Exhibit 10.1

 

EXCHANGE AGREEMENT

 

EXCHANGE AGREEMENT (the “Agreement”), dated as of  July 14, 2010, among KKR
Management Holdings L.P., KKR Fund Holdings L.P., KKR Holdings L.P. and KKR &
Co. L.P.

 

WHEREAS, this Agreement governs the terms and conditions for the exchange of
certain Group Partnership Units for Common Units, on the terms and subject to
the conditions set forth herein;

 

WHEREAS, the right to exchange Group Partnership Units set forth in
Section 2.1(a) below, once exercised, represents a several, and not a joint and
several, obligation of the Group Partnerships (on a pro rata basis), and no
Group Partnership shall have any obligation or right to acquire Group
Partnership Units issued by another Group Partnership;

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

ARTICLE I.
DEFINITIONS

 

Section 1.1             Definitions.

 

The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.

 

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

 

“Base Exchange” has the meaning set forth in Section 2.1(a)(i) of this
Agreement.

 

“Business Day” means each day that is not a Saturday, Sunday or other day on
which banking institutions in the Cayman Islands and New York, New York are
authorized or required by law to close.

 

“Charitable Exchange” means a direct or indirect exchange of Group Partnership
Units pursuant to this Agreement by a KKR Holdings Affiliated Person for the
purpose of making a gratuitous transfer of any Common Units received in the
exchange to a Charity.

 

“Charity” means any organization that is organized and operated for a purpose
described in Section 170(c) of the Code (determined without reference to
Section 170(c)(2)(A) of the Code) and described in Sections 2055(a) and 2522 of
the Code.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

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“Common Unit” means a partnership interest in the Issuer representing a
fractional part of the partnership interests in the Issuer of all limited
partners of the Issuer having the rights and obligations specified with respect
to Common Units in the Issuer Partnership Agreement.

 

“Contribution Transaction” has the meaning ascribed to such term in the
Investment Agreement.

 

“Corporate Holdco” means a corporation (or other entity classified as a
corporation for United States federal income tax purposes) that (i) is wholly
owned by a KKR Holdings Affiliated Person, (ii) owns solely Group Partnership I
Units, (iii) was formed solely for the purpose of owning such Group Partnership
I Units, and (iv) has never owned any assets other than Group Partnership I
Units or engaged in any other business, or such other corporation designated a
Corporate Holdco by a Group Partnership General Partner.

 

“Exchange” means a Charitable Exchange, a Non-U.S. Exchange or a Base Exchange,
as the case may be.

 

“Exchange Rate” means the number of Common Units for which a Group Partnership
Unit is entitled to be exchanged.  On the date of this Agreement, the Exchange
Rate shall be 1 for 1, which Exchange Rate shall be subject to modification as
provided in Section 2.4.

 

“Fair Market Value” means, as of a given time, (i) if Common Units are traded on
a securities exchange, then the volume-weighted average price of a Common Unit
based on the trades during the most recent completed trading day as reported by
the principal securities exchange on which Common Units are traded and (ii) if
Common Units are not traded on a securities exchange, the fair market value of
such asset as reasonably determined by the conflicts committee of the board of
directors of the Issuer General Partner.

 

“Group Partnership I” means KKR Management Holdings L.P., a Delaware limited
partnership, and any successor thereto.

 

“Group Partnership I General Partner” means Group Partnership Holdco, and any
successor thereto.

 

“Group Partnership I Units” means the Class A partnership units of Group
Partnership I (and partnership units of any subsequently formed Group
Partnership whose interests are held by the Issuer through a Group Partnership
HoldCo).

 

“Group Partnership II” means KKR Fund Holdings L.P., a Cayman limited
partnership, and any successor thereto.

 

“Group Partnership II Units” means the Class A partnership units of Group
Partnership II (and partnership units of any subsequently formed Group
Partnership whose interests the Issuer holds directly or indirectly through
entities that are transparent for U.S. federal income tax purposes).

 

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“Group Partnership Agreements” means, collectively, the Amended and Restated
Limited Partnership Agreement of Group Partnership I and the Amended and
Restated Limited Partnership Agreement of Group Partnership II (and the
partnership agreement then in effect of any future partnership designated as a
Group Partnership), as each may be amended, supplemented or restated from time
to time.

 

“Group Partnership General Partners” means Group Partnership I General Partner
and Issuer (and the general partner of any future partnership designated as a
Group Partnership).

 

“Group Partnership HoldCo” means Management Holdings Corp. (and any future
entity that is classified as an association taxable as a corporation for U.S.
federal income tax purposes, is directly or indirectly owned by the Issuer and
formed for the purposes of holding partnership units of a Group Partnership).

 

“Group Partnership Unit” means, collectively, one partnership unit in each of
Group Partnership I and Group Partnership II (and any future partnership
designated as a Group Partnership) issued under its respective Group Partnership
Agreement.

 

“Group Partnerships” means, collectively, Group Partnership I and Group
Partnership II (and any future partnership designated as a Group Partnership).

 

“Issuer” means KKR & Co. L.P., a Delaware limited partnership, and any successor
thereto.

 

“Issuer General Partner” means KKR Management LLC, a Delaware limited
partnership, and any successor thereto.

 

“Insider Trading Policy” means the Dealing Code of the Issuer applicable to the
directors and executive officers of its general partner, as such insider trading
policy may be amended, supplemented or restated from time to time.

 

“Issuer Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of the Issuer to be dated substantially concurrently with
the consummation of the Contribution Transaction, as such agreement of limited
partnership may be amended, supplemented or restated from time to time.

 

“Investment Agreement” means the amended and restated investment agreement,
dated October 1, 2009, by and among the Issuer, KKR Private Equity Investors,
L.P., Group Partnership I, Group Partnership II, and KKR Holdings, as amended
from time to time.

 

“KKR Holdings” means KKR Holdings L.P., a limited partnership formed under the
laws of the Cayman Islands, and any successor thereto, and its Subsidiaries.

 

“KKR Holdings Affiliated Person” means each Person that is as of the date of
this Agreement or becomes from time to time (i) a general partner or a limited
partner of KKR Holdings pursuant to the terms of the KKR Holdings Partnership
Agreement or (ii) a general partner, limited partner or holder of any other type
of equity interest of any Person included in clause (i) above.

 

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

 

“Non-U.S. Exchange” means a direct or indirect exchange of Group Partnership
Units pursuant to this Agreement by a Non-U.S. KKR Holdings Affiliated Person.

 

“Non-U.S. KKR Holdings Affiliated Person” means a KKR Holdings Affiliated Person
that is not (i) an individual citizen or resident of the United States, (ii) a
corporation (or other entity classified as a corporation for United States
federal income tax purposes) created or organized in or under the laws of the
United States (or any political subdivision thereof), or (iii) a partnership (or
other entity classified as a partnership for United State federal income tax
purposes) created or organized in or under the laws of the United States (or any
political subdivision thereof) or that has at least one partner who is an
individual citizen or resident of the United States.

 

“Person” means an individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization,
association (including any group, organization, co-tenanacy, plan, board,
council or committee), government (including a country, state, county, or any
other governmental or political subdivision, agency or instrumentality thereof)
or other entity (or series thereof).

 

“Quarter” means, unless the context requires otherwise, a fiscal quarter of the
Issuer.

 

“Quarterly Exchange Date” means, unless the Issuer cancels such Quarterly
Exchange Date pursuant to Section 2.9 hereof, the date that is the later to
occur of either: (1) the second Business Day after the date on which the Issuer
makes a public news release of its quarterly earnings for the prior Quarter or
(2) the first day of each Quarter that directors and executive officers of the
Issuer General Partner are permitted to trade under the Insider Trading Policy.

 

“Sale Transaction” has the meaning set forth in Section 2.9 of this Agreement.

 

“Subsidiaries” means any corporation, partnership, joint venture or other legal
entity of which KKR Holdings (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests.

 

“Transfer Agent” means such bank, trust company or other Person as shall be
appointed from time to time by the Issuer pursuant to the Issuer Partnership
Agreement to act as registrar and transfer agent for the Common Units.

 

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ARTICLE II.
EXCHANGE OF GROUP PARTNERSHIP UNITS

 

Section 2.1             Exchange of Group Partnership Units.

 

(a)           Subject to the provisions of the Group Partnership Agreements and
the Issuer Partnership Agreement and to the provisions of Section 2.2 hereof,
KKR Holdings or a KKR Holdings Affiliated Person shall be entitled on any
Quarterly Exchange Date to surrender Group Partnership Units held by KKR
Holdings or a KKR Holdings Affiliated Person as follows; provided that any such
exchange is for a minimum of the lesser of 1,000 Group Partnership Units or all
of the Group Partnership Units held by KKR Holdings.

 

(i)            KKR Holdings or a KKR Holdings Affiliated Person may surrender
Group Partnership Units to the Group Partnerships in exchange for either (at the
option of the Group Partnerships) (x) the delivery by the Group Partnerships of
a number of Common Units (provided by the Issuer) equal to the number of Group
Partnership Units surrendered multiplied by the Exchange Rate or (y) cash in an
amount equal to the Fair Market Value on the date of such exchange of the Common
Units that KKR Holdings or a KKR Holdings Affiliated Person would receive
pursuant to clause (x) (any such exchange, a “Base Exchange”).  Simultaneous
with any such Exchange pursuant to clause (x) above, each Group Partnership
shall issue a number of its Group Partnership Units to its respective Group
Partnership General Partner equal to the number of Group Partnership Units
surrendered to such Group Partnership.  Any election by the Group Partnerships
to deliver cash to KKR Holdings or a KKR Holdings Affiliated Person, as the case
may be, pursuant to clause (y) above, shall be subject to the prior approval of
the conflicts committee of the board of directors of the Issuer General Partner.

 

(ii)           For purposes of making a Charitable Exchange or a Non-U.S.
Exchange, a KKR Holdings Affiliated Person may surrender Group Partnership Units
to the Issuer in exchange for the delivery of a number of Common Units equal to
the number of Group Partnership Units surrendered multiplied by the Exchange
Rate, provided, however, the Issuer may instead require that the Group
Partnership I units the KKR Holdings Affiliated Person intends to surrender be
owned by one or more Corporate Holdcos prior to surrender, in which case the
number of Common Units delivered pursuant to the Exchange will be equal to the
total Group Partnership Units that are surrendered, taking into account those
collectively owned by the Corporate Holdcos whose interest are surrendered,
multiplied by the Exchange Rate.

 

(b)           Immediately following any Charitable Exchange or Non-U.S. Exchange
pursuant to Section 2.1(a)(ii) above, the Issuer shall contribute (i) any Group
Partnership I Units or interests in Corporate Holdcos surrendered pursuant to
such Exchange to the Group Partnership Holdco that currently holds interests in
the issuer of the Group Partnership I Units that have been surrendered or are
held by the Corporate Holdco whose interests have been surrendered, and (ii) any
Group Partnership II Units surrendered pursuant to such Exchange to the issuer
of the Group Partnership II Units surrendered.

 

(c)           Where KKR Holdings or a KKR Holdings Affiliated Person has
exercised its right to surrender its Group Partnership Units to the Group
Partnerships in a Base Exchange, the Group Partnership General Partners shall
have a superseding right to acquire such interests for an amount of cash or, at
the option of the Group Partnership General Partners, Common

 

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Units equal to the amount of cash or Common Units (provided by the Issuer) that
would be received pursuant to the Base Exchange.

 

(d)           On the date the Exchange of the Group Partnership Units is
effective, all rights of KKR Holdings or a KKR Holdings Affiliated Person as
holder of such Group Partnership Units shall cease, and KKR Holdings or such KKR
Holdings Affiliated Person shall be treated for all purposes as having become
the Record Holder (as defined in the Issuer Partnership Agreement) of the Common
Units which are the subject of the Exchange and shall be admitted as a Limited
Partner (as defined in the Issuer Partnership Agreement) of the Issuer in
accordance and upon compliance with Section 10.2 of the Issuer Partnership
Agreement.

 

(e)           Immediately prior to the time Group Partnership Units are
surrendered for Exchange, KKR Holdings shall assign its rights together with its
obligations hereunder in connection with an Exchange to each KKR Holdings
Affiliated Person beneficially owning such Group Partnership Units.

 

(f)            For the avoidance of doubt, any Exchange of Group Partnership
Units shall be subject to the provisions of the Group Partnership Agreements.

 

Section 2.2             Exchange Procedures.

 

(a)           KKR Holdings or a KKR Holdings Affiliated Person may exercise the
right to Exchange Group Partnership Units set forth in Section 2.1(a) above by
providing written notice of the Exchange at least sixty (60) days prior to the
applicable Quarterly Exchange Date or within such shorter period of time as may
be agreed by the parties hereto (i) in the case of a Base Exchange, to each
Group Partnership General Partner and the Issuer substantially in the form of
Exhibit A hereto, and (ii) in the case of a Charitable Exchange or Non-U.S.
Exchange, to the Issuer substantially in the form of Exhibit B hereto. Such
notice shall be duly executed by such holder or such holder’s duly authorized
attorney in respect of the Group Partnership Units to be Exchanged and delivered
during normal business hours at the principal executive offices of the Group
Partnership General Partners and/or the registered office of the Issuer, as
applicable.

 

(b)           Each KKR Holdings Affiliated Person beneficially owning the Group
Partnership Units that are subject to Exchange pursuant to Section 2.1(a) above
shall execute a written assignment and acceptance agreement with respect to such
Group Partnership Units prior to such Exchange, which assignment and acceptance
agreement shall be delivered during normal business hours at the registered
office of KKR Holdings.

 

(c)           As promptly as practicable following the surrender for Exchange of
Group Partnership Units in the manner provided in this Article II, the Issuer,
in the case of a Base Exchange shall deliver or cause to be delivered at the
principal executive offices of the Group Partnership or at the office of the
Transfer Agent the number of Common Units issuable upon such Exchange, issued in
the name of KKR Holdings or its designee, and in the case of a Charitable
Exchange or Non-U.S. Exchange shall deliver or cause to be delivered at the
principal executive offices of KKR Holdings or at the office of the Transfer
Agent the number of Common Units issuable upon such Exchange, issued in the name
of KKR Holdings or its designee.

 

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(d)           The Issuer, in the case of a Charitable Exchange or Non-U.S.
Exchange, or the Group Partnerships, in the case of a Base Exchange, may adopt
reasonable procedures for the implementation of the exchange provisions set
forth in this Article II, including, without limitation, procedures for the
giving of notice of an election for Exchange.

 

Section 2.3             Blackout Periods and Ownership Restrictions. 
Notwithstanding anything to the contrary, KKR Holdings or a KKR Holdings
Affiliated Person shall not be entitled to Exchange Group Partnership Units, and
the Issuer and the Group Partnerships shall have the right to refuse to honor
any request for Exchange of Group Partnership Units, (i) at any time or during
any period if the Issuer or the Group Partnerships shall determine, based on the
advice of counsel (which may be inside counsel), that there may be material
non-public information that may affect the trading price per Common Unit at such
time or during such period, (ii) if such Exchange would be prohibited under
applicable law or regulation, (iii) to the extent such KKR Holdings Affiliated
Person would be prohibited from holding Common Units under the Issuer
Partnership Agreement, or (iv) to the extent such Exchange would not be
permitted under the policies and procedures established by the general partner
of KKR Holdings.

 

Section 2.4             Splits, Distributions and Reclassifications.  The
Exchange Rate shall be adjusted accordingly if there is: (1) any subdivision (by
split, distribution, reclassification, recapitalization or otherwise) or
combination (by reverse split, reclassification, recapitalization or otherwise)
of the Group Partnership Units that is not accompanied by an identical
subdivision or combination of the Common Units; or (2) any subdivision (by
split, distribution, reclassification, recapitalization or otherwise) or
combination (by reverse split, reclassification, recapitalization or otherwise)
of the Common Units that is not accompanied by an identical subdivision or
combination of the Group Partnership Units. In the event of a reclassification
or other similar transaction as a result of which the Common Units are converted
into another security, then KKR Holdings or a KKR Holdings Affiliated Person, as
the case may be, shall be entitled to receive upon Exchange the amount of such
security that KKR Holdings or such KKR Holdings Affiliated Person would have
received if such Exchange had occurred immediately prior to the effective date
of such reclassification or other similar transaction. Except as may be required
in the immediately preceding sentence, no adjustments in respect of
distributions shall be made upon the Exchange of any Group Partnership Unit.

 

Section 2.5             Common Units to be Issued.  The Issuer covenants that if
any Common Units require registration with or approval of any governmental
authority under any foreign, U.S. federal or state law before such Common Units
may be issued upon Exchange pursuant to this Article II, the Issuer shall use
commercially reasonable efforts to cause such Common Units to be duly registered
or approved, as the case may be. The Issuer shall use commercially reasonable
efforts to list the Common Units required to be delivered upon Exchange prior to
such delivery upon each national securities exchange or inter-dealer quotation
system upon which the outstanding Common Units may be listed or traded at the
time of such delivery. Nothing contained herein shall be construed to preclude
the Issuer or the Group Partnerships from satisfying their obligations in
respect of the Exchange of the Group Partnership Units by delivery of Common
Units which are held in the treasury of the Issuer or the Group Partnerships or
any of their subsidiaries.

 

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Section 2.6             Taxes.  The delivery of Common Units upon Exchange of
Group Partnership Units shall be made without charge to KKR Holdings or a KKR
Holdings Affiliated Person for any stamp or other similar tax in respect of such
issuance.

 

Section 2.7             Restrictions.  The provisions of Section 7.05 of the
Group Partnership Agreements shall apply, mutatis mutandis, to any Common Units
issued upon Exchange of Group Partnership Units.

 

Section 2.8             Disposition of Common Units Issued.  KKR Holdings
covenants to cause any KKR Holdings Affiliated Person receiving Common Units as
a result of an Exchange, other than a Charitable Exchange or Non-U.S. Exchange,
under this Agreement (i) to use reasonable best efforts to sell or otherwise
dispose of any Common Units received in such an Exchange within ten (10) days of
the receipt thereof or any specified shorter period as the Issuer General
Partner determines to be in the best interests of the Issuer, (ii) to use
reasonable best efforts to ensure that neither such KKR Holdings Affiliated
Person’s spouse nor any grantor trust which is treated as owned by such KKR
Holdings Affiliated Person or his or her spouse owns any Common Units and
(iii) to agree that no other Common Units will be acquired or held by such KKR
Holdings Affiliated Person during such period other than through a Qualifying
Entity. Any KKR Holdings Affiliated Person who receives Common Units as a result
of an Exchange under this Agreement and who holds any such Common Units on the
last day of the ten (10) day or shorter period referred to above shall agree to
cause all such Common Units to be transferred immediately to a Qualifying
Entity. For the purposes of this Agreement, a “Qualifying Entity” means a
partnership, trust or other entity (other than a “grantor trust” or an entity
otherwise disregarded as an entity separate from its owner for United States
federal income tax purposes). For the avoidance of doubt, nothing contained
herein shall prohibit any KKR Holdings Affiliated Person from owning an interest
in a Qualifying Entity that owns Common Units.

 

Section 2.9             Subsequent Offerings.  The Issuer may from time to time
provide the opportunity for KKR Holdings to sell its Group Partnership Units to
the Issuer, the Group Partnerships or any of their subsidiaries on terms no more
beneficial than an Exchange (a “Sale Transaction”); provided that no Sale
Transaction shall occur unless the Issuer cancels the nearest Quarterly Exchange
Date scheduled to occur in the same fiscal year of the Issuer as such Sale
Transaction.  In connection with a Sale Transaction, KKR Holdings must provide
notice to Issuer at least thirty (30) days prior to the cash settlement of such
Sale Transaction in respect of the Group Partnership Units to be sold or within
such shorter period of time as may be agreed by the parties hereto. Such notice
shall be delivered during normal business hours at the principal executive
offices of the Issuer.  For the avoidance of doubt, the total aggregate number
of Quarterly Exchange Dates and Sale Transactions occurring during any fiscal
year of the Issuer shall not exceed four (4).

 

ARTICLE III.
GENERAL PROVISIONS

 

Section 3.1             Amendment.  The provisions of this Agreement may be
amended by the affirmative vote or written consent of each of the Issuer, the
Group Partnerships and KKR Holdings.

 

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Section 3.2             Addresses and Notices.  All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by courier service, by fax, by electronic mail (delivery receipt
requested) or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be as specified in a notice given in
accordance with this Section 3.2):

 

(a)  If to the Group Partnership General Partners, to:

 

 

9 West 57th Street, Suite 4200

 

New York, NY 10019

 

Attention: Chief Financial Officer

 

Fax: 212-750-0003

 

(b)  If to Group Partnership I or Group Partnership II to:

 

 

9 West 57th Street, Suite 4200

 

New York, NY 10019

 

Attention: Chief Financial Officer

 

Fax: 212-750-0003

 

(c)  If to KKR Holdings, to:

 

 

9 West 57th Street, Suite 4200

 

New York, NY 10019

 

Attention: Chief Financial Officer

 

Fax: 212-750-0003

 

(d) If to the Issuer, to:

 

 

9 West 57th Street, Suite 4200

 

New York, NY 10019

 

Attention: Chief Financial Officer

 

Fax: 212-750-0003

 

Section 3.3             Further Action. The parties shall execute and deliver
all documents, provide all information and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement.

 

Section 3.4             Binding Effect. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, executors, administrators, heirs, legal
representatives and assigns.  KKR Holdings may enforce the terms of this
agreement in the name of or on behalf of any KKR Holdings Affiliated Person. 
Other than as expressly provided herein, nothing in this Agreement will be
construed to give any

 

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person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement.

 

Section 3.5             Severability.  If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions is not affected in any manner
materially adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.

 

Section 3.6             Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.

 

Section 3.7             Waiver. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute waiver of any such breach of any other covenant, duty,
agreement or condition.

 

Section 3.8             Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)           Any and all disputes which cannot be settled amicably, including
any ancillary claims of any party, arising out of, relating to or in connection
with the validity, negotiation, execution, interpretation, performance or
non-performance of this Agreement (including the validity, scope and
enforceability of this arbitration provision) shall be finally settled by
arbitration conducted by a single arbitrator in New York in accordance with the
then-existing Rules of Arbitration of the International Chamber of Commerce. If
the parties to the dispute fail to agree on the selection of an arbitrator
within thirty (30) days of the receipt of the request for arbitration, the
International Chamber of Commerce shall make the appointment.  Performance under
this Agreement shall continue if reasonably possible during any arbitration
proceedings.

 

(b)           Notwithstanding the provisions of Section 3.8(a), in the case of
matters relating to a Charitable Exchange or Non-U.S. Exchange, the Issuer may
bring, and in the case of matters relating to a Base Exchange, KKR Holdings may
cause any Group Partnership to bring, on behalf of the Issuer or such Group
Partnership or on behalf of any KKR Holdings Affiliated Person, an action or
special proceeding in any court of competent jurisdiction for the purpose of
compelling a party to arbitrate, seeking temporary or preliminary relief in aid
of an arbitration hereunder, and/or enforcing an arbitration award and, for the
purposes of this paragraph.

 

(c)           Notwithstanding any provision of this Agreement to the contrary,
this Section 3.8 shall be construed to the maximum extent possible to comply
with the laws of the State of Delaware, including the Delaware Uniform
Arbitration Act (10 Del. C. § 5701 et  seq.) (the “Delaware Arbitration Act”). 
If, nevertheless, it shall be determined by a court of competent

 

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jurisdiction that any provision or wording of this Section 3.8, including any
rules of the International Chamber of Commerce, shall be invalid or
unenforceable under the Delaware Arbitration Act, or other applicable law, such
invalidity shall not invalidate all of this Section 3.8.  In that case, this
Section 3.8 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 3.8 shall be construed to omit such invalid or
unenforceable provision.

 

Section 3.9             Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. Copies of executed
counterparts transmitted by telecopy or other electronic transmission service
shall be considered original executed counterparts for purposes of this
Section 3.9.

 

Section 3.10           Tax Treatment. To the extent this Agreement imposes
obligations upon a particular Group Partnership or either Group Partnership
General Partner, this Agreement shall be treated as part of the relevant Group
Partnership Agreement as described in Section 761(c) of the Code and Sections
1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations. The parties
shall report any Base Exchange consummated hereunder (pursuant to which Common
Units are delivered pursuant to Section 2.1(a)(i) or Section 2.1(c) hereof), in
the case of Group Partnership I (or any other Group Partnership owned directly
or indirectly by the Issuer through a Group Partnership Holdco), as a taxable
sale of Group Partnership Units by a KKR Holdings Affiliated Person to Group
Partnership HoldCo (or the partner of such other Group Partnership owned
directly or indirectly by the Issuer through a Group Partnership Holdco) and, in
the case of Group Partnership II (or any other Group Partnership owned directly
by the Issuer), as a contribution to the Issuer described in Section 721(a) of
the Code, and no party shall take a contrary position on any income tax return,
amendment thereof or communication with a taxing authority.  The parties shall
report any Charitable Exchange or Non-U.S. Exchange consummated pursuant to
Section 2.1(a)(ii) hereof as a contribution of (i) Group Partnership I Units or
Corporate Holdco interests, and (ii) Group Partnership II Units to the Issuer
described in Section 721(a) of the Code, followed by a tax free contribution of
such Group Partnership I Units or Corporate Holdco interests to the appropriate
Group Partnership Holdco pursuant to Section 351 of the Code, and no party shall
take a contrary position on any income tax return, amendment thereof or
communication with a taxing authority.

 

Section 3.11           Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered, all as of the date first set forth above.

 

[Signature Page Follows]

 

11

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KKR & Co. L.P.

 

 

 

By:

KKR Management LLC, its general partner

 

 

 

 

By:

/s/ William J. Janetschek

 

 

Name: William J. Janetschek

 

 

Title: Chief Financial Officer

 

 

 

 

KKR MANAGEMENT HOLDINGS L.P.

 

 

 

By:

KKR Management Holdings Corp., its general partner

 

 

 

 

By:

/s/ William J. Janetschek

 

 

Name: William J. Janetschek

 

 

Title: Chief Financial Officer

 

 

 

 

KKR FUND HOLDINGS L.P.

 

 

 

By:

KKR & Co. L.P., its general partner

 

 

 

 

By:

KKR Management LLC, its general partner

 

 

 

 

By:

/s/ William J. Janetschek

 

 

Name: William J. Janetschek

 

 

Title: Chief Financial Officer

 

 

 

 

KKR HOLDINGS L.P.

 

 

 

By:

KKR Holdings GP Limited, its general partner

 

 

 

 

By:

/s/ William J. Janetschek

 

 

Name: William J. Janetschek

 

 

Title: Director

 

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EXHIBIT A

 

[FORM OF]
NOTICE OF BASE EXCHANGE

 

KKR & Co. L.P.

9 West 57th Street, Suite 4200

New York, NY 10019

Attention: [Chief Financial Officer]

Fax: 212-750-0003

 

Reference is hereby made to the Exchange Agreement, dated as July 14, 2010 (the
“Exchange Agreement”), among KKR Private Equity Investors, L.P.,  KKR Management
Holdings L.P., KKR Fund Holdings L.P., KKR Holdings L.P., and KKR & Co. L.P. as
amended from time to time.  Capitalized terms used but not defined herein shall
have the meanings given to them in the Exchange Agreement.

 

[                      ] (the “Exchanging KKR Holdings Affiliated Person”)
desires to Exchange the number of Group Partnership Units set forth below in a
Base Exchange.

 

Number of Group Partnership Units to be Exchanged:
                                                     

 

The Exchanging KKR Holdings Affiliated Person (1) hereby represents that the
Group Partnership Units set forth above shall immediately prior to the Exchange
be owned by it, (2) hereby gives notice of its desire to Exchange such Group
Partnership Units for Common Units as set forth in the Exchange Agreement,
(3) hereby irrevocably constitutes and appoints any officer of the Group
Partnerships, either Group Partnership General Partner or the Issuer General
Partner as its attorney, with full power of substitution, to Exchange said Group
Partnership Units on the books of the Group Partnerships for Common Units on the
books of the Issuer, with full power of substitution in the premises.

 

The Exchanging KKR Holdings Affiliated Person covenants (i) to use reasonable
best efforts to sell or otherwise dispose of any Common Units received in such
an Exchange within ten (10) days of the receipt thereof or any specified shorter
period as the general partner of the Issuer determines to be in the best
interests of the Issuer, (ii) to use reasonable best efforts to ensure that
neither such person’s spouse nor any grantor trust which is treated as owned by
such person or his or her spouse owns any Common Units and (iii) to agree that
no other Common Units will be acquired or held by such person during such period
other than through a Qualifying Entity.  Such exchanging KKR Holdings Affiliated
Person who receives Common Units as a result of an Exchange under this Agreement
and who holds any such Common Units on the last day of the ten (10) day or
shorter period referred to above agrees to cause all such Common Units to be
transferred immediately to a Qualifying Entity. For the purposes of the Exchange
Agreement, a “Qualifying Entity” means a partnership, trust or other entity
(other than an entity disregarded as an entity separate from its owner for
United States federal income tax purposes). For the

 

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avoidance of doubt, nothing contained herein shall prohibit any Exchanging KKR
Holdings Affiliated Person from owning an interest in a Qualifying Entity that
owns Common Units.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice of Exchange to be executed and delivered by the undersigned or by its
duly authorized attorney.

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Dated:

 

 

 

 

 

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EXHIBIT B

 

[FORM OF]
NOTICE OF CHARITABLE OR NON-U.S. EXCHANGE

 

 

KKR Private Equity Investors, L.P.

c/o KKR & Co. L.P.

9 West 57th Street, Suite 4200

New York, NY 10019

Attention: [Chief Financial Officer]

Fax: 212-750-0003

 

Reference is hereby made to the Exchange Agreement, dated as of July 14, 2010
(the “Exchange Agreement”), among KKR Private Equity Investors, L.P., KKR
Management Holdings L.P., KKR Fund Holdings L.P., KKR Holdings L.P., and KKR &
Co. L.P. as amended from time to time.  Capitalized terms used but not defined
herein shall have the meanings given to them in the Exchange Agreement.

 

[                    ] (the “Exchanging KKR Holdings Affiliated Person”) desires
to Exchange the number of Group Partnership Units set forth below in a
Charitable or Non-U.S. Exchange, as indicated.

 

Number of Group Partnership Units to be Exchanged:
                                              

 

Type of Exchange (Charitable or Non-U.S. Exchange):
                                            

 

The Exchanging KKR Holdings Affiliated Person (1) hereby represents that the
Group Partnership Units set forth above shall immediately prior to the Exchange
be owned by it, (2) hereby gives notice of its desire to Exchange such Group
Partnership Units for Common Units as set forth in the Exchange Agreement,
(3) hereby irrevocably constitutes and appoints any officer of the Group
Partnerships, either Group Partnership General Partner or the Issuer General
Partner as its attorney, with full power of substitution, to Exchange said Group
Partnership Units on the books of the Group Partnerships for Common Units on the
books of the Issuer, with full power of substitution in the premises.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice of Exchange to be executed and delivered by the undersigned or by its
duly authorized attorney.

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Dated:

 

 

 

 

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