Exhibit 10.3

EXECUTION VERSION

THIRD AMENDED AND RESTATED TAX RECEIVABLE AGREEMENT
This THIRD AMENDED AND RESTATED TAX RECEIVABLE AGREEMENT (as amended from time
to time, this “Agreement”), dated as of September 30, 2019 (the “Closing Date”),
is hereby entered into by and among Brookfield Asset Management Inc., a
corporation incorporated under the laws of the Province of Ontario (“Parent”),
Oaktree Holdings, Inc., a Delaware corporation (“Holdings Inc.”), Oaktree AIF
Holdings, Inc. (f/k/a Oaktree Media Holdings, Inc.), a Delaware corporation
(“AIF Holdings Inc.”) (each of Holdings Inc. and AIF Holdings Inc. (including,
for the avoidance of doubt, each successor thereto) a “Corporation” and
collectively, the “Corporations”), Oaktree Capital II, L.P., a Delaware limited
partnership (“Oaktree Capital II”), Oaktree Capital Management, L.P., a Delaware
limited partnership (“OCM”), Oaktree Investment Holdings, L.P. a Delaware
limited partnership (“Investment Holdings”), Oaktree AIF Investments, L.P.
(f/k/a Oaktree Media Investments, L.P.), a Delaware limited partnership
(“Oaktree AIF”), the entities set forth on the signature pages hereto (together
with all other Persons (as defined herein) in which the Corporations acquire a
partnership interest, limited liability company interest or similar interest
after the date hereof and who execute and deliver a joinder contemplated in
Section 7.12, the “Partnerships”), Oaktree Capital Group Holdings, L.P., a
Delaware limited partnership (“OCGH”), and each of the limited partners of OCGH
(the “Limited Partners”).
RECITALS
WHEREAS, the Limited Partners hold or held limited partnership interests (“OCGH
Units”) in OCGH;
WHEREAS, OCGH holds limited partnership interests (“Partnership Units”) in each
of the Partnerships, each of which is treated as a partnership for U.S. federal
income tax purposes;
WHEREAS, the Limited Partners have, prior to the Signing Date, exchanged OCGH
Units with the Corporations for cash, Class A Units or other consideration and
the right to receive payments under this Agreement;
WHEREAS, in connection with an exchange of OCGH Units by certain Limited
Partners, certain other Limited Partners (each such other Limited Partner with
respect to such exchange, a “Surplus Partner”) were entitled to receive payments
from the Corporations in exchange for certain equity interests of OCGH (“Surplus
Interests”) pursuant to Section 6.3(b)(iii) of the Prior OCGH Partnership
Agreement;
WHEREAS, following such exchanges, OCGH distributed Partnership Units to the
Corporations in redemption of the OCGH Units acquired in such exchanges and each
Corporation exchanged certain of such Partnerships Units with the other
Corporation and the other general partners of the Partnerships in exchange for
Partnership Units of the Partnerships of which such Corporation and other
general partners were the general partners (any such subsequent exchange, an
“OCGH Exchange”);
WHEREAS, OCGH and the Partnerships have had in effect an election under Section
754 of the Internal Revenue Code of 1986, as amended (the “Code”), for each
Taxable Year in which a taxable exchange of OCGH Units (and, if applicable,
Surplus Interests) for cash, Class A Units or other consideration prior to the
Signing Date occurred, which election resulted in an adjustment to the tax basis
of the assets owned by the Partnerships at the time of such exchanges of OCGH
Units (and, if applicable, Surplus Interests) for cash, Class A Units or other
consideration (collectively, an “Exchange”) (such time, the “Exchange Date”)
(any such exchanges occurring on an Exchange Date prior to the Signing Date, a
“Pre-Signing Exchange”) (such assets and any asset whose tax basis is
determined, in whole or in part, by reference to the adjusted basis of any such
asset, the “Reference Assets”) by reason of such Exchange, the OCGH Exchange
immediately following such Exchange and the receipt of payments under this
Agreement;
WHEREAS, the income, gain, loss, expense and other Tax items of (i) the
Partnerships solely with respect to the Corporations may be affected by the
Basis Adjustment (defined below) and (ii) the Corporations may be affected by
the Imputed Interest (as defined below);
WHEREAS, the parties to this Agreement desire to make certain arrangements with
respect to the effect of the Basis Adjustment and Imputed Interest on the actual
liability for Taxes of the Corporations;
WHEREAS, the parties executed a Tax Receivable Agreement, dated as of May 25,
2007 (the “Original Agreement”);
WHEREAS, the Original Agreement was amended and restated in its entirety by the
execution of an Amended and Restated Tax Receivable Agreement, dated as of March
28, 2008 (the “First Amended Agreement”);
WHEREAS, the First Amended Agreement was amended and restated in its entirety by
the execution of a Second Amended and Restated Tax Receivable Agreement on March
29, 2012;
WHEREAS, Oaktree Capital Group, LLC, a Delaware limited liability company
(“Oaktree”), Oslo Holdings LLC, a Delaware limited liability company, Oslo
Holdings Merger Sub LLC, Parent, and Berlin Merger Sub, LLC, a Delaware limited
liability company (“Merger Sub”), entered into an Agreement and Plan of Merger,
dated as of the Signing Date (as may be amended, supplemented or waived from
time to time in accordance with its terms, the “Merger Agreement”), pursuant to
which, among other things, Merger Sub merged with and into Oaktree with Oaktree
continuing as the surviving company in accordance with the terms set forth in
the Merger Agreement;
WHEREAS, the parties intend (i) for the terms of this Agreement to continue to
apply to Pre-Signing Exchanges and (ii) to terminate any rights to payments
under this Agreement for exchanges of OCGH Units occurring on or following the
Signing Date (any such exchanges occurring on an Exchange Date on or following
the Signing Date, the “Post-Signing Exchanges”);
WHEREAS, Section 7.06 of the Second Amended Agreement provides that the
Agreement may be amended in writing by each of the Corporations, on behalf of
themselves and the respective Partnerships they Control, and by Senior
Executives who would be entitled to receive at least two-thirds of the Early
Termination Payments payable to all Senior Executives hereunder if each of the
Corporations had exercised its right of early termination on the date of the
most recent Exchange prior to such amendment (excluding, for purposes of this
sentence, all payments made to any Senior Executive pursuant to this Agreement
since the date of such most recent Exchange) (the “Amending Parties”), unless
such amendment would have a disproportionate effect on the payment certain
Limited Partners will or may receive under this Agreement;
WHEREAS, the Amending Parties desire to amend and restate the Second Amended
Agreement in a manner that would not have a disproportionate effect on the
payment certain Limited Partners will or may receive under this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective covenants
and agreements set forth herein, and intending to be legally bound hereby, the
parties hereto agree to amend and restate the Second Amended Agreement in its
entirety as follows:
Article I
DEFINITIONS
Section 1.01    Definitions. As used in this Agreement, the terms set forth in
this Article I shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined).
“Additional Payment” has the meaning set forth in the Exchange Agreement.
“Advisory Firm” means Simpson Thacher & Bartlett LLP, Munger, Tolles & Olson
LLP, Pricewaterhouse Coopers LLP, Ernst & Young, LLP, or any other accounting
firm or law firm that is nationally recognized as being expert in the relevant
Tax matters.
“Advisory Firm Letter” shall mean a letter from the Advisory Firm stating that
the relevant schedule, notice or other information to be provided or made
available by the Corporations to the Limited Partners or Senior Executives’
Representative, as the case may be, and all supporting schedules and work papers
were prepared in a manner consistent with the terms of this Agreement and, to
the extent not expressly provided in this Agreement, on a reasonable basis in
light of the facts and law in existence on the date such schedule, notice or
other information is delivered or made available to the Limited Partners or
Senior Executives’ Representative, as the case may be.
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person.
“Agreed Rate” means LIBOR plus 100 basis points.
“Agreement” is defined in the preamble of this Agreement.
“AIF Holdings Inc.” is defined in the preamble of this Agreement.
“Amended Schedule” is defined in Section 2.04(b) of this Agreement.
“Amending Parties” is defined in the Recitals of this Agreement.
“Basis Adjustment” means the adjustment to the tax basis of a Reference Asset
under Sections 1012, 732, 734(b), 743(b) and 754 of the Code and, in each case,
comparable sections of state, local and foreign tax laws (as calculated under
Section 2.01 of this Agreement) as a result of a Pre-Signing Exchange, the OCGH
Exchange immediately following such Pre-Signing Exchange and the payments made
pursuant to this Agreement. In the case of an interest in a Partnership that
owns a Reference Asset and that has been the subject of a Pre-Signing Exchange
and OCGH Exchange, if at any time after such Pre-Signing Exchange and OCGH
Exchange the interest is transferred to (i) a Corporation or (ii) any entity
that is owned directly or indirectly in whole or in part by a Corporation, the
Basis Adjustment for such Reference Asset shall include, to the extent
reasonably determined to be appropriate by such Corporation, any adjustment to
the tax basis of the Reference Asset under Sections 1012, 732, 734(b), 743(b)
and 754 of the Code and, in each case, comparable sections of state, local and
foreign tax laws (as calculated under Section 2.01 of this Agreement) as a
result of such transfer to the extent such adjustment does not exceed the
unamortized Basis Adjustment for the Reference Asset as determined immediately
before such transfer. Notwithstanding any other provision of this Agreement, the
amount of any Basis Adjustment resulting from a Pre-Signing Exchange and any
corresponding OCGH Exchange immediately following such Exchange of one or more
OCGH Units shall be determined separately for each exchanging Limited Partner
and Surplus Partners, if any, with respect to such Pre-Signing Exchange and
without regard to any Pre-Exchange Transfer of such OCGH Units and as if any
such Pre-Exchange Transfer had not occurred.
A “Beneficial Owner” of a security is a Person who directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise has
or shares: (i) voting power, which includes the power to vote, or to direct the
voting of, such security and/or (ii) investment power, which includes the power
to dispose, or to direct the disposition of, such security. The terms
“Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.
“BUSI” means Brookfield US Inc., a Delaware corporation and an indirectly
wholly-owned subsidiary of Parent.
“Business Day” means Monday through Friday of each week, except that a legal
holiday recognized as such by the government of the United States of America or
the State of New York shall not be regarded as a Business Day.
“Change of Control” means the occurrence of any of the following events:
(i)any Person or any group of Persons acting together which would constitute a
“group” for purposes of Section 13(d) of the Securities and Exchange Act of
1934, or any successor provisions thereto, is or becomes the Beneficial Owner,
directly or indirectly, of securities of Parent representing more than fifty
percent (50%) of the combined voting power of Parent’s then outstanding voting
securities; provided that in no event shall a Change of Control be deemed to
occur if, following any such transaction or transactions, both (x) a majority of
the Class B Limited Voting Shares are owned, beneficially or otherwise, by
individuals who were, immediately prior to the consummation of such transaction,
existing or former officers, directors and employees of Parent or their
respective Related Parties and (y) a majority of the Class B Limited Voting
Shares continue to have the right to elect at least 50% of the board of
directors of Parent;
(ii)    either (A) a majority of the Class B Limited Voting Shares cease to be
owned, beneficially or otherwise, by existing or former officers, directors or
employees of Parent or their respective Related Parties or (B) the Class B
Limited Voting Shares cease to have the right to elect at least 50% of the board
of directors of Parent;
(iii)    Parent consummates any merger, amalgamation, scheme or plan of
arrangement or consolidation or similar business combination transaction as a
result of which (A) the holders of Parent’s capital stock issued and outstanding
immediately prior to such transaction do not Beneficially Own, immediately after
giving effect to such transaction, more than 50% of the combined voting power of
the surviving or resulting entity; provided that in no event shall a Change of
Control be deemed to occur if, following any such transaction or transactions, a
majority of the Class B Limited Voting Shares are owned, beneficially or
otherwise, by individuals who were, immediately prior to the consummation of
such transaction, existing or former officers, directors and employees of Parent
or their respective Related Parties or (B) the holders of a majority of the
Class B Limited Voting Shares immediately prior to such transaction do not,
immediately after giving effect to such transaction, have the right to elect at
least 50% of the surviving or resulting entity’s board of directors; or
(iv)    the date, after the expiration of the Initial Period, when the Permitted
Oaktree Holders (as defined in the Oaktree Operating Agreement) no longer
Beneficially Own (as defined in the Oaktree Operating Agreement) at least the
Minimum Threshold (as defined in the Oaktree Operating Agreement.
Notwithstanding the foregoing, (A) except with respect to clause (ii) and clause
(iii) above, a “Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of Parent’s capital
stock immediately prior to such transaction or series of transactions continue
to have substantially the same proportionate ownership in an entity which owns
all or substantially all of the assets of the Parent immediately following such
transaction or series of transactions, and (B) the parties agree that the
transactions contemplated by the Merger Agreement shall not constitute a Change
of Control for purposes of this Agreement.
“Class A Units” means Class A units of Oaktree.
“Class B Limited Voting Shares” means Class B limited voting shares of Parent.
“Closing Date” is defined in the preamble of this Agreement.
“Code” is defined in the Recitals of this Agreement.
“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise, including as deemed
hereunder.
“Corporation” and “Corporations” are defined in the preamble of this Agreement.
“Corporation Return” means the federal Tax Return and/or state and/or local
and/or foreign Tax Return, as applicable, of either Holdings Inc. or AIF
Holdings Inc. filed with respect to Taxes of any Taxable Year.
“Default Rate” means LIBOR plus 100 basis points.
“Determination” has the meaning ascribed to such term in Section 1313(a) of the
Code or similar provision of state, local and foreign tax law, as applicable, or
any other event (including the execution of a Form 870-AD) that finally and
conclusively establishes the amount of any liability for Tax.
“Early Termination Date” means the date of an Early Termination Notice for
purposes of determining the Early Termination Payment.
“Early Termination Notice” is defined in Section 4.02 of this Agreement.
“Early Termination Schedule” is defined in Section 4.02 of this Agreement.
“Early Termination Payment” is defined in Section 4.03(b) of this Agreement.
“Early Termination Rate” means the lesser of (i) 6.5% and (ii) LIBOR plus 100
basis points.
“Exchange” is defined in the Recitals of this Agreement.
“Exchange Agreement” means that certain Third Amended and Restated Exchange
Agreement, dated as of September 30, 2019, by and among Atlas Holdings, LLC,
Atlas OCM Holdings, LLC, Oaktree, OCM Holdings I, LLC, Oaktree New Holdings,
LLC, Oaktree AIF Holdings II, LLC, Oaktree Holdings, Ltd., OCGH, Oaktree Capital
I, Oaktree Capital II, OCM, Oaktree Capital Management (Cayman), L.P., Oaktree
AIF, Investment Holdings, OCGH ExchangeCo, L.P., the OCGH Limited Partners (as
defined therein), (solely for certain limited purposes) Parent, and the other
parties thereto from time to time.
“Exchange Basis Schedule” is defined in Section 2.02 of this Agreement.
“Exchange Date” is defined in the Recitals of this Agreement.
“Exchange Payment” means any Tax Benefit Payment or Early Termination Payment
required to be made by a Corporation to the Limited Partners under this
Agreement.
“Exchange Price” is the amount of cash, Class A Units or other consideration
transferred to a Limited Partner and each applicable Surplus Partner, if any,
pursuant to the Exchange as payment for the exchanged OCGH Units (and, if
applicable, Surplus Interests), other than amounts payable pursuant to this
Agreement.
“Excluded Items” means each of the following:
(i)    any items of loss or deduction resulting from intercompany transactions
between a Corporation and any Affiliate of such Corporation entered into after
the Closing Date, other than the Interest Expense;
(ii)    pre-existing net operating losses and other tax attributes of entities
acquired after the Closing Date to which a Corporation becomes entitled as a
result of an acquisition after the Closing Date, and
(iii)    any net losses generated after the Closing Date by entities or
businesses acquired after the Closing Date (calculated on a standalone basis for
each such acquisition) to which a Corporation becomes entitled (other than by
reason of an acquisition by any Oaktree Operating Group entities or any of their
Subsidiaries).
“Expert” is defined in Section 7.09 of this Agreement.
“First Amended Agreement” is defined in the Recitals of this Agreement.
“Holdings Inc.” is defined in the preamble of this Agreement.
“Imputed Interest” means any interest imputed under Section 1272, 1274 or 483 or
other provision of the Code and any similar provision of state, local and
foreign tax law with respect to a Corporation’s payment obligations under this
Agreement.
“Interest Amount” is defined in Section 3.01(b) of this Agreement.
“Interest Expense” is defined in Section 7.11(a) of this Agreement.
“Investment Holdings” is defined in the preamble of this Agreement.
“IRS” means the United States Internal Revenue Service.
“JAMS” is defined in Section 7.08 of this Agreement.
“LIBOR” means for each month (or portion thereof) during any period, an interest
rate per annum equal to the rate per annum reported, on the date two days prior
to the first day of such month, on the Telerate Page 3750 (or if such screen
shall cease to be publicly available, as reported on Reuters Screen page “LIBO”
or by any other publicly available source of such market rate) for London
interbank offered rates for U.S. dollar deposits for such month (or portion
thereof).
“Limited Partners” is defined in the preamble of this Agreement. The term
“Limited Partner” shall include any applicable Surplus Partner as the context
requires.
“Material Objection Notice” is defined in Section 4.02 of this Agreement.
“Merger Agreement” is defined in the Recitals of this Agreement.
“Merger Sub” is defined in the Recitals of this Agreement.
“Net Tax Benefit” is defined in Section 3.01(b) of this Agreement.
“Non-Stepped Up Tax Basis” means, with respect to any asset at any time, the tax
basis that such asset would have had at such time if no Basis Adjustment had
been made.
“Non-Stepped Up Tax Liability” means, with respect to any Taxable Year, the
liability for Taxes of a Corporation or any Partnership in which such
Corporation owns an interest, but only with respect to Taxes imposed on such
Partnership and allocable to such Corporation using the same methods, elections,
conventions and similar practices used on the relevant Corporation Return, but
using the Non-Stepped Up Tax Basis instead of the tax basis of the Reference
Assets and excluding any deduction attributable to the Imputed Interest.
“Oaktree” is defined in the Recitals of this Agreement.
“Oaktree AIF” is defined in the preamble of this Agreement.
“Oaktree Capital I” is defined in the definition of Oaktree Operating Group.
“Oaktree Capital II” is defined in the Recitals of this Agreement.
“Oaktree (Cayman)” is defined in the definition of Oaktree Operating Group.
“Oaktree Operating Agreement” means the operating agreement of Oaktree, as it
may be amended or modified from time to time.
“Oaktree Operating Group” means, collectively, Oaktree Capital I, L.P., a
Delaware limited partnership (“Oaktree Capital I”), Oaktree Capital II, OCM,
Investment Holdings, Oaktree AIF and Oaktree Capital Management (Cayman), L.P.,
a Cayman Islands exempted limited partnership (“Oaktree (Cayman)”).
“Objection Notice” is defined in Section 2.04(a) of this Agreement.
“OCGH” is defined in the Recitals of this Agreement.
“OCGH Exchange” is defined in the Recitals of this Agreement.
“OCGH Partnership Agreement” means the limited partnership agreement of OCGH, as
it may be amended or modified from time to time.
“OCGH Units” is defined in the Recitals of this Agreement.
“OCM” is defined in the preamble of this Agreement.
“Original Agreement” is defined in the Recitals of this Agreement.
“Parent” is defined in the Recitals of this Agreement.
“Partnership Agreement” means, with respect to a Partnership, the Amended and
Restated Limited Partnership Agreement, Amended and Restated Limited Liability
Company Agreement or similar agreement of such Partnership.
“Partnership Units” is defined in the Recitals of this Agreement.
“Partnerships” is defined in the Recitals of this Agreement.
“Payment Date” means any date on which a payment is required to be made pursuant
to this Agreement.
“Person” means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization,
governmental entity or other entity.
“Post-Signing Exchanges” is defined in the Recitals of this Agreement.
“Pre-Exchange Transfer” means any transfer (including upon the death of a
Limited Partner) of one or more OCGH Units (i) that occurred prior to a
Pre-Signing Exchange of such OCGH Units, and (ii) to which Section 734(b) or
743(b) of the Code applied.
“Pre-Signing Exchange” is defined in the Recitals of this Agreement.
“Prior OCGH Partnership Agreement” means the limited partnership agreement of
OCGH, as amended, prior to the Sixth Amended and Restated Limited Partnership
Agreement, dated September 30, 2019.
“Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the
Non-Stepped Up Tax Liability over the actual liability (as determined under this
Agreement) for Taxes of a Corporation or any Partnership in which such
Corporation owns, or is deemed to own (pursuant to Section 7.11 hereunder), an
interest, using the “with or without” methodology. If all or a portion of such
actual tax liability for Taxes for the Taxable Year arises as a result of an
audit by a Taxing Authority of any Taxable Year, such liability shall not be
included in determining the Realized Tax Benefit unless and until there has been
a Determination.
“Realized Tax Detriment” means, for a Taxable Year, the excess, if any, of the
actual liability (as determined under this Agreement) for Taxes of a Corporation
or any Partnership in which such Corporation owns, or is deemed to own (pursuant
to Section 7.11 hereunder), an interest over the Non-Stepped Up Tax Liability
for such Taxable Year using the “with or without” methodology. If all or a
portion of such actual tax liability for Taxes for the Taxable Year arises as a
result of an audit by a Taxing Authority of any Taxable Year, such liability
shall not be included in determining the Realized Tax Detriment unless and until
there has been a Determination.
“Receivable” of a Limited Partner means such Limited Partner’s rights,
interests, and entitlements hereunder as of the date of this Agreement.
“Reconciliation Dispute” is defined in Section 7.09 of this Agreement.
“Reconciliation Procedures” is defined in Section 2.04(a) of this Agreement.
“Reference Assets” is defined in the Recitals of this Agreement.
“Related Parties” has the meaning set forth in the Exchange Agreement.
“Schedule” means any Exchange Basis Schedule, Tax Benefit Schedule and the Early
Termination Schedule.
“Senior Executives” means John B. Frank, Bruce A. Karsh, Howard S. Marks,
Sheldon M. Stone, Jay S. Wintrob and any additional individuals who may from
time to time be designated by the general partner of OCGH as senior executives
of OCGH, in each case for so long as such individual remains an officer or
employee of OCGH or any Oaktree Operating Group entity.
“Senior Executives’ Representative” means Todd Molz or such other Person as
designated in writing by OCGH.
“Service Partner” has the meaning set forth in the OCGH Partnership Agreement.
“Signing Date” means March 13, 2019.
“Subsidiaries” means, with respect to any Person, as of any date of
determination, any other Person as to which such Person, owns, or is deemed to
own (pursuant to Section 7.11 hereunder), directly or indirectly, or otherwise
controls, or is deemed to control, more than 50% of the voting shares or other
similar interests or the sole general partner interest or managing member or
similar interest of such Person.
“Successor Funds” is defined in Section 7.11(a) of this Agreement.
“Surplus Interest” is defined in the Recitals of this Agreement.
“Surplus Partner” is defined in the Recitals of this Agreement.
“Tax Benefit Payment” is defined in Section 3.01(b) of this Agreement.
“Tax Benefit Schedule” is defined in Section 2.03 of this Agreement.
“Tax Return” means any return, declaration, report or similar statement required
to be filed with respect to Taxes (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return and
declaration of estimated Tax.
“Taxable Year” means a taxable year as defined in Section 441(b) of the Code or
comparable section of state, local or foreign tax law, as applicable (and,
therefore, for the avoidance of doubt, may include a period of less than 12
months for which a Tax Return is made), ending on or after the Exchange Date in
which there is a Basis Adjustment due to a Pre-Signing Exchange.
“Taxes” means any and all U.S. federal, state, local and foreign taxes,
assessments or similar charges measured with respect to net income or profits
and any interest related to such Tax.
“Taxing Authority” means any domestic, foreign, federal, national, state, county
or municipal or other local government, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising any taxing
authority or any other authority exercising Tax regulatory authority.
“Treasury Regulations” means the final, temporary and proposed regulations under
the Code promulgated from time to time (including corresponding provisions and
succeeding provisions) as in effect for the relevant taxable period.
“Valuation Assumptions” means, as of an Early Termination Date, with respect to
a Corporation, the assumptions that (1) in each Taxable Year ending on or after
such Early Termination Date, the Corporation will have taxable income sufficient
to fully utilize the deductions arising from the Basis Adjustment and the
Imputed Interest during such Taxable Year, (2) the federal income tax rates and
state, local and foreign income tax rates that will be in effect for each such
Taxable Year will be those specified for each such Taxable Year by the Code and
other law as in effect on the Early Termination Date, (3) any loss carryovers
generated by the Basis Adjustment or the Imputed Interest and available as of
the date of the Early Termination Schedule will be utilized by the Corporation
on a pro rata basis from the date of the Early Termination Schedule through the
scheduled expiration date of such loss carryovers, and (4) any non-amortizable
assets are deemed to be disposed of (A) with respect to fund related assets,
pro-rata over the number of years remaining under the original fund agreement
until expected liquidation (without extensions) of the applicable fund (or, (y)
if such expected liquidation date has passed, on the Early Termination Date and
(z) if with respect to evergreen funds, after eighteen (18) months) and (B) with
respect to all other assets, on the fifteenth anniversary of the earlier of the
Basis Adjustment and the Early Termination Date.
ARTICLE II    
DETERMINATION OF REALIZED TAX BENEFIT
Section 2.01    Basis Adjustment. The Corporations and the Partnerships, on the
one hand, and each Limited Partner and Surplus Partner with respect to such
Pre-Signing Exchange, if any, on the other hand, acknowledge that, as a result
of a Pre-Signing Exchange by such Limited Partner and the OCGH Exchange
following such Exchange, each Corporation’s basis in the applicable Reference
Assets was increased, if at all, as provided in the definition of Basis
Adjustment. For the avoidance of doubt, payments made under this Agreement shall
not be treated as resulting in a Basis Adjustment to the extent such payments
are treated as Imputed Interest.
Section 2.02    Exchange Basis Schedule. The schedule attached hereto as Exhibit
A (the “Exchange Basis Schedule”) shall apply with respect to all Pre-Signing
Exchanges. For the avoidance of doubt, no additional Exchange Basis Schedule
shall be required to be delivered for any Taxable Year following the Taxable
Year that includes the Signing Date.
Section 2.03    Tax Benefit Schedule. Within sixty (60) calendar days after the
filing of the U.S. federal income tax return of a Corporation for any Taxable
Year in which there is a Realized Tax Benefit or Realized Tax Detriment, such
Corporation shall notify the Senior Executives’ Representative that the
Corporation shall, at a Senior Executive’s request, make available to the Senior
Executives’ Representative a schedule showing, in reasonable detail, the
calculation of the Realized Tax Benefit or Realized Tax Detriment for such
Taxable Year setting forth the Realized Tax Benefit or Realized Tax Detriment,
as the case may be, for each Limited Partner (a “Tax Benefit Schedule”). The
Schedule will become final as provided in Section 2.04(a) and may be amended as
provided in Section 2.04(b) (subject to the procedures set forth in Section
2.04(b)). For periods after the Closing Date, the Tax Benefit Schedule shall be
prepared by OCGH but shall be subject to review and comment by Parent in
accordance with procedures equivalent to Section 2.04(a) (after treating
references to a “Corporation” or the “Corporations” as references to “OCGH”, and
references to a “Senior Executive”, the “Senior Executives”, or the “Senior
Executives’ Representative” as references to “Parent”). Any disputes between
OCGH and Parent shall be resolved in accordance with Section 7.08 and the
Reconciliation Procedures (as defined below) (after treating references to a
“Corporation” or the “Corporations” as references to “OCGH”, and references to a
“Senior Executive”, the “Senior Executives”, or the “Senior Executives’
Representative” as references to “Parent”).
Section 2.04    Procedures, Amendments
(a)    Procedure. Every time a Corporation makes available to the Senior
Executives’ Representative an applicable Schedule under this Agreement,
including any Amended Schedule delivered pursuant to Section 2.04(b), but
excluding any Early Termination Schedule or amended Early Termination Schedule,
such Corporation shall also (x) make available to the Senior Executives’
Representative schedules and work papers providing reasonable detail regarding
the preparation of the Schedule and an Advisory Firm Letter supporting such
Schedule and (y) allow the Senior Executives reasonable access at no cost to the
appropriate representatives at each of such Corporation and the Advisory Firm in
connection with a review of such Schedule. The applicable Schedule shall become
final and binding on all parties unless a Senior Executive, within thirty (30)
calendar days after receiving notice that an Exchange Basis Schedule or
amendment thereto is available or thirty (30) calendar days after receiving
notice that a Tax Benefit Schedule or amendment thereto is available, provides
such Corporation with notice of a material objection to such Schedule
(“Objection Notice”) made in good faith; provided, for the sake of clarity, only
Senior Executives shall have the right to object to any Schedule or Amended
Schedule pursuant to this Section 2.04. If the parties, for any reason, are
unable to successfully resolve the issues raised in such notice within thirty
(30) calendar days of receipt by such Corporation of an Objection Notice, if
with respect to an Exchange Basis Schedule, or thirty (30) calendar days of
receipt by such Corporation of an Objection Notice, if with respect to a Tax
Benefit Schedule, after such Schedule was made available to the Senior
Executives’ Representative, such Corporation and such Senior Executive shall
employ the reconciliation procedures as described in Section 7.09 of this
Agreement (the “Reconciliation Procedures”).
(b)    Amended Schedule. The applicable Schedule for any Taxable Year may be
amended from time to time by a Corporation (i) in connection with a
Determination affecting such Schedule, (ii) to correct material inaccuracies in
the Schedule identified as a result of the receipt of additional factual
information relating to a Taxable Year after the date the Schedule was made
available to the Senior Executives’ Representative, (iii) to comply with the
Expert’s determination under the Reconciliation Procedures, (iv) to reflect a
material change in the Realized Tax Benefit or Realized Tax Detriment for such
Taxable Year attributable to a carryback or carryforward of a loss or other tax
item to such Taxable Year, (v) to reflect a material change in the Realized Tax
Benefit or Realized Tax Detriment for such Taxable Year attributable to an
amended Tax Return filed for such Taxable Year, or (vi) to adjust the Exchange
Basis Schedule to take into account payments made pursuant to this Agreement
(such Schedule, an “Amended Schedule”).
ARTICLE III    
TAX BENEFIT PAYMENTS
Section 3.01    Payments
(a)    Payments. Within five (5) calendar days of a Tax Benefit Schedule
becoming final in accordance with Section 2.04(a), the applicable Corporation
shall pay to OCGH, as administrative agent on behalf of each applicable Limited
Partner (including, if applicable, Surplus Partners), for such Taxable Year the
Tax Benefit Payment determined pursuant to Section 3.01(b). The portion of such
Tax Benefit Payment that is payable to OCGH on behalf of a particular Limited
Partner (or Surplus Partner) shall be determined taking into account the portion
of the Tax Benefit Payment attributable to such Limited Partner’s Exchanges for
such Taxable Year relative to the aggregate Tax Benefit Payments attributable to
all Limited Partners’ Exchanges for such Taxable Year (as determined in the
reasonable discretion of the Corporation). Each such Tax Benefit Payment shall
be made by wire transfer of immediately available funds to a bank account of
OCGH previously designated by OCGH to such Corporation. OCGH shall pay any Tax
Benefit Amounts received on behalf of a Limited Partner to a bank account of
such Limited Partner previously designated by such Limited Partner to OCGH;
provided that notwithstanding anything to the contrary in this Agreement, OCGH
shall be permitted to offset any Tax Benefit Payment received on behalf of a
Limited Partner (or any Early Termination Payment pursuant to Section 4.01) by
any Tax indemnity payments paid or payable by OCGH pursuant to a Partnership
Agreement that are attributable to such Limited Partner to the extent such Tax
indemnity payments did not reduce distributions to OCGH attributable to such
Limited Partner; provided, further, that nothing in this Agreement shall expand
any obligations of OCGH to indemnify for Taxes pursuant to a Partnership
Agreement. For the avoidance of doubt, no Tax Benefit Payment shall be made in
respect of estimated tax payments, including, without limitation, federal income
tax payments. Notwithstanding anything herein to the contrary, in no event shall
the Aggregate Tax Benefit Payments attributable to a Limited Partner (other than
amounts treated as interest under the Code) in respect of any Exchange under
this Agreement exceed an amount equal to 85% of the portion of the Exchange
Price paid to the Limited Partner in the Exchange or, at the option of the
Limited Partner, an amount to be determined on the Exchange Date as agreed to by
the Corporation and the Limited Partner.
(b)    A “Tax Benefit Payment” means an amount, not less than zero, equal to 85%
of the sum of the Net Tax Benefit and the Interest Amount. The “Net Tax Benefit”
shall equal: (1) each Corporation’s Realized Tax Benefit, if any, for a Taxable
Year plus (2) the excess of the Realized Tax Benefit reflected on an amended Tax
Benefit Schedule for a previous Taxable Year over the Realized Tax Benefit (or
Realized Tax Detriment (expressed as a negative number)) reflected on the Tax
Benefit Schedule for such previous Taxable Year, minus (3) an amount equal to
each Corporation’s Realized Tax Detriment (if any) for the current or any
previous Taxable Year, minus (4) the excess of the Realized Tax Benefit
reflected on a Tax Benefit Schedule for a previous Taxable Year over the
Realized Tax Benefit (or Realized Tax Detriment (expressed as a negative
number)) reflected on the amended Tax Benefit Schedule for such previous Taxable
Year; provided, however, that to the extent the amounts described in 3.01(b)(2),
(3) and (4) were taken into account in determining any Tax Benefit Payment in a
preceding Taxable Year, such amounts shall not be taken into account in
determining a Tax Benefit Payment attributable to any other Taxable Year;
provided, further, for the avoidance of doubt, no Limited Partner shall be
required to return any portion of any previously made Tax Benefit Payment. The
“Interest Amount” shall equal the interest on the Net Tax Benefit calculated at
the Agreed Rate from the due date (without extensions) for filing the
Corporation Return with respect to Taxes for such Taxable Year until the Payment
Date. Notwithstanding the foregoing, for each Taxable Year ending on or after
the date of a Change of Control (for the avoidance of doubt, other than the
transactions contemplated by the Merger Agreement), all Tax Benefit Payments,
whether paid with respect to OCGH Units that were exchanged (i) prior to the
date of such Change of Control or (ii) on or after the date of such Change of
Control, shall be calculated by utilizing Valuation Assumptions (1), (3), and
(4), substituting in each case the terms “the closing date of a Change of
Control” for an “Early Termination Date”. For the avoidance of doubt, no Tax
Benefit Payment shall be payable with respect to any Post-Signing Exchange.
Section 3.02    No Duplicative Payments. It is intended that the above
provisions of this Agreement will not result in duplicative payment of any
amount (including interest) required under this Agreement. It is also intended
that the provisions of this Agreement provide that 85% of each Corporation’s
Realized Tax Benefit and Interest Amount is paid to OCGH on behalf of the
Limited Partners pursuant to this Agreement. The provisions of this Agreement
shall be construed in the appropriate manner as such intentions are realized.
Section 3.03    Pro Rata Payments. For the avoidance of doubt, to the extent
each of the Corporations’ deductions with respect to the Basis Adjustments are
limited in a particular Taxable Year or such Corporation lacks sufficient funds
to satisfy its obligations to make all Tax Benefit Payments due in a particular
taxable year, the limitation on the deduction, or the Tax Benefit Payments that
may be made, as the case may be, shall be taken into account or made to OCGH on
behalf of each Limited Partner on a pro rata basis reflecting the proportion of
the total amount of deductions attributable to such Limited Partner with respect
to Pre-Signing Exchanges relative to the aggregate deductions for all of the
Limited Partners with respect to such Pre-Signing Exchanges (using such
methodology as determined in the reasonable discretion of such Corporation). For
purposes of calculating the Tax Benefit Payments, if there is insufficient
taxable income to fully utilize amortization and depreciation deductions
attributable to Post-Signing Exchanges and Pre-Signing Exchanges, the
amortization and depreciation deductions attributable to Post-Signing Exchanges
shall be taken into account in determining Tax Benefit Payments on a pro rata
basis with the amortization and depreciation deductions attributable to the
Pre-Signing Exchanges. For example, if there is $100 of taxable income for a tax
year (without regard to Exchanges), $100 of deductions attributable to
Post-Signing Exchanges and $200 of deductions attributable to Pre-Signing
Exchanges, $66.67 of the deductions attributable to Pre-Signing Exchanges shall
be taken into account in calculating the Tax Benefit Payments.
ARTICLE IV    
TERMINATION
Section 4.01    Early Termination.
A Corporation may terminate its obligations under this Agreement with respect to
all of the Pre-Signing Exchanges at any time by paying to OCGH on behalf of all
of the Limited Partners the Early Termination Payment; provided, however, that
this Agreement shall only terminate upon the receipt of the Early Termination
Payment by all Limited Partners, and provided, further, that a Corporation may
withdraw any notice to execute its termination rights under this Section 4.01
prior to the time at which any Early Termination Payment has been paid. Upon
payment of the Early Termination Payments by a Corporation, such Corporation
shall not have any further payment obligations under this Agreement in respect
of such Limited Partners, other than for any (a) Tax Benefit Payment agreed to
by such Corporation and the Senior Executives as due and payable but unpaid as
of the Early Termination Notice and (b) Tax Benefit Payment due for the Taxable
Year ending with or including the date of the Early Termination Notice (except
to the extent that the amount described in clause (b) is included in the Early
Termination Payment). For the avoidance of doubt, if a Corporation exercises its
termination rights under this Section 4.01, it shall have no impact on its
obligations with respect to the Additional Payment.
Section 4.02    Early Termination Notice. If a Corporation chooses to exercise
its right of early termination under Section 4.01 above, such Corporation shall
deliver to the Limited Partners notice of such intention to exercise such right
(“Early Termination Notice”) and shall deliver to the Senior Executives’
Representative a schedule (the “Early Termination Schedule”) specifying such
Corporation’s intention to exercise such right and showing in reasonable detail
the calculation of the Early Termination Payment. The applicable Early
Termination Schedule shall become final and binding on all parties unless a
Senior Executive, within 30 calendar days after receiving the Early Termination
Schedule thereto provides such Corporation with notice of a material objection
to such Schedule made in good faith (“Material Objection Notice”); provided, for
the sake of clarity, only a Senior Executive shall have the right to object to
any Schedule or Amended Schedule pursuant to this Section 4.02. If the parties,
for any reason, are unable to successfully resolve the issues raised in such
notice within 30 calendar days after receipt by such Corporation of the Material
Objection Notice, such Corporation and a Senior Executive shall employ the
Reconciliation Procedures as described in Section 7.09 of this Agreement.
Section 4.03    Payment upon Early Termination. (a) Within three calendar days
after agreement between the Senior Executives and a Corporation of the Early
Termination Schedule, such Corporation shall pay to OCGH, as administrative
agent on behalf of a Limited Partner an amount equal to the Early Termination
Payment. Such payment shall be made by wire transfer of immediately available
funds to a bank account designated by OCGH. OCGH shall pay any Early Termination
Payment received on behalf of a Limited Partner to a bank account of such
Limited Partner previously designated by such Limited Partner to OCGH, subject
to its right to offset any such payment pursuant to Section 3.01(b).
(a)    The “Early Termination Payment” as of the date of the delivery of an
Early Termination Schedule shall equal with respect to a Limited Partner the
present value, discounted at the Early Termination Rate as of such date, of all
Tax Benefit Payments that would be required to be paid by a Corporation to OCGH
on behalf of such Limited Partner beginning from the Early Termination Date
assuming the Valuation Assumptions are applied.
ARTICLE V    
LATE PAYMENTS
Section 5.01    Late Payments by a Corporation. The amount of all or any portion
of any Exchange Payment not made to OCGH on behalf of the Limited Partners when
due under the terms of this Agreement shall be payable together with any
interest thereon, computed at the Default Rate and commencing from the date on
which such Exchange Payment was due and payable.
ARTICLE VI    
NO DISPUTES; CONSISTENCY; COOPERATION
Section 6.01    Senior Executive Participation in the Corporations’ and
Partnerships’ Tax Matters. Except as otherwise provided herein, each Corporation
shall have full responsibility for, and sole discretion over, all Tax matters
concerning such Corporation and the Partnerships, including without limitation
the preparation, filing or amending of any Tax Return and defending, contesting
or settling any issue pertaining to Taxes. Notwithstanding the foregoing, each
Corporation shall notify the Senior Executives’ Representative of, and keep the
Senior Executives’ Representative reasonably informed with respect to the
portion of any audit of such Corporation and the Partnerships by a Taxing
Authority the outcome of which is reasonably expected to affect any Senior
Executive’s rights and obligations under this Agreement, and shall provide to
the Senior Executives reasonable opportunity to provide information and other
input to such Corporation, the Partnerships and their respective advisors
concerning the conduct of any such portion of such audit; provided, however,
that each Corporation and the Partnerships shall not be required to take any
action that is inconsistent with any provision of any of the Partnership
Agreements.
Section 6.02    Consistency. Except upon the written advice of an Advisory Firm,
each Corporation and the Limited Partners agree to report and cause to be
reported for all purposes, including federal, state, local and foreign Tax
purposes and financial reporting purposes, all Tax-related items (including
without limitation the Basis Adjustment and each Tax Benefit Payment) in a
manner consistent with that provided herein or (if not otherwise provided
herein) specified by each Corporation in any Schedule required to be provided by
or on behalf of such Corporation under this Agreement.
Section 6.03    Cooperation. The Limited Partners shall (a) furnish to each
Corporation in a timely manner such information, documents and other materials
as such Corporation may reasonably request for purposes of making any
determination or computation necessary or appropriate under this Agreement,
preparing any Tax Return or contesting or defending any audit, examination or
controversy with any Taxing Authority, (b) make itself available to each
Corporation and its representatives to provide explanations of documents and
materials and such other information as such Corporation or its representatives
may reasonably request in connection with any of the matters described in clause
(a) above, and (c) reasonably cooperate in connection with any such matter, and
each Corporation shall reimburse the Limited Partners for any reasonable
third-party costs and expenses incurred pursuant to this Section 6.03.
ARTICLE VII    
MISCELLANEOUS
Section 7.01    Notices. Any notice to any Service Partner that is required or
permitted hereunder to be given to such Service Partner shall be in writing and
shall be delivered to such Service Partner at the principal office of OCGH or at
such other place where such Service Partner may be found. Any notice to a
Service Partner which is delivered to the principal office of OCGH when such
Service Partner is absent from the office shall, if reasonable efforts have been
made to deliver it to him or her elsewhere, be deemed delivered to him or her on
the next succeeding business day, if he or she does not actually receive such
notice sooner. Any notice to any Limited Partner who is not a Service Partner
that is required or permitted hereunder to be given to such Limited Partner
shall be in writing and shall be delivered to such Limited Partner at the
address or facsimile number of such Limited Partner shown on the register of
OCGH. Any notice to a Corporation, Oaktree Capital II, OCM, Investment Holdings
or Oaktree AIF required or permitted hereunder to be given to a Corporation,
Oaktree Capital II, OCM, Investment Holdings or Oaktree AIF shall be in writing
and shall be delivered to such Corporation, Oaktree Capital II, OCM, Investment
Holdings or Oaktree AIF at the principal office of BUSI. A written notice may be
delivered by facsimile transmission.
Section 7.02    Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same instrument.
Section 7.03    Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their respective successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 7.04    Governing Law. This Agreement shall be construed and enforced,
along with any rights, remedies, or obligations provided for hereunder, in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within the State of Delaware by residents of the
State of Delaware; provided, that the enforceability of Section 7.08 shall be
governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and not the laws
of the State of Delaware.
Section 7.05    Severability. Whenever possible, each provision or portion of
any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein, if the economic and legal substance of the arrangements
contemplated hereby are not affected in any manner materially adverse to any
party hereto. Upon such a determination, each of the Corporations and Senior
Executives who would be entitled to receive at least two-thirds of the Early
Termination Payments payable to all Senior Executives hereunder if a Corporation
had exercised its right of early termination on the date of the most recent
Exchange shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby shall be consummated
as originally contemplated to the fullest extent possible.
Section 7.06    Successors; Assignment; Amendments; Waivers. No Limited Partner
may assign this Agreement to any person without the prior written consent of
each Corporation; provided, however, (i) that, except with respect to a transfer
of OCGH Units in connection with an Exchange, to the extent OCGH Units are
effectively transferred in accordance with the terms of the OCGH Partnership
Agreement, the transferring Limited Partner shall have the option to assign to
the transferee of such OCGH Units the transferring Limited Partner’s rights
under this Agreement with respect to the OCGH Units, as long as such transferee
has executed and delivered, or, in connection with such transfer, executes and
delivers, a joinder to this Agreement, in form and substance reasonably
satisfactory to each Corporation, agreeing to become an “Limited Partner” for
all purposes of this Agreement, except as otherwise provided in such joinder,
and (ii) that, once an Exchange has occurred, any and all payments that may
become payable to a Limited Partner pursuant to this Agreement with respect to
such Exchange may be assigned to any Person or Persons, as long as any such
Person has executed and delivered, or, in connection with such assignment,
executes and delivers, a joinder to this Agreement, in form and substance
reasonably satisfactory to each Corporation. For the avoidance of doubt, to the
extent a Senior Executive or other Person transfers OCGH Units to a Senior
Executive, the Senior Executive receiving such OCGH Units shall have all rights
under this Agreement with respect to such transferred OCGH Units as such Senior
Executive has, under this Agreement, with respect to the other OCGH Units held
by him.
No provision of this Agreement may be amended unless such amendment is approved
in writing by each of the Corporations, on behalf of themselves and the
respective Partnerships they Control, and by Senior Executives who would be
entitled to receive at least two-thirds of the Early Termination Payments
payable to all Senior Executives hereunder if each of the Corporations had
exercised its right of early termination on the date of the most recent Exchange
prior to such amendment (excluding, for purposes of this sentence, all payments
made to any Senior Executive pursuant to this Agreement since the date of such
most recent Exchange); provided, that no such amendment shall be effective if
such amendment will have a disproportionate effect on the payments certain
Limited Partners will or may receive under this Agreement unless all such
Limited Partners disproportionately effected consent in writing to such
amendment. No provision of this Agreement may be waived unless such waiver is in
writing and signed by the party against whom the waiver is to be effective.
All of the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the parties hereto and their
respective successors, assigns, heirs, executors, administrators and legal
representatives. Each Corporation shall require and cause any direct or indirect
successor (whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of such Corporation or interests in
a Partnership held by such Corporation, by written agreement, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that such Corporation would be required to perform if no such succession
had taken place. Notwithstanding anything to the contrary herein, in the event a
Senior Executive transfers his OCGH Units to a transferee as permitted under the
OCGH Partnership Agreement, excluding any other Senior Executive, such Senior
Executive shall have the right, on behalf of such transferee, to enforce the
provisions of Sections 2.04, 4.02 or 6.01 with respect to such transferred OCGH
Units.
Section 7.07    Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
Section 7.08    Resolution of Disputes. (a) Any and all disputes, claims or
controversies arising out of or relating to this Agreement, including any and
all disputes, claims or controversies arising out of or relating to (i) the
parties to this Agreement, (ii) any party’s rights and obligations hereunder,
(iii) the validity or scope of any provision of this Agreement, (iv) whether a
particular dispute, claim or controversy is subject to arbitration under this
Section 7.08, and (v) the power and authority of any arbitrator selected
hereunder, that are not resolved by mutual agreement shall be submitted to final
and binding arbitration before Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) pursuant to the Federal Arbitration Act, 9 U.S.C. Section 1 et seq. A
party to this Agreement may commence the arbitration process by filing a written
demand for arbitration with JAMS and delivering a copy of such demand to the
other in accordance with the notice procedures set forth in Section 7.01. The
arbitration shall take place in Wilmington, Delaware, and shall be conducted in
accordance with the provisions of JAMS Streamlined Arbitration Rules and
Procedures in effect at the time of filing of the demand for arbitration. The
parties to the arbitration will cooperate with JAMS and with each other in
selecting an arbitrator from JAMS’ panel of neutrals and in scheduling the
arbitration proceedings. The arbitrator selected shall be neutral and a former
Delaware chancery court judge or, if such judge is not available, a former U.S.
federal judge with experience in adjudicating matters under the law of the State
of Delaware; provided that if no such person is both willing and able to
undertake such a role, the parties to the arbitration shall cooperate with each
other and JAMS in good faith to select such other person as may be available
from a JAMS’ panel of neutrals with experience in adjudicating matters under the
law of the State of Delaware. The parties to the arbitration shall participate
in the arbitration in good faith. Each party to the arbitration shall share the
payment of those costs, if any, of arbitration that it must pay to cause this
Section 7.08 to be enforceable, and all other costs of arbitration shall be
shared equally between the parties to the arbitration.
(a)    Neither party to the arbitration shall be entitled to undertake discovery
in the arbitration; provided that, if discovery is required by applicable law,
discovery shall not exceed (i) one witness deposition plus the depositions of
any expert designated by the other party or parties, (ii) two interrogatories,
(iii) ten document requests, and (iv) ten requests for admissions; provided
further that additional discovery may be permitted to the extent such additional
discovery is required by applicable law for this Section 7.08 to be enforceable.
The arbitrator shall have no power to modify any of the provisions of this
Agreement, to make an award or impose a remedy that, in each case, is not
available to the Delaware chancery court or to make an award or impose a remedy
that was not requested by a party to the dispute, and the jurisdiction of the
arbitrator is limited accordingly. To the extent permitted by law, the
arbitrator shall have the power to order injunctive relief, and shall
expeditiously act on any petition for such relief.
(b)    The provisions of this Section 7.08 may be enforced by any court of
competent jurisdiction, and, to the extent permitted by law, the party seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys’ fees, to be paid by the party against whom enforcement is
ordered. Notwithstanding any provision of this Agreement to the contrary, a
party to an arbitration pursuant to this Section 7.08 shall be entitled to seek
a restraining order or injunction in any court of competent jurisdiction to
prevent any violation of the provisions of this Agreement pending a final
determination on the merits by the arbitrator, and each party hereby consents
that such a restraining order or injunction may be granted without the necessity
of posting any bond.
(c)    The details of any arbitration pursuant to this Section 7.08, including
the existence and/or outcome of such arbitration and any information obtained in
connection with any such arbitration, shall be kept strictly confidential and
shall not be disclosed or discussed with any person not a party to the
arbitration; provided that such party may make such disclosures as are required
by applicable law or legal process; provided further that such party may make
such disclosures to its, his or her attorneys, accountants or other agents and
representatives who reasonably need to know the disclosed information in
connection with any arbitration pursuant to this Section 7.08 and who are
obligated to keep such information confidential to the same extent as such
party. If either party to the arbitration, as the case may be, receives a
subpoena or other request for information from a third party that seeks
disclosure of any information that is required to be kept confidential pursuant
to the prior sentence, or otherwise believes that it, he or she may be required
to disclose any such information, such the party to the arbitration, as the case
may be, shall (i) promptly notify the other party to the arbitration and
(ii) reasonably cooperate with such other party in taking any legal or otherwise
appropriate actions, including the seeking of a protective order, to prevent the
disclosure, or otherwise protect the confidentiality, of such information.
(d)    For the avoidance of doubt, (i) any arbitration pursuant to this Section
7.08 shall not include any disputes, claims or controversies that do not arise
out of or relate to this Agreement, and (ii) any arbitration pursuant to this
Section 7.08 of disputes, claims or controversies arising out of or relating to
this Agreement is intended to be separate and distinct proceeding from any
arbitration or other adjudication of disputes, claims or controversies between
the parties to the arbitration, that do not arise out of or relate to this
Agreement.
Section 7.09    Reconciliation. In the event that a Corporation and a Senior
Executive are unable to resolve a disagreement with respect to the matters
governed by Sections 2.04, 4.02 and 6.02 within the relevant period designated
in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall
be submitted for determination to a nationally recognized expert (the “Expert”)
in the particular area of disagreement mutually acceptable to both parties. The
Expert shall be a partner in a nationally recognized accounting firm or a law
firm (other than the Advisory Firm), and the Expert shall not, and the firm that
employs the Expert shall not, have any material relationship with either such
Corporation or such Senior Executive or other actual or potential conflict of
interest. If the parties are unable to agree on an Expert within fifteen (15)
days of receipt by the respondent(s) of written notice of a Reconciliation
Dispute, the Expert shall be appointed by the International Chamber of Commerce
Centre for Expertise. The Expert shall resolve any matter relating to the
Exchange Basis Schedule or an amendment thereto or the Early Termination
Schedule or an amendment thereto within 30 calendar days and shall resolve any
matter relating to a Tax Benefit Schedule or an amendment thereto within 15
calendar days or as soon thereafter as is reasonably practicable, in each case
after the matter has been submitted to the Expert for resolution.
Notwithstanding the preceding sentence, if the matter is not resolved before any
payment that is the subject of a disagreement is due or any Tax Return
reflecting the subject of a disagreement is due, such payment shall be made on
the date prescribed by this Agreement and such Tax Return may be filed as
prepared by such Corporation, subject to adjustment or amendment upon
resolution. The costs and expenses relating to the engagement of such Expert or
amending any Tax Return shall be borne by the Corporation; except as provided in
the next sentence. Each participating Corporation and each Senior Executive
shall bear their own costs and expenses of such proceeding, unless the Senior
Executive has a prevailing position that is more than 10% of the payment at
issue, in which case such Corporation shall reimburse such Senior Executive for
any reasonable out-of-pocket costs and expenses in such proceeding. Any dispute
as to whether a dispute is a Reconciliation Dispute within the meaning of this
Section 7.09 shall be decided by the Expert. The Expert shall finally determine
any Reconciliation Dispute and the determinations of the Expert pursuant to this
Section 7.09 shall be binding on such Corporation and such Senior Executive and
may be entered and enforced in any court having jurisdiction.
Section 7.10    Withholding. Each Corporation shall be entitled to deduct and
withhold from any payment payable pursuant to this Agreement such amounts as
such Corporation is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld and paid over to the appropriate
Taxing Authority by the Corporation, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to OCGH on behalf of such
Limited Partner.
Section 7.11    Calculation of Tax Benefit Payments Attributable to Pre-Signing
Exchanges. Notwithstanding anything in this Agreement to the contrary and for
the avoidance of doubt, for periods after the Closing Date, the parties intend
for the Tax Benefit Payments to be determined as follows:
(a)    As if (i) the Corporations were corporations or associations taxable as
corporations for U.S. federal income tax purposes, (ii) the Corporations were a
stand-alone affiliated group, (iii) the Corporations were not part of any other
affiliated group (including any affiliated group of which BUSI is the parent)
(for the avoidance of doubt, disregarding any losses, deductions, net operating
loss carryovers, tax credit carryovers or any other tax attributes of any
members of such group other than the Corporations), (iv) the Corporations have
no other assets, holdings, liabilities or activities other than (x) the Oaktree
Operating Group entities they directly or indirectly own or (y) assets,
holdings, liabilities or activities of any successor funds to any fund currently
operated by the Oaktree Operating Group entities that are currently directly or
indirectly owned by the Corporations (the “Successor Funds”), and (v) the
Corporations incur interest expense in an amount equal to $40 million annually
(the “Interest Expense”) (it being understood that no interest income of Parent
or any of its Affiliates that corresponds to the Interest Expense shall be
treated as income of the Corporations).
(b)    The effects of any Excluded Items shall not be taken into account to the
extent that giving effect to such Excluded Items would result in a reduction or
delay in any payment required to be made under this Agreement, unless such items
are items of the Oaktree Operating Group entities or any of their Subsidiaries.
(c)    Transfers (directly or indirectly, including by way of merger and
including transfers of assets that are deemed to occur for U.S. federal income
tax purposes) of interests in or assets of the Oaktree Operating Group entities
or the Successor Funds or the Reference Assets to Affiliates of Parent or
Affiliates of the Corporations shall be ignored for purposes of calculating the
Tax Benefit Payments and such interests in or assets of the Oaktree Operating
Group entities or the Successor Funds or the Reference Assets shall be treated
for all purposes of this Agreement as having been retained or held by the
applicable Corporation or Oaktree Operating Group entity. If any entity
obligated to make a payment under this Agreement transfers (directly or
indirectly, including by way of merger and including transfers of assets that
are deemed to occur for U.S. federal income tax purposes) one or more Reference
Assets or interests in or assets of the Oaktree Operating Group entities or the
Successor Funds to an entity that is both not a corporation and not an Affiliate
of Parent or an Affiliate of the Corporations, the entity will be treated as
having disposed of the Reference Assets or interests in or assets of Oaktree
Operating Group entities or the Successor Funds in a fully taxable transaction
on the date of such transfer for purposes of determining Tax Benefit Payments
under this Agreement.
Section 7.12    Partnerships. Each Corporation hereby agrees that, to the extent
it acquires a general partnership interest, managing member interest or similar
interest in any Person after the date hereof, it shall cause such Person to
execute and deliver a joinder to this Agreement and become a “Partnership” for
all purposes of this Agreement.
Section 7.13    Conclusive Nature of Calculations. All determinations,
interpretations, calculations, adjustments and other actions of a Corporation or
any Partnership or a designee of any of the foregoing that are within such
Person’s authority hereunder (including, without limitation, in connection with
the preparation of any Schedule) shall be made in good faith by such Person and
shall be binding and conclusive absent manifest error. In connection with any
such determination, interpretation, calculation, adjustment or other action,
each Corporation or any Partnership or the designee of any of the foregoing
shall be entitled to resolve any ambiguity with respect to the manner in which
such determination, interpretation, calculation, adjustment or other action is
to be made or taken, and shall be entitled to interpret the provisions of this
Agreement, in such a manner as it determines to be fair and equitable, and such
resolution or interpretation shall be binding and conclusive absent manifest
error.
[Signatures on following pages]

IN WITNESS WHEREOF, each of the Corporations and the Senior Executives have duly
executed this Agreement as of the date first written above.
BROOKFIELD ASSET MANAGEMENT INC.
By: /s/ Justin Beber                    
Name: Justin Beber
Title: Chief Legal Officer
OAKTREE HOLDINGS, INC.
(on its own behalf and on behalf of Oaktree Capital II, OCM and Investment
Holdings)
By: /s/ Todd Molz        
Name: Todd Molz
Title: General Counsel and Chief Administrative Officer
By: /s/ Richard Ting                    
Name: Richard Ting
Title: Managing Director Associate General Counsel
OAKTREE AIF HOLDINGS, INC.
(on its own behalf and on behalf of Oaktree AIF)
By: /s/ Todd Molz        
Name: Todd Molz
Title: General Counsel and Chief Administrative Officer
By: /s/ Richard Ting                    
Name: Richard Ting
Title: Managing Director Associate General Counsel

OAKTREE CAPITAL GROUP HOLDINGS, L.P., for itself and as attorney-in-fact for all
the limited partners of OCGH

By: OAKTREE CAPITAL GROUP HOLDINGS GP, LLC, its General partner
By: /s/ Todd Molz        
Name: Todd Molz
Title: General Counsel and Chief Administrative Officer
By: /s/ Richard Ting                    
Name: Richard Ting
Title: Managing Director Associate General Counsel