Exhibit 10.5

 

 

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

OZ ADVISORS LP

Dated as of March 1, 2017

 

 

 

TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     1  

Section 1.1

 

Definitions

     1  

ARTICLE II GENERAL PROVISIONS

     20  

Section 2.1

 

Organization

     20  

Section 2.2

 

Partnership Name

     20  

Section 2.3

 

Registered Office, Registered Agent

     20  

Section 2.4

 

Certificates

     20  

Section 2.5

 

Nature of Business; Permitted Powers

     20  

Section 2.6

 

Fiscal Year

     20  

Section 2.7

 

Perpetual Existence

     21  

Section 2.8

 

Limitation on Partner Liability

     21  

Section 2.9

 

Indemnification

     21  

Section 2.10

 

Exculpation

     22  

Section 2.11

 

Fiduciary Duty

     22  

Section 2.12

 

Confidentiality; Intellectual Property

     23  

Section 2.13

 

Non-Competition; Non-Solicitation; Non-Disparagement; Non-Interference; and
Remedies

     24  

Section 2.14

 

Insurance

     30  

Section 2.15

 

Representations and Warranties

     30  

Section 2.16

 

Devotion of Time

     31  

Section 2.17

 

Partnership Property; Partnership Interest

     31  

Section 2.18

 

Short Selling and Hedging Transactions

     31  

Section 2.19

 

Compliance with Policies

     32  

ARTICLE III INTERESTS AND ADMISSION OF PARTNERS

     32  

Section 3.1

 

Units and other Interests

     32  

Section 3.2

 

Issuance of Additional Units and other Interests

     42  

ARTICLE IV VOTING AND MANAGEMENT

     44  

Section 4.1

 

General Partner: Power and Authority

     44  

Section 4.2

 

Partner Management Committee

     45  

Section 4.3

 

Partner Performance Committee

     46  

Section 4.4

 

Books and Records; Accounting

     48  

Section 4.5

 

Expenses

     48  

Section 4.6

 

Partnership Tax and Information Returns

     48  

ARTICLE V CONTRIBUTIONS AND CAPITAL ACCOUNTS

     49  

Section 5.1

 

Capital Contributions

     49  

Section 5.2

 

Capital Accounts

     50  

Section 5.3

 

Determinations by General Partner

     51  

 

i

ARTICLE VI ALLOCATIONS

     51  

Section 6.1

 

Allocations for Capital Account Purposes

     51  

Section 6.2

 

Allocations for Tax Purposes

     56  

ARTICLE VII DISTRIBUTIONS

     58  

Section 7.1

 

Distributions

     58  

Section 7.2

 

Distributions in Kind

     59  

Section 7.3

 

Tax Distributions

     59  

Section 7.4

 

Expense Amount Distributions

     60  

Section 7.5

 

Borrowing

     60  

Section 7.6

 

Restrictions on Distributions

     60  

ARTICLE VIII TRANSFER OR ASSIGNMENT OF INTEREST; CESSATION OF PARTNER STATUS

     61  

Section 8.1

 

Transfer and Assignment of Interest

     61  

Section 8.2

 

Withdrawal by General Partner

     62  

Section 8.3

 

Withdrawal and Special Withdrawal of Limited Partners

     63  

Section 8.4

 

Vesting

     65  

Section 8.5

 

Tag-Along Rights

     65  

Section 8.6

 

Drag-Along Rights

     66  

Section 8.7

 

Reallocation of Common Units pursuant to Partner Agreements

     66  

ARTICLE IX DISSOLUTION

     67  

Section 9.1

 

Duration and Dissolution

     67  

Section 9.2

 

Notice of Liquidation

     68  

Section 9.3

 

Liquidator

     68  

Section 9.4

 

Liquidation

     68  

Section 9.5

 

Capital Account Restoration

     70  

ARTICLE X MISCELLANEOUS

     70  

Section 10.1

 

Incorporation of Agreements

     70  

Section 10.2

 

Amendment to the Agreement

     70  

Section 10.3

 

Successors, Counterparts

     71  

Section 10.4

 

Applicable Law; Submission to Jurisdiction; Severability

     71  

Section 10.5

 

Arbitration

     72  

Section 10.6

 

Filings

     73  

Section 10.7

 

Power of Attorney

     74  

Section 10.8

 

Headings and Interpretation

     74  

Section 10.9

 

Additional Documents

     74  

Section 10.10

 

Notices

     74  

Section 10.11

 

Waiver of Right to Partition

     74  

Section 10.12

 

Partnership Counsel

     75  

Section 10.13

 

Survival

     75  

Section 10.14

 

Ownership and Use of Name

     75  

Section 10.15

 

Remedies

     75  

Section 10.16

 

Entire Agreement

     75  

 

ii

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

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

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

WHEREAS, from the date of the Initial Partnership Agreement, Och-Ziff
Associates, L.L.C. ceased to be a Limited Partner and each of Daniel S. Och,
David Windreich and their respective Related Trusts which on the date of the
Initial Partnership Agreement were also members of Och-Ziff Associates, L.L.C.
became Limited Partners as of such date; and

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

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

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

 

2

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

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

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

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

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

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

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

 

3

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

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

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

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

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

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

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

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

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

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

 

4

Executive Officer or other executive officer of Och-Ziff in respect of such
Partner’s Class C Non-Equity Interests shall be made by the compensation
committee of Och-Ziff in its sole and absolute discretion after consultation
with the Partner Management Committee.

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

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

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

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

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

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

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

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

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

 

5

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

“Closing Date” means November 19, 2007.

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

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

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

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

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

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

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

 

6

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

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

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

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

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

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

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

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

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

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

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

“Drag-Along Securities” means, with respect to a Limited Partner, that number of
Company Securities equal to the product of (A) the total number of Company
Securities to be acquired by the Drag-Along Purchaser pursuant to a Drag-Along
Sale and (B) a fraction, the

 

7

numerator of which is the number of Company Securities then held by such Limited
Partner and the denominator of which is the total number of Company Securities
then held by all Limited Partners (calculated, in the case of both the numerator
and denominator, as if all Related Securities held by the relevant Limited
Partners had been converted into, exercised or exchanged for, or repaid with,
Class A Shares).

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

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

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

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

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

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

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

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

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

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

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

 

8

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

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

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

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

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

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

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

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

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

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

“Intellectual Property” means any of the following that are conceived of,
developed, reduced to practice, created, modified, or improved by a Partner,
either solely or with others, in whole or in part, whether or not in the course
of, or as a result of, such Partner carrying out his responsibilities to the
Partnership, whether at the place of business of the Partnership or any of its
Affiliates or otherwise, and whether on the Partner’s own time or on the time of
the Partnership or any of its Affiliates: (i) trademarks, service marks, brand
names, certification marks, trade dress, assumed names, trade names, Internet
domain names, and all other indications of source or origin, including, without
limitation, all registrations and applications to register any of the foregoing;
(ii) inventions, discoveries (whether or not patentable or reduced to practice),
patents, including, without limitation, design patents and utility patents,
provisional applications, reissues, reexaminations, divisions, continuations,
continuations-in-part, and extensions thereof, in each case including, without
limitation, all applications therefore and

 

9

equivalent foreign applications and patents corresponding, or claiming priority,
thereto; (iii) works of authorship, whether copyrightable or not, copyrights,
registrations and applications for copyrights, and all renewals, modifications
and extensions thereof, moral rights, and design rights, (iv) computer systems
and software; and (v) trade secrets, know-how, and other confidential and
protectable information.

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

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

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

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

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

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

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

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

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

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

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

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

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

 

10

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

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

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

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

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

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

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

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

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

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

 

11

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

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

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

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

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

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

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

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

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

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

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

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

“Participating Class P Common Units” means all Class P Common Units with respect
to which the applicable Class P Performance Condition has been satisfied during
the Class P Performance Period with respect to such Class P Common Units and the
applicable Class P Service Condition has been satisfied or waived.

 

12

“Partner” means any Person that is admitted as a general partner or limited
partner of the Partnership pursuant to the provisions of this Agreement and
named as a general partner or limited partner of the Partnership in the books of
the Partnership and includes any Person admitted as an Additional Limited
Partner pursuant to the provisions of this Agreement, in each case, in such
Person’s capacity as a partner of the Partnership.

“Partner Agreement” means, with respect to one or more Partners, any separate
written agreement entered into between such Partner(s) and the Partnership or
one of its Affiliates regarding the rights and obligations of such Partner(s)
with respect to the Partnership or such Affiliate, as amended, modified,
supplemented or restated from time to time.

“Partner Management Committee” has the meaning set forth in Section 4.2(a).

“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).

“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury
Regulation Section 1.704-2(i)(2).

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

“Partner Performance Committee” has the meaning set forth in Section 4.3(a).

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

“Partnership Minimum Gain” means that amount determined in accordance with the
principles of Treasury Regulation Section 1.704-2(d).

“Partnership Representative” has the meaning set forth in Section 4.6(d).

“Percentage Interest” means, as of any date of determination, (a) as to each
Common Unit (other than Non-Participating Class P Common Units), the percentage
such Common Unit represents of all outstanding Common Units, as such Percentage
Interest per Common Unit is reduced to take into account the Percentage
Interests attributable to other Units such that the sum of the Percentage
Interests of all Common Units and other Units is 100%; (b) as to any
Non-Participating Class P Common Units, zero; (c) as to any PSIs, the aggregate
PSI Percentage Interest with respect to such PSIs; and (d) as to any other
Units, the percentage established for such Units by the General Partner as a
part of such issuance, which percentage could be zero. References in this
definition to a Partner’s Common Units, PSIs or other Units shall refer to all
vested or unvested Common Units, PSIs or other Units of such Partner.

“Permitted Transferee” means, with respect to each Limited Partner and his
Permitted Transferees, (a) a Charitable Institution (as defined below)
Controlled by such Partner, (b) a trust (whether inter vivos or testamentary) or
other estate planning vehicle, all of the current beneficiaries and presumptive
remaindermen (as defined below) of which are lineal descendents

 

13

(as defined below) of such Partner and his spouse, (c) a corporation, limited
liability company or partnership, of which all of the outstanding shares of
capital stock or interests therein are owned by no one other than such Partner,
his spouse and his lineal descendents and (d) a legal or personal representative
of such Partner in the event of his Disability. For purposes of this definition:
(i) “lineal descendants” shall not include natural persons adopted after
attaining the age of eighteen (18) years and such adopted Person’s descendants;
(ii) “Charitable Institution” shall refer to an organization described in
section 501(c)(3) of the Code (or any corresponding provision of a future United
State Internal Revenue law) which is exempt from income taxation under section
501(a) thereof; and (iii) “presumptive remaindermen” shall refer to those
Persons entitled to a share of a trust’s assets if it were then to terminate.

“Person” means a natural person or a corporation, limited liability company,
firm, partnership, joint venture, trust, estate, unincorporated organization,
association (including any group, organization, co-tenancy, plan, board, council
or committee), governmental entity or other entity (or series thereof).

“PMC Approval” means the prior written approval of (a) Daniel S. Och or any
successor as Chairman of the Partner Management Committee or (b) if there is no
such Chairman, by majority vote of the Partner Management Committee; provided,
however, that “PMC Approval” shall mean the prior written approval by majority
vote of the Partner Management Committee in the case of Transfers (and waivers
of the requirements thereof), vesting requirements, the Minimum Retained
Ownership Requirements, and the determination described in the definition of
“Reallocation Date,” each by or with respect to the Chairman of the Partner
Management Committee.

“PMC Chairman” means Daniel S. Och (or, following the death, Disability or
Withdrawal of Daniel S. Och, the Partner Management Committee acting by majority
vote).

“Potential Tag-Along Seller” means each Limited Partner not constituting a
Tag-Along Seller.

“Pre-Existing Units” has the meaning set forth in Section 6.1(c)(i)(A).

“Presumed Tax Liability” means, with respect to the Capital Account of any
Partner for any Quarterly Period ending after the date hereof, an amount equal
to the product of (x) the amount of taxable income that, in the good faith
judgment of the General Partner, would have been allocated to such Partner in
respect of such Partner’s Units if allocations pursuant to the provisions of
Article VI hereof were made in respect of such Quarterly Period and (y) the
Presumed Tax Rate as of the end of such Quarterly Period.

“Presumed Tax Rate” means the effective combined federal, state and local income
tax rate applicable to either a natural person or corporation, whichever is
higher, residing in New York, New York, taxable at the highest marginal federal
income tax rate and the highest marginal New York State and New York City income
tax rates (taking into account the character of the income) and after giving
effect to the federal income tax deduction for such state and local income taxes
and taking into account the effects of Sections 67 and 68 of the Code (or
successor provisions thereto).

 

14

“Prior Distributions” means distributions made to the Partners pursuant to
Section 7.1 or 7.3.

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

“Priority Allocation” means allocations of Net Income with respect to each
Participating Class P Common Unit, Class D Common Unit or PSI described in
Section 6.1(c)(i)(B), 6.1(c)(i)(C) or 6.1(c)(i)(D), respectively, in an
aggregate amount such that, immediately after taking such allocations into
account, the Economic Capital Account Balance attributable to ownership of such
Participating Class P Common Unit, Class D Common Unit or PSI shall be in
proportion to the relative Economic Capital Account Balances of all Partners (in
each case based on relative Percentage Interests of all Partners attributable to
Common Units or PSIs other than any series or classes of Common Units
subordinate to such Participating Class P Common Unit, Class D Common Unit or
PSI, respectively).

“PSI” has the meaning set forth in Section 3.1(i) with respect to the
Partnership and the corresponding interests in each other Operating Group Entity
with respect to such Operating Group Entity.

“PSI Cash Distribution” has the meaning set forth in Section 3.1(i)(iv)(A).

“PSI Cash Percentage” means the percentage of any PSI Distribution paid in the
form of PSI Cash Distributions (other than Deferred Cash Interests).

“PSI Class D Unit Distribution” has the meaning set forth in Section
3.1(i)(iv)(B).

“PSI Distribution” has the meaning set forth in Section 3.1(i)(ii).

“PSI Limited Partner” has the meaning set forth in Section 3.1(i).

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

“PSI Number” means the number of PSIs held by a PSI Limited Partner in each
Operating Group Entity as of the first day of any Fiscal Year or, if later, the
first day during such Fiscal Year on which the PSI Limited Partner held PSIs (as
such number of PSIs are increased or reduced in accordance with the terms of
this Agreement or any applicable Partner Agreement).

“PSI Percentage Interest” means, with respect to any PSI as of any date of
determination, (a) solely for purposes of allocations under Article VI (other
than Section 6.1(d)(v)) and distributions under Article VII for any Fiscal Year,
a percentage equal to the product of (i) the PSI Cash Percentage applicable to
such PSI and (ii) the Percentage Interest attributable to one Common Unit as of
such date; and (b) for all other purposes, a percentage equal to the Percentage
Interest attributable to one Common Unit as of such date.

 

15

“Quarterly Period” means any of the First Quarterly Period, the Second Quarterly
Period, the Third Quarterly Period and the Fourth Quarterly Period; provided,
however, that if there is a change in the periods applicable to payments of
estimated federal income taxes by natural persons, then the Quarterly Period
determinations hereunder shall change correspondingly such that the Partnership
is required to make periodic Tax Distributions under Section 7.3 at the times
and in the amounts sufficient to enable a Partner to satisfy such payments in
full with respect to amounts allocated pursuant to the provisions of Article VI
(other than Section 6.2(d)), treating the Partner’s Presumed Tax Liability with
respect to the relevant Quarterly Period (as such Quarterly Period is changed as
provided above) as the amount of the Partner’s actual liability for the payment
of estimated federal income taxes with respect to such Quarterly Period (as so
changed).

“Reallocation Date” means, as to the Common Units (including all distributions
received thereon after the relevant date of Withdrawal) to be reallocated to the
Continuing Partners pursuant to Section 2.13(g), Section 8.3(a) or Section 8.7
or any Partner Agreement, the date which is the earlier of (a) the date that is
six months after the date of the applicable breach of Section 2.13(b) or
Withdrawal, as the case may be, and (b) the date on or after such date of breach
or Withdrawal that is six months after the date of the latest publicly reported
disposition of equity securities of Och-Ziff by any such Continuing Partner
which disposition is not exempt from the application of the provisions of
Section 16(b) of the Exchange Act, unless otherwise determined with PMC
Approval.

“Reference Price” for a Class P Common Unit means the Average Share Price for
the calendar month prior to the month in which the grant date of the Class P
Common Unit occurred; provided that (i) for any Class P Common Units granted on
March 1, 2017, the Reference Price shall be the Average Share Price for January
2017, and (ii) a Class P Limited Partner’s Partner Agreement may specify any
other Reference Price for such Class P Common Unit.

“Registration Rights Agreement” means one or more Registration Rights Agreements
providing for the registration of Class A Shares to be entered into among
Och-Ziff and certain holders of Units on or prior to the Closing Date, as
amended, modified, supplemented or restated from time to time.

“Registration Statement” means the Registration Statement on Form S-1
(Registration No. 333-144256) as it has been or as it may be amended or
supplemented from time to time, filed by Och-Ziff with the United States
Securities and Exchange Commission under the Securities Act to register the
offering and sale of the Class A Shares in the IPO.

“Related Security” means any security convertible into, exercisable or
exchangeable for or repayable with Class A Shares including, without limitation,
any Class A Common Units, Class D Common Units, Participating Class P Common
Units or other Class P Common Units deemed to be Participating Class P Common
Units to the extent provided in Section 3.1(j), in each case that may be
exchangeable for Class A Shares pursuant to the Exchange Agreement.

 

16

“Related Trust” means, in respect of any Individual Limited Partner, any other
Limited Partner that is an estate, family limited liability company, family
limited partnership of such Individual Limited Partner, a trust the grantor of
which is such Individual Limited Partner, or any other estate planning vehicle
or family member relating to such Individual Limited Partner.

“Related Trust Supplementary Agreement” means, in respect of any Original
Related Trust, the Supplementary Agreement to which such Original Related Trust
is a party.

“Required Allocations” means (a) any limitation imposed on any allocation of Net
Loss under Section 6.1(b) and (b) any allocation of an item of income, gain,
loss or deduction pursuant to Section 6.1(d)(i) - (viii).

“Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Partnership recognized for federal income tax purposes resulting
from a sale, exchange or other disposition of a Contributed Property or Adjusted
Property, to the extent such item of gain or loss is not allocated pursuant to
Section 6.2(b)(i)(A) or 6.2(b)(ii), respectively, to eliminate Book-Tax
Disparities.

“Restricted Period” means, with respect to any Partner, the period commencing on
the later of the date of the Prior Partnership Agreement and the date of such
Partner’s admission to the Partnership, and concluding on the last day of the
24-month period immediately following the date of Special Withdrawal or
Withdrawal of such Partner.

“Retirement” of an Active Individual LP means a Withdrawal pursuant to clause
(C) of Section 8.3(a)(i) (Resignation) after ten consecutive calendar years of
service as an Active Individual LP or an employee of the Partnership or its
Affiliates, provided that the Active Individual LP is over 55 years of age as of
the effective date of such Withdrawal.

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

“Sale” means an actual or hypothetical sale of all or substantially all of the
assets of the Partnership (including a revaluation of assets under Section
5.2(b)(iii)).

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

“Securities Act” means the Securities Act of 1933, as amended, supplemented or
restated from time to time and any successor to such statute, and the rules and
regulations promulgated thereunder.

“Special Withdrawal” (a) in respect of an Individual Limited Partner, has the
meaning set forth in Section 8.3(b), and (b) in respect of any Related Trust,
means the Special Withdrawal of such Related Trust in accordance with Section
8.3(b).

“Subsequent Related Trust” means, in respect of an Original Related Trust of an
Individual Original Partner, the Related Trust of such Individual Original
Partner to which the Interest of such Original Related Trust shall be
Transferred in accordance with its Related Trust Supplementary Agreement.

 

17

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

“Substitute Limited Partner” means each Person who acquires an Interest of any
Limited Partner in connection with a Transfer by a Limited Partner whose
admission as a Limited Partner is approved by the General Partner.

“Supplementary Agreement” means, with respect to one or more Limited Partners,
any supplementary agreement entered into prior to the date of the Prior
Partnership Agreement between the Partnership and such Limited Partners
regarding their rights and obligations with respect to the Partnership, as the
same may be amended, supplemented, modified or replaced from time to time.

“Tag-Along Offer” has the meaning set forth in Section 8.5(b).

“Tag-Along Purchaser” means, in respect of a Tag-Along Sale, the Person or group
of Persons proposing to acquire the Class A Shares and/or Class A Common Units
to be transferred in such Tag-Along Sale.

“Tag-Along Sale” means any transfer (other than a pledge, hypothecation,
mortgage or encumbrance), in one or a series of related transactions, by any
Limited Partner or group of Limited Partners to a single Person or group of
Persons (other than Related Trusts or Permitted Transferees of such Limited
Partners) pursuant to any transaction exempt from registration under the
Securities Act and any similar applicable state securities laws of Class A
Shares and/or Class A Common Units representing in the aggregate at least 5% of
the Class A Shares (calculated as if all Class A Common Units held by each
Limited Partner had been exchanged for Class A Shares) then held by all of the
Limited Partners, but only in the event that (i) such Person or group of Persons
to which such transfer is made is a strategic buyer, or (ii) the Limited
Partners participating in such transfer include Daniel S. Och or any of his
Related Trusts. For the avoidance of doubt, sales of Class A Shares pursuant to
the provisions of Rule 144 shall not constitute a Tag-Along Sale or any part
thereof.

“Tag-Along Securities” means, with respect to a Potential Tag-Along Seller, such
number of Class A Shares and/or vested and unvested Class A Common Units, as
applicable, equal to the product of (i) the total number of Class A Shares
(assuming the exchange for Class A Shares of any vested and unvested Class A
Common Units) to be acquired by the Tag-Along Purchaser in a Tag-Along Sale and
(ii) a fraction, the numerator of which is the total number of Class A Shares
(assuming the exchange for Class A Shares of any vested and unvested Class A
Common Units) then held by such Potential Tag-Along Seller and the denominator
of which is the total number of Class A Shares (assuming the exchange for
Class A Shares of any vested and unvested Class A Common Units) then held by all
Limited Partners. If any other Potential Tag-Along Sellers do not accept the
Tag-Along Offer, the foregoing shall also include each accepting

 

18

Potential Tag-Along Seller’s pro rata share of the non-accepting Potential
Tag-Along Sellers’ Class A Shares and/or vested and unvested Class A Common
Units, determined as set forth in the preceding sentence.

“Tag-Along Seller” has the meaning set forth in Section 8.5(b).

“Tax Distributions” has the meaning set forth in Section 7.3.

“Tax Matters Partner” means the Person designated as such in Section 4.6(c).

“Tax Receivable Agreement” means the Tax Receivable Agreement entered into in
connection with the IPO, by and among Och-Ziff, the Intermediate Holding
Companies, the Operating Group Entities and each partner of any Operating Group
Entity, as the same may be amended, supplemented, modified or replaced from time
to time.

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

“Total Shareholder Return” for a Class P Common Unit as of any date means (i) a
fraction, the numerator of which is the sum of (A) the increase in the Average
Share Price for the previous 30 trading days compared to the Reference Price as
of the grant date of such Class P Common Unit and (B) the aggregate amount of
distributions per Class A Share made by Och-Ziff during the same period, and the
denominator of which is the Reference Price, or (ii) as otherwise set forth in a
Partner Agreement; in each case, subject to any equitable adjustments for stock
splits and other capitalization changes.

“Total Voting Power” has the meaning ascribed to such term in the Class B
Shareholders Agreement.

“Transfer” means, with respect to any Interest, any sale, exchange, assignment,
pledge, hypothecation, bequeath, creation of an encumbrance, or any other
transfer or disposition of any kind, whether voluntary or involuntary, of such
Interest. “Transferred” shall have a correlative meaning.

“Transfer Agent” means, with respect to any class of Units or the Class C
Non-Equity Interests, such bank, trust company or other Person (including the
Partnership or one of its Affiliates) as shall be appointed from time to time by
the Partnership to act as registrar and transfer agent for such class of Units
or the Class C Non-Equity Interests; provided, however, that if no Transfer
Agent is specifically designated for such class of Units or the Class C
Non-Equity Interests, the Partnership shall act in such capacity.

“Treasury Regulations” means the regulations, including temporary regulations,
promulgated under the Code, as amended from time to time, or any federal income
tax regulations promulgated after the date of this Agreement. A reference to a
specific Treasury Regulation refers not only to such specific Treasury
Regulation but also to any corresponding provision of any federal tax regulation
enacted after the date of this Agreement, as such specific Treasury Regulation
or corresponding provision is in effect and applicable on the date of
application of the provisions of this Agreement containing such reference.

 

19

“Units” means a fractional share of the Interests in the Partnership that
entitles the holder thereof to such benefits as are specified in this Agreement
or any Unit Designation and shall include the Common Units and PSIs but not the
Class C Non-Equity Interests.

“Unit Designation” has the meaning set forth in Section 3.2(b).

“Withdrawal” (a) in respect of an Individual Limited Partner, has the meaning
set forth in Section 8.3(a), and (b) in respect of any Related Trust, means the
Withdrawal of such Related Trust in accordance with Section 8.3(a). “Withdrawn”
has the correlative meaning.

“Withdrawn General Partner” has the meaning set forth in Section 4.1(a).

ARTICLE II

GENERAL PROVISIONS

Section 2.1    Organization. The Original Company was originally organized as a
Delaware limited liability company under the LLC Act. The Original Company was
converted to a Delaware limited partnership pursuant to the Act on June 25,
2007.

Section 2.2    Partnership Name. The name of the Partnership is “OZ Advisors
LP.” The name of the Partnership may be changed from time to time by the General
Partner.

Section 2.3    Registered Office, Registered Agent. The Partnership shall
maintain a registered office in the State of Delaware at, and the name and
address of the Partnership’s registered agent in the State of Delaware is,
National Corporate Research, Ltd., 615 South DuPont Highway, Dover, Delaware
19901. Such office and such agent may be changed from time to time by the
General Partner.

Section 2.4    Certificates. Any Person authorized by the General Partner shall
execute, deliver and file any amendment to or restatements of the Certificate of
Limited Partnership and any other certificates (and any amendments and/or
restatements thereof) necessary for the Partnership to qualify to do business in
a jurisdiction in which the Partnership may wish to conduct business.

Section 2.5    Nature of Business; Permitted Powers. The purposes of the
Partnership shall be to engage in any lawful act or activity for which limited
partnerships may be formed under the Act.

Section 2.6    Fiscal Year. Unless and until otherwise determined by the General
Partner in its sole and absolute discretion, the fiscal year of the Partnership
for federal income tax purposes shall, except as otherwise required in
accordance with the Code, end on December 31 of each year (each, a “Fiscal
Year”).

 

20

Section 2.7    Perpetual Existence. The Partnership shall have a perpetual
existence unless dissolved in accordance with the provisions of Article IX of
this Agreement.

Section 2.8    Limitation on Partner Liability. Except as otherwise expressly
required by law, the debts, obligations and liabilities of the Partnership,
whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the Partnership, and no Partner shall be
obligated personally for any such debt, obligation or liability of the
Partnership solely by reason of being a Partner. No Partner shall have any
obligation to restore any negative or deficit balance in its Capital Account,
including any negative or deficit balance in its Capital Account upon
liquidation and dissolution of the Partnership. For federal income tax purposes,
the rules of Treasury Regulation Section 1.752-3 shall apply to determine a
Partner’s share of any debt or obligation the terms of which provide that, in
respect of the Partnership, the creditor has recourse only to the Partnership
and its assets and not to any Partner.

Section 2.9    Indemnification.

(a)    To the fullest extent permitted by applicable law, each Covered Person
shall be indemnified and held harmless by the Partnership for and from any
liabilities, demands, claims, actions or causes of action, regulatory,
legislative or judicial proceedings or investigations, assessments, levies,
judgments, fines, amounts paid in settlement, losses, fees, penalties, damages,
costs and expenses, including, without limitation, reasonable attorneys’,
accountants’, investigators’, and experts’ fees and expenses and interest on any
of the foregoing (collectively, “Damages”) sustained or incurred by such Covered
Person by reason of any act performed or omitted by such Covered Person or by
any other Covered Person in connection with the affairs of the Partnership or
the General Partner unless such act or omission constitutes fraud, gross
negligence or willful misconduct (the “Disabling Conduct”); provided, however,
that any indemnity under this Section 2.9 shall be provided out of and to the
extent of Partnership assets only, and no Limited Partner or any Affiliate of
any Limited Partner shall have any personal liability on account thereof. The
right of indemnification pursuant to this Section 2.9 shall include the right of
a Covered Person to have paid on his behalf, or be reimbursed by the Partnership
for, the reasonable expenses incurred by such Covered Person with respect to any
Damages, in each case in advance of a final disposition of any action, suit or
proceeding, including expenses incurred in collecting such amounts from the
Partnership; provided, however, that such Covered Person shall have given a
written undertaking to reimburse the Partnership in the event it is subsequently
determined that he is not entitled to such indemnification.

(b)    The right of any Covered Person to the indemnification provided herein
(i) shall be cumulative of, and in addition to, any and all rights to which such
Covered Person may otherwise be entitled by contract or as a matter of law or
equity, (ii) in the case of Covered Persons that are Partners, shall continue as
to such Covered Person after any Withdrawal or Special Withdrawal of such
Partner and after he has ceased to be a Partner, and (iii) shall extend to such
Covered Person’s successors, assigns and legal representatives.

(c)    The termination of any action, suit or proceeding relating to or
involving a Covered Person by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that such Covered Person committed an act or omission that
constitutes Disabling Conduct.

 

21

(d)    For purposes of this Agreement, no action or failure to act on the part
of any Covered Person in connection with the management or conduct of the
business and affairs of such Covered Person and other activities of such Covered
Person which involve a conflict of interest with the Partnership, any other
Person in which the Partnership has a direct or indirect interest or any Partner
(or any of their respective Affiliates) or in which such Covered Person realizes
a profit or has an interest shall constitute, per se, Disabling Conduct.

Section 2.10    Exculpation.

(a)    To the fullest extent permitted by applicable law, no Covered Person
shall be liable to the Partnership or any Partner or any Affiliate of any
Partner for any Damages incurred by reason of any act performed or omitted by
such Covered Person unless such act or omission constitutes Disabling Conduct.
In addition, no Covered Person shall be liable to the Partnership, any other
Person in which the Partnership has a direct or indirect interest or any Partner
(or any Affiliate thereof) for any action taken or omitted to be taken by any
other Covered Person.

(b)    A Covered Person shall be fully protected in relying upon the records of
the Partnership and upon such information, opinions, reports or statements
presented to the Partnership by any Person (other than such Covered Person) as
to matters the Covered Person reasonably believes are within such other Person’s
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Partnership, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to Partners might properly be paid.

(c)    The right of any Partner that is a Covered Person to the exculpation
provided in this Section 2.10 shall continue as to such Covered Person after any
Withdrawal or Special Withdrawal of such Partner and after he has ceased to be a
Partner.

(d)    The General Partner may consult with legal counsel and accountants and
any act or omission suffered or taken by the General Partner on behalf of the
Partnership in reliance upon and in accordance with the advice of such counsel
or accountants will be full justification for any such act or omission, and the
General Partner will be fully protected in so acting or omitting to act so long
as such counsel or accountants were selected with reasonable care.

Section 2.11    Fiduciary Duty.

(a)    To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating to the Partnership or to
any Limited Partner or any Affiliate of any Limited Partner (or other Person
with any equity interest in the Partnership) or other Person bound by (or having
rights pursuant to) the terms of this Agreement, a Covered Person acting
pursuant to the terms, conditions and limitations of this Agreement shall not be
liable to the Partnership or to any Limited Partner or any Affiliate of any
Limited Partner (or other Person) for its reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they expand or
restrict the duties and liabilities of a Covered

 

22

Person otherwise existing at law or equity, are agreed by the Partners (and any
other Person bound by or having rights pursuant to this Agreement) to modify to
that extent such other duties and liabilities of the Covered Person to the
extent permitted by law.

(b)    Notwithstanding anything to the contrary in the Agreement or under
applicable law, whenever in this Agreement the General Partner is permitted or
required to make a decision or take an action or omit to do any of the foregoing
acting solely in its capacity as the General Partner, the General Partner shall,
except where an express standard is set forth, be entitled to make such decision
in its sole and absolute discretion (and the words “in its sole and absolute
discretion” should be deemed inserted therefor in each case in association with
the words “General Partner,” whether or not the words “sole and absolute
discretion” are actually included in the specific provisions of this Agreement),
and in so acting in its sole and absolute discretion the General Partner shall
be entitled to consider only such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Partnership, any of
the Partnership’s Affiliates, any Limited Partner or any other Person. To the
fullest extent permitted by applicable law, if pursuant to this Agreement the
General Partner, acting solely in its capacity as the General Partner, is
permitted or required to make a decision in its “good faith” or under another
express standard, the General Partner shall act under such express standard and
shall not be subject to any other or different standard imposed by this
Agreement or other applicable law.

Section 2.12    Confidentiality; Intellectual Property.

(a)    Confidentiality. Each Partner acknowledges and agrees that the
information contained in the books and records of the Partnership is
confidential and, except in the course of such Partner performing such duties as
are necessary for the Partnership and its Affiliates, as required by law or
legal process or to enforce the terms of this Agreement, at all times such
Partner shall keep and retain in the strictest confidence and shall not disclose
to any Person any confidential matters of the Partnership or any Person included
within the Och-Ziff Group and their respective Affiliates and successors and the
other Partners, including, without limitation, the identity of any Investors,
confidential information concerning the Partnership, any Person included within
the Och-Ziff Group and their respective Affiliates and successors, the General
Partner, the other Partners and any fund, account or investment managed by any
Person included within the Och-Ziff Group, including marketing, investment,
performance data, fund management, credit and financial information, and other
business or personal affairs of the Partnership, any Person included within the
Och-Ziff Group and their respective Affiliates and successors, the General
Partner, the other Partners and any fund, account or investment managed directly
or indirectly by any Person included within the Och-Ziff Group learned by the
Partner heretofore or hereafter. This Section 2.12(a) shall not apply to (i) any
information that has been made publicly available by the Partnership or any of
its Affiliates or becomes public knowledge (except as a result of an act of any
Partner in violation of this Agreement), (ii) the disclosure of information to
the extent necessary for a Partner to prepare and file his tax returns, to
respond to any inquiries regarding the same from any taxing authority or to
prosecute or defend any action, proceeding or audit by any taxing authority with
respect to such returns or (iii) the disclosure of information with the prior
written consent of the General Partner. Notwithstanding anything to the contrary
herein, each Partner (and each employee, representative or other agent of such
Partner) may disclose to any and all Persons, without limitation of any kind,
the tax treatment

 

23

and tax structure of (x) the Partnership and (y) any of its transactions, and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Partners relating to such tax treatment and tax structure. In
addition, nothing in this Agreement or any policies, rules and regulations of OZ
Management LP, or any other agreement between a Limited Partner and any member
of the Och-Ziff Group prohibits or restricts the Limited Partner from initiating
communications with, or responding to any inquiry from, any regulatory or
supervisory authority regarding any good faith concerns about possible
violations of law or regulation.

(b)    Intellectual Property. (i) Each Partner acknowledges and agrees that the
Intellectual Property shall be the sole and exclusive property of the
Partnership and such Partner shall have no right, title, or interest in or to
the Intellectual Property.

(ii)    All copyrightable material included in the Intellectual Property shall
be deemed a “work made for hire” under the applicable copyright law, to the
maximum extent permitted under such applicable copyright law, and ownership of
all rights therein shall vest in the Partnership. To the extent that a Partner
may retain any interest in any Intellectual Property by operation of law or
otherwise, such Partner hereby assigns and transfers to the Partnership his or
her entire right, title and interest in and to all such Intellectual Property.

(iii)    Each Partner hereby covenants and binds himself and his successors,
assigns, and legal representatives to cooperate fully and promptly with the
Partnership and its designee, successors, and assigns, at the Partnership’s
reasonable expense, and to do all acts necessary or requested by the Partnership
and its designee, successors, and assigns, to secure, maintain, enforce, and
defend the Partnership’s rights in the Intellectual Property. Each Partner
further agrees, and binds himself and his successors, assigns, and legal
representatives, to cooperate fully and assist the Partnership in every way
possible in the application for, or prosecution of, all rights pertaining to the
Intellectual Property.

(c)    If a Partner commits a breach, or threatens to commit a breach, of any of
the provisions of Section 2.12(a) or Section 2.12(b), the General Partner shall
have the right and remedy to have the provisions of such Section specifically
enforced by injunctive relief or otherwise by any court of competent
jurisdiction without the need to post any bond or other security, it being
acknowledged and agreed that any such breach or threatened breach shall cause
irreparable injury to the Partnership, the other Partners, any Person included
within the Och-Ziff Group, and the investments, accounts and funds managed by
Persons included within the Och-Ziff Group and that money damages alone shall
not provide an adequate remedy to such Persons. Such rights and remedies shall
be in addition to, and not in lieu of, any other rights and remedies available
at law or in equity.

Section 2.13    Non-Competition; Non-Solicitation; Non-Disparagement;
Non-Interference; and Remedies.

(a)    Each Individual Limited Partner acknowledges and agrees, in connection
with such Individual Limited Partner’s participation in the Partnership on the
terms described in the Prior Partnership Agreement and this amendment and
restatement of the terms

 

24

of the Prior Partnership Agreement or, in the case of an Individual Limited
Partner admitted to the Partnership subsequent to the date of the Prior
Partnership Agreement, on the terms described herein and in such Individual
Limited Partner’s Partner Agreement, if any, that: (i) the alternative asset
management business (including, without limitation, for purposes of this
paragraph, any hedge or private equity fund management business) is intensely
competitive, (ii) such Partner, for the benefit of and on behalf of the
Partnership in his capacity as a Partner, has developed, and will continue to
develop and have access to and knowledge of, Confidential Information
(including, but not limited to, material non-public information of the Och-Ziff
Group and its Investors), (iii) the direct or indirect use of any such
information for the benefit of, or disclosure of any such information to, any
existing or potential competitors of the Och-Ziff Group would place the Och-Ziff
Group at a competitive disadvantage and would do damage to the Och-Ziff Group,
(iv) such Partner, for the benefit of and on behalf of the Partnership in his
capacity as a Partner, has developed relationships with Investors and
counterparties through investment by and resources of the Och-Ziff Group, while
a Limited Partner of the Partnership, (v) such Partner, for the benefit of and
on behalf of the Partnership in his capacity as a Partner, may continue to
develop relationships with Investors and counterparties, through investment by
and resources of the Och-Ziff Group, while a Limited Partner of the Partnership,
(vi) such Partner engaging in any of the activities prohibited by this
Section 2.13 would constitute improper appropriation and/or use of the Och-Ziff
Group’s Confidential Information and/or Investor and counterparty relationships,
(vii) such Partner’s association with the Och-Ziff Group has been critical, and
such Partner’s association with the Och-Ziff Group is expected to continue to be
critical, to the success of the Och-Ziff Group, (viii) the services to be
rendered, and relationships developed, for the benefit of and on behalf of the
Partnership in his capacity as a Partner, are of a special and unique character,
(ix) the Och-Ziff Group conducts the alternative asset management business
throughout the world, (x) the non-competition and other restrictive covenants
and agreements set forth in this Agreement are fair and reasonable, and (xi) in
light of the foregoing and of such Partner’s education, skills, abilities and
financial resources, such Partner acknowledges and agrees that such Partner will
not assert, and it should not be considered, that enforcement of any of the
covenants set forth in this Section 2.13 would prevent such Partner from earning
a living or otherwise are void, voidable or unenforceable or should be voided or
held unenforceable.

(b)    During the Restricted Period, each Individual Limited Partner will not,
directly or indirectly, either on his own behalf or on behalf of or with any
other Person:

(i)    without the prior written consent of the General Partner, (A) engage or
otherwise participate in any manner or fashion in any Competing Business,
(B) render any services to any Competing Business, or (C) acquire a financial
interest in or become actively involved with any Competing Business (other than
as a passive investor holding less than 2% of the issued and outstanding stock
of public companies); or

(ii)    in any manner solicit or induce any of the Och-Ziff Group’s current or
prospective Investors to (A) terminate (or diminish in any material respect) his
investments with the Och-Ziff Group for the purpose of associating or doing
business with any Competing Business, or otherwise encourage such Investors to
terminate (or diminish in any respect) his investments with the Och-Ziff Group
for any other reason or (B) invest in or otherwise participate in or support any
Competing Business.

 

25

(c)    During the Restricted Period, each Individual Limited Partner will not,
directly or indirectly, either on his own behalf or on behalf of or with any
other Person:

(i)    in any manner solicit or induce any of the Och-Ziff Group’s current,
former or prospective financing sources, capital market intermediaries,
consultants, suppliers, partners or other counterparties to terminate (or
diminish in any material respect) his relationship with the Och-Ziff Group for
the purpose of associating with any Competing Business, or otherwise encourage
such financing sources, capital market intermediaries, consultants, suppliers,
partners or other counterparties to terminate (or diminish in any respect) his
relationship with the Och-Ziff Group for any other reason; or

(ii)    in any manner interfere with the Och-Ziff Group’s business relationship
with any Investors, financing sources, capital market intermediaries,
consultants, suppliers, partners or other counterparties.

(d)    During the Restricted Period, each Individual Limited Partner will not,
directly or indirectly, either on his own behalf or on behalf of or with any
other Person, in any manner solicit any of the owners, members, partners,
directors, officers or employees of any member of the Och-Ziff Group to
terminate their relationship or employment with the applicable member of the
Och-Ziff Group, or hire any such Person (i) who is employed at the time of such
solicitation by any member of the Och-Ziff Group, (ii) who is or was once an
owner, member, partner, director, officer or employee of any member of the
Och-Ziff Group as of the date of Special Withdrawal or Withdrawal of such
Partner, or (iii) whose employment or relationship with any such member of the
Och-Ziff Group terminated within the 24-month period prior to the date of
Special Withdrawal or Withdrawal of such Partner or thereafter. Additionally,
the Partner may not solicit or encourage to cease to work with any member of the
Och-Ziff Group any consultant, agent or adviser that the Partner knows or should
know is under contract with any member of the Och-Ziff Group.

(e)    During the Restricted Period and at all times thereafter, each Individual
Limited Partner will not, directly or indirectly, make, or cause to be made, any
written or oral statement, observation, or opinion disparaging the business or
reputation of the Och-Ziff Group, or any owners, partners, members, directors,
officers, or employees of any member of the Och-Ziff Group. Notwithstanding any
other provision of this Agreement or any other agreement entered into between an
Individual Limited Partner and any member of the Och-Ziff Group and, in the case
of any Individual Limited Partner that is an attorney, subject to such
Individual Limited Partner’s compliance with any applicable obligations under
the New York Rules of Professional Conduct and any similar rules applicable to
such Individual Limited Partner: (a) pursuant to 18 U.S.C. § 1833(b), each
Limited Partner understands that he will not be held criminally or civilly
liable under any Federal or State trade secret law for the disclosure of a trade
secret of the Och-Ziff Group that (i) is made (x) in confidence to a Federal,
State, or local government official, either directly or indirectly, or to the
Limited Partner’s attorney and (y) solely for the purpose of reporting or
investigating a suspected violation of law; or (ii) is made in a complaint or
other document that is filed under seal in a lawsuit or other proceeding;
(b) the Limited Partner understands that if he files a lawsuit for retaliation
by the Och-Ziff Group for reporting a suspected violation of law, the Limited
Partner may disclose the trade secret to his

 

26

attorney and use the trade secret information in the court proceeding if he
(I) files any document containing the trade secret under seal, and (II) does not
disclose the trade secret, except pursuant to court order; (c) nothing in this
Agreement or any other agreement or arrangement with any member of the Och-Ziff
Group is intended to conflict with 18 U.S.C. § 1833(b) or create liability for
disclosures of trade secrets that are expressly allowed by such section; and
(d) nothing in this Agreement or any other agreement or arrangement with any
member of the Och-Ziff Group shall prohibit or restrict the Limited Partner from
making any voluntary disclosure of information or documents pertaining to
alleged violations of law to any governmental agency or legislative body, any
self-regulatory organization, the legal departments of the Och-Ziff Group,
and/or pursuant to the Dodd-Frank Act or Sarbanes-Oxley Act without prior notice
to the Och-Ziff Group.

(f)    Each Individual Limited Partner acknowledges and agrees that an attempted
or threatened breach by such Person of this Section 2.13 would cause irreparable
injury to the Partnership and the other members of the Och-Ziff Group not
compensable in money damages and the Partnership shall be entitled, in addition
to the remedies set forth in Sections 2.13(g) and 2.13(i), to obtain a
temporary, preliminary or permanent injunction prohibiting any breaches of this
Section 2.13 without being required to prove damages or furnish any bond or
other security.

(g)    Each Individual Limited Partner agrees that it would be impossible to
compute the actual damages resulting from a breach of Section 2.13(b) or, if
applicable, any of the non-competition covenants provided in such Partner’s
Partner Agreement, and that the amounts set forth in this Section 2.13(g) are
reasonable and do not operate as a penalty, but are a genuine pre-estimate of
the anticipated loss that the Partnership and other members of the Och-Ziff
Group would suffer from a breach of Section 2.13(b) or, if applicable, of any of
the non-competition covenants provided in such Partner’s Partner Agreement. In
the event an Individual Limited Partner breaches Section 2.13(b) or, if
applicable, any of the non-competition covenants provided in such Partner’s
Partner Agreement, then:

(i)    on or after the date of such breach, all Class P Common Units of such
Partner and its Related Trusts, if any, shall be forfeited and cancelled and any
other unvested Common Units of such Partner and its Related Trusts, if any,
shall cease to vest and thereafter shall be reallocated in accordance with this
Section 2.13(g);

(ii)    on or after the date of such breach, (x) any PSIs or Deferred Cash
Interests of such Partner and its Related Trusts shall be forfeited and
cancelled, and (y) and all allocations and distributions on such PSIs or in
respect of such Deferred Cash Interests that would otherwise have been received
by such Partner and its Related Trusts on or after the date of such breach shall
not thereafter be made;

(iii)    on or after the date of such breach, no other allocations shall be made
to the respective Capital Accounts of such Partner and its Related Trusts, if
any, and no other distributions shall be made to such Partners;

(iv)    on or after the date of such breach, no Transfer (including any exchange
pursuant to the Exchange Agreement) of any of the Common Units of such Partner
or its Related Trusts, if any, shall be permitted under any circumstances
notwithstanding anything to the contrary in this Agreement;

 

27

(v)    on or after the date of such breach, no sale, exchange, assignment,
pledge, hypothecation, bequeath, creation of an encumbrance, or any other
transfer or disposition of any kind may be made of any of the Class A Shares
acquired by such Partner or its Related Trusts, if any, through an exchange
pursuant to the Exchange Agreement;

(vi)    as of the applicable Reallocation Date, except as provided in Section
2.13(g)(i), all of the unvested and vested Common Units of such Partner and its
Related Trusts, if any, and all allocations and distributions on such Common
Units that would otherwise have been received by such Partners on or after the
date of such breach shall be reallocated from such Partners to the Partnership
and then subsequently reallocated from the Partnership to the Continuing
Partners in proportion to the total number of Original Common Units owned by
each such Continuing Partner and its Original Related Trusts; provided that, if
any of the Class D Common Units granted to James S. Levin pursuant to the Levin
2017 Partner Agreement in connection with the conditional relinquishment by
Daniel S. Och and certain of his Related Trusts of 30,000,000 vested Class A
Common Units on the date hereof pursuant to the Och Relinquishment Agreement (or
any Class A Common Units into which such Class D Common Units have converted, or
any escrowed consideration into which such Common Units have converted) are
forfeited in accordance with the terms of this Agreement or such Partner
Agreement, such Common Units (or an equivalent amount of escrowed
consideration), up to an aggregate amount of 30,000,000 Common Units (or an
equivalent amount of escrowed consideration), shall be reallocated to the
Partnership and then subsequently reallocated (in the case of Common Units, in
the form of vested Class A Common Units) from the Partnership to Daniel S. Och
and his Related Trusts in accordance with the Och Relinquishment Agreement. The
provisions of this Section 2.13(g)(vi) relating to the Och Relinquishment
Agreement and the Common Units granted under the Levin 2017 Partner Agreement
may only be amended, supplemented or waived with the consent of Daniel S. Och or
his successors in interest.

(vii)    each of such Partner and its Related Trusts, if any, agrees that, on
the Reallocation Date, it shall immediately:

(A)    pay to the Continuing Partners, in proportion to the total number of
Original Common Units owned by each such Continuing Partner and its Original
Related Trusts, a lump-sum cash amount equal to the sum of: (i) the total
after-tax proceeds received by such Individual Limited Partner or Related Trust
thereof for any Class A Shares acquired at any time pursuant to the Exchange
Agreement and that were subsequently transferred during the 24-month period
prior to the date of such breach; and (ii) any distributions received by such
Individual Limited Partner or Related Trust thereof during such 24-month period
on Class A Shares acquired pursuant to the Exchange Agreement;

 

28

(B)    transfer any Class A Shares that were acquired at any time pursuant to
the Exchange Agreement and held by such Individual Limited Partner or Related
Trust thereof on and after the date of such breach to the Partnership and then
subsequently reallocated from the Partnership to the Continuing Partners in
proportion to the total number of Original Common Units owned by each such
Continuing Partner and its Original Related Trusts; and

(C)    pay to the Continuing Partners in proportion to the total number of
Original Common Units owned by each such Continuing Partner and its Original
Related Trusts a lump-sum cash amount equal to the sum of: (i) the total
after-tax proceeds received by such Individual Limited Partner or Related Trust
thereof for any Class A Shares acquired at any time pursuant to the Exchange
Agreement and that were subsequently transferred on or after the date of such
breach; and (ii) all distributions received by such Individual Limited Partner
or Related Trust thereof on or after the date of such breach on Class A Shares
acquired pursuant to the Exchange Agreement;

(viii)    each of such Partner and its Related Trusts, if any, agrees that, on
the Reallocation Date, it shall immediately pay a lump-sum cash amount equal to
the total after-tax amount received by them as PSI Cash Distributions (including
cash distributions in respect of Deferred Cash Interests), in each case during
the 24-month period prior to the date of such breach, with such lump-sum cash
amount to be paid to the Continuing Partners in proportion to the total number
of Original Common Units owned by such Continuing Partner and its Original
Related Trusts; and

(ix)    such Partner and its Related Trusts agrees that he shall receive no
payments, if any, that he would have otherwise received under the Tax Receivable
Agreement on or after the date of such breach, and shall have no further rights
under the Tax Receivable Agreement, Exchange Agreement or Registration Rights
Agreement after such date.

Any reallocated Common Units received by a Continuing Partner pursuant to this
Section 2.13(g) shall be deemed for all purposes of this Agreement to be Common
Units of such Continuing Partner and subject to the same vesting requirements,
if any, in accordance with Section 8.4 as the transferring Limited Partner had
been before his breach of Section 2.13(b) or, if applicable, of the relevant
non-competition covenants provided in such Partner’s Partner Agreement. Any
Continuing Partner receiving reallocated Class A Common Units pursuant to this
Section 2.13(g) shall be permitted to exchange fifty percent (50%) of such
number of Class A Common Units (and sell any Class A Shares issued in respect
thereof), notwithstanding the transfer restrictions set forth in Section 8.1 in
the event that the Exchange Committee (as defined in the Exchange Agreement)
determines in its sole discretion that the reallocation is taxable; provided,
however, that such exchange of Class A Common Units is made in accordance with
the Exchange Agreement.

(h)    Notwithstanding anything in Section 2.13(g) to the contrary, the General
Partner may elect in its sole and absolute discretion to waive the application
of any portion, all or none of the provisions of Section 2.13(g) in the case of
the breach by any Partner of Section 2.13(b) or, if applicable, of the relevant
non-competition covenants provided in such Partner’s Partner Agreement.

 

29

(i)    Without limiting the right of the Partnership to obtain injunctive relief
for any attempted or threatened breach of this Section 2.13, in the event a
Partner breaches Section 2.13(c), (d) or (e), then at the election of the
General Partner in its sole and absolute discretion the Partnership shall be
entitled to seek any other available remedies including, but not limited to, an
award of money damages.

Section 2.14    Insurance. The Partnership may purchase and maintain insurance,
to the extent and in such amounts as the General Partner shall deem reasonable,
on behalf of Covered Persons and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by any such Person in connection with the activities of the
Partnership and/or its Subsidiaries regardless of whether the Partnership would
have the power or obligation to indemnify such Person against such liability
under the provisions of this Agreement. The Partnership may enter into indemnity
contracts with Covered Persons and such other Persons as the General Partner
shall determine and adopt written procedures pursuant to which arrangements are
made for the advancement of expenses and the funding of obligations under this
Section 2.14, and containing such other procedures regarding indemnification as
are appropriate and consistent with this Agreement.

Section 2.15    Representations and Warranties. Each Partner hereby represents
and warrants to the others and to the Partnership as follows:

(a)    Such Partner has all requisite power to execute, deliver and perform this
Agreement; the performance of its obligations hereunder will not result in a
breach or a violation of, or a default under, any material agreement or
instrument by which such Partner or any of such Partner’s properties is bound or
any statute, rule, regulation, order or other law to which it is subject, nor
require the obtaining of any consent, approval, permit or license from or filing
with, any governmental authority or other Person by such Person in connection
with the execution, delivery and performance by such Partner of this Agreement.

(b)    This Agreement constitutes (assuming its due authorization and execution
by the other Partners) such Partner’s legal, valid and binding obligation.

(c)    Each Limited Partner expressly agrees that the Partners may, subject to
the restrictions set forth in Sections 2.12, 2.13, 2.16, 2.18 and 2.19 and, if
applicable, any Partner Agreement, regarding Confidential Information,
Intellectual Property, non-competition, non-solicitation, non-disparagement,
non-interference, devotion of time, short selling and hedging transactions, and
compliance with relevant policies and procedures, engage independently or with
others, for its or their own accounts and for the accounts of others, in other
business ventures and activities of every nature and description whether such
ventures are competitive with the business of the Partnership or otherwise,
including, without limitation, purchasing, selling or holding investments for
the account of any other Person or enterprise or for its or his own account,
regardless of whether or not any such investments are also purchased, sold or
held for the direct or indirect account of the Partnership. Neither the
Partnership nor any Limited Partner shall have any rights or obligations by
virtue of this Agreement in and to such independent ventures and activities or
the income or profits derived therefrom.

 

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(d)    Such Partner understands that (i) the Interests have not been registered
under the Securities Act and applicable state securities laws and (ii) the
Interests may not be sold, transferred, pledged or otherwise disposed of except
in accordance with this Agreement and then only if they are subsequently
registered in accordance with the provisions of the Securities Act and
applicable state securities laws or registration under the Securities Act or any
applicable state securities laws is not required.

(e)    Such Partner understands that the Partnership is not obligated to
register the Interests for resale under any applicable federal or state
securities laws and that the Partnership is not obligated to supply such Partner
with information or assistance in complying with any exemption under any
applicable federal or state securities laws.

Section 2.16    Devotion of Time. Each Individual Limited Partner agrees to
devote substantially all of his business time, skill, energies and attention to
his responsibilities to the Och-Ziff Group in a diligent manner at all times
prior to his Special Withdrawal or Withdrawal.

Section 2.17    Partnership Property; Partnership Interest. No real or other
property of the Partnership shall be deemed to be owned by any Partner
individually, but shall be owned by and title shall be vested solely in the
Partnership. The Interests of the Partners shall constitute personal property.

Section 2.18    Short Selling and Hedging Transactions. While each Partner is a
Limited Partner of the Partnership (irrespective of whether or not a Special
Withdrawal or Withdrawal has occurred in respect of such Partner) and at all
times thereafter, such Partner and its Affiliates shall not, without PMC
Approval, directly or indirectly, (a) effect any short sale (as such term is
defined in Regulation SHO under the Exchange Act) of Class A Shares or any short
sale of any Related Security, or (b) enter into any swap or other transaction,
other than a sale (which is not a short sale) of Class A Shares or any Related
Security to the extent permitted by this Agreement, that transfers to another,
in whole or in part, any of the economic risks, benefits or consequences of
ownership of Class A Shares or any Related Security. The foregoing clause (b) is
expressly agreed to preclude each Partner and its Affiliates, while such Partner
is a Limited Partner of the Partnership (irrespective of whether or not a
Special Withdrawal or Withdrawal has occurred in respect of such Partner) and at
all times thereafter, from engaging in any hedging or other transaction (other
than a sale, which is not a short sale, of Class A Shares or any Related
Security to the extent permitted by this Agreement) which is designed to or
which reasonably could be expected to lead to or result in a transfer of the
economic risks, benefits or consequences of ownership of Class A Shares or any
Related Security, or a disposition of Class A Shares or any Related Security,
even if such transfer or disposition would be made by someone other than such
Partner or Affiliate thereof or any Person contracting directly with such
Partner or Affiliate. For purposes of this Section 2.18 only, “Related
Securities” shall include PSIs and Deferred Cash Interests.

 

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Section 2.19    Compliance with Policies. Each Individual Limited Partner hereby
agrees that he shall comply with all policies and procedures adopted by any
member of the Och-Ziff Group or which Limited Partners are required to observe
by law, or by any recognized stock exchange, or other regulatory body or
authority.

ARTICLE III

INTERESTS AND ADMISSION OF PARTNERS

Section 3.1    Units and other Interests.

(a)    General. The Partners, as of the date of the Prior Partnership Agreement,
agreed among themselves that: (i) beginning on the date of the Prior Partnership
Agreement, Interests in the Partnership shall be designated as “Class A Common
Units” (“Class A Common Units”), “Class B Common Units” (“Class B Common Units”)
and Class C Non-Equity Interests; (ii) except as expressly provided herein, a
Class A Common Unit and a Class B Common Unit shall entitle the holder thereof
to equal rights under this Agreement; (iii) holders of Class B Common Units may
include the Initial General Partner in its capacity as a Limited Partner, which
is the holder of all Class B Common Units as of the date hereof; (iv) from and
after the date of the Prior Partnership Agreement, the rights and obligations in
respect of the Interests of each applicable Original Partner, as originally
described in the Initial Partnership Agreement and such Partners’ respective
Supplementary Agreements, shall be set forth exclusively within this Agreement,
as amended and restated herein; and (v) the respective Interests of each
applicable Original Partner in the Class A Common Units and the Initial General
Partner in its capacity as a Limited Partner in the Class B Common Units shall
be as recorded in the books of the Partnership as being owned by such Partner
pursuant to this Section 3.1.

(b)    Certificated and Uncertificated Units. From time to time, the General
Partner may establish other classes or series of Units pursuant to Section 3.2.
Units may (but need not, in the sole and absolute discretion of the General
Partner) be evidenced by a certificate (a “Certificate of Ownership”) in such
form as the General Partner may approve in writing in its sole and absolute
discretion. The Certificate of Ownership may contain such legends as may be
required by law or as may be appropriate to evidence, if approved by the General
Partner pursuant to Section 8.1, the pledge of a Partner’s Units. Each
Certificate of Ownership shall be signed by or on behalf of the General Partner
by either manual or facsimile signature. The Certificates of Ownership of the
Partnership shall be numbered and registered in the register or transfer books
of the Partnership as they are issued. The Partnership or other Transfer Agent
shall act as registrar and transfer agent for the purposes of registering the
ownership and Transfer of Units. If a Certificate of Ownership is defaced, lost
or destroyed it may be replaced on such terms, if any, as to evidence and
indemnity as the General Partner determines in its sole and absolute discretion.
Notwithstanding the foregoing, Class A Common Units, Class B Common Units,
Class D Common Units, Class P Common Units and PSIs shall not be evidenced by
Certificates of Ownership and a Partner’s interest in any such Units shall be
reflected through appropriate entries in the books and records of the
Partnership.

 

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(c)    Record Holder. Except to the extent that the Partnership shall have
received written notice of a Transfer of Units and such Transfer complies with
the applicable requirements of Section 8.1, the Partnership shall be entitled to
treat (i) in the case of Units evidenced by Certificates of Ownership, the
Person in whose name any Certificates of Ownership stand on the books of the
Partnership and (ii) in the case of Units not evidenced by Certificates of
Ownership and Class C Non-Equity Interests, the Person listed in the books of
the Partnership as the holder of such Units or Class C Non-Equity Interests, as
the absolute owner thereof, and shall not be bound to recognize any equitable or
other claim to, or interest in, such Units or Class C Non-Equity Interests on
the part of any other Person. The name and business address of each Partner
shall be set forth in the books of the Partnership.

(d)    Voting Rights relating to Common Units, PSIs and Class C Non-Equity
Interests. Holders of Common Units (other than Class B Common Units) shall have
no voting, consent or approval rights with respect to any matter submitted to
holders of Units for their consent or approval, except as set forth in Sections
3.1(f)(i), 3.1(j)(vii) and 10.2. Holders of Class C Non-Equity Interests and PSI
Limited Partners (other than as holders of Common Units) shall have no voting,
consent or approval rights with respect to any matter.

(e)    Automatic Conversion of Class A Common Units and Class P Common Units.
If, as a result of an exchange pursuant to the Exchange Agreement, Och-Ziff or
any of its Subsidiaries (excluding any Operating Group Entity and any Subsidiary
of an Operating Group Entity) acquires (in any manner) any Class A Common Units
or Class P Common Units, each such Common Unit will automatically convert into
one Class B Common Unit, unless otherwise determined or cancelled.

(f)    Class D Common Units. Interests in the Partnership shall include a class
of Units designated as “Class D Common Units.” Class D Common Units may be
conditionally issued in one or more series of such class. Class D Common Units
of the first such series shall be designated as “Class D-1 Common Units,” with
each subsequent series of Class D Common Units to be designated with a
consecutive number or as otherwise recorded in the books of the Partnership and
the applicable Partner Agreement. The respective Interests in the Class D Common
Units conditionally held by each Individual Limited Partner and his Related
Trusts, if any, holding such Class D Common Units (each, a “Class D Limited
Partner”) shall be as recorded in the books of the Partnership as being owned by
such Partners pursuant to this Section 3.1. Except as otherwise set forth in
this Agreement or the applicable Partner Agreement, if any, of any Class D
Limited Partner, each series of Class D Common Units shall have the same rights,
powers and duties, and the rights, powers and duties applicable to Class D
Common Units shall be as set forth below and elsewhere in this Agreement:

(i)    With respect to amendments (A) pursuant to Section 10.2(a)(ii), (x) the
Class D Common Units shall be treated as Class A Common Units and shall vote
together as a single class with the Class A Common Units in respect of any
amendment that adversely affects the rights of the Class D Common Units and the
rights of the Class A Common Units similarly and (y) the Class D Common Units
shall vote separately in respect of any amendment that only adversely affects
the rights of the Class D Common Units or otherwise adversely affects the rights
of Class D Common Units and the rights of Class A Common Units dissimilarly
(other than in a de minimis manner), and (B)

 

33

pursuant to Section 10.2(a)(iii), the Class D Common Units shall be treated as
Class A Common Units and shall vote together as a single class with the Class A
Common Units in respect of any amendment requiring approval thereunder.

(ii)    No Class D Limited Partner shall be permitted to exchange any Class D
Common Unit pursuant to the Exchange Agreement except to the extent that the
General Partner determines that there has been sufficient Appreciation to result
in such Class D Common Unit being economically equivalent to one Class A Common
Unit consistent with the principles of Treasury Regulation section
1.704-1(b)(2)(iv)(f) and Section 6.1(c) (including with respect to the order of
priority set forth therein). Such determination shall be made in writing
(A) prior to any sale (including, but not limited to, by merger or otherwise) of
Class A Common Units, (B) prior to any exchange of Class A Common Units pursuant
to the Exchange Agreement and (C) at any other time as determined by the General
Partner in its sole discretion. To the extent that the General Partner
determines that all Class D Common Units of a Class D Limited Partner, in
aggregate, are not fully economically equivalent to Class A Common Units in
connection with any determination described in clauses (A), (B) or (C) of the
foregoing sentence, the General Partner shall make such determination with
respect to as many of such Class D Limited Partner’s Class D Common Units as
possible and shall continue to make such determinations at the time of each
subsequent occurrence of any of the events described in clauses (A), (B) or
(C) above. The Partners agree that, if the General Partner determines, in
accordance with this Section 3.1(f)(ii), that any Class D Common Unit of a
Class D Limited Partner has become economically equivalent to one Class A Common
Unit, then such Class D Common Unit will automatically convert into a Class A
Common Unit and such Class D Limited Partner shall be a Potential Tag-Along
Seller for purposes of Sections 8.5(a) and 8.5(b) with respect to any proposed
sale or exchange related to any such determination. The Partners further agree
that any Class D Common Units and any Class A Common Units into which such
Class D Common Units have converted shall be Company Securities for purposes of
any Drag-Along Sale for purposes of Sections 8.6(a) and 8.6(b) with respect to
any proposed sale or exchange related to any such determination.

(iii)    Notwithstanding the provisions of Section 3.1(f)(ii) and the final
sentence of Section 8.5(b), in circumstances wherein the General Partner shall
permit other Limited Partners to participate in (i) a sale of Class A Common
Units, or (ii) an exchange of Class A Common Units pursuant to the Exchange
Agreement, the General Partner shall allow each Class D Limited Partner and his
Related Trusts, if any, to make such Capital Contributions to the Partnership as
would enable the relevant number of Class D Common Units of such Class D Limited
Partner and his Related Trusts, if any, to become economically equivalent to
Class A Common Units, in which case each such Class D Common Unit will
automatically convert into a Class A Common Unit and such Class D Limited
Partner and his Related Trusts, if any, will then be permitted to participate in
such sale or exchange.

(iv)    If any Class D Limited Partner does not participate in any sale or
exchange of Common Units by the other Limited Partners occurring within two
years after the applicable Issue Date of such Class D Limited Partner’s Class D
Common Units

 

34

and in which such Class D Limited Partner would have been entitled to
participate in accordance with Sections 3.1(f)(ii) or 3.1(f)(iii), then,
following the end of such two-year period, such Class D Limited Partner shall,
subject to the satisfaction of the conditions set forth in Sections 3.1(f)(ii)
or 3.1(f)(iii), be entitled to exchange the number of vested Common Units equal
to such Class D Limited Partner’s pro rata share of the total number of vested
Common Units that all Individual Limited Partners and their Related Trusts were
entitled to Transfer in such sale or exchange, provided that if such sale or
exchange of Common Units by the other Limited Partners occurred in connection
with a Tag-Along Sale, all unvested Common Units shall be treated as vested
Common Units for purposes of this Section 3.1(f)(iv).

(v)    Each Class D Limited Partner that is an Individual Limited Partner shall
be issued one Class B Share in respect of any additional complete Operating
Group A Unit conditionally owned by him and his Related Trusts, if any, with
each such Class B Share to be issued to such Class D Limited Partner on the same
date as the conversion of the relevant partnership unit(s) in the relevant
Operating Group Entity(ies) that gives rise to such Class D Limited Partner’s
entitlement to such Class B Share. Simultaneously with the first such issuance
to such Class D Limited Partner of Class B Shares, such Class D Limited Partner
shall be joined to the Class B Shareholders Agreement.

(g)    Adjustments to Class D Common Units. The General Partner shall maintain a
one-to-one correspondence between each Class D Common Unit and each Class A
Common Unit into which each such Class D Common Unit may convert, and may make
equitable adjustments to the Class D Common Units to take into account changes
in the number of Common Units, reclassifications, recapitalizations and similar
factors provided that such adjustments are consistent with the intent of Section
6.1(c) and the other relevant provisions of this Agreement; provided, however,
that no such equitable adjustment may adversely affect the Class D Common Units’
rights to the allocations and distributions set forth in this Agreement and any
applicable Partner Agreement.

(h)    Reallocations of Common Units. In the event of any reallocation of Common
Units to the Continuing Partners, the General Partner shall determine in its
sole discretion the class and series of Common Units to which each such Common
Unit shall belong upon its reallocation, notwithstanding anything to the
contrary in any Partner Agreement entered into prior to the date hereof.

(i)    Profit Sharing Interests. Interests in the Partnership shall include a
class of Units designated as “Profit Sharing Interests,” which may be
conditionally issued in one or more series of such class (each, a “PSI”). The
first series of such class shall be designated as “Series 1 PSIs,” with each
subsequent series of PSIs to be designated with consecutive numbers indicating
the order in which series have been issued, or as otherwise recorded in the
books of the Partnership and the applicable Partner Agreement. The respective
Interests in the PSIs conditionally held by each Individual Limited Partner
(each, a “PSI Limited Partner”) shall be as recorded in the books of the
Partnership as being owned by such Partner pursuant to this Section 3.1, with
each Person receiving a conditional grant of PSIs being admitted as a Limited
Partner upon such grant if such Person was not previously a Limited Partner.
Except as otherwise set forth in this Agreement or any applicable Partner
Agreement and subject to Section 3.1(i)(ix),

 

35

each PSI shall have the rights, powers and duties set forth below and elsewhere
in this Agreement:

(i)    Grants, Reallocations and Cancellations of PSIs. At all times, each PSI
Limited Partner will conditionally own an equal number of PSIs in the
Partnership and each of the other Operating Group Entities. The PMC Chairman may
in his discretion conditionally grant any number of PSIs at any time to any
existing Individual Limited Partners or other Person who becomes an Individual
Limited Partner in connection with such grant. At any time, the PMC Chairman in
his sole discretion may determine to (A) conditionally reallocate PSIs held by
any PSI Limited Partner to any other Limited Partners, whether or not they are
PSI Limited Partners, or (B) cancel any PSIs held by any PSI Limited Partner.
PSIs forfeited by any PSI Limited Partner in accordance with this Agreement or
the terms of any Partner Agreement shall automatically be cancelled.

(ii)    PSI Distributions. Unless otherwise specified in any applicable Partner
Agreement, a PSI Limited Partner shall conditionally receive distributions with
respect to such PSI Limited Partner’s PSIs from the Partnership and the other
Operating Group Entities in respect of any Fiscal Year in an aggregate annual
amount equal to the product of (i) such PSI Limited Partner’s PSI Number in
respect of such Fiscal Year, and (ii) the aggregate distributions made by the
Operating Group Entities with respect to each Operating Group A Unit in respect
of the Net Income earned by the Operating Group Entities during such Fiscal Year
(the aggregate amounts to be distributed to any PSI Limited Partner with respect
to such PSI Limited Partner’s PSIs by the Partnership and the other Operating
Group Entities in respect of any Fiscal Year, such PSI Limited Partner’s “PSI
Distribution” in respect of such Fiscal Year). In order to be eligible to
receive any portion of the PSI Distribution in respect of any Fiscal Year, the
PSI Limited Partner shall not have been subject to a Withdrawal or Special
Withdrawal as of the applicable distribution date of such portion of such PSI
Distribution.

(iii)    Types of PSI Distributions. Unless otherwise specified in any
applicable Partner Agreement and subject to Section 3.1(i)(ix), any PSI
Distribution to be made to any PSI Limited Partner by the Partnership and the
other Operating Group Entities with respect to the PSIs of such PSI Limited
Partner shall be conditionally distributed at the times and in the amounts
described in this Section 3.1(i) in a combination of (A) cash to be
conditionally distributed to the Limited Partner by one or more of the Operating
Group Entities, which may include a conditional grant of Deferred Cash Interests
by the Partnership and/or the other Operating Group Entities in the sole
discretion of the General Partner, and (B) a conditional grant by the Operating
Group Entities of Operating Group D Units.

 

36

(iv)    Proportions of Cash and Units. Unless otherwise specified in any
applicable Partner Agreement and subject to Section 3.1(i)(ix), any PSI
Distribution to be made to any PSI Limited Partner in respect of any Fiscal Year
shall be conditionally distributed at the times specified in Section 3.1(i)(v)
such that, on an aggregate basis, it shall be conditionally made:

(A)    75% in the form of cash distributions, to be satisfied by distributions
from one or more of the Operating Group Entities in the proportions determined
by the General Partner in its sole discretion (the “PSI Cash Distribution”), of
which a portion equal to 60% of the PSI Distribution shall be distributed in
accordance with clauses (A) and (B) of Section 3.1(i)(v) and the remainder shall
be distributed in the form of Deferred Cash Interests in accordance with clause
(C) of Section 3.1(i)(v) (the “Deferred Cash Distribution”); and

(B)    25% in the form of a grant of Operating Group D Units by the Operating
Group Entities in accordance with clause (D) of Section 3.1(i)(v) (the “PSI
Class D Unit Distribution”).

(v)    Timing of PSI Distributions. Unless otherwise specified in any applicable
Partner Agreement and subject to Article VII and Section 3.1(i)(ix), any PSI
Distribution to be made to any PSI Limited Partner in respect of any Fiscal Year
may be conditionally made during the subsequent Fiscal Year, on January 15 and
the 4Q Distribution Date, provided that the PSI Limited Partner has not been
subject to a Withdrawal or a Special Withdrawal as of the applicable date, as
follows:

(A)     as of such January 15, a portion of the PSI Cash Distribution for such
Fiscal Year shall be distributed in cash to such PSI Limited Partner in an
amount equal to 50% of such PSI Cash Distribution (not including any Deferred
Cash Distribution); provided that, for purposes of this Clause (A), these
amounts shall be determined by the PMC Chairman in his sole discretion taking
into account the General Partner’s estimate of the aggregate distributions to be
made by the Operating Group Entities with respect to each Operating Group A Unit
in respect of the Net Income earned by the Operating Group Entities during such
Fiscal Year, with such amount to be distributed by one or more of the Operating
Group Entities in the proportions determined by the General Partner in its sole
discretion;

(B)    as of such 4Q Distribution Date, the amount of the PSI Cash Distribution
in respect of such Fiscal Year, less the amounts of such PSI Cash Distribution
to be distributed in accordance with Clause (A) above or Clause (C) below, shall
be distributed in cash to such PSI Limited Partner, with such amount to be
distributed by one or more of the Operating Group Entities in the proportions
determined by the General Partner in its sole discretion;

(C)    as of such 4Q Distribution Date, the Deferred Cash Distribution in
respect of such Fiscal Year shall be distributed to such PSI Limited Partner in
the form of Deferred Cash Interests relating to one or more OZ Funds (as defined
in the DCI Plan) in accordance with the DCI Plan by the Partnership and/or the
other Operating Group Entities in the sole discretion of the General Partner;
and

(D)    the PSI Class D Unit Distribution in respect of such Fiscal Year shall be
satisfied by a grant of Operating Group D Units to be made by the Operating
Group Entities as of the 4Q Distribution Date relating to such Fiscal Year, with
the number of Operating Group D Units to be calculated in accordance with the
applicable Partner Agreement.

 

37

(vi)    Vesting; Transfer. PSIs shall not vest and may be reallocated or
cancelled as provided in this Section 3.1(i) and any Partner Agreement. No PSI
Limited Partner may Transfer any PSIs or Deferred Cash Interests under any
circumstances, and any purported Transfer of PSIs or Deferred Cash Interests
shall be null and void and of no force and effect.

(vii)    PSI Liquidity Events. Notwithstanding the provisions of Section
3.1(i)(vi), in the PMC Chairman’s sole discretion, a PSI Limited Partner may
participate in a PSI Liquidity Event with respect to such PSI Limited Partner’s
PSIs on the same terms as Class A Common Units participate, provided that such
PSI Limited Partner may only participate in such a PSI Liquidity Event to the
extent that the PSIs held by such PSI Limited Partner have become economically
equivalent to Class A Common Units, although PSIs shall not convert into Class A
Common Units upon becoming economically equivalent to them. The General Partner
in its sole discretion may permit any such PSI Limited Partner to make such
Capital Contributions as would enable the relevant number of PSIs of such PSI
Limited Partner to become economically equivalent to Class A Common Units, in
which case such PSIs shall be permitted to participate in such PSI Liquidity
Event.

(viii)    Adjustments to PSIs. The General Partner may in its sole discretion
make equitable adjustments to the PSIs to take into account changes in the
number of Common Units, reclassifications, recapitalizations and similar
factors.

(ix)    Terms of the PSIs and PSI Distributions. The PMC Chairman at any time
may determine in his sole discretion to amend, supplement, modify or waive the
terms of this Section 3.1(i) and any other provisions in this Agreement or any
Partner Agreement relating to PSIs, PSI Distributions, PSI Class D Unit
Distributions or PSI Cash Distributions, including Deferred Cash Interests,
including, without limitation, with respect to the terms of previously granted
PSIs or distributions thereon; and such amendments, supplements, modifications
or waivers shall not require the consent or approval of any Partner.

(x)    Terms of Deferred Cash Interests. Anything herein to the contrary
notwithstanding, any Deferred Cash Interests shall be paid pursuant to the terms
of the DCI Plan and the applicable Partner Agreements and award agreements
relating to individual grants of Deferred Cash Interests which shall set forth
the applicable vesting and payment terms and all such terms shall be subject to
the requirements of Section 409A of the Code.

(j)    Class P Common Units. Interests in the Partnership shall include a class
of Units designated as “Class P Common Units.”    Class P Common Units may be
conditionally issued in one or more series of such class. Class P Common Units
of the first such series shall be designated as “Class P-1 Common Units,” with
each subsequent series of Class P Common Units to be designated with a
consecutive number or as otherwise recorded in the

 

38

books of the Partnership and the applicable Partner Agreement. Class P Common
Units shall be issued to Active Individual LPs as and when determined by the
General Partner with the approval of the PMC Chairman, and shall be issued
pursuant to a Partner Agreement substantially in the form of award agreement
attached to this Agreement as Exhibit B hereto or in such other form that is
otherwise determined by the General Partner. The respective Interests in the
Class P Common Units conditionally held by each Individual Limited Partner and
his Related Trusts, if any, holding such Class P Common Units (each, a “Class P
Limited Partner”) shall be as recorded in the books of the Partnership as being
owned by such Partners pursuant to this Section 3.1. Except as otherwise set
forth in this Agreement or the applicable Partner Agreement of any Class P
Limited Partner, each series of Class P Common Units shall have the same rights,
powers and duties, and the rights, powers and duties applicable to Class P
Common Units shall be as set forth below and elsewhere in this Agreement:

(i)    Vesting; Forfeiture. Each Class P Common Unit of a Class P Limited
Partner shall conditionally vest on the date that both the Class P Service
Condition and the Class P Performance Condition applicable to such Class P
Common Unit have been satisfied; provided, that, upon the earlier of (x) such
Class P Limited Partner ceasing to be an Active Individual LP and (y) the last
day of the Class P Performance Period, each such Class P Limited Partner’s
unvested Class P Common Units shall be forfeited and cancelled except as
follows:

(A)    upon such Class P Limited Partner’s Withdrawal for Cause at any time
pursuant to clause (A) of Section 8.3(a)(i) (Cause), all of the vested and
unvested Class P Common Units held by such Class P Limited Partner shall be
forfeited and cancelled;

(B)    if the Class P Service Condition is satisfied on or prior to the
effective date of any Withdrawal of such Class P Limited Partner resulting from
Retirement but prior to the Class P Performance Condition being satisfied, all
of the Class P Common Units held by such Class P Limited Partner shall be
conditionally retained; provided that any Class P Common Units that have not
satisfied the applicable Class P Performance Condition on or prior to the last
day of the Class P Performance Period shall be forfeited and cancelled and any
Class P Common Units that have satisfied the Class P Performance Condition on or
prior to the last day of the Class P Performance Period shall be retained as
Participating Class P Common Units;

(C)    if the Class P Service Condition is satisfied on or prior to the
effective date of such Class P Limited Partner’s Special Withdrawal or
Withdrawal (other than any Withdrawal pursuant to clause (A) of Section
8.3(a)(i) (Cause) or pursuant to clause (C) of Section 8.3(a)(i) (Resignation)
as a result of Retirement), all of the Class P Common Units held by such Class P
Limited Partner shall be conditionally retained until the first anniversary of
the effective date of such Withdrawal or Special Withdrawal; provided that any
Class P Common Units that have not satisfied the applicable Class P Performance
Condition on or prior to the earlier of (i) such first anniversary date or
(ii) the last day of the Class P Performance Period shall be forfeited and
cancelled; and provided, further, that any Class P Common Units that have
satisfied the Class P Performance Condition on or prior to such date shall be
retained as Participating Class P Common Units; and

 

39

(D)    in the event of the death or Disability of such Class P Limited Partner,
all of the Class P Common Units held by such Class P Limited Partner shall be
conditionally retained by such Class P Limited Partner and the Class P Service
Condition (but not the Class P Performance Condition) shall be waived (if not
already satisfied); provided that any Class P Common Units that have not
satisfied the applicable Class P Performance Condition on or prior to the last
day of the Class P Performance Period shall be forfeited and cancelled and any
Class P Common Units that have satisfied the Class P Performance Condition on or
prior to the last day of the Class P Performance Period shall be retained as
Participating Class P Common Units.

(ii)    Exchange Rights. No Class P Limited Partner shall be permitted to
exchange pursuant to the Exchange Agreement any Class P Common Unit issued on
any grant date except to the extent that (A) both the Class P Service Condition
and the Class P Performance Condition applicable to such Class P Common Unit
have been satisfied or waived, (B) the General Partner determines that there has
been sufficient Appreciation to result in such Class P Common Unit being
economically equivalent to one Class A Common Unit consistent with the
principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and Section
6.1(c) (including with respect to the order of priority set forth therein), and
(C) one Class A Share has been reserved under the Och-Ziff Incentive Plan for
each Class P Common Unit issued on such grant date.

(iii)    Tag-Along Rights; Drag-Along Rights. Each Class P Limited Partner shall
be a Potential Tag-Along Seller with respect to its Class P Common Units in
connection with any proposed Tag-Along Sale and such Class P Common Units shall
be deemed to be Class A Common Units for purposes of Section 8.5, but only to
the extent that (A) the Class P Service Condition applicable to such Class P
Common Unit has been satisfied or waived in the General Partner’s discretion,
(B) the Class P Performance Condition applicable to such Class P Common Unit has
already been satisfied or is deemed satisfied based on the price per Class A
Share implied by the terms of the Tag-Along Offer, and (C) the General Partner
determines that there has been sufficient Appreciation to result in such Class P
Common Unit being economically equivalent to one Class A Common Unit consistent
with the principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and
Section 6.1(c) (including with respect to the order of priority set forth
therein). Certain Class P Common Units may be deemed to be Participating Class P
Common Units upon the occurrence of a proposed Drag-Along Sale to the extent and
as provided in Section 3.1(j)(iv).    Any Class P Common Units that are not
Participating Class P Common Units upon the occurrence of a proposed Tag-Along
Sale but are permitted to participate in such Tag-Along Sale in accordance with
this Section 3.1(j)(iii) shall be deemed to be Participating Class P Common
Units. Subject to the other terms of this Agreement, Class P Common Units that
are Non-Participating Class P Common Units prior to the occurrence of a proposed
Drag-Along Sale that is not subject to Section 3.1(j)(iv) shall be retained as
Non-Participating Common Units following the Drag-Along Sale; provided, that any
Class P Common Units that are Non-Participating Class P Common Units following a
Drag-Along Sale subject to Section 3.1(j)(iv) shall be forfeited and cancelled
upon the date of such event as provided in Section 3.1(j)(iv).

 

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(iv)    Class P Liquidity Events. Upon the occurrence of a Class P Liquidity
Event, each Class P Common Unit shall participate on a pro rata basis with other
classes of Common Units regardless of whether the Class P Service Condition has
been satisfied or waived, but only to the extent that (A) the Class P
Performance Condition applicable to such Class P Common Unit has already been
satisfied or is deemed satisfied based on the price per Class A Share implied by
the relevant Class P Liquidity Event, and (B) the General Partner determines
that there has been sufficient Appreciation to result in such Class P Common
Unit being economically equivalent to one Class A Common Unit consistent with
the principles of Treasury Regulation section 1.704-1(b)(2)(iv)(f) and Section
6.1(c) (including with respect to the order of priority set forth therein). If
the Total Shareholder Return upon the date of the applicable Class P Liquidity
Event is greater than one Class P Performance Threshold and less than the next
Class P Performance Threshold, a ratable portion of the Class P Common Units
with the higher Class P Performance Threshold shall become entitled to
participate pro rata in such Class P Liquidity Event. Any Class P Common Units
that are not Participating Class P Common Units upon the occurrence of such
Class P Liquidity Event but are permitted to participate in such Class P
Liquidity Event in accordance with this Section 3.1(j)(iv) shall be deemed to be
Participating Class P Common Units. Any Non-Participating Class P Common Unit
that is not deemed to satisfy the relevant Class P Performance Condition
immediately prior to such Class P Liquidity Event shall be forfeited and
cancelled upon the date of such event.

(v)    Reservation of Class A Shares; Issuance of Class B Shares. The Class P
Limited Partners agree and acknowledge that the grants of Class P Common Units
on any grant date are conditional upon a sufficient number of Class A Shares
being reserved under the Och-Ziff Incentive Plan. If the Och-Ziff Incentive Plan
does not have the capacity on the relevant grant date to reserve a sufficient
number of Class A Shares then such Class P Common Units shall not become
exchangeable unless and until the shareholders of Och-Ziff subsequently approve
an amendment to the Och-Ziff Incentive Plan to permit such reservations to be
made. Each Class P Limited Partner that is an Individual Limited Partner shall
be issued one Class B Share in respect of each Operating Group P Unit
conditionally owned by him and any Related Trusts, with each such Class B Share
to be issued to such Class P Limited Partner as of the date on which shareholder
approval to such amendment to the Och-Ziff Incentive Plan is received.
Simultaneously with the first such issuance to such Class P Limited Partner of
Class B Shares, such Class P Limited Partner shall be joined to the Class B
Shareholders Agreement.

(vi)    Adjustments to Class P Common Units. The General Partner shall maintain
a one-to-one correspondence between each Operating Group P Unit and each Class A
Share into which each such Operating Group P Unit may be exchanged, and may make
equitable adjustments to the Class P Common Units to take into account changes
in the number of Common Units, reclassifications, recapitalizations and similar
factors provided that such adjustments are consistent with the intent of Section
6.1(c) and the other relevant provisions of this Agreement; provided, however,
that no such equitable adjustment may adversely affect the Class P Common Units’
rights to the allocations and distributions set forth in this Agreement and any
applicable Partner Agreement.

 

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(vii)    Amendments. The provisions of Section 3.1(j) and other provisions of
this Agreement relating to Class P Common Units may be amended, supplemented,
modified or waived by the General Partner with the approval of the PMC Chairman;
and such amendments, supplements, modifications or waivers shall not require the
consent or approval of any Limited Partner, except (A) as provided in Section
10.2(a)(i); (B) that pursuant to Section 10.2(a)(ii), (x) the Class P Common
Units shall be treated as Class A Common Units and shall vote together with
Class A Common Units in respect of any amendment that adversely affects the
rights of the Class P Common Units and the rights of the Class A Common Units
similarly, and (y) the Class P Common Units shall vote separately in respect of
any amendment that only adversely affects the rights of the Class P Common
Units; and (C) that pursuant to Section 10.2(a)(iii), the Class P Common Units
shall be treated as Class A Common Units and shall vote together as a single
class with the Class A Common Units in respect of any amendment requiring
approval thereunder.

Section 3.2    Issuance of Additional Units and other Interests.

(a)    Additional Units. The General Partner may from time to time in its sole
and absolute discretion admit any Person as an additional Limited Partner of the
Partnership (each such Person, if so admitted, an “Additional Limited Partner”
and, collectively, the “Additional Limited Partners”). A Person shall be deemed
admitted as a Limited Partner at the time such Person (i) executes this
Agreement or a counterpart of this Agreement and (ii) is named as a Limited
Partner in the books of the Partnership. Each Substitute Limited Partner shall
be deemed an Additional Limited Partner whose admission as an Additional Limited
Partner has been approved in writing by the General Partner for all purposes
hereunder. Subject to the satisfaction of the foregoing requirements and Section
4.1(c), the General Partner is hereby expressly authorized to cause the
Partnership to issue additional Units for such consideration and on such terms
and conditions, and to such Persons, including the General Partner, any Limited
Partner or any of their Affiliates, as shall be established by the General
Partner in its sole and absolute discretion, in each case without the approval
of any other Partner or any other Person. Without limiting the foregoing, but
subject to Section 4.1(c), the General Partner is expressly authorized to cause
the Partnership to issue Units (A) upon the conversion, redemption or exchange
of any debt or other securities issued by the Partnership, (B) for less than
fair market value or no consideration, so long as the General Partner concludes
that such issuance is in the best interests of the Partnership and its Partners,
and (C) in connection with the merger of any other Person into the Partnership
if the applicable merger agreement provides that Persons are to receive Units in
exchange for their interests in the Person merging into the Partnership. The
General Partner is hereby expressly authorized to take any action, including
without limitation amending this Agreement without the approval of any other
Partner, to reflect any issuance of additional Units. Subject to Section 4.1(c),
additional Units may be Class A Common Units, Class B Common Units or other
Units.

(b)    Unit Designations. Any additional Units may be issued in one or more
classes, or one or more series of any of such classes, with such designations,
preferences

 

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and relative, participating, optional or other special rights, powers and duties
(including, without limitation, rights, powers and duties that may be senior or
otherwise entitled to preference over existing Units) as shall be determined by
the General Partner, in its sole and absolute discretion without the approval of
any Limited Partner or any other Person, and set forth in a written document
thereafter attached to and made an exhibit to this Agreement, which exhibit
shall be an amendment to this Agreement and shall be incorporated herein by this
reference (each, a “Unit Designation”), including the Unit Designation attached
as Exhibit C hereto pursuant to which the “Class A Cumulative Preferred Units”
of the Partnership were created (the “Class A Cumulative Preferred Units”).

(c)    Unit Rights. Without limiting the generality of the foregoing, but
subject to Section 4.1(c), in respect of additional Units the General Partner
shall have authority to specify (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to holders of each such class or series
of Units; (ii) the right of holders of each such class or series of Units to
share (on a pari passu, junior or preferred basis) in Partnership distributions;
(iii) the rights of holders of each such class or series of Units upon
dissolution and liquidation of the Partnership; (iv) the voting rights, if any,
of holders of each such class or series of Units; and (v) the conversion,
redemption or exchange rights applicable to each such class or series of Units.
The total number of Units that may be created and issued pursuant to this
Section 3.2 is not limited.

(d)    Class C Non-Equity Interests. Class C Non-Equity Interests may only be
issued to a Limited Partner as consideration for the provision of services to
the Partnership in the form of future allocations of Net Income to such Limited
Partner. No Partner may, under any circumstances, Transfer any Class C
Non-Equity Interests, and any purported Transfer of Class C Non-Equity Interests
shall be null and void and of no force and effect. Holders of Class C Non-Equity
Interests shall have no right to receive any allocations thereon, and
allocations, if any, made thereon to such Limited Partner need not be made in
proportion to the number of Common Units or other Units held by such Limited
Partner. Holders of Class C Non-Equity Interests shall have only the limited
rights expressly set forth in this Agreement. The Partnership or other Transfer
Agent shall act as registrar and transfer agent for the purposes of registering
the ownership of Class C Non-Equity Interests.

(e)    Additional Limited Partners. Subject to the other terms of this
Agreement, the rights and obligations of an Additional Limited Partner to which
Units are issued shall be set forth in such Additional Limited Partner’s Partner
Agreement, the Unit Designation relating to the Units issued to such Additional
Limited Partner or a written document thereafter attached to and made an exhibit
to this Agreement, which exhibit shall be an amendment to this Agreement (but
shall not require the approval of any Limited Partner) and shall be incorporated
herein by this reference. Such rights and obligations may include, without
limitation, provisions describing the vesting of the Units issued to such
Additional Limited Partner and the reallocation of such Units or other
consequences of the Withdrawal of such Additional Limited Partner other than due
to a breach of any of the covenants in Section 2.13(b) or, if applicable, any of
those provided in such Additional Limited Partner’s Partner Agreement.

 

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ARTICLE IV

VOTING AND MANAGEMENT

Section 4.1    General Partner: Power and Authority.

(a)    Pursuant to the Prior Partnership Agreement, Och-Ziff GP LLC, a Delaware
limited liability company (the “Withdrawn General Partner”), was removed as
general partner of the Partnership and the Initial General Partner was admitted
as general partner of the Partnership from the date of the Prior Partnership
Agreement. The business and affairs of the Partnership shall be managed
exclusively by the General Partner; provided, however, that the General Partner
may delegate such power and authority to the Partner Management Committee (or
its Chairman), the Partner Performance Committee (or its Chairman) or such other
committee (or its chairman) as it shall deem necessary, advisable or appropriate
in its sole and absolute discretion from time to time, which delegation may be
set forth in this Agreement, as an amendment hereto (which shall not require the
vote or approval of any Limited Partner) or in a resolution duly adopted by the
General Partner. Initially the General Partner has delegated certain power and
authority to the Partner Management Committee and the Partner Performance
Committee, as set forth elsewhere in this Agreement. The General Partner shall
have the power and authority, on behalf of and in the name of the Partnership,
to carry out any and all of the objects and purposes and exercise any and all of
the powers of the Partnership and to perform all acts which it may deem
necessary or advisable in connection therewith. Such acts include, but are not
limited to, the approval of a merger or consolidation involving the Partnership,
or of the conversion, transfer, domestication or continuance of the Partnership,
or of the compromise of any obligation of a Partner to make a contribution or
return money or other property to the Partnership, to the fullest extent
permitted by applicable law, by the General Partner without the consent or
approval of any of the other Partners. Appraisal rights permitted under
Section 17-212 of the Act shall not apply or be incorporated into this
Agreement, and no Partner or assignee of an Interest shall have any of the
dissenter or appraisal rights described therein. The Limited Partners, in their
capacity as limited partners (and not as officers of the General Partner or
members of any committee established by the General Partner), shall have no part
in the management of the Partnership and shall have no authority or right to act
on behalf of or bind the Partnership in connection with any matter. The Partners
agree that all determinations, decisions and actions made or taken by the
General Partner, the Partner Management Committee (or its Chairman) or the
Partner Performance Committee (or its Chairman) in accordance with this
Agreement shall be conclusive and absolutely binding upon the Partnership, the
Partners and their respective successors, assigns and personal representatives.

(b)    Limited Partners holding a majority of the outstanding Class B Common
Units shall have the right to remove the General Partner at any time, with or
without cause. Upon the withdrawal or removal of the General Partner, Limited
Partners holding a majority of the outstanding Class B Common Units shall have
the right to appoint a successor General Partner; provided, however, that any
successor General Partner must be a direct or indirect wholly owned Subsidiary
of Och-Ziff. Any Person appointed as a successor General Partner by the Limited
Partners holding a majority of the outstanding Class B Common Units shall become
a successor General Partner for all purposes herein, and shall be vested with
the powers and rights of the transferring General Partner, and shall be liable
for all obligations of the

 

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General Partner arising from and after such date, and shall be responsible for
all duties of the General Partner, once such Person has executed such
instruments as may be necessary to effectuate its admission and to confirm its
agreement to be bound by all the terms and provisions of this Agreement in its
capacity as the General Partner.

(c)    In order to protect the economic and legal rights of the Original
Partners set forth in this Agreement and the Exchange Agreement, unless the
General Partner has received PMC Approval, (i) the General Partner shall not
take any action, and shall not permit any Subsidiary of the Partnership to take
any action, that is prohibited under Section 2.9 of the Och-Ziff LLC Agreement
and (ii) the General Partner shall cause the Partnership and its Subsidiaries to
comply with the provisions of Section 2.9 of the Och-Ziff LLC Agreement.

(d)    The General Partner may, from time to time, employ any Person or engage
third parties to render services to the Partnership on such terms and for such
compensation as the General Partner may determine in its sole and absolute
discretion, including, without limitation, attorneys, investment consultants,
brokers or finders, independent auditors and printers. Such employees and third
parties may be Affiliates of the General Partner or of one or more of the
Limited Partners. Persons retained, engaged or employed by the Partnership may
also be engaged, retained or employed by and act on behalf of any Partner or any
of their respective Affiliates.

Section 4.2    Partner Management Committee.

(a)    Establishment. The General Partner has established a partner management
committee (the “Partner Management Committee”) which, as of the date of this
Agreement, consists of Daniel S. Och, David Windreich, Zoltan Varga, Harold
Kelly, James-Keith Brown, James Levin, Wayne Cohen, Alesia J. Haas and David
Levine, with Daniel S. Och serving as its Chairman. The Partner Management
Committee’s membership may change in accordance with Section 4.2(b) and it shall
have the powers and responsibilities described in Section 4.2(d).

(b)    Membership. Each member of the Partner Management Committee shall serve
until such member’s Special Withdrawal, Withdrawal, death, Disability or, other
than with respect to Daniel S. Och, removal by a majority vote of the other
members of the Partner Management Committee. The Chairman, or, if there is no
Chairman, a majority of the Partner Management Committee, may appoint a new
member of the Partner Management Committee at any time. Upon Mr. Och’s
Withdrawal, death or Disability, the remaining members of the Partner Management
Committee shall act by majority vote to either (1) replace Mr. Och with a
Limited Partner to serve as Chairman, until such Limited Partner’s Special
Withdrawal, Withdrawal, death, Disability or removal by a majority vote of the
other members of the Partner Management Committee or (2) reduce the size of the
committee to the remaining members (in which case, there shall be no Chairman of
the Partner Management Committee). Upon a reconstitution as provided in clause
(1) above, the Partner Management Committee shall have the rights of
reconstitution described in the previous sentence in the event of the new
Chairman’s Special Withdrawal, Withdrawal, death, Disability or removal by a
majority vote of the other members of the Partner Management Committee. Upon the
Special Withdrawal, Withdrawal, death, Disability or removal of any of the
members of the Partner Management Committee other than the Chairman, the
remaining members of the Partner Management Committee shall act by majority vote
to fill such vacancy.

 

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(c)    Procedure. Meetings of the Partner Management Committee shall be held at
such time, at such place and in such manner as the Chairman shall determine (or,
in the case of there being no Chairman, at such times as a majority of the other
members of the Partner Management Committee request). When the Partner
Management Committee acts by full committee, each member shall have one vote.
The Chairman of the Partner Management Committee shall have the ability to take
action unilaterally as expressly set forth in this Agreement. Where the Chairman
acts unilaterally, no meeting need be held. Members of the Partner Management
Committee may participate in a meeting of the Partner Management Committee by
means of telephone, video conferencing or other communications technology by
means of which all Persons participating in the meeting can hear and be heard.
Any member of the Partner Management Committee who is unable to attend a meeting
of the Partner Management Committee may grant in writing to another member of
the Partner Management Committee such member’s proxy to vote on any matter upon
which action is to be taken at such meeting. No meeting may be held without the
attendance of a majority of the members of the Partner Management Committee,
including the Chairman (if any). Any decision or action that may be approved by
a vote of the Partner Management Committee in a meeting held in accordance with
this Section 4.2 shall be equally valid if approved, without a meeting being
held, by the written consent of members of the Partner Management Committee who
could together have approved such decision or action by their votes at a
meeting. The Partner Management Committee shall conduct its business by such
other procedures as approved in writing by a majority of its members including
the Chairman.

(d)    Powers and Responsibilities. The powers and responsibilities of the
Partner Management Committee and its Chairman individually shall be limited to
those powers and responsibilities set forth expressly in this Agreement
(including, without limitation, in Sections 3.1, 4.1, 4.2, 7.1, 8.1, 8.3, 8.4
and 10.2), and to the reconstitution of the Class B Shareholder Committee (by
majority vote of the Partner Management Committee) pursuant to the Class B
Shareholders Agreement; provided, however, that the General Partner may delegate
in writing such further power and responsibilities to the Partner Management
Committee or its Chairman as it shall deem necessary, advisable or appropriate
in its sole and absolute discretion from time to time, which delegation may be
set forth in this Agreement, as an amendment hereto (which shall not require the
vote or approval of any Limited Partner) or a resolution duly adopted by the
General Partner.

Section 4.3    Partner Performance Committee.

(a)    Establishment. The General Partner has established a partner performance
committee (the “Partner Performance Committee”) which, as of the date of this
Agreement, consists of Daniel S. Och, David Windreich, Zoltan Varga, Harold
Kelly, James Levin and Wayne Cohen, with Daniel S. Och serving as its Chairman.
The Partner Performance Committee’s membership may change in accordance with
Section 4.3(b) and it shall have the powers and responsibilities described in
Section 4.3(d).

 

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(b)    Membership. Each member of the Partner Performance Committee shall serve
until such member’s Special Withdrawal, Withdrawal, death, Disability or, other
than with respect to Daniel S. Och, removal by a majority vote of the other
members of the Partner Performance Committee. The Chairman, or, if there is no
Chairman, a majority of the Partner Performance Committee, may appoint a new
member of the Partner Performance Committee at any time. Upon Mr. Och’s
Withdrawal, death or Disability, the remaining members of the Partner
Performance Committee shall act by majority vote to (i) replace Mr. Och with a
Limited Partner until such Limited Partner’s Special Withdrawal, Withdrawal,
death, Disability or removal by a majority vote of the other members of the
Partner Performance Committee and (ii) determine whether such Limited Partner
shall serve as Chairman of the Partner Performance Committee. The Partner
Performance Committee shall have the rights of reconstitution described in the
foregoing sentence in the event of the new Chairman’s Special Withdrawal,
Withdrawal, death, Disability or removal by a majority vote of the other members
of the Partner Performance Committee. Upon the Special Withdrawal, Withdrawal,
death, Disability or removal of any of the members of the Partner Performance
Committee other than the Chairman, the remaining members of the Partner
Performance Committee shall act by majority vote to fill such vacancy.

(c)    Procedure. Meetings of the Partner Performance Committee shall be held at
such time, at such place and in such manner as the Chairman shall determine (or,
in the case of there being no Chairman, at such times as a majority of the other
members of the Partner Performance Committee request). When the Partner
Performance Committee acts by full committee, each member shall have one vote
and the vote of Daniel S. Och shall break any deadlock. The Chairman of the
Partner Performance Committee shall have the ability to take action as expressly
set forth in this Agreement. Where the Chairman acts unilaterally, no meeting
need be held. Members of the Partner Performance Committee may participate in a
meeting of the Partner Performance Committee by means of telephone, video
conferencing or other communications technology by means of which all Persons
participating in the meeting can hear and be heard. Any member of the Partner
Performance Committee who is unable to attend a meeting of the Partner
Performance Committee may grant in writing to another member of the Partner
Performance Committee such member’s proxy to vote on any matter upon which
action is to be taken at such meeting. No meeting may be held without the
attendance of a majority of the members of the Partner Performance Committee,
including the Chairman (if any). Any decision or action that may be approved by
a vote of the Partner Performance Committee in a meeting held in accordance with
this Section 4.3 shall be equally valid if approved, without a meeting being
held, by the written consent of members of the Partner Performance Committee who
could together have approved such decision or action by their votes at a
meeting. The Partner Performance Committee shall conduct its business by such
other procedures as approved in writing by a majority of its members including
the Chairman.

(d)    Powers and Responsibilities. The powers and responsibilities of the
Partner Performance Committee and its Chairman individually shall be limited to
those powers and responsibilities set forth expressly elsewhere in this
Agreement (including, without limitation, in Sections 4.1, 4.3 and 8.3);
provided, however, that the General Partner may delegate in writing such further
power and responsibilities to the Partner Performance Committee or its Chairman
as it shall deem necessary, advisable or appropriate in its sole and absolute
discretion from time to time, which delegation may be set forth in this
Agreement, as an amendment hereto (which shall not require the vote or approval
of any Limited Partner) or a resolution duly adopted by the General Partner.

 

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Section 4.4    Books and Records; Accounting. The General Partner shall have
responsibility for the day-to-day management and general oversight of the
accounting and finance function of the Partnership and shall keep at the
principal office of the Partnership (or at such other place as the General
Partner shall determine) true and complete books and records regarding the
status of the business and financial condition and results of operations of the
Partnership. The books and records of the Partnership shall be kept in
accordance with the federal income tax accounting methods and rules determined
by the General Partner, which methods and rules shall reflect all transactions
of the Partnership and shall be appropriate and adequate for the business of the
Partnership. No Limited Partner shall have the right to request any information
from the Partnership except as provided in Section 4.6.

Section 4.5    Expenses. Except as otherwise provided in this Agreement, the
Partnership shall be responsible for and shall pay out of funds of the
Partnership determined by the General Partner to be available for such purpose,
all expenses and obligations of the Partnership, including, without limitation,
those incurred by the Partnership or the General Partner or their Affiliates, or
the Partner Management Committee or the Partner Performance Committee in
connection with the formation, conversion, operation or management of the
Partnership and the business conducted by the Partnership, in organizing the
Partnership and preparing, negotiating, executing, delivering, amending and
modifying this Agreement.

Section 4.6    Partnership Tax and Information Returns.

(a)    The Partnership shall use commercially reasonable efforts to timely file
all returns of the Partnership that are required for U.S. federal, state and
local income tax purposes. The Tax Matters Partner shall use commercially
reasonable efforts to furnish to all Partners necessary tax information as
promptly as possible after the end of the Fiscal Year; provided, however, that
delivery of such tax information may be subject to delay as a result of the late
receipt of any necessary tax information from an entity in which the Partnership
holds a direct or indirect interest. Each Partner agrees to file all U.S.
federal, state and local tax returns required to be filed by it in a manner
consistent with the information provided to it by the Partnership. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for U.S.
federal, state and local income tax purposes.

(b)    Except as otherwise provided herein, the General Partner, in its sole and
absolute discretion, shall determine whether the Partnership should make any
elections permitted by the tax laws of the United States, the several states and
other relevant jurisdictions.

(c)    The General Partner shall designate one Partner as the Tax Matters
Partner (as defined in the Code). The Tax Matters Partner shall be the General
Partner until the General Partner designates another Partner in writing. The Tax
Matters Partner is authorized and required to represent the Partnership (at the
Partnership’s expense) in connection with all examinations of the Partnership’s
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner agrees to cooperate with the Tax Matters
Partner and to do or refrain from doing any or all things reasonably required by
the Tax Matters Partner to conduct such proceedings.

 

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(d)    To the extent permissible under the New Partnership Audit Procedures, the
Tax Matters Partner shall be the “Partnership Representative” of the Partnership
(within the meaning of Section 6223 of the New Partnership Audit Procedures)
(the “Partnership Representative”). If the Tax Matters Partner is not permitted
to be the Partnership Representative under the New Partnership Audit Procedures,
then the General Partner shall, in its discretion, appoint another Partner to
serve as the Partnership Representative. The Partnership Representative is
authorized to, in its sole discretion, make an election under the New
Partnership Audit Procedures or otherwise take any legally permissible action so
that, to the greatest extent possible, no Partner shall bear liability for
taxes, interest, or penalties imposed on the Partnership under Section 6225 of
the New Partnership Audit Procedures that such Partner would not have borne if
the law in effect prior to the effective date of the New Partnership Audit
Procedures continued to remain effective and Section 6225 were not effective.
The Partnership Representative may, in its sole discretion, apportion any taxes
(and related interest, penalties, claims, liabilities and expenses) imposed on
the Partnership pursuant to the New Partnership Audit Procedures among the
Partners and may withhold any such amounts from distributions made to any such
Partner. Notwithstanding any other provision of this Agreement, the General
Partner and the Partnership Representative are authorized to take any action
that may be required to assist or cause the Partnership or any of its
Subsidiaries to comply with any withholding requirements established under the
Code or any other federal, state, local or foreign law including, without
limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the
extent that the Partnership is required or elects to withhold or otherwise pays
over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner (including, without limitation, by reason
of Section 1446 of the Code) or any amounts apportioned to a Partner with
respect to the New Partnership Audit Procedures, the General Partner or the
Partnership Representative may, in its sole and absolute discretion, treat the
amount withheld as a distribution of cash pursuant to Section 7.1 or Article IX
in the amount of such withholding from or with respect to such Partner or the
amount paid over as an expense to be borne by the Partners generally. If
distributions are insufficient to satisfy any amounts apportioned to any Partner
with respect to the New Partnership Audit Rules, such Partner shall indemnify
and hold harmless the General Partner, the Partnership Representative and the
Partnership for such amounts, which indemnity obligation shall survive the
exchange or assignment of an Interest and the termination of this Agreement.

ARTICLE V

CONTRIBUTIONS AND CAPITAL ACCOUNTS

Section 5.1    Capital Contributions.

(a)    Limited Partners may make Capital Contributions at such times and in such
amounts as shall be determined by the General Partner in its sole and absolute
discretion; provided, however, that (i) no Original Related Trust or Subsequent
Related Trust shall be obligated to make Capital Contributions pursuant to this
Section 5.1(a) and (ii) no other Related Trust shall be obligated to make
Capital Contributions pursuant to this Section 5.1(a) unless otherwise
determined by the General Partner.

 

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(b)    In the event that the Partnership is required at any time to return any
distribution it has received from any fund or investment vehicle or other
entity, each Partner who received a portion of such distribution agrees that
upon request it will promptly make a Capital Contribution in proportion to the
distribution amount such Partner received to enable the Partnership to return
such distribution.

Section 5.2    Capital Accounts.

(a)    The General Partner shall maintain, for each Partner owning Units or
Class C Non-Equity Interests, a separate Capital Account with respect to such
Partner in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made to the Partnership with respect to any such Units
or Class C Non-Equity Interests pursuant to this Agreement and (ii) all items of
Partnership income and gain (including, without limitation, income and gain
exempt from tax) computed in accordance with Section 5.2(b) and allocated with
respect to any such Units and Class C Non-Equity Interests pursuant to
Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions of cash or property made with respect to any
such Units and Class C Non-Equity Interests pursuant to this Agreement and
(y) all items of Partnership deduction and loss computed in accordance with
Section 5.2(b) and allocated with respect to any such Units pursuant to
Section 6.1. Except as otherwise indicated in this Agreement, the foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulation
Section 1.704-1(b) and shall be interpreted and applied in a manner consistent
with such Treasury Regulation.

(b)    For purposes of computing the amount of any item of income, gain, loss or
deduction, which is to be allocated pursuant to Article VI and is to be
reflected in the Partners’ Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for U.S. federal income tax purposes (including,
without limitation, any method of depreciation, cost recovery or amortization
used for that purpose); provided, however, that:

(i)    Except as otherwise provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership and, as to those items described in
Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact
that such items are not includable in gross income or are neither currently
deductible nor capitalized for U.S. federal income tax purposes. To the extent
an adjustment to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment in the Capital Accounts shall be
treated as an item of gain or loss.

 

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(ii)    Any income, gain or loss attributable to the taxable disposition of any
Partnership property shall be determined as if the adjusted basis of such
property as of such date of disposition were equal in amount to the
Partnership’s Carrying Value with respect to such property as of such date.

(iii)    The Capital Account balance of each Partner and the Carrying Value of
all Partnership Property shall be adjusted in accordance with the rules set
forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(f) to reflect the
Partner’s allocable share (as determined under Article VI) of the items of Net
Income or Net Loss that would be realized by the Partnership if it sold all of
its property at its fair market value (taking Code Section 7701(g) into account)
on (a) the date of the acquisition of any additional interest in the Partnership
by any new or existing Partner in exchange for more than a de minimis Capital
Contribution; (b) the date of the distribution of more than a de minimis amount
of Partnership assets to a Partner; (c) the date any interest in the Partnership
is relinquished to the Partnership; or (d) any other date specified in the
Treasury Regulations or as otherwise determined by the General Partner;
provided, however, that adjustments pursuant to clauses (a), (b) (c) and (d)
above shall be made only if the General Partner, in its sole and absolute
discretion, determines that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners.

(c)    A transferee of Units shall succeed to a pro rata portion of the Capital
Account of the transferor relating to the Units so Transferred, unless otherwise
determined by the General Partner.

(d)    Notwithstanding anything expressed or implied to the contrary in this
Agreement, no Partner shall have the right to request, demand, or receive any
distribution in respect of such Partner’s Capital Account from the Partnership
(other than as expressly provided in Article VII or Article IX).

Section 5.3    Determinations by General Partner. Notwithstanding anything
expressed or implied to the contrary in this Agreement, in the event the General
Partner shall determine, in its sole and absolute discretion, that it is prudent
to modify the manner in which the Capital Accounts, or any debits or credits
thereto, are computed in order to effectuate the intended economic sharing
arrangement of the Partners, the General Partner may make such modification.

ARTICLE VI

ALLOCATIONS

Section 6.1    Allocations for Capital Account Purposes. For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership’s items of income, gain, loss and deduction
(computed in accordance with Section 5.2(b)) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided herein below.

 

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(a)    Net Income. Subject to the terms of any Unit Designation and Section
6.1(c), after giving effect to the special allocations set forth in Section
6.1(d), Net Income for each taxable year and all items of income, gain, loss and
deduction taken into account in computing Net Income for such taxable year shall
be allocated to the Partners: first, with respect to Partners that have Class C
Non-Equity Interests, in amounts, if any, as determined by Class C Approval in
respect of each such Partner for such taxable year and, second, in accordance
with the respective Percentage Interests of the Partners.

(b)    Net Loss. Subject to the terms of any Unit Designation and Section
6.1(c), after giving effect to the special allocations set forth in Section
6.1(d), Net Loss for each taxable period and all items of income, gain, loss and
deduction taken into account in computing Net Loss for such taxable period shall
be allocated to the Partners in accordance with their respective Percentage
Interests; provided, however, that to the extent any allocation of Net Loss
would cause any Partner to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any existing deficit
balance in its Adjusted Capital Account), such allocation of Net Loss shall be
reallocated among the other Partners in accordance with their respective
Percentage Interests.

(c)    Net Income or Loss upon Sale. Notwithstanding any other provision of this
Agreement to the contrary (subject to the terms of any Unit Designation, and
after giving effect to the special allocations set forth in Section 6.1(d)):

(i)    items of Net Income realized in connection with a Sale shall be specially
allocated in the following order:

(A)    first, pro rata among the Partners holding Units (“Pre-Existing Units”)
that were outstanding immediately prior to the date of issuance (the “Issue
Date”) of the first series of (i) Class P Common Units that become Participating
Class P Common Units, if any, or (ii) Class D Common Units, in each case in
accordance with the number of such Pre-Existing Units until the aggregate amount
so allocated to such Pre-Existing Units equals the difference between the fair
market value of the Partnership immediately prior to such Issue Date and the
aggregate Economic Capital Account Balances of Pre-Existing Units immediately
prior to such Issue Date; provided that the principles of this Section
6.1(c)(i)(A) shall be applied with respect to each subsequent series of Class P
Common Units that have become Participating Class P Common Units, if any, and to
each series of Class D Common Units so as to include Units that have been
allocated their full Priority Allocation under Sections 6.1(c)(i)(B) and
6.1(c)(i)(C) as Pre-Existing Units and to take into account the difference
between the fair market value of the Partnership and the aggregate Economic
Capital Account Balances of Pre-Existing Units immediately prior to issuance of
such subsequent series (or, with respect to the Existing Class D Common Units,
to take into account the Existing Value);

(B)    second, to the Class P Limited Partners, provided that such allocations
shall be made: (i) so that each series of Class P Common Units issued on any
date that have become Participating Class P Common Units, if any,

 

52

receives such allocations of Net Income in an aggregate amount equal to the
Priority Allocation with respect to any such series of Class P Common Units
prior to any such allocations being made to any series of Class P Common Units
issued on a subsequent date that have become Participating Class P Common Units;
(ii) pro rata among all such Class P Limited Partners with respect to their
Participating Class P Common Units that were issued on the same date in
accordance with the Priority Allocations of such Participating Class P Common
Units; and (iii) such that no such Class P Limited Partner shall receive
aggregate allocations of Net Income under this Section 6.1(c)(i)(B) that would
exceed such Class P Limited Partner’s Appreciation with respect to his
Participating Class P Common Units;

(C)    third, to the Class D Limited Partners, provided that such allocations
shall be made: (i) so that each series of Class D Common Units issued on any
date receives such allocations of Net Income in an aggregate amount equal to the
Priority Allocation with respect to such series of Class D Common Units prior to
any such allocations being made to any series of Class D Common Units that were
issued on a subsequent date; (ii) pro rata among all such Class D Limited
Partners with respect to their Class D Common Units that were issued on the same
date in accordance with the Priority Allocations of such Class D Common Units;
and (iii) such that no such Class D Limited Partner shall receive aggregate
allocations of Net Income under this Section 6.1(c)(i)(C) that would exceed such
Class D Limited Partner’s Appreciation with respect to his Class D Common Units;

(D)    fourth, unless determined otherwise by the General Partner in its sole
discretion, to the PSI Limited Partners, provided that such allocations shall be
made: (i) so that each series of PSIs issued on any date receives such
allocations of Net Income in an aggregate amount equal to the Priority
Allocation with respect to such series of PSIs prior to any such allocations
being made to any series of PSIs that were issued on a subsequent date; (ii) pro
rata among all PSI Limited Partners with respect to their PSIs that were issued
on the same date in accordance with the Priority Allocations of such PSIs; and
(iii) such that no PSI Limited Partner shall receive aggregate allocations of
Net Income under this Section 6.1(c)(i)(D) that would exceed such PSI Limited
Partner’s Appreciation with respect to his PSIs; and

(E)    thereafter, pro rata among the Partners in accordance with their
respective aggregate Percentage Interests with respect to their Common Units
(other than Non-Participating Class P Common Units) and, unless determined
otherwise by the General Partner in its sole discretion, their PSIs; and

(ii)    items of Net Loss realized in connection with such Sale shall be
specially allocated in the following order:

(A)    first, pro rata among the Partners receiving prior allocations of Net
Income under Section 6.1(c)(i)(A), to the extent of such prior allocations of
Net Income; and

 

53

(B)    thereafter, as determined by the General Partner in a manner consistent
with the intent of this Section 6.1(c), which is to make the Economic Capital
Account Balance associated with each Class D Common Unit and Participating
Class P Common Unit, and, thereafter, unless determined otherwise by the General
Partner in its sole discretion, the Economic Capital Account Balance associated
with each PSI, economically equivalent to the Economic Capital Account Balance
associated with a Class A Common Unit, but only to the extent that the
Partnership has recognized cumulative net gains with respect to its assets since
the issuance of the relevant Class D Common Unit, Participating Class P Common
Unit or PSI (or, with respect to the Existing Class D Common Units, since the
date immediately prior to the date hereof).

(d)    Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such taxable
period:

(i)    Partnership Minimum Gain Chargeback. Notwithstanding any other provision
of this Section 6.1, if there is a net decrease in Partnership Minimum Gain
during any Partnership taxable period, each Partner shall be allocated items of
Partnership income and gain for such period (and, if necessary, subsequent
periods) in the manner and amounts provided in Treasury Regulation Sections
1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision.
For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account
balance shall be determined, and the allocation of income and gain required
hereunder shall be effected, prior to the application of any other allocations
pursuant to this Section 6.1(d) with respect to such taxable period (other than
an allocation pursuant to Section 6.1(d)(iii) and 6.1(d)(vi)). This Section
6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback
requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.

(ii)    Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the
other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as
provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the
beginning of such taxable period shall be allocated items of Partnership income
and gain for such period (and, if necessary, subsequent periods) in the manner
and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section
6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and
the allocation of income and gain required hereunder shall be effected, prior to
the application of any other allocations pursuant to this Section 6.1(d), other
than Section 6.1(d)(i) and other than an allocation pursuant to Section
6.1(d)(v) and 6.1(d)(vi), with respect to such taxable period. This Section
6.1(d)(ii) is intended to comply with the chargeback of items of income and gain
requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

 

54

(iii)    Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Treasury Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership income and
gain shall be specially allocated to such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Treasury Regulations
promulgated under Section 704(b) of the Code, the deficit balance, if any, in
its Adjusted Capital Account created by such adjustments, allocations or
distributions as quickly as possible unless such deficit balance is otherwise
eliminated pursuant to Section 6.1(d)(i) or (ii). This Section 6.1(d)(iii) is
intended to qualify and be construed as a “qualified income offset” within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

(iv)    Gross Income Allocations. In the event any Partner has a deficit balance
in its Capital Account at the end of any Partnership taxable period in excess of
the sum of (A) the amount such Partner is required to restore pursuant to the
provisions of this Agreement and (B) the amount such Partner is deemed obligated
to restore pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of Partnership
gross income and gain in the amount of such excess as quickly as possible;
provided, however, that an allocation pursuant to this Section 6.1(d)(iv) shall
be made only if and to the extent that such Partner would have a deficit balance
in its Capital Account as adjusted after all other allocations provided for in
this Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were
not in this Agreement.

(v)    Nonrecourse Deductions. Nonrecourse Deductions for any taxable period
shall be allocated to the Partners in accordance with their respective
Percentage Interests. If the General Partner determines that the Partnership’s
Nonrecourse Deductions should be allocated in a different ratio to satisfy the
safe harbor requirements of the Treasury Regulations promulgated under Section
704(b) of the Code, the General Partner is authorized, upon notice to the other
Partners, to revise the prescribed ratio to the numerically closest ratio that
does satisfy such requirements.

(vi)    Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Partner that bears the Economic
Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury Regulation
Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss
with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions
attributable thereto shall be allocated between or among such Partners in
accordance with the ratios in which they share such Economic Risk of Loss.

(vii)    Nonrecourse Liabilities. Nonrecourse Liabilities of the Partnership
described in Treasury Regulation Section 1.752-3(a)(3) shall be allocated among
the Partners in the manner chosen by the General Partner and consistent with
such Treasury Regulation.

 

55

(viii)    Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Treasury Regulations.

(ix)    Curative Allocation. The Required Allocations are intended to comply
with certain requirements of the Treasury Regulations. It is the intent of the
Partners that, to the extent possible, all Required Allocations shall be offset
either with other Required Allocations or with special allocations of other
items of Partnership income, gain, loss or deduction pursuant to this Section
6.1(d)(ix). Therefore, notwithstanding any other provision of this Article VI
(other than the Required Allocations), the General Partner shall make such
offsetting special allocations of Partnership income, gain, loss or deduction in
whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Partner’s Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would have had if
the Required Allocations were not part of this Agreement and all Partnership
items were allocated pursuant to the economic agreement among the Partners.

(x)    The General Partner shall, with respect to each taxable period, (1) apply
the provisions of Section 6.1(d)(ix) in whatever order is most likely to
minimize the economic distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(ix) among
the Partners in a manner that is likely to minimize such economic distortions.

(xi)    The Partnership shall specially allocate an amount of gross income equal
to the Expense Amount to the General Partner.

Section 6.2    Allocations for Tax Purposes.

(a)    Except as otherwise provided herein, each item of income, gain, loss and
deduction shall be allocated, for U.S. federal income tax purposes, among the
Partners in the same manner as its correlative item of “book” income, gain, loss
or deduction is allocated pursuant to Section 6.1.

(b)    In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or an Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
U.S. federal income tax purposes among the Partners as follows:

(i)    (A) In the case of a Contributed Property, such items attributable
thereto shall be allocated among the Partners in the manner provided under
Section 704(c) of the Code that takes into account the variation between the
Agreed Value of such

 

56

property and its adjusted basis at the time of contribution; and (B) any item of
Residual Gain or Residual Loss attributable to a Contributed Property shall be
allocated among the Partners in the same manner as its correlative item of
“book” gain or loss is allocated pursuant to Section 6.1.

(ii)    (A) In the case of an Adjusted Property, such items attributable thereto
shall (1) first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the Book-Tax
Disparity of such property, and (2) second, in the event such property was
originally a Contributed Property, be allocated among the Partners in a manner
consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain or
Residual Loss attributable to an Adjusted Property shall be allocated among the
Partners in the same manner as its correlative item of “book” gain or loss is
allocated pursuant to Section 6.1.

(iii)    The General Partner may cause the Partnership to eliminate Book-Tax
Disparities using any method or methods described in Treasury Regulation
Section 1.704-3 or that it determines is appropriate, in its sole and absolute
discretion.

(c)    For the proper administration of the Partnership, the General Partner, as
it determines in its sole and absolute discretion is necessary or appropriate to
execute the provisions of this Agreement and to comply with U.S. federal, state
and local tax law, may (i) adopt such conventions as it deems appropriate in
determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations for federal income tax purposes of
income (including, without limitation, gross income) or deductions; (iii) amend
the provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of the Units (or any
class or classes thereof); and (iv) adopt and employ methods for (A) the
maintenance of Capital Accounts for book and tax purposes, (B) the determination
and allocation of adjustments under Sections 704(c), 734 and 743 of the Code,
(C) the determination and allocation of taxable income, tax loss and items
thereof under this Agreement and pursuant to the Code, (D) the determination of
the identities and tax classification of holders of Units, (E) the provision of
tax information and reports to the holders of Units, (F) the adoption of
reasonable conventions and methods for the valuation of assets and the
determination of tax basis, (G) the allocation of asset values and tax basis,
(H) the adoption and maintenance of accounting methods, (I) the recognition of
the Transfer of Units and (J) tax compliance and other tax-related requirements,
including without limitation, the use of computer software.

(d)    All items of income, gain, loss, deduction and credit recognized by the
Partnership for U.S. federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any election under Section 754 of the Code that may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted (in the
manner determined by the General Partner in its sole and absolute discretion) to
take into account those adjustments permitted or required by Sections 734 and
743 of the Code.

 

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(e)    For purposes of determining the items of Partnership income, gain, loss,
deduction, or credit allocable to any Partner with respect to any period, such
items shall be determined on a daily, monthly, quarterly or other basis, as
determined by the General Partner in its sole and absolute discretion using any
permissible method under Code Section 706 and the Regulations thereunder.

ARTICLE VII

DISTRIBUTIONS

Section 7.1    Distributions.

(a)    No Partner shall have the right to withdraw capital or demand or receive
distributions or other returns of any amount in his Capital Account, except as
expressly provided in this Article VII or Article IX.

(b)    Subject to the terms of any Unit Designation, distributions in respect of
Units shall be made to the Partners in the following order:

(i)    First, Tax Distributions shall be made pursuant to Section 7.3.

(ii)    Second, an Expense Amount Distribution shall be made pursuant to
Section 7.4.

(iii)    Third, distributions, if any, shall be made to the relevant Limited
Partners in respect of Class C Non-Equity Interests as and when determined by
Class C Approval.

(iv)    Fourth, distributions shall be made as and when determined by the
General Partner, in its sole and absolute discretion, in respect of any amounts
allocated to a Partner’s Capital Account pursuant to Section 5.3.

(v)    Fifth, distributions shall be made to the relevant Limited Partners in
respect of their Common Units (other than Non-Participating Class P Common
Units) as and when determined by the General Partner in its sole and absolute
discretion in accordance with the Partners’ respective Percentage Interests
associated with such Common Units.

(vi)    Sixth, distributions shall be made to the relevant Limited Partners in
respect of PSIs as and when determined by the General Partner in its sole and
absolute discretion in accordance with the Partners’ respective Percentage
Interests associated with such PSIs.

(vii)    Notwithstanding the foregoing, (A) the General Partner may, with the
consent of the affected Partner, delay distribution of any amounts otherwise
distributable to any Partner under this Section 7.1, and (B) in the event of the
Partnership selling or otherwise disposing of substantially all of its assets or
a dissolution of the Partnership, all distributions shall be made in accordance
with Section 9.4.

 

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(c)    In the General Partner’s sole discretion and subject to the terms of any
Partner Agreement, amounts received (including amounts withheld in respect of
taxes or other governmental charges from such amounts so received) (i) by any
International Partner pursuant to a Partner Agreement with any Subsidiary of the
Partnership relating to the performance of services to or for the benefit of
such Subsidiary by such Partner during any period beginning on or after the date
of such Partner’s admission to the Partnership or (ii) by any PSI Limited
Partner as a draw, for services or any comparable payment for an annual period
pursuant to a Partner Agreement, in each case shall be treated as distributions
made to such Partner with respect to such period (and, if required, future
periods) for all purposes of this Agreement, and such amounts shall reduce
amounts otherwise distributable to the Partner pursuant to this Agreement with
respect to such period (or such future periods).

Section 7.2    Distributions in Kind. The General Partner may cause the
Partnership to make distributions of assets in kind in its sole and absolute
discretion. Whenever the distributions provided for in Section 7.1 shall be
distributable in property other than cash, the value of such distribution shall
be the fair market value of such property determined by the General Partner in
good faith, and in the event of such a distribution there shall be allocated to
the Partners in accordance with Article VI the amount of Net Income or Net Loss
that would result if the distributed asset had been sold for an amount in cash
equal to its fair market value at the time of the distribution. No Partner shall
have the right to demand that the Partnership distribute any assets in kind to
such Partner.

Section 7.3    Tax Distributions. Subject to §17-607 of the Act, and unless
determined otherwise by the General Partner in its sole discretion, the
Partnership shall make distributions to each Partner for each calendar quarter
ending after the date hereof as follows (collectively, the “Tax Distributions”):

(a)    On or before the 10th day following the end of the First Quarterly Period
of each calendar year, an amount equal to such Partner’s Presumed Tax Liability
for the First Quarterly Period less the aggregate amount of Prior Distributions
previously made to such Partner during such calendar year, excluding any Tax
Distribution with respect to a previous calendar year;

(b)    On or before the 10th day following the end of the Second Quarterly
Period of each calendar year, an amount equal to such Partner’s Presumed Tax
Liability for the Second Quarterly Period less the aggregate amount of Prior
Distributions previously made to such Partner during such calendar year,
excluding any Tax Distribution with respect to a previous calendar year;

(c)    On or before the 10th day following the end of the Third Quarterly Period
of each calendar year, an amount equal to such Partner’s Presumed Tax Liability
for the Third Quarterly Period less the aggregate amount of Prior Distributions
previously made to such Partner during such calendar year, excluding any Tax
Distribution with respect to a previous calendar year;

(d)    On or before the 10th day following the end of the Fourth Quarterly
Period of each calendar year, an amount equal to such Partner’s Presumed Tax

 

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Liability for the Fourth Quarterly Period less the aggregate amount of Prior
Distributions previously made to such Partner during such calendar year,
excluding any Tax Distribution with respect to a previous calendar year; and

(e)    Tax Distributions shall be made on the basis of a calendar year
regardless of the Fiscal Year used by the Partnership. To the extent the General
Partner determines in its sole and absolute discretion that the distributions
made under the foregoing subsections (a) through (d) are insufficient to satisfy
the Partners’ Presumed Tax Liability for the applicable calendar year, on or
before the April 10th immediately following the applicable calendar year, an
amount that the General Partner determines in its reasonable discretion will be
sufficient to allow each Partner to satisfy his Presumed Tax Liability for the
applicable calendar year, after taking into account all Prior Distributions made
to the Partners with respect to the applicable calendar year, excluding any Tax
Distribution with respect to a previous calendar year.

(f)    Notwithstanding any other provision of this Agreement, other than Section
7.3(g), any Tax Distributions shall be made: (i) to all Limited Partners holding
Common Units (other than Non-Participating Class P Common Units) pro rata in
accordance with the Percentage Interests associated with their Common Units;
(ii) to all PSI Limited Partners pro rata in accordance with the Percentage
Interests associated with their PSIs; and (iii) as if each distributee Partner
was allocated an amount of income in each Quarterly Period in respect of such
Partner’s class of Units equal to the product of (x) the highest amount of
income allocated to any Partner with respect to the same class of Units,
calculated on a per-Unit basis, taking into account any income allocations
pursuant to Section 6.2 hereof and disregarding any adjustment required by
Section 734 or Section 743 of the Code, multiplied by (y) the amount of Units
held by such distributee Partner.

(g)    Subject to the limitations set forth in this Section 7.3, the Partnership
shall make distributions in respect of the tax liability of a Partner arising
from the allocation of any items hereunder to Class C Non-Equity Interests
applying principles similar to the principles for determining Tax Distributions
and Presumed Tax Liability, and amounts so allocated, determined or distributed
with respect to Class C Non-Equity Interests of a Partner shall not be taken
into account in determining any Tax Distributions in respect of Units.

Section 7.4    Expense Amount Distributions. The Partnership shall distribute
any Expense Amount to the General Partner at such times as the General Partner
shall determine in its sole discretion (an “Expense Amount Distribution”).

Section 7.5    Borrowing. Subject to Section 17-607 of the Act, the Partnership
may borrow funds in order to make the Tax Distributions or Expense Amount
Distributions.

Section 7.6    Restrictions on Distributions. The foregoing provisions of this
Article VII to the contrary notwithstanding, no distribution shall be made:
(a) if such distribution would violate any contract or agreement to which the
Partnership is then a party or any law, rule, regulation, order or directive of
any governmental authority then applicable to the Partnership; (b) to the extent
that the General Partner, in its sole and absolute discretion, determines that
any amount otherwise distributable should be retained by the Partnership to pay,
or to establish a reserve for the payment of, any liability or obligation of the
Partnership, whether liquidated, fixed, contingent or otherwise; or (c) to the
extent that the General Partner, in its sole and absolute discretion, determines
that the cash available to the Partnership is insufficient to permit such
distribution.

 

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ARTICLE VIII

TRANSFER OR ASSIGNMENT OF INTEREST; CESSATION OF PARTNER STATUS

Section 8.1    Transfer and Assignment of Interest.

(a)    Transfers of Interests. Notwithstanding anything to the contrary herein,
Transfers of Common Units may only be made by Limited Partners (x) in accordance
with the other provisions of this Article VIII (including, without limitation,
the vesting provisions in Section 8.4, except as expressly set forth in this
Section 8.1(a) in respect of Transfers by Original Related Trusts), and
(y) subject to Section 2.13(g). During the Restricted Period, no Limited Partner
shall be permitted to Transfer Common Units unless, immediately following such
Transfer, the relevant Individual Limited Partner continues to hold a number of
Common Units (other than Class P Common Units) no less than 10% of such Common
Units of such Partner that have vested on or before the date of such Transfer,
without regard to dispositions, or such greater percentage determined by the
General Partner in its sole discretion (such requirements, the “Minimum Retained
Ownership Requirements”). A Limited Partner may not Transfer all or any of such
Partner’s Units without the prior written approval of the General Partner, which
approval may be granted or withheld, with or without reason, in the General
Partner’s sole and absolute discretion; provided, however, that, without the
prior written approval of the General Partner, (i) an Original Related Trust may
Transfer its Interest (including any unvested Units) in accordance with its
Related Trust Supplementary Agreement to the relevant Subsequent Related Trust
(provided, however, that such Subsequent Related Trust remains subject to the
same vesting requirements in accordance with Section 8.4 as the transferring
Original Related Trust had been before its Withdrawal), (ii) the Related Trust
of any Individual Limited Partner may, at any time, subject to Section 2.13(g),
Transfer such Related Trust’s Common Units (including any unvested Units) to
such Individual Limited Partner as authorized by the terms of the relevant trust
agreement (provided, however, that such Individual Limited Partner remains
subject to the same vesting requirements in accordance with Section 8.4 as the
transferring Related Trust had been before the Transfer), and (iii) any Limited
Partner may, at any time, subject to the Minimum Retained Ownership Requirements
and Section 2.13(g), and provided further that the relevant Units have vested in
accordance with Section 8.4 (other than in the case of any unvested Tag-Along
Securities or unvested Drag-Along Securities) or become eligible to participate
in a transaction in accordance with Section 3.1(j), (A) Transfer any of such
Partner’s Units in accordance with the Exchange Agreement, (B) Transfer any of
such Partner’s Units to a Permitted Transferee of such Partner with PMC
Approval, which PMC Approval may not be unreasonably withheld, (C) Transfer the
Common Units (including all distributions thereon that would otherwise be
received after the relevant date of Withdrawal) received by such Partner
pursuant to Sections 2.13(g) and 8.3(a) to the extent permitted thereby,
(D) Transfer by operation of law upon the death of an Individual Limited Partner
or (E) Transfer any of such Partner’s Units to the extent permitted or required
by Sections 3.1(j), 8.5 or 8.6. In addition, subject to Section 2.13(g) and the
Minimum Retained Ownership Requirements, with prior PMC Approval, each Limited
Partner and such Limited Partner’s Permitted Transferees may Transfer

 

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Units that have vested in accordance with applicable securities laws. The
foregoing restrictions on Transfer and the Minimum Retained Ownership
Requirements may be waived at any time with PMC Approval. A Limited Partner
shall cease to be a Partner if, following a Transfer, he no longer has any
Interest in the Partnership. An Original Related Trust shall cease to be a
Partner, without the prior written consent of the General Partner, following the
Transfer of such Original Related Trust’s Interest in accordance with its
Related Trust Supplementary Agreement to the relevant Subsequent Related Trust.
PSIs and Deferred Cash Interests shall not be Transferred under any
circumstances as provided in Section 3.1(i)(vi).

(b)    Transfer and Exchange. When a request to register a Transfer of Units,
together with the relevant Certificates of Ownership, if any, is presented to
the Transfer Agent, the Transfer Agent shall register the Transfer or make the
exchange on the register or transfer books of the Transfer Agent if the
requirements set forth in this Section 8.1 for such transactions are met;
provided, however, that any Certificates of Ownership presented or surrendered
for registration of Transfer or exchange shall be duly endorsed or accompanied
by a written instrument of Transfer in form satisfactory to the Transfer Agent
duly executed by the holder thereof or his attorney duly authorized in writing.
The Transfer Agent shall not be required to register a Transfer of any Units or
exchange any Certificate of Ownership if such purported Transfer would cause the
Partnership to violate the Securities Act, the Exchange Act, the Investment
Company Act (including by causing any violation of the laws, rules, regulations,
orders and other directives of any governmental authority) or otherwise violate
this Section 8.1. In the event of any Transfer, the transferring Partner shall
provide the address and facsimile number for each transferee as contemplated by
Section 10.10 and shall cause each transferee to agree in writing to comply with
the terms of this Agreement.

(c)    Publicly Traded Partnership. No Transfer shall be permitted (and, if
attempted, shall be void ab initio) if the General Partner determines in its
sole and absolute discretion that such a Transfer would pose a risk that the
Partnership would be a “publicly traded partnership” as defined in Section 7704
of the Code.

(d)    Securities Laws. Each Partner and each assignee thereof hereby agrees
that it will not effect any Transfer of all or any part of its Interest in the
Partnership (whether voluntarily, involuntarily or by operation of law) in any
manner contrary to the terms of this Agreement or that violates or causes the
Partnership or the Partners to violate the Securities Act, the Exchange Act, the
Investment Company Act, or the laws, rules, regulations, orders and other
directives of any governmental authority.

(e)    Expenses. In addition to the other requirements of this Section 8.1,
unless waived by the General Partner with respect to Transfers for estate
planning purposes or as otherwise determined by the General Partner in its sole
discretion, no Transfer of any Interest in the Partnership shall be permitted
unless the transferor or the proposed transferee shall have undertaken to pay
all reasonable expenses incurred by the Partnership or its Affiliates in
connection therewith.

Section 8.2    Withdrawal by General Partner. The General Partner shall not
cease to act as the General Partner of the Partnership without the prior written
approval of the Limited Partners holding a majority of the outstanding Class B
Common Units.

 

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Section 8.3    Withdrawal and Special Withdrawal of Limited Partners.

(a)    Withdrawal.

(i)    An Individual Limited Partner (other than Daniel S. Och in the case of
the following clauses (A) and (B)) shall immediately cease to be actively
involved with the Partnership and its Affiliates (such event, a “Withdrawal”):
(A) for Cause (as determined by the General Partner in its sole and absolute
discretion) upon notice to the Individual Limited Partner from the General
Partner; (B) for any reason or no reason upon a determination by majority vote
of the Partner Performance Committee (which, if the Partner Performance
Committee has a Chairman, may only be made upon the recommendation of such
Chairman) and notice of such determination to the Individual Limited Partner
from the Partner Performance Committee; or (C) upon the Individual Limited
Partner otherwise (except as a result of death, Disability or a Special
Withdrawal) ceasing to be, or providing notice to the General Partner of his
intention to cease to be, actively involved with the Partnership and its
Affiliates. In the event of the Withdrawal of an Individual Limited Partner,
such Individual Limited Partner’s Related Trusts, if any, shall be subject to a
required Withdrawal.

(ii)    In the event of the Withdrawal of an Individual Original Partner prior
to the fifth anniversary of the Closing Date (other than where the Withdrawal is
due to a breach of any of the covenants in Section 2.13(b), in which case the
provisions of Section 2.13(g) shall apply), all of the Class A Common Units
(including all distributions thereon that would otherwise be received after the
date of Withdrawal) of such Individual Original Partner and its Related Trusts,
if any, that have not yet vested in accordance with Section 8.4 shall cease to
vest with respect to such Partners and upon the Reallocation Date shall be
reallocated to the Partnership and then subsequently reallocated from the
Partnership to each Continuing Partner in such a manner that each such
Continuing Partner receives Common Units in proportion to the total number of
Original Common Units of such Continuing Partner and its Original Related
Trusts. Any such reallocated Common Units received by a Continuing Partner
pursuant to this Section 8.3(a) shall be deemed for all purposes of this
Agreement to be Common Units of such Continuing Partner and subject to the same
vesting requirements in accordance with Section 8.4 as the transferring Limited
Partner had been before his Withdrawal; provided, however, that such Continuing
Partner shall be permitted to exchange fifty percent (50%) of the number of
Class A Common Units reallocated to it (and sell any Class A Shares issued in
respect thereof), notwithstanding the transfer restrictions set forth in
Section 8.1, in the event that the Exchange Committee (as defined in the
Exchange Agreement) determines in its sole discretion that the reallocation of
such Class A Common Units is taxable; provided, however, that such exchange of
Class A Common Units is made in accordance with the Exchange Agreement.

(b)    Special Withdrawal.

(i)    An Individual Limited Partner (other than Daniel S. Och) may be required
to no longer be actively involved with the Partnership and its Affiliates for
any reason other than Cause, in the sole and absolute discretion of the General
Partner (such

 

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event, a “Special Withdrawal”), which shall not constitute a Withdrawal. Upon
the Special Withdrawal of an Individual Limited Partner, such Individual Limited
Partner’s Related Trusts, if any, shall also be subject to a Special Withdrawal.

(ii)    In the event of the Special Withdrawal of any Limited Partner, such
Limited Partner’s Common Units shall continue to vest in accordance with
Section 8.4, except as otherwise set forth in Section 3.1(j) with respect to
Class P Common Units or in any applicable Partner Agreement.

(c)    Upon a Withdrawal or Special Withdrawal for any reason, an Individual
Limited Partner shall:

(i)    have no right to access or use the property of the Partnership or its
Affiliates;

(ii)    not be permitted to provide services to, or on behalf of, the
Partnership or its Affiliates; and

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

(d)    The provisions of Sections 8.3(a) and 8.3(b) may be amended,
supplemented, modified or waived with PMC Approval.

(e)    Except as expressly provided in this Agreement, no event affecting a
Partner, including death, bankruptcy, insolvency or withdrawal from the
Partnership, shall affect the Partnership.

(f)    Following the Withdrawal of a Limited Partner, unless the General Partner
in its sole discretion determines otherwise, from the applicable Reallocation
Date such Limited Partner will be required to pay the same management fees and
shall be subject to the same incentive allocation with respect to any remaining
investments by such Limited Partner in any fund or account managed by Och-Ziff
or any of its Subsidiaries as are applicable to other Investors that are not
Affiliates of Och-Ziff in such funds or accounts.

(g)    The continued ownership by any Individual Limited Partner and his Related
Trusts of any Interests following the Individual Limited Partner’s Withdrawal or
Special Withdrawal and their right to receive any distributions or allocations
in respect of such

 

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Interests in respect of any periods following such Withdrawal or Special
Withdrawal are conditioned upon the Limited Partner’s execution of a general
release in a form acceptable to the General Partner that is substantially in the
form attached to this Agreement as Exhibit A (the “General Release”) which
becomes effective no later than fifty-three (53) days following any such
Withdrawal or Special Withdrawal. If the General Release is not executed, or if
the Individual Limited Partner timely revokes the Limited Partner’s execution
thereof, the Partnership shall have no further obligations under this Agreement
or any Partner Agreement to make any distributions or allocations to the
Individual Limited Partner or any Related Trusts and their Interests in the
Partnership, if any, shall be forfeited.

Section 8.4    Vesting.

(a)    [INTENTIONALLY OMITTED]

(b)    Subject to Sections 2.13(g) and 8.3(a), all Original Common Units held by
a Partner shall vest in equal installments on each anniversary date of the
Closing Date for five years, beginning on the first anniversary date of the
Closing Date; provided, however, that upon a Withdrawal (but not a Special
Withdrawal), all unvested Units shall cease to vest and shall be reallocated
pursuant to Section 8.3(a); and provided, however, that this Section 8.4(b)
shall not prevent the Transfer of the unvested Interest of any Original Related
Trust (including unvested Class A Common Units) in accordance with its Related
Trust Supplementary Agreement to the relevant Subsequent Related Trust or the
Transfer of unvested Class A Common Units of an Individual Limited Partner’s
Related Trust to such Individual Limited Partner as authorized by the terms of
the relevant trust agreement. In the event of the death or Disability of an
Individual Limited Partner or in the event of a Transfer of any of such
Individual Limited Partner’s Class A Common Units, such Class A Common Units
shall continue to vest on the same schedule as set forth above. The provisions
of this Section 8.4 may be amended, supplemented, modified or waived with PMC
Approval.

(c)    All Class B Common Units will be fully vested on issuance.

(d)    All Class C Non-Equity Interests held by an Individual Limited Partner
and all PSIs held by an Individual Limited Partner or its Related Trusts shall
be cancelled upon the death, Disability, Withdrawal or Special Withdrawal of
such Individual Limited Partner. Class P Common Units shall vest or be subject
to forfeiture as provided in Section 3.1(j), except as otherwise set forth in
the applicable Partner Agreement of any Class P Limited Partner.

(e)    Except as otherwise set forth in this Section 8.4, Units issued to
Additional Limited Partners shall be subject to vesting, if at all, as described
in Section 3.2(e).

Section 8.5    Tag-Along Rights.

(a)    Notwithstanding anything to the contrary in this Agreement, prior to the
consummation of a proposed Tag-Along Sale, the Potential Tag-Along Sellers shall
be afforded the opportunity to participate in such Tag-Along Sale on a pro rata
basis, as provided in Section 8.5(b) below.

 

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(b)    Prior to the consummation of a Tag-Along Sale, the Limited Partners
participating in such Tag-Along Sale (the “Tag-Along Sellers”) shall cause the
Tag-Along Purchaser to offer in writing (such offer, a “Tag-Along Offer”) to
purchase each Potential Tag-Along Seller’s Tag-Along Securities. In addition,
the Tag-Along Offer shall set forth the consideration for which the Tag-Along
Sale is proposed to be made and all other material terms and conditions of the
Tag-Along Sale. If the Tag-Along Offer is accepted by some or all of such
Potential Tag-Along Sellers within five Business Days after its receipt then the
number of Class A Shares and/or Class A Common Units to be sold to the Tag-Along
Purchaser by the Tag-Along Sellers shall be reduced by the number of Class A
Shares and/or Class A Common Units to be purchased by the Tag-Along Purchaser
from such accepting Potential Tag-Along Sellers. The purchase from the accepting
Potential Tag-Along Sellers shall be made on the same terms and conditions
(including timing of receipt of consideration and choice of consideration, if
any) as the Tag-Along Purchaser shall have offered to the Tag-Along Sellers, and
the accepting Potential Tag-Along Sellers shall otherwise be required to
transfer the Class A Shares and/or Class A Common Units to the Tag-Along
Purchaser upon the same terms, conditions, and provisions as the Tag-Along
Sellers, including making the same representations, warranties, covenants,
indemnities and agreements that the Tag-Along Sellers agree to make.

Section 8.6    Drag-Along Rights.

(a)    Prior to the consummation of a proposed Drag-Along Sale, the Drag-Along
Sellers may, at their option, require each other Limited Partner to sell its
Drag-Along Securities to the Drag-Along Purchaser by giving written notice (the
“Notice”) to such other Limited Partners not later than ten Business Days prior
to the consummation of the Drag-Along Sale (the “Drag-Along Right”); provided,
however, that if the Drag Along Right is exercised by the Drag-Along Sellers,
all Limited Partners shall sell their Drag-Along Securities to the Drag-Along
Purchaser on the same terms and conditions, including the class of security, the
consideration per Company Security and the date of sale, as applicable to the
Drag-Along Sellers. The Notice shall contain written notice of the exercise of
the Drag-Along Right pursuant to this Section 8.6, setting forth the
consideration to be paid by the Drag-Along Purchaser and the other material
terms and conditions of the Drag-Along Sale.

(b)    Within five Business Days following the date of the Notice, the
Drag-Along Sellers shall have delivered to them by the other Limited Partners
their Drag-Along Securities together with a limited power-of-attorney
authorizing such Drag-Along Sellers to sell such other Limited Partner’s
Drag-Along Securities pursuant to the terms of the Drag-Along Sale and such
other transfer instruments and other documents as are reasonably requested by
the Drag-Along Sellers in order to effect such sale.

Section 8.7    Reallocation of Common Units pursuant to Partner Agreements.

(a)    Subject to Section 8.7(b), in the event of any reallocation of Common
Units to the Continuing Partners in respect of any Common Units granted pursuant
to a Partner Agreement (including as a result of a Withdrawal, provided that in
the case of any reallocation due to a breach of any of the covenants in Section
2.13(b) (as modified by any Partner Agreement), the provisions of Section
2.13(g) shall apply unless specified otherwise in any Partner Agreement), all of
the Common Units (including all distributions thereon that would

 

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otherwise be received after the event causing such reallocation) to be
reallocated thereunder shall be reallocated upon the relevant Reallocation Date
to the Partnership and then subsequently reallocated from the Partnership to
each Continuing Partner in such a manner that each such Continuing Partner
receives Common Units in proportion to the total number of Original Common Units
of such Continuing Partner and its Original Related Trusts, unless specified
otherwise in any Partner Agreement. Any such reallocated Common Units received
by a Continuing Partner shall be deemed for all purposes of this Agreement to be
Common Units of such Continuing Partner and subject to the same vesting
requirements as the transferring Limited Partner had been prior to the date of
the event causing such reallocation.

(b)    If any of the Class D Common Units granted to James S. Levin pursuant to
the Levin 2017 Partner Agreement in connection with the conditional
relinquishment by Daniel S. Och and certain of his Related Trusts of 30,000,000
vested Class A Common Units on the date hereof pursuant to the Och
Relinquishment Agreement (or any Class A Common Units into which such Class D
Common Units have converted, or any escrowed consideration into which such
Common Units have converted) are forfeited in accordance with the terms of this
Agreement or such Partner Agreement, such Common Units (or an equivalent amount
of escrowed consideration), up to an aggregate amount of 30,000,000 Common Units
(or an equivalent amount of escrowed consideration), shall be reallocated to the
Partnership and then subsequently reallocated (in the case of Common Units, in
the form of vested Class A Common Units) from the Partnership to Daniel S. Och
and his Related Trusts in accordance with the Och Relinquishment Agreement.

(c)    The provisions of this Section 8.7 may be amended, supplemented, modified
or waived with PMC Approval, provided that Section 8.7(b) may only be amended,
supplemented or waived with the consent of Daniel S. Och or his successors in
interest.

ARTICLE IX

DISSOLUTION

Section 9.1    Duration and Dissolution. The Partnership shall be dissolved and
its affairs shall be wound up upon the first to occur of the following:

(a)    the entry of a decree of judicial dissolution of the Partnership under
Section 17-802 of the Act; and

(b)    the determination of the General Partner to dissolve the Partnership.

Except as provided in this Agreement, the death, Disability, resignation,
expulsion, bankruptcy or dissolution of any Partner or the occurrence of any
other event which terminates the continued participation of any Partner in the
Partnership shall not cause the Partnership to be dissolved or its affairs wound
up; provided, however, that at any time after the bankruptcy of the General
Partner, the holders of a majority of the outstanding Class B Common Units may,
pursuant to prior written consent to such effect, replace the General Partner
with another Person, who shall, after executing a written instrument confirming
such Person’s agreement to be bound by all the terms and provisions of this
Agreement, (i) become a successor General Partner for all

 

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purposes hereunder, (ii) be vested with the powers and rights of the replaced
General Partner, and (iii) be liable for all obligations and responsible for all
duties of the replaced General Partner from the date of such replacement.

Section 9.2    Notice of Liquidation. The General Partner shall give each of the
Partners prompt written notice of any liquidation, dissolution or winding up of
the Partnership.

Section 9.3    Liquidator. Upon dissolution of the Partnership, the General
Partner may select one or more Persons to act as a liquidating trustee for the
Partnership (such Person, or the General Partner, the “Liquidator”). The
Liquidator (if other than the General Partner) shall be entitled to receive such
compensation for its services as may be approved by holders of a majority of the
outstanding Class B Common Units (subject to the terms of any Unit Designation).
The Liquidator (if other than the General Partner) shall agree not to resign at
any time without 15 days’ prior notice and may be removed at any time, with or
without cause, by notice of removal approved by holders of a majority of the
outstanding Class B Common Units (subject to the terms of any Unit Designation).
Upon dissolution, death, incapacity, removal or resignation of the Liquidator, a
successor and substitute Liquidator (who shall have and succeed to all rights,
powers and duties of the original Liquidator) shall within 30 days thereafter be
approved by the General Partner (or, in the case of the removal of the
Liquidator by holders of units, by holders of a majority of the outstanding
Class B Common Units (subject to the terms of any Unit Designation)). The right
to approve a successor or substitute Liquidator in the manner provided herein
shall be deemed to refer also to any such successor or substitute Liquidator
approved in the manner herein provided. Except as expressly provided in this
Section 9.3, the Liquidator approved in the manner provided herein shall have
and may exercise, without further authorization or consent of any of the parties
hereto, all of the powers conferred upon the General Partner under the terms of
this Agreement (but subject to all of the applicable limitations, contractual
and otherwise, upon the exercise of such powers) necessary or appropriate to
carry out the duties and functions of the Liquidator hereunder for and during
the period of time required to complete the winding up and liquidation of the
Partnership as provided for herein.

Section 9.4    Liquidation. The Liquidator shall proceed to dispose of the
assets of the Partnership, discharge its liabilities, and otherwise wind up its
affairs in such manner and over such period as determined by the Liquidator,
subject to Section 17-804 of the Act and the following:

(a)    Subject to Section 9.4(d), the assets may be disposed of by public or
private sale or by distribution in kind to one or more Partners on such terms as
the Liquidator and such Partner or Partners may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 9.4(d) to have received cash equal to its fair market value;
and contemporaneously therewith, appropriate cash distributions must be made to
the other Partners. Notwithstanding anything to the contrary contained in this
Agreement, the Partners understand and acknowledge that a Partner may be
compelled to accept a distribution of any asset in kind from the Partnership
despite the fact that the percentage of the asset distributed to such Partner
exceeds the percentage of that asset which is equal to the percentage in which
such Partner shares in distributions from the Partnership. The Liquidator may
defer liquidation or distribution of the Partnership’s assets for a reasonable
time if it determines that an immediate sale or distribution of all or some of
the Partnership’s assets would

 

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be impractical or would cause undue loss to the Partners. The Liquidator may
distribute the Partnership’s assets, in whole or in part, in kind if it
determines that a sale would be impractical or would cause undue loss to the
Partners.

(b)    Liabilities of the Partnership include amounts owed to the Liquidator as
compensation for serving in such capacity (subject to the terms of Section 9.3)
and amounts to Partners otherwise than in respect of their distribution rights
under Article VII. With respect to any liability that is contingent, conditional
or unmatured or is otherwise not yet due and payable, the Liquidator shall
either settle such claim for such amount as it thinks appropriate or establish a
reserve of cash or other assets to provide for its payment. When paid, any
unused portion of the reserve shall be applied to other liabilities or
distributed as additional liquidation proceeds.

(c)    Subject to the terms of any Unit Designation, all property and all cash
in excess of that required to discharge liabilities as provided in Section
9.4(b) shall be distributed to the Partners in accordance with and to the extent
of the positive balances in their respective Capital Accounts, as determined
after taking into account all Capital Account adjustments (other than those made
by reason of distributions pursuant to this Section 9.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined by the General Partner) and such
distribution shall be made by the end of such taxable year (or, if later, within
90 days after said date of such occurrence).

(d)    Notwithstanding any other provision of this Agreement, if, upon the
dissolution and liquidation of the Partnership pursuant to this Article IX and
after all other allocations provided for in Section 6.1 (including Section
6.1(c)) have been tentatively made as if this Section 9.4 were not in this
Agreement, either (i) the positive Capital Account balance attributable to one
or more Units (other than Common Units) having a liquidation preference is not
equal to such liquidation preference, or (ii) the quotient obtained by dividing
any Partner’s positive Hypothetical Capital Account Balance with respect to
Common Units by the aggregate of all Partners’ Hypothetical Capital Account
Balances with respect to Common Units at such time (such Partner’s “Hypothetical
Capital Account Quotient”) would differ from such Partner’s Percentage Interest,
then, subject to Section 5.3 (and with respect to PSIs, unless determined
otherwise by the General Partner in its sole discretion), Net Income (and items
thereof) and Net Loss (and items thereof) for the Fiscal Year in which the
Partnership dissolves and liquidates pursuant to this Article IX shall be
allocated among the Partners (x) first, to the extent necessary to ensure that
the Capital Account balance attributable to a Unit (other than Common Units)
having a liquidation preference is equal to such liquidation preference, and
(y) second, in a manner such that the positive Hypothetical Capital Account
Quotient of each Partner with respect to Common Units, immediately after giving
effect to such allocation, is, as nearly as possible, equal to such Partner’s
Percentage Interest; provided, however, that this Section 9.4(d) shall not be
applied to cause any Partner’s Capital Account balance to be negative. The
General Partner, in its sole and absolute discretion, may apply the principles
of this Section 9.4(d) to any Fiscal Year preceding the Fiscal Year in which the
Partnership dissolves and liquidates (including through application of Section
761(e) of the Code) if delaying application of the principles of this Section
9.4(d) would likely result in Capital Account balances (or Hypothetical Capital
Account Quotients) that are materially different from the Capital Account
balances (or Hypothetical Capital Account Quotients) set forth in clauses
(x) and (y) of the preceding sentence.

 

69

Section 9.5    Capital Account Restoration. No Partner shall have any obligation
to restore any negative balance in its Capital Account upon liquidation of the
Partnership.

ARTICLE X

MISCELLANEOUS

Section 10.1    Incorporation of Agreements. The Exchange Agreement and the Tax
Receivable Agreement shall each be treated as part of this Agreement as
described in Section 761(c) of the Code and Treasury Regulation Sections
1.704-1(b)(2)(ii)(h) and 1.761-1(c).

Section 10.2    Amendment to the Agreement.

(a)    Except as may be otherwise required by law, this Agreement may be amended
by the General Partner without the consent or approval of any Partners,
provided, however, that, except as expressly provided herein (including, without
limitation, Sections 3.2 and 10.2(b)), (i) if an amendment adversely affects the
rights (not including any rights relating to the Class C Non-Equity Interests)
of an Individual Limited Partner or any Related Trust thereof other than on a
pro rata basis with other holders of Units of the same class, such Individual
Limited Partner must provide his prior written consent to the amendment, (ii) no
amendment may adversely affect the rights (not including any rights relating to
the Class C Non-Equity Interests) of the holders of a class of Units (or any
group of such holders) without the prior written consent of Individual Limited
Partners that (together with their Related Trusts) hold a majority of the
outstanding Units of such class (or of such group) then owned by all Limited
Partners, (iii) the provisions of this Section 10.2(a) may not be amended
without the prior written consent of Individual Limited Partners that (together
with their Related Trusts) hold a majority of the Class A Common Units then
owned by all Limited Partners, and (iv) the provisions of Sections 3.1(i),
8.3(a), 8.3(b), 8.4 and 8.7 may only be amended with PMC Approval. For the
purposes of this Section 10.2(a), any Units owned by a Related Trust of an
Individual Limited Partner shall be treated as being owned by such Individual
Limited Partner. Subject to the foregoing, the General Partner may enter into
Partner Agreements with any Limited Partner that affect the terms hereof and the
terms of such Partner Agreement shall govern with respect to such Limited
Partner notwithstanding the provisions of this Agreement.

(b)    It is acknowledged and agreed that none of the admission of any
Additional Partner, the adoption of any Unit Designation, the issuance of any
Units or Class C Non-Equity Interests, or the delegation of any power or
authority to any committee (or its chairman) shall be considered an amendment of
this Agreement that requires the approval of any Limited Partner.

(c)    Notwithstanding any other provision in this Agreement, no Limited Partner
other than an Active Individual LP shall have any voting or consent rights under
this Agreement for any reason. Any Active Individual LP may vote or consent on
behalf of its Related Trust. The Interests of any Limited Partner without direct
or indirect voting or consent rights shall be disregarded for purposes of
calculating any thresholds under this Agreement.

 

70

Section 10.3    Successors, Counterparts. This Agreement and any amendment
hereto in accordance with Section 10.2 shall be binding as to executors,
administrators, estates, heirs and legal successors, or nominees or
representatives, of the Partners, and may be executed in several counterparts
with the same effect as if the parties executing the several counterparts had
all executed one counterpart.

Section 10.4    Applicable Law; Submission to Jurisdiction; Severability.

(a)    This Agreement and the rights and obligations of the Partners shall be
governed by, interpreted, construed and enforced in accordance with the laws of
the State of Delaware, other than in respect of Section 2.13 which shall be
governed by, interpreted, construed and enforced in accordance with the laws of
the State of New York without regard to choice of law rules that would apply the
law of any other jurisdiction. If any term or other provision of this Agreement
is held to be invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions is not affected in any manner materially
adverse to any party. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

(b)    TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER
ARISING HEREUNDER.

(c)    Each International Partner irrevocably consents and agrees that (i) any
action brought to compel arbitration or in aid of arbitration in accordance with
the terms of this Agreement, (ii) any action confirming and entering judgment
upon any arbitration award, and (iii) any action for temporary injunctive relief
to maintain the status quo or prevent irreparable harm, may be brought in the
state and federal courts of the State of New York and, by execution and delivery
of this Agreement, each International Partner hereby submits to and accepts for
itself and in respect of its property, generally and unconditionally, the
exclusive jurisdiction of the aforesaid courts for such purpose and to the
non-exclusive jurisdiction of such courts for entry and enforcement of any award
issued hereunder.

(d)    Each Partner that is not an International Partner hereby submits to and
accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of the state and federal courts of
the State of New York for any dispute arising out of or relating to this
Agreement or the breach, termination or validity thereof.

(e)    Each Partner further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of

 

71

copies thereof by certified or registered mail return receipt requested or by
receipted courier service in the manner set forth in Section 10.10, provided
that each International Partner hereby irrevocably designates CT Corporation
System, 111 Eighth Avenue, Broadway, New York, New York 10011, as his designee,
appointee and agent to receive, for and on behalf of himself, service of process
in the jurisdictions set forth above in any such action or proceeding and such
service shall, to the extent permitted by applicable law, be deemed complete ten
(10) days after delivery thereof to such agent, and provided further that,
although it is understood that a copy of such process served on such agent will
be promptly forwarded by mail to the relevant International Partner, the failure
of such International Partner to receive such copy shall not, to the extent
permitted by applicable law, affect in any way the service of such process.

Section 10.5    Arbitration.

(a)    Any dispute, controversy or claim between the Partnership and one or more
International Partners arising out of or relating to this Agreement or the
breach, termination or validity thereof or concerning the provisions of this
Agreement, including whether or not such a dispute, controversy or claim is
arbitrable (“International Dispute”) shall be resolved by final and binding
arbitration conducted in English by three arbitrators in New York, New York, in
accordance with the JAMS International Arbitration Rules then in effect (the
applicable rules being referred to herein as the “Rules”) except as modified in
this Section 10.5.

(b)    The party requesting arbitration must notify the other party of the
demand for arbitration in writing within the applicable statute of limitations
and in accordance with the Rules. The written notification must include a
description of the claim in sufficient detail to advise the other party of the
nature of the claim and the facts on which the claim is based.

(c)    The claimant shall select its arbitrator in its demand for arbitration
and the respondent shall select its arbitrator within 30 days after receipt of
the demand for arbitration. The two arbitrators so appointed shall select a
third arbitrator to serve as chairperson within 14 days of the designation of
the second of the two arbitrators. If practicable, each arbitrator shall have
relevant financial services experience. If any arbitrator is not timely
appointed, at the request of any party to the arbitration such arbitrator shall
be appointed by JAMS pursuant to the listing, striking and ranking procedure in
the Rules. Any arbitrator appointed by JAMS shall be, if practicable, a retired
federal judge, without regard to industry-related experience.

(d)    By agreeing to arbitration, the parties do not intend to deprive any
court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral
attachment or other order in aid of arbitration proceedings and the enforcement
of any award. Without prejudice to such other provisional remedies as may be
available, the arbitral tribunal shall have full authority to grant provisional
remedies or order the parties to request that such court modify or vacate any
temporary or preliminary relief issued by a such court, and to award damages for
the failure of any party to respect the arbitral tribunal’s orders to that
effect.

 

72

(e)    There shall be documentary discovery consistent with the Rules and the
expedited nature of arbitration. All disputes involving discovery shall be
resolved promptly by the chair of the arbitral tribunal.

(f)    No witness or party to a claim that is subject to arbitration shall be
required to waive any privilege recognized by applicable law.

(g)    It is the intent of the parties that, barring extraordinary circumstances
as determined by the arbitrators, the arbitration hearing pursuant to this
Agreement shall be commenced as expeditiously as possible, if practicable within
nine months after the written demand for arbitration pursuant to this
Section 10.5 is served on the respondent, that the hearing shall proceed on
consecutive Business Days until completed, and if delayed due to extraordinary
circumstances, shall recommence as promptly as practicable. The parties to the
International Dispute may, upon mutual agreement, provide for different time
limits, or the arbitrators may extend any time limit contained herein for good
cause shown. The arbitrators shall issue their final award (which shall be in
writing and shall briefly state the findings of fact and conclusions of law on
which it is based) as soon as practicably, if possible within a time period not
to exceed 30 days after the close of the arbitration hearing.

(h)    Each party to an arbitration hereby waives any rights or claims to
recovery of damages in the nature of punitive, exemplary or multiple damages, or
to any form of damages in excess of compensatory damages and the arbitral
tribunal shall be divested of any power to award any such damages.

(i)    Any award or decision issued by the arbitrators pursuant to this
Agreement shall be final, and binding on the parties. Judgment on the award
rendered by the arbitrators may be entered in any court having jurisdiction.

(j)    Any arbitration conducted pursuant hereto shall be confidential. No party
or any of its agents shall disclose or permit the disclosure of any information
about the evidence adduced or the documents produced by the other in the
arbitration proceedings or about the existence, contents or results of the
proceedings except (i) as may be required by a governmental authority or (ii) as
required in an action in aid of arbitration or for enforcement of an arbitral
award. Before making any disclosure permitted by clause (i) in the preceding
sentence, the party intending to make such disclosure shall give the other party
reasonable written notice of the intended disclosure and afford the other party
a reasonable opportunity to protect their interests.

Section 10.6    Filings. Following the execution and delivery of this Agreement,
the General Partner or its designee shall promptly prepare any documents
required to be filed and recorded under the Act or the LLC Act, and the General
Partner or such designee shall promptly cause each such document to be filed and
recorded in accordance with the Act or the LLC Act, as the case may be, and, to
the extent required by local law, to be filed and recorded or notice thereof to
be published in the appropriate place in each jurisdiction in which the
Partnership may hereafter establish a place of business. The General Partner or
such designee shall also promptly cause to be filed, recorded and published such
statements of fictitious business name and any other notices, certificates,
statements or other instruments required by any provision of any applicable law
of the United States or any state or other jurisdiction which governs the
conduct of its business from time to time.

 

73

Section 10.7    Power of Attorney. Each Partner does hereby constitute and
appoint the General Partner as its true and lawful representative and
attorney-in-fact, in its name, place and stead, to make, execute, sign, deliver
and file (a) any amendment to the Certificate of Limited Partnership required
because of an amendment to this Agreement or in order to effectuate any change
in the partners of the Partnership, (b) all such other instruments, documents
and certificates which may from time to time be required by the laws of the
United States of America, the State of Delaware or any other jurisdiction, or
any political subdivision or agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Partnership or to dissolve
the Partnership or for any other purpose consistent with this Agreement and the
transactions contemplated hereby. The power of attorney granted hereby is
coupled with an interest and shall (i) survive and not be affected by the
subsequent death, incapacity, Disability, dissolution, termination or bankruptcy
of the Partner granting the same or the Transfer of all or any portion of such
Partner’s Interest and (ii) extend to such Partner’s successors, assigns and
legal representatives.

Section 10.8    Headings and Interpretation. Section and other headings
contained in this Agreement are for reference purposes only and are not intended
to describe, interpret, define or limit the scope or intent of this Agreement or
any provision hereof. Wherever from the context it appears appropriate, (i) each
pronoun stated in the masculine, the feminine or neuter gender shall include the
masculine, the feminine and the neuter, and (ii) references to “including” shall
mean “including without limitation.”

Section 10.9    Additional Documents. Each Partner, upon the request of the
General Partner, agrees to perform all further acts and execute, acknowledge and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement.

Section 10.10    Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile, e-mail or similar
writing) and shall be given to such party (and any other Person designated by
such party) at its address, facsimile number or e-mail address set forth in a
schedule filed with the records of the Partnership or such other address,
facsimile number or e-mail address as such party may hereafter specify to the
General Partner. Each such notice, request or other communication shall be
effective (a) if given by facsimile, when transmitted to the number specified
pursuant to this Section 10.10 and the appropriate confirmation of receipt is
received, (b) if given by mail, seventy-two hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid,
(c) if given by e-mail, when transmitted to the e-mail address specified
pursuant to this Section 10.10 and the appropriate confirmation of receipt is
received or (d) if given by any other means, when delivered at the address
specified pursuant to this Section 10.10.

Section 10.11    Waiver of Right to Partition. Each of the Partners irrevocably
waives any right that it may have to maintain any action for partition with
respect to any of the Partnership’s assets.

 

74

Section 10.12    Partnership Counsel. Each Limited Partner hereby acknowledges
and agrees that Skadden, Arps, Slate, Meagher & Flom LLP and any other law firm
retained by the General Partner in connection with the management and operation
of the Partnership, or any dispute between the General Partner and any Limited
Partner, is acting as counsel to the General Partner and as such does not
represent or owe any duty to such Limited Partner or to the Limited Partners as
a group.

Section 10.13    Survival. Except as otherwise expressly provided herein, all
indemnities and reimbursement obligations made pursuant to Sections 2.9 and
2.10, all prohibitions in Sections 2.12, 2.13 and 2.18 and the provisions of
this Section 10 shall survive dissolution and liquidation of the Partnership
until expiration of the longest applicable statute of limitations (including
extensions and waivers).

Section 10.14    Ownership and Use of Name. The name “OZ” is the property of the
Partnership and/or its Affiliates and no Partner, other than the General
Partner, may use (a) the names “OZ,” “Och,” “Och-Ziff,” “Och-Ziff Capital
Management Group,” “Och-Ziff Capital Management Group LLC,” “Och-Ziff Holding
Corporation,” “Och-Ziff Holding LLC,” “OZ Advisors LP,” “OZ Advisors II LP” or
“OZ Management LP” or any name that includes “OZ,” “Och,” “Och-Ziff,” “Och-Ziff
Capital Management Group,” “Och-Ziff Capital Management Group LLC,” “Och-Ziff
Holding Corporation,” “Och-Ziff Holding LLC,” “OZ Advisors LP,” “OZ Advisors II
LP” or “OZ Management LP” or any variation thereof, or any other name of the
General Partner or the Partnership or their respective Affiliates, (b) any other
name to which the name of the Partnership, the General Partner, or any of their
Affiliates is changed, or (c) any name confusingly similar to a name referenced
or described in clause (a) or (b) above, including, without limitation, in
connection with or in the name of new business ventures, except pursuant to a
written license with the Partnership and/or its Affiliates that has been
approved by the General Partner.

Section 10.15    Remedies. Any remedies provided for in this Agreement shall be
cumulative in nature and shall be in addition to any other remedies whatsoever
(whether by operation of law, equity, contract or otherwise) which any party may
otherwise have.

Section 10.16    Entire Agreement. This Agreement, together with any Partner
Agreements and, to the extent applicable, the Registration Rights Agreement, the
Exchange Agreement, the Tax Receivable Agreement and the Class B Shareholders
Agreement, constitutes the entire agreement among the Partners with respect to
the subject matter hereof and, as amended and restated herein, supersedes any
agreement or understanding entered into as of a date prior to the date hereof
among or between any of them with respect to such subject matter, including
(without limitation), the Limited Liability Company Agreement of the Original
Company, the Initial Partnership Agreement, the Prior Partnership Agreement and
all Supplementary Agreements.

 

75

IN WITNESS WHEREOF, this Agreement is executed and delivered as of the date
first written above by the undersigned.

 

GENERAL PARTNER: OCH-ZIFF HOLDING CORPORATION, a Delaware corporation By:  

/s/ Wayne N. Cohen

Name:   Wayne N. Cohen Title:   President and Chief Operating Officer

Exhibit A: Form of General Release

I,                     , in consideration of and subject to the terms and
conditions set forth in the Amended and Restated Agreement of Limited
Partnership of OZ Advisors LP dated as of March 1, 2017 to which this General
Release is attached (as amended, modified, supplemented or restated from time to
time, the “Limited Partnership Agreement”) and any Partner Agreement, and
intending to be legally bound, do hereby release and forever discharge the
Och-Ziff Group, from any and all legally waivable actions, causes of action,
covenants, contracts, claims, sums of money or liabilities, which I or any of my
Related Trusts, my or their heirs, executors, administrators, and assigns, or
any of them, ever had, now have, or hereafter can, shall, or may have, by reason
of any act or omission occurring on or before the date that I sign this General
Release, including, but not limited to, with respect to my service to, or
affiliation with, the Partnership and its Affiliates, and my Withdrawal or
Special Withdrawal from the Partnership. Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them in the Limited
Partnership Agreement.

By signing this General Release, to the fullest extent permitted by law, I
waive, release, and forever discharge the Och-Ziff Group from any and all
legally waivable claims, grievances, injuries, controversies, agreements,
covenants, promises, debts, accounts, actions, causes of action, suits,
arbitrations, sums of money, wages, attorneys’ fees, costs or damages, whether
known or unknown, in law or in equity, by contract, tort, law of trust, or
pursuant to U.S. federal, state, local, or non-U.S. statute, regulation,
ordinance, or common law, which I or any of my Related Trusts ever have had, now
have, or may hereafter have, based upon, or arising from, any fact or set of
facts, whether known or unknown to me, from the beginning of time until the date
of execution of this General Release, arising out of, or relating in any way to,
my service to, or affiliation with, the Partnership and its Affiliates or other
associations with the Och-Ziff Group, or any cessation thereof. I acknowledge
and agree that I am not an employee of any of the Partnership or any of its
Affiliates. Nevertheless, and without limiting the foregoing, in the event that
any administrative agency, court, or arbitrator might find that I am an
employee, I acknowledge and agree that this General Release constitutes a
waiver, release, and discharge of any claim or right based upon, or arising
under any U.S. federal, state, local, or non-U.S. fair employment practices and
equal opportunity laws, including, but not limited to, the Rehabilitation Act of
1973, the Worker Adjustment and Retraining Notification Act, 42 U.S.C.
Section 1981, Title VII of the Civil Rights Act of 1964, the Sarbanes-Oxley Act
of 2002, the Equal Pay Act, the Employee Retirement Income Security Act
(“ERISA”) (including, but not limited to, claims for breach of fiduciary duty
under ERISA), the Family Medical Leave Act, the Americans With Disabilities Act,
the Age Discrimination in Employment Act of 1967, the Older Worker’s Benefit
Protection Act, and the New York State and New York City anti-discrimination
laws, including all amendments thereto, and the corresponding fair employment
practices and equal opportunities laws in non-U.S. jurisdictions that may be
applicable.

I also understand that I am releasing any rights or claims concerning bonus(es)
and any award(s) or grant(s) under any incentive compensation plan or program,
except as set forth in the Limited Partnership Agreement and any Partner
Agreement, having any bearing whatsoever on the terms and conditions of my
service to the Partnership and its Affiliates, and the cessation thereof;
provided that, this General Release shall not prohibit me from enforcing my
rights, if any, under the Limited Partnership Agreement, any Partner Agreement,
or this General Release, including, without limitation, any rights to
indemnification or director and officer liability insurance coverage.

I expressly acknowledge and agree that, by entering into this General Release, I
am waiving any and all rights or claims that I may have under the Age
Discrimination in Employment Act of 1967, as amended (the “ADEA”), if any, which
have arisen on or before the date of execution of this General Release (the
“Effective Date”). I also expressly acknowledge and agree that:

 

  a. In return for this General Release, I will receive consideration, i.e.,
something of value beyond that to which I was already entitled before entering
into this General Release;

 

  b. I am hereby advised in writing by this General Release of my opportunity to
consult with an attorney before signing this General Release;

 

  c. I have [twenty-one (21)] days to consider this General Release (although I
need not take all twenty-one (21) days and may choose to voluntarily execute
this General Release earlier); and

 

  d. I have [seven (7)] days following the date that this General Release is
executed (the “Revocation Period”) in which to revoke this General Release. To
be effective, such revocation must be in writing and delivered to the Och-Ziff
Group, as set forth in Section 10.01 of the Limited Partnership Agreement,
within the Revocation Period.

Nothing herein shall prevent me from cooperating in any investigation by a
governmental agency or from seeking a judicial determination as to the validity
of the release with regard to age discrimination claims consistent with the
ADEA.

I acknowledge that I have been given sufficient time to review this General
Release. I have consulted with legal counsel or knowingly and voluntarily chosen
not to do so. I am signing this General Release knowingly, voluntarily, and with
full understanding of its terms and effects. I voluntarily accept the amounts
provided for in the Limited Partnership Agreement and any Partner Agreement for
the purpose of making full and final settlement of all claims referred to above
and acknowledge that these amounts are in excess of anything to which I would
otherwise be entitled. I acknowledge and agree that in executing this General
Release, I am not relying, and have not relied, upon any oral or written
representations or statements not set forth or referred to in the Limited
Partnership Agreement, any Partner Agreement and this General Release.

I acknowledge and agree that Skadden, Arps, Slate, Meagher & Flom LLP, and any
other law firm retained by any member of the Och-Ziff Group in connection with
the Limited Partnership Agreement and this General Release, or any dispute
between myself and any member of the Och-Ziff Group in connection therewith, is
acting as counsel to the Och-Ziff Group, and as such, does not represent or owe
any duty to me or to any of my Related Trusts.

I have been given a reasonable and sufficient period of time in which to
consider and return this General Release. This General Release will be effective
as of the Effective Date.

I have executed this General Release this      day of         , 20    .

 

 

Name: [NAME OF TRUST] [By:  

 

Name:   Trustee By:  

 

Name:   Trustee]

Exhibit B: Form of Class P Common Unit Award Agreement

CLASS P COMMON UNIT AWARD AGREEMENT

Date:                     

To:                     

Dear                     :

We are pleased to confirm that you have been awarded a conditional grant of
Class P Common Units in OZ Management LP (“OZM”), OZ Advisors LP (“OZA”) and OZ
Advisors II LP (“OZAII” and, together with OZM and OZA, the “Partnerships”)
pursuant to the limited partnership agreements of the Partnerships (the “LPAs”)
(your “Class P Unit Grants”). Capitalized terms used in this Award Agreement
(this “Award Agreement”) and not defined herein will have the meanings assigned
to them in the LPAs.

Your Class P Unit Grants shall be conditionally issued to you by the
Partnerships in the numbers specified below and effective as of the grant date
specified below:

Class P Unit Grants:

(1) OZM Class P Unit Grant:                      Class P-1 Common Units in OZM.

(2) OZA Class P Unit Grant:                      Class P-1 Common Units in OZA.

(3) OZAII Class P Unit Grant:                      Class P-1 Common Units in
OZAII.

Grant Date:                     .

The Class P Common Units constituting each of your Class P Unit Grants are
subject to the terms and conditions of the LPAs, including, but not limited to,
the vesting and forfeiture terms set forth therein.

You agree that your retention of the Class P Common Units constituting your
Class P Unit Grants is subject to, and conditional on, your compliance with the
conditions specified in the LPAs and, by signing this Award Agreement, you
acknowledge (i) your receipt of your Class P Unit Grants described above,
(ii) your receipt of the LPAs, and (iii) that you receive the Class P Common
Units subject to the terms and conditions of the LPAs.

This Award Agreement may be signed in counterparts and all signed copies of this
Award Agreement will together constitute one original. This Award Agreement
shall be a “Partner Agreement” (as defined in the LPAs).

Please sign this Award Agreement in the space provided below to confirm your
Class P Unit Grants and return a copy at your earliest convenience.

 

Acknowledged and agreed as of the date set forth above:

 

Name:   OZ MANAGEMENT LP By:   Och-Ziff Holding Corporation,   its General
Partner By:  

 

Name:   Title:   OZ ADVISORS LP By:   Och-Ziff Holding Corporation,   its
General Partner By:  

 

Name:   Title:   OZ ADVISORS II LP By:   Och-Ziff Holding LLC,   its General
Partner

By:

 

 

Name:

 

Title:

 

Exhibit C: Unit Designation

OZ ADVISORS LP

UNIT DESIGNATION OF

THE PREFERENCES AND RELATIVE, PARTICIPATING,

OPTIONAL, AND OTHER SPECIAL RIGHTS, POWERS AND DUTIES

OF

CLASS A CUMULATIVE PREFERRED UNITS

OZ ADVISORS LP, a Delaware limited partnership (the “Partnership”), pursuant to
the provisions of the Delaware Revised Uniform Limited Partnership Act and the
Amended and Restated Agreement of Limited Partnership of the Partnership dated
as of December 14, 2015, as amended from time to time (the “Limited Partnership
Agreement”), does hereby state and certify that, pursuant to the authority
expressly vested in Och-Ziff Holding Corporation, a Delaware corporation and the
Partnership’s general partner (the “General Partner”), the General Partner duly
adopted the following resolution, which remains in full force and effect as of
the date hereof:

RESOLVED, that this Unit Designation of the Class A Cumulative Preferred Units
of the Partnership dated as of October 5, 2016 (this “Unit Designation”) be and
hereby is adopted as follows:

1.    Designation.

(a)    Pursuant to Section 3.2(b) of the Limited Partnership Agreement, there is
hereby created a class of Units designated as the “Class A Cumulative Preferred
Units” (the “Class A Preferred Units”), which shall each have a liquidation
preference per Class A Preferred Unit equal to the Unit Price (the “Liquidation
Preference”). The General Partner is authorized to provide for the issuance of
up to 400,000 Class A Preferred Units in one or more series (each, a “Class A
Series”), each of which Class A Series shall be identical other than the date of
issuance.

(b)    The Class A Preferred Units have no maturity date. Each Class A Preferred
Unit shall be identical in all respects to every other Class A Preferred Unit.
Notwithstanding Section 3.1(b) of the Limited Partnership Agreement, the
Preferred Units shall not be evidenced by Certificates of Ownership and a
Partner’s interest in any such Units shall be reflected through appropriate
entries in the books and records of the Partnership.

(c)    All Class A Preferred Units issued pursuant to, and in accordance with
the requirements of this Unit Designation, shall be fully paid and
non-assessable Units of the Partnership.

2.    Definitions. For purposes of this Unit Designation, the following terms
have the meanings ascribed to them below. Capitalized terms used herein without
definition have the meanings ascribed to such terms in the Limited Partnership
Agreement.

“Change of Control Event” means the occurrence of the following:

(i)    the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties and assets of the
Operating Partnerships, taken as a whole, to any “person” or “group” (as each
such term is defined in Section 13(d)(3) of the Exchange Act or any successor
provision), other than to a Continuing OZ Person or one or more wholly-owned
subsidiaries of any of the Operating Partnerships; or

(ii)    the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any “person” or “group” (as
each such term is defined in Section 13(d)(3) of the Exchange Act or any
successor provision), other than a Continuing OZ Person or the Company and any
of its wholly-owned subsidiaries, becomes (A) the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act or any successor provision) of a
percentage of voting units (or other capital stock) greater than the percentage
of voting units (or other capital stock) held by DSO and his Related Parties as
of the Initial Issuance Date (excluding, for the avoidance of doubt, any units
or other capital stock DSO or his Related Parties are entitled to vote on behalf
of other Persons), in each case, immediately after giving effect to such
transaction in (i) the Company or (ii) one or more of the Operating Partnerships
comprising all or substantially all of the assets of the Operating Partnerships
or (B) entitled to receive a Majority Economic Interest in connection with such
transaction.

“Closing Date” means, with respect to a Class A Series, the original date of
issuance of such Class A Series.

“Commitment” has the meaning assigned to it in the Revolving Credit Facility.

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

“Continuing OZ Person” means, immediately prior to and immediately following any
relevant date of determination, (i) DSO, (ii) any Related Party of DSO or
(iii) any “person” or “group” (as each such term is used in Section 13(d)(3) of
the Exchange Act or any successor provision) of which DSO or one of his Related
Parties is a member.

“Credit Party” has the meaning assigned to it in the Revolving Credit Facility.

“Designated Officers” has the meaning assigned to it in Section 9(d) hereof.

“Distribution Payment Date” has the meaning assigned to it in Section 3(a)
hereof.

“Distribution Period” means a period commencing on, and including, a
Distribution Payment Date, to, but not including, the following Distribution
Payment Date.

“Distribution Rate” means, with respect to the periods specified below, the
following rates per annum:

(i)    Prior to the Step Up Date: 0%

(ii)    From the Step Up Date to the day immediately prior to the sixth
anniversary of the Step Up Date: 6%;

(iii)    From the sixth anniversary of the Step Up Date to the day immediately
prior to the seventh anniversary of the Step Up Date: 8%

(iv)    From the seventh anniversary of the Step Up Date to the day immediately
prior to the eighth anniversary of the Step Up Date: 9%; and

(v)    From the eighth anniversary of the Step Up Date and thereafter: 10%.

Following a Change of Control Event, the Distribution Rate for each applicable
period described above shall increase by 7.0% per annum beginning on the 31st
day following the consummation of such Change of Control Event in accordance
with Section 6(b) hereof unless and until the Operating Partnerships redeem all
Operating Group Class A Preferred Units.

“Distribution Record Date” has the meaning assigned to it in Section 3(a)
hereof.

“DSO” means Daniel S. Och.

“Excess Distributable Earnings” has the meaning assigned to it in Section
6(a)(i) hereof.

“General Partner” has the meaning assigned to it in the recitals hereof.

“Holders’ Committee” has the meaning assigned to it in Section 9(a) hereof.

“Initial Issuance Date” means October 5, 2016.

“Junior Units” means Units and other equity securities in the Partnership that,
with respect to distributions on such interests and distributions upon
liquidation of the Partnership, rank junior to the Class A Preferred Units.
“Junior Units” include Common Units and PSIs but do not include Class C
Non-Equity Interests.

“Limited Partnership Agreement” has the meaning assigned to it in the recitals
hereof.

“Liquidation Event” has the meaning assigned to it in Section 4(a) hereof.

“Liquidation Preference” has the meaning assigned to it in Section 1 hereof.

“Liquidation Value” has the meaning assigned to it in Section 4(a) hereof.

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

“Mandatory Change of Control Redemption” has the meaning assigned to it in
Section 6(b)(i) hereof.

“Mandatory Change of Control Trigger Date” has the meaning assigned to it in
Section 6(b)(i) hereof.

“Mandatory Delivery Date” has the meaning assigned to it in Section 6(a)(iii)
hereof.

“Maturity Date” has the meaning assigned to it in the Revolving Credit Facility.

“New NEO Units” has the meaning assigned to it in Section 9(d) hereof.

“Nonpayment Event” has the meaning assigned to it in Section 9(d) hereof.

“Obligations” has the meaning assigned to it in the Revolving Credit Facility.

“Offered Securities” has the meaning assigned to it in Section 13 hereof.

“Operating Group Class A Preferred Units” means the Class A Preferred Units
issued by the Partnership and the Class A preferred units issued by the other
Operating Partnerships.

“Operating Group Entity” has the meaning assigned to it in Section 3(b)(ii)
hereof.

“Operating Partnerships” means the Partnership, OZ Management LP and OZ Advisors
II LP.

“OZ Fund” means any investment vehicle managed (or for which investment advisory
or other asset management services are provided), directly or indirectly, by an
Operating Group Entity in which (a) substantially all of the capital is provided
by third parties in the ordinary course (“Third Party LPs”) and (b) no Person
other than the Operating Partnerships or their wholly-owned Subsidiaries has the
right to receive (x) carried interest, incentive fees, promoted interest,
performance fee or similar rights of participation or profit-sharing,
(y) investment management fees, asset management fees, commitment-based fees,
transaction fees or similar fees not based on performance (or fees payable in
lieu thereof) or (z) other distributions or payments (including guaranteed
payments or other similar distributions or payments but excluding distributions
or redemption payments made to Third Party LPs in the ordinary course in respect
of their interests in such investment vehicle) from such investment vehicle,
whether or not such payments arise as a result of or are due and payable
pursuant to (i) ownership of a membership interest, partnership interest or
other equity interest, (ii) an employment or consulting agreement or arrangement
or (iii) a contract, revenue sharing agreement, participation or other
agreement.

“OZ Subsidiary” has the meaning assigned to it in the Revolving Credit Facility.

“Parity Units” means (a) any equity securities in the Partnership (or any debt
or other securities convertible into equity securities of the Partnership) that
the Partnership may authorize or issue, the terms of which expressly provide
that such securities shall rank equally with, or senior to, the Class A
Preferred Units with respect to the payment of distributions on such

interests and distributions upon the occurrence of a Liquidation Event relating
to the Partnership and (b) for purposes of Section 8(a) only, any equity
securities in any Subsidiary of the Partnership (or any debt or other securities
convertible into equity securities of any Subsidiary of the Partnership).

“Partnership” has the meaning assigned to it in the recitals hereof.

“Partnership Interests” has the meaning assigned to it in Section 6(a)(i)
hereof.

“Permitted Activities” means (i) the asset management, investment management and
financial services business or any business ancillary, complementary or
reasonably related thereto and reasonable extensions thereof, (ii) the
businesses currently conducted by the Company, the Operating Partnerships or
their Affiliates as of the Initial Issuance Date, and (iii) such other lines of
business as may be consented to by the Holders’ Committee, in each of clauses
(i), (ii) and (iii) only to the extent conducted by any of the Operating
Partnerships and, subject to compliance with Section 3(b)(ii), an Operating
Group Entity.

“Preceding Year” has the meaning assigned to it in Section 6(a)(i) hereof.

“Preferred Distributions” has the meaning assigned to it in Section 3(a) hereof.

“Redemption Multiple” means, with respect to redemptions occurring during the
periods specified below, the following percentages:

(i)    105% with respect to redemptions occurring during the period commencing
on the Closing Date and ending on the day immediately prior to the Step Up Date;

(ii)    103% with respect to redemptions occurring during the period commencing
on the Step Up Date and ending on the day immediately prior to the first
anniversary of the Step Up Date;

(iii)    101% with respect to redemptions occurring during the period commencing
on the first anniversary of the Step Up Date and ending on the day immediately
prior to the second anniversary of the Step Up Date; and

(iv)    100% with respect to redemptions occurring on or after the second
anniversary of the Step Up Date.

“Related Party” means, with respect to any Person, (i) any Person that is the
spouse (including a surviving spouse) or another immediate family member of such
Person, (ii) the estate and lawful heirs of such Person or (iii) any trust,
family partnership, foundation, family limited liability company or other estate
planning vehicle for which such Person acts as a trustee or beneficiary,
provided that the investment decisions relating to any equity interests of the
Operating Partnerships held by such trusts or other entities are controlled
directly or indirectly by such Person.

“Reorganization Event” has the meaning assigned to it in Section 11(a) hereof.

“Revolving Credit Facility” means the $150.0 million, 5-year unsecured revolving
credit facility entered into by the Partnership, among other parties, on
November 20, 2014, as amended, modified or supplemented from time to time in
accordance with Section 8 hereof; provided, that for purposes of any defined
terms set forth herein that reference the corresponding defined terms in the
Revolving Credit Facility, such defined terms shall have the respective meanings
set forth in the Revolving Credit Facility as in effect as of the date hereof.

“ROFR Notice” has the meaning assigned to it in Section 13 hereof.

“Seller” has the meaning assigned to it in Section 13 hereof.

“Step Up Date” means February 19, 2020.

“Subsidiary” of a Person means any other Person as to which such Person owns,
directly or indirectly, or otherwise Controls more than 50% of the voting shares
or other similar interests or a general partner interest or managing member or
similar interest of such Person. A Subsidiary of the Company, its direct
Subsidiaries or an Operating Group Entity does not include any OZ Fund or any of
its Subsidiaries.

“Third Party Buyer” has the meaning assigned to it in Section 13 hereof.

“Transfer” means any direct, indirect or synthetic transfer, sale, assignment,
pledge, conveyance, hypothecation or other encumbrance or disposition.

“Unit Designation” has the meaning assigned to it in the recitals hereof.

“Unit Price” means $119.70, subject to appropriate adjustment in the event of
any equity dividend, equity split, combination or other similar recapitalization
with respect to the Class A Preferred Units.

3.    Distributions; Allocations.

(a)    Annual Distributions. Each holder of Class A Preferred Units shall be
entitled to receive, when, as and if declared by the General Partner in its sole
discretion out of funds legally available therefor, cumulative cash
distributions (“Preferred Distributions”) on each Class A Preferred Unit
calculated based on the Liquidation Preference of such Class A Preferred Unit at
a rate per annum equal to the Distribution Rate (taking into account the
different Distribution Rates that may apply during each Distribution Period in
accordance with the definition of Distribution Rate or Section 6(b) below), with
such Preferred Distributions accruing from, and including, the earlier of
(i) the Step Up Date and (ii) if applicable, the 31st day following the
consummation of a Change of Control Event; provided, however, that the amount of
the Preferred Distributions actually paid shall not exceed the sum of the
cumulative Net Income and items of income and gain allocated to such holder
pursuant to Section 3(d). Any Preferred Distributions that have been declared in
accordance with the foregoing sentence shall, unless waived by the Holders’
Committee in its sole discretion, be payable in arrears on the 27th day of
February of each applicable year (each, a “Distribution Payment Date”) to the
holders of record as they appear in the books and records of the Partnership for
the Class A Preferred Units at the close of business on the 15th day of February
(each, a “Distribution Record Date”);

provided, that (i) if any Distribution Payment Date is not a Business Day, then
the Preferred Distribution which would otherwise have been payable on that
Distribution Payment Date may be paid on the next succeeding Business Day and
(ii) accumulated and unpaid Preferred Distributions for any prior Distribution
Period may be paid at any time. Any Preferred Distribution payable on the
Class A Preferred Units, including distributions payable for any partial
Distribution Period, will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Notwithstanding anything to the contrary contained
herein, Preferred Distributions will accumulate whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of those Preferred Distributions and whether or not those Preferred
Distributions are declared. In the event that any Preferred Distributions or
other payments on the Class A Preferred Units are in arrears, or, are otherwise
not payable as a result of the proviso in the first sentence of Section 3(a),
such amounts shall accrue and accumulate at the Distribution Rate. Holders of
the Class A Preferred Units will not be entitled to any distributions in excess
of full cumulative distributions described in this Section 3(a). Any Preferred
Distributions made on the Class A Preferred Units shall first be credited
against the earliest accumulated but unpaid distribution due with respect to the
Class A Preferred Units.

(b)    Funding of Distributions on Operating Group Class A Preferred Units.

(i)    Distributions on Junior Units and Parity Units. Except as provided in
Section 3(c) hereof, unless full cumulative distributions on all of the
Operating Group Class A Preferred Units have been or contemporaneously are
declared and paid in respect of all past Distribution Periods as provided in the
corresponding terms of all Operating Group Class A Preferred Units, (i) no
distributions shall be declared or paid or set apart for payment upon Junior
Units or Parity Units by the Partnership, other than Tax Distributions,
distributions payable in Common Units or Deferred Cash Interests, payments or
distributions required under a Partner Agreement, or distributions payable in
Units of any series of preferred Units that the Partnership may issue ranking
junior to the Class A Preferred Units as to distributions and upon liquidation,
and (ii) no Junior Units or Parity Units shall be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such Units) by the
Partnership (except by conversion or exchange for other Units of the Partnership
that rank junior to the Class A Preferred Units as to distributions and upon
liquidation or for shares of the Company (or the cash value thereof) in
accordance with the Exchange Agreement or the Limited Partnership Agreement);
provided, however, that the foregoing shall not prevent Expense Amount
Distributions in accordance with the Expense Allocation Agreement, distributions
or payments pursuant to the terms of any restricted share units of the Company,
or required to facilitate exchanges of Common Units permitted under the Exchange
Agreement, and distributions or transactions necessary to make any payment when
due on any financing or other contractual arrangement (including, without
limitation, the Limited Partnership Agreement or any Partner Agreement) in
effect on the date hereof, or to which the Holders’ Committee has consented.

(ii)    Inter-Entity Loans. If one of the other Operating Partnerships does not
have legally available funds to pay in full all distributions or redemption
payments required to be paid to the holders of the Operating Group Class A
Preferred Units issued by such other Operating Partnership pursuant to their
terms, the Partnership hereby agrees that it will lend or otherwise make
available to such other Operating Partnership adequate funds in order to enable
it to make

the required distributions or redemption payments in full, provided that the
Partnership has legally available funds to make such loans or otherwise make
such funds available after giving effect to any required distributions or
redemption payments that the Partnership is required to make under the terms of
the Preferred Units. The Company and the Partnership agree that it is the
intention of the Company and the Partnership that all Operating Group Entities
(whether existing as of the date of this Unit Designation or formed as of a
later date) shall support the Partnership’s obligations in respect of the
Operating Group Class A Preferred Units. In furtherance of the foregoing, the
Company and the Partnership agree that, if a Subsidiary of the Company or any of
its Subsidiaries or the Operating Partnerships or any of their Subsidiaries (an
“Operating Group Entity”), in each case, other than OZ Funds (as defined in the
Revolving Credit Facility) and their Subsidiaries, is formed for the purpose of
engaging in one or more Permitted Activities, the Company and the Partnership
shall cause such new Operating Group Entity to (i) expressly agree to the due
and punctual observance and performance of each and every covenant and condition
of this Unit Designation to be performed and observed by the Partnership and all
the obligations and liabilities hereunder (including those obligations and
liabilities described in Section 3(b), Section 3(c) and Section 6) (as agreed in
good faith by the Company and the Holders’ Committee), and (ii) to the extent
requested by the Holders’ Committee, agree to lend or otherwise make available
to the Partnership adequate funds to make any required distributions or
redemption payments in full that the Partnership is required to make under the
terms of the Preferred Units in the event that the Partnership does not have
legally available funds to make such distributions or redemption payments,
provided that such new Operating Group Entity has legally available funds to
make such loans or otherwise make such funds available. Concurrently with the
formation and the commencement of operations of such Operating Group Entity, the
Company shall deliver a certificate to the Holders’ Committee certifying as to
its compliance with the provisions of this Section 3(b)(ii).

(c)    Distributions on Preferred Units of Equal Rank. When distributions are
not paid in full upon the Class A Preferred Units and the Units of any other
series of preferred Units that rank on a parity as to distributions with the
Class A Preferred Units, all distributions declared upon the Class A Preferred
Units and any other series of preferred Units that the Partnership may issue
that rank on a parity as to distributions with the Class A Preferred Units shall
be declared pro rata so that the amount of distributions declared per Class A
Preferred Unit and per Unit of such other series of preferred Units shall in all
cases bear to each other the same ratio that accumulated distributions per
Class A Preferred Unit and accumulated or accrued distributions per Unit of such
other series of preferred Units (which shall not include any accrual in respect
of unpaid distributions for prior Distribution Periods if such other series of
preferred Units is non-cumulative) bear to each other. No interest, or sum of
money in lieu of interest, shall be payable in respect of any distribution
payment or payments on the Class A Preferred Units which may be in arrears.

(d)    Allocations. After giving effect to the special allocations set forth in
Section 6.1(d) of the Limited Partnership Agreement, and subject to Section 5.3
thereof, Net Income and Net Loss for each taxable year (and items of income,
gain, loss and deduction taken into account in computing Net Income and Net
Loss) shall be allocated in a manner such that the Capital Account of each
holder of Class A Preferred Units attributable to ownership of Class A Preferred
Units is, as nearly as possible, equal to (i) the distributions that would be
made with respect to such Class A Preferred Units if the Partnership were
dissolved, its affairs wound up and its assets

sold for their Carrying Value, all Partnership liabilities were satisfied
(limited with respect to each non-recourse liability to the Carrying Value of
the assets securing such liability) and the net assets of the Partnership were
distributed to the Partners, without regard to any limitations on the payment of
Preferred Distributions as a result of the proviso in the first sentence of
Section 3(a) minus (ii) such Partner’s share of Partnership Minimum Gain and
Partner Nonrecourse Debt Minimum Gain, computed immediately prior to the
hypothetical sale of assets.

4.    Liquidation Value.

(a)    In the event of any liquidation, dissolution or winding up of the
Partnership, either voluntary or involuntary (a “Liquidation Event”), after
payment or provision for the liabilities of the Partnership (including the
expenses of such event) and the satisfaction of any claims ranking senior to the
Class A Preferred Units, the holders of the Class A Preferred Units shall be
entitled to receive, out of the assets of the Partnership or proceeds thereof
available for distribution to unit holders, prior to, and in preference to, any
payment or distribution of any assets of the Partnership to the holders of any
Junior Units, an amount equal to the Liquidation Preference per Class A
Preferred Unit plus all accumulated but unpaid Preferred Distributions, taking
into account any limitations on the payment of Preferred Distributions as a
result of the proviso in the first sentence of Section 3(a) (collectively, the
“Liquidation Value”). If the assets of the Partnership available for
distribution in respect of Class A Preferred Units are less than the aggregate
Liquidation Value of all outstanding Class A Preferred Units, such distributions
shall be made to the holders of the Class A Preferred Units pro rata, based on
the aggregate Liquidation Value to which each holder of Class A Preferred Units
is entitled pursuant to this Section 4(a). The foregoing shall not affect any
rights which holders of Class A Preferred Units may have to monetary damages.

(b)    Upon a Liquidation Event, after each holder of Class A Preferred Units
receives a payment equal to the Liquidation Value of its Class A Preferred
Units, such holder shall not be entitled to any further participation in any
distribution of assets by the Partnership.

(c)    If the assets of the Partnership available for distribution upon a
Liquidation Event are insufficient to pay in full the aggregate amount payable
to the holders of all Class A Preferred Units and the holders of any other
outstanding Parity Units that rank equally with the Class A Preferred Units,
such assets shall be distributed to the holders of the Class A Preferred Units
and the holders of such Parity Units pro rata, based on the full respective
distributable amounts to which each such Unitholder is entitled pursuant to this
Section 4.

(d)    Nothing in this Section 4 shall be understood to entitle the holders of
Class A Preferred Units to be paid any amount upon the occurrence of a
Liquidation Event until holders of any classes or series of Units ranking, as to
the distribution of assets upon a Liquidation Event, senior to the Class A
Preferred Units have been paid all amounts to which such classes or series of
Units are entitled.

(e)    Neither the sale, conveyance, exchange or transfer, for cash, Units,
securities or other consideration, of all or substantially all of the
Partnership’s property or assets nor the consolidation, merger or amalgamation
of the Partnership with or into any other entity or the consolidation, merger or
amalgamation of any other entity with or into the Partnership shall be

deemed to be a Liquidation Event, notwithstanding that for other purposes such
an event may constitute a liquidation, dissolution or winding up; provided, that
in the event of any such sale, conveyance, exchange, transfer, consolidation,
merger, amalgamation or similar transaction (which shall include any Change of
Control Event), the successor or acquiring Person (if other than the
Partnership) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Unit Designation to
be performed and observed by the Partnership and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as agreed in good faith by the General Partner and the Holders’
Committee). In addition, notwithstanding anything to the contrary in this
Section 4, no payment will be made to the holders of Class A Preferred Units
pursuant to this Section 4: solely (i) upon the voluntary or involuntary
liquidation, dissolution or winding up of any Subsidiary of the Partnership or
upon any reorganization of the Partnership into another limited liability entity
pursuant to provisions of any Limited Partnership Agreement that allow the
Partnership to convert, merge or convey its assets to another limited liability
entity with or without Limited Partner approval or (ii) if the Partnership
engages in a reorganization or other transaction in which a successor to the
Partnership issues equity securities to the holders of Class A Preferred Units
that have voting powers, rights and preferences that are substantially similar
to the voting powers, rights and preferences of the Class A Preferred Units
pursuant to provisions of any Limited Partnership Agreement that allow the
Partnership to do so without Limited Partner approval, in each case of clauses
(i) and (ii), so long as the Partnership (or any successor thereof, as
applicable) owns substantially the same assets and liabilities as the
Partnership immediately prior to such liquidation, dissolution, winding up or
other transaction.

5.    Optional Redemption.

(a)    At any time following the initial Closing Date, subject to any
limitations imposed by law, the Partnership may, in the General Partner’s sole
discretion, redeem the outstanding Class A Preferred Units, in whole or in part,
at a redemption price per Class A Preferred Unit equal to the product of the
Redemption Multiple and the Liquidation Value per Class A Preferred Unit as of
the redemption date. If less than all of the Class A Preferred Units are to be
redeemed, the General Partner shall select the Class A Preferred Units to be
redeemed pro rata, based on the number of Class A Preferred Units held by each
holder, calculated to the nearest whole Class A Preferred Unit.

(b)    In the event the Partnership shall redeem any or all of the Class A
Preferred Units pursuant to Section 5(a) above, the Partnership shall, subject
to clause (ii) below, give notice of any such redemption to the holders of the
Class A Preferred Units not more than 60 nor less than 10 days (or such other
period as shall be agreed to by the Holders’ Committee) prior to the date fixed
for such redemption. Such notice shall state: (A) the redemption date; (B) the
redemption price; (C) the number of Class A Preferred Units to be redeemed;
(D) the place or places where the Class A Preferred Units are to be surrendered
(if so required in the notice) for payment of the redemption price; and (E) that
distributions on the Class A Preferred Units to be redeemed will cease to accrue
on such redemption date. If less than all of the Class A Preferred Units held by
any holder is to be redeemed, the notice provided to such holder shall also
specify the number of Class A Preferred Units held by such holder to be
redeemed. Failure to give notice to any holder of Class A Preferred Units shall
not affect the validity of the proceedings for the redemption of any Class A
Preferred Units being redeemed. Once notice has been given as provided in this

Section 5(b), so long as (i) funds sufficient to pay the redemption price for
all of the Class A Preferred Units called for redemption have been set aside for
payment and (ii) the Partnership pays the redemption price for all of the
Class A Preferred Units called for redemption within 30 days after providing
notice as provided in this Section 5(b), from and after the redemption date such
Class A Preferred Units that have been called for redemption shall no longer be
deemed outstanding, and all rights of the holders of the Class A Preferred Units
that have been called for redemption with respect to such Class A Preferred
Units shall cease other than the right to receive the redemption price, without
interest.

(c)    The holders of Class A Preferred Units shall have no right to require
redemption of any Class A Preferred Units, except as provided in Section 6
below.

6.    Mandatory Redemption.

(a)    Certain Mandatory Redemption Events.

(i)    From and after March 31, 2020, if the sum of (i) the aggregate amounts
which were distributed in respect of their equity interests in the Partnership
(collectively, “Partnership Interests”) by the Partnership (other than Tax
Distributions, distributions in respect of Class C Non-Equity Interests or
distributions payable in Common Units or Deferred Cash Interests) in respect of
the immediately preceding fiscal year (the “Preceding Year”), or which were
utilized by the Partnership to repurchase Partnership Interests during such
Preceding Year, or were available for such uses (but not so used) and (ii) the
corresponding amounts that were distributed or used for repurchases (or were
available but not used for such purposes) by the other Operating Partnerships
during such Preceding Year were in excess of $100 million (“Excess Distributable
Earnings”), then an amount equal to 20% of such Excess Distributable Earnings
shall be used by the Operating Partnerships to redeem Operating Group Class A
Preferred Units in accordance with this Section 6(a).

(ii)    Each Class A Preferred Unit to be redeemed pursuant to this Section 6(a)
shall be redeemed for an amount equal to the Liquidation Value of such Class A
Preferred Unit as of the relevant redemption date. If less than all of the
Operating Group Class A Preferred Units are to be redeemed on any redemption
date, to the extent possible the Operating Partnerships will redeem their
Operating Group Class A Preferred Units pro rata, based on the aggregate amount
that would be required to redeem all then outstanding Operating Group Class A
Preferred Units in each Operating Partnership. If less than all of the Class A
Preferred Units are to be redeemed on any redemption date, the General Partner
shall select the Class A Preferred Units to be redeemed pro rata, based on the
number of Class A Preferred Units held by each holder, calculated to the nearest
whole Class A Preferred Unit.

(iii)    Commencing with fiscal year 2020 (with respect to Preceding Year 2019),
no later than January 31 of the fiscal year immediately following any Preceding
Year, the General Partner shall deliver to the Holders’ Committee a statement
setting forth the General Partner’s good faith determination of the Excess
Distributable Earnings for such Preceding Year and reasonable supporting
documentation with respect thereto, provided that with respect to Preceding Year
2019 such statement need not be provided prior to March 31, 2020. To the extent
the Partnership is required to make a mandatory redemption pursuant to Section
6(a)

above, on May 15, 2020 and thereafter on the Distribution Payment Date occurring
in February of each following year (each, a “Mandatory Delivery Date”), the
Partnership shall give notice of any such redemption to the holders of the
Class A Preferred Units on the applicable Mandatory Delivery Date and shall,
subject to clause (y) below, redeem the Class A Preferred Units on a date to be
determined by the General Partner that is not more than 60 days or less than 10
days after the Mandatory Delivery Date. Such notice shall state: (A) the
redemption date; (B) the redemption price; (C) the number of Class A Preferred
Units to be redeemed; (D) the place or places where the Class A Preferred Units
are to be surrendered (if so required in the notice) for payment of the
redemption price; and (E) that distributions on the Class A Preferred Units to
be redeemed will cease to accrue on such redemption date. If less than all of
the Class A Preferred Units held by any holder are to be redeemed, the notice
provided to such holder shall also specify the number of Class A Preferred Units
held by such holder to be redeemed. Failure to give notice to any holder of
Class A Preferred Units shall not affect the validity of the proceedings for the
redemption of any Class A Preferred Units being redeemed or the Partnership’s
obligations to redeem at the time set forth herein. Once notice has been given
as provided in this Section 6(a)(iii), so long as funds (x) sufficient to pay
the redemption price for all of the Class A Preferred Units called for
redemption have been set aside for payment and (y) the Partnership pays the
redemption price for all of the Class A Preferred Units called for redemption
within 30 days after providing notice as provided in this Section 6(a)(iii),
from and after the redemption date such Class A Preferred Units that have been
called for redemption shall no longer be deemed outstanding, and all rights of
the holders of the Class A Preferred Units that have been called for redemption
with respect to such Class A Preferred Units shall cease other than the right to
receive the redemption price, without interest.

(b)    Mandatory Redemption Upon Change of Control Event.

(i)    If a Change of Control Event occurs, the Partnership shall redeem all
outstanding Class A Preferred Units pursuant to this Section 6(b) (a “Mandatory
Change of Control Redemption”); provided, however, that such Mandatory Change of
Control Redemption shall not occur prior the earlier of (x) the date that is 91
days after the Maturity Date of the Revolving Credit Facility and (y) the
payment in full of the Loans (as defined in the Revolving Credit Facility) and
all other Obligations that are accrued and payable and the termination of the
Commitments (the earlier of such dates, the “Mandatory Change of Control Trigger
Date”). From and after the date that is 31 days following the consummation of a
Change of Control Event until the Mandatory Change of Control Redemption has
been consummated, the Distribution Rate payable by the Partnership on the
Class A Preferred Units shall increase by 7.0% per annum for all periods set
forth in the definition of Distribution Rate.

(ii)    The Partnership shall redeem all outstanding Class A Preferred Units
pursuant to this Section 6(b) at a redemption price per Class A Preferred Unit
equal to the Liquidation Value per Class A Preferred Unit as of the redemption
date.

(iii)    In the event the Partnership is required to effect a Mandatory Change
of Control Redemption, the Partnership shall, subject to clause (y) below, give
notice of any such Mandatory Change of Control Redemption to the holders of the
Class A Preferred Units not more than 60 nor less than 10 days (or such other
period as shall be agreed to by the Holders’ Committee) prior to the date fixed
for such Mandatory Change of Control Redemption. Such

notice shall state: (A) the redemption date, which shall be no later than 30
days following the Mandatory Change of Control Trigger Date; (B) the redemption
price; (C) the number of Class A Preferred Units to be redeemed; (D) the place
or places where the Class A Preferred Units are to be surrendered (if so
required in the notice) for payment of the redemption price; and (E) that
distributions on the Class A Preferred Units to be redeemed will cease to accrue
on such redemption date. Failure to give notice to any holder of Class A
Preferred Units shall not affect the validity of the proceedings for the
Mandatory Change of Control Redemption of any Class A Preferred Units being
redeemed or the Partnership’s obligations to redeem no later than 30 days
following the Mandatory Change of Control Trigger Date. Once notice has been
given as provided in this Section 6(b)(iii), so long as (x) funds sufficient to
pay the redemption price for all of the Class A Preferred Units called for
redemption have been set aside for payment and (y) the Partnership pays the
redemption price for all of the Class A Preferred Units called for redemption
within 30 days after the Mandatory Change of Control Trigger Date, from and
after the redemption date such Class A Preferred Units that have been called for
redemption shall no longer be deemed outstanding, and all rights of the holders
of the Class A Preferred Units that have been called for redemption with respect
to such Class A Preferred Units shall cease other than the right to receive the
redemption price, without interest.

7.    Refinancing or Other Redemption Trigger Events. As of any Business Day
from and after the date hereof, if the average closing price of the Class A
Shares of the Company on the New York Stock Exchange for the previous 20 trading
days exceeds $15.00 (subject to appropriate adjustment in the event of any
equity dividend, equity split, combination or other similar recapitalization
with respect to the Class A Shares), the General Partner agrees to use its
reasonable best efforts to redeem all of the outstanding Class A Preferred Units
pursuant to Section 5 above as promptly as practicable; provided, that, if such
event occurs prior to February 19, 2020, the General Partner shall use its
reasonable best efforts to obtain the consent of the lenders under the Revolving
Credit Facility and, if consent is required from lenders under any other bona
fide debt financings of the Company at the time, the consent of such other
lenders to effect such redemption as promptly as practicable, it being
understood that no such redemption shall occur absent such consent. The
procedures for the redemption of Class A Preferred Units in Section 6(a) shall
apply mutatis mutandis to the redemption of Class A Preferred Units pursuant to
this Section 7.

8.    Parity Units; Consents; Non-Circumvention.

(a)    The Partnership shall not issue any Parity Units without the prior
written consent of the Holders’ Committee in its sole discretion and the
Partnership shall not, and shall cause each of its Subsidiaries not to, amend,
modify or otherwise cause any of its equity securities (or any debt or other
securities convertible into equity securities of the Partnership or its
Subsidiaries) to become Parity Units without the prior written consent of the
Holders’ Committee, other than (i) Parity Units issued to the Partnership or any
of its wholly-owned Subsidiaries or (ii) subject to Sections 9(d) and (e),
Parity Units issued by Subsidiaries of the Partnership to the extent required to
satisfy, or upon consultation with the Company’s outside counsel in compliance
with, any regulatory or other legal requirements. Nothing in this Unit
Designation shall prohibit any refinancing, refunding, replacement, renewal,
restatement, amendment and restatement, amendment, supplement or other
modification of the Revolving Credit Facility or any existing non-convertible
debt obligations of the Partnership or intercompany debt between or among the

Operating Partnerships; provided, that no such refinancing, refunding,
replacement, renewal, restatement, amendment and restatement, amendment,
supplement or other modification of the Revolving Credit Facility or
intercompany debt shall prohibit the Partnership from making any distributions
or redemptions in respect of the Class A Preferred Units.

(b)    The Company and the Partnership shall not, and shall cause their
respective Subsidiaries not to, engage in any line of business or activity other
than Permitted Activities, in each case, subject to the Company and the
Partnership’s compliance with Section 3.2(b)(ii). The Partnership shall not by
any action or inaction, including, without limitation, amending its Limited
Partnership Agreement or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action or inaction, directly or indirectly, avoid or seek to avoid the
observance or performance of any of the terms of this Unit Designation.
Notwithstanding anything herein to the contrary, so long as the Revolving Credit
Facility is in effect, this Unit Designation shall not restrict the ability of
any OZ Subsidiary to (i) pay dividends or make any other distributions on any
such OZ Subsidiary’s equity interests owned by any Credit Party or any OZ
Subsidiary, (ii) repay or prepay any Indebtedness (as defined in the Revolving
Credit Facility) owed by such OZ Subsidiary to any Credit Party or any OZ
Subsidiary, (iii) make loans or advances to any Credit Party or any OZ
Subsidiary or (iv) transfer, lease or license any of its material property or
assets to any Credit Party.

9.    Voting Rights; Preferred Unit Holders’ Committee.

(a)    This Unit Designation establishes a committee of the holders of the
Class A Preferred Units (the “Holders’ Committee”) to be comprised initially of
Daniel S. Och, as sole member. Subject to the foregoing, the holders of a
majority of the Operating Group Class A Preferred Units then outstanding may at
any time remove members from, or appoint replacement or additional members to,
the Holders’ Committee and shall appoint at least one member promptly if at any
time thereafter the Holders’ Committee has no members. In the event that
additional members are appointed to the Holders’ Committee, the members of the
Holders’ Committee shall act by majority vote on all matters to be approved by
the Holders’ Committee.

(b)    Except as provided herein, the holders of Class A Preferred Units have no
consent, approval, waiver or voting rights or powers. Each holder of Class A
Preferred Units hereby irrevocably delegates all power and authority to the
Holders’ Committee to exercise, on behalf of such holder of Class A Preferred
Units, any and all rights of such holder in respect of such Class A Preferred
Units, including the granting of any waivers or the exercise of any consent,
approval or voting rights or powers on behalf of such holder.

(c)    Each holder of Class A Preferred Units hereby irrevocably constitutes and
appoints the members of the Holders’ Committee (and each of them) existing at
any time and from time to time, as the sole and exclusive attorney-in-fact and
proxy of such holder of Class A Preferred Units, with full power of substitution
and resubstitution, to attend any meeting of the shareholders of the Class A
Preferred Unit holders, and any adjournment or postponement thereof, on such
Class A Preferred Unit holder’s behalf and to vote or abstain from voting the
Class A Preferred Units owned by such holder in its sole discretion for or
against any action or proposal to the fullest extent permitted by law. Any such
vote or abstention shall not be subject

to challenge or input from such holder of Class A Preferred Units. Each holder
of Class A Preferred Units hereby revokes any and all previous proxies with
respect to such holder’s Class A Preferred Units and no subsequent proxies
(whether revocable or irrevocable) shall be given (and if given, shall not be
effective) by such holder with respect to the Class A Preferred Units that
conflict with this proxy. This proxy and power of attorney is intended to be
irrevocable and is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted for good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged and shall be valid and binding
on any person to whom the holder of Class A Preferred Units may transfer any of
its Class A Preferred Units. The attorney-in-fact and proxy identified above
will be empowered at any and all times to vote or act by written consent with
respect to the Class A Preferred Units at every annual, special, adjourned or
postponed meeting of holder of Class A Preferred Units, and in every written
consent in lieu of such a meeting, or otherwise. The power of attorney granted
herein is a durable power of attorney and shall survive the dissolution,
bankruptcy, death or incapacity of each holder of Class A Preferred Units. Any
such vote shall be cast or consent shall be given in accordance with such
procedures relating thereto as shall ensure that it is duly counted for purposes
of determining that a quorum is present and for purposes of recording the
results of such vote or consent. The provisions of this Section 9 shall
terminate with respect to a holder of Class A Preferred Units once such holder
no longer owns any Class A Preferred Units.

(d)    Notwithstanding anything in this Unit Designation to the contrary, none
of the Partnership, any other Operating Group Entity or OZ Fund may issue, and
the Company and the Partnership shall not permit the Partnership, any other
Operating Group Entity or OZ Fund to issue, to (x) any individual who is a
“named executive officer” in the Company’s most recent filing with the
Securities and Exchange Commission that required disclosure pursuant to Rule
402(c) of Regulation S-K or such individual’s Related Parties (or would be a
“named executive officer” with respect to the fiscal year in which the proposed
issuance occurs) or (y) in the event that the Company is not required to file
reports with the Securities and Exchange Commission, any individual who would
have been a “named executive officer” if the Company was required to file such
reports or such individual’s Related Parties, in each case of clauses (x) and
(y), other than DSO or his Related Parties (collectively, the “Designated
Officers”), new equity interests in the Partnership, such Operating Group Entity
or OZ Fund (“New NEO Units”) and make any distributions in respect of such New
NEO Units, unless (i) so long as the Company’s common shares are traded on the
New York Stock Exchange or another nationally recognized stock exchange, the
issuance of such New NEO Units is approved by the Company’s compensation
committee and (ii) to the extent the Company’s common shares are not traded on
the New York Stock Exchange or another nationally recognized stock exchange,
with the prior written consent of the Holders’ Committee. For the avoidance of
doubt, (i) if the issuance of such New NEO Units are approved in accordance with
the preceding sentence, any distributions paid on such New NEO Units that
otherwise comply with the terms of this Unit Designation shall be permitted
without any further action on the part of the compensation committee or the
Holders’ Committee as the case may be, and (ii) this Section 9(d) shall not
restrict issuances of interests in the ordinary course to Designated Officers in
connection with any direct or indirect capital investments they make in the OZ
Funds on substantially the same terms and conditions as third party investors
(other than any waiver of management, incentive, carry or similar fees agreed to
by the Company).

(e)    Neither the Company nor the Partnership shall effect, or cause or permit
to be effected, any transaction between the Company, the Partnership or any
other Operating Group Entity or any OZ Fund, on the one hand, with any
Designated Officer, any holder of at least 10% of the outstanding equity
interests of the Company, the Partnership, any other Operating Group Entity or
their respective Affiliates or Related Parties (for the avoidance of doubt,
other than the Company, the Partnership, any other Operating Group Entity, DSO
or his Related Parties), on the other hand, other than transactions in the
ordinary course of business with any Person (other than any Person that is a
Designated Officer) relating to such Person’s service to any Operating Group
Entity or consistent with past practice as of the date hereof including in
connection with granting any direct or indirect carry or capital interest in the
OZ Funds to such Person, which matters shall, without limiting Section 9(d), be
determined by the Board of Directors of the Company or the compensation
committee thereof.

(f)    None of the Partnership or any other Operating Group Entity shall, and
the Company and the Partnership shall not permit the Partnership or such
Operating Group Entity to, sell, dispose of, or otherwise transfer (whether
directly or indirectly, by merger, spin-off, consolidation, or otherwise) any of
their respective businesses, business lines, or divisions (including their
respective multi-strategy, credit and real estate businesses) or any significant
assets thereof without the prior written consent of the Holders’ Committee;
provided that this Section 9(f) does not restrict any such sale, disposal or
other transfer from any OZ Subsidiary to any Credit Party that is permitted
under Section 8(b), provided that nothing in this Section 9(f) shall limit
obligations of the Operating Partnerships and the Company under Section
3(c)(ii).

10.    Amendments and Waivers. Only the prior written consent of the Holders’
Committee shall be required for the repeal of this Unit Designation, any
amendment (directly or indirectly, by merger, consolidation or otherwise) to
this Unit Designation, or any waiver of any of its provisions. Only the prior
written consent of the Holders’ Committee shall be required for any amendment
(directly or indirectly, by merger, consolidation or otherwise) to the Limited
Partnership Agreement that would have an adverse effect on any holders of the
Class A Preferred Units or effectuate any waiver of any provisions of this Unit
Designation.

11.    No Reissuance. No Class A Preferred Units acquired by the Partnership by
reason of redemption, purchase or otherwise shall be reissued.

12.    Transfers.

(a)    No Class A Preferred Unit (or any rights with respect thereto) shall be
Transferred without the consent of the Holders’ Committee and, solely in the
case of any holder of Class A Preferred Units other than DSO or a Related Party
of DSO, the General Partner; provided, that any such consent shall not be
unreasonably withheld with respect to a request to Transfer Class A Preferred
Units in accordance with this Section 12. Any attempted Transfer that is not
made in compliance with this Section 12 shall be void ab initio.

(b)    No Transfer shall be permitted under Section 12(a) if the Holders’
Committee determines in its sole and absolute discretion that (i) such a
Transfer would pose a risk that the Partnership would be a “publicly traded
partnership” as defined in Section 7704 of the Code; (ii) such Transfer would
obligate the Partnership to register the Interests for resale under any
applicable federal or state securities laws or require the Partnership to file
reports pursuant to any applicable federal or state securities laws.

(c)    Each holder of Class A Preferred Units hereby agrees that it will not
effect any Transfer of all or any of its Class A Preferred Units (whether
voluntarily, involuntarily or by operation of law) in any manner contrary to the
terms of this Unit Designation or that violates or causes the Partnership or the
Partners to violate the Securities Act, the Exchange Act, the Investment Company
Act, or the laws, rules, regulations, orders or other directives of any
governmental authority.

(d)    In the event of any Transfer of Class A Preferred Units, (i) the
transferor shall cause each transferee to agree in writing to comply with the
terms of this Unit Designation and the Partnership Agreement, (ii) prior to such
Transfer by any holder of Class A Preferred Units other than by DSO or a Related
Party of DSO, and as a condition thereto, the General Partner may require such
other documentation, including appropriate opinions of legal counsel, as it
deems necessary in its sole discretion, and (iii) unless waived by the General
Partner in its sole discretion, no Transfer of Class A Preferred Units other
than by DSO or a Related Party of DSO shall be permitted unless the transferor
or the proposed transferee shall have undertaken to pay all reasonable expenses
incurred by the Partnership or its Affiliates in connection therewith.

13.    Right of First Refusal. In the event that a holder of Class A Preferred
Units (other than DSO or a Related Party of DSO) (the “Seller”) receives a
bona-fide offer for the sale of any or all of such holder’s Class A Preferred
Units (the “Offered Securities”), the Seller shall first offer to sell the
Offered Securities to DSO or his designee(s) pursuant to a written notice (the
“ROFR Notice”) provided to DSO, which notice shall include: (i) a description of
the transaction being proposed, (ii) the identity of the offeror (“Third Party
Buyer”), (iii) the purchase price proposed and the manner of payment thereof and
(iv) a term sheet setting forth the material terms and conditions of the offer
and a copy of the proposed agreement, if any. Within twenty (20) days of
receiving the ROFR Notice, DSO must either accept or decline the offer and if
DSO neither accepts nor declines the offer within such twenty (20) day period,
the offer will be considered declined. If the offer is declined by DSO, (i) the
Seller shall next offer to sell the Offered Securities to the General Partner,
on behalf of the Partnership, pursuant to a ROFR Notice and otherwise on the
terms specified in the foregoing sentence, and (ii) if the General Partner
declines such offer, the Seller will have the right to sell the Offered
Securities to the person specified in the offer at a price and on terms and
conditions no less favorable to the Seller than the price and terms and
conditions set out in the ROFR Notice. If the sale to the Third Party Buyer is
not completed within sixty (60) days after the General Partner declines the
offer, this Section 13 shall again become applicable as if the offer had not
been made.

14.    No Preemptive Rights. Unless otherwise determined by the General Partner
and the Holders’ Committee, no holders of the Class A Preferred Units will, as
holders of Class A Preferred Units, have any preemptive rights to purchase or
subscribe for Common Units or any other security of the Partnership.

15.    Notices. Any notices required or permitted to be given to a holder of
Preferred Units hereunder may be given by mail or other means of written
communication, including by electronic mail or other means of electronic
transmission, to the address or other applicable contact details maintained for
such holder in the books and records of the Partnership.

16.    Severability of Provisions. If any right, preference or limitation of the
Class A Preferred Units set forth in this Unit Designation (as this Unit
Designation may be amended from time to time) is invalid, unlawful or incapable
of being enforced by reason of any rule or law or public policy, all other
rights, preferences and limitations set forth in this Unit Designation, which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall nevertheless remain in full force and effect, and
no right, preference or limitation herein set forth be deemed dependent upon any
such other right, preference or limitation unless so expressed herein.

[Signature Page Follows]

IN WITNESS WHEREOF, this Unit Designation has been duly executed as of the date
first above written.

 

OZ ADVISORS LP By:   OCH-ZIFF HOLDING CORPORATION,   its general partner By:  

/s/ Joel M. Frank

Name:   Joel M. Frank Title:   Chief Financial Officer OCH-ZIFF CAPITAL
MANAGEMENT GROUP LLC, as to Section 3(b)(ii), Section 8(b), Section 9(d),
Section 9(e), and Section 9(f) only By:  

/s/ Joel M. Frank

Name:   Joel M. Frank Title:   Chief Financial Officer