Liquidator by holders of units, by holders of a majority of the outstanding Class B Common Units (subject to the terms of any Unit Designation)). The right to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided in this Section 9.3, the Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the General Partner under the terms of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers) necessary or appropriate to carry out the duties and functions of the Liquidator hereunder for and during the period of time required to complete the winding up and liquidation of the Partnership as provided for herein.

Section 9.4 Liquidation . The Liquidator shall proceed to dispose of the assets of the Partnership, discharge its liabilities, and otherwise wind up its affairs in such manner and over such period as determined by the Liquidator, subject to Section 17-804 of the Act and the following:

(a) Subject to Section 9.4(d), the assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 9.4(d) to have received cash equal to its fair market value; and contemporaneously therewith, appropriate cash distributions must be made to the other Partners. Notwithstanding anything to the contrary contained in this Agreement, the Partners understand and acknowledge that a Partner may be compelled to accept a distribution of any asset in kind from the Partnership despite the fact that the percentage of the asset distributed to such Partner exceeds the percentage of that asset which is equal to the percentage in which such Partner shares in distributions from the Partnership. The Liquidator may defer liquidation or distribution of the Partnership’s assets for a reasonable time if it determines that an immediate sale or distribution of all or some of the Partnership’s assets would

be impractical or would cause undue loss to the Partners. The Liquidator may distribute the Partnership’s assets, in whole or in part, in kind if it determines that a sale would be impractical or would cause undue loss to the Partners.

(b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for serving in such capacity (subject to the terms of Section 9.3) and amounts to Partners otherwise than in respect of their distribution rights under Article VII. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be applied to other liabilities or distributed as additional liquidation proceeds.

(c) Subject to the terms of any Unit Designation, all property and all cash in excess of that required to discharge liabilities as provided in Section 9.4(b) shall be distributed to the Partners in accordance with and to the extent of the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments (other than those made by reason of distributions pursuant to this Section 9.4(c)) for the taxable year of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined by the General Partner) and such distribution shall be made by the end of such taxable year (or, if later, within 90 days after said date of such occurrence).

(d) Notwithstanding any other provision of this Agreement, if, upon the dissolution and liquidation of the Partnership pursuant to this Article IX and after all other allocations provided for in Section 6.1 (including Section 6.1(c)) have been tentatively made as if this Section 9.4 were not in this Agreement, either (i) the positive Capital Account balance attributable to one or more Units (other than Common Units) having a liquidation preference is not equal to such liquidation preference, or (ii) the quotient obtained by dividing any Partner’s positive Hypothetical Capital Account Balance with respect to Common Units by the aggregate of all Partners’ Hypothetical Capital Account Balances with respect to Common Units at such time (such Partner’s “ Hypothetical Capital Account Quotient ”) would differ from such Partner’s Percentage Interest, then, subject to Section 5.3 (and with respect to PSIs, unless determined otherwise by the General Partner in its sole discretion), Net Income (and items thereof) and Net Loss (and items thereof) for the Fiscal Year in which the Partnership dissolves and liquidates pursuant to this Article IX shall be allocated among the Partners (x) first, to the extent necessary to ensure that the Capital Account balance attributable to a Unit (other than Common Units) having a liquidation preference is equal to such liquidation preference, and (y) second, in a manner such that the positive Hypothetical Capital Account Quotient of each Partner with respect to Common Units, immediately after giving effect to such allocation, is, as nearly as possible, equal to such Partner’s Percentage Interest; provided, however, that this Section 9.4(d) shall not be applied to cause any Partner’s Capital Account balance to be negative. The General Partner, in its sole and absolute discretion, may apply the principles of this Section 9.4(d) to any Fiscal Year preceding the Fiscal Year in which the Partnership dissolves and liquidates (including through application of Section 761(e) of the Code) if delaying application of the principles of this Section 9.4(d) would likely result in Capital Account balances (or Hypothetical Capital Account Quotients) that are materially different from the Capital Account balances (or Hypothetical Capital Account Quotients) set forth in clauses (x) and (y) of the preceding sentence.

Section 9.5 Capital Account Restoration . No Partner shall have any obligation to restore any negative balance in its Capital Account upon liquidation of the Partnership.

ARTICLE X

MISCELLANEOUS

Section 10.1 Incorporation of Agreements . The Exchange Agreement and the Tax Receivable Agreement shall each be treated as part of this Agreement as described in Section 761(c) of the Code and Treasury Regulation Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c).

Section 10.2 Amendment to the Agreement .

(a) Except as may be otherwise required by law, this Agreement may be amended by the General Partner without the consent or approval of any Partners, provided, however, that, except as expressly provided herein (including, without limitation, Sections 3.2 and 10.2(b)), (i) if an amendment adversely affects the rights (not including any rights relating to the Class C Non-Equity Interests) of an Individual Limited Partner or any Related Trust thereof other than on a pro rata basis with other holders of Units of the same class, such Individual Limited Partner must provide his prior written consent to the amendment, (ii) no amendment may adversely affect the rights (not including any rights relating to the Class C Non-Equity Interests) of the holders of a class of Units (or any group of such holders) without the prior written consent of Individual Limited Partners that (together with their Related Trusts) hold a majority of the outstanding Units of such class (or of such group) then owned by all Limited Partners, (iii) the provisions of this Section 10.2(a) may not be amended without the prior written consent of Individual Limited Partners that (together with their Related Trusts) hold a majority of the Class A Common Units then owned by all Limited Partners, and (iv) the provisions of Sections 3.1(i), 8.3(a), 8.3(b), 8.4 and 8.7 may only be amended with PMC Approval. For the purposes of this Section 10.2(a), any Units owned by a Related Trust of an Individual Limited Partner shall be treated as being owned by such Individual Limited Partner. Subject to the foregoing, the General Partner may enter into Partner Agreements with any Limited Partner that affect the terms hereof and the terms of such Partner Agreement shall govern with respect to such Limited Partner notwithstanding the provisions of this Agreement.

(b) It is acknowledged and agreed that none of the admission of any Additional Partner, the adoption of any Unit Designation, the issuance of any Units or Class C Non-Equity Interests, or the delegation of any power or authority to any committee (or its chairman) shall be considered an amendment of this Agreement that requires the approval of any Limited Partner.

(c) Notwithstanding any other provision in this Agreement, no Limited Partner other than an Active Individual LP shall have any voting or consent rights under this Agreement for any reason. Any Active Individual LP may vote or consent on behalf of its Related Trust. The Interests of any Limited Partner without direct or indirect voting or consent rights shall be disregarded for purposes of calculating any thresholds under this Agreement.

Section 10.3 Successors, Counterparts . This Agreement and any amendment hereto in accordance with Section 10.2 shall be binding as to executors, administrators, estates, heirs and legal successors, or nominees or representatives, of the Partners, and may be executed in several counterparts with the same effect as if the parties executing the several counterparts had all executed one counterpart.

Section 10.4 Applicable Law; Submission to Jurisdiction; Severability .

(a) This Agreement and the rights and obligations of the Partners shall be governed by, interpreted, construed and enforced in accordance with the laws of the State of Delaware, other than in respect of Section 2.13 which shall be governed by, interpreted, construed and enforced in accordance with the laws of the State of New York without regard to choice of law rules that would apply the law of any other jurisdiction. If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions is not affected in any manner materially adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

(c) Each International Partner irrevocably consents and agrees that (i) any action brought to compel arbitration or in aid of arbitration in accordance with the terms of this Agreement, (ii) any action confirming and entering judgment upon any arbitration award, and (iii) any action for temporary injunctive relief to maintain the status quo or prevent irreparable harm, may be brought in the state and federal courts of the State of New York and, by execution and delivery of this Agreement, each International Partner hereby submits to and accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts for such purpose and to the non-exclusive jurisdiction of such courts for entry and enforcement of any award issued hereunder.

(d) Each Partner that is not an International Partner hereby submits to and accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the state and federal courts of the State of New York for any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof.

(e) Each Partner further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of

copies thereof by certified or registered mail return receipt requested or by receipted courier service in the manner set forth in Section 10.10, provided that each International Partner hereby irrevocably designates CT Corporation System, 111 Eighth Avenue, Broadway, New York, New York 10011, as his designee, appointee and agent to receive, for and on behalf of himself, service of process in the jurisdictions set forth above in any such action or proceeding and such service shall, to the extent permitted by applicable law, be deemed complete ten (10) days after delivery thereof to such agent, and provided further that, although it is understood that a copy of such process served on such agent will be promptly forwarded by mail to the relevant International Partner, the failure of such International Partner to receive such copy shall not, to the extent permitted by applicable law, affect in any way the service of such process.

Section 10.5 Arbitration .

(a) Any dispute, controversy or claim between the Partnership and one or more International Partners arising out of or relating to this Agreement or the breach, termination or validity thereof or concerning the provisions of this Agreement, including whether or not such a dispute, controversy or claim is arbitrable (“ International Dispute ”) shall be resolved by final and binding arbitration conducted in English by three arbitrators in New York, New York, in accordance with the JAMS International Arbitration Rules then in effect (the applicable rules being referred to herein as the “ Rules ”) except as modified in this Section 10.5.

(b) The party requesting arbitration must notify the other party of the demand for arbitration in writing within the applicable statute of limitations and in accordance with the Rules. The written notification must include a description of the claim in sufficient detail to advise the other party of the nature of the claim and the facts on which the claim is based.

(c) The claimant shall select its arbitrator in its demand for arbitration and the respondent shall select its arbitrator within 30 days after receipt of the demand for arbitration. The two arbitrators so appointed shall select a third arbitrator to serve as chairperson within 14 days of the designation of the second of the two arbitrators. If practicable, each arbitrator shall have relevant financial services experience. If any arbitrator is not timely appointed, at the request of any party to the arbitration such arbitrator shall be appointed by JAMS pursuant to the listing, striking and ranking procedure in the Rules. Any arbitrator appointed by JAMS shall be, if practicable, a retired federal judge, without regard to industry-related experience.

(d) By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such other provisional remedies as may be available, the arbitral tribunal shall have full authority to grant provisional remedies or order the parties to request that such court modify or vacate any temporary or preliminary relief issued by a such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.

(e) There shall be documentary discovery consistent with the Rules and the expedited nature of arbitration. All disputes involving discovery shall be resolved promptly by the chair of the arbitral tribunal.

(f) No witness or party to a claim that is subject to arbitration shall be required to waive any privilege recognized by applicable law.

(g) It is the intent of the parties that, barring extraordinary circumstances as determined by the arbitrators, the arbitration hearing pursuant to this Agreement shall be commenced as expeditiously as possible, if practicable within nine months after the written demand for arbitration pursuant to this Section 10.5 is served on the respondent, that the hearing shall proceed on consecutive Business Days until completed, and if delayed due to extraordinary circumstances, shall recommence as promptly as practicable. The parties to the International Dispute may, upon mutual agreement, provide for different time limits, or the arbitrators may extend any time limit contained herein for good cause shown. The arbitrators shall issue their final award (which shall be in writing and shall briefly state the findings of fact and conclusions of law on which it is based) as soon as practicably, if possible within a time period not to exceed 30 days after the close of the arbitration hearing.

(h) Each party to an arbitration hereby waives any rights or claims to recovery of damages in the nature of punitive, exemplary or multiple damages, or to any form of damages in excess of compensatory damages and the arbitral tribunal shall be divested of any power to award any such damages.

(i) Any award or decision issued by the arbitrators pursuant to this Agreement shall be final, and binding on the parties. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction.

(j) Any arbitration conducted pursuant hereto shall be confidential. No party or any of its agents shall disclose or permit the disclosure of any information about the evidence adduced or the documents produced by the other in the arbitration proceedings or about the existence, contents or results of the proceedings except (i) as may be required by a governmental authority or (ii) as required in an action in aid of arbitration or for enforcement of an arbitral award. Before making any disclosure permitted by clause (i) in the preceding sentence, the party intending to make such disclosure shall give the other party reasonable written notice of the intended disclosure and afford the other party a reasonable opportunity to protect their interests.

Section 10.6 Filings . Following the execution and delivery of this Agreement, the General Partner or its designee shall promptly prepare any documents required to be filed and recorded under the Act or the LLC Act, and the General Partner or such designee shall promptly cause each such document to be filed and recorded in accordance with the Act or the LLC Act, as the case may be, and, to the extent required by local law, to be filed and recorded or notice thereof to be published in the appropriate place in each jurisdiction in which the Partnership may hereafter establish a place of business. The General Partner or such designee shall also promptly cause to be filed, recorded and published such statements of fictitious business name and any other notices, certificates, statements or other instruments required by any provision of any applicable law of the United States or any state or other jurisdiction which governs the conduct of its business from time to time.

Section 10.7 Power of Attorney . Each Partner does hereby constitute and appoint the General Partner as its true and lawful representative and attorney-in-fact, in its name, place and stead, to make, execute, sign, deliver and file (a) any amendment to the Certificate of Limited Partnership required because of an amendment to this Agreement or in order to effectuate any change in the partners of the Partnership, (b) all such other instruments, documents and certificates which may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, to effectuate, implement and continue the valid and subsisting existence of the Partnership or to dissolve the Partnership or for any other purpose consistent with this Agreement and the transactions contemplated hereby. The power of attorney granted hereby is coupled with an interest and shall (i) survive and not be affected by the subsequent death, incapacity, Disability, dissolution, termination or bankruptcy of the Partner granting the same or the Transfer of all or any portion of such Partner’s Interest and (ii) extend to such Partner’s successors, assigns and legal representatives.

Section 10.8 Headings and Interpretation . Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Agreement or any provision hereof. Wherever from the context it appears appropriate, (i) each pronoun stated in the masculine, the feminine or neuter gender shall include the masculine, the feminine and the neuter, and (ii) references to “including” shall mean “including without limitation.”

Section 10.9 Additional Documents . Each Partner, upon the request of the General Partner, agrees to perform all further acts and execute, acknowledge and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement.

Section 10.10 Notices . All notices, requests and other communications to any party hereunder shall be in writing (including facsimile, e-mail or similar writing) and shall be given to such party (and any other Person designated by such party) at its address, facsimile number or e-mail address set forth in a schedule filed with the records of the Partnership or such other address, facsimile number or e-mail address as such party may hereafter specify to the General Partner. Each such notice, request or other communication shall be effective (a) if given by facsimile, when transmitted to the number specified pursuant to this Section 10.10 and the appropriate confirmation of receipt is received, (b) if given by mail, seventy-two hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, (c) if given by e-mail, when transmitted to the e-mail address specified pursuant to this Section 10.10 and the appropriate confirmation of receipt is received or (d) if given by any other means, when delivered at the address specified pursuant to this Section 10.10.

Section 10.11 Waiver of Right to Partition . Each of the Partners irrevocably waives any right that it may have to maintain any action for partition with respect to any of the Partnership’s assets.

Section 10.12 Partnership Counsel . Each Limited Partner hereby acknowledges and agrees that Skadden, Arps, Slate, Meagher & Flom LLP and any other law firm retained by the General Partner in connection with the management and operation of the Partnership, or any dispute between the General Partner and any Limited Partner, is acting as counsel to the General Partner and as such does not represent or owe any duty to such Limited Partner or to the Limited Partners as a group.

Section 10.13 Survival . Except as otherwise expressly provided herein, all indemnities and reimbursement obligations made pursuant to Sections 2.9 and 2.10, all prohibitions in Sections 2.12, 2.13 and 2.18 and the provisions of this Section 10 shall survive dissolution and liquidation of the Partnership until expiration of the longest applicable statute of limitations (including extensions and waivers).

Section 10.14 Ownership and Use of Name . The name “OZ” is the property of the Partnership and/or its Affiliates and no Partner, other than the General Partner, may use (a) the names “OZ,” “Och,” “Och-Ziff,” “Och-Ziff Capital Management Group,” “Och-Ziff Capital Management Group LLC,” “Och-Ziff Holding Corporation,” “Och-Ziff Holding LLC,” “OZ Advisors LP,” “OZ Advisors II LP” or “OZ Management LP” or any name that includes “OZ,” “Och,” “Och-Ziff,” “Och-Ziff Capital Management Group,” “Och-Ziff Capital Management Group LLC,” “Och-Ziff Holding Corporation,” “Och-Ziff Holding LLC,” “OZ Advisors LP,” “OZ Advisors II LP” or “OZ Management LP” or any variation thereof, or any other name of the General Partner or the Partnership or their respective Affiliates, (b) any other name to which the name of the Partnership, the General Partner, or any of their Affiliates is changed, or (c) any name confusingly similar to a name referenced or described in clause (a) or (b) above, including, without limitation, in connection with or in the name of new business ventures, except pursuant to a written license with the Partnership and/or its Affiliates that has been approved by the General Partner.

Section 10.15 Remedies . Any remedies provided for in this Agreement shall be cumulative in nature and shall be in addition to any other remedies whatsoever (whether by operation of law, equity, contract or otherwise) which any party may otherwise have.

Section 10.16 Entire Agreement . This Agreement, together with any Partner Agreements and, to the extent applicable, the Registration Rights Agreement, the Exchange Agreement, the Tax Receivable Agreement and the Class B Shareholders Agreement, constitutes the entire agreement among the Partners with respect to the subject matter hereof and, as amended and restated herein, supersedes any agreement or understanding entered into as of a date prior to the date hereof among or between any of them with respect to such subject matter, including (without limitation), the Limited Liability Company Agreement of the Original Company, the Initial Partnership Agreement, the Prior Partnership Agreement and all Supplementary Agreements.

IN WITNESS WHEREOF, this Agreement is executed and delivered as of the date first written above by the undersigned.


GENERAL PARTNER:

OCH-ZIFF HOLDING CORPORATION, a Delaware corporation

By:		/s/ Wayne N. Cohen
Name:		Wayne N. Cohen
Title:		President and Chief Operating Officer

Exhibit A: Form of General Release

I, , in consideration of and subject to the terms and conditions set forth in the Amended and Restated Agreement of Limited Partnership of OZ Management LP dated as of March 1, 2017 to which this General Release is attached (as amended, modified, supplemented or restated from time to time, the “ Limited Partnership Agreement ”) and any Partner Agreement, and intending to be legally bound, do hereby release and forever discharge the Och-Ziff Group, from any and all legally waivable actions, causes of action, covenants, contracts, claims, sums of money or liabilities, which I or any of my Related Trusts, my or their heirs, executors, administrators, and assigns, or any of them, ever had, now have, or hereafter can, shall, or may have, by reason of any act or omission occurring on or before the date that I sign this General Release, including, but not limited to, with respect to my service to, or affiliation with, the Partnership and its Affiliates, and my Withdrawal or Special Withdrawal from the Partnership. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Limited Partnership Agreement.

By signing this General Release, to the fullest extent permitted by law, I waive, release, and forever discharge the Och-Ziff Group from any and all legally waivable claims, grievances, injuries, controversies, agreements, covenants, promises, debts, accounts, actions, causes of action, suits, arbitrations, sums of money, wages, attorneys’ fees, costs or damages, whether known or unknown, in law or in equity, by contract, tort, law of trust, or pursuant to U.S. federal, state, local, or non-U.S. statute, regulation, ordinance, or common law, which I or any of my Related Trusts ever have had, now have, or may hereafter have, based upon, or arising from, any fact or set of facts, whether known or unknown to me, from the beginning of time until the date of execution of this General Release, arising out of, or relating in any way to, my service to, or affiliation with, the Partnership and its Affiliates or other associations with the Och-Ziff Group, or any cessation thereof. I acknowledge and agree that I am not an employee of any of the Partnership or any of its Affiliates. Nevertheless, and without limiting the foregoing, in the event that any administrative agency, court, or arbitrator might find that I am an employee, I acknowledge and agree that this General Release constitutes a waiver, release, and discharge of any claim or right based upon, or arising under any U.S. federal, state, local, or non-U.S. fair employment practices and equal opportunity laws, including, but not limited to, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, 42 U.S.C. Section 1981, Title VII of the Civil Rights Act of 1964, the Sarbanes-Oxley Act of 2002, the Equal Pay Act, the Employee Retirement Income Security Act (“ ERISA ”) (including, but not limited to, claims for breach of fiduciary duty under ERISA), the Family Medical Leave Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act of 1967, the Older Worker’s Benefit Protection Act, and the New York State and New York City anti-discrimination laws, including all amendments thereto, and the corresponding fair employment practices and equal opportunities laws in non-U.S. jurisdictions that may be applicable.

I also understand that I am releasing any rights or claims concerning bonus(es) and any award(s) or grant(s) under any incentive compensation plan or program, except as set forth in the Limited Partnership Agreement and any Partner Agreement, having any bearing whatsoever on the terms and conditions of my service to the Partnership and its Affiliates, and the cessation thereof; provided that , this General Release shall not prohibit me from enforcing my rights, if any, under the Limited Partnership Agreement, any Partner Agreement, or this General Release, including, without limitation, any rights to indemnification or director and officer liability insurance coverage.

I expressly acknowledge and agree that, by entering into this General Release, I am waiving any and all rights or claims that I may have under the Age Discrimination in Employment Act of 1967, as amended (the “ ADEA ”), if any, which have arisen on or before the date of execution of this General Release (the “ Effective Date ”). I also expressly acknowledge and agree that:

In return for this General Release, I will receive consideration, i.e., something of value beyond that to which I was already entitled before entering into this General Release;

I am hereby advised in writing by this General Release of my opportunity to consult with an attorney before signing this General Release;

I have [twenty-one (21)] days to consider this General Release (although I need not take all twenty-one (21) days and may choose to voluntarily execute this General Release earlier); and

I have [seven (7)] days following the date that this General Release is executed (the “ Revocation Period ”) in which to revoke this General Release. To be effective, such revocation must be in writing and delivered to the Och-Ziff Group, as set forth in Section 10.01 of the Limited Partnership Agreement, within the Revocation Period.

Nothing herein shall prevent me from cooperating in any investigation by a governmental agency or from seeking a judicial determination as to the validity of the release with regard to age discrimination claims consistent with the ADEA.

I acknowledge that I have been given sufficient time to review this General Release. I have consulted with legal counsel or knowingly and voluntarily chosen not to do so. I am signing this General Release knowingly, voluntarily, and with full understanding of its terms and effects. I voluntarily accept the amounts provided for in the Limited Partnership Agreement and any Partner Agreement for the purpose of making full and final settlement of all claims referred to above and acknowledge that these amounts are in excess of anything to which I would otherwise be entitled. I acknowledge and agree that in executing this General Release, I am not relying, and have not relied, upon any oral or written representations or statements not set forth or referred to in the Limited Partnership Agreement, any Partner Agreement and this General Release.

I acknowledge and agree that Skadden, Arps, Slate, Meagher & Flom LLP, and any other law firm retained by any member of the Och-Ziff Group in connection with the Limited Partnership Agreement and this General Release, or any dispute between myself and any member of the Och-Ziff Group in connection therewith, is acting as counsel to the Och-Ziff Group, and as such, does not represent or owe any duty to me or to any of my Related Trusts.

I have been given a reasonable and sufficient period of time in which to consider and return this General Release. This General Release will be effective as of the Effective Date.

I have executed this General Release this day of , 20 .



Name:

[NAME OF TRUST]

[By:
Name:		Trustee

By:
Name:		Trustee]

Exhibit B: Form of Class P Common Unit Award Agreement

CLASS P COMMON UNIT AWARD AGREEMENT

Date:

To:

Dear :

We are pleased to confirm that you have been awarded a conditional grant of Class P Common Units in OZ Management LP (“ OZM ”), OZ Advisors LP (“ OZA ”) and OZ Advisors II LP (“ OZAII ” and, together with OZM and OZA, the “ Partnerships ”) pursuant to the limited partnership agreements of the Partnerships (the “ LPAs ”) (your “ Class P Unit Grants ”). Capitalized terms used in this Award Agreement (this “ Award Agreement ”) and not defined herein will have the meanings assigned to them in the LPAs.

Your Class P Unit Grants shall be conditionally issued to you by the Partnerships in the numbers specified below and effective as of the grant date specified below:

Class P Unit Grants :

(1) OZM Class P Unit Grant: Class P-1 Common Units in OZM.

(2) OZA Class P Unit Grant: Class P-1 Common Units in OZA.

(3) OZAII Class P Unit Grant: Class P-1 Common Units in OZAII.

Grant Date: .

The Class P Common Units constituting each of your Class P Unit Grants are subject to the terms and conditions of the LPAs, including, but not limited to, the vesting and forfeiture terms set forth therein.

You agree that your retention of the Class P Common Units constituting your Class P Unit Grants is subject to, and conditional on, your compliance with the conditions specified in the LPAs and, by signing this Award Agreement, you acknowledge (i) your receipt of your Class P Unit Grants described above, (ii) your receipt of the LPAs, and (iii) that you receive the Class P Common Units subject to the terms and conditions of the LPAs.

This Award Agreement may be signed in counterparts and all signed copies of this Award Agreement will together constitute one original. This Award Agreement shall be a “Partner Agreement” (as defined in the LPAs).

Please sign this Award Agreement in the space provided below to confirm your Class P Unit Grants and return a copy at your earliest convenience.


Acknowledged and agreed as of the date set forth above:


Name:

OZ MANAGEMENT LP

By:		Och-Ziff Holding Corporation,
		its General Partner

By:
Name:
Title:

OZ ADVISORS LP

By:		Och-Ziff Holding Corporation,
		its General Partner

By:
Name:
Title:

OZ ADVISORS II LP

By:		Och-Ziff Holding LLC,
		its General Partner

By:
Name:
Title:

Exhibit C: Unit Designation

OZ MANAGEMENT LP

UNIT DESIGNATION OF

THE PREFERENCES AND RELATIVE, PARTICIPATING,

OPTIONAL, AND OTHER SPECIAL RIGHTS, POWERS AND DUTIES

CLASS A CUMULATIVE PREFERRED UNITS

OZ MANAGEMENT LP, a Delaware limited partnership (the “ Partnership ”), pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act and the Amended and Restated Agreement of Limited Partnership of the Partnership dated as of December 14, 2015, as amended from time to time (the “ Limited Partnership Agreement ”), does hereby state and certify that, pursuant to the authority expressly vested in Och-Ziff Holding Corporation, a Delaware corporation and the Partnership’s general partner (the “ General Partner ”), the General Partner duly adopted the following resolution, which remains in full force and effect as of the date hereof:

RESOLVED , that this Unit Designation of the Class A Cumulative Preferred Units of the Partnership dated as of October 5, 2016 (this “ Unit Designation ”) be and hereby is adopted as follows:

1. Designation .

(a) Pursuant to Section 3.2(b) of the Limited Partnership Agreement, there is hereby created a class of Units designated as the “ Class A Cumulative Preferred Units ” (the “ Class A Preferred Units ”), which shall each have a liquidation preference per Class A Preferred Unit equal to the Unit Price (the “ Liquidation Preference ”). The General Partner is authorized to provide for the issuance of up to 400,000 Class A Preferred Units in one or more series (each, a “ Class A Series ”), each of which Class A Series shall be identical other than the date of issuance.

(b) The Class A Preferred Units have no maturity date. Each Class A Preferred Unit shall be identical in all respects to every other Class A Preferred Unit. Notwithstanding Section 3.1(b) of the Limited Partnership Agreement, the Preferred Units shall not be evidenced by Certificates of Ownership and a Partner’s interest in any such Units shall be reflected through appropriate entries in the books and records of the Partnership.

(c) All Class A Preferred Units issued pursuant to, and in accordance with the requirements of this Unit Designation, shall be fully paid and non-assessable Units of the Partnership.

2. Definitions . For purposes of this Unit Designation, the following terms have the meanings ascribed to them below. Capitalized terms used herein without definition have the meanings ascribed to such terms in the Limited Partnership Agreement.

“ Change of Control Event ” means the occurrence of the following:

(i) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties and assets of the Operating Partnerships, taken as a whole, to any “person” or “group” (as each such term is defined in Section 13(d)(3) of the Exchange Act or any successor provision), other than to a Continuing OZ Person or one or more wholly-owned subsidiaries of any of the Operating Partnerships; or

(ii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as each such term is defined in Section 13(d)(3) of the Exchange Act or any successor provision), other than a Continuing OZ Person or the Company and any of its wholly-owned subsidiaries, becomes (A) the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act or any successor provision) of a percentage of voting units (or other capital stock) greater than the percentage of voting units (or other capital stock) held by DSO and his Related Parties as of the Initial Issuance Date (excluding, for the avoidance of doubt, any units or other capital stock DSO or his Related Parties are entitled to vote on behalf of other Persons), in each case, immediately after giving effect to such transaction in (i) the Company or (ii) one or more of the Operating Partnerships comprising all or substantially all of the assets of the Operating Partnerships or (B) entitled to receive a Majority Economic Interest in connection with such transaction.

“ Closing Date ” means, with respect to a Class A Series, the original date of issuance of such Class A Series.

“ Commitment ” has the meaning assigned to it in the Revolving Credit Facility.

“ Company ” means Och-Ziff Capital Management Group LLC, a Delaware limited liability company.

“ Continuing OZ Person ” means, immediately prior to and immediately following any relevant date of determination, (i) DSO, (ii) any Related Party of DSO or (iii) any “person” or “group” (as each such term is used in Section 13(d)(3) of the Exchange Act or any successor provision) of which DSO or one of his Related Parties is a member.

“ Credit Party ” has the meaning assigned to it in the Revolving Credit Facility.

“ Designated Officers ” has the meaning assigned to it in Section 9(d) hereof.

“ Distribution Payment Date ” has the meaning assigned to it in Section 3(a) hereof.

“ Distribution Period ” means a period commencing on, and including, a Distribution Payment Date, to, but not including, the following Distribution Payment Date.

“ Distribution Rate ” means, with respect to the periods specified below, the following rates per annum:

(i) Prior to the Step Up Date: 0%

(ii) From the Step Up Date to the day immediately prior to the sixth anniversary of the Step Up Date: 6%;

(iii) From the sixth anniversary of the Step Up Date to the day immediately prior to the seventh anniversary of the Step Up Date: 8%

(iv) From the seventh anniversary of the Step Up Date to the day immediately prior to the eighth anniversary of the Step Up Date: 9%; and

(v) From the eighth anniversary of the Step Up Date and thereafter: 10%.

Following a Change of Control Event, the Distribution Rate for each applicable period described above shall increase by 7.0% per annum beginning on the 31 ^st day following the consummation of such Change of Control Event in accordance with Section 6(b) hereof unless and until the Operating Partnerships redeem all Operating Group Class A Preferred Units.

“ Distribution Record Date ” has the meaning assigned to it in Section 3(a) hereof.

“ DSO ” means Daniel S. Och.

“ Excess Distributable Earnings ” has the meaning assigned to it in Section 6(a)(i) hereof.

“ General Partner ” has the meaning assigned to it in the recitals hereof.

“ Holders’ Committee ” has the meaning assigned to it in Section 9(a) hereof.

“Initial Issuance Date” means October 5, 2016.

“ Junior Units ” means Units and other equity securities in the Partnership that, with respect to distributions on such interests and distributions upon liquidation of the Partnership, rank junior to the Class A Preferred Units. “Junior Units” include Common Units and PSIs but do not include Class C Non-Equity Interests.

“ Limited Partnership Agreement ” has the meaning assigned to it in the recitals hereof.

“ Liquidation Event ” has the meaning assigned to it in Section 4(a) hereof.

“ Liquidation Preference ” has the meaning assigned to it in Section 1 hereof.

“ Liquidation Value ” has the meaning assigned to it in Section 4(a) hereof.

“ Majority Economic Interest ” means any right or entitlement to receive more than 50% of the equity distributions or partner allocations (whether such right or entitlement results from the ownership of partner or other equity interests, securities, instruments or agreements of any kind) made to all holders of partner or other equity interests in the Operating Partnerships (other than the Company or its Subsidiaries).

“ Mandatory Change of Control Redemption ” has the meaning assigned to it in Section 6(b)(i) hereof.

“Mandatory Change of Control Trigger Date ” has the meaning assigned to it in Section 6(b)(i) hereof.

“ Mandatory Delivery Date ” has the meaning assigned to it in Section 6(a)(iii) hereof.

“ Maturity Date ” has the meaning assigned to it in the Revolving Credit Facility.

“ New NEO Units ” has the meaning assigned to it in Section 9(d) hereof.

“ Nonpayment Event ” has the meaning assigned to it in Section 9(d) hereof.

“ Obligations ” has the meaning assigned to it in the Revolving Credit Facility.

“ Offered Securities ” has the meaning assigned to it in Section 13 hereof.

“ Operating Group Class A Preferred Units ” means the Class A Preferred Units issued by the Partnership and the Class A preferred units issued by the other Operating Partnerships.

“ Operating Group Entity ” has the meaning assigned to it in Section 3(b)(ii) hereof.

“ Operating Partnerships ” means the Partnership, OZ Advisors LP and OZ Advisors II LP.

“ OZ Fund ” means any investment vehicle managed (or for which investment advisory or other asset management services are provided), directly or indirectly, by an Operating Group Entity in which (a) substantially all of the capital is provided by third parties in the ordinary course (“ Third Party LPs ”) and (b) no Person other than the Operating Partnerships or their wholly-owned Subsidiaries has the right to receive (x) carried interest, incentive fees, promoted interest, performance fee or similar rights of participation or profit-sharing, (y) investment management fees, asset management fees, commitment-based fees, transaction fees or similar fees not based on performance (or fees payable in lieu thereof) or (z) other distributions or payments (including guaranteed payments or other similar distributions or payments but excluding distributions or redemption payments made to Third Party LPs in the ordinary course in respect of their interests in such investment vehicle) from such investment vehicle, whether or not such payments arise as a result of or are due and payable pursuant to (i) ownership of a membership interest, partnership interest or other equity interest, (ii) an employment or consulting agreement or arrangement or (iii) a contract, revenue sharing agreement, participation or other agreement.

“ OZ Subsidiary ” has the meaning assigned to it in the Revolving Credit Facility.

“ Parity Units ” means (a) any equity securities in the Partnership (or any debt or other securities convertible into equity securities of the Partnership) that the Partnership may authorize or issue, the terms of which expressly provide that such securities shall rank equally with, or senior to, the Class A Preferred Units with respect to the payment of distributions on such

interests and distributions upon the occurrence of a Liquidation Event relating to the Partnership and (b) for purposes of Section 8(a) only, any equity securities in any Subsidiary of the Partnership (or any debt or other securities convertible into equity securities of any Subsidiary of the Partnership).

“ Partnership ” has the meaning assigned to it in the recitals hereof.

“ Partnership Interests ” has the meaning assigned to it in Section 6(a)(i) hereof.

“ Permitted Activities ” means (i) the asset management, investment management and financial services business or any business ancillary, complementary or reasonably related thereto and reasonable extensions thereof, (ii) the businesses currently conducted by the Company, the Operating Partnerships or their Affiliates as of the Initial Issuance Date, and (iii) such other lines of business as may be consented to by the Holders’ Committee, in each of clauses (i), (ii) and (iii) only to the extent conducted by any of the Operating Partnerships and, subject to compliance with Section 3(b)(ii), an Operating Group Entity.

“ Preceding Year ” has the meaning assigned to it in Section 6(a)(i) hereof.

“ Preferred Distributions ” has the meaning assigned to it in Section 3(a) hereof.

“ Redemption Multiple ” means, with respect to redemptions occurring during the periods specified below, the following percentages:

(i) 105% with respect to redemptions occurring during the period commencing on the Closing Date and ending on the day immediately prior to the Step Up Date;

(ii) 103% with respect to redemptions occurring during the period commencing on the Step Up Date and ending on the day immediately prior to the first anniversary of the Step Up Date;

(iii) 101% with respect to redemptions occurring during the period commencing on the first anniversary of the Step Up Date and ending on the day immediately prior to the second anniversary of the Step Up Date; and

(iv) 100% with respect to redemptions occurring on or after the second anniversary of the Step Up Date.

“ Related Party ” means, with respect to any Person, (i) any Person that is the spouse (including a surviving spouse) or another immediate family member of such Person, (ii) the estate and lawful heirs of such Person or (iii) any trust, family partnership, foundation, family limited liability company or other estate planning vehicle for which such Person acts as a trustee or beneficiary, provided that the investment decisions relating to any equity interests of the Operating Partnerships held by such trusts or other entities are controlled directly or indirectly by such Person.

“ Reorganization Event ” has the meaning assigned to it in Section 11(a) hereof.

“ Revolving Credit Facility ” means the $150.0 million, 5-year unsecured revolving credit facility entered into by the Partnership, among other parties, on November 20, 2014, as amended, modified or supplemented from time to time in accordance with Section 8 hereof; provided , that for purposes of any defined terms set forth herein that reference the corresponding defined terms in the Revolving Credit Facility, such defined terms shall have the respective meanings set forth in the Revolving Credit Facility as in effect as of the date hereof.

“ ROFR Notice ” has the meaning assigned to it in Section 13 hereof.

“ Seller ” has the meaning assigned to it in Section 13 hereof.

“ Step Up Date ” means February 19, 2020.

“ Subsidiary ” of a Person means any other Person as to which such Person owns, directly or indirectly, or otherwise Controls more than 50% of the voting shares or other similar interests or a general partner interest or managing member or similar interest of such Person. A Subsidiary of the Company, its direct Subsidiaries or an Operating Group Entity does not include any OZ Fund or any of its Subsidiaries.

“ Third Party Buyer ” has the meaning assigned to it in Section 13 hereof.

“ Transfer ” means any direct, indirect or synthetic transfer, sale, assignment, pledge, conveyance, hypothecation or other encumbrance or disposition.

“ Unit Designation ” has the meaning assigned to it in the recitals hereof.

“ Unit Price ” means $684.70, subject to appropriate adjustment in the event of any equity dividend, equity split, combination or other similar recapitalization with respect to the Class A Preferred Units.

3. Distributions; Allocations .

(a) Quarterly Distributions . Each holder of Class A Preferred Units shall be entitled to receive, when, as and if declared by the General Partner in its sole discretion out of funds legally available therefor, cumulative cash distributions (“ Preferred Distributions ”) on each Class A Preferred Unit calculated based on the Liquidation Preference of such Class A Preferred Unit at a rate per annum equal to the Distribution Rate (taking into account the different Distribution Rates that may apply during each Distribution Period in accordance with the definition of Distribution Rate or Section 6(b) below), with such Preferred Distributions accruing from, and including, the earlier of (i) the Step Up Date and (ii) if applicable, the 31st day following the consummation of a Change of Control Event; provided , however , that the amount of the Preferred Distributions actually paid shall not exceed the sum of the cumulative Net Income and items of income and gain allocated to such holder pursuant to Section 3(d). Any Preferred Distributions that have been declared in accordance with the foregoing sentence shall, unless waived by the Holders’ Committee in its sole discretion, be payable in arrears on the 27th day of February, May, August and November of each applicable year (each, a “ Distribution Payment Date ”) to the holders of record as they appear in the books and records of the Partnership for the Class A Preferred Units at the close of business on the 15th day of February,

May, August and November, respectively (each, a “ Distribution Record Date ”); provided, that (i) if any Distribution Payment Date is not a Business Day, then the Preferred Distribution which would otherwise have been payable on that Distribution Payment Date may be paid on the next succeeding Business Day and (ii) accumulated and unpaid Preferred Distributions for any prior Distribution Period may be paid at any time. Any Preferred Distribution payable on the Class A Preferred Units, including distributions payable for any partial Distribution Period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Notwithstanding anything to the contrary contained herein, Preferred Distributions will accumulate whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of those Preferred Distributions and whether or not those Preferred Distributions are declared. In the event that any Preferred Distributions or other payments on the Class A Preferred Units are in arrears, or, are otherwise not payable as a result of the proviso in the first sentence of Section 3(a), such amounts shall accrue and accumulate at the Distribution Rate. Holders of the Class A Preferred Units will not be entitled to any distributions in excess of full cumulative distributions described in this Section 3(a). Any Preferred Distributions made on the Class A Preferred Units shall first be credited against the earliest accumulated but unpaid distribution due with respect to the Class A Preferred Units.

(b) Funding of Distributions on Operating Group Class A Preferred Units .

(i) Distributions on Junior Units and Parity Units . Except as provided in Section 3(c) hereof, unless full cumulative distributions on all of the Operating Group Class A Preferred Units have been or contemporaneously are declared and paid in respect of all past Distribution Periods as provided in the corresponding terms of all Operating Group Class A Preferred Units, (i) no distributions shall be declared or paid or set apart for payment upon Junior Units or Parity Units by the Partnership, other than Tax Distributions, distributions payable in Common Units or Deferred Cash Interests, payments or distributions required under a Partner Agreement, or distributions payable in Units of any series of preferred Units that the Partnership may issue ranking junior to the Class A Preferred Units as to distributions and upon liquidation, and (ii) no Junior Units or Parity Units shall be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such Units) by the Partnership (except by conversion or exchange for other Units of the Partnership that rank junior to the Class A Preferred Units as to distributions and upon liquidation or for shares of the Company (or the cash value thereof) in accordance with the Exchange Agreement or the Limited Partnership Agreement); provided, however, that the foregoing shall not prevent Expense Amount Distributions in accordance with the Expense Allocation Agreement, distributions or payments pursuant to the terms of any restricted share units of the Company, or required to facilitate exchanges of Common Units permitted under the Exchange Agreement, and distributions or transactions necessary to make any payment when due on any financing or other contractual arrangement (including, without limitation, the Limited Partnership Agreement or any Partner Agreement) in effect on the date hereof, or to which the Holders’ Committee has consented.

(ii) Inter-Entity Loans . If one of the other Operating Partnerships does not have legally available funds to pay in full all distributions or redemption payments required to be paid to the holders of the Operating Group Class A Preferred Units issued by such other Operating Partnership pursuant to their terms, the Partnership hereby agrees that it will lend or otherwise

make available to such other Operating Partnership adequate funds in order to enable it to make the required distributions or redemption payments in full, provided that the Partnership has legally available funds to make such loans or otherwise make such funds available after giving effect to any required distributions or redemption payments that the Partnership is required to make under the terms of the Preferred Units. The Company and the Partnership agree that it is the intention of the Company and the Partnership that all Operating Group Entities (whether existing as of the date of this Unit Designation or formed as of a later date) shall support the Partnership’s obligations in respect of the Operating Group Class A Preferred Units. In furtherance of the foregoing, the Company and the Partnership agree that, if a Subsidiary of the Company or any of its Subsidiaries or the Operating Partnerships or any of their Subsidiaries (an “ Operating Group Entity ”), in each case, other than OZ Funds (as defined in the Revolving Credit Facility) and their Subsidiaries, is formed for the purpose of engaging in one or more Permitted Activities, the Company and the Partnership shall cause such new Operating Group Entity to (i) expressly agree to the due and punctual observance and performance of each and every covenant and condition of this Unit Designation to be performed and observed by the Partnership and all the obligations and liabilities hereunder (including those obligations and liabilities described in Section 3(b), Section 3(c) and Section 6) (as agreed in good faith by the Company and the Holders’ Committee), and (ii) to the extent requested by the Holders’ Committee, agree to lend or otherwise make available to the Partnership adequate funds to make any required distributions or redemption payments in full that the Partnership is required to make under the terms of the Preferred Units in the event that the Partnership does not have legally available funds to make such distributions or redemption payments, provided that such new Operating Group Entity has legally available funds to make such loans or otherwise make such funds available. Concurrently with the formation and the commencement of operations of such Operating Group Entity, the Company shall deliver a certificate to the Holders’ Committee certifying as to its compliance with the provisions of this Section 3(b)(ii) .

(c) Distributions on Preferred Units of Equal Rank . When distributions are not paid in full upon the Class A Preferred Units and the Units of any other series of preferred Units that rank on a parity as to distributions with the Class A Preferred Units, all distributions declared upon the Class A Preferred Units and any other series of preferred Units that the Partnership may issue that rank on a parity as to distributions with the Class A Preferred Units shall be declared pro rata so that the amount of distributions declared per Class A Preferred Unit and per Unit of such other series of preferred Units shall in all cases bear to each other the same ratio that accumulated distributions per Class A Preferred Unit and accumulated or accrued distributions per Unit of such other series of preferred Units (which shall not include any accrual in respect of unpaid distributions for prior Distribution Periods if such other series of preferred Units is non-cumulative) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Class A Preferred Units which may be in arrears.

(d) Allocations . After giving effect to the special allocations set forth in Section 6.1(d) of the Limited Partnership Agreement, and subject to Section 5.3 thereof, Net Income and Net Loss for each taxable year (and items of income, gain, loss and deduction taken into account in computing Net Income and Net Loss) shall be allocated in a manner such that the Capital Account of each holder of Class A Preferred Units attributable to ownership of Class A Preferred Units is, as nearly as possible, equal to (i) the distributions that would be made with respect to

such Class A Preferred Units if the Partnership were dissolved, its affairs wound up and its assets sold for their Carrying Value, all Partnership liabilities were satisfied (limited with respect to each non-recourse liability to the Carrying Value of the assets securing such liability) and the net assets of the Partnership were distributed to the Partners, without regard to any limitations on the payment of Preferred Distributions as a result of the proviso in the first sentence of Section 3(a) minus (ii) such Partner’s share of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets.

4. Liquidation Value .

(a) In the event of any liquidation, dissolution or winding up of the Partnership, either voluntary or involuntary (a “ Liquidation Event ”), after payment or provision for the liabilities of the Partnership (including the expenses of such event) and the satisfaction of any claims ranking senior to the Class A Preferred Units, the holders of the Class A Preferred Units shall be entitled to receive, out of the assets of the Partnership or proceeds thereof available for distribution to unit holders, prior to, and in preference to, any payment or distribution of any assets of the Partnership to the holders of any Junior Units, an amount equal to the Liquidation Preference per Class A Preferred Unit plus all accumulated but unpaid Preferred Distributions, taking into account any limitations on the payment of Preferred Distributions as a result of the proviso in the first sentence of Section 3(a) (collectively, the “ Liquidation Value ”). If the assets of the Partnership available for distribution in respect of Class A Preferred Units are less than the aggregate Liquidation Value of all outstanding Class A Preferred Units, such distributions shall be made to the holders of the Class A Preferred Units pro rata, based on the aggregate Liquidation Value to which each holder of Class A Preferred Units is entitled pursuant to this Section 4(a). The foregoing shall not affect any rights which holders of Class A Preferred Units may have to monetary damages.

(b) Upon a Liquidation Event, after each holder of Class A Preferred Units receives a payment equal to the Liquidation Value of its Class A Preferred Units, such holder shall not be entitled to any further participation in any distribution of assets by the Partnership.

(c) If the assets of the Partnership available for distribution upon a Liquidation Event are insufficient to pay in full the aggregate amount payable to the holders of all Class A Preferred Units and the holders of any other outstanding Parity Units that rank equally with the Class A Preferred Units, such assets shall be distributed to the holders of the Class A Preferred Units and the holders of such Parity Units pro rata, based on the full respective distributable amounts to which each such Unitholder is entitled pursuant to this Section 4.

(d) Nothing in this Section 4 shall be understood to entitle the holders of Class A Preferred Units to be paid any amount upon the occurrence of a Liquidation Event until holders of any classes or series of Units ranking, as to the distribution of assets upon a Liquidation Event, senior to the Class A Preferred Units have been paid all amounts to which such classes or series of Units are entitled.

(e) Neither the sale, conveyance, exchange or transfer, for cash, Units, securities or other consideration, of all or substantially all of the Partnership’s property or assets nor the consolidation, merger or amalgamation of the Partnership with or into any other entity or the

consolidation, merger or amalgamation of any other entity with or into the Partnership shall be deemed to be a Liquidation Event, notwithstanding that for other purposes such an event may constitute a liquidation, dissolution or winding up; provided , that in the event of any such sale, conveyance, exchange, transfer, consolidation, merger, amalgamation or similar transaction (which shall include any Change of Control Event), the successor or acquiring Person (if other than the Partnership) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Unit Designation to be performed and observed by the Partnership and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as agreed in good faith by the General Partner and the Holders’ Committee). In addition, notwithstanding anything to the contrary in this Section 4, no payment will be made to the holders of Class A Preferred Units pursuant to this Section 4: solely (i) upon the voluntary or involuntary liquidation, dissolution or winding up of any Subsidiary of the Partnership or upon any reorganization of the Partnership into another limited liability entity pursuant to provisions of any Limited Partnership Agreement that allow the Partnership to convert, merge or convey its assets to another limited liability entity with or without Limited Partner approval or (ii) if the Partnership engages in a reorganization or other transaction in which a successor to the Partnership issues equity securities to the holders of Class A Preferred Units that have voting powers, rights and preferences that are substantially similar to the voting powers, rights and preferences of the Class A Preferred Units pursuant to provisions of any Limited Partnership Agreement that allow the Partnership to do so without Limited Partner approval, in each case of clauses (i) and (ii), so long as the Partnership (or any successor thereof, as applicable) owns substantially the same assets and liabilities as the Partnership immediately prior to such liquidation, dissolution, winding up or other transaction.

5. Optional Redemption .

(a) At any time following the initial Closing Date, subject to any limitations imposed by law, the Partnership may, in the General Partner’s sole discretion, redeem the outstanding Class A Preferred Units, in whole or in part, at a redemption price per Class A Preferred Unit equal to the product of the Redemption Multiple and the Liquidation Value per Class A Preferred Unit as of the redemption date. If less than all of the Class A Preferred Units are to be redeemed, the General Partner shall select the Class A Preferred Units to be redeemed pro rata, based on the number of Class A Preferred Units held by each holder, calculated to the nearest whole Class A Preferred Unit.

(b) In the event the Partnership shall redeem any or all of the Class A Preferred Units pursuant to Section 5(a) above, the Partnership shall, subject to clause (ii) below, give notice of any such redemption to the holders of the Class A Preferred Units not more than 60 nor less than 10 days (or such other period as shall be agreed to by the Holders’ Committee) prior to the date fixed for such redemption. Such notice shall state: (A) the redemption date; (B) the redemption price; (C) the number of Class A Preferred Units to be redeemed; (D) the place or places where the Class A Preferred Units are to be surrendered (if so required in the notice) for payment of the redemption price; and (E) that distributions on the Class A Preferred Units to be redeemed will cease to accrue on such redemption date. If less than all of the Class A Preferred Units held by any holder is to be redeemed, the notice provided to such holder shall also specify the number of Class A Preferred Units held by such holder to be redeemed. Failure to give notice to any holder of Class A Preferred Units shall not affect the validity of the proceedings for the redemption of

any Class A Preferred Units being redeemed. Once notice has been given as provided in this Section 5(b), so long as (i) funds sufficient to pay the redemption price for all of the Class A Preferred Units called for redemption have been set aside for payment and (ii) the Partnership pays the redemption price for all of the Class A Preferred Units called for redemption within 30 days after providing notice as provided in this Section 5(b), from and after the redemption date such Class A Preferred Units that have been called for redemption shall no longer be deemed outstanding, and all rights of the holders of the Class A Preferred Units that have been called for redemption with respect to such Class A Preferred Units shall cease other than the right to receive the redemption price, without interest.

(c) The holders of Class A Preferred Units shall have no right to require redemption of any Class A Preferred Units, except as provided in Section 6 below.

6. Mandatory Redemption .

(a) Certain Mandatory Redemption Events .

(i) From and after March 31, 2020, if the sum of (i) the aggregate amounts which were distributed in respect of their equity interests in the Partnership (collectively, “ Partnership Interests ”) by the Partnership (other than Tax Distributions, distributions in respect of Class C Non-Equity Interests or distributions payable in Common Units or Deferred Cash Interests) in respect of the immediately preceding fiscal year (the “ Preceding Year ”), or which were utilized by the Partnership to repurchase Partnership Interests during such Preceding Year, or were available for such uses (but not so used) and (ii) the corresponding amounts that were distributed or used for repurchases (or were available but not used for such purposes) by the other Operating Partnerships during such Preceding Year were in excess of $100 million (“ Excess Distributable Earnings ”), then an amount equal to 20% of such Excess Distributable Earnings shall be used by the Operating Partnerships to redeem Operating Group Class A Preferred Units in accordance with this Section 6(a).

(ii) Each Class A Preferred Unit to be redeemed pursuant to this Section 6(a) shall be redeemed for an amount equal to the Liquidation Value of such Class A Preferred Unit as of the relevant redemption date. If less than all of the Operating Group Class A Preferred Units are to be redeemed on any redemption date, to the extent possible the Operating Partnerships will redeem their Operating Group Class A Preferred Units pro rata, based on the aggregate amount that would be required to redeem all then outstanding Operating Group Class A Preferred Units in each Operating Partnership. If less than all of the Class A Preferred Units are to be redeemed on any redemption date, the General Partner shall select the Class A Preferred Units to be redeemed pro rata, based on the number of Class A Preferred Units held by each holder, calculated to the nearest whole Class A Preferred Unit.

(iii) Commencing with fiscal year 2020 (with respect to Preceding Year 2019), no later than January 31 of the fiscal year immediately following any Preceding Year, the General Partner shall deliver to the Holders’ Committee a statement setting forth the General Partner’s good faith determination of the Excess Distributable Earnings for such Preceding Year and reasonable supporting documentation with respect thereto, provided that with respect to Preceding Year 2019 such statement need not be provided prior to March 31, 2020. To the

extent the Partnership is required to make a mandatory redemption pursuant to Section 6(a) above, on May 15, 2020 and thereafter on the Distribution Payment Date occurring in February of each following year (each, a “ Mandatory Delivery Date ”), the Partnership shall give notice of any such redemption to the holders of the Class A Preferred Units on the applicable Mandatory Delivery Date and shall, subject to clause (y) below, redeem the Class A Preferred Units on a date to be determined by the General Partner that is not more than 60 days or less than 10 days after the Mandatory Delivery Date. Such notice shall state: (A) the redemption date; (B) the redemption price; (C) the number of Class A Preferred Units to be redeemed; (D) the place or places where the Class A Preferred Units are to be surrendered (if so required in the notice) for payment of the redemption price; and (E) that distributions on the Class A Preferred Units to be redeemed will cease to accrue on such redemption date. If less than all of the Class A Preferred Units held by any holder are to be redeemed, the notice provided to such holder shall also specify the number of Class A Preferred Units held by such holder to be redeemed. Failure to give notice to any holder of Class A Preferred Units shall not affect the validity of the proceedings for the redemption of any Class A Preferred Units being redeemed or the Partnership’s obligations to redeem at the time set forth herein. Once notice has been given as provided in this Section 6(a)(iii), so long as funds (x) sufficient to pay the redemption price for all of the Class A Preferred Units called for redemption have been set aside for payment and (y) the Partnership pays the redemption price for all of the Class A Preferred Units called for redemption within 30 days after providing notice as provided in this Section 6(a)(iii), from and after the redemption date such Class A Preferred Units that have been called for redemption shall no longer be deemed outstanding, and all rights of the holders of the Class A Preferred Units that have been called for redemption with respect to such Class A Preferred Units shall cease other than the right to receive the redemption price, without interest.

(b) Mandatory Redemption Upon Change of Control Event .

(i) If a Change of Control Event occurs, the Partnership shall redeem all outstanding Class A Preferred Units pursuant to this Section 6(b) (a “ Mandatory Change of Control Redemption ”); provided , however , that such Mandatory Change of Control Redemption shall not occur prior the earlier of (x) the date that is 91 days after the Maturity Date of the Revolving Credit Facility and (y) the payment in full of the Loans (as defined in the Revolving Credit Facility) and all other Obligations that are accrued and payable and the termination of the Commitments (the earlier of such dates, the “ Mandatory Change of Control Trigger Date ”). From and after the date that is 31 days following the consummation of a Change of Control Event until the Mandatory Change of Control Redemption has been consummated, the Distribution Rate payable by the Partnership on the Class A Preferred Units shall increase by 7.0% per annum for all periods set forth in the definition of Distribution Rate.

(ii) The Partnership shall redeem all outstanding Class A Preferred Units pursuant to this Section 6(b) at a redemption price per Class A Preferred Unit equal to the Liquidation Value per Class A Preferred Unit as of the redemption date.

(iii) In the event the Partnership is required to effect a Mandatory Change of Control Redemption, the Partnership shall, subject to clause (y) below, give notice of any such Mandatory Change of Control Redemption to the holders of the Class A Preferred Units not more than 60 nor less than 10 days (or such other period as shall be agreed to by the Holders’

Committee) prior to the date fixed for such Mandatory Change of Control Redemption. Such notice shall state: (A) the redemption date, which shall be no later than 30 days following the Mandatory Change of Control Trigger Date; (B) the redemption price; (C) the number of Class A Preferred Units to be redeemed; (D) the place or places where the Class A Preferred Units are to be surrendered (if so required in the notice) for payment of the redemption price; and (E) that distributions on the Class A Preferred Units to be redeemed will cease to accrue on such redemption date. Failure to give notice to any holder of Class A Preferred Units shall not affect the validity of the proceedings for the Mandatory Change of Control Redemption of any Class A Preferred Units being redeemed or the Partnership’s obligations to redeem no later than 30 days following the Mandatory Change of Control Trigger Date. Once notice has been given as provided in this Section 6(b)(iii), so long as (x) funds sufficient to pay the redemption price for all of the Class A Preferred Units called for redemption have been set aside for payment and (y) the Partnership pays the redemption price for all of the Class A Preferred Units called for redemption within 30 days after the Mandatory Change of Control Trigger Date, from and after the redemption date such Class A Preferred Units that have been called for redemption shall no longer be deemed outstanding, and all rights of the holders of the Class A Preferred Units that have been called for redemption with respect to such Class A Preferred Units shall cease other than the right to receive the redemption price, without interest.

7. Refinancing or Other Redemption Trigger Events . As of any Business Day from and after the date hereof, if the average closing price of the Class A Shares of the Company on the New York Stock Exchange for the previous 20 trading days exceeds $15.00 (subject to appropriate adjustment in the event of any equity dividend, equity split, combination or other similar recapitalization with respect to the Class A Shares), the General Partner agrees to use its reasonable best efforts to redeem all of the outstanding Class A Preferred Units pursuant to Section 5 above as promptly as practicable; provided, that, if such event occurs prior to February 19, 2020, the General Partner shall use its reasonable best efforts to obtain the consent of the lenders under the Revolving Credit Facility and, if consent is required from lenders under any other bona fide debt financings of the Company at the time, the consent of such other lenders to effect such redemption as promptly as practicable, it being understood that no such redemption shall occur absent such consent. The procedures for the redemption of Class A Preferred Units in Section 6(a) shall apply mutatis mutandis to the redemption of Class A Preferred Units pursuant to this Section 7.

8. Parity Units; Consents; Non-Circumvention .

(a) The Partnership shall not issue any Parity Units without the prior written consent of the Holders’ Committee in its sole discretion and the Partnership shall not, and shall cause each of its Subsidiaries not to, amend, modify or otherwise cause any of its equity securities (or any debt or other securities convertible into equity securities of the Partnership or its Subsidiaries) to become Parity Units without the prior written consent of the Holders’ Committee, other than (i) Parity Units issued to the Partnership or any of its wholly-owned Subsidiaries or (ii) subject to Sections 9(d) and (e), Parity Units issued by Subsidiaries of the Partnership to the extent required to satisfy, or upon consultation with the Company’s outside counsel in compliance with, any regulatory or other legal requirements. Nothing in this Unit Designation shall prohibit any refinancing, refunding, replacement, renewal, restatement, amendment and restatement, amendment, supplement or other modification of the Revolving Credit Facility or any existing

non-convertible debt obligations of the Partnership or intercompany debt between or among the Operating Partnerships; provided, that no such refinancing, refunding, replacement, renewal, restatement, amendment and restatement, amendment, supplement or other modification of the Revolving Credit Facility or intercompany debt shall prohibit the Partnership from making any distributions or redemptions in respect of the Class A Preferred Units.

(b) The Company and the Partnership shall not, and shall cause their respective Subsidiaries not to, engage in any line of business or activity other than Permitted Activities, in each case, subject to the Company and the Partnership’s compliance with Section 3.2(b)(ii). The Partnership shall not by any action or inaction, including, without limitation, amending its Limited Partnership Agreement or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action or inaction, directly or indirectly, avoid or seek to avoid the observance or performance of any of the terms of this Unit Designation. Notwithstanding anything herein to the contrary, so long as the Revolving Credit Facility is in effect, this Unit Designation shall not restrict the ability of any OZ Subsidiary to (i) pay dividends or make any other distributions on any such OZ Subsidiary’s equity interests owned by any Credit Party or any OZ Subsidiary, (ii) repay or prepay any Indebtedness (as defined in the Revolving Credit Facility) owed by such OZ Subsidiary to any Credit Party or any OZ Subsidiary, (iii) make loans or advances to any Credit Party or any OZ Subsidiary or (iv) transfer, lease or license any of its material property or assets to any Credit Party.

9. Voting Rights; Preferred Unit Holders’ Committee .

(a) This Unit Designation establishes a committee of the holders of the Class A Preferred Units (the “ Holders’ Committee ”) to be comprised initially of Daniel S. Och, as sole member. Subject to the foregoing, the holders of a majority of the Operating Group Class A Preferred Units then outstanding may at any time remove members from, or appoint replacement or additional members to, the Holders’ Committee and shall appoint at least one member promptly if at any time thereafter the Holders’ Committee has no members. In the event that additional members are appointed to the Holders’ Committee, the members of the Holders’ Committee shall act by majority vote on all matters to be approved by the Holders’ Committee.

(b) Except as provided herein, the holders of Class A Preferred Units have no consent, approval, waiver or voting rights or powers. Each holder of Class A Preferred Units hereby irrevocably delegates all power and authority to the Holders’ Committee to exercise, on behalf of such holder of Class A Preferred Units, any and all rights of such holder in respect of such Class A Preferred Units, including the granting of any waivers or the exercise of any consent, approval or voting rights or powers on behalf of such holder.

(c) Each holder of Class A Preferred Units hereby irrevocably constitutes and appoints the members of the Holders’ Committee (and each of them) existing at any time and from time to time, as the sole and exclusive attorney-in-fact and proxy of such holder of Class A Preferred Units, with full power of substitution and resubstitution, to attend any meeting of the shareholders of the Class A Preferred Unit holders, and any adjournment or postponement thereof, on such Class A Preferred Unit holder’s behalf and to vote or abstain from voting the Class A Preferred Units owned by such holder in its sole discretion for or against any action or

proposal to the fullest extent permitted by law. Any such vote or abstention shall not be subject to challenge or input from such holder of Class A Preferred Units. Each holder of Class A Preferred Units hereby revokes any and all previous proxies with respect to such holder’s Class A Preferred Units and no subsequent proxies (whether revocable or irrevocable) shall be given (and if given, shall not be effective) by such holder with respect to the Class A Preferred Units that conflict with this proxy. This proxy and power of attorney is intended to be irrevocable and is coupled with an interest sufficient in law to support an irrevocable proxy and is granted for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged and shall be valid and binding on any person to whom the holder of Class A Preferred Units may transfer any of its Class A Preferred Units. The attorney-in-fact and proxy identified above will be empowered at any and all times to vote or act by written consent with respect to the Class A Preferred Units at every annual, special, adjourned or postponed meeting of holder of Class A Preferred Units, and in every written consent in lieu of such a meeting, or otherwise. The power of attorney granted herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of each holder of Class A Preferred Units. Any such vote shall be cast or consent shall be given in accordance with such procedures relating thereto as shall ensure that it is duly counted for purposes of determining that a quorum is present and for purposes of recording the results of such vote or consent. The provisions of this Section 9 shall terminate with respect to a holder of Class A Preferred Units once such holder no longer owns any Class A Preferred Units.

(d) Notwithstanding anything in this Unit Designation to the contrary, none of the Partnership, any other Operating Group Entity or OZ Fund may issue, and the Company and the Partnership shall not permit the Partnership, any other Operating Group Entity or OZ Fund to issue, to (x) any individual who is a “named executive officer” in the Company’s most recent filing with the Securities and Exchange Commission that required disclosure pursuant to Rule 402(c) of Regulation S-K or such individual’s Related Parties (or would be a “named executive officer” with respect to the fiscal year in which the proposed issuance occurs) or (y) in the event that the Company is not required to file reports with the Securities and Exchange Commission, any individual who would have been a “named executive officer” if the Company was required to file such reports or such individual’s Related Parties, in each case of clauses (x) and (y), other than DSO or his Related Parties (collectively, the “ Designated Officers ”), new equity interests in the Partnership, such Operating Group Entity or OZ Fund (“ New NEO Units ”) and make any distributions in respect of such New NEO Units, unless (i) so long as the Company’s common shares are traded on the New York Stock Exchange or another nationally recognized stock exchange, the issuance of such New NEO Units is approved by the Company’s compensation committee and (ii) to the extent the Company’s common shares are not traded on the New York Stock Exchange or another nationally recognized stock exchange, with the prior written consent of the Holders’ Committee. For the avoidance of doubt, (i) if the issuance of such New NEO Units are approved in accordance with the preceding sentence, any distributions paid on such New NEO Units that otherwise comply with the terms of this Unit Designation shall be permitted without any further action on the part of the compensation committee or the Holders’ Committee as the case may be, and (ii) this Section 9(d) shall not restrict issuances of interests in the ordinary course to Designated Officers in connection with any direct or indirect capital investments they make in the OZ Funds on substantially the same terms and conditions as third party investors (other than any waiver of management, incentive, carry or similar fees agreed to by the Company).

(e) Neither the Company nor the Partnership shall effect, or cause or permit to be effected, any transaction between the Company, the Partnership or any other Operating Group Entity or any OZ Fund, on the one hand, with any Designated Officer, any holder of at least 10% of the outstanding equity interests of the Company, the Partnership, any other Operating Group Entity or their respective Affiliates or Related Parties (for the avoidance of doubt, other than the Company, the Partnership, any other Operating Group Entity, DSO or his Related Parties), on the other hand, other than transactions in the ordinary course of business with any Person (other than any Person that is a Designated Officer) relating to such Person’s service to any Operating Group Entity or consistent with past practice as of the date hereof including in connection with granting any direct or indirect carry or capital interest in the OZ Funds to such Person, which matters shall, without limiting Section 9(d), be determined by the Board of Directors of the Company or the compensation committee thereof.

(f) None of the Partnership or any other Operating Group Entity shall, and the Company and the Partnership shall not permit the Partnership or such Operating Group Entity to, sell, dispose of, or otherwise transfer (whether directly or indirectly, by merger, spin-off, consolidation, or otherwise) any of their respective businesses, business lines, or divisions (including their respective multi-strategy, credit and real estate businesses) or any significant assets thereof without the prior written consent of the Holders’ Committee; provided that this Section 9(f) does not restrict any such sale, disposal or other transfer from any OZ Subsidiary to any Credit Party that is permitted under Section 8(b), provided that nothing in this Section 9(f) shall limit obligations of the Operating Partnerships and the Company under Section 3(c)(ii).

10. Amendments and Waivers . Only the prior written consent of the Holders’ Committee shall be required for the repeal of this Unit Designation, any amendment (directly or indirectly, by merger, consolidation or otherwise) to this Unit Designation, or any waiver of any of its provisions. Only the prior written consent of the Holders’ Committee shall be required for any amendment (directly or indirectly, by merger, consolidation or otherwise) to the Limited Partnership Agreement that would have an adverse effect on any holders of the Class A Preferred Units or effectuate any waiver of any provisions of this Unit Designation.

11. No Reissuance . No Class A Preferred Units acquired by the Partnership by reason of redemption, purchase or otherwise shall be reissued.

12. Transfers .

(a) No Class A Preferred Unit (or any rights with respect thereto) shall be Transferred without the consent of the Holders’ Committee and, solely in the case of any holder of Class A Preferred Units other than DSO or a Related Party of DSO, the General Partner; provided, that any such consent shall not be unreasonably withheld with respect to a request to Transfer Class A Preferred Units in accordance with this Section 12. Any attempted Transfer that is not made in compliance with this Section 12 shall be void ab initio.

(b) No Transfer shall be permitted under Section 12(a) if the Holders’ Committee determines in its sole and absolute discretion that (i) such a Transfer would pose a risk that the Partnership would be a “publicly traded partnership” as defined in Section 7704 of the Code; (ii) such Transfer would obligate the Partnership to register the Interests for resale under any applicable federal or state securities laws or require the Partnership to file reports pursuant to any applicable federal or state securities laws.

(c) Each holder of Class A Preferred Units hereby agrees that it will not effect any Transfer of all or any of its Class A Preferred Units (whether voluntarily, involuntarily or by operation of law) in any manner contrary to the terms of this Unit Designation or that violates or causes the Partnership or the Partners to violate the Securities Act, the Exchange Act, the Investment Company Act, or the laws, rules, regulations, orders or other directives of any governmental authority.

(d) In the event of any Transfer of Class A Preferred Units, (i) the transferor shall cause each transferee to agree in writing to comply with the terms of this Unit Designation and the Partnership Agreement, (ii) prior to such Transfer by any holder of Class A Preferred Units other than by DSO or a Related Party of DSO, and as a condition thereto, the General Partner may require such other documentation, including appropriate opinions of legal counsel, as it deems necessary in its sole discretion, and (iii) unless waived by the General Partner in its sole discretion, no Transfer of Class A Preferred Units other than by DSO or a Related Party of DSO shall be permitted unless the transferor or the proposed transferee shall have undertaken to pay all reasonable expenses incurred by the Partnership or its Affiliates in connection therewith.

13. Right of First Refusal . In the event that a holder of Class A Preferred Units (other than DSO or a Related Party of DSO) (the “ Seller ” ) receives a bona-fide offer for the sale of any or all of such holder’s Class A Preferred Units (the “ Offered Securities ” ), the Seller shall first offer to sell the Offered Securities to DSO or his designee(s) pursuant to a written notice (the “ ROFR Notice ”) provided to DSO, which notice shall include: (i) a description of the transaction being proposed, (ii) the identity of the offeror ( “ Third Party Buyer ” ), (iii) the purchase price proposed and the manner of payment thereof and (iv) a term sheet setting forth the material terms and conditions of the offer and a copy of the proposed agreement, if any. Within twenty (20) days of receiving the ROFR Notice, DSO must either accept or decline the offer and if DSO neither accepts nor declines the offer within such twenty (20) day period, the offer will be considered declined. If the offer is declined by DSO, (i) the Seller shall next offer to sell the Offered Securities to the General Partner, on behalf of the Partnership, pursuant to a ROFR Notice and otherwise on the terms specified in the foregoing sentence, and (ii) if the General Partner declines such offer, the Seller will have the right to sell the Offered Securities to the person specified in the offer at a price and on terms and conditions no less favorable to the Seller than the price and terms and conditions set out in the ROFR Notice. If the sale to the Third Party Buyer is not completed within sixty (60) days after the General Partner declines the offer, this Section 13 shall again become applicable as if the offer had not been made.

14. No Preemptive Rights . Unless otherwise determined by the General Partner and the Holders’ Committee, no holders of the Class A Preferred Units will, as holders of Class A Preferred Units, have any preemptive rights to purchase or subscribe for Common Units or any other security of the Partnership.

15. Notices . Any notices required or permitted to be given to a holder of Preferred Units hereunder may be given by mail or other means of written communication, including by electronic mail or other means of electronic transmission, to the address or other applicable contact details maintained for such holder in the books and records of the Partnership.

16. Severability of Provisions . If any right, preference or limitation of the Class A Preferred Units set forth in this Unit Designation (as this Unit Designation may be amended from time to time) is invalid, unlawful or incapable of being enforced by reason of any rule or law or public policy, all other rights, preferences and limitations set forth in this Unit Designation, which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein set forth be deemed dependent upon any such other right, preference or limitation unless so expressed herein.

[Signature Page Follows]

IN WITNESS WHEREOF, this Unit Designation has been duly executed as of the date first above written.


OZ MANAGEMENT LP

By:		OCH-ZIFF HOLDING CORPORATION,
		its general partner

By:		/s/ Joel M. Frank
Name:		Joel M. Frank
Title:		Chief Financial Officer

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC, as to Section 3(b)(ii), Section 8(b), Section 9(d), Section 9(e), and Section 9(f) only

By:		/s/ Joel M. Frank
Name:		Joel M. Frank
Title:		Chief Financial Officer

Exhibit 10.5

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OZ ADVISORS LP

Dated as of March 1, 2017

TABLE OF CONTENTS


		Page
ARTICLE I DEFINITIONS			1
Section 1.1	Definitions		1

ARTICLE II GENERAL PROVISIONS			20
Section 2.1	Organization		20
Section 2.2	Partnership Name		20
Section 2.3	Registered Office, Registered Agent		20
Section 2.4	Certificates		20
Section 2.5	Nature of Business; Permitted Powers		20
Section 2.6	Fiscal Year		20
Section 2.7	Perpetual Existence		21
Section 2.8	Limitation on Partner Liability		21
Section 2.9	Indemnification		21
Section 2.10	Exculpation		22
Section 2.11	Fiduciary Duty		22
Section 2.12	Confidentiality; Intellectual Property		23
Section 2.13	Non-Competition; Non-Solicitation; Non-Disparagement; Non-Interference; and Remedies		24
Section 2.14	Insurance		30
Section 2.15	Representations and Warranties		30
Section 2.16	Devotion of Time		31
Section 2.17	Partnership Property; Partnership Interest		31
Section 2.18	Short Selling and Hedging Transactions		31
Section 2.19	Compliance with Policies		32

ARTICLE III INTERESTS AND ADMISSION OF PARTNERS			32
Section 3.1	Units and other Interests		32
Section 3.2	Issuance of Additional Units and other Interests		42

ARTICLE IV VOTING AND MANAGEMENT			44
Section 4.1	General Partner: Power and Authority		44
Section 4.2	Partner Management Committee		45
Section 4.3	Partner Performance Committee		46
Section 4.4	Books and Records; Accounting		48
Section 4.5	Expenses		48
Section 4.6	Partnership Tax and Information Returns		48

ARTICLE V CONTRIBUTIONS AND CAPITAL ACCOUNTS			49
Section 5.1	Capital Contributions		49
Section 5.2	Capital Accounts		50
Section 5.3	Determinations by General Partner		51


ARTICLE VI ALLOCATIONS		51
Section 6.1	Allocations for Capital Account Purposes	51
Section 6.2	Allocations for Tax Purposes	56

ARTICLE VII DISTRIBUTIONS		58
Section 7.1	Distributions	58
Section 7.2	Distributions in Kind	59
Section 7.3	Tax Distributions	59
Section 7.4	Expense Amount Distributions	60
Section 7.5	Borrowing	60
Section 7.6	Restrictions on Distributions	60

ARTICLE VIII TRANSFER OR ASSIGNMENT OF INTEREST; CESSATION OF PARTNER STATUS		61
Section 8.1	Transfer and Assignment of Interest	61
Section 8.2	Withdrawal by General Partner	62
Section 8.3	Withdrawal and Special Withdrawal of Limited Partners	63
Section 8.4	Vesting	65
Section 8.5	Tag-Along Rights	65
Section 8.6	Drag-Along Rights	66
Section 8.7	Reallocation of Common Units pursuant to Partner Agreements	66

ARTICLE IX DISSOLUTION		67
Section 9.1	Duration and Dissolution	67
Section 9.2	Notice of Liquidation	68
Section 9.3	Liquidator	68
Section 9.4	Liquidation	68
Section 9.5	Capital Account Restoration	70

ARTICLE X MISCELLANEOUS		70
Section 10.1	Incorporation of Agreements	70
Section 10.2	Amendment to the Agreement	70
Section 10.3	Successors, Counterparts	71
Section 10.4	Applicable Law; Submission to Jurisdiction; Severability	71
Section 10.5	Arbitration	72
Section 10.6	Filings	73
Section 10.7	Power of Attorney	74
Section 10.8	Headings and Interpretation	74
Section 10.9	Additional Documents	74
Section 10.10	Notices	74
Section 10.11	Waiver of Right to Partition	74
Section 10.12	Partnership Counsel	75
Section 10.13	Survival	75
Section 10.14	Ownership and Use of Name	75
Section 10.15	Remedies	75
Section 10.16	Entire Agreement	75

This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF OZ ADVISORS LP, a Delaware limited partnership (the “ Partnership ”), is made as of March 1, 2017, by and among Och-Ziff Holding Corporation, a Delaware corporation, as general partner (the “ Initial General Partner ”) and the Limited Partners (as defined below).

WHEREAS, OZ Advisors, L.L.C. (the “ Original Company ”) was originally organized as a Delaware limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et seq. (the “ LLC Act ”) on December 12, 1997;

WHEREAS, on June 25, 2007, the Original Company was converted from a Delaware limited liability company to a Delaware limited partnership organized pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §17-101, et seq. (the “ Act ”), and an Agreement of Limited Partnership of OZ Advisors LP dated as of June 25, 2007 (the “ Initial Partnership Agreement ”);

WHEREAS, from the date of the Initial Partnership Agreement, Och-Ziff Associates, L.L.C. ceased to be a Limited Partner and each of Daniel S. Och, David Windreich and their respective Related Trusts which on the date of the Initial Partnership Agreement were also members of Och-Ziff Associates, L.L.C. became Limited Partners as of such date; and

WHEREAS, the Initial Partnership Agreement was amended and restated on November 13, 2007 (the Initial Partnership Agreement, as amended and restated, the “ Prior Partnership Agreement ”), on February 11, 2008, on September 30, 2009, on August 1, 2012, and on December 14, 2015, and is hereby amended and restated again.

NOW THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used herein, the following terms shall have the following meanings:

“ Act ” has the meaning specified in the Preamble to this Agreement.

“ Additional Limited Partner ” has the meaning specified in Section 3.2(a).

“ Adjusted Capital Account ” means the Capital Account maintained for each Partner as of the end of each Fiscal Year, (a) increased by any amounts that such Partner is obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such Fiscal Year, are reasonably expected to be allocated to such Partner in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such Fiscal Year, are reasonably expected to be made to such Partner in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Partner’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or Section 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.