EXHIBIT 10.3


 


FORM OF
CONTINGENT VALUE INTERESTS AGREEMENT




 





 


KKR & Co. L.P.


 


TO


 


     ,


 


 


as


 


Trustee


 










 


CONTINGENT VALUE INTERESTS

AGREEMENT


 


Dated as of                        


 












 





 





















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  
	
  ARTICLE
  ONE

  
	
   

  
	
  DEFINITIONS
  AND OTHER PROVISIONS OF GENERAL APPLICATION

  
	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
  Act

  	
  2

  
	
   

  	
  Affiliate

  	
  2

  
	
   

  	
  Aggregate Unit Cap

  	
  2

  
	
   

  	
  Agreement

  	
  2

  
	
   

  	
  Authorized Newspaper

  	
  2

  
	
   

  	
  Automatic Extinguishment Event

  	
  2

  
	
   

  	
  Averaging Period

  	
  2

  
	
   

  	
  Board of Directors

  	
  2

  
	
   

  	
  Board Resolution

  	
  2

  
	
   

  	
  Business Day

  	
  3

  
	
   

  	
  Commission

  	
  3

  
	
   

  	
  Common Unit Value

  	
  3

  
	
   

  	
  Control

  	
  3

  
	
   

  	
  Corporate Trust Office

  	
  3

  
	
   

  	
  CVI Certificate

  	
  3

  
	
   

  	
  CVI Consideration

  	
  3

  
	
   

  	
  CVI Consideration Cap

  	
  4

  
	
   

  	
  Default Amount

  	
  4

  
	
   

  	
  Default Amount Cap

  	
  4

  
	
   

  	
  Default Interest Rate

  	
  4

  
	
   

  	
  Default Payment Date

  	
  4

  
	
   

  	
  Default VWAP Price

  	
  4

  
	
   

  	
  Distribution Amount

  	
  5

  
	
   

  	
  Event of Default

  	
  5

  
	
   

  	
  Exchange Act

  	
  5

  
	
   

  	
  Ex-Date

  	
  5

  
	
   

  	
  Extinguishment Price

  	
  5

  
	
   

  	
  Floor Price

  	
  5

  
	
   

  	
  Fundamental Change

  	
  5

  
	
   

  	
  Group Partnerships

  	
  6

  
	
   

  	
  Holder

  	
  6

  
	
   

  	
  Independent Financial Expert

  	
  6

  
	
   

  	
  Issue Date

  	
  6

  
	
   

  	
  Maturity Date

  	
  6

  
	
   

  	
  Officer’s Certificate

  	
  6

  
	
   

  	
  Opinion of Counsel

  	
  6

  
	
   

  	
  Outstanding

  	
  6

  
	
   

  	
  Partnership

  	
  7

  



 


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  Partnership Common Units

  	
  7

  
	
   

  	
  Partnership Request

  	
  7

  
	
   

  	
  Paying Agent

  	
  7

  
	
   

  	
  Person

  	
  7

  
	
   

  	
  Responsible Officer

  	
  7

  
	
   

  	
  Security Register

  	
  7

  
	
   

  	
  Strike Price

  	
  8

  
	
   

  	
  Surviving Person

  	
  8

  
	
   

  	
  Trust Indenture Act

  	
  8

  
	
   

  	
  Trustee

  	
  8

  
	
   

  	
  Uncapped CVI Consideration

  	
  8

  
	
   

  	
  Uncapped Default Amount

  	
  8

  
	
   

  	
  Unit Cap

  	
  8

  
	
   

  	
  vice president

  	
  8

  
	
   

  	
  VWAP

  	
  8

  
	
  Section 1.02

  	
  Compliance Certificates
  and Opinions

  	
  8

  
	
  Section 1.03

  	
  Form of Documents Delivered
  to Trustee

  	
  9

  
	
  Section 1.04

  	
  Acts of Holders

  	
  9

  
	
  Section 1.05

  	
  Notices, etc., to
  Trustee and Partnership

  	
  10

  
	
  Section 1.06

  	
  Notice to Holders;
  Waiver

  	
  10

  
	
  Section 1.07

  	
  Conflict with Trust
  Indenture Act

  	
  11

  
	
  Section 1.08

  	
  Effect of Headings and
  Table of Contents

  	
  11

  
	
  Section 1.09

  	
  Successors and Assigns

  	
  11

  
	
  Section 1.10

  	
  Benefits of Agreement

  	
  11

  
	
  Section 1.11

  	
  Governing Law

  	
  11

  
	
  Section 1.12

  	
  Legal Holidays

  	
  11

  
	
  Section 1.13

  	
  Separability Clause

  	
  12

  
	
  Section 1.14

  	
  Tax Treatment

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  TWO

  
	
   

  
	
  CVI
  FORMS

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Forms Generally

  	
  12

  
	
  Section 2.02

  	
  Form of Face of
  CVI

  	
  12

  
	
  Section 2.03

  	
  Form of Reverse of
  CVI

  	
  13

  
	
  Section 2.04

  	
  Form of Trustee’s
  Certificate of Authentication

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  THREE

  
	
   

  
	
  THE
  CVIs

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Title and Terms

  	
  21

  
	
  Section 3.02

  	
  Registrable Form

  	
  23

  
	
  Section 3.03

  	
  Execution,
  Authentication, Delivery and Dating

  	
  23

  
	
  Section 3.04

  	
  Temporary CVIs

  	
  24

  
	
  Section 3.05

  	
  Registration, Transfer
  and Exchange

  	
  24

  



 


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  Section 3.06

  	
  Mutilated, Destroyed, Lost
  and Stolen CVIs

  	
  26

  
	
  Section 3.07

  	
  Presentation of CVI
  Certificate

  	
  26

  
	
  Section 3.08

  	
  Persons Deemed Owners

  	
  27

  
	
  Section 3.09

  	
  Cancellation

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  FOUR

  
	
   

  
	
  THE
  TRUSTEE

  
	
   

  
	
  Section 4.01

  	
  Certain Duties and
  Responsibilities

  	
  27

  
	
  Section 4.02

  	
  Certain Rights of
  Trustee

  	
  28

  
	
  Section 4.03

  	
  Not Responsible for
  Recitals or Issuance of CVIs

  	
  30

  
	
  Section 4.04

  	
  May Hold CVIs

  	
  30

  
	
  Section 4.05

  	
  Money Held in Trust

  	
  30

  
	
  Section 4.06

  	
  Compensation,
  Reimbursement and Indemnification of the Trustee

  	
  30

  
	
  Section 4.07

  	
  Disqualification;
  Conflicting Interests

  	
  31

  
	
  Section 4.08

  	
  Corporate Trustee
  Required; Eligibility

  	
  31

  
	
  Section 4.09

  	
  Resignation and
  Removal; Appointment of Successor

  	
  31

  
	
  Section 4.10

  	
  Acceptance of
  Appointment by Successor

  	
  32

  
	
  Section 4.11

  	
  Merger, Conversion,
  Consolidation or Succession to Business

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  FIVE

  
	
   

  
	
  HOLDERS’
  LISTS AND REPORTS BY TRUSTEE AND COMPANY

  
	
   

  
	
  Section 5.01

  	
  Partnership to Furnish
  Trustee Names and Addresses of Holders

  	
  33

  
	
  Section 5.02

  	
  Preservation of
  Information; Communications to Holders

  	
  33

  
	
  Section 5.03

  	
  Reports by Trustee

  	
  34

  
	
  Section 5.04

  	
  Reports by Partnership

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  SIX

  
	
   

  
	
  AMENDMENTS

  
	
   

  
	
  Section 6.01

  	
  Amendments Without
  Consent of Holders

  	
  35

  
	
  Section 6.02

  	
  Amendments with Consent
  of Holders

  	
  36

  
	
  Section 6.03

  	
  Execution of Amendments

  	
  37

  
	
  Section 6.04

  	
  Effect of Amendments

  	
  37

  
	
  Section 6.05

  	
  Conformity with Trust
  Indenture Act

  	
  37

  
	
  Section 6.06

  	
  Reference in CVIs to
  Amendments

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  SEVEN

  
	
   

  
	
  COVENANTS

  
	
   

  
	
  Section 7.01

  	
  Payment of Amounts, if
  Any, to Holders

  	
  37

  
	
  Section 7.02

  	
  Maintenance of Office
  or Agency

  	
  37

  
	
  Section 7.03

  	
  CVI Consideration or
  Default Amount to Be Held in Trust

  	
  38

  



 


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  Section 7.04

  	
  Certain Purchases and
  Sales

  	
  39

  
	
  Section 7.05

  	
  Written Statement to
  Trustee

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  EIGHT

  
	
   

  
	
  REMEDIES
  OF THE TRUSTEE AND HOLDERS

  
	
  ON
  EVENT OF DEFAULT

  
	
   

  
	
  Section 8.01

  	
  Event of Default
  Defined; Acceleration of Maturity; Waiver of Default

  	
  40

  
	
  Section 8.02

  	
  Collection of
  Indebtedness by Trustee; Trustee May Prove Debt

  	
  41

  
	
  Section 8.03

  	
  Application of Proceeds

  	
  43

  
	
  Section 8.04

  	
  Suits for Enforcement

  	
  44

  
	
  Section 8.05

  	
  Restoration of Rights
  on Abandonment of Proceedings

  	
  44

  
	
  Section 8.06

  	
  Limitations on Suits by
  Holders

  	
  44

  
	
  Section 8.07

  	
  Unconditional Right of
  Holders to Institute Certain Suits

  	
  45

  
	
  Section 8.08

  	
  Powers and Remedies
  Cumulative; Delay or Omission Not Waiver of Default

  	
  45

  
	
  Section 8.09

  	
  Control by Holders

  	
  45

  
	
  Section 8.10

  	
  Waiver of Past Defaults

  	
  46

  
	
  Section 8.11

  	
  Trustee to Give Notice
  of Default, but May Withhold in Certain Circumstances

  	
  46

  
	
  Section 8.12

  	
  Right of Court to
  Require Filing of Undertaking to Pay Costs

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  NINE

  
	
   

  
	
  CONSOLIDATION,
  MERGER, SALE OR CONVEYANCE

  
	
   

  
	
  Section 9.01

  	
  Partnership
  May Consolidate, Etc.

  	
  47

  
	
  Section 9.02

  	
  Successor Substituted

  	
  47

  
	
  Section 9.03

  	
  Opinion of Counsel to
  Trustee

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  TEN

  
	
   

  
	
  DISCHARGE
  OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Discharge of Liability
  on CVIs

  	
  48

  



 


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CONTINGENT VALUE INTERESTS AGREEMENT, dated
as of
                            ,
between KKR & Co. L.P., a Delaware limited partnership (hereinafter
called the “Partnership”), and                        ,
as trustee (hereinafter called the “Trustee”).


 


RECITALS OF THE COMPANY


 


WHEREAS, the Partnership has duly authorized
the creation of an issue of Contingent Value Interests (hereinafter called the “CVIs”),
of substantially the tenor and amount hereinafter set forth, and to provide
therefor the Partnership has duly authorized the execution and delivery of this
Agreement;


 


WHEREAS, pursuant to the Purchase and Sale
Agreement dated as of July 27, 2008 (the “Purchase Agreement”), among the
Partnership, KKR Private Equity Investors, L.P. (the “Seller”) and the other
parties thereto, the Partnership has agreed to issue and deliver to the Seller,
among other securities, one (1) CVI for each common unit representing
limited partner interests of the Seller (“Seller Common Units”) issued and
outstanding immediately prior to the consummation of the purchase and sale
contemplated by Section 1.1 of the Purchase Agreement;


 


WHEREAS, pursuant to the Purchase Agreement
it is contemplated that the Seller will make a distribution in kind of the CVIs
and a number of Partnership Common Units to holders of Seller Common Units on a
pro rata basis; and


 


WHEREAS, all things necessary have been done
to make the CVIs, when executed by the Partnership and authenticated and
delivered hereunder, the valid obligations of the Partnership and to make this
Agreement a valid agreement of the Partnership, in accordance with their and
its terms.


 


NOW, THEREFORE, for and in consideration of
the premises and the consummation of the transactions referred to above, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the CVIs, as follows:


 


ARTICLE ONE



DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION


 


Section 1.01  
Definitions.


 


For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:


 


(a)                                  the terms defined in
this Article have the meanings assigned to them in this Article, and
include the plural as well as the singular;


 


(b)                                 all accounting terms
used herein and not expressly defined shall have the meanings assigned to such
terms in accordance with generally accepted accounting principles, and the term
“generally accepted accounting principles” means such accounting principles as
are generally accepted in the United States of America at the time of any
computation;


 

















 


(c)                                  all other terms used
herein which are defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein; and


 


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


 


Certain terms, used principally in Article Four,
are defined in that Article.


 


“Act”, when used with respect to any Holder,
has the meaning specified in Section 1.04.


 


“Affiliate” means a Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person; provided that
for purposes of this Agreement, no portfolio company of any investment fund or
other investment vehicle that is from time-to-time managed, sponsored or
otherwise advised by the Partnership and/or one or more of its Affiliates shall
be deemed to be an Affiliate of the Partnership.


 


“Aggregate Unit Cap” means [6% of the sum of the number of Purchaser Common Units outstanding at
Closing and the number of Purchaser Common Units then issuable upon exchange
(without regard to any restrictions on exchange) by KKR Holdings L.P. or its
designees to the Partnership of partner interests in the Group Partnerships (
for the avoidance of doubt, any Purchaser Common Units outstanding or issuable
under an equity incentive plan shall not be considered outstanding or issuable
for purposes of the foregoing calculation)] Partnership Common Units
(subject to adjustment as provided herein).


 


“Agreement” means this instrument as
originally executed and as it may from time to time be supplemented or amended
pursuant to the applicable provisions hereof.


 


“Authorized Newspaper” means The Wall Street
Journal (Eastern Edition), or if The Wall Street Journal (Eastern Edition)
shall cease to be published, or, if the publication or general circulation of
The Wall Street Journal (Eastern Edition) shall be suspended for whatever
reason, such other English language newspaper as is selected by the Partnership
with general circulation in The City of New York, New York.


 


 “Automatic
Extinguishment Event” has the meaning set forth in Section 3.01(g).


 


“Averaging Period” means the 90 consecutive
trading day period ending on the third trading day preceding the Maturity Date.


 


“Board of Directors” means either the board
of directors of the general partner of the Partnership or any duly authorized
committee of that board; provided that for purposes of the third
paragraph of Section 7.04, any such committee shall be comprised of a
majority of independent directors.


 


“Board Resolution” means a copy of a
resolution certified by the Secretary or an Assistant Secretary of the general partner
of the Partnership to have been duly adopted by the 


 


2

















 


Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.


 


“Business Day” means any day (other than a
Saturday or a Sunday) on which banking institutions in The City of New York,
New York, in the Cayman Islands or in the State of the principal office of the
Trustee are not authorized or obligated by law or executive order to close.


 


“Commission” means the Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or if at any time after the execution of this Agreement such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.


 


“Common Unit Value” means (A) if the
Partnership Common Units are listed or admitted to trading on any securities
exchange, the sum of the daily VWAPs of one Partnership Common Unit on the New
York Stock Exchange (or if the Partnership Common Units are not then listed on
the New York Stock Exchange, such other exchange on which the Partnership
Common Units are then listed) for each of the 90 consecutive trading days during
the Averaging Period, divided by 90, (B) if the Partnership Common Units
are not then listed or admitted to trading on any securities exchange, the sum
of the daily last reported sale prices (or if no sale takes place on any
particular day, the average of the closing bid and asked prices on such day) as
reported by a reputable quotation source designated by the Partnership for each
of the 90 trading days during the Averaging Period, divided by 90 and (C) if
the Partnership Common Units are not then listed or admitted to trading on any
securities exchange and no such reported sale price or bid and asked prices are
available, the average of the high bid and low asked prices on the last day on
which such information was available, as reported in the Authorized Newspaper; provided
that if during the Averaging Period the Ex-Date with respect to any dividend or
other distribution (other than the payment of a dividend or other distribution
by the Partnership to its unitholders in Partnership Common Units) shall have
occurred in respect of a Partnership Common Unit, for purposes of calculating
the Common Unit Value, the daily VWAP, the last reported sale price or the
average of the closing bid and asked prices, as applicable, for any trading day
in the Averaging Period preceding the Ex-Date in respect of such dividend or
other distribution shall be reduced by the amount of such dividend or other
distribution.


 


 “Control”
(including the terms “controlled”, “controlled by” and “under common control
with”) means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of stock or as trustee or executor, by
contract or otherwise.


 


“Corporate Trust Office” means the office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, which office at the date of execution of this
Agreement is located at                        .


 


“CVI Certificate” means a certificate
representing any of the CVIs.


 


“CVI Consideration” means, an amount equal to
the difference between (A) the Strike Price and (B) the greater of (I) the
Floor Price and (II) the Common Unit Value (such 


 


3

















 


difference, the “Uncapped CVI
Consideration”); provided (x) if the Common Unit Value equals or exceeds
the Strike Price, the CVI Consideration shall be $0 and (y) if the
Uncapped CVI Consideration equals or exceeds the CVI Consideration Cap, the CVI
Consideration shall be equal to the CVI Consideration Cap.


 


“CVI Consideration Cap” means the product of
the Unit Cap and the Common Unit Value.


 


“Default Amount” means, an amount equal to
the difference between (A) the Strike Price and (B) the greater of (I) the
Floor Price and (II) the Default VWAP Price (such difference, the “Uncapped
Default Amount”); provided (x) if the Default VWAP Price equals or
exceeds the Strike Price, the Default Amount shall be $0 and (y) if the
Uncapped Default Amount equals or exceeds the Default Amount Cap, the Default
Amount shall mean the Default Amount Cap.


 


“Default Amount Cap” means the product of the
Unit Cap and the Default VWAP Price.


 


“Default Interest Rate” means 8% per annum.


 


“Default Payment Date” means the date upon
which the CVIs are declared due and payable pursuant to Section 8.01.


 


“Default VWAP
Price” means (A) if the Partnership Common Units are listed or admitted to
trading on any securities exchange, the sum of the daily VWAPs of one
Partnership Common Unit on the New York Stock Exchange (or, if the Partnership
Common Units are not then listed on the New York Stock Exchange, such other
exchange on which the Partnership Common Units are then listed) for each of the
10 consecutive trading days immediately preceding the Default Payment Date,
divided by 10; (B) if the Partnership Common Units are not then listed or
admitted to trading on any securities exchange, the sum of the daily last
reported sale prices (or if no sale takes place on any particular day, the
average of the closing bid and asked prices on such day) as reported by a
reputable quotation source designated by the Partnership for each of the 10
consecutive trading days immediately preceding the Default Payment Date,
divided by 10 and (C) if the Partnership Common Units are not then listed
or admitted to trading on any securities exchange and no such reported sale
price or bid and asked prices are available, the average of the reported high
bid and low asked prices on the last day on which such information was
available, as reported in the Authorized Newspaper; provided that if
during such 10 consecutive trading day period the Ex-Date with respect to any
dividend or other distribution (other than the payment of a dividend or other
distribution by the Partnership to its unitholders in Partnership Common Units)
shall have occurred in respect of a Partnership Common Unit, for purposes of
calculating the Default VWAP Price, the daily VWAP, the last reported sale
price or the average of the closing bid and asked prices, as applicable, for
any trading day in such 10 consecutive trading day period preceding the Ex-Date
in respect of such dividend or other distribution shall be reduced by the
amount of such dividend or other distribution.


 


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“Distribution Amount” means the aggregate
amount of any dividends or other distributions (other than the payment of a
dividend or other distribution by the Partnership to its unitholders in
Partnership Common Units) made in respect of a single Partnership Common Unit
for which the Ex-Date occurs during the period from the Issue Date through, and
including, the last day of the Averaging Period; provided that in the case of
any non-cash dividend or other distribution (other than the payment of a
dividend or other distribution by the Partership to its unitholders in
Partnership Common Units), the value of such dividend or other distribution
shall be equal to the fair market value of the dividend or other distribution
made in respect of a single Partnership Common Unit as determined by an
Independent Financial Advisor at the time such dividend or other distribution
is made.


 


“Event of Default” has the meaning set forth
in Section 8.01.


 


“Exchange Act” means The Securities Exchange
Act of 1934, as amended.


 


“Ex-Date” means, when used with respect to
dividends or other distributions made in respect of a Partnership Common Unit,
the first date on which the Partnership Common Units trade on the New York
Stock Exchange (or, if the Partnership Common Units are not then listed on the
New York Stock Exchange, such other exchange on which Partnership Common Units
are then listed) without the right to receive the dividend or other
distribution.


 


“Extinguishment Price” means $24 (subject to adjustment
as provided herein) minus the Distribution Amount (taking into account
dividends or other distributions for which the Ex-Date occurs during the period
from the Issue Date through, and including, the last day of the 20 consecutive
trading days used to determine whether an Automatic Extinguishment Event has
occurred); provided that in no event shall the Extinguishment Price be less
than $0.


 


“Floor Price” means $17.3056 (subject to
adjustment as provided herein) minus the Distribution Amount; provided that in
no event shall the Floor Price be less than $0.


 


 “Fundamental
Change” means that at any time after the Issue Date any of the following
occurs:


 


(A) consummation of any share exchange,
exchange offer, tender offer, consolidation, merger or other business
combination involving the Partnership pursuant to which all or substantially
all of the Partnership Common Units are converted into cash, securities or
other property, (B) any sale, lease or other transfer in one transaction
or a series of transactions of all or substantially all of the consolidated
assets of the Partnership and its subsidiaries, taken as a whole, to any Person
other than one of its subsidiaries or (C) the Partnership adopts any plan
or proposal for its liquidation or dissolution; provided, however,
that in respect of (A) above a Fundamental Change will not be deemed to
have occurred if (x) at least 90% of the consideration received or to be
received by holders of the Partnership Common Units, excluding cash payments
for fractional units or pursuant to statutory or contractual appraisal rights,
in connection with the transaction or transactions constituting the Fundamental
Change consists of shares of common stock or common units that are quoted or
listed for trading on a securities exchange or that will be so quoted or listed
when issued or exchanged in connection with such transaction or transactions
(these securities being referred to as “publicly traded securities”) and 


 


5

















 


as a result of this transaction
or transactions the Partnership has the right to satisfy the CVI Consideration
with such publicly traded securities and (y) the acquirer in any such
transaction assumes the obligations of the Partnership relating to the CVIs,
and appropriate adjustments are made to the Aggregate Unit Cap, Extinguishment
Price, Floor Price, Strike Price and Unit Cap and any other defined terms that
require mathematical adjustments as a result of such transaction based on, and
to reflect, the number of publicly traded securities into which a Partnership
Common Unit is converted in such transaction.


 


“Group
Partnerships”  means  KKR
Management Holdings L.P., a Delaware limited partnership, and KKR Fund Holdings
L.P., a Cayman limited partnership (and any future partnership designated as a
Group Partnership by the Partnership (it being understood that such designation
may only be made if such future partnership enters into a group partnership
agreement substantially the same as, and which provides for substantially the
same obligations as, the group partnership agreements then in existence)), and
any successors thereto.


 


“Holder” means a Person in whose name a CVI
is registered in the Security Register.


 


“Independent Financial Expert” means an
independent nationally recognized investment banking firm, valuation firm or
appraisal firm selected by the Partnership.


 


“Issue Date” means the date of this
Agreement.


 


“Maturity Date” means the third Business Day
following the earlier of (x) a Fundamental Change and (y) [Insert third anniversary of closing date].


 


“Officer’s Certificate” means a certificate
signed by the chairman of the Board of Directors, the chief-executive officer,
any co-chief executive officer, the chief operating officer, the chief
financial officer, the general counsel, the chief compliance officer, any
president, any vice president, any treasurer, any assistant treasurer, any
secretary or any assistant secretary of the Partnership or the general partner
of the Partnership in his or her capacity as such an officer, and delivered to
the Trustee.


 


“Opinion of Counsel” means a written opinion
of counsel, who may be internal counsel for the general partner of the
Partnership or an Affiliate thereof, and who shall be reasonably acceptable to
the Trustee.


 


“Outstanding”, when used with respect to CVIs
means, as of the date of determination, all CVIs theretofore authenticated and
delivered under this Agreement, except:


 


(a)                                  CVIs
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;


 


(b)                                 From
and after the earlier of the Default Payment Date and the Maturity Date, CVIs,
or portions thereof, for which delivery of cash or Partnership Common Units in
the necessary amount to satisfy the CVI Consideration or the Default Amount, as
applicable, has been theretofore deposited with the Trustee or any Paying Agent
(other 


 


6

















 


than the
Partnership) in trust or set aside and segregated in trust by the Partnership
(if the Partnership shall act as its own Paying Agent) for the Holders of such
CVIs; and


 


(c)                                  CVIs
in exchange for or in lieu of which other CVIs have been authenticated and
delivered pursuant to this Agreement;


 


provided,
however, that in determining whether the Holders of the requisite
Outstanding CVIs have given any request, demand, direction, consent or waiver
hereunder, CVIs owned by the Partnership or any other obligor upon the CVIs or
any Affiliate of the Partnership or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, direction, consent
or waiver, only CVIs which the Trustee knows to be so owned shall be so
disregarded.


 


“Partnership” means the Person named as the “Partnership”
in the first paragraph of this instrument, until a successor Person shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter “Partnership” shall mean such successor Person. To the extent necessary
to comply with the requirements of the provisions of Trust Indenture Act
Sections 3.10 through 3.17 as they are applicable to the Partnership, the term “Partnership”
shall include any other obligor with respect to the CVIs for the purposes of
complying with such provisions.


 


“Partnership Common Units” means common units
representing limited partner interests of the Partnership.


 


“Partnership Request” or “Partnership Order”
means a written request or order signed in the name of the Partnership by the
chairman of the Board of Directors, the chief-executive officer, any co-chief
executive officer, the chief operating officer, the chief financial officer,
the general counsel, the chief compliance officer, any president, any vice
president, any treasurer, any assistant treasurer, any secretary or any
assistant secretary of the Partnership or the general partner of the
Partnership, and delivered to the Trustee.


 


“Paying Agent” means any Person authorized by
the Partnership to pay the amount determined pursuant to Section 3.01, if
any, on any CVIs on behalf of the Partnership, which shall initially be the
Trustee.


 


“Person” means any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.


 


“Responsible Officer”, when used with respect
to the Trustee, means any officer assigned to the Corporate Trust Office and
also means, with respect to any particular corporate trust matter, any other
officer of the Trustee to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.


 


“Security Register” and “Security Registrar”
have the respective meanings specified in Section 3.05.


 


7

















 


“Strike Price” means $22.25 (subject to
adjustment as provided herein) minus the Distribution Amount; provided that in
no event shall the Strike Price be less than $0.


 


“Surviving Person” has the meaning set forth
in Section 9.01.


 


“Trust Indenture Act” means the Trust
Indenture Act of 1939 as in force at the date as of which this Agreement was
executed, except as provided in Section 6.05.


 


“Trustee” means the Person named as the “Trustee”
in the first paragraph of this Agreement, until a successor Trustee shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter “Trustee” shall mean such successor Trustee.


 


“Uncapped CVI Consideration” has the meaning
set forth in the definition of CVI Consideration.


 


“Uncapped Default Amount” has the meaning set
forth in the definition of Default Amount.


 


“Unit Cap” means 0.2857 (subject to
adjustment as provided herein).


 


“vice president”, when used with respect to
the general partner of the Partnership or the Trustee, means any vice
president, whether or not designated by a number or a word or words added
before or after the title of “vice president”.


 


“VWAP” means volume weighted average price.


 


Section 1.02  
Compliance Certificates and Opinions.


 


Upon any application or request by the
Partnership to the Trustee to take any action under any provision of this
Agreement, the Partnership shall furnish to the Trustee an Officer’s
Certificate stating that all conditions precedent, if any, provided for in this
Agreement (including any covenants, compliance with which constitutes a
condition precedent) relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.


 


Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Agreement shall
include:


 


(a)                                  a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;


 


(b)                                 a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;


 


8

















 


(c)                                  a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and


 


(d)                                 a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.


 


Section 1.03  
Form of Documents Delivered to Trustee.


 


In any case where several matters are required
to be certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.


 


Any certificate or opinion of an officer of
the Partnership may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
general partner of the Partnership stating that the information with respect to
such factual matters is in the possession of the Partnership, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.


 


Any certificate, statement or opinion of an
officer of the general partner of the Partnership or of counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of
or representations by an accountant or firm of accountants in the employ of the
Partnership, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate or opinion of any independent firm of
public accountants filed with the Trustee shall contain a statement that such
firm is independent.


 


Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.


 


Section 1.04  
Acts of Holders.


 


(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered 


 


9

















 


to the Trustee and, where it is
hereby expressly required, to the Partnership. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and (subject to Section 4.01)
conclusive in favor of the Trustee and the Partnership, if made in the manner
provided in this Section.


 


(b)                                 The
fact and date of the execution by any Person of any such instrument or writing
may be proved in any reasonable manner which the Trustee deems sufficient.


 


(c)                                  The
ownership of CVIs shall be proved by the Security Register.


 


(d)                                 At
any time prior to (but not after) the evidencing to the Trustee, as provided in
this Section 1.04, of the taking of any action by the Holders of the CVIs
specified in this Agreement in connection with such action, any Holder of a CVI
the serial number of which is shown by the evidence to be included among the
serial numbers of the CVIs the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Section 1.04, revoke such action so far as
concerns such CVI. Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any CVI shall bind every
future Holder of the same CVI or the Holder of every CVI issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, suffered or omitted to be done by the Trustee, any
Paying Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such CVI.


 


Section 1.05  
Notices, etc., to Trustee and Partnership.


 


Any request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or other document provided
or permitted by this Agreement to be made upon, given or furnished to, or filed
with:


 


(a)                                  the Trustee by any
Holder or by the Partnership shall be sufficient for every purpose hereunder if
made, given, furnished or filed, in writing, to or with the Trustee at its
Corporate Trust Office at                        ;
or


 


(b)                                 the Partnership by the
Trustee or by any Holder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class postage prepaid, to the Partnership addressed
to it at                        ,
or at any other address previously furnished in writing to the Trustee by the
Partnership.


 


Section 1.06  
Notice to Holders; Waiver.


 


Where this Agreement provides for notice to Holders
of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this 


 


10

















 


Agreement provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.


 


In case by reason of the suspension of
regular mail service or by reason of any other cause, it shall be impracticable
to mail notice of any event as required by any provision of this Agreement,
then any method of giving such notice as shall be satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.


 


Section 1.07  
Conflict with Trust Indenture Act.


 


If any provision hereof limits, qualifies or
conflicts with another provision hereof which is required to be included in
this Agreement by any of the provisions of the Trust Indenture Act, such
required provision shall control.


 


Section 1.08  
Effect of Headings and Table of Contents.


 


The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.


 


Section 1.09  
Successors and Assigns.


 


All covenants and agreements in this
Agreement by the Partnership shall bind its successors and assigns, whether so
expressed or not.


 


Section 1.10  
Benefits of Agreement.


 


Nothing in this Agreement or in the CVIs,
express or implied, shall give to any Person (other than the parties hereto and
their successors hereunder, any Paying Agent and the Holders) any benefit or
any legal or equitable right, remedy or claim under this Agreement or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and their successors and of the
Holders.


 


Section 1.11  
Governing Law.


 


This Agreement and the CVIs shall be governed
by and construed in accordance with the laws of the State of Delaware.


 


Section 1.12  
Legal Holidays.


 


In the event that the Maturity Date or the
Default Payment Date, as the case may be, shall not be a Business Day, then
(notwithstanding any provision of this Agreement or the CVIs to the contrary)
payment on the CVIs need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the Maturity
Date or the Default Payment Date, as the case may be.


 


11

















 


Section 1.13  
Separability Clause.


 


In case any provision in this Agreement or in
the CVIs shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


Section 1.14  
Tax Treatment.  To the extent this
Agreement imposes obligations on the Partnership, this Agreement shall be
treated as part of the Limited Partnership Agreement of the Partnership as
described in Section 761(c) of the Internal Revenue Code of 1986, as
amended, and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the
United States Treasury Regulations.  The
CVIs shall be treated as an interest in the Partnership for U.S. federal income
tax purposes, and neither the Partnership nor any Holder shall take a contrary
position on any income tax return, amendment thereof or communication with a
taxing authority.


 


ARTICLE TWO



CVI FORMS


 


Section 2.01  
Forms Generally.


 


The CVIs and the Trustee’s certificate of
authentication shall be in substantially the forms set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Agreement and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may be required by law or any rule or regulation
pursuant thereto, all as may be determined by officers executing such CVIs, as
evidenced by their execution of the CVIs. Any portion of the text of any CVI
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the CVI.


 


The definitive CVIs shall be printed,
lithographed or engraved on steel engraved borders or produced by any
combination of these methods or may be produced in any other manner as
determined by the officers executing such CVIs, as evidenced by their execution
of such CVIs.


 


Section 2.02  
Form of Face of CVI.


 


KKR &
Co. L.P.


 


	
  No.

  	
   

  	
  Certificate for Contingent Value Interests

  



 


This certifies that
                                        
(the “Holder”) is the owner of the number of Contingent Value Interests (“CVIs”)
of KKR & Co. L.P., a Delaware limited partnership (the “Partnership”),
set forth above. Each CVI entitles the Holder, subject to the provisions
contained herein and in the Agreement referred to on the reverse hereof, to
consideration from the Partnership, in respect of certain adjustments to the
Partnership’s direct or indirect ownership interests in the Group Partnerships
(as defined on the reverse hereof), in an amount and in the form determined
pursuant to the provisions set forth on the reverse hereof and as more fully
described in the Agreement.  Such
consideration shall be delivered to the Holder 


 


12

















 


on the Maturity Date or the
Default Payment Date, as the case may be (each as defined on the reverse
hereof).


 


Consideration pursuant to this CVI
Certificate shall be delivered only to the registered Holder of this CVI
Certificate.  Such consideration shall be
delivered only upon presentation of this CVI Certificate by the Holder hereof, in
person or by duly authorized attorney, at the office or agency of the
Partnership maintained for that purpose in the Borough of Manhattan, The City
of New York, or at any other office or agency maintained by the Partnership for
such purpose.  The Trustee has initially
been appointed as the Paying Agent in the Borough of Manhattan, The City of New
York.


 


Reference is hereby made to the further
provisions of this CVI Certificate set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.


 


Unless the certificate of authentication
hereon has been duly executed by the Trustee referred to on the reverse hereof
by manual signature, this CVI Certificate shall not be entitled to any benefit
under the Agreement, or be valid or obligatory for any purpose.


 


THIS CVI CERTIFICATE MAY NOT BE DIRECTLY
OR INDIRECTLY TRANSFERRED IN WHOLE OR IN PART (INCLUDING, WITHOUT
LIMITATION, BY WAY OF ANY DERIVATIVE OR SIMILAR SECURITY) EXCEPT (1) TO
THE PARTNERSHIP OR AN AFFILIATE OF THE PARTNERSHIP, (2) BY OPERATION OF
LAW OR (3) AS OTHERWISE EXPRESSLY PERMITTED BY THE AGREEMENT.


 


IN WITNESS WHEREOF, the Partnership has
caused this CVI Certificate to be duly executed.


 


	
  Dated:

  	
   

  	
   

  	
  KKR &
  Co. L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  KKR Management
  LLC, its general

  partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Authorized
  Signature

  	
   

  	
   

  
						



 


Section 2.03  
Form of Reverse of CVI.


 


This CVI Certificate is issued under and in
accordance with the Contingent Value Interests Agreement, dated as of
                      ,
2008 (as amended, supplemented or otherwise modified from time to time, the “Agreement”),
between the Partnership and
                ,
as trustee (the “Trustee”, which terms includes any successor Trustee under the
Agreement), and is subject to the terms and provisions contained in the
Agreement, all of which terms and provisions the 


 


13

















 


Holder of this CVI Certificate
consents by acceptance hereof.  The
Agreement is hereby incorporated herein by reference and made a part
hereof.  Reference is hereby made to the
Agreement for a full statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Partnership, the Trustee
and the Holders of the CVIs.  Copies of
the Agreement can be obtained by contacting the Trustee.  All capitalized terms used in this CVI
Certificate without definition shall have the meanings assigned to them in the
Agreement.


 


Each CVI represents the right to receive, in
respect of certain adjustments to the Partnership’s direct or indirect
ownership interests in the Group Partnerships, subject to the provisions
contained herein, the CVI Consideration (as defined below). The amount and form
of the CVI Consideration will be determined by the Partnership in accordance
with the provisions herein.  Such
determination by the Partnership, absent manifest error, shall be final and
binding on the Partnership and the Holder. 
Under certain circumstances, as described below, the Holders of CVIs
will not be entitled to any CVI Consideration and the CVIs represented hereby
shall terminate and become null and void and the Holder hereof shall have no
further rights with respect hereto.  The
Partnership and the Holder shall treat the CVIs represented hereby as an
interest in the Partnership for U.S. federal income tax purposes.


 


Subject to adjustment as set forth below and
to the occurrence of an Automatic Extinguishment Event (as defined below), the
Partnership shall deliver to the Holder hereof with respect to each CVI
represented hereby on the third Business Day following the earlier of (x) a
Fundamental Change (as defined below) and (y) [Insert third
anniversary of closing date] (such third Business Day, the “Maturity
Date”) CVI Consideration in the form described below.


 


The CVI Consideration, if any, shall be
satisfied by delivery by the Partnership of a number of common units
representing limited partner interests in the Partnership (“Partnership Common
Units”) having a value equal to the CVI Consideration; provided, however, that
the Partnership shall deliver cash to satisfy its obligation to deliver the CVI
Consideration instead of Partnership Common Units if (x) the Partnership
gives notice to the Trustee at least 10 days prior to the commencement of the
Averaging Period (as defined below) that the Group Partnerships have committed
to deliver cash to the Partnership in an amount sufficient to satisfy the
aggregate CVI Consideration deliverable by the Partnership with respect to all
CVIs at the Maturity Date or (y) at the time of issuance thereof, such
Partnership Common Units would not be (A) duly authorized, validly issued,
fully paid and non-assessable (other than as such non-assessability may be
affected by Section 17-607 or Section 17-804 of the Delaware Revised
Uniform Limited Partnership Act or the Limited Partnership Agreement of the
Partnership), (B) issued in compliance with any preemptive rights or
rights of first refusal, (C) authorized for listing on the New York Stock
Exchange (or, if the Partnership Common Units are not then listed on the New
York Stock Exchange, such other exchange on which Partnership Common Units are
then listed), subject to official notice of issuance or (D) issued either
in a transaction that satisfied the requirements of Section 3(a)(9) of
the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to
an effective registration statement under the Securities Act, it being
understood that the Partnership shall use its reasonable best efforts to effect
the outcomes described in (A) through (D) above.  Partnership Common Units issued as CVI
Consideration shall be valued (for purposes of calculating the number of
Partnership Common Units to be issuable to Holders) at the Common Unit Value.  Any CVI Consideration not delivered when due
at the Maturity Date shall bear interest at the Default Interest Rate (as
defined below).


 


14














 


The Trustee has been initially appointed as
Paying Agent.  All CVI Consideration to
be delivered by the Partnership pursuant to this CVI Certificate shall be
subject to and reduced by withholding taxes, if any.  The Partnership shall have no obligation to
reimburse, equalize or compensate a Holder or other person for such withholding
taxes.


 


Notwithstanding anything herein or in the
Agreement to the contrary, if at any time during the period from                          ,
2008 (the “Issue Date”) through, but excluding the first day of the Averaging
Period, the volume weighted average price (“VWAP”) of one Partnership Common
Unit on the New York Stock Exchange (or, if the Partnership Common Units are
not then listed on the New York Stock Exchange, such other exchange on which
the Partnership Common Units are then listed) equals or exceeds the
Extinguishment Price for 20 consecutive trading days (the “Automatic
Extinguishment Event”), then the CVIs will have no value and will be
automatically extinguished and terminated without further consideration or
action by the Partnership, the Trustee or the Holders; provided that if
during such 20 consecutive trading day period the Ex-Date with respect to any
dividend or other distribution (other than the payment of a dividend or other
distribution by the Partnership to its unitholders in Partnership Common Units)
shall have occurred in respect of a Partnership Common Unit, for purposes of
calculating the daily VWAP described above, the daily VWAP for any trading day
in such 20 consecutive trading day period preceding the Ex-Date in respect of
such dividend or other distribution shall be reduced by the amount of such
dividend or other distribution; provided  further that any trading
day (an “Excluded Day”) on which the Purchaser or any of its Affiliates takes
any action that it would be prohibited from taking under Section 7.04
during the Prohibited Period shall not be considered a trading day for purposes
of the foregoing and the daily VWAP for an Excluded Day shall not be taken into
account for purposes of the foregoing (it being understood that consecutive
trading days immediately preceding the Excluded Day may continue to be taken
into account for purposes of the 20 consecutive trading day period used to
determine whether an Automatic Extinguishment Event has occurred; provided
however that if an Excluded Day occurs on a trading day that would
otherwise have been one of the final 3 consecutive trading days in the 20
consecutive trading day period used to determine whether an Automatic
Extinguishment Event has occurred, the 20 consecutive trading day period used
to determine whether an Automatic Extinguishment Event has occurred shall begin
no earlier than the first trading day following such Excluded Day that is
itself not an Excluded Day).


 


In the event that the Partnership determines
that the CVI Consideration or the Default Amount on the Maturity Date or the
Default Payment Date, as applicable, is $0.00 or that the Automatic
Extinguishment Event has occurred, the Partnership shall give to the Holder of
each CVI notice of such determination. Upon making such determination, absent
manifest error, this CVI Certificate shall terminate and become null and void
and the Holder hereof shall have no further rights with respect hereto. The
failure to give such notice or any defect therein shall not affect the validity
of such determination.


 


If at any time an Event of Default occurs and
is continuing, either the Trustee or the Holders holding an aggregate of at
least 25% of the CVIs then Outstanding, by notice to the Partnership (and to
the Trustee if given by the Holders), may declare the CVIs due and payable
immediately,  and upon such declaration,
the Partnership shall deliver to the Holder for each CVI held by the Holder the
Default Amount with interest at the Default Interest Rate from the Default
Payment Date through the date payment is duly provided for.


 


15

















 


The Default Amount and the related interest
shall be satisfied by delivery by the Partnership of a number of Partnership
Common Units having a value equal to the Default Amount and the related
interest, provided, however, that the Partnership shall deliver cash to satisfy
its obligation to deliver the Default Amount and related interest instead of
Partnership Common Units if (x) the Partnership receives cash directly or
indirectly through its subsidiaries from the Group Partnerships on or prior to
the date of payment of the Default Amount in an amount adequate to satisfy delivery
of the Default Amount in cash, or (y) at the time of issuance thereof,
such Partnership Common Units would not be (A) duly authorized, validly
issued, fully paid and non-assessable (other than as such non-assessability may
be affected by Section 17-607 or Section 17-804 of the Delaware
Revised Uniform Limited Partnership Act or the Limited Partnership Agreement of
the Partnership), (B) issued in compliance with any preemptive rights or
rights of first refusal, (C) authorized for listing on the New York Stock
Exchange (or, if the Partnership Common Units are not then listed on the New
York Stock Exchange, such other exchange on which Partnership Common Units are
then listed), subject to official notice of issuance or (D) issued either
in a transaction that satisfied the requirements of Section 3(a)(9) of
the Securities Act or pursuant to an effective registration statement under the
Securities Act, it being understood that the Partnership shall use its
reasonable best efforts to effect the outcomes described in (A) through (D) above.  The Partnership Common Units issued in
respect of the Default Amount and the related interest shall be valued (for
purposes of calculating the number of Partnership Common Units to be issuable
to Holders) at the Default VWAP Price.


 


Notwithstanding anything herein or in the
Agreement to the contrary, other than in respect of the Partnership’s
obligation to deliver interest at the Default Interest Rate under the
circumstances provided herein, the Partnership shall in no event be required to
deliver (i) CVI Consideration (whether in the form of Partnership Common
Units or cash) in excess of the CVI Consideration Cap in order to satisfy its
obligations in respect of any CVI, (ii) a Default Amount (whether in the
form of Partnership Common Units or cash) in excess of the Default Amount Cap,
as applicable, in order to satisfy its obligations in respect of any CVI or (iii) an
aggregate number of Partnership Common Units in excess of the Aggregate Unit
Cap or cash in an aggregate amount in excess of an amount equal to the product
of the Aggregate Unit Cap and the Common Unit Value (or the Default VWAP Price
in the event a Default Payment Date occurs) in order to satisfy its obligations
in respect of all CVIs authenticated and delivered under the Agreement.


 


Definitions:


 


For purposes of the foregoing,


 


“Aggregate Unit Cap” means [6% of the sum of the number of Purchaser Common Units outstanding at
Closing and the number of Purchaser Common Units then issuable upon exchange
(without regard to any restrictions on exchange) by KKR Holdings L.P. or its
designees to the Partnership of partner interests in the Group Partnerships (
for the avoidance of doubt, any Purchaser Common Units outstanding or issuable
under an equity incentive plan shall not be considered outstanding or issuable
for purposes of the foregoing calculation)] Partnership Common Units
(subject to adjustment as provided in the Agreement).


 


16

















 


“Authorized Newspaper” means The Wall Street
Journal (Eastern Edition), or if The Wall Street Journal (Eastern Edition)
shall cease to be published, or, if the publication or general circulation of
The Wall Street Journal (Eastern Edition) shall be suspended for whatever
reason, such other English language newspaper as is selected by the Partnership
with general circulation in The City of New York, New York.


 


“Averaging Period” means the 90 consecutive
trading day period ending on the third trading day preceding the Maturity Date.


 


 “Common
Unit Value” means (A) if the Partnership Common Units are listed or
admitted to trading on any securities exchange, the sum of the daily VWAPs of
one Partnership Common Unit on the New York Stock Exchange (or if the
Partnership Common Units are not then listed on the New York Stock Exchange,
such other exchange on which the Partnership Common Units are then listed) for
each of the 90 consecutive trading days during the Averaging Period, divided by
90, (B) if the Partnership Common Units are not then listed or admitted to
trading on any securities exchange, the sum of the daily last reported sale
prices (or if no sale takes place on any particular day, the average of the
closing bid and asked prices on such day) as reported by a reputable quotation
source designated by the Partnership for each of the 90 trading days during the
Averaging Period, divided by 90 and (C) if the Partnership Common Units
are not then listed or admitted to trading on any securities exchange and no
such reported sale price or bid and asked prices are available, the average of
the high bid and low asked prices on the last day on which such information was
available, as reported in the Authorized Newspaper; provided that if
during the Averaging Period the Ex-Date with respect to any dividend or other
distribution (other than the payment of a dividend or other distribution by the
Partnership to its unitholders in Partnership Common Units) shall have occurred
in respect of a Partnership Common Unit, for purposes of calculating the Common
Unit Value, the daily VWAP, the last reported sale price or the average of the
closing bid and asked prices, as applicable, for any trading day in the
Averaging Period preceding the Ex-Date in respect of such dividend or other
distribution shall be reduced by the amount of such dividend or other
distribution.


 


 “CVI Consideration” means, an amount equal to
the difference between (A) the Strike Price and (B) the greater of (I) the
Floor Price and (II) the Common Unit Value (such difference, the “Uncapped
CVI Consideration”); provided (x) if the Common Unit Value equals or
exceeds the Strike Price, the CVI Consideration shall be $0 and (y) if the
Uncapped CVI Consideration equals or exceeds the CVI Consideration Cap, the CVI
Consideration shall be equal to the CVI Consideration Cap.


 


“CVI Consideration Cap” means the product of
the Unit Cap and the Common Unit Value.


 


“Default Amount” means, an amount equal to
the difference between (A) the Strike Price and (B) the greater of (I) the
Floor Price and (II) the Default VWAP Price (such difference, the “Uncapped
Default Amount”); provided (x) if the Default VWAP Price equals or exceeds
the Strike Price, the Default Amount shall be $0 and (y) if the Uncapped
Default Amount equals or exceeds the Default Amount Cap, Default Amount shall
mean the Default Amount Cap.


 


17

















 


“Default Amount
Cap” means the product of the Unit Cap and the Default VWAP Price.


 


“Default Interest
Rate” means 8% per annum.


 


“Default VWAP
Price” means (A) if the Partnership Common Units are listed or admitted to
trading on any securities exchange, the sum of the daily VWAPs of one
Partnership Common Unit on the New York Stock Exchange (or, if the Partnership
Common Units are not then listed on the New York Stock Exchange, such other
exchange on which the Partnership Common Units are then listed) for each of the
10 consecutive trading days immediately preceding the Default Payment Date,
divided by 10; (B) if the Partnership Common Units are not then listed or
admitted to trading on any securities exchange, the sum of the daily last
reported sale prices (or if no sale takes place on any particular day, the
average of the closing bid and asked prices on such day) as reported by a
reputable quotation source designated by the Partnership for each of the 10
consecutive trading days immediately preceding the Default Payment Date,
divided by 10 and (C) if the Partnership Common Units are not then listed
or admitted to trading on any securities exchange and no such reported sale
price or bid and asked prices are available, the average of the reported high
bid and low asked prices on the last day on which such information was
available, as reported in the Authorized Newspaper; provided that if
during such 10 consecutive trading day period the Ex-Date with respect to any
dividend or other distribution (other than the payment of a dividend or other
distribution by the Partnership to its unitholders in Partnership Common Units)
shall have occurred in respect of a Partnership Common Unit, for purposes of
calculating the Default VWAP Price, the daily VWAP, the last reported sale
price or the average of the closing bid and asked prices, as applicable, for
any trading day in such 10 consecutive trading day period preceding the Ex-Date
in respect of such dividend or other distribution shall be reduced by the
amount of such dividend or other distribution.


 


“Distribution Amount” means the aggregate
amount of any dividends or other distributions (other than the payment of a
dividend or other distribution by the Partnership to its unitholders in
Partnership Common Units) made in respect of a single Partnership Common Unit
for which the Ex-Date occurs during the period from the Issue Date through, and
including, the last day of the Averaging Period; provided that in the case of
any non-cash dividend or other distribution, the value of such dividend or
other distribution shall be equal to the fair market value of the dividend or
other distribution made in respect of a single Partnership Common Unit as
determined by an Independent Financial Expert at the time such dividend or
other distribution is made.


 


“Event of Default” has the meaning set forth
in Section 8.01 of the Agreement.


 


“Ex-Date” means, when used with respect to
dividends or other distributions made in respect of a Partnership Common Unit,
the first date on which the Partnership Common Units trade on the New York
Stock Exchange (or, if the Partnership Common Units are not then listed on the
New York Stock Exchange, such other exchange on which Partnership Common Units
are then listed) without the right to receive the dividend or other
distribution.


 


“Exchange Act” means The Securities Exchange
Act of 1934, as amended.


 


18

















 


“Extinguishment Price” means $24 (subject to
adjustment as provided herein and in the Agreement) minus the Distribution
Amount (taking into account dividends or other distributions for which the
Ex-Date occurs during the period from the Issue Date through, and including,
the last day of the 20 consecutive trading days used to determine whether an
Automatic Extinguishment Event has occurred); provided that in no event
shall the Extinguishment Price be less than $0.


 


“Floor Price” means $17.3056 (subject to
adjustment as provided herein and in the Agreement) minus the Distribution
Amount; provided that in no event shall the Floor Price be less than $0.


 


“Fundamental Change means that at any time
after the Issue Date any of the following occurs:


 


(A) consummation
of any share exchange, exchange offer, tender offer, consolidation, merger or
other business combination involving the Partnership pursuant to which all or
substantially all of the Partnership Common Units are converted into cash,
securities or other property, (B) any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all of the
consolidated assets of the Partnership and its subsidiaries, taken as a whole,
to any Person other than one of its subsidiaries or (C) the Partnership
adopts any plan or proposal for its liquidation or dissolution; provided,
however, that in respect of (A) above a Fundamental Change will not
be deemed to have occurred if (x) at least 90% of the consideration
received or to be received by holders of the Partnership Common Units,
excluding cash payments for fractional units or pursuant to statutory or
contractual appraisal rights, in connection with the transaction or
transactions constituting the Fundamental Change consists of shares of common
stock or common units that are quoted or listed for trading on a securities
exchange or that will be so quoted or listed when issued or exchanged in
connection with such transaction or transactions (these securities being
referred to as “publicly traded securities”) and as a result of this
transaction or transactions the Partnership has the right to satisfy the CVI
Consideration with such publicly traded securities and (y) the acquirer in
any such transaction assumes the obligations of the Partnership relating to the
CVIs, and appropriate adjustments are made to the Aggregate Unit Cap,
Extinguishment Price, Floor Price, Strike Price and Unit Cap and any other
defined terms that require mathematical adjustments as a result of such
transaction based on, and to reflect, the number of publicly traded securities
into which a Partnership Common Unit is converted in such transaction.


 


“Group
Partnerships”  means  KKR
Management Holdings L.P., a Delaware limited partnership, and KKR Fund Holdings
L.P., a Cayman limited partnership (and any future partnership designated as a
Group Partnership), and any successors thereto.


 


“Independent
Financial Expert” means an independent nationally recognized investment banking
firm, valuation firm or appraisal firm selected by the Partnership.


 


“Strike Price”
means $22.25 (subject to adjustment as provided herein and in the Agreement)
minus the Distribution Amount; provided that in no event shall the Strike Price
be less than $0.


 


19

















 


“Unit Cap” means 0.2857 (subject to
adjustment as provided herein and in the Agreement).


 


Except as set forth herein with respect to
adjustments, this CVI Certificate confers no rights with respect to any
dividends declared by the Partnership on the Partnership Common Units to
holders of record on a record date prior to the date on which Partnership
Common Units, if any, are issued in satisfaction of all or a portion of the CVI
Consideration.


 


The Aggregate Unit Cap, Extinguishment Price,
Floor Price, Unit Cap and Strike Price shall be subject to adjustment from time
to time in certain events, including (i) the payment or declaration of a
dividend or other distribution by the Partnership to its unitholders in
Partnership Common Units, (ii) the sub-division (by stock split, stock
dividend or otherwise) or combination (by reverse stock split or otherwise) of
the outstanding Partnership Common Units or (iii) the issuance by
reclassification of Partnership Common Units. Upon each such event, the
Partnership shall appropriately adjust the Aggregate Unit Cap, Extinguishment
Price, Floor Price, Unit Cap and Strike Price. Whenever an adjustment is made
as provided herein, the Partnership shall (A) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (B) promptly file with the Trustee a copy
of such certificate and (C) mail a brief summary thereof to each Holder of
a CVI. Such adjustment, absent manifest error, shall be final and binding on
the Holder hereof. Each outstanding CVI Certificate shall thereafter be deemed
to be amended to provide for the adjusted Aggregate Unit Cap, Extinguishment
Price, Floor Price, Unit Cap and Strike Price.


 


THIS CVI CERTIFICATE MAY NOT BE DIRECTLY
OR INDIRECTLY TRANSFERRED IN WHOLE OR IN PART (INCLUDING, WITHOUT
LIMITATION, BY WAY OF ANY DERIVATIVE OR SIMILAR SECURITY) EXCEPT (1) TO
THE PARTNERSHIP OR AN AFFILIATE OF THE PARTNERSHIP, (2) BY OPERATION OF
LAW OR (3) AS OTHERWISE EXPRESSLY PERMITTED BY THE AGREEMENT.


 


The Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Partnership and the rights of the Holders of
CVIs under the Agreement at any time by the Partnership and the Trustee with
the consent of the Holders of a majority of the CVIs at the time Outstanding.


 


No reference herein to the Agreement and no
provision of this CVI Certificate or of the Agreement shall alter or impair the
obligation of the Partnership, which is absolute and unconditional, to pay any
amounts pursuant to the terms hereof and of the Agreement at the times, place,
form of consideration and amount, herein prescribed.


 


Neither the Partnership nor the Trustee has
any duty or obligation to the Holder, except as expressly set forth herein or
in the Agreement.


 


Section 2.04  
Form of Trustee’s Certificate of Authentication.


 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION.


 


This is one of the CVI Certificates referred
to in the within-mentioned Agreement.


 


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  [Trustee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


ARTICLE THREE



THE CVIs


 


Section 3.01  
Title and Terms.


 


(a)           The aggregate number of CVI Certificates which may be
authenticated and delivered under this Agreement is limited to the number of
Seller Common Units issued and outstanding immediately prior to the
consummation of the purchase and sale contemplated by Section 1.1 of the
Purchase Agreement, except for CVIs authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other CVIs
pursuant to Section 3.04, 3.05, 3.06 or 6.06.


 


(b)           The CVIs shall be known and designated as the “Contingent
Value Interests” of the Partnership and the Holders shall have no rights except
for those explicitly provided for herein and shall not, by virtue of their
ownership of CVIs have any of the rights of a unitholder of the Partnership.


 


(c)           Subject to adjustment pursuant to Section 3.01(f) and
to the occurrence of an Automatic Extinguishment Event, the Partnership shall
deliver to the Holder thereof with respect to each CVI held by such Holder on
the Maturity Date, CVI Consideration in the form described below.  The CVI Consideration, if any, shall be
satisfied by delivery by the Partnership of a number of Partnership Common
Units having a value equal to the CVI Consideration; provided, however, that
the Partnership shall deliver cash to satisfy its obligation to deliver the CVI
Consideration instead of Partnership Common Units if (x) the Partnership gives
notice to the Trustee at least 10 days prior to the commencement of the
Averaging Period that the Group Partnerships have committed to deliver cash to
the Partnership in an amount sufficient to satisfy the aggregate CVI
Consideration deliverable by the Partnership with respect to all CVIs at the
Maturity Date, or (y) at the time of issuance thereof, such Partnership
Common Units would not be (A) duly authorized, validly issued, fully paid and
non-assessable (other than as such non-assessability may be affected by Section 17-607
or Section 17-804 of the Delaware Revised Uniform Limited Partnership Act
or the Limited Partnership Agreement of the Partnership), g(B) issued in
compliance with any preemptive rights or rights of first refusal, (C) authorized
for listing on the New York Stock Exchange (or, if the Partnership Common Units
are not then listed on the New York Stock Exchange, such other exchange on
which Partnership Common Units are then listed), subject to official notice of
issuance or (D) issued either in a transaction that satisfied the
requirements of Section 3(a)(9) of the Securities Act of 1933, as
amended (the “Securities Act”), or pursuant to an effective registration
statement under the Securities Act, it 


 


21

















 


being understood that the
Partnership shall use its reasonable best efforts to effect the outcomes
described in (A) through (D) above. 
Partnership Common Units issued as CVI Consideration shall be valued
(for purposes of calculating the number of Partnership Common Units to be
issuable to Holders) at the Common Unit Value. 
Any CVI Consideration not delivered when due at the Maturity Date shall
bear interest at the Default Interest Rate.


 


(d)           Notwithstanding
any provision of this Agreement or the CVI Certificates to the contrary, other
than in the case of interest on the CVI Consideration or the Default Amount, as
applicable, no interest shall accrue on any amounts payable on the CVIs to any
Holder.


 


(e)           In
the event that the Partnership determines that the CVI Consideration or the
Default Amount on the Maturity Date or Default Payment Date, as applicable, is
$0.00 or that the Automatic Extinguishment Event has occurred, the Partnership
shall give to the Holder of each CVI notice of such determination. Upon making
such determination, absent manifest error, this CVI Certificate shall terminate
and become null and void and the Holder hereof shall have no further rights
with respect hereto. The failure to give such notice or any defect therein
shall not affect the validity of such determination.


 


(f)            In
the event of the (i) the payment or declaration of a dividend or other
distribution by the Partnership to its unitholders in Partnership Common Units,
(ii) the sub-division (by stock split, stock dividend or otherwise) or
combination (by reverse stock split or otherwise) of the outstanding
Partnership Common Units or (iii) the issuance by reclassification of
Partnership Common Units, the Partnership shall appropriately adjust the
Aggregate Unit Cap, the Extinguishment Price, the Floor Price, the Unit Cap and
the Strike Price. Whenever an adjustment is made as provided herein, the
Partnership shall (A) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment, (B) promptly
file with the Trustee a copy of such certificate and (C) mail a brief
summary thereof to each Holder of a CVI. Such adjustment, absent manifest
error, shall be final and binding on the Holder hereof. Each outstanding CVI
Certificate shall thereafter be deemed to be amended to provide for the
adjusted Aggregate Unit Cap, Extinguishment Price, Floor Price, Unit Cap and
Strike Price.


 


(g)           If
at any time during the period from the Issue Date through, but excluding the
first day of the Averaging Period, the VWAP of one Partnership Common Unit on
the New York Stock Exchange (or, if the Partnership Common Units are not then
listed on the New York Stock Exchange, such other exchange on which the
Partnership Common Units are then listed) equals or exceeds the Extinguishment
Price for 20 consecutive trading days (the “Automatic Extinguishment Event”),
then the CVIs will have no value and will be automatically extinguished and
terminated without further consideration or action by the Partnership, the
Trustee or the Holders; provided, that if during such 20 consecutive
trading day period the Ex-Date with respect to any dividend or other
distribution (other than the payment of a dividend or other distribution by the
Partnership to its unitholders in Partnership Common Units) shall have occurred
in respect of a Partnership Common Unit, for purposes of calculating the daily
VWAP described above, the daily VWAP for any trading day in such 20 consecutive
trading day period preceding the Ex-Date in respect of such dividend or other
distribution shall be reduced by the amount of such dividend or other
distribution; provided  further that any trading day (an 


 


22

















 


“Excluded Day”) on which the
Purchaser or any of its Affiliates takes any action that it would be prohibited
from taking under Section 7.04 during the Prohibited Period (as defined
below) shall not be considered a trading day for purposes of the foregoing and
the daily VWAP for an Excluded Day shall not be taken into account for purposes
of the foregoing (it being understood that consecutive trading days immediately
preceding the Excluded Day may continue to be taken into account for purposes
of the 20 consecutive trading day period used to determine whether an Automatic
Extinguishment Event has occurred; provided  however that if an
Excluded Day occurs on a trading day that would otherwise have been one of the
final 3 consecutive trading days in the 20 consecutive trading day period used
to determine whether an Automatic Extinguishment Event has occurred, the 20
consecutive trading day period used to determine whether an Automatic
Extinguishment Event has occurred shall begin no earlier than the first trading
day following such Excluded Day that is itself not an Excluded Day).


 


(h)           Notwithstanding
anything herein or in any CVI Certificate to the contrary, other than in
respect of the Partnership’s obligation to deliver interest at the Default
Interest Rate under the circumstances provided herein, the Partnership shall in
no event be required to deliver (i) CVI Consideration (whether in the form
of Partnership Common Units or cash) in excess of the CVI Consideration Cap in
order to satisfy its obligations in respect of any CVI, (ii) a Default
Amount (whether in the form of Partnership Common Units or cash) in excess of
the Default Amount Cap in order to satisfy its obligations in respect of any
CVI or (iii) an aggregate number of Partnership Common Units in excess of
the Aggregate Unit Cap or cash in an aggregate amount in excess of an amount
equal to the product of the Aggregate Unit Cap and the Common Unit Value (or
the Default VWAP Price in the event a Default Payment Date occurs) in order to
satisfy its obligations in respect of all CVIs authenticated and delivered
hereunder.


 


Section 3.02  
Registrable Form.


 


The CVIs shall be issuable only in registered
form.


 


Section 3.03  
Execution, Authentication, Delivery and Dating.


 


The CVIs shall be executed on behalf of the
Partnership by the chairman of the Board of Directors, the chief-executive
officer, any co-chief executive officer, the chief operating officer, the chief
financial officer, the general counsel, the chief compliance officer, any
president, any vice president, any treasurer, any assistant treasurer, any
secretary or any assistant secretary of the Partnership or the general partner
of the Partnership, under its seal which may, but need not, be attested. The
signature of any of these officers on the CVIs may be manual or facsimile.


 


CVIs bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
general partner of the Partnership shall bind the Partnership, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such CVIs or did not hold such offices at
the date of such CVIs.


 


At any time and from time to time after the
execution and delivery of this Agreement, the Partnership may deliver CVIs
executed by the general partner of the Partnership to the Trustee for
authentication, together with a Partnership Order for the authentication and 


 


23

















 


delivery of such CVIs; and the
Trustee in accordance with such Partnership Order shall authenticate and
deliver such CVIs as provided in this Agreement and not otherwise.


 


Each CVI shall be dated the date of its
authentication.


 


No CVI shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless there appears
on such CVI a certificate of authentication substantially in the form provided
for herein duly executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any CVI shall be conclusive evidence, and
the only evidence, that such CVI has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this Agreement.


 


Section 3.04  
Temporary CVIs.


 


Until CVI Certificates are ready for
delivery, the general partner of the Partnership may execute, and upon
Partnership Order the Trustee shall authenticate and deliver, temporary CVIs
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, substantially of the tenor of the CVI Certificates in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such temporary CVIs may
determine with the concurrence of the Trustee. Temporary CVIs may contain such
reference to any provisions of this Agreement as may be appropriate. Every
temporary CVI shall be executed by the general partner of the Partnership and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the CVI Certificates.


 


If temporary CVIs are issued, the Partnership
will cause CVI Certificates to be prepared without unreasonable delay. After
the preparation of CVI Certificates, the temporary CVIs shall be exchangeable
for CVI Certificates upon surrender of the temporary CVIs at the office or
agency of the Partnership designated for such purpose pursuant to Section 7.02,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary CVIs the Partnership shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like amount of CVI
Certificates. Until so exchanged, the temporary CVIs shall in all respects be
entitled to the same benefits under this Agreement as CVI Certificates.


 


Section 3.05  
Registration, Transfer and Exchange.


 


The Partnership shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to Section 7.02
being herein sometimes referred to as the “Security Register”) in which,
subject to such reasonable regulations as it may prescribe, the Partnership
shall provide for the registration of CVIs and of transfers of CVIs. The
Trustee is hereby initially appointed “Security Registrar” for the purpose of
registering CVIs and transfers of CVIs as herein provided.


 


No CVI nor any beneficial interest therein
may be directly or indirectly, sold, assigned, pledged, encumbered or in any
other manner transferred or disposed of, in whole or in part (including,
without limitation, by way of any derivative or similar security or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the CVI, whether such security or arrangement is
to be settled by delivery of CVIs, 


 


24

















 


Partnership Common Units, other
securities, cash or otherwise) (any of the foregoing, a “Transfer”) except (i) for
Transfers to the Partnership and/or any of its Affiliates, (ii) Transfers
by operation of law (including a consolidation or merger) or in connection with
the dissolution of any corporation or other entity, (iii) a Transfer by
KKR Private Equity Investors, L.P. to the holders of Seller Partnership Units
in accordance with the terms and conditions of the Purchase Agreement, (iv) the
Transfer of any or all of the CVIs on death, by will or intestacy, (v) a
Transfer by instrument to an inter vivos or testamentary trust in which the
CVIs are to be passed to beneficiaries upon the death of the settlor or
testator, as applicable, (vi) Transfers made pursuant to a court order, (vii) if
the Holder is a partnership, a distribution from such partnership to its
partners or former partners in accordance with their partnership interests or (viii) if
the Holder is a limited liability company, a distribution from such limited
liability company to its members or former members in accordance with their
interest in the limited liability company. 
Any Transfers other than those expressly permitted under the preceding
sentence shall be null and void.


 


Upon surrender for registration of transfer
of any CVI at the office or agency of the Partnership designated pursuant to Section 7.02
in connection with a Transfer expressly permitted under the preceding
paragraph, the Partnership shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new CVI Certificates representing the same aggregate number of CVIs
represented by the CVI Certificate so surrendered that are to be transferred
and the Partnership shall execute and the Trustee shall authenticate and
deliver, in the name of the transferor, one or more new CVI Certificates
representing the aggregate number of CVIs represented by such CVI Certificate
that are not to be transferred.


 


At the option of the Holder, CVI Certificates
may be exchanged for other CVI Certificates that represent in the aggregate the
same number of CVIs as the CVI Certificates surrendered at such office or
agency. Whenever any CVI Certificates are so surrendered for exchange, the
Partnership shall execute, and the Trustee shall authenticate and deliver, the
CVI Certificates which the Holder making the exchange is entitled to receive.


 


All CVIs issued upon any registration of
transfer or exchange of CVIs shall be the valid obligations of the Partnership,
evidencing the same right, and entitled to the same benefits under this
Agreement and subject to the same limitations under this Agreement (including the
Transfer restrictions set forth in this Agreement), as the CVIs surrendered
upon such registration of transfer or exchange.


 


Every CVI presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Partnership or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Partnership and the
Security Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.


 


No service charge shall be made for any
registration of transfer or exchange of CVIs, but the Partnership may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
CVIs, other than exchanges pursuant to Section 3.04 or not involving any
transfer.


 


25














 


Section 3.06  
Mutilated, Destroyed, Lost and Stolen CVIs.


 


If (a) any mutilated CVI is surrendered
to the Trustee or (b) the Partnership and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any CVI, and there is
delivered to the Partnership and the Trustee such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice to the Partnership or the Trustee that such CVI has been acquired by a
bona fide purchaser, the Partnership shall execute and upon its written request
the Trustee shall authenticate and deliver, in exchange for any such mutilated
CVI or in lieu of any such destroyed, lost or stolen CVI, a new CVI Certificate
of like tenor and amount of CVIs, bearing a number not contemporaneously
outstanding.


 


In case any such mutilated, destroyed, lost
or stolen CVI has become or is to become due and payable within 15 days, the
Partnership in its discretion may, instead of issuing a new CVI Certificate,
pay such CVI on the Maturity Date or the Default Payment Date, as the case may
be.


 


Upon the issuance of any new CVIs under this Section 3.06,
the Partnership may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.


 


Every new CVI issued pursuant to this Section 3.06
in lieu of any destroyed, lost or stolen CVI shall constitute an original
additional contractual obligation of the Partnership, whether or not the
destroyed, lost or stolen CVI shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Agreement equally and proportionately
with any and all other CVIs duly issued hereunder.


 


The provisions of this Section 3.06 are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen CVIs.


 


Section 3.07  
Presentation of CVI Certificate.


 


Delivery of any CVI Consideration to the
Holders of the CVIs shall be made only upon presentation by the Holder thereof
at the office or agency of the Partnership maintained for that purpose in the
Borough of Manhattan, The City of New York, or the Corporate Trust Office and
at any other office or agency maintained by the Partnership for such purpose.
The Holder of a CVI shall furnish to the Partnership such forms, certificates
or other information as the Partnership may request to establish the legal
entitlement of such Holder to an exemption from withholding taxes.  In the event the Partnership does not receive
such forms, certificates or other evidence establishing a Holder’s legal
entitlement to exemption from withholding tax, then all payments and
disbursements to be made by the Partnership pursuant to this Agreement or the
CVIs shall be reduced by and subject to withholding taxes.  The Partnership shall have no obligation to
reimburse, equalize or compensate a Holder or other Person for withholding
taxes.


 


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Section 3.08  
Persons Deemed Owners.


 


The Partnership, the Trustee and any agent of
the Partnership or the Trustee may treat the Person in whose name any CVI is
registered as the owner of such CVI for the purpose of receiving payment on
such CVI and for all other purposes whatsoever, whether or not such CVI be
overdue, and neither the Partnership, the Trustee nor any agent of the
Partnership or the Trustee shall be affected by notice to the contrary.


 


Section 3.09  
Cancellation.


 


All CVIs surrendered for payment,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled
by it. The Partnership may at any time deliver to the Trustee for cancellation
any CVIs previously authenticated and delivered hereunder which the Partnership
may have acquired in any manner whatsoever, and all CVIs so delivered shall be
promptly cancelled by the Trustee. No CVIs shall be authenticated in lieu of or
in exchange for any CVIs cancelled as provided in this Section 3.09,
except as expressly permitted by this Agreement. All cancelled CVIs held by the
Trustee shall be disposed of as directed by a Partnership Order.


 


ARTICLE FOUR



THE TRUSTEE


 


Section 4.01  
Certain Duties and Responsibilities.


 


(a)           With respect to the Holders of CVIs issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with respect to the
CVIs and after the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default with
respect to the CVIs has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.


 


(b)           In the absence of bad faith on its part, prior to the
occurrence of an Event of Default and after the curing or waiving of all such
Events of Default which may have occurred, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Agreement.


 


(c)           No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that


 


27

















 


(1)           this Subsection (c) shall
not be construed to limit the effect of Subsections (a) and (b) of
this Section;


 


(2)           the Trustee shall
not be liable for any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;


 


(3)           no provision of this
Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it; and


 


(4)           the Trustee shall
not be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders pursuant to Section 8.09
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.


 


(d)           Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.


 


Section 4.02  
Certain Rights of Trustee.


 


The Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against the
Trustee. Subject to the provisions of Trust Indenture Act Sections 3.15(a) through
3.15(d) and Section 4.01 hereof:


 


(a)           the
Trustee may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;


 


(b)           any
request or direction of the Partnership mentioned herein shall be sufficiently
evidenced by a Partnership Request or Partnership Order and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;


 


(c)           whenever
in the administration of this Agreement the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s
Certificate;


 


(d)           the
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and 


 


28

















 


protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;


 


(e)           the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Agreement at the request or direction of any of the
Holders pursuant to this Agreement, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;


 


(f)            the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to do
so by the Holders of not less than a majority in aggregate number of the CVIs
then Outstanding; provided that, if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Agreement, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation shall be paid by the Partnership or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Partnership upon
demand; and


 


(g)           the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.


 


(h)           the
permissive rights of the Trustee to do things enumerated in this Agreement
shall not be construed as a duty and the Trustee shall be liable for its
negligence, bad faith or willful misconduct;


 


(i)            the
Trustee shall not be required to give any note or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the
premises; and


 


(j)            except
for (i) a default under Section 8.01(a) and (ii) any other
event of which the Trustee has “actual knowledge,” which event, with the giving
of notice or the passage of time or both, would constitute an Event of Default,
the Trustee shall not be deemed to have notice of any default or event unless
specifically notified in writing of such event by the Partnership or the
Holders of not less than 25% in aggregate number of CVIs Outstanding; as used
herein, the term “actual knowledge” means the actual fact or statement of
knowing, without any duty to make any investigation with regard thereto.


 


No provision of this Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.


 


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Section 4.03  
Not Responsible for Recitals or Issuance of CVIs.


 


The recitals contained herein and in the
CVIs, except the Trustee’s certificates of authentication, shall be taken as
the statements of the Partnership, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the CVIs. The Trustee shall not be
accountable for the use or application by the Partnership of CVIs or the
proceeds thereof.


 


Section 4.04  
May Hold CVIs.


 


The Trustee, any Paying Agent, Security
Registrar or any other agent of the Partnership, in its individual or any other
capacity, may become the owner or pledgee of CVIs, and, subject to Section 4.07,
may otherwise deal with the Partnership with the same rights it would have if
it were not Trustee, Paying Agent, Security Registrar or such other agent.


 


Section 4.05  
Money Held in Trust.


 


Money held by the Trustee in trust hereunder
need not be segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any money received by
it hereunder.


 


Section 4.06  
Compensation, Reimbursement and Indemnification of the Trustee.


 


The Partnership agrees


 


(a)           to
pay to the Trustee from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);


 


(b)           except
as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as
may be attributable to its negligence or bad faith; and


 


(c)           to
indemnify the Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, including the enforcement of this Section 4.06.


 


When the Trustee incurs expenses or renders
services after a Default specified in Section 8.01(c) or 8.01(d) occurs,
the reasonable expenses and the compensation for services (including the
reasonable fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any bankruptcy law.


 


30

















 


Section 4.07  
Disqualification; Conflicting Interests.


 


The Trustee shall be subject to the
provisions of Section 3.10(b) of the Trust Indenture Act during the
period of time provided for therein. Nothing herein shall prevent the Trustee
from filing with the Commission the application referred to in the penultimate
paragraph of Section 3.10(b) of the Trust Indenture Act.


 


Section 4.08  
Corporate Trustee Required; Eligibility.


 


There shall at all times be a Trustee
hereunder which shall be a corporation organized and doing business under the
laws of the United States of America or of any State, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $250,000,000, subject to supervision or examination by Federal or
State authority and, to the extent there is such an institution eligible and
willing to serve, having an office or agency in The City of New York. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.


 


Section 4.09  
Resignation and Removal; Appointment of Successor.


 


(a)           No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under Section 4.10.


 


(b)           The Trustee, or any trustee or trustees hereafter
appointed, may resign at any time by giving written notice thereof to the
Partnership. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.


 


(c)           The Trustee may be removed at any time by (i) the
Partnership, by a Board Resolution or (ii) an Act of the Holders of a
majority of the Outstanding CVIs, delivered to the Trustee and to the
Partnership.


 


(d)           If at any time:


 


(1)           the Trustee shall
fail to comply with Section 4.07 after written request therefor by the
Partnership or by any Holder who has been a bona fide Holder of a CVI for at
least six months, or


 


(2)           the Trustee shall
cease to be eligible under Section 4.08 and shall fail to resign after
written request therefor by the Partnership or by any such Holder, or


 


31

















 


(3)           the Trustee shall
become incapable of acting or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,


 


then, in any case, (i) the
Partnership by a Board Resolution may remove the Trustee, or (ii) the
Holder of any CVI who has been a bona fide Holder of a CVI for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.


 


(e)           If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, the Partnership, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority of the Outstanding CVIs delivered
to the Partnership and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with Section 4.10,
become the successor Trustee and supersede the successor Trustee appointed by
the Partnership. If no successor Trustee shall have been so appointed by the
Partnership or the Holders of the CVIs and so accepted appointment, the Holder
of any CVI who has been a bona fide Holder for at least six months may on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.


 


(f)            The Partnership shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of CVIs as their names and addresses appear in the Security Register.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office. If the Partnership fails to send such notice within
ten days after acceptance of appointment by a successor Trustee, the successor
Trustee shall cause the notice to be mailed at the expense of the Partnership.


 


Section 4.10  
Acceptance of Appointment by Successor.


 


Every successor Trustee appointed hereunder
shall execute, acknowledge and deliver to the Partnership and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Partnership or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Partnership shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.


 


No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article.


 


32

















 


Section 4.11  
Merger, Conversion, Consolidation or Succession to Business.


 


Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any CVIs
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the CVIs so
authenticated with the same effect as if such successor Trustee had itself
authenticated such CVIs; and such certificate shall have the full force which
it is anywhere in the CVIs or in this Agreement provided that the certificate
of the Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.


 


ARTICLE FIVE



HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY


 


Section 5.01  
Partnership to Furnish Trustee Names and Addresses of Holders.


 


The Partnership shall furnish or cause to be
furnished to the Trustee at such times as the Trustee may request in writing,
within 30 days after receipt by the Partnership of any such request, a list, in
such form as the Trustee may reasonably require, of the names and the addresses
of the Holders as of a date not more than 15 days prior to the time such list
is furnished; provided, however, that, if and so long as the
Trustee shall be the Security Registrar, no such list need be furnished.


 


Section 5.02  
Preservation of Information; Communications to Holders.


 


(a)           The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 5.01 and
the names and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in Section 5.01
upon receipt of a new list so furnished.


 


(b)           If three or more Holders (hereinafter referred to as “applicants”)
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a CVI for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the CVIs and is accompanied by a copy of
the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt
of such application at its election, either


 


(1)           afford such
applicants access to the information preserved at the time by the Trustee in
accordance with Section 5.02(a), or


 


33

















 


(2)           inform such
applicants as to the approximate number of Holders whose names and addresses
appear in the information preserved at the time by the Trustee in accordance
with Section 5.02(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in such
application.


 


If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Holder whose name and address appear
in the information preserved at the time by the Trustee in accordance with Section 5.02(a),
a copy of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the renewal
of such tender otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.


 


(c)           Every Holder of CVIs, by receiving and holding the same,
agrees with the Partnership and the Trustee that neither the Partnership nor
the Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with Section 5.02(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 5.02(b).


 


Section 5.03  
Reports by Trustee.


 


(a)           Within 60 days after July 15 of each year commencing
with the July 15 occurring after the initial issuance of CVIs hereunder,
the Trustee shall transmit by mail to the Holders of CVIs, in the manner and to
the extent provided in Section 313(c) of the Trust Indenture Act, and
to the Partnership a brief report dated as of such July 15 which satisfies
the requirements of Section 313(a) of the Trust Indenture Act.


 


34

















 


Section 5.04  
Reports by Partnership.


 


The
Partnership shall deliver to the Trustee within 15 days after it files
them with the Commission copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) which the
Partnership is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act. The Partnership also shall comply with the
other provisions of Section 314(a) of the Trust Indenture Act.


 


The Trustee shall transmit by mail to all
Holders, as their names and addresses appear in the Security Register, within
30 days after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Partnership
pursuant to this Agreement as may be required by rules and regulations prescribed
from time to time by the Commission. The Partnership and the Trustee will be
deemed to have delivered the information, documents and reports required to be
delivered under this Section 5.04 if the Partnership has filed such
information, document, or report with the Commission via the EDGAR filing
system and such information, document or report is publicly available.


 


ARTICLE SIX



AMENDMENTS


 


Section 6.01  
Amendments Without Consent of Holders.


 


Without the consent of any Holders, the
Partnership, when authorized by a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more amendments hereto, in
form satisfactory to the Trustee, for any of the following purposes:


 


(a)           to
convey, transfer, assign, mortgage or pledge to the Trustee as security for the
CVIs any property or assets; or


 


(b)           to
evidence the succession of another Person to the Partnership, and the
assumption by any such successor of the covenants of the Partnership herein and
in the CVIs; or


 


(c)           to
add to the covenants of the Partnership such further covenants, restrictions,
conditions or provisions as the Board of Directors and the Trustee shall
consider to be for the protection of the Holders of CVIs, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Agreement as herein set forth; provided that in respect
of any such additional covenant, restriction, condition or provision such
amendment may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such an Event of
Default or may limit the remedies available to the Trustee upon such an Event
of Default or may limit the right of the Holders of a majority of the
Outstanding CVIs to waive such an Event of Default; or


 


35

















 


(d)           to
make any change that would provide any additional rights or benefits to the
Holders or that does not adversely affect the legal rights under the Agreement
of any Holder; or


 


(e)           to
cure any ambiguity, omission, mistake, defect or inconsistency; or


 


(f)            to
make any other provisions with respect to matters or questions arising under
this Agreement; provided that any such other provisions shall not
adversely affect the interests of the Holders; or


 


(g)           to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Agreement under the TIA.


 


Section 6.02  
Amendments with Consent of Holders.


 


With the consent of the Holders of not less
than a majority of the Outstanding CVIs, by Act of said Holders delivered to
the Partnership and the Trustee, the Partnership, when authorized by a Board
Resolution, and the Trustee may enter into one or more amendments hereto for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders under this Agreement; provided, however,
that no such amendment shall, without the consent of the Holder of each
Outstanding CVI affected thereby:


 


(a)           modify
the definition of Aggregate Unit Cap, Automatic Extinguishment Event, Averaging
Period, CVI Consideration, Common Unit Value, Default Amount, Default Interest
Rate, Default Payment Date, Default VWAP Price, Distribution Amount, Extinguishment
Price, Floor Price, Maturity Date, Strike Price or Unit Cap or modify Section 3.01(f) in
each case in a manner adverse to such Holder or otherwise extend the maturity
of the CVIs or reduce the amounts deliverable in respect of the CVIs;


 


(b)           reduce
the amount of the Outstanding CVIs, the consent of whose Holders is required
for any such amendment; or


 


(c)           modify
any of the provisions of this Section, except to increase any such percentage
or to provide that certain other provisions of this Agreement cannot be
modified or waived without the consent of the Holder of each CVI affected
thereby.


 


It shall not be necessary for any Act of
Holders under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such Act shall approve the substance
thereof.


 


Promptly after the execution by the
Partnership and the Trustee of any amendment pursuant to the provisions of this
Section, the Partnership shall mail a notice thereof by first class mail to the
Holders of CVIs at their addresses as they shall appear on the Security
Register, setting forth in general terms the substance of such amendment. Any
failure of the Partnership to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amendment.


 


36

















 


Section 6.03  
Execution of Amendments.


 


In executing any amendment permitted by this
Article, the Trustee shall be entitled to receive, and (subject to Section 4.01)
shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee’s own rights, duties or immunities under this
Agreement or otherwise.


 


Section 6.04  
Effect of Amendments.


 


Upon the execution of any amendment under
this Article, this Agreement shall be modified in accordance therewith, and
such amendment shall form a part of this Agreement for all purposes; and every
Holder of CVIs theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.


 


Section 6.05  
Conformity with Trust Indenture Act.


 


Every amendment executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.


 


Section 6.06  
Reference in CVIs to Amendments.


 


CVIs authenticated and delivered after the
execution of any amendment pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such amendment. If the Partnership shall so
determine, new CVIs so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any such amendment may be prepared and executed
by the Partnership and authenticated and delivered by the Trustee in exchange
for Outstanding CVIs.


 


ARTICLE SEVEN



COVENANTS


 


Section 7.01  
Payment of Amounts, if Any, to Holders.


 


The Partnership shall duly and punctually pay
the amounts, if any, and issue the Partnership Common Units, if any, in the
manner provided for in Section 3.01(c) and Section 3.07 on the
CVIs in accordance with the terms of the CVIs and this Agreement.


 


Section 7.02  
Maintenance of Office or Agency.


 


As long as any of the CVIs remain
Outstanding, the Partnership shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where CVIs may be presented or
surrendered for payment. The Partnership also will maintain in the Borough of
Manhattan, The City of New York, an office or agency (i) where CVIs may be
surrendered for registration of transfer or exchange and (ii) where
notices and demands to or upon the Partnership in respect of the CVIs and this
Agreement may be served. The Partnership hereby initially designates the office
of the Trustee at                               
as the office or agency of the Partnership 


 


37

















 


where CVIs may be presented for
payment, and the Corporate Trust Office as the office or agency where CVIs may
be surrendered for registration of transfer or exchange and where such notices
or demands may be served, in each case, unless the Partnership shall designate
and maintain some other office or agency for one or more of such purposes. The
Partnership shall give prompt written notice to the Trustee of any change in
the location of any such office or agency. If at any time the Partnership shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Partnership hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.


 


The Partnership may from time to time
designate one or more other offices or agencies (in or outside of The City of
New York) where the CVIs may be presented or surrendered for any or all such
purposes, and may from time to time rescind such designation; provided, however,
that no such designation or rescission shall in any manner relieve the
Partnership of its obligations as set forth in the preceding paragraph. The
Partnership shall give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such office or
agency.


 


Section 7.03  
 CVI Consideration or Default Amount
to Be Held in Trust.


 


If the Partnership shall at any time act as
its own Paying Agent, it shall, on or before the Maturity Date or the Default
Payment Date, as the case may be, segregate and hold in trust for the benefit
of the Persons entitled thereto an amount of cash, if any, and a number of
Partnership Common Units, if any, sufficient to deliver the CVI Consideration,
if any, or the Default Amount, if any, as the case may be, so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.


 


Whenever the Partnership shall have one or
more Paying Agents for the CVIs, it shall, on or before the Maturity Date or
the Default Payment Date, as the case may be, deposit with a Paying Agent an
amount in cash in same day funds and/or a number of Partnership Common Units
sufficient to deliver the CVI Consideration, if any, so becoming due, such cash
and Partnership Common Units to be held in trust for the benefit of the Persons
entitled to such amount, and (unless such Paying Agent is the Trustee) the
Partnership shall promptly notify the Trustee of such action or any failure so
to act.


 


The Partnership shall cause each Paying Agent
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that (A) such Paying Agent will hold all sums held by it
for the delivery of any consideration deliverable on CVIs in trust for the
benefit of the Persons entitled thereto until such sums shall be delivered to
such Persons or otherwise disposed of as herein provided and (B) that it
shall give the Trustee notice of any failure by the Partnership (or by any
other obligor on the CVIs) to deliver any such consideration on the CVIs when
the same shall be due and payable.


 


38

















 


Any cash or Partnership Common Units
deposited with the Trustee or any Paying Agent, or then held by the
Partnership, in trust for the delivery of the consideration on any CVI and
remaining unclaimed for one year after the Maturity Date or the Default Payment
Date, as the case may be, shall be paid to the Partnership on Partnership
Request, or (if then held by the Partnership) shall be discharged from such
trust; and the Holder of such CVI shall thereafter, as an unsecured general
creditor, look only to the Partnership for delivery thereof and all liability
of the Trustee or such Paying Agent with respect to such trust money or
Partnership Common Units shall thereupon cease.


 


Section 7.04  
Certain Purchases and Sales.


 


The Partnership shall not, and shall not
permit any of its Affiliates to, (i) purchase any Partnership Common Units
in open market transactions, privately negotiated transactions or otherwise or (ii) enter
into any derivative or similar transaction that has the effect of providing
such person with any of the economic consequences of ownership of Purchaser
Common Units or that is otherwise designed or structured for the purpose of
avoiding the provisions of this Section 7.04, in each case on any day
during the period commencing 10 trading days before the Averaging Period and
ending on the last day of the Averaging Period (the “Prohibited Period”),
except with respect to (A) employee benefit plans and other incentive compensation
arrangements, (B) transactions contemplated by the Exchange Agreement,
dated
                      ,
among the Partnership, KKR Management Holdings L.P., KKR Fund Holdings L.P. and
KKR Holdings L.P, as such agreement may be amended or restated from time to
time, (C) transactions involving the matters referred to in clauses (i) and
(ii) (1) by an entity in which the Partnership or any of its
Affiliates has an equity interest but no discretion over the investment
decisions made by such entity and (2) transactions in broad-based indices,
or managed funds or vehicles whose investment strategies require them to track
such indices, that include the Partnership Common Units.


 


In addition, the Partnership shall not, and
shall not permit any of its Affiliates to, cause any portfolio company of any
investment fund or investment vehicle that is from time-to-time managed,
sponsored or otherwise advised by the Partnership and/or one or more of its
Affiliates to take any action that the Partnership would be prohibited from
taking under this Section 7.04.


 


On or prior to the Issue Date, the
Partnership shall adopt policies and procedures reasonably designed to ensure
compliance with this Section 7.04, which policies and procedures shall be
approved by the Board of Directors.


 


Section 7.05  
Written Statement to Trustee.


 


The Partnership shall deliver to the Trustee,
within 120 days after the end of each fiscal year, a brief certificate from the
principal executive officer, principal financial officer or principal accounting
officer as to his or her knowledge of the Partnership’s compliance with all
conditions and covenants under this Agreement. For purposes of this Section,
such compliance shall be determined without regard to any period of grace or
requirement of notice under this Agreement.


 


39














 


ARTICLE EIGHT



REMEDIES OF THE TRUSTEE AND HOLDERS

ON EVENT OF DEFAULT


 


Section 8.01  
Event of Default Defined; Acceleration of Maturity; Waiver of Default.


 


“Event of Default”, with respect to CVIs,
means any of the following events which shall have occurred and be continuing
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):


 


(a)           material
default in the performance, or material breach, of any covenant or warranty of
the Partnership relating to the CVIs (other than Section 5.04), and
continuance of such material default or material breach for a period of 60 days
after there has been given, by registered or certified mail, to the Partnership
by the Trustee or to the Partnership and the Trustee by the Holders of at least
25% of the CVIs then Outstanding, a written notice specifying such material default
or material breach and requiring it to be remedied and stating that such notice
is a “Notice of Default” hereunder;


 


(b)           a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Partnership in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Partnership or for any substantial
part of its property or ordering the winding up or liquidation of its affairs,
and such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or


 


(c)           the
Partnership shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law, or
consent to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of the
Partnership or for any substantial part of its property, or make any general
assignment for the benefit of creditors.


 


If at any time an Event of Default occurs and
is continuing, either the Trustee or the Holders holding an aggregate of at
least 25% of the CVIs then Outstanding, by notice to the Partnership (and to
the Trustee if given by the Holders), may declare the CVIs due and payable
immediately, and upon such declaration, the Partnership shall deliver to the
Holder for each CVI held by the Holder the Default Amount with interest at the
Default Interest Rate from the Default Payment Date through the date payment is
duly provided for.  The Default Amount
and the related interest shall be satisfied by delivery by the Partnership of a
number of Partnership Common Units having a value equal to the Default Amount
and the related interest, provided, however, that the Partnership shall deliver
cash to satisfy its obligation to deliver the Default Amount and related
interest instead of Partnership Common Units if (x) the Partnership
receives 


 


40

















 


cash directly indirectly
through its subsidiaries from the Group Partnerships on or prior to the date of
payment of the Default Amount in an amount adequate to satisfy delivery of the
Default Amount in cash, or (y) at the time of issuance thereof, such
Partnership Common Units would not be (A) duly authorized, validly issued,
fully paid and non-assessable (other than as such non-assessability may be
affected by Section 17-607 or Section 17-804 of the Delaware Revised
Uniform Limited Partnership Act or the Limited Partnership Agreement of the
Partnership), (B) issued in compliance with any preemptive rights or
rights of first refusal, (C) authorized for listing on the New York Stock
Exchange (or, if the Partnership Common Units are not then listed on the New
York Stock Exchange, such other exchange on which Partnership Common Units are
then listed), subject to official notice of issuance or (D) issued either in a
transaction that satisfied the requirements of Section 3(a)(9) of the
Securities Act or pursuant to an effective registration statement under the
Securities Act, it being understood that the Partnership shall use its
reasonable best efforts to effect the outcomes described in (A) through (D) above.  The Partnership Common Units issued in
respect of the Default Amount and the related interest shall be valued (for
purposes of calculating the number of Partnership Common Units to be issuable
to Holders) at the Default VWAP Price.


 


The foregoing provisions, however, are
subject to the condition that if, at any time after the CVIs shall have been so
declared due and payable, and before any judgment or decree for the payment of
the consideration due shall have been obtained or entered as hereinafter
provided, the Partnership shall pay or shall deposit with the Trustee an amount
of cash and/or number of Partnership Common Units sufficient to satisfy its
obligation to deliver consideration owed in respect of CVIs which shall have
become due otherwise than by acceleration (with interest upon such overdue
amount at the Default Interest Rate to the date of such payment or deposit) and
such amount as shall be sufficient to cover reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred and all advances made, by the Trustee except as a result
of negligence or bad faith, and if any and all Events of Default under this
Agreement, other than the nonpayment of the amounts which shall have become due
by acceleration, shall have been cured, waived or otherwise remedied as
provided herein, then and in every such case the Holders of a majority of all
the CVIs then Outstanding, by written notice to the Partnership and to the
Trustee, may waive all defaults with respect to the CVIs and rescind and annul
such declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereof.


 


Section 8.02  
Collection of Indebtedness by Trustee; Trustee May Prove Debt.


 


The Partnership covenants that in case
default shall be made in the delivery of consideration owed in respect of all
or any part of the CVIs when the same shall have become due and payable;
whether at the Maturity Date, the Default Payment Date or otherwise, then upon
demand of the Trustee, the Partnership will deliver to the Trustee (i) for
the benefit of the Holders of the CVIs the whole amount, in cash or Partnership
Common Units of the Partnership (at the option of the Partnership) that then
shall have become due and payable on all CVIs (with interest from the date due
and payable to the date of such payment upon the overdue amount at the Default
Interest Rate); and (ii) such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation
to the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and any expenses and 


 


41

















 


liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result
of its negligence or bad faith (for the avoidance of doubt, the amounts
referred to in the clause (ii) shall be payable even in the event that the
CVI Consideration or the Default Amount, as applicable, is equal to the CVI
Consideration Cap or the Default Amount Cap, as applicable).


 


In case the Partnership shall fail forthwith
to pay such amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Partnership or other obligor upon such CVIs and collect in the manner provided
by law out of the property of the Partnership or other obligor upon such CVIs,
wherever situated, the moneys adjudged or decreed to be payable.


 


In case there shall be pending proceedings
relative to the Partnership or any other obligor upon the CVIs under Title 11
of the United States Code or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Partnership or its
property or such other obligor, or in case of any other judicial proceedings
relative to the Partnership or other obligor upon the CVIs, or to the creditors
or property of the Partnership or such other obligor, the Trustee, irrespective
of whether the principal of any CVIs shall then be due and payable as therein
expressed or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:


 


(a)           to
file and prove a claim or claims for the whole amount owing and unpaid in
respect of the CVIs, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence
or bad faith) and of the Holders allowed in any judicial proceedings relative
to the Partnership or other obligor upon the CVIs, or to the creditors or
property of the Partnership or such other obligor;


 


(b)           unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or person
performing similar functions in comparable proceedings; and


 


(c)           to
collect and receive any moneys or other property payable or deliverable on any
such claims, and to distribute all amounts receivable with respect to the
claims of the Holders and of the Trustee on their behalf and any trustee,
receiver, or liquidator, custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient 


 


42

















 


to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith and all
other amounts due to the Trustee or any predecessor Trustee pursuant to Section 4.06.


 


Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the CVIs or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.


 


All rights of action and of asserting claims
under this Agreement, or under any of the CVIs, may be enforced by the Trustee
without the possession of any of the CVIs or the production thereof at any
trial or other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders.


 


In any proceedings brought by the Trustee
(and also any proceedings involving the interpretation of any provision of this
Agreement to which the Trustee shall be a party) the Trustee shall be held to
represent all the Holders, and it shall not be necessary to make any Holders of
such CVIs parties to any such proceedings.


 


Section 8.03  
Application of Proceeds.


 


Any monies (including Partnership Common
Units) collected by the Trustee pursuant to this Article in respect of any
CVIs shall be applied in the following order at the date or dates fixed by the
Trustee upon presentation of the several CVIs in respect of which monies
(including Partnership Common Units) have been collected and stamping (or
otherwise noting) thereon the payment in exchange for the presented CVIs if
only partially paid or upon surrender thereof if fully paid:


 


FIRST: To the payment of costs
and expenses in respect of which monies have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee and their
respective agents and attorneys and of all expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith, and all other amounts due to the Trustee or
any predecessor Trustee pursuant to Section 4.06;


 


SECOND: To the payment of the
whole amount then owing and unpaid upon all the CVIs, with interest at the
Default Interest Rate on all such amounts, and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the CVIs,
then to the payment of such amounts without preference or priority of any CVI
over any other CVI, ratably to the aggregate of such amounts due and payable;
and


 


43

















 


THIRD: To the payment of the
remainder, if any, to the Partnership or any other person lawfully entitled
thereto, including as a result of a breach of this Agreement.


 


Section 8.04  
Suits for Enforcement.


 


In case an Event of Default or any other
breach of this Agreement has occurred, has not been waived and is continuing,
the Trustee may in its discretion proceed to protect and enforce the rights
vested in it by this Agreement by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such rights,
either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Agreement
or in aid of the exercise of any power granted in this Agreement or to enforce
any other legal or equitable right vested in the Trustee by this Agreement or
by law.


 


Section 8.05  
Restoration of Rights on Abandonment of Proceedings.


 


In case the Trustee shall have proceeded to
enforce any right under this Agreement and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then and in every such case the Partnership and the
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Partnership, the Trustee
and the Holders shall continue as though no such proceedings had been taken.


 


Section 8.06  
Limitations on Suits by Holders.


 


No Holder of any CVI shall have any right by
virtue or by availing itself of any provision of this Agreement to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Agreement, or for the appointment of a
trustee, receiver, liquidator, custodian or other similar official or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of default and of the continuance thereof as hereinbefore
provided, and unless also the Holders of not less than 25% of the CVIs then
Outstanding shall have made written request upon the Trustee to institute such
action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 8.09; it being understood and intended, and
being expressly covenanted by the taker and Holder of every CVI with every other
taker and Holder and the Trustee, that no one or more Holders of CVIs shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provision of this Agreement to effect, disturb or prejudice
the rights of any other such Holder of CVIs, or to obtain or seek to obtain
priority over or preference to any other such Holder or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of CVIs. For the protection and
enforcement of the provisions of this Section, each and every Holder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.


 


44

















 


Section 8.07  
Unconditional Right of Holders to Institute Certain Suits.


 


Notwithstanding any other provision in this
Agreement and any provision of any CVI, the right of any Holder of any CVI to
receive payment of the amounts payable in respect of such CVI on or after the
respective due dates expressed in such CVI, or to institute suit for the
enforcement of any such payment on or after such respective dates or the
enforcement of any of the other provisions hereof, shall not be impaired or
affected without the consent of such Holder.


 


Section 8.08  
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default.


 


Except as provided in Section 8.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.


 


No delay or omission of the Trustee or of any
Holder to exercise any right or power accruing upon any Event of Default or any
other breach of the provisions hereunder occurring and continuing as aforesaid
shall impair any such right or power or shall be construed to be a waiver of
any such Event of Default or an acquiescence therein; and, subject to Section 8.06,
every power and remedy given by this Agreement or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders.


 


Section 8.09  
Control by Holders.


 


The Holders of a majority of the CVIs at the
time Outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to the CVIs
by this Agreement; provided that such direction shall not be otherwise
than in accordance with law and the provisions of this Agreement; and provided
further that (subject to the provisions of Section 4.01) the
Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good
faith by its board of directors, the executive committee, or a trust committee
of directors or Responsible Officers of the Trustee shall determine that the
action or proceedings so directed would involve the Trustee in personal
liability or if the Trustee in good faith shall so determine that the actions
or forbearances specified in or pursuant to such direction would be unduly
prejudicial to the interests of Holders of the CVIs not joining in the giving
of said direction, it being understood that (subject to Section 4.01) the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.


 


Nothing in this Agreement shall impair the
right of the Trustee in its discretion to take any action deemed proper by the
Trustee and which is not inconsistent with such direction or directions by
Holders.


 


45

















 


Section 8.10  
Waiver of Past Defaults.


 


Prior to the declaration of the acceleration
of the maturity of the CVIs as provided in Section 8.01, in the case of a
default or an Event of Default specified in clause (a), (b) or (c) of
Section 8.01, the Holders of a majority of all the CVIs then Outstanding
may waive any such default or Event of Default, and its consequences, except a
default in respect of a covenant or provisions hereof which cannot be modified
or amended without the consent of the Holder of each CVI affected. In the case
of any such waiver, the Partnership, the Trustee and the Holders of the CVIs
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.


 


Upon any such waiver, such default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Event of Default arising therefrom shall be deemed to have been cured, and
not to have occurred for every purpose of this Agreement; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.


 


Section 8.11  
Trustee to Give Notice of Default, but May Withhold in Certain
Circumstances.


 


The Trustee shall transmit to the Holders, as
the names and addresses of such Holders appear on the Security Register, notice
by mail of all defaults which have occurred, such notice to be transmitted
within 45 days after the occurrence thereof unless such defaults shall have
been cured before the giving of such notice (the term “default” or “defaults”
for the purposes of this Section being hereby defined to mean any event or
condition which is, or with notice or lapse of time or both would become, an
Event of Default); provided that, except in the case of default in the
payment of the amounts payable in respect of any of the CVIs, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.


 


Section 8.12  
Right of Court to Require Filing of Undertaking to Pay Costs.


 


All parties to this Agreement agree, and each
Holder of any CVI by his acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Agreement or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith or the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder or group
of Holders holding in the aggregate more than 10% of the CVIs Outstanding or to
any suit instituted by any Holder for the enforcement of the payment of any CVI
on or after the due date expressed in such CVI.


 


46

















 


ARTICLE NINE



CONSOLIDATION, MERGER, SALE OR CONVEYANCE


 


Section 9.01  
Partnership May Consolidate, Etc.


 


The Partnership shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:


 


(1)           in case the
Partnership shall consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, the Person formed by such consolidation or into which the Partnership
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Partnership substantially as an
entirety (the “Surviving Person”) shall be a corporation, limited liability
company, statutory trust or association, real east investment trust,
unincorporated business, including a partnership (whether general or limited
(including a limited liability partnership or a limited liability limited
partnership)) formed under the laws of the United States of America, any state
thereof or the District of Columbia and shall expressly assume payment of amounts
on all the CVIs and the performance of every covenant of this Agreement on the
part of the Partnership to be performed or observed;


 


(2)           immediately after
giving effect to such transaction and treating any indebtedness which becomes
an obligation of the Surviving Person, the Partnership or any Subsidiary as a
result of such transaction as having been incurred by the Surviving Person, the
Partnership or such Subsidiary at the time of such transaction, no Event of
Default shall have happened and be continuing; and


 


(3)           the Partnership has
delivered to the Trustee an Officer’s Certificate, stating that such
consolidation, merger, conveyance, transfer or lease complies with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with.


 


Section 9.02  
Successor Substituted.


 


Upon any consolidation of or merger by the
Partnership with or into any other Person, or any conveyance, transfer or lease
of the properties and assets substantially as an entirety to any Person in
accordance with Section 9.01, the Surviving Person shall succeed to, and
be substituted for, and may exercise every right and power of, the Partnership
under this Agreement with the same effect as if the Surviving Person had been
named as the Partnership herein, and thereafter, except in the case of a lease,
the predecessor corporation shall be relieved of all obligations and covenants
under this Agreement and the CVIs.


 


Section 9.03  
Opinion of Counsel to Trustee.


 


The Trustee, subject to the provisions of
Sections 4.01 and 4.02, may receive an Opinion of Counsel, prepared in
accordance with Sections 1.03 and 1.04, as conclusive evidence 


 


47

















 


that any such consolidation,
merger, sale, lease or conveyance, and any such assumption, and any such
liquidation or dissolution, complies with the applicable provisions of this
Agreement.


 


ARTICLE TEN



DISCHARGE OF AGREEMENT


 


Section 10.01  
Discharge of Liability on CVIs.


 


When (i) the Partnership delivers to the
Trustee all outstanding CVIs (other than CVIs replaced pursuant to Section 3.06)
for cancellation, (ii) all outstanding CVIs have become due and payable
and either (A) the Partnership irrevocably deposits with the Trustee or
the Paying Agent (if the Paying Agent is not the Partnership or any of its
Affiliates) cash and/or Partnership Common Units sufficient to deliver all
consideration, if any, due and owing on all outstanding CVIs (other than CVIs
replaced pursuant to Section 3.06 or CVIs held by the Partnership or any
Affiliate thereof) or (B) no amounts are due and owing on any CVI, or (iii) an
Automatic Extinguishment Event shall have occurred and if in all cases the
Partnership delivers any other sums payable hereunder by the Partnership, then
this Agreement shall, subject to Section 4.06, cease to be of further
effect; provided that the Partnership shall not be relieved or released
from any liabilities or damages arising out of its breach of Section 7.04.
The Trustee shall join in the execution of a document prepared by the
Partnership acknowledging satisfaction and discharge of this Agreement on
demand of the Partnership accompanied by an Officer’s Certificate and Opinion
of Counsel and at the cost and expense of the Partnership.


 


*   *  
*   *   *  
*   *


 


48

















 


This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and all such counterparts together shall be deemed an
original of this Agreement.


 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above written.


 


	
   

  	
   

  	
  KKR & CO. L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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    KKR Management LLC, its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  [TRUSTEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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