Document:

Exhibit 10.7

FORM OF EXCHANGE AGREEMENT

EXCHANGE AGREEMENT (the “Agreement”),
dated as of
                     ,
2007, among The Blackstone Group L.P., Blackstone Holdings I L.P., Blackstone
Holdings II L.P., Blackstone Holdings III L.P., Blackstone Holdings IV L.P.,
Blackstone Holdings V L.P., and the Blackstone Holdings Limited Partners from
time to time party hereto.

WHEREAS, the parties hereto
desire to provide for the exchange of certain Blackstone Holdings Partnership
Units for Common Units, on the terms and subject to the conditions set forth
herein;

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

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

ARTICLE I

DEFINITIONS

SECTION 1.1.   Definitions

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

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

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

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

“Blackstone Holdings I”
means Blackstone Holdings I L.P., a limited partnership formed under the laws
of the State of Delaware, and any successor thereto.

“Blackstone Holdings II”
means Blackstone Holdings II L.P., a limited partnership formed under the laws
of the State of Delaware, and any successor thereto.

“Blackstone Holdings I/II
General Partner” means Blackstone Holdings I/II GP Inc., a corporation
formed under the laws of the State of Delaware and the general partner of
Blackstone Holdings I and Blackstone Holdings II, and any successor general
partner thereof.

“Blackstone Holdings III”
means Blackstone Holdings III L.P., a limited partnership formed under the laws
of the State of Delaware, and any successor thereto.

 

 

“Blackstone Holdings III
General Partner” means Blackstone Holdings III GP L.L.C., a limited
liability company formed under the laws of the State of Delaware and the
general partner of Blackstone Holdings III, and any successor general partner
thereof.

“Blackstone Holdings IV”
means Blackstone Holdings IV L.P., a société en commandite formed under the
laws of the Province of Québec, and any successor thereto.

“Blackstone Holdings IV
General Partner” means Blackstone Holdings IV GP L.P., a limited
partnership formed under the laws of the State of Delaware and the general
partner of Blackstone Holdings IV, and any successor general partner thereof.

“Blackstone Holdings V”
means Blackstone Holdings V L.P., a société en commandite formed under the laws
of the Province of Québec, and any successor thereto.

“Blackstone Holdings V
General Partner” means Blackstone Holdings V GP L.P., a société en
commandite formed under the laws of the Province of Québec and the general
partner of Blackstone Holdings V, and any successor general partner thereof.

“Blackstone Holdings
General Partners” means, collectively, Blackstone Holdings I/II General
Partner, Blackstone Holdings III General Partner, Blackstone Holdings IV
General Partner and Blackstone Holdings V General Partner.

“Blackstone Holdings
Limited Partner” means each Person that is as of the date of this Agreement
or becomes from time to time a limited partner of each of the Blackstone
Holdings Partnerships pursuant to the terms of the Blackstone Holdings
Partnership Agreements.

“Blackstone Holdings
Partnership Agreements” means, collectively, the Amended and Restated
Limited Partnership Agreement of Blackstone Holdings I, the Amended and
Restated Limited Partnership Agreement of Blackstone Holdings II, the Amended
and Restated Limited Partnership Agreement of Blackstone Holdings III, the
Amended and Restated Limited Partnership Agreement of Blackstone Holdings IV
and the Amended and Restated Limited Partnership Agreement of Blackstone
Holdings V, as they may each be amended, supplemented or restated from time to
time.

“Blackstone Holdings
Partnership Unit” means, collectively, one unit of partnership interest in
each of Blackstone Holdings I, Blackstone Holdings II, Blackstone Holdings III,
Blackstone Holdings IV and Blackstone Holdings V, issued pursuant to their
respective Blackstone Holdings Partnership Agreements.

“Blackstone Holdings
Partnerships” means, collectively, Blackstone Holdings I, Blackstone
Holdings II, Blackstone Holdings III, Blackstone Holdings IV and Blackstone
Holdings V.

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

 

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

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

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

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

“IPO” means the
initial public offering and sale of Common Units, as contemplated by the Issuer’s
Registration Statement on Form S-1 (File No. 333-141504).

“Issuer” means The
Blackstone Group L.P., a limited partnership formed under the laws of the State
of Delaware, and any successor thereto.

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

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

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

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

“Quarterly Exchange Date”
means, unless the Issuer cancels such Quarterly Exchange Date pursuant to
Section 2.9 hereof, the date that is the later to occur of either: (1) the
second Business Day after the date on which the Issuer makes a public news
release of its quarterly earnings for the prior Quarter or (2) the first day
each Quarter that directors and executive officers of the Issuer’s general
partner are permitted to trade under the Insider Trading Policy; provided that
there shall be no Quarterly Exchange Date prior to the first anniversary of the
closing of the IPO.

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

 

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

ARTICLE II

EXCHANGE OF
BLACKSTONE HOLDINGS PARTNERSHIP UNITS

SECTION 2.1.  
Exchange
of Blackstone Holdings Partnership Units.

(a)           Subject to adjustment as provided in
this Article II, to the provisions of the Blackstone Holdings Partnership
Agreements and the Issuer Partnership Agreement and to the provisions of
Section 2.2 hereof, each Blackstone Holdings Limited Partner shall be entitled
to exchange Blackstone Holdings Partnership Units held by such Blackstone
Holdings Limited Partner on any Quarterly Exchange Date as follows; provided
that any such exchange is for a minimum of the lesser of 1,000 Blackstone
Holdings Partnership Units or all of the Blackstone Holdings Partnership Units
held by such Blackstone Holdings Limited Partner:

(i)            For the purpose of making a
gratuitous transfer to any Charity, a Blackstone Holdings Limited Partner may
surrender Blackstone Holdings Partnership Units to the Issuer in exchange for
the delivery by the Issuer of a number of Common Units equal to the product of
the number of Blackstone Holdings Partnership Units surrendered multiplied
by the Exchange Rate (such exchange, an “A Exchange”); or

(ii)           A Blackstone Holdings Limited Partner
may surrender Blackstone Holdings Partnership Units to the Blackstone Holdings
Partnerships in exchange for the delivery by the Blackstone Holdings
Partnerships of a number of Common Units equal to the product of such number of
Blackstone Holdings Partnership Units surrendered multiplied by the
Exchange Rate (such exchange, a “B Exchange”).

(b)           On the date Blackstone Holdings
Partnership Units are surrendered for exchange, all rights of the exchanging
Blackstone Holdings Limited Partner as holder of such Blackstone Holdings
Partnership Units shall cease, and such exchanging Blackstone Holdings Limited
Partner shall be treated for all purposes as having become the Record Holder
(as defined in the Issuer Partnership Agreement) of such Common Units and shall
be admitted as a Limited Partner (as defined in the Issuer Partnership
Agreement) of the Issuer in accordance and upon compliance with Section 10.2 of
the Issuer Partnership Agreement.

(c)           For the avoidance of doubt, any
exchange of Blackstone Holdings Partnership Units shall be subject to the
provisions of the Blackstone Holdings Partnership Agreements, including without
limitation the provisions of Sections 8.01, 8.03 and 8.04.

SECTION 2.2.   Exchange Procedures. (a)  A Blackstone Holdings Limited Partner may
exercise the right to exchange Blackstone Holdings Partnership Units set forth
in Section 2.1(a) above by providing a written notice of exchange at least
sixty (60) days prior to the applicable Quarterly Exchange Date to: (i) in the
case of an A Exchange, the Issuer substantially in the form of Exhibit A
hereto, and (ii) in the case of a B Exchange, each of the Blackstone Holdings
General Partners substantially in the form of Exhibit B hereto, duly
executed by such holder or such holder’s duly authorized attorney in respect of
the Blackstone Holdings Partnership Units to be exchanged, in each case
delivered during normal business hours

 

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at
the principal executive offices of the Issuer or the Blackstone Holdings
General Partners, as applicable.

(b)           As promptly as practicable following
the surrender for exchange of Blackstone Holdings Partnership Units in the
manner provided in this Article II, the Issuer, in the case of an A Exchange,
or the Blackstone Holdings Partnerships, in the case of a B Exchange, shall
deliver or cause to be delivered at the principal executive offices of the
Issuer or at the office of the Transfer Agent the number of Common Units
issuable upon such exchange, issued in the name of such exchanging
Blackstone Holdings Limited Partner.

(c)           The Issuer, in the case of an A
Exchange, or the Blackstone Holdings Partnerships, in the case of a B Exchange,
may adopt reasonable procedures for the implementation of the exchange
provisions set forth in this Article II, including, without limitation,
procedures for the giving of notice of an election for exchange.

SECTION 2.3.   Blackout
Periods and Ownership Restrictions.

(a)           Notwithstanding anything to the
contrary, a Blackstone Holdings Limited Partner shall not be entitled to
exchange Blackstone Holdings Partnership Units, and the Issuer and the
Blackstone Holdings Partnerships shall have the right to refuse to honor any
request for exchange of Blackstone Holdings Partnership Units, (i) at any time
or during any period if the Issuer or the Blackstone Holdings Partnerships
shall determine, based on the advice of counsel (which may be inside counsel),
that there may be material non-public information that may affect the trading
price per Common Unit at such time or during such period, (ii) if such exchange
would be prohibited under applicable law or regulation, or (iii) unless the
general partner of the Issuer provides its prior written consent, in the case
of a Category 1 Limited Partner, Category 2 Limited Partner, Category 3 Limited
Partner, Category 4 Limited Partner, or Category 5 Limited Partner (in each
case as defined in the Blackstone Holdings Partnership Agreements), if such
Blackstone Holdings Limited Partner, at the time of such request for exchange,
is, for U.S. federal income tax purposes, a partner of the Issuer.

SECTION 2.4.   Splits,
Distributions and Reclassifications. 

(a)           The Exchange Rate shall be adjusted accordingly if there
is: (1) any subdivision (by split, distribution, reclassification,
recapitalization or otherwise) or combination (by reverse split,
reclassification, recapitalization or otherwise) of the Blackstone Holdings
Partnership Units that is not accompanied by an identical subdivision or
combination of the Common Units; or (2) any subdivision (by split,
distribution, reclassification, recapitalization or otherwise) or combination
(by reverse split, reclassification, recapitalization or otherwise) of the
Common Units that is not accompanied by an identical subdivision or combination
of the Blackstone Holdings Partnership Units. In the event of a
reclassification or other similar transaction as a result of which the Common
Units are converted into another security, then a Blackstone Holdings Limited
Partner shall be entitled to receive upon exchange the amount of such security
that such Blackstone Holdings Limited Partner would have received if such
exchange had occurred immediately prior to the effective date of such
reclassification or other similar transaction. Except as may be required in the
immediately preceding sentence, no 

 

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adjustments in respect of distributions shall be
made upon the exchange of any Blackstone Holdings Partnership Unit.

SECTION 2.5.   Common
Units to be Issued.  

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

SECTION 2.6.   Taxes.  

(a)           The delivery of Common Units upon
exchange of Blackstone Holdings Partnership Units shall be made without charge
to the Blackstone Holdings Limited Partners for any stamp or other similar tax
in respect of such issuance.

SECTION 2.7.   Restrictions.

(a)           The provisions of Sections 8.02, 8.03
(other than paragraphs (a), (b) and (d)), 8.04 and 8.06 of the Blackstone
Holdings Partnership Agreements shall apply, mutatis mutandis, to any
Common Units issued upon exchange of Blackstone Holdings Partnership Units; and
the provisions of paragraphs (b) and (d) of Section 8.03 of the Blackstone
Holdings Partnership Agreements shall permit Transfers of Common Units issued
upon exchange of Blackstone Holdings Partnership Units to the same extent as
Exchange Transactions (as defined in the Blackstone Holdings Partnership
Agreements) with respect to Blackstone Holdings Partnership Units may be
permitted under such provisions. In each case, the provisions of Sections 8.03
and 8.04 of the Blackstone Holdings Partnership Agreements shall apply in the
aggregate to Blackstone Holdings Partnership Units and Common Units received in
exchange for Blackstone Holdings Partnership Units held by each Blackstone
Holdings Limited Partner or Limited Partner (as defined in the Issuer
Partnership Agreement) of the Issuer.

SECTION 2.8.   Disposition
of Common Units Issued.  

(a)           A Blackstone Holdings Limited Partner
requesting an exchange under this Agreement covenants to use reasonable best
efforts to sell or otherwise dispose of any Common Units received in such an
exchange within ten (10) days of the receipt thereof or any specified shorter
period as the general partner of the Issuer determines to be in the best
interests of the Issuer, and that no other Common Units will be acquired or
held by such Blackstone Holdings Limited Partner during such period.  Any Blackstone Holdings Limited Partner
holding any Common Units on the last day of such period shall cause all such
Common Units to be 

 

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transferred immediately to a
partnership, trust or other entity (other than an entity disregarded as an
entity separate from its parent for United States federal income tax purposes).

SECTION 2.9.   Subsequent
Offerings.

(a)           The Issuer may from time to time
provide the opportunity for Blackstone Holdings Limited Partners to sell their
Blackstone Holdings Partnership Units to the Issuer, the Blackstone Holdings
Partnerships or any of their subsidiaries (a “Sale Transaction”);
provided that no Sale Transaction shall occur unless the Issuer cancels the
nearest Quarterly Exchange Date scheduled to occur in the same fiscal year of
the Issuer as such Sale Transaction.  A
Blackstone Limited Partner selling Blackstone Holdings Partnership Units in
connection with a Sale Transaction must provide notice to Issuer at least
thirty (30) days prior to the cash settlement of such Sale Transaction in respect of
the Blackstone Holdings Partnership Units to be sold, in each case delivered
during normal business hours at the principal executive offices of the Issuer.  For the avoidance of doubt, the total
aggregate number of Quarterly Exchange Dates and Sale Transactions occurring
during any fiscal year of the Issuer shall not exceed four (4).

ARTICLE III

GENERAL PROVISIONS

SECTION 3.1.   Amendment.
(a)  The provisions of this Agreement may
be amended by the affirmative vote or written consent of: (i) in the case of
matters relating solely to A Exchanges, the Issuer and each of the Blackstone
Holdings Partnerships and, after a Change of Control (as such term as defined
in the Blackstone Holdings Partnership Agreements), the holders of at least a
majority of the Vested Percentage Interests (as such term as defined in the Blackstone
Holdings Partnership Agreements) of the holders of Blackstone Holdings
Partnership Units (excluding Blackstone Holdings Partnership Units held by the
Issuer and the Blackstone Holdings General Partners), and (ii) for all other
matters, each of the Blackstone Holdings Partnerships and, after a Change of
Control (as such term as defined in the Blackstone Holdings Partnership
Agreements), the holders of at least a majority of the Vested Percentage
Interests (as such term as defined in the Blackstone Holdings Partnership
Agreements) of the Blackstone Holdings Partnership Units (excluding Blackstone
Holdings Partnership Units held by the Issuer and the Blackstone Holdings
General Partners).

(b)           Each Blackstone Holdings Limited
Partner hereby expressly consents and agrees that, whenever in this Agreement
it is specified that an action may be taken upon the affirmative vote or
written consent of less than all of the Blackstone Holdings Limited Partners,
such action may be so taken upon the concurrence of less than all of the
Blackstone Holdings Limited Partners and each Blackstone Holdings Limited
Partner shall be bound by the results of such action.

SECTION 3.2.   Addresses
and Notices.  All notices, requests,
claims, demands and other communications hereunder shall be in writing and
shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in person, by courier service, by fax, by electronic mail (delivery
receipt requested) or by registered or certified mail (postage prepaid,

 

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return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be as specified in a notice given in
accordance with this Section 3.2):

(a)  If to the Issuer, to:

345 Park Avenue

New York, New York 10154

Attention: Chief Legal Officer

Fax: (212) 583-5258

Electronic Mail: friedman@blackstone.com

 

(b)  If to      Blackstone Holdings I L.P.

                    Blackstone
Holdings II L.P.

                    Blackstone
Holdings III L.P.

                    Blackstone
Holdings IV L.P.

                    Blackstone
Holdings V L.P., to:

 

345 Park Avenue

New York, New York, 10154

Attention: Chief Legal Officer

Fax: (212) 583-5258

Electronic Mail: friedman@blackstone.com

 

(c)  If to any Blackstone Holdings Limited
Partner, to:

c/o The Blackstone Group L.P.

345 Park Avenue

New York, New York 10154

Attention: Chief Legal Officer

Fax: (212) 583-5258

Electronic Mail: friedman@blackstone.com

 

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

SECTION 3.4.   Binding
Effect. This Agreement shall be binding upon and inure to the benefit of
all of the parties and, to the extent permitted by this Agreement, their
successors, executors, administrators, heirs, legal representatives and
assigns.

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

 

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mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

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

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

SECTION 3.8.   Submission to Jurisdiction; Waiver of
Jury Trial.

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

(b)           Notwithstanding the provisions of
paragraph (a), in the case of matters relating to an A Exchange, the Issuer may
bring, and in the case of matters relating to a B Exchange, the Blackstone
Holdings Partnerships may cause any Blackstone Holdings Partnership to bring,
on behalf of the Issuer or such Blackstone Holdings Partnership or on behalf of
one or more Blackstone Holdings Limited Partners, an action or special
proceeding in any court of competent jurisdiction for the purpose of compelling
a party to arbitrate, seeking temporary or preliminary relief in aid of an
arbitration hereunder, and/or enforcing an arbitration award and, for the
purposes of this paragraph (b), each Blackstone Holdings Limited Partner (i)
expressly consents to the application of paragraph (c) of this Section 3.8 to
any such action or proceeding, (ii) agrees that proof shall not be required
that monetary damages for breach of the provisions of this Agreement would be
difficult to calculate and that remedies at law would be inadequate, and (iii)
irrevocably appoints the Issuer, in the case of matters relating to an A
Exchange, or the Blackstone Holdings Partnerships, in the case of matters
relating to a B Exchange, as such Blackstone Holdings Limited Partner’s agents
for service of process in connection with any such action or proceeding and
agrees that service of process upon such agent, who shall promptly advise such
Blackstone Holdings Limited Partner of any such service of process, shall be
deemed in every respect effective service of process upon the Blackstone Holdings
Limited Partner in any such action or proceeding.

(c)           (i)            EACH
BLACKSTONE HOLDINGS LIMITED PARTNER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF COURTS LOCATED IN

 

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NEW YORK, NEW YORK FOR THE
PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF
THIS SECTION 3.8, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR
CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS
AGREEMENT. Such ancillary judicial proceedings include any suit, action or
proceeding to compel arbitration, to obtain temporary or preliminary judicial
relief in aid of arbitration, or to confirm an arbitration award. The parties
acknowledge that the fora designated by this paragraph (c) have a reasonable
relation to this Agreement, and to the parties’ relationship with one another.

(ii)           The parties hereby waive, to the
fullest extent permitted by applicable law, any objection which they now or
hereafter may have to personal jurisdiction or to the laying of venue of any
such ancillary suit, action or proceeding brought in any court referred to in
the preceding paragraph of this Section 3.8 and such parties agree not to plead
or claim the same.

(d)           Notwithstanding any provision of this
Agreement to the contrary, this Section 3.8 shall be construed to the maximum
extent possible to comply with the laws of the State of Delaware, including the
Delaware Uniform Arbitration Act (10 Del. C. § 5701 et  seq.) (the “Delaware Arbitration Act”).  If, nevertheless, it shall be determined by a
court of competent jurisdiction that any provision or wording of this Section
3.8, including any rules of the International Chamber of Commerce, shall be
invalid or unenforceable under the Delaware Arbitration Act, or other
applicable law, such invalidity shall not invalidate all of this Section
3.8.  In that case, this Section 3.8
shall be construed so as to limit any term or provision so as to make it valid
or enforceable within the requirements of the Delaware Arbitration Act or other
applicable law, and, in the event such term or provision cannot be so limited,
this Section 3.8 shall be construed to omit such invalid or unenforceable
provision.

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

SECTION
3.10.   Tax Treatment. To the extent this Agreement imposes
obligations upon a particular Blackstone Holdings Partnership or a Blackstone
Holdings General Partner, this Agreement shall be treated as part of the
relevant Blackstone Holdings  Partnership Agreement as described in
Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of
the Treasury Regulations. As required by the Code and the Treasury Regulations,
the parties shall report any B Exchange consummated hereunder, in the case of
Blackstone Holdings I, Blackstone Holdings II and Blackstone
Holdings V as a taxable sale of Blackstone Holdings Partnership Units by a
Blackstone Holdings Limited Partner to Blackstone Holdings I/II General Partner
and Blackstone Holdings V General Partner, and in the case of Blackstone
Holdings III and IV, as a tax-free exchange of Blackstone Holdings
Partnership Units, and no party shall take a contrary position on any income
tax return, amendment thereof or communication with a taxing authority.

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

 

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Intentionally Left Blank]

 

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

	
   

  	
  THE
  BLACKSTONE GROUP L.P.

  
	
   

  	
  By:
  Blackstone Group Management L.L.C., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BLACKSTONE
  HOLDINGS I L.P.

  
	
   

  	
  By:
  Blackstone Holdings I/II GP Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BLACKSTONE
  HOLDINGS II L.P.

  
	
   

  	
  By:
  Blackstone Holdings I/II GP Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
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  BLACKSTONE
  HOLDINGS III L.P.

  
	
   

  	
  By:
  Blackstone Holdings III GP L.L.C., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

	
   

  	
  BLACKSTONE
  HOLDINGS IV L.P.

  
	
   

  	
  By:
  Blackstone Holdings IV GP L.P., its general partner

  
	
   

  	
  By:
  Blackstone Holdings IV GP Management L.L.C., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

	
   

  	
  BLACKSTONE
  HOLDINGS V L.P.

  
	
   

  	
  By:
  Blackstone Holdings V GP L.P., its general partner

  
	
   

  	
  By:
  Blackstone Holdings V GP Management (Delaware) L.P., its general partner

  
	
   

  	
  By:
  Blackstone Holdings V GP Management L.L.C., its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

	
   

  	
  [LIMITED
  PARTNERS]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

EXHIBIT A

[FORM OF]

NOTICE OF A EXCHANGE

The Blackstone Group L.P.

345 Park Avenue

New York, New York 10154

Attention: Chief Legal
Officer

Fax: (212) 583-5258

Electronic Mail:
friedman@blackstone.com

 

Reference
is hereby made to the Exchange Agreement, dated as of
                        ,
2007 (the “Exchange Agreement”), among The Blackstone Group L.P.,
Blackstone Holdings I L.P., Blackstone Holdings II L.P., Blackstone Holdings
III L.P., Blackstone Holdings IV L.P., Blackstone Holdings V L.P., and the
Blackstone Holdings Limited Partners from time to time party thereto, as
amended from time to time.  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Exchange Agreement.

 

The
undersigned Blackstone Holdings Limited Partner desires to exchange the number
of Blackstone Holdings Partnership Units set forth below in the form of
exchange selected below to be issued in its name as set forth below.

 

Legal Name of Blackstone
Holdings Limited Partner: __________________________________

Address:
______________________________________________________________________

Number of Blackstone
Holdings Partnership Units to be exchanged: _______________________

The undersigned (1) hereby
represents that the Blackstone Holdings Partnership Units set forth above are
owned by the undersigned, (2) hereby exchanges such Blackstone Holdings
Partnership Units for Common Units as set forth in the Exchange Agreement, (3)
hereby irrevocably constitutes and appoints any officer of the Blackstone
Holdings Partnerships, the Blackstone Holdings General Partners, the Issuer or
Blackstone Group Management L.L.C. as its attorney, with full power of
substitution, to exchange said Blackstone Holdings Partnership Units on the
books of the Blackstone Holdings Partnerships for Common Units on the books of
the Issuer, with full power of substitution in the premises.

 

 

 

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

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				

 

 

EXHIBIT B

[FORM OF]

NOTICE OF B EXCHANGE

Blackstone
Holdings I L.P.

Blackstone
Holdings II L.P.

Blackstone
Holdings III L.P.

Blackstone
Holdings IV L.P.

Blackstone
Holdings V L.P.

345 Park Avenue

New York, New York, 10154

Attention: Chief Legal
Officer

Fax: (212) 583-5258

Electronic Mail:
friedman@blackstone.com

 

Reference
is hereby made to the Exchange Agreement, dated as of
                        ,
2007 (the “Exchange Agreement”), among The Blackstone Group L.P.,
Blackstone Holdings I L.P., Blackstone Holdings II L.P., Blackstone Holdings
III L.P., Blackstone Holdings IV L.P., Blackstone Holdings V L.P., and the
Blackstone Holdings Limited Partners from time to time party thereto, as
amended from time to time.  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Exchange Agreement.

 

The
undersigned Blackstone Holdings Limited Partner desires to exchange the number
of Blackstone Holdings Partnership Units set forth below in the form of
exchange selected below to be issued in its name as set forth below.

 

Legal Name of Blackstone
Holdings Limited Partner: __________________________________

Address:
______________________________________________________________________

Number of Blackstone
Holdings Partnership Units to be exchanged: _______________________

The undersigned (1) hereby
represents that the Blackstone Holdings Partnership Units set forth above are
owned by the undersigned, (2) hereby exchanges such Blackstone Holdings
Partnership Units for Common Units as set forth in the Exchange Agreement, (3)
hereby irrevocably constitutes and appoints any officer of the Blackstone
Holdings Partnerships, the Blackstone Holdings General Partners, the Issuer or
Blackstone Group Management L.L.C. as its attorney, with full power of
substitution, to exchange said Blackstone Holdings Partnership Units on the
books of the Blackstone Holdings Partnerships for Common Units on the books of
the Issuer, with full power of substitution in the premises.

 

 

 

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
  Dated:Exhibit 10.9

FORM OF THE BLACKSTONE GROUP L.P.

2007 EQUITY INCENTIVE PLAN

1.                                      Purpose of the Plan

The Blackstone Group L.P.
2007 Equity Incentive Plan (the “Plan”) is designed to promote the long
term financial interests and growth of The Blackstone Group L.P., a Delaware
limited partnership (the “Partnership”), and its Affiliates by (i)
attracting and retaining senior managing directors, employees and consultants
of the Partnership or any of its Affiliates, including directors of the Partnership’s
general partner, Blackstone Group Management L.L.C. (the “General Partner”),
and (ii) aligning the interests of such individuals with those of the Partnership
and its Affiliates by providing them with equity-based awards based on the
common units of limited partner interest in the Partnership (the “Common
Units”) or the partnership units (the “Blackstone Holdings Partnership
Units”) of Blackstone Holdings (as defined below).

2.                                      Definitions

The following capitalized
terms used in the Plan have the respective meanings set forth in this Section:

(a)           Act:  The Securities Exchange Act of 1934, as
amended, or any successor thereto.

(b)           Administrator:
The Board, or the committee or subcommittee thereof to whom authority to
administer the Plan has been delegated pursuant to Section 4 hereof.

(c)           Affiliate:  With respect to any Person,
any other Person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with the Person in
question. As used herein, the term “Control” means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

(d)           Award:  Individually or collectively,
any Option, Unit Appreciation Right, or Other Unit-Based Awards based on or
relating to the Common Units or Blackstone Holdings Partnership Units issuable
under the Plan.

(e)           Beneficial Owner:  A “beneficial owner”, as such term is defined
in Rule 13d-3 under the Act (or any successor rule thereto).

(f)            Blackstone
Holdings:  The collective reference
to all of the Blackstone Holdings Partnerships.

(g)           Blackstone
Holdings Partnerships:  Each of
Blackstone Holdings I L.P., Blackstone Holdings II L.P., Blackstone Holdings
III L.P., Blackstone Holdings IV L.P., and Blackstone Holdings V L.P.

(h)           Blackstone
Holdings Partnership Units:  Each “Blackstone
Holdings Partnership Unit” shall consist of one partnership unit in each of the
five Blackstone Holdings Partnerships.

(i)            Board:  The board of directors of the General
Partner.

 

 

 

(j)            Change in Control: 
The occurrence of any Person, other than a Person approved by the
General Partner, becoming the general partner of the Partnership.

(k)           Code:  The Internal Revenue Code of 1986, as
amended, or any successor thereto.

(l)            Common Units:  The common units representing limited partner
interests of the Partnership.

(m)          Disability:  The term “Disability” shall have the meaning
as provided under Section 409A(a)(2)(C)(i) of the Code.  Notwithstanding the foregoing or any other
provision of this Plan, the definition of Disability (or any analogous term) in
an Award agreement shall supersede the foregoing definition; provided, however,
that if no definition of Disability or any analogous term is set forth in such
agreement, the foregoing definition shall apply.

(n)           Effective Date:  The date on which the Board adopts the Plan,
or such later date as is designated by the Board.

(o)           Employment:  The term “Employment” as used herein shall be
deemed to refer to (i) a Participant’s employment if the Participant is an
employee of the Partnership or any of its Affiliates, (ii) a Participant’s
services as a consultant or partner, if the Participant is consultant to, or
partner of, the Partnership or of any of its Affiliates, and (iii) a
Participant’s services as an non-employee director, if the Participant is a
non-employee member of the Board.

(p)           Fair Market Value:  Of a Unit on any given date means (i) the
closing sale price per Unit on the New York Stock Exchange on that date (or, if
no closing sale price is reported, the last reported sale price), (ii) if the
Units are not listed for trading on the New York Stock Exchange, the closing
sale price (or, if no closing sale price is reported, the last reported sale
price) as reported on that date in composite transactions for the principal
national securities exchange registered pursuant to Section 6(g) of the Act on
which the Units are listed, (iii) if the Units are not so listed on a national securities
exchange, the last quoted bid price for the Units on that date in the
over-the-counter market as reported by Pink Sheets LLC or a similar
organization, or (iv) if the Units are not so quoted by Pink Sheets LLC or a
similar organization, the average of the mid-point of the last bid and ask
prices for the Units on that date from a nationally recognized independent
investment banking firm selected b the General Partner for this purpose.

(q)           General Partner:  Blackstone Group Management
L.L.C., a Delaware limited liability company.

(r)            Option:  An option to purchase Units granted pursuant
to Section 6 of the Plan.

(s)           Option Price:  The purchase price per Unit of an Option, as
determined pursuant to Section 6(a) of the Plan.

(t)            Other Unit-Based
Awards:  Awards granted pursuant to
Section 8 of the Plan.

(u)           Partnership:  The Blackstone Group L.P., a Delaware limited
partnership.

 

2

(v)           Participant:  A senior managing director, other employee,
consultant, director or other service provider of the Partnership or of any of
its Affiliates, including any director of the General Partner, who is selected
by the Administrator to participate in the Plan.

(w)          Performance-Based
Awards:  Certain Other Unit-Based Awards
granted pursuant to Section 8(b) of the Plan.

(x)            Person:  A “person”, as such term is used for purposes
of Section 13(d) or 14(d) of the Act (or any successor section thereto).

(y)           Plan:  The Blackstone Group L.P. 2007 Equity
Incentive Plan.

(z)            Units:  Common Units or Blackstone Holdings Partnership
Units which are issued or may be issued under the Plan.

(aa)         Unit Appreciation
Right:  A unit appreciation right
granted pursuant to Section 7 of the Plan.

3.                                      Units Subject to the Plan

Subject
to Section 9 hereof, the total number of Units which may be issued under the
Plan shall be 163,000,000, of which all or any portion may be issued as Common
Units or Blackstone Holdings Partnership Units. 
Notwithstanding the foregoing, the total number of Units subject to the
Plan shall be increased on the first day of each fiscal year
beginning in calendar year 2008 by a number of Units equal to the excess of (x)
15% of the aggregate number of Common Units and Blackstone Holdings Partnership
Units outstanding on the last day of the immediately preceding fiscal year
(excluding Blackstone Holdings Partnership Units held by the Partnership or its
wholly-owned subsidiaries) over (y) the aggregate number of Common Units and Blackstone
Holdings Partnership Units covered by the Plan, unless the Administrator should
decide to increase the number of Common Units and Blackstone Holdings
Partnership Units covered by the Plan by a lesser amount on any such date.  The issuance of Units or the
payment of cash upon the exercise of an Award or in consideration of the
cancellation or termination of an Award shall reduce the total number of Units
available under the Plan, as applicable. 
Units which are subject to Awards which terminate or lapse without the
payment of consideration may be granted again under the Plan.

4.                                      Administration

The Plan shall be
administered by the Board, which may delegate its duties and powers in whole or
in part to any committee or subcommittee thereof (the “Administrator”).  Additionally, the Administrator may delegate
the authority to grant Awards under the Plan to any employee or group of
employees of the Partnership or of any Affiliate of the Partnership; provided
that such delegation and grants are consistent with applicable law and
guidelines established by the Board from time to time.  Awards may, in the discretion of the
Administrator, be made under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by the Partnership, any Affiliate of the Partnership
or any entity acquired by the Partnership or with which the Partnership
combines.  The number of Units underlying
such substitute awards shall be counted against the aggregate number of Units
available for Awards under the Plan.  The
Administrator is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or 

 

3

desirable
for the administration of the Plan.  The
Administrator may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Administrator
deems necessary or desirable.  Any
decision of the Administrator in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned (including,
but not limited to, Participants and their beneficiaries or successors).  The Administrator shall have the full power
and authority to establish the terms and conditions of any Award consistent
with the provisions of the Plan and to waive any such terms and conditions at
any time (including, without limitation, accelerating or waiving any vesting
conditions).  The Administrator shall
require payment of any amount it may determine to be necessary to withhold for
federal, state, local or other taxes as a result of the exercise, grant or
vesting of an Award.  Unless the
Administrator specifies otherwise, the Participant may elect to pay a portion
or all of such withholding taxes by (a) delivery in Units or
(b) having Units withheld by the Partnership from any Units that would
have otherwise been received by the Participant.

5.                                      Limitations

No Award may be granted
under the Plan after the tenth anniversary of the Effective Date, but Awards
theretofore granted may extend beyond that date.

6.                                      Terms and Conditions of Options

Options granted under the
Plan shall be non-qualified options for federal income tax purposes, and
shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the
Administrator shall determine:

(a)           Option Price.  The Option Price per Unit shall be determined
by the Administrator.

(b)           Exercisability.  Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Administrator, but in no event shall an Option be exercisable
more than ten years after the date it is granted.

(c)           Exercise of
Options.  Except as otherwise
provided in the Plan or in an Award agreement, an Option may be exercised for
all, or from time to time any part, of the Units for which it is then
exercisable.  For purposes of Section 6
of the Plan, the exercise date of an Option shall be the later of the date a
notice of exercise is received by the Partnership and, if applicable, the date
payment is received by the Partnership pursuant to clauses (i), (ii), (iii) or
(iv) in the following sentence.  The
purchase price for the Units as to which an Option is exercised shall be paid
to the Partnership, and in the manner designated by the Administrator, pursuant
to one or more of the following methods: (i) in cash or its equivalent (e.g.,
by personal check), (ii) in Units having a Fair Market Value equal to the
aggregate Option Price for the Units being purchased and satisfying such other
requirements as may be imposed by the Administrator; provided  that
such Units have been held by the Participant for no less than six months (or
such other period as established from time to time by the Administrator in
order to avoid adverse accounting treatment applying generally accepted
accounting principles), (iii) partly in cash and partly in such Units, or
(iv) if there is a public market for the Units at such time, through the
delivery of irrevocable instructions to a broker to sell Units obtained upon
the exercise of the Option and to deliver promptly to the Partnership an amount
out of the proceeds of such Sale equal to the 

 

 

4

aggregate
Option Price for the Units being purchased, or (v) to the extent permitted by
the Administrator, through net settlement in Units.  No Participant shall have any rights to distributions
or other rights of a holder with respect to Units subject to an Option until
the Participant has given written notice of exercise of the Option, paid in
full for such Units and, if applicable, has satisfied any other conditions
imposed by the Administrator pursuant to the Plan.

(d)           Attestation.  Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the exercise price of an
Option or taxes relating to the exercise of an Option by delivering Units, the
Participant may, subject to procedures satisfactory to the Administrator,
satisfy such delivery requirement by presenting proof of beneficial ownership
of such Units, in which case the Partnership shall treat the Option as
exercised without further payment and/or shall withhold such number of Units
from the Units acquired by the exercise of the Option, as appropriate.

7.                                      Terms and Conditions of Unit Appreciation
Rights

(a)           Grants.  The Administrator may grant (i) a Unit
Appreciation Right independent of an Option or (ii) a Unit Appreciation
Right in connection with an Option, or a portion thereof.  A Unit Appreciation Right granted pursuant to
clause (ii) of the preceding sentence (A) may be granted at the time
the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of
Units covered by an Option (or such lesser number of Units as the Administrator
may determine) and (C) shall be subject to the same terms and conditions
as such Option except for such additional limitations as are contemplated by
this Section 7 (or such additional limitations as may be included in an Award
agreement).

(b)           Terms.  The exercise price per Unit of a Unit
Appreciation Right shall be an amount determined by the Administrator; provided,
however, that in the case of a Unit Appreciation Right granted in
conjunction with an Option, or a portion thereof, the exercise price may not be
less than the Option Price of the related Option.  Each Unit Appreciation Right granted
independent of an Option shall entitle a Participant upon exercise to an amount
equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Unit over (B) the exercise price per Unit, times (ii) the
number of Units covered by the Unit Appreciation Right.  Each Unit Appreciation Right granted in
conjunction with an Option, or a portion thereof, shall entitle a Participant
to surrender to the Partnership the unexercised Option, or any portion thereof,
and to receive from the Partnership in exchange therefore an amount equal to
(i) the excess of (A) the Fair Market Value on the exercise date of
one Unit over (B) the Option Price per Unit, times (ii) the number of
Units covered by the Option, or portion thereof, which is surrendered.  Payment shall be made in Units or in cash, or
partly in Units and partly in cash (any such Units valued at such Fair Market
Value), all as shall be determined by the Administrator.  Unit Appreciation Rights may be exercised
from time to time upon actual receipt by the Partnership of written notice of
exercise stating the number of Units with respect to which the Unit
Appreciation Right is being exercised. 
The date a notice of exercise is received by the Partnership shall be
the exercise date.  The Administrator, in
its sole discretion, may determine that no fractional Units will be issued in
payment for Unit Appreciation Rights, but instead cash will be paid for a
fraction or the number of Units will be rounded downward to the next whole Unit.

 

5

(c)           Limitations.  The Administrator may impose, in its
discretion, such conditions upon the exercisability of Unit Appreciation Rights
as it may deem fit, but in no event shall a Unit Appreciation Right be
exercisable more than ten years after the date it is granted.

8.                                      Other Unit-Based Awards

                The Administrator, in its sole discretion, may grant
or sell Awards of Units, restricted Units, restricted Common Units,
deferred restricted Common Units, phantom restricted Common Units or other
Unit-Based awards based in whole or in part on the Fair Market Value of the
Common Units or Blackstone Holdings Partnership Units (“Other
Unit-Based Awards”).  Such Other
Unit-Based Awards shall be in such form, and dependent on such conditions, as
the Administrator shall determine, including, without limitation, the right to
receive, or vest with respect to, one or more Units (or the equivalent cash
value of such Units) upon the completion of a specified period of service, the
occurrence of an event and/or the attainment of performance objectives.  Other Unit-Based Awards may be granted alone
or in addition to any other Awards granted under the Plan.  Subject to the provisions of the Plan, the
Administrator shall determine to whom and when Other Unit-Based Awards will be
made, the number of Units to be awarded under (or otherwise related to) such
Other Unit-Based Awards; whether such Other Unit-Based Awards shall be settled
in cash, Units or a combination of cash and Units; and all other terms and
conditions of such Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Units so awarded and issued
shall be fully paid and non-assessable).

9.                                      Adjustments Upon Certain Events

Notwithstanding any other
provisions in the Plan to the contrary, the following provisions shall apply to
all Awards granted under the Plan:

(a)           Generally.  In the event of any change in the outstanding
Units after the Effective Date by reason of any Unit distribution or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination,
combination or transaction or exchange of Units or other corporate exchange, or
any distribution to holders of Units other than regular cash distributions or any
transaction similar to the foregoing, the Administrator in its sole discretion
and without liability to any person shall make such substitution or adjustment,
if any, as it deems to be equitable (subject to Section 17), as to (i) the
number or kind of Units or other securities issued or reserved for issuance
pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number
of Units for which Options or Unit Appreciation Rights may be granted during a
calendar year to any Participant (iii)  the
maximum amount of a Performance-Based Award that may be granted during a
calendar year to any Participant, (iv) the Option Price or exercise price of
any unit appreciation right and/or (v) any other affected terms of such Awards.

(b)           Change in Control.
In the event of a Change in Control after the Effective Date, (i) if determined
by the Administrator in the applicable Award agreement or otherwise, any
outstanding Awards then held by Participants which are unexercisable or
otherwise unvested or subject to lapse restrictions shall automatically be
deemed exercisable or otherwise vested or no longer subject to lapse
restrictions, as the case may be, as of immediately prior to such Change of
Control and (ii) the Administrator may (subject to Section 17), but shall not
be obligated to, (A) accelerate, vest or cause the restrictions to lapse with
respect to all or any portion of an Award, (B) cancel such Awards for fair
value (as determined in the sole discretion of the Administrator) which, in the
case of Options and Unit Appreciation Rights, may equal the excess, if any, of 

 

6

value
of the consideration to be paid in the Change in Control transaction to holders
of the same number of Units subject to such Options or Unit Appreciation Rights
(or, if no consideration is paid in any such transaction, the Fair Market Value
of the Units subject to such Options or Unit Appreciation Rights) over the
aggregate exercise price of such Options or Unit Appreciation Rights, (C)
provide for the issuance of substitute Awards that will substantially preserve
the otherwise applicable terms of any affected Awards previously granted
hereunder as determined by the Administrator in its sole discretion or (D)
provide that for a period of at least 15 days prior to the Change in Control,
such Options shall be exercisable as to all shares subject thereto and that
upon the occurrence of the Change in Control, such Options shall terminate and
be of no further force and effect.

10.                               No Right to Employment or Awards

The granting of an Award
under the Plan shall impose no obligation on the Partnership or any Affiliate
to continue the Employment of a Participant and shall not lessen or affect the Partnership’s
or Affiliate’s right to terminate the Employment of such Participant.  No Participant or other Person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards.  The terms and conditions of Awards and the
Administrator’s determinations and interpretations with respect thereto need
not be the same with respect to each Participant (whether or not such
Participants are similarly situated).

11.                               Successors and Assigns

The Plan shall be binding on
all successors and assigns of the Partnership and a Participant, including
without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant’s creditors.

12.                               Nontransferability of Awards

Unless otherwise determined or
approved by the Administrator, an Award shall not be transferable or assignable
by the Participant otherwise than by will or by the laws of descent and
distribution.  An Award exercisable after
the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant.

13.                               Amendments or Termination

The Board may amend, alter
or discontinue the Plan, but no amendment, alteration or discontinuation shall
be made, without the consent of a Participant, if such action would diminish
any of the rights of the Participant under any Award theretofore granted to
such Participant under the Plan; provided, however, that the
Administrator may amend the Plan in such manner as it deems necessary to permit
the granting of Awards meeting the requirements of the Code or other applicable
laws (including, without limitation, to avoid adverse tax consequences to the Partnership
or to Participants).

Notwithstanding any
provision of the Plan to the contrary, in the event that the Administrator
determines that any amounts payable hereunder will be taxable to a Participant
under Section 409A of the Code and related Department of Treasury guidance
prior to payment to such Participant of such amount, the Partnership may (a)
adopt such amendments to the Plan 

 

7

and
Awards and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Administrator determines necessary
or appropriate to preserve the intended tax treatment of the benefits provided
by the Plan and Awards hereunder and/or (b) take such other actions as the
Administrator determines necessary or appropriate to avoid the imposition of an
additional tax under Section  409A of the
Code.

14.                               International Participants

With respect to Participants
who reside or work outside the United States of America, the Administrator may,
in its sole discretion, amend the terms of the Plan or Awards with respect to
such Participants in order to conform such terms with the requirements of local
law or to obtain more favorable tax or other treatment for a Participant, the Partnership
or an Affiliate.

15.                               Choice of Law

The Plan shall be governed
by and construed in accordance with the law of the State of New York.

16.                               Effectiveness of the Plan

The Plan shall be effective
as of the Effective Date.

17.               Section
409A

To
the extent applicable, this Plan and Awards issued hereunder shall be interpreted
in accordance with Section 409A of the Code and Department of Treasury
regulations and other interpretative guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued
after the Effective Date.  
Notwithstanding other provisions of the Plan or any Award agreements
thereunder, no Award shall be granted, deferred, accelerated, extended, paid
out or modified under this Plan in a manner that would result in the imposition
of an additional tax under Section 409A of the Code upon a Participant.  In the event that it is reasonably determined
by the Administrator that, as a result of Section 409A of the Code, payments in
respect of any Award under the Plan may not be made at the time contemplated by
the terms of the Plan or the relevant Award agreement, as the case may be,
without causing the Participant holding such Award to be subject to taxation
under Section 409A of the Code, the  Partnership
may take whatever actions the Administrator determines necessary or appropriate
to comply with, or exempt the Plan and Award agreement from the requirements of
Section 409A of the Code and related Department of Treasury guidance and other
interpretive materials as may be issued after the Effective Date, which action
may include, but is not limited to, delaying payment to a Participant who is a “specified
employee” within the meaning of Section 409A of the Code until the first day
following the six-month period beginning on the date of the Participant’s
termination of Employment.  The Partnership shall use commercially
reasonable efforts to implement the provisions of this Section 17 in good
faith; provided that neither the Partnership, the Administrator nor any
employee, director or representative of the Partnership or of any of its
Affiliates shall have any liability to Participants with respect to this
Section 17.

 

8

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