EXHIBIT 10.2

 

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OPERATING AGREEMENT

 

OF

 

LAZARD GROUP LLC

 

Dated as of May 10, 2005

 

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TABLE OF CONTENTS

 

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ARTICLE I DEFINITIONS

SECTION 1.01.

  

Definitions

   4

SECTION 1.02.

  

Other Definitional Provisions

   13

SECTION 1.03.

  

References to Schedules

   14 ARTICLE II FORMATION, CONTINUATION AND POWERS

SECTION 2.01.

  

Formation and Continuation

   14

SECTION 2.02.

  

Name

   15

SECTION 2.03.

  

Purpose and Scope of Activity

   15

SECTION 2.04.

  

Principal Place of Business

   15

SECTION 2.05.

  

Registered Agent and Office

   15

SECTION 2.06.

  

Authorized Persons

   15

SECTION 2.07.

  

Specific Authorization

   15 ARTICLE III MANAGEMENT

SECTION 3.01.

  

Management Generally

   16

SECTION 3.02.

  

Lazard Board

   16

SECTION 3.03.

  

Officers

   19

SECTION 3.04.

  

Resignations

   22

SECTION 3.05.

  

Members

   22 ARTICLE IV MEMBERS AND INTERESTS

SECTION 4.01.

  

Members

   22

SECTION 4.02.

  

Managing Member

   23

SECTION 4.03.

  

Interests

   23

SECTION 4.04.

  

Admission and Withdrawal of Members

   25

SECTION 4.05.

  

Liability to Third Parties; Capital Account Deficits

   27

SECTION 4.06.

  

Classes

   27

SECTION 4.07.

  

Certificates

   27

 

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ARTICLE V CAPITAL AND ACCOUNTING MATTERS

SECTION 5.01.

  

Capital

   27

SECTION 5.02.

  

Withdrawals; Return on Capital

   28

SECTION 5.03.

  

Allocation of Profits and Losses

   28

SECTION 5.04.

  

Allocations and Tax Matters

   29

SECTION 5.05.

  

Board Determinations

   30

SECTION 5.06.

  

Books and Accounts

   30

SECTION 5.07.

  

Tax Matters Partner

   31

SECTION 5.08.

  

Tax Information

   31

SECTION 5.09.

  

Withholding

   31 ARTICLE VI DISTRIBUTIONS

SECTION 6.01.

  

Distributions in Respect of Profit Participation Interests

   31

SECTION 6.02.

  

Distributions in Respect of Common Interests

   32

SECTION 6.03.

  

Limitation on Distributions

   33 ARTICLE VII TRANSFERS OF INTERESTS

SECTION 7.01.

  

Transfer of Interests

   33

SECTION 7.02.

  

Permitted Transfers

   33

SECTION 7.03.

  

First Redemption

   34

SECTION 7.04.

  

Second Redemption

   35

SECTION 7.05.

  

Lazard Group Exchange

   35

SECTION 7.06.

  

Estate Transfers

   36

SECTION 7.07.

  

Encumbrances

   36

SECTION 7.08.

  

Legend

   36

SECTION 7.09.

  

Effect of Transfer Not in Compliance with This Article

   37 ARTICLE VIII DISSOLUTION

SECTION 8.01.

  

Dissolution

   37

SECTION 8.02.

  

Liquidation

   37

SECTION 8.03.

  

Distributions

   38

 

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ARTICLE IX INDEMNIFICATION AND EXCULPATION

SECTION 9.01.

  

Exculpation

   38

SECTION 9.02.

  

Indemnification

   38

SECTION 9.03.

  

Non-Exclusivity of Rights

   42

SECTION 9.04.

  

Insurance

   42

SECTION 9.05.

  

Survival

   42 ARTICLE X MISCELLANEOUS

SECTION 10.01.

  

Use of Firm Name

   42

SECTION 10.02.

  

Amendments

   42

SECTION 10.03.

  

Benefits of Agreement

   43

SECTION 10.04.

  

Waiver of Notice

   43

SECTION 10.05.

  

Arbitration

   43

SECTION 10.06.

  

Successors and Assigns

   44

SECTION 10.07.

  

Confidentiality

   44

SECTION 10.08.

  

Notices

   45

SECTION 10.09.

  

No Waiver of Rights

   45

SECTION 10.10.

  

Power of Attorney

   45

SECTION 10.11.

  

Severability

   45

SECTION 10.12.

  

Headings

   46

SECTION 10.13.

  

Entire Agreement

   46

SECTION 10.14.

  

Governing Law

   46

SECTION 10.15.

  

Counterparts

   46

SECTION 10.16.

  

Effectiveness

   46

SECTION 10.17.

  

Corporate Opportunity; Fiduciary Duty

   46

SECTION 10.18.

  

Certain Provisions

   49

 

Exhibits      Exhibit A    Certain Tax Related Matters

 

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OPERATING AGREEMENT (together with all exhibits, annexes and schedules hereto,
this “Agreement”) of Lazard Group LLC (formerly known as Lazard LLC), a Delaware
limited liability company (the “Company”), dated as of May 10, 2005.

 

WHEREAS, the Amended and Restated Limited Partnership Agreement made as of May
6, 1988, as amended (the “Partnership Agreement”), constituted the partnership
agreement of Lazard Partners Limited Partnership, a Delaware limited partnership
(the “Partnership”); and

 

WHEREAS, effective as of 5:00 a.m., New York City time, on March 3, 2000, the
Partnership was converted into the Company under the Delaware Limited Liability
Company Act (6 Del. C. § 18-101, et seq.) (as amended from time to time and any
successor statute thereto, the “Act”) and the ownership, capital and profit
sharing interests in the Partnership were reorganized into ownership, capital
and profit sharing interests in the Company; and

 

WHEREAS, on March 3, 2000, certain members of Lazard Frères & Co. LLC, a New
York limited liability company (“LFNY”), and certain shareholders of Lazard
Frères S.A.S., a French Société par Actions Simplifiée (“LF”), and Maison Lazard
S.A.S., a French Société par Actions Simplifiée (“ML” and, together with LF,
“LFP”), transferred their ownership, capital and profit sharing interests in
LFNY and LFP to the Company in exchange for ownership, capital and profit
sharing interests in the Company; and

 

WHEREAS, as of March 16, 2001, the members of the Company entered into an
Amended and Restated Operating Agreement of the Company, dated as of March 16,
2001 (the “First Amended Operating Agreement”), amending and restating in its
entirety the Operating Agreement of the Company dated March 3, 2000 (the
“Original Operating Agreement”) to reflect certain amendments thereto; and

 

WHEREAS, as of May 30, 2001, the members of the Company entered into a Second
Amended and Restated Operating Agreement of the Company, dated as of May 30,
2001 (the “Second Amended Operating Agreement”), amending and restating in its
entirety the First Amended Operating Agreement to reflect certain amendments
thereto; and

 

WHEREAS, as of January 1, 2002, the members of the Company entered into a Third
Amended and Restated Operating Agreement of the Company, dated as of January 1,
2002 (the “Initial Third Amended Operating Agreement”), amending and restating
in its entirety the Second Amended Operating Agreement to reflect certain
amendments thereto; and

 

WHEREAS, the members of the Company amended the Initial Third Amended Operating
Agreement pursuant to Amendment No.1 dated as of January 10, 2003, Amendment No.
2, dated as of December 10, 2003, and Amendment No. 3, dated as of December 15,
2004, to reflect certain amendments thereto; and

 

WHEREAS, on December 16, 2004, the Company entered into that certain Class B-1
and Class C Members Transaction Agreement relating to Lazard LLC (the
“Transaction Agreement”); and

 

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WHEREAS, the members of the Company further amended the Initial Third Amended
Operating Agreement pursuant to Amendment No. 3.1, dated as of April 7, 2005,
Amendment No. 4, dated as of the date hereof and Amendment No. 5, dated as of
the date hereof, to reflect certain amendments thereto (as so amended through
Amendment No. 5, the “Third Amended Operating Agreement”); and

 

WHEREAS, on the date hereof after the effectiveness of the amendments to the
Third Amended Operating Agreement on the date hereof, the Company entered into
that certain Master Separation Agreement (the “Master Separation Agreement”)
with Lazard Ltd, a Bermuda company (“Lazard Ltd”), LAZ-MD Holdings LLC, a
Delaware limited liability company (“LAZ-MD”), and LFCM Holdings LLC, a Delaware
limited liability company and currently wholly owned subsidiary of the Company
(“LFCM”); and

 

WHEREAS, pursuant to the Transaction Agreement, on the date hereof and after
entry into the Master Separation Agreement, certain Class B-1 Members and Class
C Members (each as defined in the Third Amended Operating Agreement) transferred
Class

B-1 Interests and Class C Interests (each as defined in the Third Amended
Operating Agreement) to LAZ-MD, and simultaneously therewith, pursuant to
Section 6.02(b) of the Third Amended Operating Agreement, all other Interests
(as defined in the Third Amended Operating Agreement) were transferred to LAZ-MD
in exchange for limited liability company interests in LAZ-MD (the “Forced
Sale”); and

 

WHEREAS, pursuant to and simultaneously with the consummation of the Exchange
and the Forced Sale, all members of the Company immediately prior to the
Exchange and the Forced Sale ceased to be members of the Company, and LAZ-MD was
admitted to the Company as the sole member and is continuing the Company without
dissolution; and

 

WHEREAS, LAZ-MD, as the sole member of the Company, is entering into this
Agreement to amend and restate in its entirety the Third Amended Operating
Agreement, effective immediately, to reflect, among other things, (1) the
recapitalization of the Company’s limited liability company interests into new
classes of limited liability company interests having the rights and obligations
set forth herein, (2) the reconstitution of the management and governance of the
Company as set forth herein, and (3) the change in the name of the Company to
“Lazard Group LLC”; and

 

WHEREAS, on the date hereof, immediately after the effectiveness of this
Agreement, the Company is causing the filing of a Certificate of Amendment to
its Certificate of Formation with the Secretary of State of the State of
Delaware to reflect the change in the Company’s name from “Lazard LLC” to
“Lazard Group LLC”; and

 

WHEREAS, pursuant to, and subject to satisfaction or waiver of the conditions
set forth in, the Transaction Agreement and the Master Separation Agreement, on
the date hereof, LAZ-MD shall redeem the limited liability company interests in
LAZ-MD that were issued in exchange for Class B-1 Interests and Class C
Interests (each as defined in the Third Amended Operating Agreement) for the
Redeemable Interests (as defined below), effective immediately after
effectiveness of this Agreement (the “First Redemption”); and

 

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WHEREAS, pursuant to, and subject to satisfaction or waiver of the conditions
set forth in, the Transaction Agreement and the Master Separation Agreement,
immediately after consummation of the First Redemption, the Company shall
contribute all of its right, title and interests in and to certain businesses
and assets of the Company (the “Separated Business”) to LFCM, and the Company
shall delegate, and LFCM shall assume, certain liabilities, including
liabilities relating to the Separated Business, and the Company shall distribute
all of the limited liability company interests in LFCM to LAZ-MD, in each case,
on the terms and subject to the conditions set forth in the Master Separation
Agreement (collectively, the “Separation”); and

 

WHEREAS, pursuant to, and subject to satisfaction or waiver of the conditions
set forth in, the Transaction Agreement and the Master Separation Agreement,
immediately after consummation of the Separation, (1) Lazard Ltd shall
consummate the initial public offering of shares of Class A common stock, par
value $.01 per share, of Lazard Ltd (the “Lazard Ltd Common Stock”), (2) Lazard
Ltd shall cause Lazard Ltd Sub A (as defined below) to contribute to the Company
a portion of the net proceeds from such initial public offering on the terms and
subject to the conditions set forth in the Master Separation Agreement (the
“Lazard Ltd Sub A Contribution”), and Lazard Ltd shall cause Lazard Ltd Sub B
(as defined below) to contribute to the Company a portion of the net proceeds
from such initial public offering on the terms and subject to the conditions set
forth in the Master Separation Agreement (the “Lazard Ltd Sub B Contribution”),
and (3) in exchange therefor, the Company shall issue to Lazard Ltd Sub A a
Common Interest (each as defined herein) and to Lazard Ltd Sub B a Common
Interest and admit each of Lazard Ltd Sub A and Lazard Ltd Sub B as Common
Members and Lazard Group Finance LLC, a Delaware limited liability company
(“FinanceCo”), as the Managing Member, in each case in accordance with the
Master Separation Agreement and effective immediately upon consummation of the
contributions in accordance with this Agreement (the “Common Stock IPO
Transaction”); and

 

WHEREAS, pursuant to, and subject to satisfaction or waiver of the conditions
set forth in, the Transaction Agreement and the Master Separation Agreement,
immediately after the consummation of the Separation, the Company shall sell
debt securities to certain institutional investors and shall sell debt
securities to FinanceCo (such sales, together with the Common Stock IPO
Transaction, the “Financing Transactions”); and

 

WHEREAS, pursuant to, and subject to satisfaction or waiver of the conditions
set forth in, the Transaction Agreement and the Master Separation Agreement,
immediately after consummation of the Financing Transactions, the Company shall
redeem the Redeemable Interests for the Redemption Consideration (as defined
below) (the “Second Redemption”); and

 

WHEREAS, each of the Lazard Board (as defined in the Third Amended Operating
Agreement) and LAZ-MD, in its capacity as the sole member of the Company, has
approved and adopted this Agreement.

 

NOW, THEREFORE, the Member hereby amends and restates in its entirety the Third
Amended Operating Agreement and adopts the following as the “limited liability
company agreement” of the Company within the meaning of the Act:

 

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ARTICLE I

 

DEFINITIONS

 

SECTION 1.01. Definitions. As used in this Agreement, the following terms have
the meanings set forth below:

 

“Accounting Period” means (i) in the case of the first Accounting Period, the
period commencing on the date of this Agreement and ending at the next Closing
of the Books Event, and (ii) in the case of each subsequent Accounting Period,
the period commencing immediately after a Closing of the Books Event and ending
at the next Closing of the Books Event.

 

“Acknowledgment” means a Membership Acknowledgement and Agreement with respect
to the Profit Participation Interests in the form to be approved by the Chief
Executive Officer, the Chief Financial Officer and the General Counsel (or any
of them).

 

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

 

“Adjusted Percentage Interest” means, with respect to a Common Member (other
than a Lazard Ltd Member) the product of (i) the Tax Rate (as determined by the
Company in its sole discretion) applicable to such Common Member and (ii) a
fraction, the numerator of which is the Percentage Interest of such Common
Member and the denominator of which is the sum of the Percentage Interests for
all Common Members (other than the Lazard Ltd Members).

 

“Affiliate” means, with respect to any person, any other person that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such person.

 

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

 

“Alternative Tax Rate” means the weighted average of the Tax Rates (weighted in
proportion to relative Percentage Interests) applicable to Common Members other
than the Lazard Ltd Members.

 

“Ancillary Agreements” means “Ancillary Agreements” as defined in that Master
Separation Agreement.

 

“Applicable Tax Rate” means the greater of the Lazard Ltd Tax Rate and the
Alternative Tax Rate.

 

“Bankruptcy Event” means the occurrence of any of the events described in
Section 18-304 of the Act or any similar provision of any successor statute.

 

“Cap” has the meaning set forth in Section 5.04.

 

“Capital” means, with respect to any Member, such Member’s Common Capital and/or
Profit Participation Capital, as applicable.

 

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“Capital Account” has the meaning set forth in Section 5.01.

 

“Certificate of Conversion” means the certificate of conversion converting the
Partnership into the Company filed with the office of the Secretary of State of
the State of Delaware on March 2, 2000.

 

“Certificate of Formation” means the certificate of formation of the Company
filed with the office of the Secretary of State of the State of Delaware on
March 2, 2000.

 

“Closing of the Books Event” means any of (i) the close of the last day of each
calendar year and each calendar quarter, (ii) the close of any date on which
there occurs a dissolution of the Company, the admission of a new Common Member
or the withdrawal of a Common Member, or (iii) any other time that the Lazard
Board determines to be appropriate for an interim closing of the Company’s
books.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time.

 

“Common Capital” means, with respect to any Common Member, the balance in such
Member’s Common Capital Account from time to time.

 

“Common Capital Account” has the meaning set forth in Section 5.01.

 

“Common Interest” means, with respect to any Common Member, such Member’s Common
Units and Common Capital and rights and obligations with respect to the Company
pursuant to this Agreement and applicable law by virtue of such Member holding
such Common Units and having such Common Capital.

 

“Common Member” means any person who, from time to time, is entitled to a Common
Interest pursuant to and in compliance with this Agreement and who shall have
been admitted to the Company as a Common Member in accordance with this
Agreement and shall not have ceased to be a Common Member under the terms of
this Agreement.

 

“Common Member’s Proportionate Tax Share” means (i) with respect to a Lazard Ltd
Member, the product of (x) the Lazard Ltd Tax Distribution for the fiscal year,
fiscal quarter or other period, as applicable, and (y) a fraction, the numerator
of which is the Percentage Interest of such Lazard Ltd Member for such fiscal
year, fiscal quarter or other period and the denominator of which is the sum of
the Percentage Interests for all Lazard Ltd Members for such fiscal year, fiscal
quarter or other period and (ii) with respect to a Common Member other than a
Lazard Ltd Member, the product of (x) the Remaining Tax Distribution for the
fiscal year, fiscal quarter or other period, as applicable, and (y) a fraction,
the numerator of which is the Adjusted Percentage Interest of such Common Member
for such fiscal year, fiscal quarter or other period and the denominator of
which is the sum of the Adjusted Percentage Interests for all Common Members
(other than the Lazard Ltd Members) for such fiscal year, fiscal quarter or
other period. In the event that the Percentage Interest of a Common Member
changes during any fiscal year, fiscal quarter or other period, the Common
Member’s Proportionate Tax Share of such Common Member and the other Common
Members, as the case may be, for such fiscal year, fiscal quarter

 

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or other period shall be appropriately adjusted to take into account the Common
Members’ varying interests.

 

“Common Stock IPO Transaction” has the meaning set forth in the recitals to this
Agreement.

 

“Common Tax Distribution” means, for each fiscal year, fiscal quarter or other
period of the Company during the term of the Company, the product of (i) the
aggregate amount of taxable income or gain allocated to the Common Members
pursuant to Section 5.04(a)(ii) for such fiscal year, fiscal quarter or other
period and (ii) the Applicable Tax Rate for such fiscal year, fiscal quarter or
other period.

 

“Common Units” has the meaning set forth in Section 4.03(b).

 

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

 

“Conversion Agreement” means the Conversion Agreement dated as of March 3, 2000,
among the requisite percentage of the partners of the Partnership.

 

“Coordination Agreement” means the Amended and Restated Coordination Agreement,
to be entered into as of the date hereof, by and among the Company, LFP, LB,
LFNY and LAM.

 

“Delaware Arbitration Act” has the meaning set forth in Section 10.05(d).

 

“Directors” has the meaning set forth in Section 3.02(a).

 

“Disputes” has the meaning set forth in Section 10.05.

 

“Dividend Distribution” means, for each Common Member, the product of (1) the
number of Common Units held by such Member and (2) the per share cash dividend,
if any, to be paid on such date by Lazard Ltd as declared by the Board of
Directors of Lazard Ltd.

 

“Documents” has the meaning set forth in Section 2.07.

 

“Elective Lazard Group Exchange” has the meaning set forth in Section 7.05(b).

 

“Encumbrance” has the meaning set forth in Section 7.07.

 

“Estate Transfer” has the meaning set forth in Section 7.06.

 

“Estate Transferee” has the meaning set forth in Section 7.06.

 

“Executive Review” has the meaning set forth in Section 10.05(b).

 

“FinanceCo” has the meaning set forth in the recitals to this Agreement.

 

“Financing Documents” means the agreements to which the Company is a party to be
entered into in connection with the Financing Transactions, including (1) the
Underwriting

 

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Agreement, dated as of May 4, 2005, by and among Lazard Ltd, the Company and
Goldman, Sachs & Co., as representative of the underwriters, with respect to the
Common Stock IPO Transaction, (2) the Underwriting Agreement, dated as of May 4,
2005, by and among Lazard Ltd, the Company, FinanceCo and Goldman, Sachs & Co.,
as representative of the underwriters, with respect to the initial public
offering of the Lazard Ltd equity security units pursuant to the Financing
Transactions, (3) the purchase agreement, dated as of May 4, 2005, by and
between the Company, Citigroup Global Markets, Inc. and J.P. Morgan Securities
Inc., (4) the registration rights agreement, dated as of the date hereof, by and
between the Company, Citigroup Global Markets, Inc. and J.P. Morgan Securities
Inc., (5) the Indenture, with The Bank of New York as Trustee, dated as of the
date hereof, (6) the First Supplemental Indenture, with The Bank of New York as
Trustee, dated as of the date hereof, (7) the Second Supplemental Indenture,
with The Bank of New York as Trustee, dated as of the date hereof, (8) the
Investment Letter, dated as of March 15, 2005, by and among the Company, Lazard
Ltd and IXIS-Corporate & Investment Bank, an entity organized under the laws of
France (“IXIS”), (9) the Registration Rights Agreement to be entered into by and
among FinanceCo, the Company and IXIS, (10) the Senior Revolving Credit
Agreement to be entered into among the Company, JPMorgan Chase Bank, N.A.,
Citibank, N.A., The Bank of New York and JPMorgan Chase Bank, N.A., as
Administrative Agent, (11) each of the Revolving Subordination Loan Agreements
to be entered into by and between LFNY and each of JPMorgan Chase Bank, N.A.,
Citibank, N.A. and The Bank of New York, (12) the Intercreditor Agreement to be
entered into among the Lenders time to time parties thereto, Citibank, N.A., The
Bank of New York, JPMorgan Chase Bank, N.A., as a lender and as Administrative
Agent, and LFNY, (13) the Guarantee Agreement made by the Company in favor of
JPMorgan Chase Bank, N.A., as Administrative Agent, and (14) each other
agreement to be entered to pursuant to the foregoing.

 

“Financing Transactions” has the meaning set forth in the recitals to this
Agreement.

 

“First Amended Operating Agreement” has the meaning set forth in the recitals to
this Agreement.

 

“First Redemption” has the meaning set forth in the recitals to this Agreement.

 

“Forced Sale” has the meaning set forth in the recitals to this Agreement.

 

“Governing Agreements” means the constitutional or organizational documents
(including, if applicable, any limited liability company agreement, certificate
of incorporation or formation, articles of incorporation or formation, bylaws,
statuts or similar documents or agreements) of each House.

 

“Head of Lazard and Chairman of the Executive Committee” means the Chief
Executive Officer of the Company.

 

“Houses” means LB, LFNY, LFP and the Other Houses.

 

“ICC” has the meaning set forth in Section 10.05(b).

 

“ICC Rules” has the meaning set forth in Section 10.05(b).

 

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“Immediate Lazard Group Exchange” has the meaning set forth in Section 7.05(a).

 

“Initial Third Amended Operating Agreement” has the meaning set forth in the
recitals to this Agreement.

 

“Interest” means a Common Interest, a Profit Participation Interest and, until
the consummation of the Second Redemption, a Redeemable Interest.

 

“LAM” means Lazard Asset Management LLC, a Delaware limited liability company
and a Subsidiary of the Company.

 

“LAZ-MD” has the meaning set forth in the recitals to this Agreement.

 

“LAZ-MD Co II” means LAZ-MD Co II, a Delaware limited liability company.

 

“LAZ-MD Common Members” means all of the Common Members other than Lazard Ltd
and its Subsidiaries (including Lazard Ltd Sub A and Lazard Ltd Sub B).

 

“LAZ-MD Electing Exchanging Member” means an “Electing LAZ-MD Exchanging Member”
as defined in the LAZ-MD Operating Agreement.

 

“LAZ-MD Exchange” means a “LAZ-MD Exchange” as defined in the LAZ-MD Operating
Agreement.

 

“LAZ-MD Exchangeable Interest” means a “Class II Interest” of LAZ-MD having the
rights and obligations set forth in the limited liability company agreement of
LAZ-MD as in effect from time to time.

 

“LAZ-MD Exchanging Member” means a “LAZ-MD Exchanging Member” as defined in the
LAZ-MD Operating Agreement.

 

“LAZ-MD Operating Agreement” means the Operating Agreement of LAZ-MD Holdings
LLC, dated as of the date hereof, as it may be amended from time to time.

 

“Lazard Board” has the meaning set forth in Section 3.01.

 

“Lazard Group Exchange” has the meaning set forth in Section 7.05(b).

 

“Lazard Group Exchange Consideration” has the meaning set forth in Section
7.05(a).

 

“Lazard Ltd” has the meaning set forth in the recitals to this Agreement.

 

“Lazard Ltd Affiliate” has the meaning set forth in Section 10.17(a).

 

“Lazard Ltd Board” has the meaning set forth in Section 3.02(f).

 

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“Lazard Ltd Bye-Laws” means the Bye-Laws of Lazard Ltd, as amended and restated
as of the date hereof and as further amended or supplemented from time to time.

 

“Lazard Ltd Common Stock” has the meaning set forth in the recitals to this
Agreement.

 

“Lazard Ltd Member” means Lazard Ltd Sub A and Lazard Ltd Sub B.

 

“Lazard Ltd Nominating Committee” has the meaning set forth in Section 3.02(f).

 

“Lazard Ltd Recipient” has the meaning set forth in Section 7.02(a).

 

“Lazard Ltd Sub A” means the Subsidiary of Lazard Ltd designated as such on
Schedule 1.01.

 

“Lazard Ltd Sub A Contribution” has the meaning set forth in the recitals to
this Agreement.

 

“Lazard Ltd Sub B” means the Subsidiary of Lazard Ltd designated as such on
Schedule 1.01.

 

“Lazard Ltd Sub B Contribution” has the meaning set forth in the recitals to
this Agreement.

 

“Lazard Ltd Tax Distribution” means the product of (i) the Common Tax
Distribution for the fiscal year, fiscal quarter or other period, as applicable
and (ii) the aggregate Percentage Interest of the Lazard Ltd Members.

 

“Lazard Ltd Tax Rate” means the greater of Lazard Ltd Sub A’s Tax Rate and
Lazard Ltd Sub B’s Tax Rate.

 

“Lazard Mark” means (a) any service mark or trademark which includes the word
“Lazard” or the initials “LF,” including fund names and designations such as
“Lazard Asset Management,” or (b) any other word or design service mark or
trademark which (1) has been used or licensed by any of LB (or any of its
predecessor companies), LFNY, LF, ML or the Company or (2) has been designated
as a Lazard Mark by the Lazard Board on or after the date hereof.

 

“Lazard Name” means any of the firm names Lazard, Lazard Brothers or Lazard
Frères or any other firm name which includes the word “Lazard.”

 

“LB” means Lazard & Co., Holdings Limited, an English private limited company.

 

“LF” means Lazard Frères S.A.S., a French Société par Actions Simplifiée.

 

“LFCM” has the meaning set forth in the recitals to this Agreement.

 

“LFNY” means Lazard Frères & Co. LLC, a New York limited liability company.

 

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“LFP” means each of LF and ML.

 

“Managing Director” means (a) a managing director or limited managing director
of LFNY, (b) an Associé-Gérant of LF, (c) a managing director or limited
managing director of LB or (d) a managing director, limited managing director or
comparable executive of one of the Other Houses, as applicable; provided,
however, that “Managing Director” shall exclude any managing director or limited
managing director of LAM, in their capacity as such.

 

“Managing Member” has the meaning set forth in Section 4.02.

 

“Mandatory Lazard Group Exchange” has the meaning set forth in Section 7.05(b).

 

“Mandatory LAZ-MD Exchange” means a “Mandatory Exchange” as defined in the
LAZ-MD Operating Agreement.

 

“Master Separation Agreement” has the meaning set forth in the recitals to this
Agreement.

 

“MD Common Member” has the meaning set forth in Section 7.05(b).

 

“Members” means the Common Members, Profit Participation Members, the Managing
Member and, until the consummation of the Second Redemption, a Redeemable
Member, and “Member” means any of the foregoing.

 

“ML” means Maison Lazard S.A.S., a French Société par Actions Simplifiée.

 

“Original Operating Agreement” has the meaning set forth in the recitals to this
Agreement.

 

“Other Houses” means LAM and all Subsidiaries of the Company that shall be
designated by the Company as a house (but excluding LB, LFNY and LFP).

 

“Partial LAZ-MD Mandatory Exchange” means a “Partial LAZ-MD Mandatory Exchange”
as defined in the Master Separation Agreement.

 

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

 

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

 

“Percentage Interest” means, with respect to a Common Member, the ratio,
expressed as a percentage, of the number of Common Units held by such Common
Member over the number of Common Units held by all Common Members.

 

“Profit Participation Capital” means, with respect to any Profit Participation
Member, the balance in such Member’s Profit Participation Capital Account from
time to time.

 

“Profit Participation Capital Account” has the meaning set forth in Section
5.01.

 

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“Profit Participation Interest” means, with respect to any Profit Participation
Member, such Member’s Profit Participation Percentage and Profit Participation
Capital and rights and obligations with respect to the Company pursuant to this
Agreement and applicable law by virtue of such Member holding such Profit
Participation Percentage and having such Profit Participation Capital.

 

“Profit Participation Member” means any person who has acquired a Profit
Participation Interest pursuant to and in compliance with this Agreement and who
shall have been admitted to the Company as a Profit Participation Member in
accordance with this Agreement and shall not have ceased to be a Profit
Participation Member under the terms of this Agreement.

 

“Profit Participation Percentage” means, with respect to any Accounting Period,
(1) the profit percentage of a Profit Participation Member under the terms of
this Agreement for such Accounting Period determined in accordance with Section
4.03, or (2) the profit percentage constituting the Unallocated Float.

 

“Profit Participation Member’s Proportionate Tax Share” means, with respect to a
Profit Participation Member, the product of (x) the Profit Participation Tax
Distribution for the fiscal year, fiscal quarter or other period, as applicable,
and (y) the Profit Participation Percentage of such Profit Participation Member
for such fiscal year, fiscal quarter or other period. In the event that the
Profit Participation Percentage of a Profit Participation Member changes during
any fiscal year, fiscal quarter or other period, the Profit Participation
Member’s Proportionate Tax Share of such Profit Participation Member and the
other Profit Participation Members, as the case may be, for such fiscal year,
fiscal quarter or other period shall be appropriately adjusted to take into
account the Profit Participation Members’ varying interests.

 

“Profit Participation Tax Distribution” means, for each fiscal year, fiscal
quarter or other period of the Company during the term of the Company, the
product of (i) the aggregate amount of taxable income or gain allocated to the
Profit Participation Members pursuant to Section 5.04(a)(i) for such fiscal
year, fiscal quarter or other period and (ii) the Applicable Tax Rate for such
fiscal year, fiscal quarter or other period.

 

“Proportionate Distribution Amount” has the meaning set forth in Section
8.03(a).

 

“Quarterly Common Tax Distribution” means, for each Common Member for each of
the first three fiscal quarters of the Company during the term of the Company,
such Common Member’s Proportionate Tax Share for such fiscal quarter.

 

“Quarterly Profit Participation Tax Distribution” means, for each Profit
Participation Member for each of the first three fiscal quarters of the Company
during the term of the Company, such Profit Participation Member’s Proportionate
Tax Share for such fiscal quarter.

 

“Redeemable Class B-1 Interest” means, with respect to any Redeemable Class B-1
Member, such Member’s interest in the Company designated as a “Redeemable Class
B-1 Interest” and such Member’s rights and obligations with respect to the
Company pursuant to this Agreement and applicable law by virtue of such Member
holding such Redeemable Class B-1 Interest.

 

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“Redeemable Class B-1 Member” means any person who has acquired a Redeemable
Class B-1 Interest pursuant to and in compliance with this Agreement and who
shall have been admitted to the Company as a Redeemable Class B-1 Member in
accordance with this Agreement and shall not have ceased to be a Redeemable
Class B-1 Member under the terms of this Agreement.

 

“Redeemable Class C Interest” means, with respect to any Redeemable Class C
Member, such Member’s interest in the Company designated as a “Redeemable Class
C Interest” and such Member’s rights and obligations with respect to the Company
pursuant to this Agreement and applicable law by virtue of such Member holding
such Redeemable Class C Interest.

 

“Redeemable Class C Member” means any person who has acquired a Redeemable Class
C Interest pursuant to and in compliance with this Agreement and who shall have
been admitted to the Company as a Redeemable Class C Member in accordance with
this Agreement and shall not have ceased to be a Redeemable Class C Member under
the terms of this Agreement.

 

“Redeemable Interest” means, with respect to any Redeemable Member, such
Member’s Redeemable Class B-1 Interest and Redeemable Class C Interest.

 

“Redeemable Member” means any Redeemable Class B-1 Member or Redeemable Class C
Member.

 

“Redemption Consideration” has the meaning set forth in Section 4.03(d).

 

“Remaining Tax Distribution” means the excess of the Common Tax Distribution for
the fiscal year, fiscal quarter or other period, as applicable, over the Lazard
Ltd Tax Distribution.

 

“Retirement” means, with respect to any Profit Participation Member, (1) the
resignation, removal (including, for the avoidance of doubt, for cause) or
withdrawal of such Member from the Company, (2) such Member ceasing to be a
Managing Director, (3) the purported Transfer by such Member of his or her
Profit Participation Interest in violation of Article VII, (4) the death of such
Member, or (5) the occurrence with respect to such Member of any of the events
set forth in Section 18-304 of the Act. “Retired” and “Retiring” have meanings
correlative thereto.

 

“Second Amended Operating Agreement” has the meaning set forth in the recitals
to this Agreement.

 

“Second Redemption” has the meaning set forth in the recitals to this Agreement.

 

“Separated Business” has the meaning set forth in the recitals to this
Agreement.

 

“Separation” has the meaning set forth in the recitals to this Agreement.

 

“Subsidiary” means, with respect to any person, any corporation, limited
liability company, company, partnership, trust, association or other legal
entity or organization of which

 

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such person (either directly or through one or more Subsidiaries of such person)
(a) owns, directly or indirectly, a majority of the capital stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation,
limited liability company, partnership, trust, association or other legal entity
or organization, or (b) is otherwise entitled to exercise (1) a majority of the
voting power generally in the election of the board of directors or other
governing body of such corporation, limited liability company, partnership,
trust, association or other legal entity or organization or (2) control of such
corporation, limited liability company, partnership, trust, association or other
legal entity or organization.

 

“Tax Rate” means, with respect to a Common Member, the highest aggregate
marginal statutory federal, state, local and foreign income, franchise and
branch profits tax rate (determined taking into account the deductibility of
state and local income taxes for federal income tax purposes and the
creditability or deductibility of foreign income taxes for federal income tax
purposes) applicable to a person or entity, as appropriate, whose principal tax
residence is in the same national jurisdiction as such Common Member on income
of the same character and source as the income allocated to such Common Member
pursuant to Section 5.04(a)(ii) for such fiscal year, fiscal quarter or other
period; provided, that in the case of a Common Member that is a partnership,
grantor trust or other pass-through entity under United States federal income
tax law, such Common Member’s Tax Rate shall be the weighted average of the Tax
Rates of such Common Member’s members, grantor-owners or other beneficial owners
(weighted in proportion to their relative economic interests in such Common
Member) and provided further that if any such member, grantor-owner or other
beneficial owner of such Common Member is itself a partnership, grantor trust or
other-pass through entity similar principles shall be applied to determine the
Tax Rate of such member, grantor-owner or other beneficial owner.

 

“Third Amended Operating Agreement” has the meaning set forth in the recitals to
this Agreement.

 

“Transaction Agreement” has the meaning set forth in the recitals to this
Agreement.

 

“Transfer” means any transfer, sale, conveyance, assignment, gift,
hypothecation, pledge or other disposition, whether voluntary or by operation of
law, of all or any part of an Interest or any right, title or interest therein.

 

“Transferee” means the transferee in a Transfer or proposed Transfer.

 

“Transferor” means the transferor in a Transfer or proposed Transfer.

 

“Unallocated Float” means any Profit Participation Percentage for any Accounting
Period that is not allocated to a particular Member.

 

SECTION 1.02. Other Definitional Provisions. Wherever required by the context of
this Agreement, the singular shall include the plural and vice versa, and the
masculine gender shall include the feminine and neuter genders and vice versa,
and references to any

 

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agreement, document or instrument shall be deemed to refer to such agreement,
document or instrument as amended, supplemented or modified from time to time.
When used herein:

 

(a) the word “or” is not exclusive;

 

(b) the word “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any
person, means the direct or indirect possession of the power to direct or cause
the direction of the management or policies of such person, whether through the
ownership of voting securities, by contract or otherwise;

 

(c) the words “including,” “includes,” “included” and “include” are deemed to be
followed by the words “without limitation”;

 

(d) the terms “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision;

 

(e) the word “person” means any individual, corporation, limited liability
company, trust, joint venture, association, company, partnership or other legal
entity or a government or any department or agency thereof or self-regulatory
organization; and

 

(f) all section, paragraph or clause references not attributed to a particular
document shall be references to such parts of this Agreement, and all exhibit,
annex and schedule references not attributed to a particular document shall be
references to such exhibits, annexes and schedules to this Agreement.

 

SECTION 1.03. References to Schedules. The Chief Executive Officer and General
Counsel shall maintain and revise from time to time all schedules referred to in
this Agreement in accordance with this Agreement. Notwithstanding anything in
Section 10.02 to the contrary, any such revision shall not be deemed an
amendment to this Agreement, and shall not require any act, vote or approval of
any person. The Company shall not be obligated by this Agreement to distribute
or otherwise provide to the Members copies of or access to such schedules.

 

ARTICLE II

 

FORMATION, CONTINUATION AND POWERS

 

SECTION 2.01. Formation and Continuation. Effective as of 5:00 a.m., New York
City time, on March 3, 2000, the Partnership was converted into a limited
liability company pursuant to the provisions of the Act by the filing of the
Certificate of Conversion and the Certificate of Formation. Pursuant to the Act,
the existence of the Company is deemed to have commenced on June 12, 1984, the
date the Partnership was formed. Pursuant to the Conversion Agreement, the
Certificate of Conversion and the Certificate of Formation, the business of the
Partnership was continued by the Company. The Company became the owner of all
the assets of the Partnership and became liable for all the obligations of the
Partnership, as provided in the Conversion Agreement. Pursuant to the Act, for
all purposes of the laws of the State of Dela-

 

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ware, the Company is deemed to be the same entity as the Partnership. The name
of the Company is hereby changed from “Lazard LLC” to “Lazard Group LLC,” and a
Certificate of Amendment to the Certificate of Formation is being filed by Scott
D. Hoffman, as a designated “authorized person” within the meaning of the Act,
on the date hereof to reflect such change. This Agreement shall be effective
upon execution by LAZ-MD as the sole initial Member.

 

SECTION 2.02. Name. The name of the Company is “Lazard Group LLC”.

 

SECTION 2.03. Purpose and Scope of Activity. The Company has been formed for the
object and purpose of, and the nature of the business to be conducted by the
Company is, engaging in any lawful business purpose or activity for which
limited liability companies may be formed under the Act, and engaging in any and
all activities necessary or incidental to the foregoing. The Company shall
possess and may exercise all the powers and privileges granted by the Act or by
any other law or by this Agreement, together with any powers incidental thereto,
that are necessary or convenient to the conduct, promotion or attainment of the
business, purposes or activities of the Company.

 

SECTION 2.04. Principal Place of Business. For purposes of the Act, the
principal place of business of the Company shall be located in New York, New
York or at such other place as may hereafter be designated from time to time by
the Lazard Board. Company, committee and board meetings shall take place at the
Company’s principal place of business unless decided otherwise for any
particular meeting.

 

SECTION 2.05. Registered Agent and Office. The registered agent for service of
process is, and the mailing address of the registered office of the Company in
the State of Delaware is in care of, The Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware. At any time, the Company may designate another
registered agent and/or registered office.

 

SECTION 2.06. Authorized Persons. The execution and causing to be filed of the
Certificate of Conversion, the Certificate of Formation and the Certificate of
Amendment to the Certificate of Formation by the applicable authorized persons
are hereby specifically ratified, adopted and confirmed. The officers of the
Company are hereby designated as authorized persons, within the meaning of the
Act, to act in connection with executing and causing to be filed, when approved
by the appropriate governing body or bodies hereunder, any certificates required
or permitted to be filed with the Secretary of State of the State of Delaware
and any certificates (and any amendments and/or restatements thereof) necessary
for the Company to file in any jurisdiction in which the Company is required to
make a filing.

 

SECTION 2.07. Specific Authorization. The execution, delivery and performance by
the Company and Bruce Wasserstein, Steven J. Golub, Michael J. Castellano and
Scott D. Hoffman, on behalf of the Company (acting individually or together), of
the Transaction Agreement, the Master Separation Agreement, the Financing
Documents and Ancillary Agreements to which the Company is a party (the
“Documents”) are hereby approved and ratified for all purposes hereunder. The
Company is hereby authorized to execute, deliver and perform, and each Director
and officer on behalf of the Company is hereby authorized to execute and
deliver, the Documents and each other document, agreement or notice contemplated
by the Documents

 

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and all documents, agreements, certificates, or financing statements
contemplated by, or related to, any such agreements or the Documents.

 

ARTICLE III

 

MANAGEMENT

 

SECTION 3.01. Management Generally. Except as otherwise expressly provided in
this Agreement with respect to the Managing Member, the business and affairs of
the Company shall be managed under the direction of the board of directors of
the Company (the “Lazard Board”). In addition to the powers and authorities by
this Agreement expressly conferred upon them, the Lazard Board may exercise all
such powers of the Company and do all such lawful acts and things as are not by
the Act or by this Agreement required to be exercised or done by the Members or
the Managing Member. Certain powers and authorities of the Lazard Board may be
concurrently allocated to or executed by the Chief Executive Officer, or one or
more other officers, when and to the extent expressly delegated thereto by the
Lazard Board in accordance with this Agreement; provided, that, subject to the
provisions of Section 3.02, any such delegation may be revoked at any time and
for any reason by the Lazard Board. Approval by or action taken by the Lazard
Board in accordance with this Agreement shall constitute approval or action by
the Company and shall be binding on the Members. Each Director on the Lazard
Board shall be a “manager” of the Company within the meaning of the Act.

 

SECTION 3.02. Lazard Board. (a) Composition. The Lazard Board shall consist of
three (3) managers (the “Directors”); provided that the number of Directors may
be increased or decreased from time to time exclusively by the Managing Member.
The members of the Lazard Board are set forth on Schedule 3.02(a). Schedule
3.02(a) shall be amended pursuant to Section 1.03 to reflect any change in the
identity of the members of, or increase or decrease in the size of, the Lazard
Board in accordance with this Agreement. Each Director shall continue in such
position until his or her successor shall have been duly elected and shall have
qualified or until the earlier of his or her death, disability, resignation,
retirement or removal from such position.

 

(b) Vacancies; Removal. Vacancies resulting from death, resignation, retirement,
removal from office or other cause, and newly created directorships resulting
from any increase in the authorized number of Directors, may be filled only by
the Managing Member. Any Director may be removed at any time, with or without
cause, by the Managing Member in its sole discretion.

 

(c) Compensation of Directors. Directors of the Company, in their capacity as
such, shall not be entitled to compensation, unless, and to the extent, approved
by the Managing Member.

 

(d) Meetings. Meetings of the Lazard Board shall be held at the Company’s
principal place of business or such other place, within or without the State of
Delaware, that has been designated from time to time by the Lazard Board.
Meetings of the Lazard Board for any purpose or purposes may be called at any
time by (i) the Managing Member, (ii) the Chief Executive Officer, (iii) the
Chairman of the Board, or (iv) a majority of the Directors then in

 

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office. Notice of any meeting of the Lazard Board shall be given to each
Director at his business or residence in writing by hand delivery, first-class
or overnight mail or courier service, electronic mail transmission, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class mail,
such notice shall be deemed adequately delivered when deposited in the United
States mails so addressed, with postage thereon prepaid, at least five (5) days
before such meeting. If by telegram, overnight mail or courier service, such
notice shall be deemed adequately delivered when the telegram is delivered to
the telegraph company or the notice is delivered to the overnight mail or
courier service company at least twenty-four (24) hours before such meeting. If
by electronic mail transmission, such notice shall be deemed adequately
delivered when the notice is transmitted at least twenty-four (24) hours before
such meeting. If by facsimile transmission, such notice shall be deemed
adequately delivered when the notice is transmitted at least twelve (12) hours
before such meeting. If by telephone or by hand delivery, the notice shall be
given at least twelve (12) hours prior to the time set for the meeting. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the Lazard Board need be specified in the notice of such meeting. A
meeting may be held at any time without notice if all the Directors are present
or if those not present waive notice of the meeting in accordance with Section
3.02(g) of this Agreement. Notwithstanding anything to the contrary set forth
herein, notice of any meeting of the Lazard Board to discuss, resolve or act
upon (1) the removal of, or any request for the resignation or retirement of,
the Chairman of the Board or the Chief Executive Officer from such office or (2)
any revocation, reduction or limitation of the powers or authorities delegated
or otherwise granted to the Chairman of the Board or the Chief Executive Officer
shall in each case be deemed adequately delivered only if given to each of the
Directors and, if such person is not a Director, the Chairman of the Board or
Chief Executive Officer, as applicable, in each case in accordance with this
Section

3.02(d) at least seven (7) business days before the date of such meeting (it
being understood that the failure to provide adequate notice in accordance with
this sentence shall invalidate any action or resolution of the Lazard Board to
remove, or to request the resignation or retirement of, the Chairman of the
Board or the Chief Executive Officer from such office or to revoke, reduce or
limit the powers or authorities delegated or otherwise granted to the Chairman
of the Board or the Chief Executive Officer taken at such meeting).

 

(e) Quorum; Alternates; Participation in Meetings by Conference Telephone
Permitted. The presence of a majority of the Directors then in office shall
constitute a quorum for the transaction of business. If at any meeting of the
Lazard Board there shall be less than a quorum present, a majority of the
Directors present may adjourn the meeting from time to time without further
notice. Directors may participate in a meeting of the Lazard Board through use
of conference telephone or similar communications equipment, so long as all
Directors participating in such meeting can communicate with and hear one
another. The Directors present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Directors to leave less than a quorum.

 

(f) Vote Required for Action. The act of the majority of the Directors present
at a meeting of the Lazard Board at which a quorum is present shall be the act
of the Lazard Board; provided, however, that, notwithstanding anything herein to
the contrary, any action or resolution of the Lazard Board (i) to remove, or to
request the resignation or retirement of, the Chairman of the Board or the Chief
Executive Officer from such office or (ii) to revoke, reduce or limit the powers
or authorities delegated or otherwise granted to the Chairman of the Board or

 

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the Chief Executive Officer shall in each case require (1) the approval of each
of the Nominating and Governance Committee of the Board of Directors of Lazard
Ltd (the “Lazard Ltd Nominating Committee”) and the Board of Directors of Lazard
Ltd (the “Lazard Ltd Board”) in accordance with Article 24 of the Lazard Ltd
Bye-Laws and (2) after each of the approvals set forth in clause (1) of this
proviso have been so obtained, the affirmative vote of a majority of the
Directors then in office, to be an act of the Lazard Board.

 

(g) Waiver of Notice; Consent to Meeting. Notice of a meeting need not be given
to any Director who signs a waiver of notice or a consent to holding the meeting
or an approval of the minutes thereof, whether before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such Director. All such waivers, consents
and approvals shall be filed with the Company’s records and made a part of the
minutes of the meeting.

 

(h) Action by Lazard Board Without a Meeting. Any action required or permitted
to be taken by the Lazard Board may be taken without a meeting and without prior
notice if a majority of the Directors then in office shall individually or
collectively consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Lazard Board. Such
action by written consent shall have the same force and effect as a vote of the
Lazard Board in favor of such action. Notwithstanding anything to the contrary
set forth herein, any action or resolution of the Lazard Board (i) to remove, or
request the resignation or retirement of, the Chairman of the Board or the Chief
Executive Officer from such office or (ii) to revoke, reduce or limit the powers
or authorities delegated or otherwise granted to the Chairman of the Board or
the Chief Executive Officer may in each case only be taken or made at a meeting
of the Lazard Board held in accordance with Section 3.02(d) (including the last
sentence thereof).

 

(i) Executive and Other Committees. The Lazard Board may, by resolution adopted
by a majority of the Lazard Board then in office, designate an Executive
Committee to exercise, subject to applicable provisions of law, all the powers
of the Lazard Board in the management of the business and affairs of the Company
when the Lazard Board is not in session, including without limitation the power
to make distributions, to authorize the issuance of Interests if and to the
extent permitted by this Agreement and to approve mergers of the Company, and
may, by resolution similarly adopted, designate one or more other committees.
The Executive Committee and each such other committee shall consist of two or
more Directors of the Company. The Lazard Board may designate one or more
Directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such committee, other
than the Executive Committee (the powers of which are expressly provided for
herein), may to the extent permitted by law exercise such powers and shall have
such responsibilities as shall be specified in the designating resolution. In
the absence or disqualification of any member of such committee or committees,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another
member of the Lazard Board to act at the meeting in the place of any such absent
or disqualified member. Each committee shall keep written minutes of its
proceedings and shall report such proceedings to the Lazard Board when required.
A majority of any committee may determine its action and fix the time and place
of its meetings, unless the Lazard Board shall otherwise provide. Notice of such
meetings shall be given to each

 

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member of the committee in the manner provided for in Section 3.02(d). The
Lazard Board shall have power at any time to fill vacancies in, to change the
membership of, or to dissolve any such committee. Nothing herein shall be deemed
to prevent the Lazard Board from appointing one or more committees consisting in
whole or in part of persons who are not Directors of the Company; provided,
however, that no such committee shall have or may exercise any authority of the
Lazard Board. Notwithstanding anything herein to the contrary, no committee
(including the Executive Committee) shall have the power or authority (i) to
remove, or to request the resignation or retirement of, the Chairman of the
Board or the Chief Executive Officer from such office or (ii) to revoke, reduce
or limit the powers or authorities delegated or otherwise granted to the
Chairman of the Board or the Chief Executive Officer, which actions may only be
taken by the Lazard Board in accordance with this Section 3.02.

 

(j) Records. The Lazard Board shall cause to be kept a record containing the
minutes of the proceedings of the meetings of the Lazard Board and of the
Members, appropriate books and registers and such books of records and accounts
as may be necessary for the proper conduct of the business of the Company.

 

(k) Agents. To the extent of their powers set forth in this Agreement, the
Directors are agents of the Company for the purpose of the Company’s business,
and the actions of the Directors taken in accordance with such powers set forth
in this Agreement shall bind the Company. Notwithstanding the last sentence of
Section 18-402 of the Act, except as provided in this Agreement or in a
resolution of the Directors, a Director may not bind the Company.

 

SECTION 3.03. Officers. (a) The elected officers of the Company shall be a
Chairman of the Board of Directors, a Chief Executive Officer, a Vice Chairman,
a President, a Chief Financial Officer, a General Counsel, a Treasurer, and such
other officers as the Lazard Board from time to time may deem proper. The
Chairman of the Board shall be chosen from among the Directors. All officers
elected by the Lazard Board shall each have such powers and duties as generally
pertain to their respective offices if the Company were a Delaware corporation,
subject to the specific provisions of this Section 3.03. Such officers shall
also have such powers and duties as from time to time may be conferred by the
Lazard Board or by any committee thereof. The Lazard Board or any committee
thereof may from time to time elect, or the Chairman of the Board or Chief
Executive Officer may appoint, such other officers (including one or more
Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers, and
Assistant Controllers) and such agents, as may be necessary or desirable for the
conduct of the business of the Company. Such other officers and agents shall
have such duties and shall hold their offices for such terms as shall be
provided in this Agreement or as may be prescribed by the Lazard Board or such
committee or by the Chairman of the Board or Chief Executive Officer, as the
case may be; provided that, notwithstanding anything in this Section 3.03 to the
contrary, such powers and duties may not impair, and shall be subordinate to,
the powers and duties of the Lazard Board set forth in Section 3.01 hereof. The
identity and office of the Officers are set forth on Schedule 3.03(a). Schedule
3.03(a) shall be amended pursuant to Section 1.03 to reflect any change in the
identity or office of the Officers in accordance with this Agreement.

 

(b) Term of Office. Each officer shall hold office until his or her successor
shall have been duly elected and shall have qualified or until his or her death
or until he or she shall resign or retire, but any officer may be removed from
office with or without cause at any

 

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time by the Lazard Board (subject to the provisions of Section 3.02 in the case
of the Chairman of the Board and the Chief Executive Officer) or, except in the
case of an officer or agent elected by the Lazard Board, by the Chairman of the
Board or Chief Executive Officer. Such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.

 

(c) Chairman of the Board. The Chairman of the Board shall preside at all
meetings of the Members (if any shall be called) and of the Lazard Board. The
Chairman of the Board may also serve as Chief Executive Officer, if so elected
by the Lazard Board.

 

(d) Chief Executive Officer. The Chief Executive Officer shall act in a general
executive capacity and shall be responsible for the general management of the
affairs of the Company and shall perform all duties incidental to his or her
office that may be required by law and all such other duties as are properly
required of him by the Lazard Board. He or she shall make reports to the Lazard
Board and the Members, and shall see that all orders and resolutions of the
Lazard Board and of any committee thereof are carried into effect. The Chief
Executive Officer shall, in the absence of or because of the inability to act of
the Chairman of the Board, perform all duties of the Chairman of the Board and
preside at all meetings of Members (if any shall be called) and of the Lazard
Board.

 

(e) Vice Chairman. The Vice Chairman shall be the chief administrative officer
of the Company. He or she shall assist the Chief Executive Officer in the
general supervision of the Company’s administration and operations; and, in
general, he or she shall perform all the duties incident to the office of Vice
Chairman and such other duties as from time to time may be assigned to him by
the Lazard Board, the Chairman of the Board or the Chief Executive Officer.

 

(f) President. The President shall assist the Chief Executive Officer with
respect to strategic matters involving the Company; and, in general, he or she
shall perform all the duties incident to the office of President and such other
duties as from time to time may be assigned to him by the Lazard Board, the
Chairman of the Board or the Chief Executive Officer.

 

(g) Chief Financial Officer. The Chief Financial Officer shall be the chief
financial officer of the Company and act in an executive financial capacity. He
or she shall assist the Chief Executive Officer in the general supervision of
the Company’s financial policies and affairs; and, in general, he or she shall
perform all the duties incident to the office of Chief Financial Officer and
such other duties as from time to time may be assigned to him by the Lazard
Board, the Chairman of the Board or the Chief Executive Officer.

 

(h) General Counsel. The General Counsel shall keep or cause to be kept in one
or more books provided for that purpose, the minutes of all meetings of the
Lazard Board, the committees of the Lazard Board and the Members (if any shall
be called); he or she shall see that all notices are duly given in accordance
with the provisions of this Agreement and as required by law; he or she shall be
custodian of the records; and he or she shall see that the books, reports,
statements, certificates and other documents and records required by law to be
kept and filed are properly kept and filed; and, in general, he or she shall
perform all the duties incident to the office of General Counsel and such other
duties as from time to time may be assigned to him by the Lazard Board, the
Chairman of the Board or the Chief Executive Officer.

 

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(i) Treasurer. The Treasurer shall exercise general supervision over the
receipt, custody and disbursement of corporate funds. The Treasurer shall cause
the funds of the Company to be deposited in such banks as may be authorized by
the Lazard Board, or in such banks as may be designated as depositaries in the
manner provided by resolution of the Lazard Board. He or she shall have such
further powers and duties and shall be subject to such directions as may be
granted or imposed upon him from time to time by the Lazard Board, the Chairman
of the Board or the Chief Executive Officer.

 

(j) Executive Vice Presidents. Each Executive Vice President shall have such
powers and shall perform such duties as shall be assigned to him by the Lazard
Board.

 

(k) Other Officers. The Lazard Board may from time to time as it deems advisable
appoint other officers of the Company and assign titles and functional titles to
any such individual. Such officers shall have such functions, powers and
obligations, including such power to bind the Company as the Lazard Board shall
delegate to them.

 

(l) Contracts. Notwithstanding any other provision contained in this Agreement
and except as required by law, any contracts or other instruments may be
executed and delivered in the name and on the behalf of the Company by such
officer or officers of the Company as the Lazard Board may from time to time
direct. Such authority may be general or confined to specific instances as the
Lazard Board may determine. The Chairman of the Board, the Chief Executive
Officer, the Vice Chairman, the President, Chief Financial Officer, General
Counsel or any Executive Vice President may execute bonds, contracts, deeds,
leases and other instruments to be made or executed for or on behalf of the
Company. Subject to any restrictions imposed by the Lazard Board, the Chairman
of the Board, the Chief Executive Officer, the Vice Chairman, the President,
Chief Financial Officer, General Counsel or any Executive Vice President may
delegate contractual powers to others under his jurisdiction, it being
understood, however, that any such delegation of power shall not relieve such
officer of responsibility with respect to the exercise of such delegated power.

 

(m) Proxies. Unless otherwise provided by resolution adopted by the Lazard
Board, the Chairman of the Board, the Chief Executive Officer, the Vice
Chairman, the President, Chief Financial Officer, General Counsel or any
Executive Vice President may from time to time appoint an attorney or attorneys
or agent or agents of the Company, in the name and on behalf of the Company, to
cast the votes which the Company may be entitled to cast as the holder of stock
or other securities in any other person, any of whose stock or other securities
may be held by the Company, at meetings of the holders of the stock or other
securities of such other person, or to consent in writing, in the name of the
Company as such holder, to any action by such other person, and may instruct the
person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed in the name and on behalf
of the Company and under its corporate seal or otherwise, all such written
proxies or other instruments as he or she may deem necessary or proper in the
premises.

 

(n) Removal. Any officer elected, or agent appointed, by the Lazard Board may be
removed by the affirmative vote of a majority of the Lazard Board then in office
with or without cause, subject, in the case of the Chairman of the Board or the
Chief Executive Officer, to the provisions of Section 3.02. Any officer or agent
appointed by the Chairman of the Board

 

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or the Chief Executive Officer may be removed by such person with or without
cause. No elected officer shall have any contractual rights against the Company
for compensation by virtue of such election beyond the date of the election of
his successor, his death, his resignation or his removal, whichever event shall
first occur, except as otherwise provided in an employment contract or under an
employee deferred compensation plan.

 

(o) Vacancies. A newly created elected office and a vacancy in any elected
office because of death, resignation, or removal may be filled by the Lazard
Board for the unexpired portion of the term at any meeting of the Lazard Board.
Any vacancy in an office appointed by the Chairman of the Board or the Chief
Executive Officer because of death, resignation, or removal may be filled by the
Chairman of the Board or the Chief Executive Officer.

 

SECTION 3.04. Resignations. Any Director or any officer, whether elected or
appointed, may resign at any time by giving written notice of such resignation
to the Chairman of the Board, the Chief Executive Officer or General Counsel,
and such resignation shall be deemed to be effective as of the close of business
on the date said notice is received by the Chairman of the Board, the Chief
Executive Officer or General Counsel, or at such later time as is specified
therein. No formal action shall be required of the Lazard Board or the Members
(including the Managing Member) to make any such resignation effective.

 

SECTION 3.05. Members. (a) No Member Voting Rights. The Members shall not have
voting rights under the Act, this Agreement or otherwise, and shall not be
entitled to consent to, approve or authorize any actions by the Company, except
(1) in the case of the Managing Member, as set forth herein, and (2) in the case
of the Common Members, as explicitly provided in Section 10.02. Without in any
way limiting the foregoing, the Members shall not have voting rights with
respect to the matters set forth in Sections 18-209, 18-213, 18-216, 18-702,
18-704, 18-801 and 18-803 of the Act, all of which voting and approval rights
shall be vested in the Lazard Board, except as expressly set forth herein with
respect to the Managing Member.

 

(b) Authority of Members. Except as expressly set forth herein with respect to
the Managing Member, no Member shall have any power or authority, in such
Member’s capacity as a Member, to act for or bind the Company except to the
extent that such Member is so authorized in writing prior thereto by the Lazard
Board. Without limiting the generality of the foregoing, except as expressly set
forth herein with respect to the Managing Member, no Member, as such, shall,
except as so authorized, have any power or authority to incur any liability or
execute any instrument, agreement or other document for or on behalf of the
Company, whether in the Company’s name or otherwise.

 

ARTICLE IV

 

MEMBERS AND INTERESTS

 

SECTION 4.01. Members. The Company shall have a Managing Member, Common Members,
Profit Participation Members and, until the consummation of the Second
Redemption, Redeemable Members. Schedule 4.01 sets forth the name and address of
the

 

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Members. Schedule 4.01 shall be amended pursuant to Section 1.03 to reflect any
change in the identity or address of the Members in accordance with this
Agreement. Each person admitted to the Company as a Member pursuant to this
Agreement shall be a member of the Company until such person ceases to be a
Member in accordance with the provisions of this Agreement.

 

SECTION 4.02. Managing Member. The Company shall have a managing member (the
“Managing Member”) who shall have the rights, powers, duties and obligations set
forth in this Agreement and no other rights, powers, duties or obligations. The
Managing Member shall be a member of the Company that does not hold an Interest
in its capacity as the Managing Member. Schedule 4.01 sets forth the name and
address of the Managing Member. Schedule 4.01 shall be amended pursuant to
Section 1.03 to reflect any change in the identity or address of the Managing
Member in accordance with this Agreement. The Managing Member shall not be
allocated, distributed or entitled to receive any interest in the profits,
losses, assets or capital of the Company by reason of being designated as the
Managing Member.

 

SECTION 4.03. Interests. (a) The Recapitalization of the Interests of the
Company. Pursuant to the amendments effected by this Agreement, effective
immediately, all of the limited liability company interests in the Company
outstanding immediately prior to the effectiveness of this Agreement shall be
cancelled, and replaced in their entirety as follows: (1) the Class A Interests
and the Class

B-2 Interests (each as defined in the Third Amended Operating Agreement) shall
be cancelled and replaced in their entirety with the Common Interests set forth
on Schedule 4.03, (2) the Class B-1 Interests (as defined in the Third Amended
Operating Agreement) shall be cancelled and replaced in their entirety with the
Redeemable Class B-1 Interests, (3) the Class C Interests (as defined in the
Third Amended Operating Agreement) shall be cancelled and replaced in their
entirety with the Redeemable Class C Interests, and (4) all other limited
liability company interests in the Company shall be cancelled. The Company shall
have three classes of Interests: Common Interests, Profit Participation
Interests and, until the consummation of the Second Redemption, Redeemable
Interests.

 

(b) Common Interests. (i) The Common Interests shall consist of, and be issued
as, units (“Common Units”) and Common Capital. The total number of authorized
Common Units is 500,000,000, which is the total number of authorized shares of
Lazard Ltd Common Stock on the date hereof. The number of authorized Common
Units shall not be changed, modified or adjusted; provided, that in the event
that the total number of authorized shares of Lazard Ltd Common Stock shall be
increased or decreased after the date hereof in accordance with the Bye-Laws of
Lazard Ltd, then the total number of authorized Common Units shall be
correspondingly adjusted by the Lazard Board to the same number. Interests
representing fractional Units may be issued. The number of Common Units issued
to each Common Member is set forth on Schedule 4.03. Schedule 4.03 shall be
amended pursuant to Section 1.03 to reflect any change in the number or the
issuance or allocation of the Common Units in accordance with this Agreement.

 

(ii) Any authorized but unissued Common Units may be issued (1) by the Lazard
Board, or (2) as provided in Section

4.04(a)(i) below, in each case without any further action or approval of any
other person (except that each person issued Common Units must as a condition to
such issuance be admitted to the Company as a Member).

 

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(c) Profit Participation Interests. (i) The Profit Participation Interests shall
consist of, and be allocated as, Profit Participation Percentages and Profit
Participation Capital. The aggregate of all Profit Participation Percentages
shall total 100%. The Profit Participation Percentages allocated to each of the
Profit Participation Members and the Profit Participation Percentage contained
in the Unallocated Float are set forth on Schedule 4.03. Schedule 4.03 shall be
amended pursuant to Section 1.03 to reflect any change in identity of the Profit
Participation Members and the Profit Participation Percentages in accordance
with this Agreement.

 

(ii) In any Accounting Period, the Company (by action of the Chief Executive
Officer or the Lazard Board) may from time to time change or otherwise modify
any or all of the Profit Participation Percentages in his or her sole
discretion, including by changing any Member’s Profit Participation Percentage
to zero, allocating additional Profit Participation Interests from the
Unallocated Float to new or existing Profit Participation Members or increasing
or decreasing the aggregate Profit Participation Percentages allocated to the
Members (with a corresponding decrease or increase in the Profit Participation
Percentage contained in the Unallocated Float); provided that the aggregate of
all Profit Participation Percentages allocated to the Members and the Profit
Participation Percentages contained in the Unallocated Float shall total 100%.

 

(iii) Notwithstanding anything herein to the contrary, the Lazard Board shall
have the power, in its sole discretion, to terminate the Profit Participation
Interests, effective at the time specified in the resolutions of the Lazard
Board approving such termination or, if not so specified in such resolutions, at
the time that the resolutions approving such termination were approved by the
Lazard Board. Upon termination of the Profit Participation Interests, all Profit
Participation Interests shall immediately cease to be outstanding and shall no
longer be allocable by the Company, and such termination shall have the effects
set forth in Section 4.04(b)(ii).

 

(d) Redeemable Interests. (i) The Redeemable Interests shall consist of
Redeemable Class B-1 Interests and Redeemable Class C Interests. The Redeemable
Class B-1 Interests shall consist solely of the right to receive the type and
amount of consideration set forth opposite the applicable Redeemable Class B-1
Member’s name set forth on Schedule 4.03(d). The Redeemable Class C Interests
shall consist solely of the right to receive the type and amount of
consideration set forth opposite the applicable Redeemable Class C Member’s name
set forth on Schedule 4.03(d) (the consideration to be paid in respect of the
Redeemable Class B-1 Interests and Redeemable Class C Interests pursuant to this
Section 4.03(d), the “Redemption Consideration”). The Redeemable Interests shall
not have or consist of any capital accounts or rights in respect of the profits,
gain or capital of the Company. Schedule 4.03(d) shall be amended pursuant to
Section 1.03 to reflect any change in the identity of the Redeemable Members in
accordance with this Agreement.

 

(ii) The Company shall have the right to effect the Second Redemption by
redeeming the Redeemable Interests for the Redemption Consideration at any time
after the First Redemption. Upon the redemption of the Redeemable Interests, all
Redeemable Interests shall immediately cease to be outstanding and shall no
longer be allocable by the Company, and such termination shall have the effects
set forth in Section 4.04(c)(ii) and Section 4.04(c)(iii), as applicable.

 

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SECTION 4.04. Admission and Withdrawal of Members. (a) Common Members. (i)
Effective immediately upon the consummation of, in the case of Lazard Ltd Sub A,
the Lazard Ltd Sub A Contribution or, in the case of Lazard Ltd Sub B, the
Lazard Ltd Sub B Contribution, Lazard Ltd Sub A or Lazard Ltd Sub B, as
applicable, shall be admitted to the Company as a Common Member and shall be
issued a Common Interest pursuant to the Master Separation Agreement and this
Agreement, and Lazard Ltd Sub A shall be issued an additional amount of Common
Units and Common Capital pursuant to (A) any exercise of the Over-allotment
Option (as defined in the Master Separation Agreement) in the amounts, on the
terms and subject to the conditions set forth in the Master Separation Agreement
and this Agreement, (B) the Third Party Investment (as defined in the Master
Separation Agreement) in the amounts, on the terms and subject to the conditions
set forth in the Master Separation Agreement and this Agreement, and (C) the
Second Redemption as contemplated by Schedule 4.03(d) in the amounts, on the
terms and subject to the conditions set forth in the Master Separation Agreement
and this Agreement.

 

(ii) Any recipient of Common Units pursuant to any issuance under Section
4.03(b)(ii)(1) who is not a Common Member at the time of such issuance shall be
admitted as an additional Common Member, and the issuance of the Common Interest
shall be only effective, upon the execution, and delivery to the Company, by
such recipient of an agreement in which such person agrees to be bound by this
Agreement and any other agreements, documents or instruments specified by the
Lazard Board. The admission of a Transferee as a Common Member pursuant to any
Transfer permitted by Section 7.02(a) shall be governed by Section 7.02.

 

(iii) Effective immediately upon the Transfer of a Common Member’s entire Common
Interest as provided in Section

7.02(a), such Member (or his estate) shall cease to have any interest in the
profits, losses, assets, properties or capital of the Company (other than, in
the event such Member is a Profit Participation Member, such Member’s Profit
Participation Interest) and shall cease to be a Common Member.

 

(b) Profit Participation Members. (i) Each of the Managing Directors as of
immediately after the consummation of the Separation and the Recapitalization
(each as defined in the Master Separation Agreement) who are set forth on
Schedule 4.04(b) shall be admitted to the Company as a Profit Participation
Member and issued a Profit Participation Interest immediately upon the
execution, and delivery to the Lazard Board, by such person of an
Acknowledgement; provided that in the event that a Managing Director shall not
execute and deliver to the Lazard Board an Acknowledgement within sixty (60)
days after the date hereof, such Managing Director shall not be admitted as a
Profit Participation Member.

 

(ii) Effective immediately upon the earliest of (1) Retirement of a Profit
Participation Member or (2) termination of the Profit Participation Interests as
provided in Section 4.03(c)(iii), such Member (or his estate) shall cease to
have any interest in the profits, losses, assets, properties or capital of the
Company (other than, in the event such Member is a Common Member, such Member’s
Common Interest and other than, in respect of such former Profit Participation
Member’s Profit Participation Capital, the right to receive any distributions in
respect of such Profit Participation

 

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Capital to the extent provided in Section 8.03) and shall cease to be a Profit
Participation Member; provided that, for the avoidance of doubt, under no
circumstances shall any Profit Participation Member be entitled to receive or
otherwise be distributed any of the Profit Participation Capital associated with
such Member’s Profit Participation Interest in the event of the occurrence of
any of the events set forth in clauses (1) – (2) of this sentence, which Profit
Participation Capital shall thereafter represent solely the right to receive
distributions of such Profit Participation Capital to the extent provided in
Section 8.03. Upon the Retirement of a Profit Participation Member, the Profit
Participation Percentage associated with such Member’s Profit Participation
Interest shall cease to be allocated and become part of the Unallocated Float.

 

(c) Redeemable Members. (i) The initial Redeemable Member is set forth on
Schedule 4.03(d). The admission of a Transferee as a Redeemable Member pursuant
to any Transfer permitted by Section 7.02(c) shall be governed by Section 7.02.

 

(ii) Effective immediately upon the payment or delivery of a Redeemable Class
B-1 Member’s Redemption Consideration with respect to such Member’s Redeemable
Class B-1 Interest, such Member shall cease to have any interest in the profits,
losses, assets, properties or capital of the Company (other than, in the event
such Member is a Common Member and/or a Profit Participation Member, such
Member’s Common Interest and/or Profit Participation Interest, as applicable,
and, if such Member is a Redeemable Class C Member, such Member’s Redeemable
Class C Interest (unless redeemed as provided in clause (iii) below)), shall
cease to have any right to receive any amounts in respect of its Redeemable
Class B-1 Interest, and shall cease to be a Redeemable Class B-1 Member.

 

(iii) Effective immediately upon the payment or delivery of a Redeemable Class C
Member’s Redemption Consideration with respect to such Member’s Redeemable Class
C Interest, such Member shall cease to have any interest in the profits, losses,
assets, properties or capital of the Company (other than, in the event such
Member is a Common Member and/or a Profit Participation Member, such Member’s
Common Interest and/or Profit Participation Interest, as applicable, and, if
such Member is a Redeemable Class B-1 Member, such Member’s Redeemable Class B-1
Interest (unless redeemed as provided in clause (ii) above)), shall cease to
have any right to receive any amounts in respect of its Redeemable Class C
Interest, and shall cease to be a Redeemable Class C Member.

 

(d) Managing Member. (i) The initial Managing Member is LAZ-MD. Effective
immediately upon consummation of the Common Stock IPO Transaction, LAZ-MD shall
automatically cease to be the Managing Member (but shall otherwise remain a
Member with respect to its Interests), and FinanceCo shall be admitted as, and
become, the Managing Member. Notwithstanding anything in this Agreement to the
contrary, the Managing Member may resign from the Company for any reason (with
or without cause); provided, that, as a condition to such resignation, (1) such
resigning Managing Member shall first appoint another person as the new Managing
Member and (2) such person shall be admitted to the Company as the new Managing
Member (upon the execution and delivery of an agreement to be bound by the terms
of this Agreement). Such admission shall be deemed effective immediately prior
to the resignation,

 

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and, immediately following such admission, the resigning Managing Member shall
cease to be a member of the Company (but, if applicable, shall otherwise remain
a Member with respect to its Interests).

 

(ii) Notwithstanding anything herein to the contrary, upon the occurrence of a
Bankruptcy Event with respect to FinanceCo, FinanceCo shall immediately cease to
be the Managing Member of the Company, without any further action required on
the part of FinanceCo or the Company, and Lazard Ltd (or, upon execution by such
person of an agreement to be admitted to the Company as the Managing Member and
be bound by this Agreement, any designee of Lazard Ltd) shall be admitted to the
Company as the Managing Member, and such admission shall be deemed effective
immediately upon such Bankruptcy Event.

 

(e) No Additional Members. No additional Members shall be admitted to the
Company except in accordance with this Article IV.

 

SECTION 4.05. Liability to Third Parties; Capital Account Deficits. Except as
may otherwise be expressly provided by the Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and the
Members (including the Managing Member) and Directors shall not be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being Members or acting as managers or the Managing Member of the
Company. The Members shall not be liable to make up any deficit in their Capital
Accounts.

 

SECTION 4.06. Classes. As used in this Agreement, all Common Members, Profit
Participation Members and Redeemable Members shall be deemed to be separate
Members even if any Member holds more than one class of Interest. References to
a certain class of Interest (or Unit or Capital) with respect to any Member
shall refer solely to that class of Interest (or Unit or Capital) of such Member
and not to any other class of Interest (or Unit or Capital), if any, held by
such Member.

 

SECTION 4.07. Certificates. The Company shall issue all Common Interests, and
may in the discretion of the Lazard Board issue other Interests, in certificated
form in accordance with Section 18-702(c) of the Act, which certificates shall
be held by the Company as custodian for the applicable Members. The form of any
such certificates shall be approved by the Lazard Board and include the legend
required by Section 7.08.

 

ARTICLE V

 

CAPITAL AND ACCOUNTING MATTERS

 

SECTION 5.01. Capital. (a) Capital Accounts. There shall be established on the
books and records of the Company a capital account for each Common Member (a
“Common Capital Account”) and a capital account for each Profit Participation
Member (a “Profit Participation Capital Account”; any of a Profit Participation
Capital Account or a Common Capital Account, a “Capital Account”). Schedule 5.01
sets forth the names, Common Capital Accounts and Profit Participation Capital
Accounts of the Members as of the date hereof. Such Schedule

 

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shall be deemed to be amended from time to time to reflect any change in the
identity, Common Capital Accounts or Profit Participation Capital Accounts in
accordance with this Agreement.

 

(b) Capital Contributions. (i) Pursuant to the Common Stock IPO Transaction, (A)
Lazard Ltd Sub A shall make a capital contribution to the Company of an amount
in cash equal to the Lazard Ltd Sub A Contribution, and, upon consummation of
such capital contribution and admission as a Common Member as provided in
Section 4.04(a), Lazard Ltd Sub A’s Common Capital Account shall accordingly be
credited by an amount equal to the Lazard Ltd Sub A Contribution, and (B) Lazard
Ltd Sub B shall make a capital contribution to the Company of an amount in cash
equal to the Lazard Ltd Sub B Contribution, and, upon consummation of such
capital contribution and admission as a Common Member as provided in Section
4.04(a), Lazard Ltd Sub B’s Common Capital Account shall accordingly be credited
by an amount equal to the Lazard Ltd Sub B Contribution.

 

(ii) Except as otherwise provided in Section 5.01(b)(i), no capital
contributions shall be required (1) unless otherwise determined by the Lazard
Board and agreed to by the contributing Member, (2) unless otherwise determined
by the Lazard Board in connection with the admission of a new Member or the
issuance of additional Interests to a Member, or (3) except as provided in the
Master Separation Agreement.

 

(iii) The Company may invest or cause to be invested all amounts received by the
Company as capital contributions in its sole discretion.

 

SECTION 5.02. Withdrawals; Return on Capital. No Member shall be entitled to
withdraw or otherwise receive any distributions in respect of any Capital,
except (a) in the case of Common Interests, as provided in Section 6.02 or
Section 8.03 or as approved by the Lazard Board, or (b) in the case of Profit
Participation Interests, as provided in Section 6.01 or Section 8.03. The
Members shall not be entitled to any return on their Capital.

 

SECTION 5.03. Allocation of Profits and Losses. As of the end of each Accounting
Period, the balance in each Member’s Capital Account shall be adjusted by (x)
increasing such balance by (i) such Member’s allocable share of each item of the
Company’s income and gain for such Accounting Period (allocated in accordance
with Section 5.04(a)) and (ii) the amount of cash or the fair market value of
other property (determined in accordance with Section 5.05) contributed to the
Company by such Member in respect of such class of Capital during such
Accounting Period, net of liabilities assumed by the Company with respect to
such other property, and (y) decreasing such balance by (i) the amount of cash
or the fair market value of other property (determined in accordance with
Section 5.05) distributed to such Member in respect of such class of Capital or
Interest pursuant to this Agreement, net of liabilities (if any) assumed by such
Member with respect to such other property and (ii) such Member’s allocable
share of each item of the Company’s deduction and loss for such Accounting
Period (allocated in accordance with Section 5.04(a)). The balances in each
Members’ Capital Account shall also be adjusted at the time and in the manner
permitted by the capital accounting rules of the U.S. Treasury Regulation
section 1.704-1(b)(2)(iv)(f). The foregoing and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with

 

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Treasury Regulation section 1.704-1(b), and shall be interpreted and applied in
a manner consistent therewith.

 

SECTION 5.04. Allocations and Tax Matters. (a) Book Allocations. After giving
effect to the allocations set forth in Section 2 of Exhibit A hereto, for
purposes of computing Capital Accounts and allocating any items of income, gain,
loss or deduction thereto, with respect to each Accounting Period:

 

(i) first, a net amount of income, gain, loss and deduction (other than any
depreciation, amortization or other cost recovery deduction) equal to the Profit
Participation Amount for such Accounting Period shall be allocated among the
Profit Participation Capital Accounts of the Profit Participation Members in
proportion to their respective Profit Participation Percentages as of the end of
such Accounting Period; and

 

(ii) thereafter, all other items of income, gain, loss or deduction of the
Company (calculated in the manner contemplated by the capital accounting rules
of the Treasury Regulations promulgated under Section 704(b) of the Code) shall
be allocated among the Common Capital Accounts of the Common Members in
proportion to their respective Common Units as of the end of such Accounting
Period.

 

For the purposes of this Agreement:

 

(A) “Fixed Percentage” means 20%; provided, however, that in the event that the
Profit Participation Amount would in any Accounting Period exceed the product of
(1) 8% and (2) the Operating Revenue for such Accounting Period (such product,
the “Cap”), the Fixed Percentage shall, for such Accounting Period, be an amount
(expressed as a percentage) equal to a fraction, the numerator of which shall be
the Cap and the denominator of which shall be the Operating Income, in each case
for such Accounting Period;

 

(B) “Operating Expenses” means, with respect to any Accounting Period, an amount
equal to the excess, if any, of (1) the consolidated expenses of the Company
over (2) the sum of (a) the aggregate amount of compensation paid or payable to
Managing Directors, (b) all minority interest, (c) all interest expense (but
excluding all “operating” interest expense, including in respect of Lazard
Frères Banque S.A.), (d) all income taxes, and (e) all extraordinary losses, in
each case as determined in accordance with generally accepted accounting
principles in the United States of America and otherwise in accordance with
Section 5.05. For the avoidance of doubt, “Operating Expense” shall exclude
amounts allocable to Profit Participation Members in respect of their Profit
Participation Interests;

 

(C) “Operating Income” means, with respect to any Accounting Period, an amount
equal to the excess, if any, of (1) the Operating Revenue over (2) the Operating
Expenses, in each case for such Accounting Period.

 

(D) “Operating Revenue” means, with respect to any Accounting Period, an amount
equal to the excess, if any, of (1) the sum of (a) the consolidated net revenue
of the Company and (b) all interest expense (but excluding all “operating”
interest expense,

 

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including in respect of Lazard Frères Banque S.A.), over (2) all extraordinary
gains, in each case as determined in accordance with generally accepted
accounting principles in the United States of America and otherwise in
accordance with Section 5.05; and

 

(E) “Profit Participation Amount” means, with respect to any Accounting Period,
an amount equal to the product of (1) the Fixed Percentage and (2) the Operating
Income, in each case for such Accounting Period.

 

In any calculation of Operating Income, all gains and losses arising from the
sale of a business segment or a significant asset outside the ordinary course of
business shall be excluded from Operating Revenue and Operating Expense, as
applicable.

 

(b) Tax Allocations. Except as otherwise required under Section 704(c) of the
Code and the Treasury Regulations promulgated thereunder, the Company shall
cause each item of income, gain, loss or deduction recognized by the Company to
be allocated among the Members for U.S. federal, state and local income and,
where relevant, non-U.S. tax purposes in the same manner that each such item is
allocated to the Members’ Capital Accounts or as otherwise provided herein.
Allocations required by Section 704(c) of the Code shall be made using any
reasonable method permitted by the Treasury Regulations promulgated under
Section 704(c) of the Code that is selected by the tax matters partner.

 

SECTION 5.05. Board Determinations. All determinations, valuations and other
matters of judgment required to be made for purposes of this Article V,
including with respect to calculations of Profit Participation Amount, Ordinary
Revenue and Ordinary Expenses and accounting procedures and tax matters not
expressly provided for by the terms of this Agreement, or for determining the
value of any type or form of proceeds, contribution or distributions hereunder
shall be made by the Lazard Board. In the event an additional Member is admitted
to the Company and contributes property to the Company, or an existing Member
contributes additional property to the Company, pursuant to this Agreement, the
value of such contributed property shall be the fair market value of such
property as determined by the Lazard Board.

 

SECTION 5.06. Books and Accounts. (a) The Company shall at all times keep or
cause to be kept true and complete records and books of account, which records
and book shall be maintained in accordance with U.S. generally accepted
accounting principles. Such records and books of account shall be kept at the
principal place of business of the Company. The Managing Member and the Lazard
Board shall have access thereto and the right to receive copies thereof. As
permitted by Section 18-305(g) of the Act, no Member shall be entitled to review
such records and books of account (including any of the Schedules hereto) unless
the Lazard Board, in its sole discretion, shall permit such review. The
Company’s accounts shall be maintained in United States dollars.

 

(b) The Company’s fiscal year shall begin on the first day of January and end on
the thirty-first day of December of each year, or shall be such other period
designated by the Board. At the end of each fiscal year the Company’s accounts
shall be prepared, presented to the Board and submitted to the Company’s
auditors for examination.

 

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(c) The Company’s auditors shall be an independent accounting firm of
international reputation to be appointed from time to time by the Lazard Board
or the Managing Member. The Company’s auditors shall be entitled to receive
promptly such information, accounts and explanations from the Lazard Board, each
officer and each Member that they deem reasonably necessary to carry out their
duties. The Members shall provide such financial, tax and other information to
the Company as may be reasonably necessary and appropriate to carry out the
purposes of the Company.

 

SECTION 5.07. Tax Matters Partner. Lazard Ltd Sub A is hereby designated as the
tax matters partner of the Company, in accordance with the Treasury Regulations
promulgated pursuant to Section 6231 of the Code and any similar provisions
under any other state or local or non-U.S. tax laws. Lazard Ltd Sub A shall have
the authority, in its sole discretion, to (a) make an election under Section 754
of the Code on behalf of the Company, and each Member agrees to provide such
information and documentation as Lazard Ltd Sub A may reasonably request in
connection with any such election, (b) determine the manner in which “excess
nonrecourse liabilities” (within the meaning of Treasury Regulation section
1.752-3(a)(3)) are allocated among the Members and (c) make any other election
or determination with respect to taxes (including with respect to depreciation,
amortization and accounting methods).

 

SECTION 5.08. Tax Information. The Company shall use commercially reasonable
efforts to prepare and mail as soon as reasonably practicable after the end of
each taxable year of the Company, or as soon as practicable thereafter, to each
Member other than the Managing Member (and each other Person that was such a
Member during such taxable year or its legal representatives), U.S. Internal
Revenue Service Schedule K-1, “Partner’s Share of Income, Credits, Deductions,
Etc.,” or any successor schedule or form, for such Person.

 

SECTION 5.09. Withholding. The Company is authorized to withhold from
distributions and allocations to the Members, and to pay over to any federal,
state, local or foreign governmental authority any amounts believed in good
faith to be so withheld pursuant to the Code or any provision of any other
federal, state, local or foreign law and, for all purposes under this Agreement,
shall treat such amounts as distributed to those Members with respect to which
such amounts were withheld.

 

ARTICLE VI

 

DISTRIBUTIONS

 

SECTION 6.01. Distributions in Respect of Profit Participation Interests. (a)
Subject to the last sentence of this Section 6.01(a), the Company shall
distribute to each Profit Participation Member from such Member’s Profit
Participation Capital Account as promptly as practicable after the end of each
of the first three (3) fiscal quarters of each fiscal year of the Company an
amount equal to such Profit Participation Member’s Quarterly Profit
Participation Tax Distribution for such fiscal quarter. In addition, the Company
shall distribute to each Profit Participation Member from such Member’s Profit
Participation Capital Account as promptly as practicable after the end of each
fiscal year an amount equal to the excess, if any, of such Profit Participation
Member’s Proportionate Tax Share for such fiscal year over the aggregate amount
of Quarterly Profit Participation Tax Distributions made to such Profit
Participation Member

 

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with respect to such fiscal year. If, at the end of any fiscal year of the
Company, the aggregate amount of Quarterly Profit Participation Tax
Distributions made to a Profit Participation Member exceeds such Profit
Participation Member’s Proportionate Tax Share, in each case with respect to
such fiscal year, then (i) in the case of any Profit Participation Member who is
an executive officer of the Company or Lazard Ltd or any other Affiliate of the
Company designated by the Company, the amount of such excess shall reduce the
amount of any future distributions that would otherwise be made to such Profit
Participation Member, including any distributions pursuant to this Section
6.01(a) or Section 6.01(b) and (ii) in the case of any other Profit
Participation Member, the amount of such excess shall be treated as an advance,
and, at the election of the Company, shall be repaid to the Company by such
Profit Participation Member or shall reduce the amount of any future
distributions that would otherwise be made to such Profit Participation Member,
including any distributions pursuant to this Section 6.01(a) or Section 6.01(b).

 

(b) The Company shall, after the end of each fiscal year, distribute to each
Profit Participation Member from such Member’s Profit Participation Capital
Account an amount (if positive) equal to the aggregate of all Profit
Participation Amounts allocated to such Member’s Profit Participation Capital
Account pursuant to Section 5.04(a) during such fiscal year (reduced by the
amount of any distributions pursuant to Section 6.01(a)), with such distribution
to occur on such date and time as determined by the Company; provided that no
distribution shall be made to such person pursuant to this Section 6.01(b)
unless such person shall continue to be a Profit Participation Member as of the
date and time of distribution; provided further that distributions pursuant to
this Section 6.01(b) shall be made to a Profit Participation Member only to the
extent of the positive balance in such Member’s Profit Participation Capital
Account unless otherwise determined by the Lazard Board. Notwithstanding the
foregoing, the Company may (i) withhold all or a portion of the distributions
otherwise payable to any Profit Participation Member pursuant to the immediately
foregoing sentence, or (ii) distribute to any Profit Participation Member all or
a portion of the positive balance, if any, in such Member’s Profit Participation
Capital Account as of the end of the applicable fiscal year (after giving effect
to (A) the allocations pursuant to Section 5.04(a) with respect to the
Accounting Period ending on December 31 of such fiscal year and (B) any
distributions pursuant to the first sentence of this Section 6.01(b)).

 

SECTION 6.02. Distributions in Respect of Common Interests. (a) Subject to the
last sentence of this Section 6.02(a), the Company shall distribute to each
Common Member from such Member’s Common Capital Account as promptly as
practicable after the end of each of the first three (3) fiscal quarters of each
fiscal year of the Company an amount equal to such Common Member’s Quarterly
Common Tax Distribution for such fiscal quarter. In addition, the Company shall
distribute to each Common Member from such Member’s Common Capital Account as
promptly as practicable after the end of each fiscal year an amount equal to the
excess, if any, of such Common Member’s Proportionate Tax Share for such fiscal
year over the aggregate amount of Quarterly Common Tax Distributions made to
such Common Member with respect to such fiscal year. If, at the end of any
fiscal year of the Company, the aggregate amount of Quarterly Common Tax
Distributions made to a Common Member exceeds such Common Member’s Proportionate
Tax Share, in each case with respect to such fiscal year, then (i) in the case
of any Common Member who is an executive officer of the Company or Lazard Ltd or
any other Affiliate of the Company designated by the Company, the amount of such

 

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excess shall reduce the amount of any future distributions that would otherwise
be made to such Common Member, including any distributions pursuant to this
Section 6.02(a) or Section 6.02(b) and (ii) in the case of any other Common
Member, the amount of such excess shall be treated as an advance, and, at the
election of the Company, shall be repaid to the Company by such Common Member or
shall reduce the amount of any future distributions that would otherwise be made
to such Common Member, including any distributions pursuant to this Section
6.02(a) or Section 6.02(b).

 

(b) Lazard Ltd shall have the right to cause the Company to distribute to each
Common Member from such Member’s Common Capital Account amounts in connection
with any dividends on Lazard Ltd Common Stock or as otherwise determined by
Lazard Ltd, in each case at such times, and in such amounts per Common Unit, as
determined by Lazard Ltd in its sole discretion; provided that such other
distributions are pro rata according to the number of Common Units held (subject
to Section 7.05(c)(iii)).

 

SECTION 6.03. Limitation on Distributions. Notwithstanding any provision to the
contrary contained in this Agreement, the Company, and the Lazard Board on
behalf of the Company, shall not be required to make a distribution to a Member
on account of its interest in the Company if such distribution would violate the
Act or any other applicable law.

 

ARTICLE VII

 

TRANSFERS OF INTERESTS

 

SECTION 7.01. Transfer of Interests. No Member may Transfer or agree or
otherwise commit to Transfer all or any portion of, or any of rights, title and
interest in and to, its Interest, except as permitted by the terms and
conditions set forth in this Article VII. The Schedules shall be deemed to be
amended from time to time to reflect any change in the Members or Interests to
reflect any Transfer permitted by this Article VII.

 

SECTION 7.02. Permitted Transfers. (a) Common Interests. No Common Member may
Transfer or agree or otherwise commit to Transfer all or any portion of, or any
of rights, title and interest in and to, its Common Interest, except (i) any
Transfer for which the Lazard Board shall have given its prior approval; (ii)
LAZ-MD may Transfer all or a portion of its Common Interest pursuant to a LAZ-MD
Exchange; (iii) any Common Member who received its Common Interest pursuant to a
LAZ-MD Exchange may Transfer all or any portion of such Common Interest to an
Estate Transferee pursuant to an Estate Transfer; (iv) any Common Member who
received its Common Interest pursuant to a LAZ-MD Exchange or any Estate
Transferee may Transfer all or any portion of such Common Interest to Lazard Ltd
Sub A and Lazard Ltd Sub B as directed by Lazard Ltd (such recipient, the
“Lazard Ltd Recipient”) pursuant to a Lazard Group Exchange; (v) LAZ-MD may
Transfer all or a portion of its Common Interests pursuant to Section 8.4(c) of
the Master Separation Agreement, and (vi) LAZ-MD Co II may Transfer all or a
portion of a Common Interest held by LAZ-MD Co II pursuant to a LAZ-MD Exchange
to the applicable LAZ-MD Electing Exchanging Member in accordance with the
proviso to Section 7.4(b) of the LAZ-MD Operating Agreement.

 

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(b) Profit Participation Interests. No Profit Participation Member may Transfer
or agree or otherwise commit to Transfer all or any portion of, or any of its
rights, title and interest in and to, its Profit Participation Interest.

 

(c) Redeemable Interests. No Redeemable Member may Transfer or agree or
otherwise commit to Transfer all or any portion of, or any of its rights, title
and interest in and to, any of its Redeemable Interests, except (i) LAZ-MD may
Transfer all of its Redeemable Interests pursuant to the First Redemption, (ii)
a Redeemable Member shall Transfer its Redeemable Interest to the Company
pursuant to the Second Redemption, and (iii) the stockholder of Lazard Ltd Sub A
as of the date hereof may indirectly Transfer all of Lazard Ltd Sub A’s
Redeemable Interest by the Transfer of the entire capital stock of Lazard Ltd
Sub A to Lazard Ltd (or a Subsidiary thereof) in exchange for shares of Lazard
Ltd Common Stock pursuant to the Master Separation Agreement.

 

(d) Admission as a Member. Notwithstanding anything to the contrary set forth
herein, a Transferee pursuant to this Section 7.02 shall become a Member, and
shall be listed as a “Common Member” or “Profit Participation Member,” as
applicable, on Schedule 4.01, and shall be deemed to receive the Interest being
Transferred, in each case at such time as such Transferee executes and delivers
to the Company an agreement in which the Transferee agrees to be admitted as a
Member and bound by this Agreement and any other agreements, documents or
instruments specified by the Company; provided that a Transferee who shall (A)
at the time of such Transfer be a Member of the applicable class of Interests
being Transferred or (B) have previously entered into an agreement pursuant to
which the Transferee shall have agreed to become a Member and be bound by this
Agreement (which agreement is in effect at the time of such Transfer), shall not
be required to enter into a new agreement to be bound by this Agreement with
respect to such Interests or such other agreement, documents or instruments as a
condition to receiving the Interest and being admitted or continuing as a
Member, in each case unless otherwise determined by the Company; and provided
further that a Transferee pursuant to the First Redemption shall for the
avoidance of doubt not be required to execute and deliver any additional
agreements as a condition to receiving the Interest and being admitted as a
Member.

 

(e) Transfer of Capital. (a) Notwithstanding anything herein to the contrary,
each Member who Transfers an Interest (or a portion thereof) shall be deemed to
have Transferred (a) in the case of a Common Interest, the entire Common
Interest, including the Common Units and Common Capital with respect to such
Interest (or, if a portion of a Common Interest is being Transferred, such
number of Common Units and a proportionate amount of Common Capital with respect
to such Common Units) to the Transferee, or (b) in the case of a Redeemable
Interest, the entire Redeemable Interest, including all rights to the Redemption
Consideration (or if a portion of a Redeemable Interest is being Transferred,
such portion of the right to receive the Redemption Consideration) to the
Transferee.

 

SECTION 7.03. First Redemption. Each of the transferees set forth on Schedule
4.03(d) shall upon consummation of the First Redemption be admitted as a
Redeemable Member and deemed to receive the Redeemable Interest being
transferred to such person, subject to, in the case of any transferees who shall
not be Class III Redeemable Members or Class IV Redeemable Members (each as
defined in the LAZ-MD Operating Agreement), the execution, and

 

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delivery to the Company, by such transferee of an agreement by such transferee
to become a Member and be bound by the terms of this Agreement and any other
agreements, documents or instruments specified by the Company.

 

SECTION 7.04. Second Redemption. Notwithstanding anything herein to the
contrary, upon the consummation of the Second Redemption, (i) all of the
Redeemable Interests (including all of the Members’ rights, title and interests
in and to such Interests) shall be automatically and immediately transferred to,
and redeemed by, the Company free and clear of all liens or other encumbrances,
without any action required on the part of any Member or any further action on
the part of the Company, as applicable, and (ii) in exchange therefor each
former Redeemable Member shall only have the right to receive the applicable
Redemption Consideration from the Company with respect to such person’s redeemed
Redeemable Interest(s).

 

SECTION 7.05. Lazard Group Exchange. (a) Immediate Exchange. Subject to Section
7.05(b), in the event of a LAZ-MD Exchange in which the transferee of a Common
Interest from LAZ-MD shall be the LAZ-MD Exchanging Member, immediately after
the receipt of such Common Interest by the LAZ-MD Exchanging Member, such Common
Interest shall be automatically transferred free and clear of all liens and
encumbrances to the applicable Lazard Ltd Recipient, without any action required
on the part of any person to effect such transfer (an “Immediate Lazard Group
Exchange”), and, in exchange therefor, the applicable Lazard Ltd Recipient shall
transfer to the LAZ-MD Exchanging Member the amount of Lazard Ltd Common Stock
(or other consideration) required by the Master Separation Agreement (the
“Lazard Group Exchange Consideration”) on the terms, and subject to the
conditions, set forth in this Article VII and in the Master Separation
Agreement.

 

(b) Partial LAZ-MD Mandatory Exchange. In the event of a Partial LAZ-MD
Mandatory Exchange, then (i) the provisions of Section 7.05(a) shall not apply
to the Common Interest transferred to the LAZ-MD Exchanging Member, (ii) the
LAZ-MD Exchanging Member shall be admitted as a Common Member as provided in
Section 7.02(d) (a “MD Common Member”) and shall have the right to transfer all
or a portion of its Common Interest for the applicable Lazard Group Exchange
Consideration at such times, on the terms, and subject to the conditions, set
forth in the Master Separation Agreement (an “Elective Lazard Group Exchange”)
in exchange for the applicable Lazard Group Exchange Consideration, and (iii)
the Company shall have the right to cause all of the MD Common Members to
transfer their entire Common Interests in accordance with the Master Separation
Agreement (a “Mandatory Lazard Group Exchange,” and any of a Mandatory Lazard
Group Exchange, an Immediate Lazard Group Exchange and an Elective Lazard Group
Exchange, an “Lazard Group Exchange”) in exchange for the applicable Lazard
Group Exchange Consideration.

 

(c) Additional Limitations on Partial LAZ-MD Mandatory Exchanges.
Notwithstanding anything herein to the contrary, the Company shall have the
right to subject any Common Interest transferred to an MD Common Member (and, if
applicable, LAZ-MD Co II) pursuant to a Partial LAZ-MD Mandatory Exchange to
limitations and other restrictions in respect of distributions pursuant to
Section 6.02(b) as the Lazard Board shall determine to be appropriate to put
such MD Common Member in a substantially similar position with respect to
distributions had such Partial LAZ-MD Mandatory Exchange not occurred and such
Member had

 

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continued to hold limited liability company interests at LAZ-MD; provided that
the Company shall give written notice of such limitations and obligations to the
MD Common Members subject thereto (it being understood that the failure to give
such notice shall not affect the validity or enforceability of any such
limitations and obligations); and, provided further, that, effective immediately
upon the transfer of all or a portion of such Common Interest to a Lazard Ltd
Recipient, all such limitations and obligations with respect to such Common
Interest (or portion thereof) being transferred shall immediately expire.

 

(d) Acknowledgement. Each MD Common Member and LAZ-MD Co II acknowledges and
agrees to the terms of exchange of such Member’s Common Interest set forth in
Article VIII of the Master Separation Agreement.

 

(e) References to LAZ-MD Exchanging Member. For the purposes of this Section
7.05, references to a LAZ-MD Exchanging Member or a MD Common Member shall, with
respect to any LAZ-MD Exchange effected pursuant to the proviso to Section
7.4(b) of the LAZ-MD Operating Agreement, be deemed to refer to the LAZ-MD
Electing Exchanging Member and not LAZ-MD Co II (it being understood that LAZ-MD
Co II shall be admitted to the Company as a Common Member pursuant to Section
7.02(d) in the event of a LAZ-MD Exchange upon receipt of any Common Interest
hereunder).

 

SECTION 7.06. Estate Transfers. A Member may transfer its Common Interest to any
trust for the benefit of such Member, his direct descendants or a spouse (an
“Estate Transferee”); provided that (i) such transfer receives the prior
approval of the Company (which approvals may be given in the sole discretion of
the Company), (ii) the trustee and any successor trustees for any such trust are
approved by the Company and (iii) the transferee executes and delivers to the
Company an agreement in which the transferee agrees to be bound by this
Agreement and any other agreements, documents or instruments specified by the
Company. In addition, a Member who is an individual may transfer his Common
Interest by operation of law by virtue of the death of such Member to such
Member’s estate, direct descendants or spouse. Any transfer in accordance with
this Section 7.06 is referred to herein as an “Estate Transfer.”

 

SECTION 7.07. Encumbrances. No Member (other than Lazard Ltd or one of its
controlled Subsidiaries) may without the consent of the Company charge or
encumber his Interest or subject his Interest to a lien, pledge, security
interest, right of first refusal, option or other similar limitation (an
“Encumbrance”) except in each case for those created by this Agreement.
Notwithstanding anything to the contrary set forth in this Article VII, the
incurrence of any Encumbrance permitted by this Section 7.07 shall not be deemed
to be a Transfer.

 

SECTION 7.08. Legend. Each Member agrees that any certificate issued to it to
evidence its Interests shall have inscribed conspicuously on its front or back
the following legend:

 

THE LIMITED LIABILITY COMPANY INTEREST IN LAZARD GROUP LLC REPRESENTED BY THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE OR FOREIGN JURIS-

 

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DICTION, AND THIS LIMITED LIABILITY COMPANY INTEREST MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE DISPOSED OF, IN
WHOLE OR IN PART, EXCEPT (A) EITHER (1) WHILE A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND SUCH OTHER APPLICABLE REGISTRATIONS AND QUALIFICATIONS ARE IN
EFFECT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT (INCLUDING, IF APPLICABLE, REGULATION S THEREUNDER) AND SUCH
OTHER APPLICABLE LAWS AND (B) IF PERMITTED BY THE OPERATING AGREEMENT OF LAZARD
GROUP LLC AS IT MAY BE AMENDED FROM TIME TO TIME, WHICH CONTAINS STRICT
PROHIBITIONS ON TRANSFERS, SALES, ASSIGNMENTS, PLEDGES, HYPOTHECATIONS,
ENCUMBRANCES OR OTHER DISPOSITIONS OF THIS LIMITED LIABILITY COMPANY INTEREST.

 

SECTION 7.09. Effect of Transfer Not in Compliance with This Article. Any
purported Transfer of all or any part of a Member’s Interest, or any interest
therein, that is not in compliance with this Article VII shall, to the fullest
extent permitted by law, be void and shall be of no effect.

 

ARTICLE VIII

 

DISSOLUTION

 

SECTION 8.01. Dissolution. The Company shall be dissolved and its affairs shall
be wound up upon (a) a decision made at any time by the Lazard Board to dissolve
the Company, (b) the termination of the legal existence of the last remaining
member of the Company or the occurrence of any other event which terminates the
continued membership of the last remaining member of the Company in the Company
unless the Company is continued without dissolution in a manner permitted by
this Agreement or the Act, or (c) the entry of a decree of judicial dissolution
under Section 18-802 of the Act. Subject to clause (b) of the immediately
preceding sentence, the Company shall not be dissolved solely by reason of, and
shall continue notwithstanding, the death, Retirement, resignation, bankruptcy
or dissolution of any Member (including any Managing Member). None of the
Members shall have any right to terminate, dissolve or have redeemed their class
of Interests (other than in respect of Redeemable Interests pursuant to the
Second Redemption) or, to the fullest extent permitted by law, to terminate,
wind up or dissolve the Company.

 

SECTION 8.02. Liquidation. Upon a dissolution pursuant to Section 8.01, the
Company’s business and assets shall be wound up promptly in an orderly manner.
The Lazard Board shall be the liquidator to wind up the affairs of the Company.
In performing its duties, the Lazard Board is authorized to sell, exchange or
otherwise dispose of the Company’s business and assets in accordance with the
Act in any reasonable manner that the Lazard Board determines to be in the best
interests of the Members. Upon completion of the winding-up of the Company, the
Lazard Board shall prepare and submit to each Common Member a final statement
with respect thereto.

 

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SECTION 8.03. Distributions. (a) In the event of a dissolution of the Company
pursuant to Section 8.01, the Company shall apply and distribute the proceeds of
the dissolution as provided below:

 

(i) first: to the creditors of the Company, including Members that are creditors
of the Company to the extent permitted by law, in satisfaction of the
liabilities of the Company (by payment or by the making of reasonable provision
for payment thereof, including the setting up of any reserves which the Managing
Member determines, in its sole discretion, are necessary therefor);

 

(ii) second: to the Common Members in proportion to (and to the extent of) the
positive balances in their respective Common Capital Accounts;

 

(iii) third: to the Profit Participation Members in proportion to (and to the
extent of) the positive balances in their respective Profit Participation
Capital Accounts; and

 

(iv) thereafter: to the Common Members in proportion to the number of Common
Units held by each such Common Member;

 

provided, however, that notwithstanding the foregoing, if the amount received by
the Lazard Ltd Members pursuant clauses (ii) and (iii) above is less than the
amount that the Lazard Ltd Members would have received had the Company
distributed the proceeds of the dissolution (reduced by the aggregate amount, if
any, of Profit Participation Capital) in proportion to the number of Common
Units held by each Common Member (the “Proportionate Distribution Amount”), then
(x) the Lazard Ltd Member shall receive the Proportionate Distribution Amount
and (y) the remaining proceeds of the dissolution shall be distributed to the
Common Members other than the Lazard Ltd Members in accordance with the clauses
(ii) and (iii) above.

 

(b) Cancellation of Certificate of Formation. Upon completion of a liquidation
and distribution pursuant to Section 8.03(a) following a dissolution of the
Company pursuant to Section 8.01, the Managing Member shall execute, acknowledge
and cause to be filed a certificate of cancellation of the Certificate of
Formation of the Company in the office of the Secretary of State of the State of
Delaware.

 

ARTICLE IX

 

INDEMNIFICATION AND EXCULPATION

 

SECTION 9.01. Exculpation. A Director shall not be personally liable to the
Company or its Members for monetary damages for breach of fiduciary duty as a
Director, except to the extent such exemption from liability or limitation
thereof is not permitted under the Act as the same exists or may hereafter be
amended. Any repeal or modification of the immediately preceding sentence shall
not adversely affect any right or protection of a Director existing hereunder
with respect to any act or omission occurring prior to such repeal or
modification.

 

SECTION 9.02. Indemnification. (a) Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit, or
proceeding, whether

 

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civil, criminal, administrative or investigative (hereinafter a “proceeding”),
by reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was (i) a Director or officer of the Company, (ii) a
director or officer of Lazard Ltd or (iii) serving at the request of the Company
(including as evidenced in a written letter signed by a proper officer of the
Company) as a director, officer, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise or person, including
service with respect to employee benefit plans maintained or sponsored by the
Company, in each case whether the basis of such proceeding is alleged action in
an official capacity as a Director, director, officer, employee or agent or in
any other capacity while serving as a Director, director, officer, employee or
agent, shall be indemnified and held harmless by the Company to the fullest
extent authorized by the General Corporation Law of the State of Delaware (the
“DGCL”) as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted the Company to
provide prior to such amendment), if the Company were a corporation organized
under the DGCL, against all expense, liability and loss (including attorneys’
fees, judgments, fines, excise taxes or penalties arising under the Employee
Retirement Income Security Act of 1974, and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a Director, director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that except as provided in Section 9.02(c), the Company shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Lazard Board. The right to indemnification conferred in this
Section 9.02 shall be a contract right. The right to indemnification conferred
in this Section in the case of any Director or officer of the Company or any
director or officer of Lazard Ltd shall include (and, in the case of any other
person entitled to indemnification hereunder, may at the option of the Chief
Executive Officer, General Counsel or the Lazard Board include) the right to be
paid by the Company the expenses incurred in defending any such proceeding in
advance of its final disposition, such advances to be paid by the Company within
20 days after the receipt by the Company of a statement or statements from the
claimant requesting such advance or advances from time to time; provided,
however, that the payment of such expenses incurred by any such person in
advance of the final disposition of a proceeding shall be made only upon
delivery to the Company of an undertaking by or on behalf of such person to
repay all amounts so advanced if it shall ultimately be determined that such
person is not entitled to be indemnified under this Section 9.02 or otherwise.

 

(b) To obtain indemnification under this Section 9.02, a claimant shall submit
to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the claimant is
entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this Section 9.02(b), a
determination, if required by the DGCL if the Company were a corporation
organized under the DGCL, with respect to the claimant’s entitlement thereto
shall be made as follows: (1) if requested by the claimant, by Independent
Counsel (as hereinafter defined), or (2) if no request is made by the claimant
for a determination by Independent Counsel, by the Chief Executive Officer or
General Counsel of the Company, whose determination shall be approved by the
Lazard Board (by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined)),

 

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provided, that (i) if a quorum of the Lazard Board consisting of Disinterested
Directors is not obtainable or, even if obtainable, such quorum of Disinterested
Directors so directs, such determination shall be approved by Independent
Counsel in a written opinion to the Lazard Board, a copy of which shall be
delivered to the claimant, or (ii) if a quorum of Disinterested Directors so
directs, such determination shall be approved by the Common Members. In the
event the determination of entitlement to indemnification is to be made by
Independent Counsel at the request of the claimant, the Independent Counsel
shall be selected by the Lazard Board unless there shall have occurred within
two years prior to the date of the commencement of the action, suit or
proceeding for which indemnification is claimed a “Change of Control” as defined
in the Lazard Ltd 2005 Equity Incentive Plan, in which case the Independent
Counsel shall be selected by the claimant unless the claimant shall request that
such selection be made by the Lazard Board. If it is so determined that the
claimant is entitled to indemnification, payment to the claimant shall be made
within 10 days after such determination.

 

(c) If a claim under Section 9.02(a) is not paid in full by the Company within
thirty days after a written claim pursuant to Section 9.02(b) has been received
by the Company, the claimant may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim and, if successful in whole or
in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Company) that the claimant has not
met the standard of conduct that makes it permissible under the DGCL as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) for the Company to indemnify the claimant for the amount claimed
if the Company were a corporation organized under the DGCL, but the burden of
proving such defense shall be on the Company. Neither the failure of the Company
(including the Lazard Board, Independent Counsel or Common Members) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she or she has met the
applicable standard of conduct set forth in the DGCL, nor an actual
determination by the Company (including its Lazard Board, Independent Counsel or
Common Members) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

 

(d) If a determination shall have been made pursuant to Section 9.02(b) that the
claimant is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding commenced pursuant to Section 9.02(c).

 

(e) The Company shall be precluded from asserting in any judicial proceeding
commenced pursuant to Section 9.02(c) that the procedures and presumptions of
this Section 9.02 are not valid, binding and enforceable and shall stipulate in
such proceeding that the Company is bound by all the provisions of this Section
9.02.

 

(f) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Section 9.02 shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute,

 

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provision of this Agreement, agreement, vote of the Common Members or
Disinterested Directors or otherwise. No amendment or other modification of this
Section 9.02 shall in any way diminish or adversely affect the rights of any
Director, officer, employee or agent of the Company hereunder in respect of any
occurrence or matter arising prior to any such repeal or modification.

 

(g) The Company may, to the extent authorized from time to time by the Lazard
Board, grant rights to indemnification, and rights to be paid by the Company the
expenses incurred in defending any proceeding in advance of its final
disposition, to any employee or agent of the Company to the fullest extent of
the provisions of this Section 9.02 with respect to the indemnification and
advancement of expenses of Directors and officers of the Company.

 

(h) If any provision or provisions of this Section 9.02 shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (1) the validity,
legality and enforceability of the remaining provisions of this Section 9.02
(including, without limitation, each portion of any subsection of this Section
9.02 containing any such provision held to be invalid, illegal or unenforceable,
that is not itself held to be invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (2) to the fullest extent possible,
the provisions of this Section 9.02 (including, without limitation, each such
portion of any subsection of this Section 9.02 containing any such provision
held to be invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.

 

(i) For purposes of this Article IX:

 

(i) “Disinterested Director” means a Director of the Company who is not and was
not a party to the matter in respect of which indemnification is sought by the
claimant.

 

(ii) “Independent Counsel” means a law firm, a member of a law firm, or an
independent practitioner, that is experienced in matters of corporation law and
shall include any person who, under the applicable standards of professional
conduct then prevailing, would not have a conflict of interest in representing
either the Company or the claimant in an action to determine the claimant’s
rights under this Section 9.02.

 

(j) Any notice, request or other communication required or permitted to be given
to the Company under this Section 9.02 shall be in writing and either delivered
in person or sent by telecopy, telex, telegram, overnight mail or courier
service, or certified or registered mail, postage prepaid, return receipt
requested, to the General Counsel of the Company and shall be effective only
upon receipt by the General Counsel.

 

(k) Notwithstanding any other provision contained in this Agreement, the parties
hereto hereby acknowledge that in accordance with Section 8.04 of the Third
Amended Operating Agreement, Article 8 of the Third Amended Operating Agreement
shall survive the adoption of this Agreement with respect to any Liability (as
defined in the Third Amended Operating Agreement) incurred in connection with
any events, circumstances, act or omissions that occurred prior to the adoption
of this Agreement.

 

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SECTION 9.03. Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
this Agreement, agreement, vote of Disinterested Directors or otherwise.

 

SECTION 9.04. Insurance. The Company may maintain insurance, at its expense, to
protect itself and any Director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Company would have
the power to indemnify such person against such expense, liability or loss under
the DGCL if the Company were a corporation organized under the DGCL.

 

SECTION 9.05. Survival. This Article IX shall survive any termination of this
Agreement.

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01. Use of Firm Name. The right to use the firm name, Lazard Group
LLC, shall belong to the Company; provided that the use, sale or other
disposition of any Lazard Name or any Lazard Mark shall be governed by the terms
of the Coordination Agreement.

 

SECTION 10.02. Amendments. Except as provided in Section 1.03 with respect to
this Agreement or Section 2.01 with respect to the Certificate of Formation, the
Certificate of Formation and this Agreement may not be amended except with (and
any such amendment shall be authorized upon obtaining) the approval of the
Lazard Board and the Managing Member, and the approval of any other Member or
other person shall not be required; provided that any amendment to Sections
4.03(b) (other than any amendment to such Section that shall increase or
decrease the number of authorized Common Units in an equal amount to any
increase or decrease in the number of authorized shares of Lazard Ltd Common
Stock), 4.04(a)(ii), 4.05, 5.04(a)(i), 6.02, 7.02(a), 7.05, 7.06, 8.03(a) or any
of the defined terms contained in such Section in each case that is materially
adverse to the LAZ-MD Common Members, or any amendment to this proviso, shall
require the additional prior approval of the LAZ-MD Common Members (by the
affirmative vote of LAZ-MD Common Members holding a majority of the Common Units
held by all LAZ-MD Common Members); provided further that any amendment to
Section 3.01, the last sentence of Section 3.02(d), the proviso to Section
3.02(f), the last sentence of 3.02(h), the last sentence of Section 3.02(i),
Section 3.03(b), Section 3.03(n) or any of the defined terms contained in such
Sections, or any amendment to this proviso, shall require the additional prior
approval of each of the Lazard Ltd Nominating Committee and the Lazard Ltd Board
in accordance with Article 24 of the Lazard Ltd Bye-Laws; provided, however,
that the Lazard Board may authorize, without further approval of another person
or group, (a) any amendment to this Agreement to correct any technicality,
incorrect statement or error apparent on the face hereof in order to further the
intent of the parties hereto or (b) correction of any formality or error
apparent on the face hereof or incorrect statement or defect in the execution
hereof. Any merger

 

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or consolidation of the Company with any third party that shall amend or
otherwise modify the terms of this Agreement shall require the approval of the
persons referred to above to the extent the approval of such persons would have
been required had such amendment or modification been effected by an amendment
to this Agreement.

 

SECTION 10.03. Benefits of Agreement. Except as provided in Article IX, none of
the provisions of this Agreement shall be for the benefit of or enforceable by
any creditor of the Company or by any creditor of any of the Members. Except as
provided in Article IX, nothing in this Agreement shall be deemed to create any
right in any person not a party hereto, and this instrument shall not be
construed in any respect to be a contract in whole or in part for the benefit of
any third person. Without limiting the generality of the foregoing, except as
provided in Article IX, no person not a party hereto shall have any right to
compel performance by a manager of its obligations hereunder.

 

SECTION 10.04. Waiver of Notice. Whenever any notice is required to be given to
any Member or Director under the provisions of the Act or this Agreement, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any meeting of the Members (if any shall be called) or
the Lazard Board or committee thereof need be specified in any waiver of notice
of such meeting.

 

SECTION 10.05. Arbitration. (a) All disputes, controversies and claims arising
out of or relating to the Coordination Agreement, any Governing Agreement, the
Company’s affairs, the rights or interests of the Members or the estate of any
deceased Member (to the extent that they are related to any of the foregoing),
or any breach or termination or alleged breach or termination of the
Coordination Agreement or any Governing Agreement (“Disputes”), whether arising
during or after the Company’s term or liquidation, shall be determined in
accordance with this Section 10.05.

 

(b) All Disputes shall first be reviewed by the Chief Executive Officer
(“Executive Review”). Any party to a Dispute may invoke Executive Review by
written notice to the other party or parties thereto and the Chief Executive
Officer. As soon as practicable and in any event within 30 days after receipt of
notice of a Dispute, the Chief Executive Officer shall attempt in good faith to
resolve such Dispute. In the event that any Dispute remains unresolved 45 days
after notice thereof to the Chief Executive Officer, such Dispute shall be
finally determined by an arbitral tribunal under the Rules of Arbitration (the
“ICC Rules”) of the International Chamber of Commerce (the “ICC”) and in
accordance with Section 10.05(c).

 

(c) The arbitral tribunal determining any Dispute shall be comprised of three
arbitrators. Each party to a Dispute shall designate one arbitrator. If a party
fails to designate an arbitrator within a reasonable period, the ICC shall
designate an arbitrator for such party, including upon a request by another
party. The two arbitrators designated by the parties to a Dispute (or, if
applicable, the ICC) shall designate a third arbitrator. In the event that the
two arbitrators designated by the parties to a Dispute (or, if applicable, the
ICC) are unable to agree upon a third arbitrator within a reasonable period, the
third arbitrator shall be selected in accordance with the ICC Rules by the ICC.
The language, place and procedures of the arbitration of any Dispute shall be as
agreed upon by the parties to such Dispute or, failing such

 

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agreement within a reasonable period, as determined in accordance with the ICC
Rules in order to ensure a speedy, efficient and just resolution of such
Dispute. If neither the parties nor the arbitral tribunal can agree upon
procedures, the arbitration shall be conducted in accordance with the ICC’s
procedures. The hearings and taking of evidence of any Dispute may be conducted
at any locations that will, in the judgment of the arbitral tribunal, result in
a speedy, efficient and just resolution of such Dispute. The parties to any
dispute shall use their best efforts to cooperate with each other and the
arbitral tribunal in order to obtain a resolution as quickly as possible,
including by adopting the ICC’s “fast-track” procedure (as provided for in
Article 32(1) of the ICC Rules) if appropriate.

 

(d) Notwithstanding any provision of this Agreement to the contrary, this
Section 10.05 shall be construed to the maximum extent possible to comply with
the laws of the State of Delaware, including the Uniform Arbitration Act (10
Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it
shall be determined by a court of competent jurisdiction that any provision or
wording of this Section 10.05, including the ICC Rules, shall be invalid or
unenforceable under the Delaware Arbitration Act or other applicable law, such
invalidity shall not invalidate all of this Section 10.05. In that case, this
Section 10.05 shall be construed so as to limit any term or provision so as to
make it valid or enforceable within the requirements of the Delaware Arbitration
Act or other applicable law, and, in the event such term or provision cannot be
so limited, this Section 10.05 shall be construed to omit such invalid or
unenforceable provision.

 

SECTION 10.06. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their respective estates,
heirs, legal representatives, successors and permitted assigns, any additional
Member admitted in accordance with the provisions hereof and any successor to a
trustee of a trust that is or becomes a party hereto.

 

SECTION 10.07. Confidentiality. Each Member that is not a controlled Affiliate
of Lazard Ltd expressly agrees, whether or not at the time a Member of the
Company or providing services to the Company and/or any of its Subsidiaries, to
maintain the confidentiality of, and not disclose to any Person other than the
Company, a Member, a Managing Director (including, for this purpose, any
managing director or limited managing director of LAM) or any financial, legal
or other advisor to the Company, any information relating to the business,
clients, affairs or financial structure, position or results of the Company or
its affiliates (including any Affiliate) or any Dispute that shall not be
generally known to the public or the securities industry; provided that such
Member may disclose any such information (a) to the extent required by any
applicable law, rule or regulation in the opinion of counsel or by the order of
any securities exchange, banking supervisory authority or other governmental or
self-regulatory organization of competent jurisdiction (provided that such
Member notifies the Company of such requirement prior to making such disclosure
and cooperates with the Company in seeking to prevent or minimize such
disclosure), (b) to his or its legal counsel and financial advisers (who shall
agree to abide by the terms of this Section), or (c) with the prior written
consent of the Company.

 

Notwithstanding any other provision contained in this Agreement, the Members
hereby expressly acknowledge and agree that to the fullest extent permitted by
law, with respect

 

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to all persons who were members or former members of the Company prior to
Exchange and Forced Sale, the obligations of such members and the former members
set forth in Section 9.06 of the Third Amended Operating Agreement shall
continue in full force and effect, and are not invalidated or otherwise altered
by Section 10.07 of this Agreement.

 

SECTION 10.08. Notices. Except as provided in Section 3.02(d), all notices and
other communications required or permitted by this Agreement shall be made in
writing and any such notice or communication shall be deemed delivered when
delivered in person, properly transmitted by telecopier or one business day
after it has been sent by an internationally recognized overnight courier to the
address for notices shown in the Company’s records (or any other address
provided to the Company in writing for this purpose) or, if given to the
Company, to the principal place of business of the Company in New York, New
York. Communications by telecopier also shall be sent concurrently by overnight
courier, but shall in any event be effective as stated above. Each Member and
Director may from time to time change its address for notices under this Section
by giving at least five days’ prior written notice of such changed address to
the Company.

 

SECTION 10.09. No Waiver of Rights. No failure or delay on the part of any
Member in the exercise of any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or of any other right or power.
The waiver by any Member or manager of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach hereunder. All rights and remedies existing under this
Agreement are cumulative and are not exclusive of any rights or remedies
otherwise available.

 

SECTION 10.10. Power of Attorney. Each Member agrees that, by its execution of
this Agreement, such Member irrevocably constitutes and appoints the Chief
Executive Officer and the General Counsel, each acting alone, as its true and
lawful attorney-in-fact coupled with an interest, with full power and authority,
in its name, place and stead to make, execute, acknowledge and record (a) all
certificates, instruments or documents, including fictitious name or assumed
name certificates, as may be required by, or may be appropriate under, the laws
of any state or jurisdiction in which the Company is doing or intends to do
business and (b) all agreements, documents, certificates or other instruments
amending this Agreement or the Certificate of Formation that may be necessary or
appropriate to reflect or accomplish (i) a change in the name or location of the
principal place of business of the Company or a change of name or address of a
Member, (ii) the disposal or increase by a Member of his Interest in the Company
or any part thereof, (iii) a distribution and reduction of the capital
contribution of a Member or any other changes in the capital of the Company,
(iv) the dissolution or termination of the Company, (v) the addition or
substitution of a person becoming a Member of the Company and (vi) any amendment
to this Agreement, in each case only to the extent expressly authorized and
conducted in accordance with the preceding sections of this Agreement. The power
granted hereby is coupled with an interest and shall survive the subsequent
disability or incapacity of the principal.

 

SECTION 10.11. Severability. If any one or more of the provisions contained in
this Agreement shall be invalid, illegal or unenforceable in any respect under
any applicable law,

 

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the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired.

 

SECTION 10.12. Headings. The Article, Section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

 

SECTION 10.13. Entire Agreement. Except as otherwise expressly set forth in
Section 9.02(k) and Section 10.07, this Agreement amends and restates in its
entirety the Third Amended Operating Agreement. This Agreement, including the
exhibits, annexes and schedules hereto and the Acknowledgements, the Master
Separation Agreement, the Ancillary Agreements, the LAZ-MD Operating Agreement
and Section 3(a) of the Transaction Agreement, constitute the entire agreement
among the parties hereto and, except as otherwise expressly set forth in Section
9.02(k) and Section 10.07, supersede all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof and thereof.

 

SECTION 10.14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to its
conflicts of law principles.

 

SECTION 10.15. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.

 

SECTION 10.16. Effectiveness. The Original Operating Agreement was effective for
all financial and accounting purposes as of January 3, 2000. This Agreement
shall be effective immediately upon execution hereof following the effectiveness
of the Exchange and the Forced Sale by each of Scott D. Hoffman, on behalf of
the Lazard Board, and LAZ-MD on the date hereof.

 

SECTION 10.17. Corporate Opportunity; Fiduciary Duty. (a) To the greatest extent
permitted by law, none of Lazard Ltd, any Affiliate of Lazard Ltd (excluding for
this purpose the Company and its Subsidiaries, LAZ-MD and LFCM and its
Subsidiaries) (each such Affiliate of Lazard Ltd, a “Lazard Ltd Affiliate”) and
none of their respective officers, directors, employees or agents shall owe any
fiduciary duty to, nor shall any of Lazard Ltd or any Lazard Ltd Affiliate be
liable for breach of fiduciary duty to, the Company, any Subsidiary of the
Company or any other holder of Interests or Affiliate of such holder (or any of
their respective officers, directors, employees or agents). To the greatest
extent permitted by law, in taking any action, making any decision or exercising
any discretion with respect to the Company, each of Lazard Ltd and each Lazard
Ltd Affiliate shall be entitled to consider such interests and factors as it
desires, including its own interests and those of other Lazard Ltd Affiliates,
and shall have no duty or obligation (1) to give any consideration to the
interests of or factors affecting the Company, the holders of Interests or any
other person, or (2) to abstain from participating in any vote or other action
of the Company or any Affiliate thereof, the Lazard Board or any committee or
similar body of any of the foregoing. Lazard Ltd and any Lazard Ltd Affiliate
(and their respective officers, directors, employees or agents) shall not
violate a duty or obligation to the Company merely because such person’s conduct
furthers such person’s own interest, except as specifically set forth in clause
(c) of this Section. Such persons may lend money to and transact

 

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other business with the Company. The rights and obligations of any such person
who lends money to, contracts with, borrows from or transacts business with the
Company are the same as those of a person who is not involved with the Company,
subject to other applicable law. To the greatest extent permitted by law, no
transaction with the Company shall be voidable solely because any such person
has a direct or indirect interest in the transaction. Nothing herein contained
shall prevent any such person from conducting any other business, including,
without limitation, serving as an officer, director, employee, or stockholder of
any corporation, a trustee of any trust, an executor or administrator of any
estate, or an administrative official of any other business or not-for-profit
entity, or from receiving any compensation in connection therewith.

 

(b) Except as may be otherwise provided in a written agreement between the
Company and Lazard Ltd, none of Lazard Ltd or any Lazard Ltd Affiliate shall owe
any duty to refrain from engaging in the same or similar activities or lines of
business as the Company. In the event that Lazard Ltd or any Lazard Ltd
Affiliate acquires knowledge of a potential transaction or matter which may be a
corporate opportunity for Lazard Ltd or any Lazard Ltd Affiliate, on the one
hand, and the Company, on the other hand, Lazard Ltd or such Lazard Ltd
Affiliate, as the case may be, shall, to the fullest extent permitted by law,
have no duty to communicate or offer such corporate opportunity to the Company.

 

(c) In the event that a Director or officer of the Company who is also a
director or officer of Lazard Ltd or any Lazard Ltd Affiliate acquires knowledge
of a potential transaction or matter which may be a corporate opportunity for
both the Company, on the one hand, and Lazard Ltd or any Lazard Ltd Affiliate,
as applicable, on the other hand, such Director or officer of the Company shall,
to the fullest extent permitted by law, have fully satisfied and fulfilled any
fiduciary duty of such Director or officer to the Company and its Members with
respect to such corporate opportunity, if such Director or officer of the
Company acts in a manner consistent with the following policy:

 

(i) a corporate opportunity offered to any individual who is an officer of the
Company, and who is also a director but not an officer of Lazard Ltd or any
Lazard Ltd Affiliate, shall belong to the Company unless such opportunity is
expressly offered to such individual in his or her capacity as a director of
Lazard Ltd or such Lazard Ltd Affiliate (in which case it shall belong to Lazard
Ltd);

 

(ii) a corporate opportunity offered to any individual who is a Director but not
an officer of the Company, and who is also a director or officer of Lazard Ltd
or any Lazard Ltd Affiliate shall belong to Lazard Ltd or the applicable Lazard
Ltd Affiliate unless such opportunity is expressly offered to such individual in
his or her capacity as a Director (in which case it shall belong to the
Company); and

 

(iii) a corporate opportunity offered to any individual who is an officer of
both the Company and Lazard Ltd or any Lazard Ltd Affiliate shall belong to
Lazard Ltd or such Lazard Ltd Affiliate unless such opportunity is expressly
offered to such individual in his or her capacity as an officer of the Company
(in which case it shall belong to the Company).

 

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(d) To the greatest extent permitted by law, neither LAZ-MD nor any of its
officers, directors, employees or agents shall owe any fiduciary duty to, nor
shall LAZ-MD be liable for breach of fiduciary duty to, the Company, any
Subsidiary of the Company or any other holder of Interests or Affiliate of such
holder (or any of their respective officers, directors, employees or agents). In
taking any action, making any decision or exercising any discretion with respect
to the Company, LAZ-MD shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
(1) to give any consideration to the interests of or factors affecting the
Company, the holders of Interests or any other person, or (2) to abstain from
participating in any vote or other action of the Company or any Affiliate
thereof, the Lazard Board or any committee or similar body of any of the
foregoing. LAZ-MD (and its officers, directors, employees or agents) shall not
violate a duty or obligation to the Company merely because such person’s conduct
furthers such person’s own interest, except as specifically set forth in clause
(e) of this Section. Such persons may lend money to and transact other business
with the Company. The rights and obligations of any such person who lends money
to, contracts with, borrows from or transacts business with the Company are the
same as those of a person who is not involved with the Company, subject to other
applicable law. No transaction with the Company shall be voidable solely because
any such person has a direct or indirect interest in the transaction. To the
greatest extent permitted by law, nothing herein contained shall prevent any
such person from conducting any other business, including, without limitation,
serving as an officer, director, employee, or stockholder of any corporation, a
trustee of any trust, an executor or administrator of any estate, or an
administrative official of any other business or not-for-profit entity, or from
receiving any compensation in connection therewith.

 

(e) In the event that a Director or officer of the Company who is also a
director or officer of LAZ-MD acquires knowledge of a potential transaction or
matter which may be a corporate opportunity for both the Company, on the one
hand, and LAZ-MD, on the other hand, such Director or officer of the Company
shall, to the fullest extent permitted by law, have fully satisfied and
fulfilled any fiduciary duty of such Director or officer to the Company and its
Members with respect to such corporate opportunity, if such director or officer
acts in a manner consistent with the following policy: a corporate opportunity
offered to any individual who is an officer of the Company or a Director, and
who is also a director or officer of LAZ-MD, shall belong to the Company unless
such opportunity is first expressly offered to the Company, affirmatively
rejected by the Lazard Board and then offered to LAZ-MD by the Lazard Board.

 

(f) Any person purchasing or otherwise acquiring any Interest shall be deemed to
have notice of and to have consented to the provisions of this Section.

 

(g) For purposes of this Section only, a director of the Company who is chairman
of the Lazard Board or of a committee thereof shall not be deemed to be an
officer of the Company by reason of holding such position, unless such
individual is an employee of the Company.

 

(h) Except to the extent otherwise modified herein, each Director and officer of
the Company shall have fiduciary duties identical to those of directors and
officers of business corporations organized under the DGCL. The provisions of
this Agreement, to the extent that they restrict or eliminate the duties
(including fiduciary duties) of a Director, officer or other

 

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person otherwise existing at law or in equity, are agreed by the parties hereto
to replace such other duties of such person.

 

(i) Neither the alteration, amendment, termination, expiration or repeal of this
Section nor the adoption of any provision of this Agreement inconsistent with
this Section shall eliminate or reduce the effect of this Section in respect of
any matter occurring, or any cause of action, suit or claim that, but for this
Section, would accrue or arise, prior to such alteration, amendment,
termination, expiration, repeal or adoption.

 

SECTION 10.18. Certain Provisions. (a) In connection with the Exchangeable
Securities IPO Transaction (as defined in the Master Separation Agreement), each
of the Company, on the one hand, and Lazard Ltd Sub A and Lazard Ltd Sub B, on
the other hand, with Lazard Ltd as guarantor thereof, shall promptly after the
date hereof enter into appropriate forward contracts providing for the issuance
of Common Units to Lazard Ltd Sub A and Lazard Ltd Sub B on substantially
similar terms in respect of pricing, timing and antidilution as set forth in the
forward purchase contracts forming part of the equity security units sold in the
Exchangeable Securities IPO Transaction.

 

(b) Schedule 10.18(b) shall apply with respect to the terms of this Agreement
referred to in the Guaranty, dated as of March 26, 2003, by the Company in favor
of Banca Intesa S.p.A., a Società per Azioni organized under the laws of the
Republic of Italy.

 

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IN WITNESS WHEREOF, the undersigned, acting pursuant to the resolutions of the
Lazard Board adopted on the date hereof, has duly executed this Agreement to
reflect approval by the Lazard Board as of the date first above written.

 

By:   /s/ Scott D. Hoffman    

Name:

 

Scott D. Hoffman

   

Title:

 

Representative of the Lazard Board

 

Accepted and agreed (with such acceptance and agreement to constitute approval
of this Agreement for all purposes under Section 9.02 of the Third Amended
Operating Agreement) in its capacity as the sole member of the Company as of the
date hereof: LAZ-MD HOLDINGS LLC

By:

  /s/ Scott D. Hoffman    

Name:

 

Scott D. Hoffman

   

Title:

 

Member

 

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AGREEMENT TO BECOME MEMBERS

 

Each of the undersigned hereby agrees to be admitted to the Company as a Member
as set forth in, and to be bound by, this Agreement, as of the date first above
written.

 

LAZARD GROUP FINANCE LLC By:   /s/ Scott D. Hoffman     Name:   Scott D. Hoffman
    Title:   Director and Vice President

 

LLTD CORP II By:   /s/ Scott D. Hoffman     Name:   Scott D. Hoffman     Title:
  Director

 

LLTD 2 S.AR.L. By:   /s/ Scott D. Hoffman     Name:   Scott D. Hoffman    
Title:   General Counsel

 

LAZ-MD CO II By:   /s/ Scott D. Hoffman     Name:   Scott D. Hoffman     Title:
  Member

 

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ACKNOWLEDGEMENT

 

Acknowledged and agreed by: LAZARD LTD By:   /s/ Scott D. Hoffman     Name:  

Scott D. Hoffman

    Title:  

Director, Vice President and Secretary