CONFIDENTIAL & PROPRIETARY    

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This limited partnership is the general partner of Apollo Credit Opportunity
Fund III LP and Apollo Credit Opportunity Fund III (Offshore) LP and earns
“carried interest” on COF III profits.

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APOLLO CREDIT OPPORTUNITY ADVISORS III (APO FC) LP

Second Amended and Restated

Agreement of Limited Partnership

                                                                                                     

Dated as of December 18, 2014

                                                                                                        

                                                    

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TABLE OF CONTENTS

Page
ARTICLE 1 DEFINITIONS    2
Section 1.1Definitions; Interpretation    2
ARTICLE 2 FORMATION AND ORGANIZATION    9
Section 2.1Formation    9
Section 2.2Name    10
Section 2.3Principal Offices; Registered Office and Agent    10
Section 2.4Term of Partnership    10
Section 2.5Purpose of the Partnership    11
Section 2.6Actions by Partnership    11
Section 2.7Admission of Limited Partners    11
ARTICLE 3 CAPITAL    11
Section 3.1Contributions to Capital    11
Section 3.2Rights of Partners in Capital    12
Section 3.3Capital Accounts    13
Section 3.4Allocation of Profit and Loss    14
Section 3.5Tax Allocations    16
Section 3.6Tax Treatment of Points    16
Section 3.7FATCA    17
Section 3.8Reserves; Adjustments for Certain Future Events    18
Section 3.9Finality and Binding Effect of General Partner’s Determinations    19
Section 3.10Alternative GP Vehicles    19
ARTICLE 4 DISTRIBUTIONS    20
Section 4.1Distributions    20
Section 4.2Withholding of Certain Amounts    22
Section 4.3Limitation on Distributions    23
Section 4.4Distributions in Excess of Basis    23
ARTICLE 5 MANAGEMENT    23
Section 5.1Rights and Powers of the General Partner    23
Section 5.2Delegation of Duties    24
Section 5.3Transactions with Affiliates    25
Section 5.4Expenses    25
Section 5.5Rights of Limited Partners    25
Section 5.6Other Activities of General Partner    26
Section 5.7Duty of Care; Indemnification    26
ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS    28
Section 6.1Admission of Additional Limited Partners; Effect on Points    28
Section 6.2Admission of Additional General Partner    28
Section 6.3Transfer of Interests of Limited Partners    28
Section 6.4Withdrawal of Partners    30
Section 6.5Pledges    30
ARTICLE 7 ALLOCATION OF POINTS; ADJUSTMENTS OF POINTS AND RETIREMENT OF
PARTNERS    31
Section 7.1Allocation of Points    31
Section 7.2Retirement of Partner    33
Section 7.3Effect of Retirement on Points    33
ARTICLE 8 DISSOLUTION AND LIQUIDATION    33
Section 8.1Dissolution and Liquidation of Partnership    33
ARTICLE 9 GENERAL PROVISIONS    34
Section 9.1Consistent Economic Treatment    34
Section 9.2Carried Interest Related to the Fund    35
Section 9.3Amendment of Partnership Agreement and Co-Investors (A) Partnership
Agreement    35
Section 9.4Special Power-of-Attorney    36
Section 9.5Notices    38
Section 9.6Agreement Binding Upon Successors and Assigns    38
Section 9.7Merger, Consolidation, etc.    39
Section 9.8Governing Law; Dispute Resolution    39
Section 9.9Termination of Right of Action    40
Section 9.10Not for Benefit of Creditors    41
Section 9.11Reports    41
Section 9.12Filings    41
Section 9.13Counterparts    41

APOLLO CREDIT OPPORTUNITY ADVISORS III (APO FC) LP

SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of APOLLO CREDIT
OPPORTUNITY ADVISORS III (APO FC) LP, a Delaware limited partnership (the
“Partnership”), dated as of December __, 2014, by and among Apollo Credit
Opportunity Advisors III (APO FC) GP LLC, a Delaware limited liability company,
as the sole general partner (the “General Partner”), APH Holdings (FC), L.P., a
Cayman Islands exempted limited partnership (“APH”), Apollo CIP Partner Pool,
L.P., a Cayman Islands exempted limited partnership (“Partner Pool LP”), Apollo
CIP Professionals, L.P., a Delaware limited partnership (“Professionals LP”)
(with effect from and after January 1, 2015), and the other Persons (as defined
below) who shall execute this Agreement, whether in counterpart, by separate
instrument, or otherwise, and hereafter shall be admitted to the Partnership as
limited partners in accordance with the provisions hereof and whose names and
addresses shall, upon such admission, be reflected in the Register of Partners
(as defined below) as limited partners of the Partnership (together with APH,
Partner Pool LP and Professionals LP, the “Limited Partners,” and each, a
“Limited Partner”).

R E C I T A L S :

A.    The Partnership was formed as a limited partnership under the Delaware Act
(as defined below) upon the filing of a Certificate of Limited Partnership of
the Partnership (the “Certificate”) with the Office of the Secretary of State of
the State of Delaware on October 22, 2014.
B.    The General Partner and APH have entered into an Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of October 24,
2014 (the “Amended Agreement”).
C.    On October 27, 2014, Apollo Credit Opportunity Advisors III LP
transferred, conveyed, assigned and delivered to the Partnership all of its
right, title and interest in and to all of the general partner interests in COF
III (as defined below).
D.    On October 27, 2014, APH Holdings (DC), L.P. transferred, conveyed,
assigned and delivered to APH all of its right, title and interest into all of
the limited partnership interests in the Partnership.
E.    The parties hereto acknowledge and agree that Professionals LP will be
admitted to the Partnership effective January 1, 2015, and that the provisions
hereof (including rights to allocations and distributions) with respect to
Professionals LP will not take effect until such date.
F.    The parties hereto desire to amend and restate the Amended Agreement to
reflect: (i) the admission of those Persons party hereto who are listed on the
Register of Partners as Limited Partners of the Partnership on the date hereof
(but subject to Recital E with respect to Professionals LP); and (ii) the
modifications set forth herein.
NOW, THEREFORE, the parties hereby agree to amend and restate the Amended
Agreement in its entirety to read as follows:
Article 1
DEFINITIONS
Section 1.1    Definitions; Interpretation.
(a)    Capitalized terms used but not otherwise defined herein have the
following meanings:
“Affiliate” means with respect to any Person any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
Except as the context otherwise requires, the term “Affiliate” in relation to
AGM includes each collective investment fund and other client account sponsored
or managed by AGM or its affiliated asset management entities, but, in each
case, does not include Portfolio Companies (except with respect to Bad Acts),
Partner Pool LP or Professionals LP or any of the limited partners of Partner
Pool LP or Professionals LP.
“AGM” means Apollo Global Management, LLC, a Delaware limited liability company.
“Agreement” means this Second Amended and Restated Agreement of Limited
Partnership, as amended or supplemented from time to time.
“Alternative GP Vehicle” has the meaning set forth in Section 3.10.
“Amended Agreement” has the meaning set forth in Recital B.
“APH” has the meaning set forth in the preamble.
“APH Percentage” has the meaning agreed by the General Partner and AGM Credit
Senior Management prior to the date hereof.
“Award Letter” means, with respect to any Limited Partner, the letter agreement
between the Partnership and such Limited Partner setting forth (i) such Limited
Partner’s Points, (ii) such Limited Partner’s vesting schedule, (iii) the
formula applied to calculate the Holdback Amount with respect to such Limited
Partner, (iv) any restrictive covenants with respect to such Limited Partner,
(v) the definition of “Bad Act,” (vi) the definition of “Designated Act,” and
(vii) any other terms applicable to such Limited Partner.
“Bad Act” has the meaning ascribed to that term in a Limited Partner’s Award
Letter.
“Book-Tax Difference” means the difference between the Carrying Value of a
Partnership asset and its adjusted tax basis for United States federal income
tax purposes, as determined at the time of any of the events described in the
definition of Carrying Value, which for purposes of this Agreement shall include
any accrued income in respect of securities contributed to or held (directly or
indirectly) by the Partnership as of the date of any such event. The General
Partner shall maintain an account in the name of each Limited Partner that
reflects such Limited Partner’s share of any Book-Tax Difference.
“Capital Account” means with respect to each Partner the capital account
established and maintained on behalf of such Partner as described in Section
3.3.
“Capital Loss” means, for each Fund with respect to any Fiscal Year, the portion
of any Net Loss allocable to the Partnership, but only to the extent such
allocation is made by such Fund to the Partnership in proportion to the
Partnership’s capital contribution to such Fund, as determined pursuant to the
applicable Fund LP Agreement.
“Capital Profit” means, for each Fund with respect to any Fiscal Year, the
portion of any Net Income allocable to the Partnership, but only to the extent
such allocation is made by such Fund to the Partnership in proportion to the
Partnership’s capital contribution to such Fund, as determined pursuant to the
applicable Fund LP Agreement.
“Carried Interest Revenues” means distributions received by the Partnership
pursuant to Sections 4.2(a)(iv)(A) and 4.2(a)(v)(A) (or the corresponding
provisions) of the applicable Fund LP Agreement.
“Carrying Value” means, with respect to any Partnership asset, the asset’s
adjusted basis for United States federal income tax purposes, except that the
Carrying Values of all Partnership assets shall be adjusted to equal their
respective fair market values (as determined by the General Partner), in
accordance with the rules set forth in Treasury Regulations section
1.704-1(b)(2)(iv)(f), except as otherwise provided herein, immediately prior to:
(i) the date of the acquisition of any interests in the Partnership by any new
Partner or any additional interests by an existing Partner in exchange for more
than a de minimis capital contribution; (ii) the date of the distribution of
more than a de minimis amount of any Partnership asset to a Partner, including
cash as consideration for an interest in the Partnership; (iii) the date of the
grant of more than a de minimis profits interest in the Partnership as
consideration for the provision of services to or for the benefit of the
Partnership by an existing Partner, or by a new Partner acting in his capacity
as a Partner or in anticipation of becoming a Partner, including the issuance of
Points to Partner Pool LP pursuant to the terms hereof; or (iv) the liquidation
of the Partnership within the meaning of Treasury Regulations section
1.704-l(b)(2)(ii)(g); provided, that any adjustment pursuant to clauses (i),
(ii) and (iii) above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners. The Carrying Value of any
Partnership asset distributed to any Partner shall be adjusted immediately prior
to such distribution to equal its fair market value (as determined by the
General Partner). The Carrying Value of any asset contributed by a Partner to
the Partnership shall be the fair market value (as determined by the General
Partner) of the asset at the date of its contribution. The General Partner may
treat any of the enumerated events in clauses (i) through (iv) hereof that
actually occur at Partner Pool LP (or that may be deemed to occur at Partner
Pool LP under the terms of the limited partnership agreement of Partner Pool LP,
as in effect from time to time) as occurring at the Partnership for purposes of
determining the Carrying Value of the Partnership’s assets.
“Catch Up Amount” means the product derived by multiplying (i) the amount of any
Book-Tax Difference arising on the admission to the Partnership of a
Newly-Admitted Limited Partner or a reallocation of Points described in
Section 4.1(f)(ii) by (ii) the percentage derived by dividing the number of
Points issued to the Newly-Admitted Limited Partner or reallocated to the
applicable Limited Partner as described in Section 4.1(f)(ii), by the aggregate
number of Points on the date the Newly-Admitted Limited Partner is admitted to
the Partnership or the date of the applicable reallocation of Points pursuant to
this Agreement. The General Partner shall maintain an account in the name of
each Newly-Admitted Limited Partner (and any Limited Partner receiving a
reallocation of Points in respect of which Section 4.1(f)(ii) applies) that
reflects such Limited Partner’s Catch Up Amount, which shall be adjusted as
necessary to reflect any subsequent reduction in such Book-Tax Difference
corresponding to any subsequent negative adjustments to Carrying Value of the
Partnership’s assets that relate to such Book-Tax Difference, and which may be
further adjusted to the extent the General Partner determines in its sole
discretion is necessary to cause the Catch Up Amount to be equal to the amount
necessary to provide the applicable Limited Partner with a requisite share of
Partnership capital based on such Limited Partner’s Points in accordance with
the terms of this Agreement and such Limited Partner’s Award Letter.
“Certificate” has the meaning set forth in Recital A.
“Clawback Payment” means any payment required to be made by the Partnership to
any Fund pursuant to Section 10.3(c) (or the corresponding provision) of the
Fund LP Agreement of such Fund.
“Clawback Share” means, as of the time of determination, with respect to any
Limited Partner and any Clawback Payment a percentage of such Clawback Payment
equal to the quotient (expressed as a percentage) of (a) the cumulative amount
of Operating Profit attributable to the Fund in respect of which the Clawback
Payment is required to be made that has been distributed to such Limited
Partner, divided by (b) the cumulative amount so distributed to all Limited
Partners with respect to such Operating Profit attributable to such Fund.
“Code” means the United States Internal Revenue Code of 1986, as amended and as
hereafter amended, or any successor law.
“COF III” means (i) Apollo Credit Opportunity Fund III LP, a Delaware limited
partnership, and/or (ii) Apollo Credit Opportunity Fund III (Offshore) LP, a
Delaware limited partnership, as the context requires.
“Co-Investors (A)” means Apollo Credit Opportunity Co-Investors III (A), L.P., a
Delaware limited partnership.
“Co-Investors (A) Partnership Agreement” means the Amended and Restated
Agreement of Limited Partnership of Co-Investors (A), as in effect from time to
time.
“Covered Person” has the meaning set forth in Section 5.7(a).
“Credit Business” has the meaning ascribed to that term in a Limited Partner’s
Award Letter.
“DEUCC” has the meaning set forth in Section 6.5(c).
“Delaware Act” means the Delaware Revised Uniform Limited Partnership Act (6
Del. C. §§ 17-101 et seq.), as amended and in effect from time to time, or any
successor law.
“Designated Act” has the meaning ascribed to that term in a Limited Partner’s
Award Letter.
“Discretionary Share” has the meaning set forth in Section 4.1(b).
“Disability” has the meaning ascribed to that term in the Apollo Global
Management LLC 2007 Omnibus Equity Incentive Plan.
“FATCA” means: (i) Sections 1471 to 1474 of the Code, and any associated
legislation, regulations or guidance, or similar legislation, regulations or
guidance enacted in any jurisdiction which seeks to implement similar tax
reporting and/or withholding tax regimes; (ii) any intergovernmental agreement,
treaty, regulation, guidance or any other agreement entered into in order to
comply with, facilitate, supplement or implement the legislation, regulations or
guidance described in clause (i); and (iii) any legislation, regulations or
guidance in an applicable non-U.S. jurisdiction that give effect to the matters
outlined in the preceding clauses.
“Final Adjudication” has the meaning set forth in Section 5.7(a).
“Fiscal Year” means, with respect to a year, the period commencing on January 1
of such year and ending on December 31 of such year (or on the date of a final
distribution pursuant to Section 8.1(a)), unless the General Partner shall elect
another fiscal year for the Partnership which is a permissible taxable year
under the Code.
“Fund” means COF III. Such term also includes each alternative investment
vehicle created by COF III, to the extent the context so requires.
“Fund LP Agreement” means the limited partnership agreement of any Fund, as
amended from time to time, and, to the extent the context so requires, the
corresponding constituent agreement, certificate or other document governing
each such Fund.
“General Partner” has the meaning set forth in the preamble, and includes any
successor to the business of the General Partner in its capacity as general
partner of the Partnership.
“Giveback Share” means, as of the time of determination, with respect to any
Limited Partner and any Partner Giveback Payment, a percentage of such Partner
Giveback Payment equal to the quotient (expressed as a percentage) of (a) the
cumulative amount of Capital Profit and Operating Profit attributable to the
Fund in respect of which the Partner Giveback Payment is required to be made
that has been distributed to such Limited Partner, divided by (b) the cumulative
amount so distributed to all Limited Partners with respect to such Capital
Profit and Operating Profit attributable to such Fund.
“Governmental Authority” means: (i) any government or political subdivision
thereof, whether non‑U.S. or U.S., national, state, county, municipal or
regional; (ii) any agency or instrumentality of any such government, political
subdivision or other government entity (including any central bank or comparable
agency); and (iii) any court.
“Holdback Amount” has the meaning ascribed to that term in a Limited Partner’s
Award Letter.
“Home Address” has the meaning set forth in Section 9.5.
“JAMS” has the meaning set forth in Section 9.8(b).
“Intermediate Pooling Vehicles” means Apollo CIP Hedge Funds, L.P., Apollo CIP
Structured Credit, L.P., Apollo CIP European SMAs & CLOs, L.P., Apollo CIP
Global SMAs, L.P. and Apollo CIP US SMAs, L.P., each a Cayman Islands exempted
limited partnership.
“Limited Partner” means any Person admitted as a limited partner to the
Partnership in accordance with this Agreement, including any Retired Partner,
until such Person withdraws entirely as a limited partner of the Partnership, in
his or her capacity as a limited partner of the Partnership. All references
herein to a Limited Partner shall be construed as referring collectively to such
Limited Partner and to each Related Party of such Limited Partner (and to each
Person of which such Limited Partner is a Related Party) that also is or that
previously was a Limited Partner, except to the extent that the General Partner
determines that the context does not require such interpretation as between such
Limited Partner and his Related Parties.
“Losses” has the meaning set forth in Section 5.7(a).
“Manager” or “Investment Manager” has the meaning ascribed to that term in each
of the Fund LP Agreements.
“Net Income” has the meaning ascribed to that term in each of the Fund LP
Agreements.
“Net Loss” has the meaning ascribed to that term in each of the Fund LP
Agreements.
“Newly-Admitted Limited Partner” has the meaning set forth in Section 4.1(f)(i).
“Operating Loss” means, with respect to any Fiscal Year, any Net Loss, adjusted
to exclude (a) any Capital Profit or Capital Loss and (b) the effect of any
reorganization, restructuring or other capital transaction proceeds derived by
the Partnership. To the extent derived from any Fund, any items of income, gain,
loss, deduction and credit shall be determined in accordance with the same
accounting policies, principles and procedures applicable to the determination
by the relevant Fund, and any items not derived from a Fund shall be determined
in accordance with the accounting policies, principles and procedures used by
the Partnership for U.S. federal income tax purposes. Operating Loss shall not
include any loss attributable to a Book-Tax Difference.
“Operating Profit” means, with respect to any Fiscal Year, any Net Income,
adjusted to exclude (a) any Capital Profit or Capital Loss and (b) the effect of
any reorganization, restructuring or other capital transaction proceeds derived
by the Partnership. To the extent derived from any Fund, any items of income,
gain, loss, deduction and credit shall be determined in accordance with the same
accounting policies, principles and procedures applicable to the determination
by the relevant Fund, and any items not derived from a Fund shall be determined
in accordance with the accounting policies, principles and procedures used by
the Partnership for U.S. federal income tax purposes. Operating Profit shall not
include any income or gain attributable to a Book-Tax Difference.
“Other Agreements” has the meaning set forth in Section 9.3(b).
“Other Phantom Operating Profit” has the meaning set forth in Section 3.4(a).
“Partner” means the General Partner or any of the Limited Partners, and
“Partners” means the General Partner and all of the Limited Partners.
“Partner Giveback Payment” means any payment required to be made by the
Partnership to any Fund pursuant to Section 6.5(c) (or the corresponding
provision) of the Fund LP Agreement of such Fund.
“Partner Pool LP” has the meaning set forth in the preamble.
“Partnership” has the meaning set forth in the preamble.
“Person” means any individual, partnership (whether or not having separate legal
personality), corporation, limited liability company, joint venture, joint stock
company, unincorporated organization or association, trust (including the
trustees thereof, in their capacity as such), government, governmental agency,
political subdivision of any government, or other entity.
“Phantom Operating Profit Limitation” has the meaning set forth in
Section 3.4(a).
“Point” means a share of Operating Profit or Operating Loss. The aggregate
number of Points available for assignment to all Partners shall be 2,000.
“Portfolio Company” has the meaning ascribed to that term in each of the Fund LP
Agreements.
“Portfolio Investment” has the meaning ascribed to that term in each of the Fund
LP Agreements.
“Professionals LP” has the meaning set forth in the preamble.
“Public Vehicles” means (i) Apollo Investment Corporation (NASDAQ: AINV); (ii)
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI); (iii) Apollo
Residential Mortgage, Inc. (NYSE: AMTG); and (iv) Apollo Tactical Income Fund
Inc. (NYSE: AIF).
“Reference Rate” means the interest rate announced publicly from time to time by
JPMorgan Chase Bank in New York, New York as such bank’s prime rate.
“Register of Partners” means a register of partners to be maintained by the
General Partner showing the following information with respect to each Partner:
name, address, date of admission and retirement and required capital
contribution (if any).
“Related Party” means, with respect to any Limited Partner:
(a)    any spouse, child, parent or other lineal descendant of such Limited
Partner or such Limited Partner’s parent, or any natural Person who occupies the
same principal residence as such Limited Partner;
(b)    any trust or estate in which such Limited Partner and any Related Party
or Related Parties (other than such trust or estate) collectively have more than
80% of the beneficial interests (excluding contingent and charitable interests);
(c)    any entity of which such Limited Partner and any Related Party or Related
Parties (other than such entity) collectively are beneficial owners of more than
80% of the equity interest; and
(d)    any Person with respect to whom such Limited Partner is a Related Party.
“Required Commitment” has the meaning ascribed to that term in a Limited
Partner’s Award Letter.
“Retired Partner” means any Limited Partner who has become a retired partner in
accordance with or pursuant to Section 7.2.
“Retirement Date” means, with respect to any Limited Partner, the date as of
which such Person becomes a Retired Partner.
“Safe Harbor” means the election described in the Safe Harbor Regulation,
pursuant to which a partnership and all of its partners may elect to treat the
fair market value of a partnership interest that is transferred in connection
with the performance of services as being equal to the liquidation value of that
interest.
“Safe Harbor Election” means the election by a partnership and its partners to
apply the Safe Harbor, as described in the Safe Harbor Regulation and IRS Notice
2005-43, issued on May 20, 2005.
“Safe Harbor Regulation” means Proposed Regulations Section 1.83-3(l) issued on
May 24, 2005.
“Team Member” has the meaning ascribed to that term in a Limited Partner’s Award
Letter.
“Transfer” means any direct or indirect sale, exchange, transfer, assignment or
other disposition by a Partner of any or all of his or her interest in the
Partnership or an economic benefit thereof (whether with respect to, for
example, economic rights only or all the rights associated with the interest) to
another Person, whether voluntary or involuntary.
“Vested Points” means, with respect to any Limited Partner (other than Partner
Pool LP and Professionals LP), as of the date of determination, such Limited
Partner’s Points that have vested, as calculated in accordance with the
provisions set forth in such Limited Partner’s Award Letter.
(b)    The headings in this Agreement are inserted for convenience of reference
only and shall not affect the interpretation of this Agreement. As used herein,
masculine pronouns shall include the feminine and neuter, neuter pronouns shall
include the masculine and the feminine, and the singular shall be deemed to
include the plural. The use of the word “including” herein shall not be
considered to limit the provision which it modifies but instead shall mean
“including, without limitation.”
(c)    As used in this Agreement, the phrases “any provision of this Agreement,”
“the provisions of this Agreement” and derivative or similar phrases, and the
terms “hereof,” “herein,” “hereby” and derivative or similar words, shall mean
or refer only to any express provision actually written in this Agreement and
not to any provision of the Delaware Act that may have application to the
Partnership.
ARTICLE 2    
FORMATION AND ORGANIZATION
Section 2.1    Formation
The Partnership was formed and is hereby continued as a limited partnership
under and pursuant to the Delaware Act. The General Partner shall execute,
acknowledge and file any amendments to the Certificate as may be required by the
Delaware Act, and any other instruments, documents and certificates which, in
the opinion of the Partnership’s legal counsel, may from time to time be
required by the laws of the State of Delaware, the United States of America or
any other jurisdiction in which the Partnership shall determine to do business,
or any political subdivision or agency thereof, or which such legal counsel may
deem necessary or appropriate to effectuate, implement and continue the valid
and subsisting existence and business of the Partnership.
Section 2.2    Name
The name of the Partnership shall be “Apollo Credit Opportunity Advisors III
(APO FC) LP” or such other name as the General Partner hereafter may adopt upon
causing an appropriate amendment to be made to this Agreement and to the
Certificate to be filed in accordance with the Delaware Act. The General Partner
shall give notice of any name change to each Limited Partner.
Section 2.3    Principal Offices; Registered Office and Agent
(a)    The Partnership shall maintain its principal office, and may maintain one
or more additional offices, at such place or places as the General Partner may
from time to time determine.
(b)    The General Partner shall arrange for the Partnership to have and
maintain in the State of Delaware, at the expense of the Partnership, a
registered office and registered agent for service of process on the Partnership
as required by the Delaware Act.
Section 2.4    Term of Partnership
(a)    The term of the Partnership shall continue until the dissolution (without
continuation) of all of the Funds or the earliest of:
(i)    at any time there are no Limited Partners, unless the business of the
Partnership is continued in accordance with the Delaware Act;
(ii)    the occurrence of any event that results in the General Partner’s
ceasing to be a general partner of the Partnership under the Delaware Act;
provided that the Partnership shall not be dissolved or required to be wound up
in connection with any such event if (A) at the time of the occurrence of such
event there is at least one remaining general partner of the Partnership who is
hereby authorized to and does carry on the business of the Partnership, or (B)
within 90 days after notice of the occurrence of such event, a majority of the
Limited Partners agree in writing or vote to continue the business of the
Partnership and to the appointment, effective from the date of such event, if
required, of one or more additional general partners of the Partnership; or
(iii)    the entry of a decree of judicial dissolution under Section 17-802 of
the Delaware Act.
(b)    The parties agree that irreparable damage would be done to the
Partnership and reputation of the Partners if any Limited Partner should bring
an action to dissolve the Partnership. Care has been taken in this Agreement to
provide for fair and just payment in liquidation of the interests of all
Partners. Accordingly, to the fullest extent permitted by law, each Limited
Partner hereby waives and renounces his right to seek a decree of dissolution or
to seek the appointment of a liquidator for the Partnership, except as expressly
provided herein.
Section 2.5    Purpose of the Partnership
The principal purpose of the Partnership is to act as the sole general partner
of each of the Funds pursuant to their respective Fund LP Agreements and to
undertake such related and incidental activities and execute and deliver such
related documents necessary or incidental thereto.
Section 2.6    Actions by Partnership
The Partnership may execute, deliver and perform, and the General Partner may
execute and deliver, all contracts, agreements and other undertakings, and
engage in all activities and transactions as may in the opinion of the General
Partner be necessary or advisable to carry out the objects and purposes of the
Partnership, without the approval or vote of any Limited Partner.
Section 2.7    Admission of Limited Partners
On the date hereof, the Persons whose names are set forth in the Register of
Partners under the caption “Limited Partners” shall be admitted to the
Partnership or shall continue, as the case may be, as Limited Partners of the
Partnership upon their execution of a counterpart of this Agreement or such
other instrument evidencing, to the satisfaction of the General Partner, such
Limited Partner’s intent to become a Limited Partner. Additional Limited
Partners may be admitted to the Partnership in accordance with Section 6.1.
ARTICLE 3    
CAPITAL
Section 3.1    Contributions to Capital
(a)    Subject to the remaining provisions of this Section 3.1, (i) any required
contribution of a Limited Partner to the capital of the Partnership shall be as
set forth in the Register of Partners, and (ii) any such contributions to the
capital of the Partnership shall be made as of the date of admission of such
Limited Partner as a limited partner of the Partnership and as of each such
other date as may be specified by the General Partner. Except as otherwise
permitted by the General Partner, all contributions to the capital of the
Partnership by each Limited Partner shall be payable exclusively in cash.
(b)    APH shall make capital contributions from time to time to the extent
necessary to ensure that the Partnership meets its obligations to make
contributions of capital to each of the Funds.
(c)    No Partner shall be obligated, nor shall any Partner have any right, to
make any contribution to the capital of the Partnership, except as may be agreed
from time to time between such Partner and the General Partner (including in an
Award Letter) and other than as specified in this Section 3.1. No Limited
Partner shall be obligated to restore any deficit balance in his Capital
Account.
(d)    To the extent, if any, that at the time of the Final Distribution (as
defined in each of the Fund LP Agreements) or at any time prior thereto (whether
pursuant to the provisions of the applicable Fund LP Agreement, upon the
determination of the Partnership or otherwise), it is determined that the
Partnership, as a general partner of each of the Funds, is required to make any
Clawback Payment with respect to any of the Funds, each Limited Partner shall be
required to participate in such payment and contribute to the Partnership, for
ultimate distribution to the limited partners of the relevant Fund, an amount
equal to such Limited Partner’s Clawback Share of any Clawback Payment, but not
in any event, together with any Partner Giveback Payments made by such Limited
Partner from the return of distributions of Operating Profit attributable to
such Fund, in excess of the cumulative amount theretofore distributed to such
Limited Partner with respect to the Operating Profit attributable to such Fund.
For purposes of determining each Limited Partner’s required contribution, each
Limited Partner’s allocable share of any Escrow Account (as defined in the Fund
LP Agreements), to the extent applied to satisfy any portion of a Clawback
Payment, shall be treated as if it had been distributed to such Limited Partner
and re-contributed by such Limited Partner pursuant to this Section 3.1(d) at
the time of such application. The Partners acknowledge that the Clawback Payment
is calculated under the applicable Fund LP Agreement on an after-tax basis, and
that accordingly each Limited Partner’s Clawback Share will be of an amount that
has already taken into account hypothetical taxes that an individual residing in
New York City would have owed in respect of the excess carry received by the
Partnership under the applicable Fund LP Agreement that gives rise to the
Clawback Payment.
(e)    To the extent, if any, that it is determined that the Partnership is
required to make any Partner Giveback Payment with respect to any of the Funds,
each Limited Partner shall be required to participate in such payment and
contribute to the Partnership, for ultimate contribution to the relevant Fund,
an amount equal to such Limited Partner’s Giveback Share of any Partner Giveback
Payment, but not in any event, together with any Clawback Payments made by such
Limited Partner with respect to such Fund, in excess of the cumulative amount
theretofore distributed to such Limited Partner with respect to the Capital
Profit and Operating Profit attributable to such Fund.
(f)    For the avoidance of doubt, the aggregate Clawback Payments and Partner
Giveback Payments required to be made by the Limited Partners hereunder with
respect to any Fund shall not exceed the aggregate amount of distributions
actually received by the Partnership that: (i) in the case of Clawback Payments,
are attributable to Carried Interest Revenues; and (ii) in the case of Partner
Giveback Payments, are attributable to Carried Interest Revenues and any other
distributions that the Partnership receives from such Fund.
Section 3.2    Rights of Partners in Capital
(c)    No Partner shall be entitled to interest on his capital contributions to
the Partnership.
(d)    No Partner shall have the right to distributions or the return of any
contribution to the capital of the Partnership except (i) for distributions in
accordance with Section 4.1, or (ii) upon dissolution of the Partnership. The
entitlement to any such return at such time shall be limited to the value of the
Capital Account of the Partner. The General Partner shall not be liable for the
return of any such amounts.
Section 3.3    Capital Accounts
(c)    The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the provisions of Treas. Reg. Section
1.704-1(b)(2)(iv) and, to the extent consistent with such provisions, the terms
of this Agreement.
(d)    Each Partner’s Capital Account shall have an initial balance equal to the
amount of cash and the net value of any securities or other property
constituting such Partner’s initial contribution to the capital of the
Partnership.
(e)    Each Partner’s Capital Account shall be increased by the sum of:
(i)    the amount of cash and the net value of any securities or other property
constituting additional contributions by such Partner to the capital of the
Partnership permitted pursuant to Section 3.1; plus
(ii)    in the case of APH, any Capital Profit allocated to such Partner’s
Capital Account pursuant to Section 3.4; plus
(iii)    the portion of any Operating Profit allocated to such Partner’s Capital
Account pursuant to Section 3.4; plus
(iv)    such Partner’s allocable share of any decreases in any reserves recorded
by the Partnership pursuant to Section 3.8 and any receipts determined to be
applicable to a prior period pursuant to Section 3.8(b), to the extent the
General Partner determines that, pursuant to any provision of this Agreement,
such item is to be credited to such Partner’s Capital Account on a basis which
is not in accordance with the current respective Points of all Partners; plus
(v)    such Partner’s allocable share of any increase in Book-Tax Difference.
(f)    Each Partner’s Capital Account shall be reduced by the sum of (without
duplication):
(i)    in the case of APH, any Capital Loss allocated to such Partner’s Capital
Account pursuant to Section 3.4; plus
(ii)    the portion of any Operating Loss allocated to such Partner’s Capital
Account pursuant to Section 3.4; plus
(iii)    the amount of any cash and the net value of any property distributed to
such Partner pursuant to Section 4.1 or Section 8.1, including any amount
deducted pursuant to Section 4.2 or Section 5.4 from any such amount
distributed; plus
(iv)    any withholding taxes or other items payable by the Partnership and
allocated to such Partner pursuant to Section 5.4(b), any increases in any
reserves recorded by the Partnership pursuant to Section 3.8 and any payments
determined to be applicable to a prior period pursuant to Section 3.8(b), to the
extent the General Partner determines that, pursuant to any provision of this
Agreement, such item is to be charged to such Partner’s Capital Account on a
basis which is not in accordance with the current respective Points of all
Partners; plus
(v)    such Partner’s allocable share of any decrease in Book-Tax Difference.
(g)    If securities and/or other property are to be distributed in kind to the
Partners or Retired Partners, including in connection with a liquidation
pursuant to Section 8.1, they shall first be written up or down to their fair
market value as of the date of such distribution, thus creating gain or loss for
the Partnership, and the value of the securities and/or other property received
by each Partner and each Retired Partner as so determined shall be debited
against such Person’s Capital Account at the time of distribution.
Section 3.4    Allocation of Profit and Loss
(a)    Capital Profit and Operating Profit or Capital Loss and Operating Loss
for any Fiscal Year shall be allocated to the Partners so as to produce Capital
Accounts for the Partners (such Capital Accounts computed after taking into
account any other Capital Profit and Operating Profit or Capital Loss and
Operating Loss for the Fiscal Year in which such event occurred and all
distributions pursuant to Article 4 with respect to such Fiscal Year and after
adding back each Partner’s share, if any, of Partner Nonrecourse Debt Minimum
Gain, as defined in Treasury Regulations Sections 1.704 - 2(b)(2) and 1.704 -
2(i), or Partnership Minimum Gain, as defined in Treasury Regulations Sections
1.704 - 2(b)(2) and 1.704 - 2(d)) such that a distribution of an amount of cash
and value of property equal to such Capital Account balances in accordance with
such Capital Account balances would be in the amounts, sequence and priority set
forth in Article 4; provided, however, that, (i) except as the General Partner
in its sole discretion may otherwise determine, allocations of Operating Profit
to Professionals LP shall not exceed the amount of cash (or value of property)
distributed to Professionals LP for the Fiscal Year (the “Phantom Operating
Profit Limitation”) and any Operating Profit in excess of the Phantom Operating
Profit Limitation that would have been allocable to Professionals LP but for the
Phantom Operating Profit Limitation instead shall be allocated pro rata to the
other Limited Partners (other than APH); (ii) the General Partner may, in its
sole discretion, determine to specially allocate solely to APH such excess
Operating Profit and any additional amounts of Operating Profit that the General
Partner determines are in excess of the cash and value of property received by
the Partnership for the Fiscal Year (“Other Phantom Operating Profit”); and
(iii) the General Partner may allocate Operating Profit and Operating Loss and
items thereof in such other manner as it determines in its sole discretion to be
appropriate to reflect the Partners’ interests in the Partnership. Income, gains
and loss associated with a Book-Tax Difference shall be allocated to the Limited
Partners that are entitled to a share of such Book-Tax Difference consistent
with the account maintained by the General Partner pursuant to the definition of
“Book-Tax Difference” and in the manner in which cash or property associated
with such Book-Tax Difference is required to be distributed pursuant to the
proviso of Section 4.1(b).
(b)    Following a special allocation of Operating Profit to the Limited
Partners pursuant to the provisos of Section 3.4(a), appropriate adjustments
shall be made to the allocation of Operating Profit and Operating Loss to the
Limited Partners (including Professionals LP) in one or more subsequent Fiscal
Years as the General Partner may determine, in its sole discretion, may be
necessary to ensure that the Limited Partners are allocated aggregate Operating
Profit (in excess of aggregate Operating Loss) for all Fiscal Years in
proportion to their respective Points and (in the case of Professionals LP)
Discretionary Share for all such Fiscal Years.
(c)    To the extent that the allocations of Capital Loss or Operating Loss
contemplated by Section 3.4(a) would cause the Capital Account of any Limited
Partner to be less than zero, such Capital Loss or Operating Loss shall to that
extent instead be allocated to and debited against the Capital Account of the
General Partner (or, at the direction of the General Partner, to those Limited
Partners who are members of the General Partner in proportion to their limited
liability company interests in the General Partner). Following any such
adjustment pursuant to this Section 3.4(c) with respect to any Limited Partner,
any Capital Profit or Operating Profit for any subsequent Fiscal Year which
would otherwise be credited to the Capital Account of such Limited Partner
pursuant to Section 3.4(a) shall instead be credited to the Capital Account of
the General Partner (or relevant Limited Partners) until the cumulative amounts
so credited to the Capital Account of the General Partner (or relevant Limited
Partners) with respect to such Limited Partner pursuant to this Section 3.4(c)
is equal to the cumulative amount debited against the Capital Account of the
General Partner (or relevant Limited Partners) with respect to such Limited
Partner pursuant to this Section 3.4(c).
(d)    Each Limited Partner’s rights and entitlements as a Limited Partner are
limited to the rights to receive allocations and distributions of Capital Profit
and Operating Profit expressly conferred by this Agreement and any Other
Agreement entered into pursuant to Section 9.3(b) and the other rights expressly
conferred by this Agreement and any such Other Agreement or required by the
Delaware Act, and a Limited Partner shall not be entitled to any other
allocations, distributions or payments in respect of his interest, or to have or
exercise any other rights, privileges or powers.
(e)    For purposes of Section 3.4(a), the General Partner may determine in its
sole discretion to allocate any increase in value of the Partnership’s assets
pursuant to the definition of “Carrying Value” solely to the Limited Partners
that are entitled to a Catch Up Amount (pro rata based on any method the General
Partner determines is reasonable), or to specially allocate Operating Profit to
such Limited Partners, or a combination thereof, until such Limited Partners
have received an allocation equal to the Catch Up Amount.
(f)    Operating Profit and Operating Loss shall be determined on a daily,
monthly or other basis, as reasonably approved by the General Partner using any
permissible method under Section 706 and the Treasury Regulations thereunder. If
any Limited Partner shall be admitted to the Partnership, retire from the
Partnership or assigned additional Points at different times during the
Partnership’s Fiscal Year, Operating Profit or Operating Loss shall be allocated
among the Limited Partners on such proper basis as the General Partner shall
determine consistent with the applicable requirements under Section 706 of the
Code.
Section 3.5    Tax Allocations
(a)    For United States federal, state and local income tax purposes,
Partnership income, gain, loss, deduction or credit (or any item thereof) for
each Fiscal Year shall be allocated to and among the Partners in order to
reflect the allocations of Capital Profit, Capital Loss, Operating Profit and
Operating Loss pursuant to the provisions of Section 3.4 for such Fiscal Year;
provided that any taxable income or loss associated with any Book-Tax Difference
shall be allocated for tax purposes in accordance with the principles of Section
704(c) of the Code in any such manner (as is permitted under that Code Section
and the Treasury Regulations promulgated thereunder) as determined by the
General Partner in its sole discretion.
(b)    If any Partner or Partners are treated for United States federal income
tax purposes as realizing ordinary income because of receiving interests in the
Partnership (whether under Section 83 of the Code or under any similar provision
of any law, rule or regulation) and the Partnership is entitled to any
offsetting deduction (net of any income realized by the Partnership as a result
of such receipt), the Partnership’s net deduction shall be allocated to and
among the Partners in such manner as to offset, as nearly as possible, the
ordinary income realized by such Partner or Partners.
Section 3.6    Tax Treatment of Points
(a)    The Partnership and each Partner agree to treat the Points and (in the
case of Professionals LP) Discretionary Share issued to the Limited Partners
other than APH as a “Profits Interest” with respect to the Partnership within
the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343. In accordance with Rev. Proc.
2001-43, 2001-2 C.B. 191, the Partnership shall treat such a Limited Partner
holding Points or Discretionary Share as the owner of such Points and
Discretionary Share from the date such Points or Discretionary Share are issued,
and shall file its IRS form 1065, and issue appropriate Schedule K-1s to such
Limited Partner, allocating to such Limited Partner its distributive share of
all items of income, gain, loss, deduction and credit associated with such
Points or Discretionary Share as if they were fully vested. Each such Limited
Partner agrees to take into account such distributive share in computing its
United States federal income tax liability for the entire period during which it
holds the Points or Discretionary Share. Except as required pursuant to a
“Determination” as defined in Section 1313(a) of the Code, none of the
Partnership or any Partner shall claim a deduction (as wages, compensation or
otherwise) for the fair market value of such Points or (in the case of
Professionals LP) Discretionary Share issued to a Limited Partner in respect of
the Partnership, either at the time of grant of the Points or Discretionary
Share, or at the time the Points or Discretionary Share become substantially
vested. The undertakings contained in this Section 3.6 shall be construed in
accordance with Section 4 of Rev. Proc. 2001-43. The provisions of this Section
3.6 shall apply regardless of whether or not the holder of Points or
Discretionary Share files an election pursuant to Section 83(b) of the Code.
This Section 3.6 shall only apply to Points and Discretionary Share granted
while Rev. Proc. 93-27, 1993-2 C.B. 343 and Rev. Proc. 2001-43, 2001-2 C.B. 191,
remain in effect.
(b)    The Partners agree that, in the event the Safe Harbor Regulation is
finalized, the Partnership shall be authorized and directed to make the Safe
Harbor Election, and the Partnership and each Partner (including any Person to
whom an interest in the Partnership is transferred in connection with the
performance of services) agrees to comply with all requirements of the Safe
Harbor with respect to all interests in the Partnership transferred in
connection with the performance of services while the Safe Harbor Election
remains effective. The General Partner shall be authorized to (and shall)
prepare, execute, and file the Safe Harbor Election. The General Partner shall
cause the Partnership to make any allocations of items of income, gain, loss,
deduction or expense (including forfeiture allocations) necessary or appropriate
to effectuate and maintain the Safe Harbor Election.
Section 3.7    FATCA
(a)    Each Limited Partner:
(vi)    shall provide, in a timely manner, such information regarding the
Limited Partner and its beneficial owners and such forms or documentation as may
be requested from time to time by the General Partner or the Partnership to
enable the Partnership to comply with the requirements and obligations imposed
on it pursuant to FATCA;
(vii)    acknowledges that any such forms or documentation requested by the
Partnership or its agents pursuant to clause (i), or any financial or account
information with respect to the Limited Partner’s investment in the Partnership,
may be disclosed to any Governmental Authority which collects information in
accordance with FATCA and to any withholding agent where the provision of that
information is required by such agent to avoid the application of any
withholding tax on any payments to the Partnership;
(viii)    shall waive, and/or shall cooperate with the Partnership to obtain a
waiver of, the provisions of any law which prohibits the disclosure by the
Partnership, or by any of its agents, of the information or documentation
requested from the Limited Partner pursuant to clause (i), prohibits the
reporting of financial or account information by the Partnership or its agents
required pursuant to FATCA or otherwise prevents compliance by the Partnership
with its obligations under FATCA;
(ix)    acknowledges that, if it provides information and documentation that is
in anyway misleading, or it fails to provide the Partnership or its agents with
the requested information and documentation necessary, in either case, to
satisfy the Partnership’s obligations under FATCA, the Partnership may (whether
or not such action or inaction leads to compliance failures by the Partnership,
or a risk of the Partnership or its investors being subject to withholding tax
or other penalties under FATCA) take any action and/or pursue all remedies at
its disposal, including compulsory withdrawal of the Limited Partner, and may
hold back from any withdrawal proceeds, or deduct from the Limited Partner’s
Capital Account, any liabilities, costs, expenses or taxes caused (directly or
indirectly) by the Limited Partner’s action or inaction; and
(x)    shall have no claim against the Partnership, or its agents, for any form
of damages or liability as a result of actions taken or remedies pursued by or
on behalf of the Partnership in order to comply with FATCA.
(b)    Each Limited Partner hereby indemnifies the General Partner and the
Partnership and each of their respective partners, members, managers, officers,
directors, employees and agents and holds them harmless from and against any
FATCA-related liability, action, proceeding, claim, demand, costs, damages,
expenses (including legal expenses), penalties or taxes whatsoever which such
Person may incur as a result of any action or inaction (directly or indirectly)
of such Limited Partner (or any Related Party) described in Sections 3.7(a)(i)
through (iv). This indemnification shall survive the Limited Partner’s death or
disposition of its interests in the Partnership.
Section 3.8    Reserves; Adjustments for Certain Future Events
(a)    Appropriate reserves may be created, accrued and charged against the
Operating Profit or Operating Loss for contingent liabilities, if any, as of the
date any such contingent liability becomes known to the General Partner or as of
each other date as the General Partner deems appropriate, such reserves to be in
the amounts which the General Partner deems necessary or appropriate. The
General Partner may increase or reduce any such reserve from time to time by
such amounts as the General Partner deems necessary or appropriate. The amount
of any such reserve, or any increase or decrease therein, shall be
proportionately charged or credited, as appropriate, to the Capital Accounts of
those Persons who are Partners at the time when such reserve is created,
increased or decreased, as the case may be, in proportion to their respective
Points at such time; provided that, if any individual reserve item, as adjusted
by any increase therein, exceeds the lesser of $500,000 or 1% of the aggregate
Capital Account balances of all such Partners, the amount of such reserve,
increase or decrease shall instead be charged or credited to those Persons who
were Partners at the time, as determined by the General Partner, of the act or
omission giving rise to the contingent liability for which the reserve item was
established in proportion to their respective Points at that time. The amount of
any such reserve charged against the Capital Account of a Partner shall reduce
the distributions such Partner would otherwise be entitled to under Section 4.1
or Section 8.1 hereof; and the amount of any such reserve credited to the
Capital Account of a Partner shall increase the distributions such Partner would
otherwise be entitled to under Section 4.1 or Section 8.1 hereof.
(b)    If at any time an amount is paid or received by the Partnership and such
amount exceeds the lesser of $500,000 or 1% of the aggregate Capital Account
balances of all Partners at the time of payment or receipt, and such amount was
not accrued or reserved for but would nevertheless, in accordance with the
Partnership’s accounting practices, be treated as applicable to one or more
prior periods, then such amount may be proportionately charged or credited by
the General Partner, as appropriate, to those Persons who were Partners during
such prior period or periods, based on each such Partner’s Points for such
applicable period.
(c)    If any amount is required by Section 3.8(a) or (b) to be credited to a
Person who is no longer a Partner, such amount shall be paid to such Person in
cash, with interest from the date on which the General Partner determines that
such credit is required at the Reference Rate in effect on that date. Any amount
required to be charged pursuant to Section 3.8(a) or (b) shall be debited
against the current balance in the Capital Account of the affected Partners. To
the extent that the aggregate current Capital Account balances of such affected
Partners are insufficient to cover the full amount of the required charge, the
deficiency shall be debited against the Capital Accounts of the other Partners
in proportion to their respective Capital Account balances at such time;
provided that each such other Partner shall be entitled to a preferential
allocation, in proportion to and to the extent of such other Partner’s share of
any such deficiency, together with a carrying charge at a rate equal to the
Reference Rate, of any Operating Profit that would otherwise have been allocable
after the date of such charge to the Capital Accounts of the affected Partners
whose Capital Accounts were insufficient to cover the full amount of the
required charge. In no event shall a current or former Partner be obligated to
satisfy any amount required to be charged pursuant to Section 3.8(a) or (b)
other than by means of a debit against such Partner’s Capital Account.
Section 3.9    Finality and Binding Effect of General Partner’s Determinations
All matters concerning the determination, valuation and allocation among the
Partners with respect to any profit or loss of the Partnership and any
associated items of income, gain, deduction, loss and credit, pursuant to any
provision of this Article 3, including any accounting procedures applicable
thereto, shall be determined by the General Partner unless specifically and
expressly otherwise provided for by the provisions of this Agreement, and such
determinations and allocations shall be final and binding on all the Partners.
Section 3.10    Alternative GP Vehicles
If the General Partner determines that for legal, tax, regulatory or other
reasons (a) any investment or other activities of a Fund should be conducted
through one or more parallel funds or other alternative investment vehicles as
contemplated by the applicable Fund LP Agreement, (b) any of such separate
entities comprising the Fund should be managed or controlled by one or more
separate entities serving as a general partner or in a similar capacity (each,
an “Alternative GP Vehicle”), and (c) some or all of the Partners should
participate through any such Alternative GP Vehicle, the General Partner may
require any or all of the Partners, as determined by the General Partner, to
participate directly or indirectly through any such Alternative GP Vehicle and
to undertake such related and incidental activities and execute and deliver such
related documents necessary or incidental thereto with and/or in lieu of the
Partnership, and the General Partner shall have all necessary authority to
implement such Alternative GP Vehicle; provided that to the maximum extent
practicable and subject to applicable legal, tax, regulatory or similar
technical reasons, each Partner shall have the same economic interest in all
material respects in an Alternative GP Vehicle formed pursuant to this Section
3.10 as such Partner would have had if it had participated in all Portfolio
Investments through the Partnership, and the terms of such Alternative GP
Vehicle shall be substantially the same in all material respects to those of the
Partnership and this Agreement. Each Partner shall take such actions and execute
such documents as the General Partner determines are reasonably needed to
accomplish the foregoing.
ARTICLE 4    
DISTRIBUTIONS
Section 4.1    Distributions
(e)    Any amount of cash or property received as a distribution from any of the
Funds by the Partnership in its capacity as a partner, to the extent such amount
is determined by reference to the capital commitment of the Partnership in, or
the capital contributions of the Partnership to, any of the Funds, shall be
promptly distributed by the Partnership to APH.
(f)    The General Partner shall use reasonable efforts to cause the Partnership
to distribute, on a quarterly basis, any available cash or property attributable
to items included in the determination of Operating Profit and Book-Tax
Difference, subject to the provisions of the Fund LP Agreements relating to
Final Distributions on the dissolution or termination of a Fund and subject to
the retention of such reserves as the General Partner considers appropriate for
purposes of the prudent and efficient financial operation of the Partnership’s
business including in accordance with Section 3.8. The General Partner shall
determine in its sole discretion for each Fiscal Year the proportion (expressed
as a percentage) of the cash and value of property available for distribution to
the Limited Partners that shall be distributable to Professionals LP for the
Fiscal Year (the “Discretionary Share”) in addition to any amounts distributable
on the Points held by Professionals LP pursuant to this Article 4. Distributions
when made shall be made to the Limited Partners as follows (before adjustment
for Holdback Amounts):
(xi)    the APH Percentage to APH;
(xii)    to Professionals LP, until it has received an amount equal to the
Discretionary Share; and
(xiii)    the balance to the Limited Partners (other than APH) pro rata in
accordance with their Points, determined:
(A)    in the case of any amount of cash or property received from any of the
Funds that is attributable to the disposition of a Portfolio Investment by such
Fund, as of the date of such disposition by such Fund; and
(B)    in any other case, as of the date of receipt of such cash or property by
the Partnership;
provided, however, that any cash or other property that the General Partner
determines is attributable to a Book-Tax Difference in the Partnership assets
shall be distributed to the Limited Partners that are entitled to a share of
such Book-Tax Difference pursuant to the definition of “Book-Tax Difference,”
with any such distribution to be in the proportion that each such Limited
Partner’s allocated share of the applicable Book-Tax Difference bears to the
total Book-Tax Difference of the asset giving rise to the cash or property.
Notwithstanding the foregoing, the General Partner shall retain from the
distribution amount apportioned to each Limited Partner (other than APH, Partner
Pool LP and Professionals LP) pursuant to this Section 4.1(b) any Holdback
Amount with respect to such Limited Partner, determined in accordance with such
Limited Partner’s Award Letter. Any Holdback Amount retained by the General
Partner pursuant to this Section 4.1(b) shall be considered to have been
distributed to the Limited Partners for all purposes of this Agreement.
(g)    Distributions of amounts attributable to Operating Profit and Book-Tax
Difference shall be made in cash; provided, however, that if the Partnership
receives a distribution from a Fund in the form of property other than cash, the
General Partner may distribute such property in kind to Partners in proportion
to their respective Points.
(h)    Any distributions or payments in respect of the interests of Limited
Partners unrelated to Capital Profit, Operating Profit or Book-Tax Difference
shall be made at such time, in such manner and to such Limited Partners as the
General Partner shall determine.
(i)    Except as otherwise set forth in a Limited Partner’s Award Letter, a
Retired Partner shall receive his share of any distribution made pursuant to
Section 4.1(b) with respect to which such Retired Partner received an allocation
prior to his becoming a Retired Partner in accordance with Section 3.4, which
distribution shall be made at the same time and in the same form as such
distribution is made to the Limited Partners.
(j)    (%4) Except as the General Partner otherwise may determine pursuant to
the terms of an Award Letter, any Limited Partner whose admission to the
Partnership causes an adjustment to Carrying Values pursuant to the definition
of “Carrying Value” (a “Newly-Admitted Limited Partner”) shall have the right to
receive a special distribution of the Catch Up Amount (before adjustment for
Holdback Amounts). Any such special distribution of the Catch Up Amount shall be
in addition to the distributions to which the Newly-Admitted Limited Partner is
entitled pursuant to Section 4.1(b), and shall be made to the Newly-Admitted
Limited Partner (or, if there is more than one such Newly-Admitted Limited
Partner, pro rata to all such Newly-Admitted Limited Partners based on the
aggregate amount of such distributions each such Newly-Admitted Limited Partner
has not yet received), after distribution of any amounts attributable to any
Book-Tax Difference pursuant to the proviso of Section 4.1(b), from amounts
otherwise distributable pursuant to Section 4.1(b) to APH (or other Limited
Partners, as the case may be), and shall reduce the amounts distributable
pursuant to Section 4.1(b) to APH (or such other Limited Partners), until each
applicable Newly-Admitted Limited Partner has received an amount equal to the
applicable Catch Up Amount (before adjustment for Holdback Amounts).
(i)    The General Partner may determine to provide for a special distribution
of a Catch Up Amount in connection with a reallocation of Points pursuant to
Article 7 other than in connection with the admission to the Partnership of a
Newly-Admitted Limited Partner if the General Partner reasonably believes such
an adjustment to Carrying Values is required in order for the reallocated Points
to be treated as profits interests for U.S. federal income tax purposes.
(ii)    Any reallocation of Points pursuant to Article 7 shall include the right
to receive any Catch Up Amount associated with such Points.
(k)    The General Partner may reduce (but not below zero) the amounts
distributable to the Limited Partners (other than APH) pursuant to Section
4.1(b) by the aggregate amount of any payment (or commitment to make such
payment) by any Affiliate of the Partnership to an employee of such Affiliate,
if the General Partner determines that such payments (or commitments) are in
respect of services provided by the employee to such Affiliate in connection
with the Credit Business; provided that no such reduction shall occur by reason
of the payment of the Fee Payments (as defined in and) provided for in any award
letter issued to a direct or indirect limited partner of Partner Pool LP or any
of the Intermediate Pooling Vehicles or of the payment of other similar
compensation, salary or bonus amounts that any such employee receives without
regard to his interests in, treatment similar to that of a member or limited
partner of, or admission to, the Partnership, Partner Pool LP or any general
partner, managing member, manager or similar Person of any pooled investment
vehicle or managed account that, directly or indirectly, makes allocations of
incentive allocations to Partner Pool LP. The amount of any such reduction
instead shall be distributed solely to APH.
(l)    Any cash or property that the General Partner determines is attributable
to the allocation of Operating Profit to the Limited Partners (other than
Professionals LP) due to the Phantom Operating Profit Limitation or to the
allocation of Other Phantom Operating Profit pursuant to the provisos of Section
3.4(a) shall be distributed to the Limited Partners in accordance with the
manner in which such Operating Profit was specially allocated.
(m)    Any cash or property that the General Partner determines is attributable
to a special allocation of Operating Profit to Professionals LP or the other
Limited Partners (other than APH) pursuant to Section 3.4(b) shall be
distributed solely to Professionals LP or to the Limited Partners (other than
APH), as the case may be, until Professionals LP and such other Limited Partners
(other than APH) have received an amount equal to such special allocation.
Section 4.2    Withholding of Certain Amounts
(h)    If the Partnership incurs a withholding tax or other tax obligation with
respect to the share of Partnership income allocable to any Partner (including
withholding under Sections 1471 through 1474 of the Code), then the General
Partner, without limitation of any other rights of the Partnership, may cause
the amount of such obligation to be debited against the Capital Account of such
Partner when the Partnership pays such obligation, and any amounts then or
thereafter distributable to such Partner shall be reduced by the amount of such
taxes. If the amount of such taxes is greater than any such then distributable
amounts, then such Partner and any successor to such Partner’s interest shall
indemnify and hold harmless the Partnership and the General Partner against, and
shall pay to the Partnership as a contribution to the capital of the
Partnership, upon demand of the General Partner, the amount of such excess.
(i)    The General Partner may (i)  withhold from any distribution to any
Limited Partner pursuant to this Agreement and (ii) arrange the withholding from
any distribution from Co-Investors (A) to such Limited Partner any other amounts
due from such Limited Partner or a Related Party (without duplication) to the
Partnership, Co-Investors (A) or to any other Affiliate of AGM pursuant to any
binding agreement or published policy to the extent not otherwise paid. Any
amounts so withheld shall be applied by the General Partner to discharge the
obligation in respect of which such amounts were withheld.
Section 4.3    Limitation on Distributions
Notwithstanding any provision to the contrary contained in this Agreement, the
Partnership, and the General Partner on behalf of the Partnership, shall not
make a distribution to any Partner on account of his interest in the Partnership
if such distribution would violate the Delaware Act or other applicable law.
Section 4.4    Distributions in Excess of Basis
Notwithstanding anything in this Agreement to the contrary, the General Partner
may refrain from making, at any time prior to the dissolution of the
Partnership, all or any portion of any cash distribution that otherwise would be
made to a Partner or Retired Partner, if such distribution would exceed such
Person’s U.S. federal income tax basis in the Partnership. Any amount that is
not distributed to a Partner or Retired Partner due to the preceding sentence,
as determined by the General Partner, either shall be retained by the
Partnership on such Person’s behalf or loaned to such Person. Subject to the
first sentence of this Section 4.4, 100% of any or all subsequent cash
distributions shall be distributed to such Person (or, if there is more than one
such Person, pro rata to all such Persons based on the aggregate amount of
distributions each such Person has not yet received) until each such Person has
received the same aggregate amount of distributions such Person would have
received had distributions to such Person not been deferred pursuant to this
Section 4.4. If any amount is loaned to a Partner or Retired Partner pursuant to
this Section 4.4, any such loan shall be on arm’s length terms as determined by
the General Partner and shall be fully recourse to the Partner or Retired
Partner and (i) any amount thereafter distributed to such Person shall be
applied to repay the principal amount of such loan and (ii) interest, if any,
accrued or received by the Partnership on such loan shall be allocated and
distributed to such Person. Any such loan shall be repaid no later than
immediately prior to the liquidation of the Partnership. Until such repayment,
for purposes of any determination hereunder based on amounts distributed to a
Person, the principal amount of such loan shall be treated as having been
distributed to such Person.
ARTICLE 5    
MANAGEMENT
Section 5.1    Rights and Powers of the General Partner
(j)    Subject to the terms and conditions of this Agreement, the General
Partner shall have complete and exclusive responsibility (i) for all management
decisions to be made on behalf of the Partnership and (ii) for the conduct of
the business and affairs of the Partnership, including all such decisions and
all such business and affairs to be made or conducted by the Partnership in its
capacity as general partner of any of the Funds.
(k)    Without limiting the generality of the foregoing, the General Partner
shall have full power and authority to execute, deliver and perform such
contracts, agreements and other undertakings, and to engage in all activities
and transactions, as it may deem necessary or advisable for, or as may be
incidental to, the conduct of the business contemplated by this Section 5.1,
including, without in any manner limiting the generality of the foregoing,
contracts, agreements, undertakings and transactions with any Partner or with
any other Person having any business, financial or other relationship with any
Partner or Partners. The Partnership, and the General Partner on behalf of the
Partnership, may enter into and perform the Fund LP Agreements and any documents
contemplated thereby or related thereto and any amendments thereto, without any
further act, vote or approval of any Person, including any Partner,
notwithstanding any other provision of this Agreement. The General Partner is
hereby authorized to enter into the documents described in the preceding
sentence on behalf of the Partnership, but such authorization shall not be
deemed a restriction on the power of the General Partner to enter into other
documents on behalf of the Partnership. Except as otherwise expressly provided
herein or as required by law, all powers and authority vested in the General
Partner by or pursuant to this Agreement or the Act shall be construed as being
exercisable by the General Partner in its sole and absolute discretion.
(l)    The General Partner shall be the tax matters partner for purposes of
Section 6231(a)(7) of the Code. Each Partner agrees not to treat, on his United
States federal income tax return or in any claim for a refund, any item of
income, gain, loss, deduction or credit in a manner inconsistent with the
treatment of such item by the Partnership. The General Partner shall have the
exclusive authority to make any elections required or permitted to be made by
the Partnership under any provisions of the Code or any other laws.
Section 5.2    Delegation of Duties
(g)    Subject to Section 5.1, the General Partner may delegate to any Person or
Persons any of the duties, powers and authority vested in it hereunder on such
terms and conditions as it may consider appropriate.
(h)     Without limiting the generality of Section 5.2(a), the General Partner
shall have the power and authority to appoint any Person, including any Person
who is a Limited Partner, to provide services to and act as an employee or agent
of the Partnership and/or General Partner, with such titles and duties as may be
specified by the General Partner. Any Person appointed by the General Partner to
serve as an employee or agent of the Partnership shall be subject to removal at
any time by the General Partner; and shall report to and consult with the
General Partner at such times and in such manner as the General Partner may
direct.
(i)    Any Person who is a Limited Partner and to whom the General Partner
delegates any of its duties pursuant to this Section 5.2 or any other provision
of this Agreement shall be subject to the same standard of care, and shall be
entitled to the same rights of indemnification and exoneration, applicable to
the General Partner under and pursuant to Section 5.7, unless such Person and
the General Partner mutually agree to a different standard of care or right to
indemnification and exoneration to which such Person shall be subject.
(j)    The General Partner shall be permitted to designate one or more
committees of the Partnership, which committees may include Limited Partners as
members. Any such committees shall have such powers and authority granted by the
General Partner. Any Limited Partner who has agreed to serve on a committee
shall not be deemed to have the power to bind or act for or on behalf of the
Partnership in any manner and in no event shall a member of a committee be
considered a general partner of the Partnership by agreement, estoppel or
otherwise or be deemed to participate in the control of the business of the
Partnership as a result of the performance of his duties hereunder or otherwise.
(k)    The General Partner shall cause the Partnership to enter into an
arrangement with the Manager, which arrangement shall require the Manager to pay
all costs and expenses of the Partnership.
Section 5.3    Transactions with Affiliates
To the fullest extent permitted by applicable law, the General Partner (or any
Affiliate of the General Partner), when acting on behalf of the Partnership, is
hereby authorized to (a) purchase property from, sell property to, lend money to
or otherwise deal with any Affiliates, any Limited Partner, the Partnership, any
of the Funds or any Affiliate of any of the foregoing Persons, and (b) obtain
services from any Affiliates, any Limited Partner, the Partnership, any of the
Funds or any Affiliate of the foregoing Persons.
Section 5.4    Expenses
(c)    Subject to the arrangement contemplated by Section 5.2(e), the
Partnership will pay, or reimburse the General Partner for, all costs and
expenses arising in connection with the organization and operations of the
Partnership.
(d)    Any withholding taxes payable by the Partnership, to the extent
determined by the General Partner to have been paid or withheld on behalf of, or
by reason of particular circumstances applicable to, one or more but fewer than
all of the Partners, shall be allocated among and debited against the Capital
Accounts of only those Partners on whose behalf such payments are made or whose
particular circumstances gave rise to such payments in accordance with Section
4.2.
Section 5.5    Rights of Limited Partners
(c)    Limited Partners shall have no right to take part in the management or
control of the Partnership’s business, nor shall they have any right or
authority to act for the Partnership or to vote on matters other than as set
forth in this Agreement or as required by applicable law.
(d)    Without limiting the generality of the foregoing, the General Partner
shall have the full and exclusive authority, without the consent of any Limited
Partner, to compromise the obligation of any Limited Partner to make a capital
contribution or to return money or other property paid or distributed to such
Limited Partner in violation of the Delaware Act.
(e)    Nothing in this Agreement shall entitle any Partner to any compensation
for services rendered to or on behalf of the Partnership as an agent or in any
other capacity, except for any amounts payable in accordance with this
Agreement.
(f)    Subject to the Fund LP Agreements and to full compliance with AGM’s code
of ethics and other written policies relating to personal investment
transactions, admission into the Partnership as a Limited Partner of the
Partnership shall not prohibit a Limited Partner from purchasing or selling as a
passive investor any interest in any asset.
Section 5.6    Other Activities of General Partner
Nothing in this Agreement shall prohibit the General Partner from engaging in
any activity other than acting as General Partner hereunder.
Section 5.7    Duty of Care; Indemnification
(a)    The General Partner (including for this purpose each former and present
director, officer, stockholder, partner, member, manager or employee of the
General Partner) and each Limited Partner (including any former Limited Partner)
in his capacity as such, and to the extent such Limited Partner participates,
directly or indirectly, in the Partnership’s activities, whether or not a
Retired Partner (each, a “Covered Person” and collectively, the “Covered
Persons”), shall not be liable to the Partnership or to any of the other
Partners for any loss, claim, damage, liability or expenses (including
attorneys’ fees, judgments, fines, penalties and amounts paid in settlement
(collectively, “Losses”) occasioned by any acts or omissions in the performance
of his services hereunder, unless it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (a “Final
Adjudication”) that such Losses are due to an act or omission of a Covered
Person (i) made in bad faith or with criminal intent or (ii) that adversely
affected any Fund and that failed to satisfy the duty of care owed pursuant to
the applicable Fund LP Agreement or as otherwise required by law.
(b)    A Covered Person shall be indemnified to the fullest extent permitted by
law by the Partnership against any Losses incurred by or imposed upon him by
reason of or in connection with any action taken or omitted by such Covered
Person arising out of the Covered Person’s status as a Partner or his activities
on behalf of the Partnership, including in connection with any action, suit,
investigation or proceeding before any Governmental Authority to which it may be
made a party or otherwise involved or with which it shall be threatened by
reason of being or having been the General Partner or a Limited Partner or by
reason of serving or having served, at the request of the Partnership in its
capacity as the general partner of any Fund, as a director, officer, consultant,
advisor, manager, stockholder, member or partner of any enterprise in which any
of the Funds has or had a financial interest, including issuers of Portfolio
Investments; provided that the Partnership may, but shall not be required to,
indemnify a Covered Person with respect to any matter as to which there has been
a Final Adjudication that his acts or his failure to act (i) were in bad faith
or with criminal intent or (ii) were of a nature that makes indemnification by
the Funds unavailable. The right to indemnification granted by this Section 5.7
shall be in addition to any rights to which a Covered Person may otherwise be
entitled and shall inure to the benefit of the successors by operation of law or
valid assigns of such Covered Person. The Partnership shall pay the expenses
incurred by a Covered Person in defending a civil or criminal action, suit,
investigation or proceeding in advance of the Final Adjudication of such action,
suit, investigation or proceeding, upon receipt of an undertaking by the Covered
Person to repay such payment if there shall be a Final Adjudication that he is
not entitled to indemnification as provided herein. In any suit brought by the
Covered Person to enforce a right to indemnification hereunder it shall be a
defense that the Covered Person has not met the applicable standard of conduct
set forth in this Section 5.7, and in any suit in the name of the Partnership to
recover expenses advanced pursuant to the terms of an undertaking the
Partnership shall be entitled to recover such expenses upon Final Adjudication
that the Covered Person has not met the applicable standard of conduct set forth
in this Section 5.7. In any such suit brought to enforce a right to
indemnification or to recover an advancement of expenses pursuant to the terms
of an undertaking, the burden of proving that the Covered Person is not entitled
to be indemnified, or to an advancement of expenses, shall be on the Partnership
(or any Limited Partner acting derivatively or otherwise on behalf of the
Partnership or the Limited Partners). The General Partner may not satisfy any
right of indemnity or reimbursement granted in this Section 5.7 or to which it
may be otherwise entitled except out of the assets of the Partnership (including
insurance proceeds and rights pursuant to indemnification agreements), and no
Partner shall be personally liable with respect to any such claim for indemnity
or reimbursement. The General Partner may enter into appropriate indemnification
agreements and/or arrangements reflective of the provisions of this Article 5
and obtain appropriate insurance coverage on behalf and at the expense of the
Partnership to secure the Partnership’s indemnification obligations hereunder.
Each Covered Person shall be deemed a third party beneficiary (to the extent not
a direct party hereto) to this Agreement and, in particular, the provisions of
this Article 5, may enforce any rights granted to it pursuant to this Agreement
in its own right as if it were a party to this Agreement, and shall be entitled
to the benefit of the indemnity granted to the Partnership by each of the Funds
pursuant to the terms of the Fund LP Agreements.
(c)    To the maximum extent permitted by law, as among any Portfolio Company of
a Fund, a Fund and the Partnership, this Section 5.7(c) shall be interpreted to
reflect an ordering of liability for potentially overlapping or duplicative
indemnification payments, in the following order: first, such Portfolio Company;
second, such Fund; and third, the Partnership (in each case, including any
applicable insurance coverage that any such indemnitor maintains with respect to
any such liability).
(d)    To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or the Partners, the Covered Person shall not be liable to the Partnership or to
any Partner for his good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict or eliminate the
duties and liabilities of a Covered Person otherwise existing at law or in
equity to the Partnership or the Partners, are agreed by the Partners to replace
such other duties and liabilities of each such Covered Person.
(e)    Notwithstanding any of the foregoing provisions of this Section 5.7, the
Partnership may but shall not be required to indemnify (i) a Retired Partner (or
any other former Limited Partner) with respect to any claim for indemnification
or advancement of expenses arising from any conduct occurring more than six
months after the date of such Person’s retirement (or other withdrawal or
departure), or (ii) a Limited Partner with respect to any claim for
indemnification or advancement of expenses as a director, officer or agent of
the issuer of any Portfolio Investment to the extent arising from conduct in
such capacity occurring more than six months after the complete disposition of
such Portfolio Investment by the applicable Fund.
ARTICLE 6    
ADMISSIONS, TRANSFERS AND WITHDRAWALS
Section 6.1    Admission of Additional Limited Partners; Effect on Points
(l)    The General Partner may at any time admit as an additional Limited
Partner any Person who has agreed to be bound by this Agreement and may assign
Points to such Person and/or increase the Points of any existing Limited
Partner, in each case, subject to and in accordance with Section 7.1.
(m)    Each additional Limited Partner shall execute (i) either a counterpart to
this Agreement or a separate instrument evidencing, to the satisfaction of the
General Partner, such Limited Partner’s intent to become a Limited Partner and
(ii) the documents contemplated by Section 7.1(b), and shall be admitted as a
Limited Partner upon such execution.
Section 6.2    Admission of Additional General Partner
The General Partner may admit one or more additional general partners at any
time without the consent of any Limited Partner. No reduction in the Points of
any Limited Partner shall be made as a result of the admission of an additional
general partner or the increase in the Points of any general partner without the
consent of such Limited Partner. Any additional general partner shall be
admitted as a general partner upon its execution of a counterpart signature page
to this Agreement.
Section 6.3    Transfer of Interests of Limited Partners
(e)    No Transfer of any Limited Partner’s interest in the Partnership, whether
voluntary or involuntary, shall be valid or effective, and no transferee shall
become a substituted Limited Partner, unless the prior written consent of the
General Partner has been obtained, which consent may be given or withheld by the
General Partner. Notwithstanding the foregoing, any Limited Partner may Transfer
to any Related Party of such Limited Partner all or part of such Limited
Partner’s interest in the Partnership (including his or its right to receive
distributions of Operating Profit); provided that the Transfer has been
previously approved in writing by the General Partner, such approval not to be
unreasonably withheld. In the event of any Transfer, all of the conditions of
the remainder of this Section 6.3 must also be satisfied.
(f)    A Limited Partner or his legal representative shall give the General
Partner notice before the proposed effective date of any voluntary Transfer and
within 30 days after any involuntary Transfer, and shall provide sufficient
information to allow legal counsel acting for the Partnership to make the
determination that the proposed Transfer will not result in any of the following
consequences:
(iii)    require registration of the Partnership or any interest therein under
any securities or commodities laws of any jurisdiction;
(iv)    result in a termination of the Partnership under Section 708(b)(1)(B) of
the Code or jeopardize the status of the Partnership as a partnership for United
States federal income tax purposes; or
(v)    violate, or cause the Partnership, the General Partner or any Limited
Partner to violate, any applicable law, rule or regulation of any jurisdiction.
Such notice must be supported by proof of legal authority and a valid instrument
of assignment acceptable to the General Partner.
(g)    If any Transfer permitted by this Section 6.3 shall result in multiple
ownership of any Limited Partner’s interest in the Partnership, the General
Partner may require one or more trustees or nominees whose names will be entered
in the Register of Partners, to be designated to hold the legal title to the
interest and to represent the entire interest transferred for the purpose of
receiving all notices which may be given and all payments which may be made
under this Agreement, and for the purpose of exercising the rights which the
transferees have pursuant to the provisions of this Agreement. The Partnership
shall not otherwise be required to recognize any trust or other beneficial
ownership of any interest.
(h)    A permitted transferee shall be entitled to the allocations and
distributions attributable to the economic interest in the Partnership
transferred to such transferee (and any such payment shall constitute a good and
valid discharge of such obligation on the part of the General Partner); provided
that such transferee shall not be entitled to the other rights of a Limited
Partner as a result of such transfer until he becomes a substituted Limited
Partner. No transferee may become a substituted Limited Partner except with the
prior written consent of the General Partner (which consent may be given or
withheld by the General Partner). Such transferee shall be admitted to the
Partnership as a substituted Limited Partner upon execution of a counterpart of
this Agreement or such other instrument evidencing, to the satisfaction of the
General Partner, such Limited Partner’s intent to become a Limited Partner of
the Partnership and to adhere to and be bound by the provisions of this
Agreement on admission as a Limited Partner. Notwithstanding the above, the
Partnership and the General Partner shall incur no liability for allocations and
distributions made in good faith to the transferring Limited Partner until a
written instrument of Transfer has been received and accepted by the Partnership
and recorded on its books and the effective date of the Transfer has passed.
(i)    Any other provision of this Agreement to the contrary notwithstanding, to
the fullest extent permitted by law, any successor or transferee of any Limited
Partner’s interest in the Partnership shall be bound by the provisions hereof.
Prior to recognizing any Transfer in accordance with this Section 6.3, the
General Partner may require the transferee to make certain representations and
warranties to the Partnership and Partners and to accept, adopt and approve in
writing all of the terms and provisions of this Agreement.
(j)    In the event of a Transfer or in the event of a distribution of assets of
the Partnership to any Partner, the Partnership, at the direction of the General
Partner, may, but shall not be required to, file an election under Section 754
of the Code and in accordance with the applicable Treasury Regulations, to cause
the basis of the Partnership’s assets to be adjusted as provided by Section 734
or 743 of the Code.
(k)    The Partnership shall maintain books for the purpose of registering the
Transfer of partnership interests in the Partnership. No Transfer of a
partnership interest shall be effective until the Transfer of the partnership
interest is registered by the General Partner on the Register of Partners.
Section 6.4    Withdrawal of Partners
A Partner in the Partnership may not withdraw from the Partnership prior to its
dissolution. For the avoidance of doubt, any Limited Partner who transfers to a
Related Party such Limited Partner’s entire remaining entitlement to allocations
and distributions shall remain a Limited Partner, notwithstanding the admission
of the transferee Related Party as a Limited Partner, for as long as the
transferee Related Party remains a Limited Partner.
Section 6.5    Pledges
(d)    A Limited Partner shall not pledge or grant a security interest in such
Limited Partner’s interest in the Partnership unless the prior written consent
of the General Partner has been obtained (which consent may be given or withheld
by the General Partner).
(e)    Notwithstanding Section 6.5(a), any Limited Partner may grant to a bank
or other financial institution a security interest in such part of such Limited
Partner’s interest in the Partnership as relates solely to the right to receive
distributions of Operating Profit in the ordinary course of obtaining bona fide
loan financing to fund his contributions to the capital of the Partnership,
Co-Investors (A), any of the Public Vehicles and/or any other investment fund or
vehicle that forms part of the Credit Business. If the interest of the Limited
Partner in the Partnership or Co-Investors (A) or any portion thereof in respect
of which a Limited Partner has granted a security interest ceases to be owned by
such Limited Partner in connection with the exercise by the secured party of
remedies resulting from a default by such Limited Partner or upon the occurrence
of such similar events with respect to such Limited Partner’s interest in
Co-Investors (A), such interest of the Limited Partner in the Partnership or
portion thereof shall thereupon become a non-voting interest and the holder
thereof shall not be entitled to vote on any matter pursuant to this Agreement.
(f)    For purposes of the grant, pledge, attachment or perfection of a security
interest in a partnership interest in the Partnership or otherwise, each such
partnership interest shall constitute a “security” within the meaning of, and
governed by, (i) Article 8 of the Uniform Commercial Code (including Section
8‑102(a)(15) thereof) as in effect from time to time in the State of Delaware
(the “DEUCC”), and (ii) Article 8 of the Uniform Commercial Code of any other
applicable jurisdiction that now or hereafter substantially includes the 1994
revisions to Article 8 thereof as adopted by the American Law Institute and the
National Conference of Commissioners on Uniform State Laws and approved by the
American Bar Association on February 14, 1995.
(g)    Any partnership interest in the Partnership may be evidenced by a
certificate issued by the Partnership in such form as the General Partner may
approve. Every certificate representing an interest in the Partnership shall
bear a legend substantially in the following form:
“Each partnership interest constitutes a “security” within the meaning of, and
governed by, (i) Article 8 of the Uniform Commercial Code (including Section
8‑102(a)(15) thereof) as in effect from time to time in the State of Delaware,
and (ii) Article 8 of the Uniform Commercial Code of any other applicable
jurisdiction that now or hereafter substantially includes the 1994 revisions to
Article 8 thereof as adopted by the American Law Institute and the National
Conference of Commissioners on Uniform State Laws and approved by the American
Bar Association on February 14, 1995.
THE TRANSFER OF THIS CERTIFICATE AND THE PARTNERSHIP INTERESTS REPRESENTED
HEREBY IS RESTRICTED AS DESCRIBED IN THE SECOND AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF THE PARTNERSHIP, AS THE SAME MAY BE AMENDED OR
RESTATED FROM TIME TO TIME.”
(h)    Each certificate representing a partnership interest in the Partnership
shall be executed by manual or facsimile signature of the General Partner on
behalf of the Partnership.
(i)    Notwithstanding any provision of this Agreement to the contrary, to the
extent that any provision of this Agreement is inconsistent with any
non-waivable provision of Article 8 of the DEUCC, such provision of Article 8 of
the DEUCC shall control.
ARTICLE 7    
ALLOCATION OF POINTS; ADJUSTMENTS OF POINTS
AND RETIREMENT OF PARTNERS
Section 7.1    Allocation of Points
(c)    Except as otherwise provided herein, the General Partner shall be
responsible for the allocation of Points from time to time to the Limited
Partners. The General Partner may allocate Points to a new Limited Partner
and/or increase or reduce the Points of any existing Limited Partner at any
time; provided that: (1) except as expressly set forth in a Limited Partner’s
Award Letter, (i) the General Partner may reduce such Limited Partner’s Points
only in December of each year following the date of the initial allocation of
Points to such Limited Partner, (ii) the General Partner may not reduce a
Retired Partner’s Vested Points, and (iii) the allocation and reallocation of
Points will be on such terms as are consistent with the treatment of the Points
as profits interests for U.S. federal income tax purposes; (2) Professionals LP
shall at all times have at least 0.4% of all Points; and (3) APH and its
Affiliates shall in no event have more than the APH Percentage of all Points.
Notwithstanding anything to the contrary herein, there shall be a maximum of
2,000 Points available for issuance.
(d)    Unless otherwise agreed by the General Partner, the initial allocation of
Points to any Limited Partner (other than Partner Pool LP and Professionals LP)
shall not become effective until:
(vi)    the receipt of the following documents, in form and substance reasonably
satisfactory to the General Partner, executed by such Limited Partner: (A) a
customary and standard guarantee or guarantees, for the benefit of Fund
investors, of the Limited Partner’s Clawback Share of the Partnership’s
obligation to make Clawback Payments, and (B) a customary and standard
undertaking to reimburse Apollo Principal Holdings II, L.P. for any payment made
by it (or by another AGM Affiliate) that is attributable to such Limited
Partner’s Clawback Share of any Clawback Payment; and
(vii)    the effective date of the acceptance by Co-Investors (A) of a capital
commitment from such Limited Partner (or his Related Party, as applicable) in an
amount equal to such Limited Partner’s Required Commitment as set forth in such
Limited Partner’s Award Letter.
(e)    Any change to a Limited Partner’s Points pursuant to this Agreement or
such Limited Partner’s Award Letter shall apply on a prospective basis only from
and after the effective date of such change; it being understood that such
Limited Partner shall not be required to refund to the Partnership any
distributions received by such Limited Partner in respect of his Points prior to
such change, solely as a result of any such change.
(f)    The General Partner shall maintain on the books and records of the
Partnership a record of the number of Points allocated to each Partner and shall
give notice to each Limited Partner of the number of such Limited Partner’s
Points upon admission to the Partnership of such Limited Partner and promptly
upon any change in such Limited Partner’s Points pursuant to this Article 7 and
such notice shall include the calculations used by the General Partner to
determine the amount of any such reduction.
(g)    Subject to the limitations imposed under Section 7.1(a)(1)(ii) and (iii)
regarding the allocation of Points and Section 7.1(f), any Points that are
forfeited under this Agreement or a Limited Partner’s Award Letter may be
reallocated by the General Partner, in its sole discretion, following
consultation with AGM Credit Senior Management, to any Person or Persons. Until
any such reallocation by the General Partner, forfeited Points shall be deemed
reallocated to James Zelter (or his successor as head of the Credit Business),
except that, unless otherwise determined by the General Partner (including as
regards any distribution to pay taxes incurred by Mr. Zelter, net of any tax
benefit conferred upon him, in respect of the reallocation of such forfeited
Points to Mr. Zelter), Mr. Zelter shall not be entitled to any allocations or
distributions on such forfeited Points and shall instead hold them for the
benefit and on behalf of the Person or Persons to whom they are reallocated,
which reallocation(s), unless otherwise determined by the General Partner, shall
occur not later than the fourth quarter of the Fiscal Year in which the Points
were forfeited.
(h)    The Points awarded to APH may be reduced from time to time, as determined
by the General Partner, to increase the Points to be allocated to any of the
other Limited Partners (other than Professionals LP) or to issue Points to any
Newly-Admitted Limited Partner with the intention that the dilution resulting
therefrom is borne by APH and by the then existing Limited Partners on a pro
rata basis. Thereafter, if Points become available for reallocation for any
reason, then any reduction theretofore made in the Points allocated to APH as
described in the preceding sentence shall first be restored, before any further
reallocation of such Points. The determinations of the General Partner to
implement the foregoing shall be final and binding on the Partnership and the
Limited Partners.
Section 7.2    Retirement of Partner
(l)    A Limited Partner shall become a Retired Partner upon:
(i)    delivery to such Limited Partner of a notice by the General Partner
terminating such Limited Partner’s employment by AGM or an Affiliate thereof,
unless otherwise determined by the General Partner;
(ii)    delivery by such Limited Partner of at least 90 days’ prior written
notice to the General Partner, AGM or an Affiliate thereof stating that such
Limited Partner elects to resign from or otherwise terminate his or her
employment by or service to AGM or an Affiliate thereof; or
(iii)    the death of the Limited Partner, whereupon the estate of the deceased
Limited Partner shall be treated as a Retired Partner in the place of the
deceased Limited Partner, or the Disability of the Limited Partner.
(m)    Nothing in this Agreement shall obligate the General Partner to treat
Retired Partners alike, and the exercise of any power or discretion by the
General Partner in the case of any one such Retired Partner shall not create any
obligation on the part of the General Partner to take any similar action in the
case of any other such Retired Partner; it being understood that any power or
discretion conferred upon the General Partner shall be treated as having been so
conferred as to each such Retired Partner separately.
Section 7.3    Effect of Retirement on Points
(g)    The consequences of a Limited Partner’s retirement on his Points shall be
set forth in such Limited Partner’s Award Letter.
(h)    Upon a Limited Partner’s becoming a Retired Partner by reason of his Bad
Act, as of his Retirement Date, he shall automatically cease to be a Limited
Partner and shall forfeit the balance of his Capital Account as of his
Retirement Date. Notwithstanding the foregoing, each Retired Partner shall be
entitled to a payment in an amount equal to any Book-Tax Difference that was
recognized by such Retired Partner as taxable income or gain prior to his
Retirement Date.
ARTICLE 8    
DISSOLUTION AND LIQUIDATION
Section 8.1    Dissolution and Liquidation of Partnership
(n)    Upon dissolution of the Partnership in accordance with the Delaware Act,
the General Partner shall liquidate the business and administrative affairs of
the Partnership, except that, if the General Partner is unable to perform this
function, a liquidator may be elected by a majority in interest (determined by
Points) of Limited Partners and upon such election such liquidator shall
liquidate the Partnership.
(o)    Capital Profit, Capital Loss, Operating Profit and Operating Loss during
the Fiscal Years that include the period of liquidation shall be allocated
pursuant to Section 3.4. The proceeds from liquidation shall be distributed in
the following manner:
(i)    first, the debts, liabilities and obligations of the Partnership,
including the expenses of liquidation (including legal and accounting expenses
incurred in connection therewith), up to and including the date that
distribution of the Partnership’s assets to the Partners has been completed,
shall be satisfied (whether by payment or by making reasonable provision for
payment thereof); and
(ii)    thereafter, the Partners shall be paid amounts in accordance with
Article 4.
(p)    Anything in this Section 8.1 to the contrary notwithstanding, the General
Partner or liquidator may distribute ratably in kind rather than in cash, upon
dissolution, any assets of the Partnership in accordance with the priorities set
forth in Section 8.1(b); provided that if any in kind distribution is to be
made, the assets distributed in kind shall be valued as of the actual date of
their distribution and charged as so valued and distributed against amounts to
be paid under Section 8.1(b).
(q)    Upon completion of the winding-up of the Partnership in accordance with
the terms hereof, the General Partner shall file a certificate of cancellation
of certificate of limited partnership of the Partnership with the Office of the
Secretary of State of the State of Delaware pursuant to the Delaware Act.
ARTICLE 9    
GENERAL PROVISIONS
Section 9.1    Consistent Economic Treatment
Except as otherwise specifically provided herein or in any Limited Partner’s
Award Letter, the General Partner shall not treat any Team Member who is a
Limited Partner in a manner that is adverse in comparison with the treatment of
APH with respect to allocations of Operating Profit, distributions (including
liquidating distributions) of Operating Profit (including form, timing and
amount of such distributions), Point dilution and funding of Clawback Shares or
Giveback Shares. For the avoidance of doubt, the foregoing is not intended to
limit the General Partner’s authority (i) relating to forfeiture of Points due
to retirement or Bad Acts and allocation of Points to APH to the extent not
required to be allocated to Team Members, in each case, in accordance with the
terms and conditions set forth herein, (ii) to enter into any Award Letter or
Other Agreement with a Team Member or APH in connection with an award of Points
to such Team Member or APH providing for special allocations of income or a
reapportionment of distributions attributable to such Points for the purpose of
eliminating or reducing a current recognition of taxable income by such Team
Member or APH as a result of such Point award, or (iii) to implement any of the
special allocation or special distribution provisions of this Agreement.
Section 9.2    Carried Interest Related to the Fund
To the extent that (a) any strategic partnership or managed account of the
Credit Business invests in or co-invests with the Fund, either directly or
through a special purpose vehicle of such strategic partnership or managed
account, and (b) its general partner or any other AGM entity derives any carried
interest distributions attributable to such investment or co-investments, AGM
and the General Partner shall cause such carried interest distributions (as
adjusted, as necessary, taking into account the arrangements described in the
next sentence of this Section 9.2) to be allocated and distributed among holders
of Points at the same time and in the same manner as such amounts would be
allocated and distributed if received as Operating Profit by the Partnership,
but without duplication, either by causing the Partnership to hold an equity or
tracking interest in the entity deriving such carried interest or in some other
manner reasonably calculated to accomplish the intent of this provision. The
Partners hereby acknowledge and understand that nothing contained herein shall
restrict the right of AGM or any of its Affiliates to apply any netting
arrangements with respect to any fees or charges, including management fees,
carried interest or incentive allocations, in respect of any such strategic
partnership or managed account across all or any portion of the investments or
co-investments made by such strategic partnership or managed account.
Section 9.3    Amendment of Partnership Agreement and Co-Investors (A)
Partnership Agreement
(f)    The General Partner may amend this Agreement at any time, in whole or in
part, without the consent of any Limited Partner by giving notice of such
amendment to any Limited Partner whose rights or obligations as a Limited
Partner pursuant to this Agreement are changed thereby; provided that: (i) any
amendment that would disproportionately effect a material adverse change in the
contractual rights or obligations of a Limited Partner vis-à-vis all other
Limited Partners (such rights or obligations determined without regard to the
amendment power reserved herein) may only be made if the written consent of such
Limited Partner is obtained prior to the effectiveness thereof; and (ii) any
amendment that (x) increases a Partner’s obligation to contribute to the capital
of the Partnership, or (y) increases such Limited Partner’s Clawback Share shall
not be effective with respect to such Limited Partner, unless such Limited
Partner consents thereto in advance in writing. Notwithstanding the foregoing,
the General Partner may amend this Agreement at any time, in whole or in part,
without the consent of any Limited Partner to enable the Partnership to (i)
comply with the requirements of the “Safe Harbor” Election within the meaning of
the Proposed Revenue Procedure of Notice 2005-43, 2005-24 IRB 1, Proposed
Treasury Regulation Section 1.83-3(e)(1) or Proposed Treasury Regulation Section
1.704-1(b)(4)(xii) at such time as such proposed Procedure and Regulations are
effective and to make any such other related changes as may be required by
pronouncements or Treasury Regulations issued by the Internal Revenue Service or
Treasury Department after the date of this Agreement and (ii) comply with
applicable law; provided that any amendment pursuant to clause (i) that would
cause a Limited Partner’s rights to allocations and distributions to suffer a
material adverse change only may be made if the written consent of such Limited
Partner is obtained prior to the effectiveness thereof. An adjustment of Points
shall not be considered an amendment to the extent effected in compliance with
the provisions of Section 7.1 or Section 7.3 as in effect on the date hereof or
as hereafter amended in compliance with the requirements of this Section 9.3(a).
The General Partner’s approval of or consent to (x) any transaction resulting in
the substitution of another Person in place of the Partnership as the general
partner of any of the Funds or (y) any change to the scheme of distribution
under any of the Fund LP Agreements (but, for the avoidance of doubt, not
including any arrangements with investors in any Fund that reduce the Carried
Interest Revenues chargeable to or payable by such investors), that, in either
case, would have the effect of reducing the Partnership’s allocable share of the
Net Income of any Fund shall require the consent of any Limited Partner
adversely affected thereby.
(g)    Notwithstanding the provisions of this Agreement, including Section
9.3(a), it is hereby acknowledged and agreed that the General Partner on its own
behalf or on behalf of the Partnership without the approval of any Limited
Partner or any other Person may enter into one or more side letters or similar
agreements (“Other Agreements”) with one or more Limited Partners which have the
effect of establishing rights under, or altering or supplementing the terms of
this Agreement. The parties hereto agree that any terms contained in an Other
Agreement with one or more Limited Partners shall govern with respect to such
Limited Partner or Limited Partners notwithstanding the provisions of this
Agreement. Any Other Agreements shall be binding upon the Partnership or the
General Partner, as applicable, and the signatories thereto as if the terms were
contained in this Agreement, but no such Other Agreement between the General
Partner and any Limited Partner or Limited Partners and the Partnership shall
adversely amend the contractual rights or obligations of any other Limited
Partner without such other Limited Partner’s prior consent.
(h)    The provisions of this Agreement that affect the terms of the
Co-Investors (A) Partnership Agreement applicable to Limited Partners constitute
a “side letter or similar agreement” between each Limited Partner and the
general partner of Co-Investors (A), which has executed this Agreement
exclusively for purposes of confirming the foregoing.
Section 9.4    Special Power-of-Attorney
(a)    Each Partner hereby irrevocably makes, constitutes and appoints the
General Partner with full power of substitution, the true and lawful
representative and attorney-in-fact, and in the name, place and stead of such
Partner, with the power from time to time to make, execute, sign, acknowledge,
swear to, verify, deliver, record, file and/or publish:
(i)    any amendment to this Agreement which complies with the provisions of
this Agreement (including the provisions of Section 9.3);
(ii)    all such other instruments, documents and certificates which, in the
opinion of legal counsel to the Partnership, may from time to time be required
by the laws of the State of Delaware, the United States of America, or any other
jurisdiction, or any political subdivision or agency thereof, or which such
legal counsel may deem necessary or appropriate to effectuate, implement and
continue the valid and subsisting existence and business of the Partnership as a
limited partnership;
(iii)    all such instruments, certificates, agreements and other documents
relating to the conduct of the investment program of any of the Funds which, in
the opinion of such attorney-in-fact and the legal counsel to the Funds, are
reasonably necessary to accomplish the legal, regulatory and fiscal objectives
of the Funds in connection with its or their acquisition, ownership and
disposition of investments, including:
(A)    the governing documents of any management entity formed as a part of the
tax planning for any of the Funds and any amendments thereto; and
(B)    documents relating to any restructuring transaction with respect to any
of the Funds’ investments;
provided that such documents referred to in clauses (A) and (B) above, viewed
individually or in the aggregate, provide substantially equivalent financial and
economic rights and obligations with respect to such Limited Partner and
otherwise do not:
(1)    increase the Limited Partner’s overall financial obligation to make
capital contributions with respect to the relevant Fund (directly or through any
associated vehicle in which the Limited Partner holds an interest);
(2)    diminish the Limited Partner’s overall entitlement to share in profits
and distributions with respect to the relevant Fund (directly or through any
associated vehicle in which the Limited Partner holds an interest);
(3)    cause the Limited Partner to become subject to increased personal
liability for any debts or obligations of the Partnership or other Partners; or
(4)    otherwise result in an adverse change in the overall rights or
obligations of the Limited Partner in relation to the conduct of the investment
program of any of the Funds;
(iv)    any instrument or document necessary or advisable to implement the
provisions of Section 3.10;
(v)    any written notice or letter of resignation from any board seat or office
of any Person (other than a company that has a class of equity securities
registered under the United States Securities Exchange Act of 1934, as amended,
or that is registered under the United States Investment Company Act of 1940, as
amended), which board seat or office was occupied or held at the request of the
Partnership or any of its Affiliates; and
(vi)    all such proxies, consents, assignments and other documents as the
General Partner determines to be necessary or advisable in connection with any
merger or other reorganization, restructuring or other similar transaction
entered into in accordance with this Agreement (including the provisions of
Section 9.7(c)).
(b)    Each Limited Partner is aware that the terms of this Agreement permit
certain amendments to this Agreement to be effected and certain other actions to
be taken or omitted by or with respect to the Partnership without his consent.
If an amendment of the Certificate or this Agreement or any action by or with
respect to the Partnership is taken by the General Partner in the manner
contemplated by this Agreement, each Limited Partner agrees that,
notwithstanding any objection which such Limited Partner may assert with respect
to such action, the General Partner is authorized and empowered, with full power
of substitution, to exercise the authority granted above in any manner which may
be necessary or appropriate to permit such amendment to be made or action
lawfully taken or omitted. Each Partner is fully aware that each other Partner
will rely on the effectiveness of this special power-of-attorney with a view to
the orderly administration of the affairs of the Partnership. This
power-of-attorney is a special power-of-attorney and is coupled with an interest
in favor of the General Partner and as such:
(vi)    shall be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any party granting this
power-of-attorney, regardless of whether the Partnership or the General Partner
shall have had notice thereof; and
(vii)    shall survive any Transfer by a Limited Partner of the whole or any
portion of its interest in the Partnership, except that, where the transferee
thereof has been approved by the General Partner for admission to the
Partnership as a substituted Limited Partner, this power- of-attorney given by
the transferor shall survive such Transfer for the sole purpose of enabling the
General Partner to execute, acknowledge and file any instrument necessary to
effect such substitution.
Section 9.5    Notices
Any notice required or permitted to be given under this Agreement shall be in
writing. A notice to the General Partner shall be directed to the attention of
Leon D. Black with a copy to the general counsel of the Partnership. A notice to
a Limited Partner shall be directed to such Limited Partner’s last known
residence as set forth in the books and records of the Partnership or its
Affiliates (a Limited Partner’s “Home Address”). A notice shall be considered
given when delivered to the addressee either by hand at his Partnership office
or electronically to the primary e-mail account supplied by the Partnership for
Partnership business communications, except that a notice to a Retired Partner
or a notice demanding cure of a Bad Act shall be considered given only when
delivered by hand or by a recognized overnight courier or delivered by mailing
through the United States Postal System by regular mail to such Retired
Partner’s Home Address.
Section 9.6    Agreement Binding Upon Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors by operation of law, but the rights and obligations
of the Partners hereunder shall not be assignable, transferable or delegable
except as expressly provided herein, and any attempted assignment, transfer or
delegation thereof that is not made in accordance with such express provisions
shall be void and unenforceable.
Section 9.7    Merger, Consolidation, etc.
(a)    Subject to Section 9.7(b) and Section 9.7(c), the Partnership may merge
or consolidate with or into one or more limited partnerships formed under the
Delaware Act or other business entities (as defined in Section 17-211 of the
Delaware Act) pursuant to an agreement of merger or consolidation which has been
approved by the General Partner.
(b)    Subject to Section 9.7(c), but notwithstanding any other provision to the
contrary contained elsewhere in this Agreement, an agreement of merger or
consolidation approved in accordance with Section 9.7(a) may, to the extent
permitted by Section 17-211(g) of the Delaware Act and Section 9.7(a), (i)
effect any amendment to this Agreement, (ii) effect the adoption of a new
partnership agreement for the Partnership if it is the surviving or resulting
limited partnership in the merger or consolidation, or (iii) provide that the
partnership agreement of any other constituent limited partnership to the merger
or consolidation (including a limited partnership formed for the purpose of
consummating the merger or consolidation) shall be the partnership agreement of
the surviving or resulting limited partnership.
(c)    The General Partner shall have the power and authority to approve and
implement any merger, consolidation or other reorganization, restructuring or
similar transaction without the consent of any Limited Partner, other than any
Limited Partner with respect to which the General Partner has determined that
such transaction will, or will reasonably be likely to, result in any material
adverse change in the financial and other material rights of such Limited
Partner conferred by this Agreement and any Other Agreement entered into
pursuant to Section 9.3(b) or the imposition of any material new financial or
other obligation on such Limited Partner. Subject to the foregoing, the General
Partner may require one or more of the Limited Partners to sell, exchange,
transfer or otherwise dispose of their interests in the Partnership in
connection with any such transaction, and each Limited Partner shall take such
action as may be directed by the General Partner to effect any such transaction.
Section 9.8    Governing Law; Dispute Resolution
(a)    This Agreement, and the rights and obligations of each and all of the
Partners hereunder, shall be governed by and construed in accordance with the
laws of the State of Delaware.
(b)    Subject to Section 9.8(c), any dispute, controversy, suit, action or
proceeding arising out of or relating to this Agreement, other than injunctive
relief, will be settled exclusively by arbitration, conducted before a single
arbitrator in New York County, New York (applying Delaware law) in accordance
with, and pursuant to, the applicable rules of JAMS (“JAMS”). The arbitration
shall be conducted on a strictly confidential basis, and none of the parties
shall disclose the existence of a claim, the nature of a claim, any documents,
exhibits, or information exchanged or presented in connection with such a claim,
or the result of any action, to any third party, except as required by law, with
the sole exception of their legal counsel and parties engaged by that counsel to
assist in the arbitration process, who also shall be bound by these
confidentiality terms. The decision of the arbitrator will be final and binding
upon the parties hereto. Any arbitral award may be entered as a judgment or
order in any court of competent jurisdiction. Any party hereto may commence
litigation in court to obtain injunctive relief in aid of arbitration, to compel
arbitration, or to confirm or vacate an award, to the extent authorized by the
U.S. Federal Arbitration Act or the New York Arbitration Act. The party that is
determined by the arbitrator not to be the prevailing party will pay all of the
JAMS’s administrative fees and the arbitrator’s fee and expenses. If neither
party is so determined, such fees shall be shared. Each party shall be
responsible for such party’s own attorneys’ fees. IF THIS AGREEMENT TO ARBITRATE
IS HELD INVALID OR UNENFORCEABLE THEN, TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTNER AND THE PARTNERSHIP WAIVE AND
COVENANT THAT THE PARTNER AND THE PARTNERSHIP WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER
NOW OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE,
AND AGREE THAT THE PARTNERSHIP OR ANY OF ITS AFFILIATES OR ANY PARTNER MAY FILE
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTNERSHIP AND ITS AFFILIATES,
ON THE ONE HAND, AND THE PARTNER, ON THE OTHER HAND, IRREVOCABLY TO WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN SUCH PARTIES ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THAT ANY PROCEEDING PROPERLY HEARD BY A
COURT UNDER THIS AGREEMENT WILL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
(c)    Nothing in this Section 9.8 will prevent the General Partner or a Limited
Partner from applying to a court for preliminary or interim relief or permanent
injunction in a judicial proceeding (e.g., injunction or restraining order), in
addition to and not in lieu of any other remedy to which it may be entitled at
law or in equity, if such relief from a court is necessary to preserve the
status quo pending resolution or to prevent serious and irreparable injury in
connection with any breach or anticipated breach of covenants applicable
pursuant to a Limited Partner’s Award Letter; provided, however, that all
parties explicitly waive all rights to seek preliminary, interim, injunctive or
other relief in a judicial proceeding and all parties submit to the exclusive
jurisdiction of the forum described in Section 9.8(b) hereto for any dispute or
claim concerning continuing entitlement to distributions or other payments, even
if such dispute or claim involves or relates to any restrictive covenants set
forth in a Limited Partner’s Award Letter. For the purposes of this Section
9.8(c), each party hereto consents to the exclusive jurisdiction and venue of
the courts of the state and federal courts within the County of New York in the
State of New York.
Section 9.9    Termination of Right of Action
Every right of action arising out of or in connection with this Agreement by or
on behalf of any past, present or future Partner or the Partnership against any
past, present or future Partner shall, to the fullest extent permitted by
applicable law, irrespective of the place where the action may be brought and
irrespective of the residence of any such Partner, cease and be barred by the
expiration of three years from the date of the act or omission in respect of
which such right of action arises.
Section 9.10    Not for Benefit of Creditors
The provisions of this Agreement are intended only for the regulation of
relations among Partners and between Partners and former or prospective Partners
and the Partnership. Except with respect to the rights of Covered Persons
hereunder, each of whom shall be an intended beneficiary and shall be entitled
to enforce the provisions of Section 5.7, this Agreement is not intended for the
benefit of any Person who is not a Partner, and no rights are intended to be
granted to any other Person who is not a Partner under this Agreement.
Section 9.11    Reports
As soon as practicable after the end of each taxable year, the General Partner
shall furnish to each Limited Partner (a) such information as may be required to
enable each Limited Partner to properly report for United States federal and
state income tax purposes his distributive share of each Partnership item of
income, gain, loss, deduction or credit for such year, and (b) a statement of
the total amount of Operating Profit or Operating Loss for such year, including
a copy of the United States Internal Revenue Service Schedule “K-1” issued by
the Partnership to such Limited Partner, and a reconciliation of any difference
between (i) such Operating Profit or Operating Loss and (ii) the aggregate net
profits or net losses allocated by the Funds to the Partnership for such year
(other than any difference attributable to the aggregate Capital Profit or
Capital Loss allocated by the Funds to the Partnership for such year).
Section 9.12    Filings
The Partners hereby agree to take any measures necessary (or, if applicable,
refrain from any action) to ensure that the Partnership is treated as a
partnership for U.S. federal, state and local income tax purposes.
Section 9.13    Counterparts
This Agreement may be executed in one or more counterparts, including by
facsimile or other electronic signature. All such counterparts so executed shall
constitute an original agreement binding on all the parties, but together shall
constitute but one instrument.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.

GENERAL PARTNER:

APOLLO CREDIT OPPORTUNITY
ADVISORS III (APO FC) GP LLC

By:    /s/ Joseph D. Glatt        
Name: Joseph D. Glatt    
Title: Vice President

LIMITED PARTNERS:

APH HOLDINGS (FC), L.P.
By:    Apollo Principal Holdings VII GP, Ltd.,
its General Partner

By:    /s/ Joseph D. Glatt    
Name: Joseph D. Glatt    
Title: Vice President

APOLLO CIP PARTNER POOL, L.P.
By:     Apollo CIP GenPar, Ltd.,
its General Partner

By:    /s/ Joseph D. Glatt        
Name: Joseph D. Glatt    
Title: Vice President

[Signature Page of COF III GP Partnership Agreement]

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APOLLO CIP PROFESSIONALS, L.P.
By:     Apollo CIP GenPar, Ltd.,
its General Partner

By:    /s/ Joseph D. Glatt            
Name: Joseph D. Glatt    
Title: Vice President

For purposes of Section 9.3(c) only:

APOLLO CO-INVESTORS MANAGER, LLC

By:    /s/ Joseph D. Glatt                
Name: Joseph D. Glatt
Title: Vice President

[Signature Page of COF III GP Partnership Agreement]