Document:

Exhibit
10.6

 

FORM OF

TAX RECEIVABLE AGREEMENT

dated as of

                    ,
2007

 

 

 

Table
of Contents

	
   

  	
  Page

  
	
  ARTICLE I

  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
  2

  
	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
  DETERMINATION
  OF REALIZED TAX BENEFIT

  	
   

  
	
   

  	
   

  
	
  Section 2.01.

  	
  Basis Adjustment

  	
  7

  
	
  Section 2.02.

  	
  Exchange Basis Schedule

  	
  7

  
	
  Section 2.03.

  	
  Tax Benefit Schedule

  	
  8

  
	
  Section 2.04.

  	
  Procedures, Amendments

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  
	
  TAX
  BENEFIT PAYMENTS

  	
   

  
	
   

  	
   

  
	
  Section 3.01.

  	
  Payments

  	
  9

  
	
  Section 3.02.

  	
  No Duplicative Payments

  	
  10

  
	
  Section 3.03.

  	
  Pro Rata Payments

  	
  10

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  TERMINATION

  	
   

  
	
   

  	
   

  
	
  Section 4.01.

  	
  Early Termination and
  Breach of Agreement

  	
  10

  
	
  Section 4.02.

  	
  Early Termination Notice

  	
  11

  
	
  Section 4.03.

  	
  Payment upon Early
  Termination

  	
  11

  
	
   

  	
   

  
	
  ARTICLE
  V

  	
   

  
	
  LATE
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Late Payments by the
  Corporate Taxpayers

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  NO DISPUTES; CONSISTENCY; COOPERATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Limited Partner Group
  Member Participation in the Corporate Taxpayers’ and Partnerships’ Tax
  Matters

  	
  12

  
	
  Section 6.02.

  	
  Consistency

  	
  12

  
	
  Section 6.03.

  	
  Cooperation

  	
  13

  
	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 7.01.

  	
  Notices

  	
  13

  

 

i

 

 

	
  Section 7.02.

  	
  Counterparts

  	
  14

  
	
  Section 7.03.

  	
  Entire Agreement; No Third
  Party Beneficiaries

  	
  14

  
	
  Section 7.04.

  	
  Governing Law

  	
  14

  
	
  Section 7.05.

  	
  Severability

  	
  14

  
	
  Section 7.06.

  	
  Successors; Assignment;
  Amendments; Waivers

  	
  14

  
	
  Section 7.07.

  	
  Titles and Subtitles

  	
  15

  
	
  Section 7.08.

  	
  Resolution of Disputes

  	
  16

  
	
  Section 7.09.

  	
  Reconciliation

  	
  16

  
	
  Section 7.10.

  	
  Withholding

  	
  17

  
	
  Section 7.11.

  	
  Affiliated Corporations of
  Other Blackstone Holdings General Partners; Admission of the Corporate
  Taxpayers into a Consolidated Group; Transfers of Corporate Assets

  	
  17

  
	
  Section 7.12.

  	
  Confidentiality

  	
  19

  
	
  Section 7.13.

  	
  Partnership Agreement

  	
  20

  
	
  Section 7.14.

  	
  Partnerships

  	
  20

  
	
  Section 7.15.

  	
  Headings

  	
  20

  
	
   

  	
   

  
	
  Exhibit A — Form of
  Joinder Agreement

  	
   

  

 

 

ii

This TAX RECEIVABLE
AGREEMENT (as amended from time to time, this “Agreement”), dated as of
                    ,
2007, is hereby entered into by and among Blackstone Holdings I GP Inc., a
Delaware corporation (“Blackstone Holdings I GP”), and Blackstone
Holdings II GP Inc., a Delaware corporation (“Blackstone Holdings II GP”
and, together with Blackstone Holdings I GP, the “Corporate Taxpayers”),
Blackstone Holdings I L.P., a Delaware limited partnership (“Blackstone
Holdings I”), Blackstone Holdings II L.P., a Delaware limited partnership (“Blackstone
Holdings II”) (together with all other Persons (as defined herein) in which
the Corporate Taxpayers acquire a partnership interest, member interest or
similar interest after the date hereof and who execute and deliver a joinder
contemplated in Section 7.14, the “Partnerships”), and each of the
undersigned parties hereto identified as “Limited Partners.”

RECITALS

WHEREAS, the Limited
Partners hold interests as partners or members of entities (the “Prior
Entities”) and are selling such interests to the Corporate Taxpayers (the “Initial
Sale”) as described in the Form S-1 Registration Statement of The
Blackstone Group L.P., a Delaware limited partnership (the “Parent”);

WHEREAS, the Limited
Partners hold limited partner interests (“Partnership Units”) in each of
the Partnerships, each of which is treated as a partnership for U.S. Federal
income tax purposes;

WHEREAS, the Corporate
Taxpayers are the general partners of each of the Partnerships;

WHEREAS, the Partnership
Units, together with limited partner interests in the other Blackstone Holdings
Partnerships (as defined below), are exchangeable with the Corporate Taxpayers
and the Parent for Common Units (the “Common Units”) in the Parent,
subject to the provisions of the Exchange Agreement (as defined below);

WHEREAS, the Prior Entities,
the Partnerships, and each of their direct and indirect subsidiaries, will have
in effect an election under Section 754 of the Internal Revenue Code of 1986,
as amended (the “Code”), for the Taxable Year in which the Initial Sale
occurs and for each Taxable Year in which an exchange of Partnership Units for
Common Units occurs, which elections are intended generally to result in an
adjustment to the tax basis of the assets owned by the Partnerships (solely
with respect to the Corporate Taxpayers) at the time of an exchange of
Partnership Units for Common Units or any other acquisition of Partnership
Units for cash or other consideration, including the Initial Sale
(collectively, an “Exchange”) (such time, the “Exchange Date”)
(such assets and any asset whose tax basis is determined, in whole or in part,
by reference to the adjusted basis of any such asset, the “Original Assets”)
by reason of such Exchange and the receipt of payments under this Agreement;

WHEREAS, the income, gain,
loss, expense and other Tax items of (i) the Partnerships solely with respect
to the Corporate Taxpayers may be affected by the Basis Adjustment (defined
below) and (ii) the Corporate Taxpayers may be affected by the Imputed Interest
(as defined below);

 

 

WHEREAS, the parties to this
Agreement desire to make certain arrangements with respect to the effect of the
Basis Adjustment and Imputed Interest on the actual liability for Taxes of the
Corporate Taxpayers;

NOW, THEREFORE, in
consideration of the foregoing and the respective covenants and agreements set
forth herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS

Section
1.01.   Definitions.  As
used in this Agreement, the terms set forth in this Article I shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined).

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

“Agreed Rate” means
LIBOR plus 100 basis points.

“Agreement” is
defined in the Recitals of this Agreement.

“Amended Schedule” is
defined in Section 2.04(b) of this Agreement.

“Basis Adjustment”
means the adjustment to the tax basis of an Original Asset under Section 732 of
the Code (in situations where, as a result of one or more Exchanges, a
Partnership becomes an entity that is disregarded as separate from its owner
for tax purposes), Section 1012 of the Code, or Sections 743(b) and 754 of the
Code (in situations where, following an Exchange, a Partnership remains in
existence as an entity for tax purposes) and, in each case, comparable sections
of state, local and foreign tax laws (as calculated under Section 2.01 of this
Agreement) as a result of an Exchange and the payments made pursuant to this
Agreement. Notwithstanding any other provision of this Agreement, the amount of
any Basis Adjustment resulting from an Exchange of one or more Partnership
Units shall be determined without regard to any Pre-Exchange Transfer of such
Partnership Units and as if any such Pre-Exchange Transfer had not occurred.

“Blackstone Holdings I GP”
is defined in the Recitals of this Agreement.

“Blackstone Holdings II
GP” is defined in the Recitals of this Agreement.

“Blackstone Holdings
General Partners” means, collectively, the Corporate Taxpayers, Blackstone
Holdings III GP L.P., a Delaware limited partnership (“Blackstone Holdings
III”), Blackstone Holdings IV GP L.P., a Delaware limited partnership (“Blackstone
Holdings IV”), and Blackstone Holdings V GP L.P., an Alberta limited
partnership (“Blackstone Holdings V”).

 

2

“Blackstone Holdings
Partnerships” means, collectively, Blackstone Holdings I, Blackstone
Holdings II, Blackstone Holdings III L.P., a Delaware limited partnership (“Blackstone
Holdings III”), Blackstone Holdings IV L.P., an Alberta limited partnership
(“Blackstone Holdings IV”), and Blackstone Holdings V L.P., an Alberta
limited partnership (“Blackstone Holdings V”).

“Business Day” means
Monday through Friday of each week, except that a legal holiday recognized as
such by the government of the United States of America or the State of New York
shall not be regarded as a Business Day.

“Change of Control”
means the occurrence of any Person, other than a Person approved by the current
General Partner, becoming the general partner of the Parent.

“Common Units” is
defined in the Recitals of this Agreement.

“Code” is defined in
the Recitals of this Agreement.

“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.

“Corporate Taxpayers”
is defined in the Recitals of this Agreement.

“Corporate Taxpayer
Return” means the federal Tax Return and/or state and/or local and/or
foreign Tax Return, as applicable, of each of the Corporate Taxpayers filed
with respect to Taxes of any Taxable Year.

“Default Rate” means
LIBOR plus 500 basis points.

“Determination” shall
have the meaning ascribed to such term in Section 1313(a) of the Code or
similar provision of state, local and foreign tax law, as applicable, or any
other event (including the execution of a Form 870-AD) that finally and
conclusively establishes the amount of any liability for Tax.

“Early Termination Date”
means the date of an Early Termination Notice for purposes of determining the
Early Termination Payment.

“Early Termination Notice”
is defined in Section 4.02 of this Agreement.

“Early Termination
Schedule” is defined in Section 4.02 of this Agreement.

“Early Termination
Payment” is defined in Section 4.03(b) of this Agreement.

“Early Termination Rate”
means the lesser of (i) 6.5% and (ii) LIBOR plus 100 basis points.

“Exchange” is defined
in the Recitals of this Agreement.

 

3

“Exchange Agreement”
means the Exchange Agreement, dated as of the date hereof, among the Parent,
the Corporate Taxpayers and the limited partners of Blackstone Holdings from
time to time.

“Exchange Basis Schedule”
is defined in Section 2.02 of this Agreement.

“Exchange Date” is
defined in the Recitals of this Agreement.

“Exchange Payment” is
defined in Section 5.01.

“Excluded Assets” is
defined in Section 7.11(c) of this Agreement.

“Expert” is defined
in Section 7.09 of this Agreement.

“General Partner”
means Blackstone Management L.L.C., a Delaware limited liability company and
the general partner of the Parent.

“Initial Sale” is
defined in the Recitals of this Agreement.

“Imputed Interest”
shall mean any interest imputed under Section 1272, 1274 or 483 or other
provision of the Code and any similar provision of state, local and foreign tax
law with respect to a Corporate Taxpayer’s payment obligations under this
Agreement.

“LIBOR” means for
each month (or portion thereof) during any period, an interest rate per annum
equal to the rate per annum reported, on the date two days prior to the first
day of such month, on the Telerate Page 3750 (or if such screen shall cease to
be publicly available, as reported on Reuters Screen page “LIBO” or by any
other publicly available source of such market rate) for London interbank
offered rates for U.S. dollar deposits for such month (or portion thereof).

“Limited Partner”
means the parties hereto other than the Corporate Taxpayers and each other
individual who from time to time executes a joinder agreement in the form
attached hereto as Exhibit A.

“Limited Partner Group
Member” has the meaning assigned to such term in the Amended and Restated
Limited Liability Company Agreement of the General Partner, as it may be
amended, supplemented or restated from time to time.

“Market Value” shall
mean the closing price of the Common Units on the applicable Exchange Date on
the national securities exchange or interdealer quotation system on which such
Common Units are then traded or listed, as reported by the Wall Street Journal;
provided that if the closing price is not reported by the Wall Street Journal
for the applicable Exchange Date, then the Market Value shall mean the closing
price of the Common Units on the Business Day immediately preceding such
Exchange Date on the national securities exchange or interdealer quotation
system on which such Common Units are then traded or listed, as reported by the
Wall Street Journal; provided further, that if the Common Units are not then
listed on a National Securities Exchange or Interdealer Quotation System, “Market
Value” shall mean the cash consideration paid for Common Units, or the fair
market value of the other property 

 

4

delivered for
Common Units, as determined by the board of directors of the General Partner in
good faith.

“Material Objection
Notice” has the meaning set forth in Section 4.02.

“Non-Stepped Up Tax Basis”
means, with respect to any asset at any time, the tax basis that such asset
would have had at such time if no Basis Adjustment had been made.

“Non-Stepped Up Tax
Liability” means, with respect to any Taxable Year, the liability for Taxes
of each of the Corporate Taxpayers or any Partnership in which each of the
Corporate Taxpayers owns an interest, but only with respect to Taxes imposed on
such Partnership and allocable to each of the Corporate Taxpayers using the
same methods, elections, conventions and similar practices used on the relevant
Corporate Taxpayer Return, but using the Non-Stepped Up Tax Basis instead of
the tax basis of the Original Assets and excluding any deduction attributable
to the Imputed Interest.

“Objection Notice”
has the meaning set forth in Section 2.04(a).

“Original Assets” is
defined in the Recitals of this Agreement.

“Parent” is defined
in the Recitals of this Agreement.

“Partnerships” is
defined in the Recitals of this Agreement.

“Partnership Agreement”
means, with respect to a Partnership, the Amended and Restated Limited
Partnership Agreement of such Partnership.

“Partnership Units”
is defined in the Recitals of this Agreement.

“Payment Date” means
any date on which a payment is required to be made pursuant to this Agreement.

“Person” means any
individual, corporation, firm, partnership, joint venture, limited liability
company, estate, trust, business association, organization, governmental entity
or other entity.

“Pre-Exchange Transfer”
means any transfer (including upon the death of a Limited Partner) of one or
more Partnership Units (i) that occurs prior to an Exchange of such Partnership
Units, and (ii) to which Section 743(b) of the Code applies.

“Prior Entities” is
defined in the Recitals of this Agreement.

“Realized Tax Benefit”
means, for a Taxable Year, the excess, if any, of the Non-Stepped Up Tax
Liability over the actual liability for Taxes of each of the Corporate
Taxpayers or any Partnership in which such Corporate Taxpayer own an interest,
but only with respect to Taxes imposed on such Partnership and allocable to
such Corporate Taxpayer for such Taxable Year using the “with or without”
methodology. If all or a portion of the actual tax liability for Taxes for the
Taxable Year arises as a result of an audit by a Taxing Authority of any
Taxable 

 

5

Year, such
liability shall not be included in determining the Realized Tax Benefit unless
and until there has been a Determination.

“Realized Tax Detriment”
means, for a Taxable Year, the excess, if any, of the actual liability for
Taxes of each of the Corporate Taxpayers or any Partnership in which such
Corporate Taxpayer owns an interest, but only with respect to Taxes imposed on
such Partnership and allocable to such Corporate Taxpayer over the Non-Stepped
Up Tax Liability for such Taxable Year using the “with or without” methodology.
If all or a portion of the actual tax liability for Taxes for the Taxable Year
arises as a result of an audit by a Taxing Authority of any Taxable Year, such
liability shall not be included in determining the Realized Tax Detriment
unless and until there has been a Determination.

“Reconciliation Dispute”
has the meaning set forth in Section 7.09.

“Reconciliation
Procedures” shall mean those procedures set forth in Section 7.09 of this
Agreement.

“Schedule” means any
Exchange Basis Schedule, Tax Benefit Schedule and the Early Termination
Schedule.

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

“Tax Benefit Payment”
is defined in Section 3.01(b) of this Agreement.

“Tax Benefit Schedule”
is defined in Section 2.03 of this Agreement.

“Tax Return” means
any return, declaration, report or similar statement required to be filed with
respect to Taxes (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return and
declaration of estimated Tax.

“Taxable Year” means
a taxable year as defined in Section 441(b) of the Code or comparable section
of state, local or foreign tax law, as applicable, (and, therefore, for the
avoidance of doubt, may include a period of less than 12 months for which a Tax
Return is made) ending on or after the Exchange Date in which there is a Basis
Adjustment due to an Exchange.

“Taxes” means any and
all U.S. federal, state, local and foreign taxes, assessments or similar
charges measured with respect to net income or profits and any interest related
to such Tax.

“Taxing Authority”
shall mean any domestic, foreign, federal, national, state, county or municipal
or other local government, any subdivision, agency, commission or authority
thereof, or any quasi-governmental body exercising any taxing authority or any
other authority exercising Tax regulatory authority.

 

6

“Treasury Regulations”
means the final, temporary and proposed regulations under the Code promulgated
from time to time (including corresponding provisions and succeeding
provisions) as in effect for the relevant taxable period.

“Valuation Assumptions”
shall mean, as of an Early Termination Date, the assumptions that (1) in each
Taxable Year ending on or after such Early Termination Date, each of the
Corporate Taxpayers will have taxable income sufficient to fully utilize the
deductions arising from the basis Adjustment and the Imputed Interest during
such Taxable Year, (2) the federal income tax rates and state, local and
foreign income tax rates that will be in effect for each such Taxable Year will
be those specified for each such Taxable Year by the Code and other law as in
effect on the Early Termination Date, (3) any loss carryovers or carryback
generated by the Basis Adjustment or the Imputed Interest and available as of
the date of the Early Termination Schedule will be utilized by each of the
Corporate Taxpayers on a pro rata basis from the date of the Early Termination
Schedule through the scheduled expiration date of such loss carryovers or
carrybacks, (4) any non-amortizable assets are deemed to be disposed of (A)
with respect to private equity fund related assets, pro-rata over the number of
years remaining under the original fund agreement until expected liquidation
(without extensions) of the applicable fund (or, if such expected liquidation
date has passed, on the Early Termination Date) and (B) with respect to all
other assets, on the fifteenth anniversary of the earlier of the Basis
Adjustment and the Early Termination Date and (5) if an Early Termination is
effected prior to an Exchange of Partnership Units, clause (i) of Section 2.01
shall be read to include the Market Value of the Common Units and cash that
would be transferred if the Exchange occurred on the Early Termination Date.

ARTICLE II

DETERMINATION OF REALIZED TAX BENEFIT

Section
2.01.   Basis Adjustment. 
Each of the Corporate Taxpayers and the Partnerships, on the one hand,
and the applicable Limited Partner, on the other hand, acknowledge that, as a
result of an Exchange, each of the Corporate Taxpayer’s basis in the applicable
Original Assets shall be increased by the excess, if any, of (i) the sum of (x)
the Market Value of the Common Units, cash or other consideration transferred
to the applicable Limited Partner pursuant to the Exchange as payment for the
exchanged Partnership Units, plus (y) the amount of payments made pursuant to
this Agreement with respect to such Exchange plus (z) the amount of debt
allocated to the Partnership Units acquired pursuant to such Exchange over (ii)
each of the Corporate Taxpayer’s share of the basis of the Original Assets
immediately after the Exchange attributable to the Partnership Units exchanged,
determined as if (x) each Partnership remains in existence as an entity for tax
purposes, and (y) no Partnership made the election provided by Section 754 of
the Code. For the avoidance of doubt, payments made under this Agreement shall
not be treated as resulting in a Basis Adjustment to the extent such payments
are treated as Imputed Interest.

Section 2.02.   Exchange Basis Schedule.  Within 90 calendar days after the filing of
the U.S. federal income tax return of each of the Corporate Taxpayers for each
Taxable Year in which any Exchange has been effected, each of the Corporate
Taxpayers shall deliver to the applicable Limited Partner a schedule (the “Exchange
Basis Schedule”) that shows for purposes 

 

7

of Taxes, (i)
the actual unadjusted tax basis of the Original Assets as of each applicable
Exchange Date, (ii) the Basis Adjustment with respect to the Original Assets as
a result of the Exchanges effected in such Taxable Year, calculated in the
aggregate, (iii) the period or periods, if any, over which the Original Assets
are amortizable and/or depreciable and (iv) the period or periods, if any, over
which each Basis Adjustment is amortizable and/or depreciable (which, for
non-amortizable assets shall be based on the Valuation Assumptions).

Section 2.03.   Tax Benefit Schedule.  Within 90 calendar days after the filing of
the U.S. federal income tax return of each the of Corporate Taxpayers for any
Taxable Year in which there is a Realized Tax Benefit or Realized Tax
Detriment, each of the Corporate Taxpayers shall provide to the applicable
Limited Partner a schedule showing the calculation of the Realized Tax Benefit
or Realized Tax Detriment for such Taxable Year (a “Tax Benefit Schedule”).
The Schedule will become final as provided in Section 2.04(a) and may be
amended as provided in Section 2.04(b) (subject to the procedures set forth in
Section 2.04(b)).

Section 2.04.   Procedures, Amendments.

(a)           Procedure.
Every time each of the Corporate Taxpayers delivers to the applicable Limited
Partner an applicable Schedule under this Agreement, including any Amended
Schedule delivered pursuant to Section 2.04(b), but excluding any Early
Termination Schedule or amended Early Termination Schedule, each of the
Corporate Taxpayers shall also (x) deliver to the applicable Limited Partner
schedules and work papers providing reasonable detail regarding the preparation
of the Schedule and (y) allow the applicable Limited Partner reasonable access
at no cost to the appropriate representatives at each of the Corporate
Taxpayers in connection with a review of such Schedule. The applicable Schedule
shall become final and binding on all parties unless the applicable Limited
Partner Group Member, within 30 calendar days after receiving an Exchange Basis
Schedule or amendment thereto or 30 calendar days after receiving a Tax Benefit
Schedule or amendment thereto, provides such Corporate Taxpayer with notice of
a material objection to such Schedule (“Objection Notice”) made in good
faith; provided, for the sake of clarity, only Limited Partner Group Members
shall have the right to object to any Schedule or Amended Schedule pursuant to
this Section 2.04. If the parties, for any reason, are unable to successfully
resolve the issues raised in such notice within 30 calendar days of receipt by
such Corporate Taxpayer of an Objection Notice, if with respect to an Exchange
Basis Schedule, or 30 calendar days of receipt by such Corporate Taxpayer of an
Objection Notice, if with respect to a Tax Benefit Schedule, after such
Schedule was delivered to the applicable Limited Partner, such Corporate
Taxpayer and the applicable Limited Partner shall employ the reconciliation
procedures as described in Section 7.09 of this Agreement (the “Reconciliation
Procedures”).

(b)           Amended Schedule.
The applicable Schedule for any Taxable Year may be amended from time to time
by each of the Corporate Taxpayers (i) in connection with a Determination
affecting such Schedule, (ii) to correct material inaccuracies in the Schedule
identified as a result of the receipt of additional factual information
relating to a Taxable Year after the date the Schedule was provided to the
applicable Limited Partner, (iii) to comply with the Expert’s determination
under the Reconciliation Procedures, (iv) to reflect a material change in the
Realized Tax Benefit or Realized Tax Detriment for such Taxable Year
attributable to a carryback or carryforward of a loss or other tax item to such
Taxable Year, (v) to reflect a 

 

 

8

material change in the Realized Tax Benefit or Realized Tax Detriment
for such Taxable Year attributable to an amended Tax Return filed for such
Taxable Year, or (vi) to adjust the Exchange Basis Schedule to take into
account payments made pursuant to this Agreement (such Schedule, an “Amended
Schedule”).

ARTICLE III

TAX BENEFIT PAYMENTS

Section
3.01.   Payments.

(a)           Payments.
Within five (5) calendar days of a Tax Benefit Schedule delivered to an
applicable Limited Partner becoming final in accordance with Section 2.04(a),
each of the Corporate Taxpayers shall pay to the applicable Limited Partner for
such Taxable Year the Tax Benefit Payment determined pursuant to Section
3.01(b). Each such Tax Benefit Payment shall be made by wire transfer of
immediately available funds to a bank account of the applicable Limited Partner
previously designated by such Limited Partner to each of the Corporate
Taxpayers or as otherwise agreed by the Corporate Taxpayer and the applicable
Limited Partner. For the avoidance of doubt, no Tax Benefit Payment shall be
made in respect of estimated tax payments, including, without limitation,
federal income tax payments.

(b)           A “Tax Benefit
Payment” means an amount, not less than zero, equal to 85% of the sum of
the Net Tax Benefit and the Interest Amount. The “Net Tax Benefit” shall equal:
(1) the Corporate Taxpayers’ Realized Tax Benefit, if any, for a Taxable Year
plus (2) the amount of the excess Realized Tax Benefit reflected on an Amended
Tax Benefit Schedule for a previous Taxable Year over the Realized Tax Benefit
(or Realized Tax Detriment (expressed as a negative number)) reflected on the
Tax Benefit Schedule for such previous Taxable Year, minus (3) an amount equal
to each of the Corporate Taxpayer’s Realized Tax Detriment (if any) for the
current or any previous Taxable Year, minus (4) the amount of the excess
Realized Tax Benefit reflected on a Tax Benefit Schedule for a previous Taxable
Year over the Realized Tax Benefit (or Realized Tax Detriment (expressed as a
negative number)) reflected on the Amended Tax Benefit Schedule for such previous
Taxable Year; provided, however, that to the extent of the
amounts described in 3.01(b)(2), (3) and (4) were taken into account in
determining any Tax Benefit Payment in a preceding Taxable Year, such amounts
shall not be taken into account in determining a Tax Benefit Payment
attributable to any other Taxable Year; provided, further, for
the avoidance of doubt, no applicable Limited Partner shall be required to
return any portion of any previously made Tax Benefit Payment. The “Interest
Amount” shall equal the interest on the Net Tax Benefit calculated at the
Agreed Rate from the due date (without extensions) for filing the Corporate
Taxpayer Return with respect to Taxes for such Taxable Year until the Payment
Date. Notwithstanding the foregoing, for each Taxable Year ending on or after
the date of a Change of Control, all Tax Benefit Payments, whether paid with
respect to Partnership Units that were exchanged (i) prior to the date of such
Change of Control or (ii) on or after the date of such Change of Control, shall
be calculated by utilizing Valuation Assumptions (1), (3), and (4),
substituting in each case the terms “the closing date of a Change of Control”
for an “Early Termination Date”.

 

 

9

Section 3.02.   No Duplicative Payments.
It is intended that the above provisions of this Agreement will not result in
duplicative payment of any amount (including interest) required under this
Agreement. It is also intended that the provisions of this Agreement provide
that 85% of each of the Corporate Taxpayer’s Realized Tax Benefit and Interest
Amount is paid to the Limited Partners pursuant to this Agreement. The
provisions of this Agreement shall be construed in the appropriate manner as
such intentions are realized.

Section 3.03.   Pro Rata Payments.
For the avoidance of doubt, to the extent each of the Corporate Taxpayer’s
deduction with respect to the Basis Adjustment is limited in a particular
Taxable Year or such Corporate Taxpayer lacks sufficient funds to satisfy its
obligations to make all Tax Benefit Payments due in a particular taxable year,
the limitation on the deduction, or the Tax Benefit Payments that may be made,
as the case may be, shall be taken into account or made for each applicable
Limited Partner on a pro rata basis relative to the total amount of deductions
with respect to the aggregate Basis Adjustments for all of the applicable
Limited Partners.

ARTICLE IV

TERMINATION

Section
4.01.   Early Termination and Breach of Agreement.

(a)           Each of Corporate
Taxpayers may terminate this Agreement with respect to all of the Partnership
Units held (or previously held and exchanged) by all Limited Partners at any
time by paying to all of the applicable Limited Partners the Early Termination
Payment; provided, however, that this Agreement shall only terminate upon the
receipt of the Early Termination Payment by all Limited Partners, and provided,
further, that each of the Corporate Taxpayers may withdraw any notice to
execute its termination rights under this Section 4.01(a) prior to the time at
which any Early Termination Payment has been paid. Upon payment of the Early
Termination Payments by a Corporate Taxpayer, neither the applicable Limited
Partners nor the Corporate Taxpayer shall have any further payment obligations
under this Agreement in respect of such Limited Partners, other than for any
(a) Tax Benefit Payment agreed to by such Corporate Taxpayer and the applicable
Limited Partner as due and payable but unpaid as of the Early Termination Notice
and (b) Tax Benefit Payment due for the Taxable Year ending with or including
the date of the Early Termination Notice (except to the extent that the amount
described in clause (b) is included in the Early Termination Payment). If an
Exchange occurs after such Corporate Taxpayer exercises its termination rights
under this Section 4.01(a), such Corporate Taxpayer shall have no obligations
under this Agreement with respect to such Exchange.

(b)           In the event that a
Corporate Taxpayer breaches any of its material obligations under this
Agreement, whether as a result of failure to make any payment when due, failure
to honor any other material obligation required hereunder or by operation of
law as a result of the rejection of this Agreement in a case commenced under
the Bankruptcy Code or otherwise, then all obligations hereunder shall be
accelerated and such obligations shall be calculated as if an Early Termination
Notice had been delivered on the date of such breach and shall include, but not
be limited to, (1) the Early Termination Payment calculated as if an Early 

 

 

10

Termination
Notice had been delivered on the date of a breach, (2) any Tax Benefit Payment
agreed to by such Corporate Taxpayer and any Limited Partners as due and
payable but unpaid as of the date of a breach, and (3) any Tax Benefit Payment
due for the Taxable Year ending with or including the date of a breach.
Notwithstanding the foregoing, in the event that a Corporate Taxpayer breaches
this Agreement, the Limited Partners shall be entitled to elect to receive the
amounts set forth in (1), (2) and (3), above or to seek specific performance of
the terms hereof. The parties agree that the failure to make any payment due
pursuant to this Agreement within three months of the date such payment is due
shall be deemed to be a breach of a material obligation under this Agreement
for all purposes of this Agreement, and that it will not be considered to be a
breach of a material obligation under this Agreement to make a payment due
pursuant to this Agreement within three months of the date such payment is due.

(c)           The undersigned
parties agree that the aggregate value of the Tax Benefit Payments cannot be
ascertained with any reasonable certainty for U.S. federal income tax purposes.

Section 4.02.   Early Termination Notice.
If a Corporate Taxpayer chooses to exercise its right of early termination
under Section 4.01 above, such Corporate Taxpayer shall deliver to the
applicable Limited Partner notice of such intention to exercise such right (“Early
Termination Notice”) and a schedule (the “Early Termination Schedule”)
specifying such Corporate Taxpayer’s intention to exercise such right and
showing in reasonable detail the calculation of the Early Termination Payment.
The applicable Early Termination Schedule shall become final and binding on all
parties unless the applicable Limited Partner Group Member, within 30 calendar
days after receiving the Early Termination Schedule thereto provides such
Corporate Taxpayer with notice of a material objection to such Schedule made in
good faith (“Material Objection Notice”); provided, for the sake of
clarity, only Limited Partner Group Members shall have the right to object to
any Schedule or Amended Schedule pursuant to this Section 4.02. If the parties,
for any reason, are unable to successfully resolve the issues raised in such
notice within 30 calendar days after receipt by such Corporate Taxpayer of the
Material Objection Notice, such Corporate Taxpayer and the applicable Limited
Partner Group Member shall employ the Reconciliation Procedures as described in
Section 7.09 of this Agreement.

Section 4.03.   Payment upon Early
Termination. (a) Within three calendar days after agreement between the
applicable Limited Partner and a Corporate Taxpayer of the Early Termination
Schedule, such Corporate Taxpayer shall pay to the applicable Limited Partner
an amount equal to the Early Termination Payment. Such payment shall be made by
wire transfer of immediately available funds to a bank account designated by
the applicable Limited Partner or as otherwise agreed by the Corporate Taxpayer
and the applicable Limited Partner.

(b)           The “Early
Termination Payment” as of the date of the delivery of an Early Termination
Schedule shall equal with respect to the applicable Limited Partner the present
value, discounted at the Early Termination Rate as of such date, of all Tax
Benefit Payments that would be required to be paid by a Corporate Taxpayer to
the applicable Limited Partner beginning from the Early Termination Date
assuming the Valuation Assumptions are applied.

 

11

 

ARTICLE V

SUBORDINATION AND LATE PAYMENTS

Section 5.01.   Subordination. 
Notwithstanding any other provision of this Agreement to the contrary,
any Tax Benefit Payment or Early Termination Payment required to be made by the
Corporation to the applicable Partner under this Agreement (an “Exchange
Payment”) shall rank subordinate and junior in right of payment to any principal,
interest or other amounts due and payable in respect of any obligations in
respect of indebtedness for borrowed money of the Corporation and its
Subsidiaries (“Senior Obligations”) and shall rank pari passu with all current
or future unsecured obligations of the Corporation that are not Senior
Obligations.

Section 5.02.   Late Payments by the
Corporate Taxpayers. The amount of all or any portion of any Tax Benefit
Payment not made to the applicable Limited Partner when due under the terms of
this Agreement shall be payable together with any interest thereon, computed at
the Default Rate and commencing from the date on which such Exchange Payment
was due and payable.

ARTICLE VI

NO DISPUTES; CONSISTENCY; COOPERATION

Section
6.01.   Limited Partner Group Member Participation in the
Corporate Taxpayers’ and Partnerships’ Tax Matters. Except as otherwise
provided herein, each of the Corporate Taxpayers shall have full responsibility
for, and sole discretion over, all Tax matters concerning each of the Corporate
Taxpayers and the Partnerships, including without limitation the preparation,
filing or amending of any Tax Return and defending, contesting or settling any
issue pertaining to Taxes. Notwithstanding the foregoing, each of the Corporate
Taxpayers shall notify the applicable Limited Partner Group Member of, and keep
the applicable Limited Partner Group Member reasonably informed with respect to
the portion of any audit of such Corporate Taxpayer and the Partnerships by a
Taxing Authority the outcome of which is reasonably expected to affect the
applicable Limited Partner Group Member’s rights and obligations under this
Agreement, and shall provide to the applicable Limited Partner Group Member
reasonable opportunity to provide information and other input to such Corporate
Taxpayer, the Partnerships and their respective advisors concerning the conduct
of any such portion of such audit; provided, however, that each
of the Corporate Taxpayers and the Partnerships shall not be required to take
any action that is inconsistent with any provision of any of the Partnership
Agreements.

Section 6.02.   Consistency. Each of
the Corporate Taxpayers and the applicable Limited Partner agree to report and
cause to be reported for all purposes, including federal, state, local and
foreign Tax purposes and financial reporting purposes, all Tax-related items
(including without limitation the Basis Adjustment and each Tax Benefit
Payment) in a manner consistent with that specified by each of the Corporate
Taxpayers in any Schedule required to be provided by or on behalf of such
Corporate Taxpayer under this Agreement.

 

12

Section 6.03.   Cooperation. The
applicable Limited Partner shall (a) furnish to each of the Corporate Taxpayers
in a timely manner such information, documents and other materials as each of
the Corporate Taxpayers may reasonably request for purposes of making any
determination or computation necessary or appropriate under this Agreement,
preparing any Tax Return or contesting or defending any audit, examination or
controversy with any Taxing Authority, (b) make itself available to each of the
Corporate Taxpayers and its representatives to provide explanations of
documents and materials and such other information as each of the Corporate
Taxpayers or its representatives may reasonably request in connection with any
of the matters described in clause (a) above, and (c) reasonably cooperate in
connection with any such matter, and each of the Corporate Taxpayers shall
reimburse the applicable Limited Partner for any reasonable third-party costs
and expenses incurred pursuant to this Section.

ARTICLE VII

MISCELLANEOUS

Section
7.01.   Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed duly
given and received (a) on the date of delivery if delivered personally, or by
facsimile upon confirmation of transmission by the sender’s fax machine if sent
on a Business Day (or otherwise on the next Business Day) or (b) on the first
Business Day following the date of dispatch if delivered by a recognized
next-day courier service. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated in writing by
the party to receive such notice:

If to Blackstone Holdings I GP or Blackstone Holdings
II GP, to:

c/o The
Blackstone Group L.P.

345 Park Avenue

New York, NY 10154

(T) (212) 583-5000

Attention: Chief Legal Officer

 

with a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

(T) (212) 455-2000

(F) (212) 735-2502

Attention: Joshua Ford Bonnie, Esq.

If to the applicable Limited Partner, to:

The address and facsimile
number set forth in the records of the Partnerships.

Any party may change its
address or fax number by giving the other party written notice of its new
address or fax number in the manner set forth above.

 

13

Section 7.02.   Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

Section 7.03.   Entire Agreement; No
Third Party Beneficiaries. This Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof. This Agreement
shall be binding upon and inure solely to the benefit of each party hereto and
their respective successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

Section 7.04.   Governing Law. This
Agreement shall be governed by, and construed in accordance with, the law of
the State of New York.

Section 7.05.   Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any law or public policy, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such 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 an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

Section 7.06.   Successors; Assignment; Amendments;
Waivers.

(a)           No Limited Partner
may assign this Agreement to any person without the prior written consent of
each of the Corporate Taxpayers; provided, however, (i) that, to the extent
Partnership Units are effectively transferred in accordance with the terms of
the Partnership Agreements and any other agreements the Limited Partners may
have entered into with the Parent, each of the Corporate Taxpayers and/or any
of the other Blackstone Holdings General Partners or Blackstone Holdings
Partnerships, the transferring Limited Partner shall assign to the transferee
of such Partnership Units the transferring Limited Partner’s rights under this
Agreement with respect to such transferred Partnership Units, as long as such
transferee has executed and delivered, or, in connection with such transfer,
executes and delivers, a joinder to this Agreement, in form and substance
reasonably satisfactory to each of the Corporate Taxpayers, agreeing to become
a “Limited Partner” for all purposes of this Agreement, except as otherwise
provided in such joinder, and (ii) that, once an Exchange has occurred, any and
all payments that may become payable to a Limited Partner pursuant to this
Agreement with respect to such Exchange may be assigned to any Person or
Persons, as long as any such Person has executed and delivered, or, in
connection with such assignment, executes and delivers, a joinder to this
Agreement, in form and substance reasonably satisfactory to each of the
Corporate Taxpayers, agreeing to be bound by Section 7.12 and acknowledging
specifically the last 

 

14

sentence of the
next paragraph. For the avoidance of doubt: (A) to the extent a Limited Partner
Group Member or other Person transfers Partnership Units to a Limited Partner
Group Member pursuant to the relevant Partnership Agreements, the Limited
Partner Group Member receiving such Partnership Units shall have all rights
under this Agreement with respect to such transferred Partnership Units as such
Limited Partner Group Members has, under this Agreement, with respect to the
other Partnership Units held by him; and (B) the requirement to execute and
deliver a joinder pursuant to this Section 7.06(a) shall not be construed as
requiring such execution and delivery prior to an assignment becoming
effective.

(b)           Notwithstanding the
provisions of Section 7.06(a), no transferee described in clause (i) of Section
7.06(a) shall have the right to enforce the provisions of Section 2.04, 4.02,
6.01 or 6.02 of this Agreement, and no assignee described in clause (ii) of
Section 7.06(a) shall have any rights under this Agreement except for the right
to enforce its right to receive payments under this Agreement.

(c)           No provision of this
Agreement may be amended unless such amendment is approved in writing by each
of the Corporate Taxpayers, on behalf of themselves and the respective
Partnerships they Control, and by Limited Partner Group Members who would be
entitled to receive at least two-thirds of the Early Termination Payments
payable to all Limited Partner Group Members hereunder if each of the Corporate
Taxpayers had exercised its right of early termination on the date of the most
recent Exchange prior to such amendment (excluding, for purposes of this
sentence, all payments made to any Limited Partner Group Member pursuant to
this Agreement since the date of such most recent Exchange); provided, that no
such amendment shall be effective if such amendment will have a
disproportionate effect on the payments certain Limited Partners will or may
receive under this Agreement unless all such Limited Partners
disproportionately effected consent in writing to such amendment. No provision
of this Agreement may be waived unless such waiver is in writing and signed by
the party against whom the waiver is to be effective.

(d)           All of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the parties hereto and their respective
successors, assigns, heirs, executors, administrators and legal
representatives. Each of the Corporate Taxpayers shall require and cause any
direct or indirect successor (whether by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of such Corporate
Taxpayer, by written agreement, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that such Corporate
Taxpayer would be required to perform if no such succession had taken place.
Notwithstanding anything to the contrary herein, in the event an Limited
Partner Group Member transfers his Partnership Units to a Permitted Transferee
(as defined in each Partnership Agreement), excluding any other Limited Partner
Group Member, such Limited Partner Group Member shall have the right, on behalf
of such transferee, to enforce the provisions of Sections 2.04, 4.02 or 6.01
with respect to such transferred Partnership Units.

Section 7.07.   Titles and Subtitles.
The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.

 

15

Section 7.08.   Resolution of Disputes.

(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), each of the Corporate Taxpayers may bring 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 Limited Partner (i) expressly
consents to the application of paragraph (c) of this Section 7.08 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 each of the Corporate Taxpayers as such Limited Partner’s
agent 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 Limited Partner of any such service of process, shall be deemed in every
respect effective service of process upon the Limited Partner in any such
action or proceeding.

(c)           (i) EACH LIMITED
PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW
YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE
WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 7.08, 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
paragraph (c) (i) of this Section 7.08 and such parties agree not to plead or
claim the same.

Section 7.09.   Reconciliation. In
the event that a Corporate Taxpayer and the applicable Limited Partner Group
Member are unable to resolve a disagreement with respect to 

 

16

the matters
governed by Sections 2.04, 4.02 and 6.02 within the relevant period designated
in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute
shall be submitted for determination to a nationally recognized expert (the “Expert”)
in the particular area of disagreement mutually acceptable to both parties. The
Expert shall be a partner in a nationally recognized accounting firm or a law
firm, and the Expert shall not, and the firm that employs the Expert shall not,
have any material relationship with such Corporate Taxpayer or the applicable
Limited Partner Group Member or other actual or potential conflict of interest.
If the parties are unable to agree on an Expert within fifteen (15) days of
receipt by the respondent(s) of written notice of a Reconciliation Dispute, the
Expert shall be appointed by the International Chamber of Commerce Centre for
Expertise. The Expert shall resolve any matter relating to the Exchange Basis
Schedule or an amendment thereto or the Early Termination Schedule or an
amendment thereto within 30 calendar days and shall resolve any matter relating
to a Tax Benefit Schedule or an amendment thereto within 15 calendar days or as
soon thereafter as is reasonably practicable, in each case after the matter has
been submitted to the Expert for resolution. Notwithstanding the preceding
sentence, if the matter is not resolved before any payment that is the subject
of a disagreement is due or any Tax Return reflecting the subject of a
disagreement is due, such payment shall be made on the date prescribed by this
Agreement and such Tax Return may be filed as prepared by such Corporate
Taxpayer, subject to adjustment or amendment upon resolution. The costs and
expenses relating to the engagement of such Expert or amending any Tax Return
shall be borne by the Corporate Taxpayer; except as provided in the next
sentence. Each of the Corporate Taxpayers and each applicable Limited Partner
Group Member shall bear their own costs and expenses of such proceeding, unless
the Limited Partner Group Member has a prevailing position that is more than
10% of the payment at issue, in which case the Corporate Taxpayer shall
reimburse such Limited Partner Group Member for any reasonable out-of-pocket
costs and expenses in such proceeding. Any dispute as to whether a dispute is a
Reconciliation Dispute within the meaning of this Section 7.09 shall be decided
by the Expert. The Expert shall finally determine any Reconciliation Dispute
and the determinations of the Expert pursuant to this Section 7.09 shall be
binding on the Corporate Taxpayer and the applicable Limited Partner Group
Member and may be entered and enforced in any court having jurisdiction.

Section 7.10.   Withholding. Each of
the Corporate Taxpayers shall be entitled to deduct and withhold from any
payment payable pursuant to this Agreement such amounts as such Corporate
Taxpayer is required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld and paid over to the appropriate Taxing
Authority by the Corporate Taxpayer, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the applicable Limited
Partner.

Section 7.11.   Affiliated Corporations
of Other Blackstone Holdings General Partners; Admission of the Corporate
Taxpayers into a Consolidated Group; Transfers of Corporate Assets.

(a)           The other Blackstone
Holdings General Partners shall provide that all provisions of this Agreement
shall correspondingly apply, including the payment of Tax Benefit Payments by
any corporation owned directly or indirectly in whole or in part, now or in the
future, by other Blackstone Holdings General Partners, with respect to any
Realized Tax Benefit with respect to limited partner interests in other
Blackstone Holdings Partnerships, that are part 

 

17

of the Exchange
and in which such corporation owns an interest, under the same terms and
conditions as set forth in this Agreement, and the other Blackstone Holdings
General Partners shall cause such corporation to execute and deliver a joinder
to this Agreement to such effect.  If
either (i) the Parent or any other Blackstone Holdings General Partner elects
to be treated as a corporation for tax purposes, or (ii) the Parent holds any
other Blackstone Holdings General Partner directly or indirectly through an
entity that is treated as a corporation for tax purposes, then the provisions
of this Agreement shall apply (w) to such other Blackstone Holdings General
Partner in the same manner as it applies to the Corporate Taxpayers and (x) to
each partnership, limited partnership and limited liability company Controlled
by any other Blackstone Holdings General Partner as if each such entity were a
Partnership; provided that, if any Partnership Units or limited partner
interests in other Blackstone Holdings Partnerships were Exchanged prior to an
event described in clause (i) or (ii) above, then (y) such Exchange shall be
treated for purposes of this Agreement as having occurred immediately after
such event at the Fair Market Value in existence at the time of such prior
Exchange, and (z) the entity that is to be treated in the same manner as the
Corporate Taxpayers shall be required to make the same Tax Benefit Payments
pursuant to the terms of this Agreement that it would have been required to
make had it been treated in the same manner as the Corporate Taxpayers on the
date of such Exchange; provided, however, that such Tax Benefit
Payments shall be payable only with respect to (I) Original Assets that are
still owned at the time of the event described in clause (i) or (ii) above, and
(II) taxable years of such entity ending on or after the date of the event
described in clause (i) or (ii) above. 
The parties agree that the terms of this Agreement will be applied to
any corporation under this Section 7.11 only if the aggregate Tax Benefit
Payments payable with respect to such corporation are reasonably expected to be
more than $10 million.

(b)           If a Corporate
Taxpayer becomes a member of an affiliated or consolidated group of
corporations that files a consolidated income tax return pursuant to Sections
1501 et seq. of the Code or any corresponding provisions of state, local or
foreign law, then: (i) the provisions of this Agreement shall be applied with
respect to the group as a whole; and (ii) Tax Benefit Payments shall be
computed with reference to the consolidated taxable income of the group as a
whole.

(c)           Notwithstanding any
other provision of this Agreement, if Parent acquires one or more assets that,
as of an Exchange Date, have not been contributed to the Corporate Taxpayers
(other than Parent’s interests in the other Blackstone Holdings General
Partners) (such assets, “Excluded Assets”), then all Tax Benefit
Payments due hereunder shall be computed as if such assets had been contributed
to the Corporate Taxpayers on a pro rata basis on the date such assets were
first acquired by Parent; provided, however, that if an Excluded
Asset consists of stock in a corporation, then, for purposes of this Section
7.11(c), (i) such corporation (and any corporation Controlled by such
corporation) shall be deemed to have contributed its assets to the Corporate
Taxpayer in a transaction described in Section 351 of the Code, and (ii) such
Corporate Taxpayer shall be deemed to have contributed all such assets to the
Partnerships, in each case on the date on which the Parent acquired stock of
such corporation.

(d)           If any entity that
is obligated to make an Exchange Payment hereunder transfers one or more assets
to a corporation with which such entity does not file a consolidated tax return
pursuant to Section 1501 of the Code, such entity, for purposes of calculating
the amount of any Exchange Payment (e.g., calculating the gross income of the
entity and 

 

18

determining the
Realized Tax Benefit of such entity) due hereunder, shall be treated as having
disposed of such asset in a fully taxable transaction on the date of such
contribution. The consideration deemed to be received by such entity shall be
equal to the Fair Market Value of the contributed asset, plus (i) the amount of
debt to which such asset is subject, in the case of a contribution of an
encumbered asset or (ii) the amount of debt allocated to such asset, in the
case of a contribution of a partner interest.

Section 7.12.   Confidentiality. Each
Limited Partner and assignee acknowledges and agrees that the information of
each of the Corporate Taxpayers is confidential and, except in the course of
performing any duties as necessary for each of the Corporate Taxpayers and its
Affiliates, as required by law or legal process or to enforce the terms of this
Agreement, shall keep and retain in the strictest confidence and not to
disclose to any Person all confidential matters, acquired pursuant to this
Agreement, of each of the Corporate Taxpayers or any Person included within the
Parent and their respective Affiliates and successors and the other Limited
Partners, including, without limitation, the identity of the beneficial holders
of interests in any fund or account managed by the Parent or any of its
Subsidiaries, confidential information concerning the Parent, any Person
included within the Parent and their respective Affiliates and successors, the
other Limited Partners and any fund, account or investment managed by any
Person included within the Parent, including marketing, investment, performance
data, fund management, credit and financial information, and other business
affairs of each of the Corporate Taxpayers, any Person included within the
Parent and their respective Affiliates and successors, the other Limited
Partners and any fund, account or investment managed directly or indirectly by
any Person included within each of the Corporate Taxpayers learned by the
Limited Partner heretofore or hereafter. This clause 7.12 shall not apply to
(i) any information that has been made publicly available by each of the
Corporate Taxpayers or any of its Affiliates, becomes public knowledge (except
as a result of an act of such Limited Partner in violation of this Agreement)
or is generally known to the business community and (ii) the disclosure of
information to the extent necessary for a Limited Partner to prepare and file
his or her tax returns, to respond to any inquiries regarding the same from any
taxing authority or to prosecute or defend any action, proceeding or audit by
any taxing authority with respect to such returns. Notwithstanding anything to
the contrary herein, each Limited Partner (and each employee, representative or
other agent of such Limited Partner) may disclose to any and all Persons,
without limitation of any kind, the tax treatment and tax structure of (x) each
of the Corporate Taxpayers and (y) any of its transactions, and all materials
of any kind (including opinions or other tax analyses) that are provided to the
Limited Partners relating to such tax treatment and tax structure.

If a Limited Partner or
assignee commits a breach, or threatens to commit a breach, of any of the
provisions of this Section 7.12, each of the Corporate Taxpayers shall have the
right and remedy to have the provisions of this Section 7.12 specifically
enforced by injunctive relief or otherwise by any court of competent
jurisdiction without the need to post any bond or other security, it being
acknowledged and agreed that any such breach or threatened breach shall cause
irreparable injury to each of the Corporate Taxpayers or any of its
Subsidiaries or the other Limited Partners and the accounts and funds managed
by each of the Corporate Taxpayers and that money damages alone shall not
provide an adequate remedy to such Persons. Such rights and remedies shall be
in addition to, and not in lieu of, any other rights and remedies available at
law or in equity.

 

19

Section 7.13.   Partnership Agreement.
This Agreement shall be treated as part of the partnership agreement of each Partnership
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.

Section 7.14.   Partnerships. Each of
the Corporate Taxpayers hereby agrees that, to the extent it acquires a general
partner interest, managing member interest or similar interest in any Person
after the date hereof, it shall cause such Person to execute and deliver a
joinder to this Agreement and become a “Partnership” for all purposes of this
Agreement.

Section 7.15.   Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

[Signatures on following
pages]

 

20

IN WITNESS WHEREOF, each of
the Corporate Taxpayers and each Limited Partner have duly executed this
Agreement as of the date first written above.

 

	
   

  	
  BLACKSTONE HOLDINGS I GP INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BLACKSTONE HOLDINGS II GP INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BLACKSTONE HOLDINGS I L.P.

  
	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BLACKSTONE HOLDINGS II L.P.

  
	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

21

 

 

	
   

  	
  LIMITED PARTNERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  

 

 

Signature Page to Tax
Receivable Agreement 

 

22Exhibit 10.8

 

 

 

FORM OF

 

REGISTRATION
RIGHTS AGREEMENT

 

 

OF

 

 

THE BLACKSTONE GROUP L.P.

 

 

 

Dated as of
                      ,
2007

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
  DEFINITIONS AND OTHER MATTERS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Definitions Generally

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
  REGISTRATION RIGHTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Exchange Registration

  	
   

  	
  4

  
	
  Section 2.2

  	
   

  	
  Demand Registration

  	
   

  	
  5

  
	
  Section 2.3

  	
   

  	
  Piggyback Registration

  	
   

  	
  6

  
	
  Section 2.4

  	
   

  	
  Lock-Up Agreements

  	
   

  	
  8

  
	
  Section 2.5

  	
   

  	
  Registration Procedures

  	
   

  	
  8

  
	
  Section 2.6

  	
   

  	
  Indemnification by the Partnership

  	
   

  	
  11

  
	
  Section 2.7

  	
   

  	
  Indemnification by Registering Covered
  Persons

  	
   

  	
  12

  
	
  Section 2.8

  	
   

  	
  Conduct of Indemnification Proceedings

  	
   

  	
  12

  
	
  Section 2.9

  	
   

  	
  Contribution

  	
   

  	
  12

  
	
  Section 2.10

  	
   

  	
  Participation in Public Offering

  	
   

  	
  13

  
	
  Section 2.11

  	
   

  	
  Other Indemnification

  	
   

  	
  13

  
	
  Section 2.12

  	
   

  	
  Cooperation by the Partnership

  	
   

  	
  13

  
	
  Section 2.13

  	
   

  	
  Parties in Interest

  	
   

  	
  13

  
	
  Section 2.15

  	
   

  	
  Acknowledgement Regarding the Partnership

  	
   

  	
  14

  
	
  Section 2.16

  	
   

  	
  Mergers, Recapitalizations, Exchanges or
  Other Transactions Affecting Registrable Securities

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Term of the Agreement; Termination of
  Certain Provisions

  	
   

  	
  14

  
	
  Section 3.2

  	
   

  	
  Amendments; Waiver

  	
   

  	
  14

  
	
  Section 3.3

  	
   

  	
  Governing Law

  	
   

  	
  15

  
	
  Section 3.4

  	
   

  	
  Submission to Jurisdiction; Waiver of Jury
  Trial

  	
   

  	
  15

  
	
  Section 3.5

  	
   

  	
  Notices

  	
   

  	
  16

  
	
  Section 3.6

  	
   

  	
  Severability

  	
   

  	
  17

  
	
  Section 3.7

  	
   

  	
  Specific Performance

  	
   

  	
  17

  
	
  Section 3.8

  	
   

  	
  Assignment; Successors

  	
   

  	
  17

  
	
  Section 3.9

  	
   

  	
  No Third-Party Rights

  	
   

  	
  17

  
	
  Section 3.10

  	
   

  	
  Section Headings

  	
   

  	
  18

  
	
  Section 3.11

  	
   

  	
  Execution in Counterparts

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appendix A

  	
   

  	
  Covered Persons

  	
   

  	
   

  

 

i

 

	
  Appendix B

  	
   

  	
  Covered Person Questionnaire

  	
   

  	
   

  

 

 

REGISTRATION RIGHTS
AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (including
Appendix A hereto, as such Appendix A may be amended from time to time pursuant
to the provisions hereof, this “Agreement”), is made and entered into as
of
                      ,
2007, by and among The Blackstone Group L.P., a Delaware limited partnership
(the “Partnership”), and the Covered Persons (defined below) from time
to time party hereto.

 

WHEREAS, the Covered Persons are holders of
Blackstone Holdings Partnership Units (defined below), which, subject to
certain restrictions and requirements, are exchangeable at the option of the
holder thereof for the Partnership’s common units representing limited partner
interests (the “Common Units”); and

 

WHEREAS, the Partnership desires to provide the
Covered Persons with registration rights with respect to Common Units
underlying their Blackstone Holdings Partnership Units and any other Common
Units they may otherwise hold from time to time.

 

NOW, THEREFORE, in consideration of the premises and
of the mutual agreements, covenants and provisions herein contained, the
parties hereto agree as follows: 

 

ARTICLE
I

DEFINITIONS AND OTHER MATTERS

 

Section 1.1                                      Definitions.  Capitalized terms used in this
Agreement without other definition shall, unless expressly stated otherwise,
have the meanings specified in this Section 1.1:

 

“Agreement” has the
meaning ascribed to such term in the Recitals. 

 

“Beneficial owner”
has the meaning set forth in Rule 13d-3 under the Exchange Act.

 

“Blackstone Holdings”
means, collectively, Blackstone Holdings I L.P., a Delaware limited partnership
(“Blackstone Holdings I”), Blackstone Holdings II L.P., a Delaware
limited partnership (“Blackstone Holdings II”), Blackstone Holdings III
L.P., a Delaware limited partnership (“Blackstone Holdings III”),
Blackstone Holdings IV L.P., an Alberta limited partnership (“Blackstone
Holdings IV”), and Blackstone Holdings V L.P., an Alberta limited
partnership (“Blackstone Holdings V”).

 

“Blackstone Holdings
Partnership Unit” means, collectively, one partnership unit in each of
Blackstone Holdings I, Blackstone Holdings II, Blackstone Holdings III,
Blackstone Holdings IV and Blackstone Holdings V issued under each of their
respective 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 each of them may be amended, supplemented or restated from time to time.

 

“Board” means the
Board of Directors of the General Partner.

 

“Common Units” has
the meaning ascribed to such term in the Recitals. 

 

“Covered Person”
means those persons from time to time listed on Appendix A hereto, and all
persons who may become parties to this Agreement and whose name is required to
be listed on Appendix A hereto, in each case in accordance with the terms
hereof.

 

“Covered Blackstone
Holdings Partnership Units” means, with respect to a Covered Person, such
Covered Person’s Blackstone Holdings Partnership Units.

 

“Demand Committee”
shall mean a committee consisting of the individuals that are from time to time
designated as “Founding Members” pursuant to the amended and restated limited
liability company agreement of Blackstone Group Management L.L.C., as amended
from time to time.

 

“Demand Notice” has
the meaning ascribed to such term in Section 2.2(a). 

 

“Demand Registration”
has the meaning ascribed to such term in Section 2.2(a).

 

“Exchange Act” means
the U.S. Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

“Exchange Agreement”
means the exchange agreement dated as of or about the date hereof among the
Partnership, Blackstone Holdings and the Limited Partners of Blackstone
Holdings, as amended from time to time.

 

“Exchange Registration”
has the meaning ascribed to such term in Section 2.1(a).  

 

“General Partner”
means Blackstone Group Management L.L.C., a Delaware limited liability company
and the general partner of the Partnership, and any successor general partner
thereof.

 

“Governmental Authority”
means any national, local or foreign (including U.S. federal, state or local)
or supranational (including European Union) governmental, judicial,
administrative or regulatory (including self-regulatory) agency, commission,
department, board, bureau, entity or authority of competent jurisdiction.

 

“Indemnified Parties”
has the meaning ascribed to such term in Section 2.6.

 

“NASD” means the
National Association of Securities Dealers, Inc.

 

“Partnership” has the
meaning ascribed to such term in the Recitals. 

 

2

 

“Permitted Transferee”
means any transferee of a Blackstone Holdings Partnership Unit after the date
hereof the transfer of which was permitted by the Blackstone Holdings
Partnership Agreements.

 

“Public Offering”
means an underwritten public offering pursuant to an effective registration
statement under the Securities Act, other than pursuant to a registration
statement on Form S-4 or Form S-8 or any similar or successor form.

 

“Registering Covered
Person” has the meaning ascribed to such term in Section 2.5(a).  

 

“Registrable Securities”
means Common Units that may be delivered in exchange for Blackstone Holdings
Partnership Units or otherwise held by Covered Persons from time to time. For
purposes of this Agreement, Registrable Securities shall cease to be
Registrable Securities when (i) a Registration Statement covering resales of such
Registrable Securities has been declared effective under the Securities Act by
the SEC and such Registrable Securities have been disposed of pursuant to such
effective Registration Statement, (ii) such Registrable Securities of a Covered
Person are eligible to be sold by such Covered Person pursuant to Rule 144(k)
(or any successor provision then in effect) under the Securities Act or (iii)
such Registrable Securities cease to be outstanding (or issuable upon exchange).

 

“Registration Expenses”
means any and all expenses incident to the performance of or compliance with
any registration or marketing of securities, including all (i) SEC and
securities exchange registration and filing fees, and all other fees and
expenses payable in connection with the listing of securities on any securities
exchange or automated interdealer quotation system, (ii) fees and expenses of
compliance with any securities or “blue sky” laws (including reasonable fees
and disbursements of counsel in connection with “blue sky” qualifications of
the securities registered), (iii) expenses in connection with the preparation,
printing, mailing and delivery of any registration statements, prospectuses and
other documents in connection therewith and any amendments or supplements
thereto, (iv) security engraving and printing expenses, (v) internal expenses
of the General Partner, the Partnership and Blackstone Holdings (including,
without limitation, all salaries and expenses of the officers and employees of
the General Partner, the Partnership or Blackstone Holdings performing legal or
accounting duties), (vi) reasonable fees and disbursements of counsel for the
General Partner, the Partnership or Blackstone Holdings and customary fees and
expenses for independent certified public accountants retained by the General
Partner, the Partnership or Blackstone Holdings (including the expenses
relating to any comfort letters or costs associated with the delivery by
independent certified public accountants of any comfort letters requested
pursuant to Section 2.5(i)), (vii) reasonable fees and expenses of any special
experts retained by the General Partner, the Partnership or Blackstone Holdings
in connection with such registration, (viii) reasonable fees, out-of-pocket
costs and expenses of the Covered Persons, including one counsel for all of the
Covered Persons participating in the offering selected by the Demand Committee,
(ix) fees and expenses in connection with any review by the NASD of the
underwriting arrangements or other terms of the offering, and all fees and
expenses of any “qualified independent underwriter,” including the fees and
expenses of any counsel thereto, (x) fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding any
underwriting fees, discounts and commissions attributable to the sale of Registrable
Securities, (xi) costs of printing and producing any agreements among
underwriters, underwriting agreements, any “blue sky” or legal investment
memoranda and any 

 

3

 

selling agreements and other documents in
connection with the offering, sale or delivery of the Registrable Securities,
(xii) transfer agents’ and registrars’ fees and expenses and the fees and
expenses of any other agent or trustee appointed in connection with such
offering, (xiii) expenses relating to any analyst or investor presentations or
any “road shows” undertaken in connection with the registration, marketing or
selling of the Registrable Securities, (xiv) fees and expenses payable in
connection with any ratings of the Registrable Securities, including expenses
relating to any presentations to rating agencies and (xv) all out-of-pocket
costs and expenses incurred by the General Partner, the Partnership, Blackstone
Holdings or their appropriate officers in connection with their compliance with
Section 2.5(m).

 

“SEC” means the
Securities and Exchange Commission.

 

“Securities Act”
means the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

Section 1.2                                      Definitions Generally. 
Wherever required by the context of this Agreement, the singular shall
include the plural and vice versa, and the masculine gender shall include the
feminine and neuter genders and vice versa, and references to any agreement,
document or instrument shall be deemed to refer to such agreement, document or
instrument as amended, supplemented or modified from time to time.  When used herein:

 

(a)                                  the word “or” is not exclusive;

 

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

 

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

 

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

 

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

 

ARTICLE
II

REGISTRATION RIGHTS

 

Section 2.1                                      Exchange Registration.

 

(a)                                  The Partnership shall use its commercially
reasonable efforts to cause to be declared effective under the Securities Act
by the SEC, prior to the time that Blackstone Holdings Partnership Units held
by Covered Persons become available for exchange for 

 

4

 

Common
Units pursuant to the terms of the Blackstone Holdings Partnership Agreements
and the Exchange Agreement, one or more registration statements (the “Exchange
Registration”) covering (i) the delivery by the Partnership or its
subsidiaries, from time to time, to the Covered Persons of Common Units
registered under the Securities Act in exchange for such Blackstone Holdings
Partnership Units or (ii) if the Partnership determines that the registration
provided for in clause (i) is not available for any reason, the registration of
resale of such Common Units by the Covered Persons. 

 

(b)                                 The Partnership shall be liable for and pay
all Registration Expenses in connection with any Exchange Registration,
regardless of whether such registration is effected.

 

(c)                                  Upon notice to each Covered Person
participating in any Exchange Registration, the Partnership may postpone
effecting a registration pursuant to this Section 2.1 on up to three occasions
during any period of six consecutive months for a reasonable time specified in
the notice but not exceeding 120 days in the aggregate (which period may not be
extended or renewed), if (i) the General Partner shall determine in good faith
that effecting the registration would materially and adversely affect an
offering of securities of the Partnership the preparation of which had then
been commenced or (ii) the Partnership is in possession of material non-public
information the disclosure of which during the period specified in such notice
the General Partner believes in good faith would not be in the best interests
of the Partnership. 

 

Section 2.2                                      Demand
Registration.

 

(a)                                  If at any time the Partnership shall receive
a written request (a “Demand Notice”) from the Demand Committee that the
Partnership effect the registration under the Securities Act of all or any
portion of the Registrable Securities specified in the Demand Notice (a “Demand
Registration”), specifying the information set forth under Section 2.5(j),
then the Partnership shall use its commercially reasonable efforts to effect,
as expeditiously as reasonably practicable, subject to the restrictions in
Section 2.2(d), the registration under the Securities Act of the Registrable
Securities for which the Demand Committee has requested registration under this
Section 2.2, all to the extent necessary to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered.  

 

(b)                                 At any time prior to the effective date of
the registration statement relating to such registration, the Demand Committee
may revoke such Demand Registration request by providing a notice to the
Partnership revoking such request.  The
Partnership shall be liable for and pay all Registration Expenses in connection
with any Demand Registration.

 

(c)                                  If a Demand Registration involves an
underwritten Public Offering and the managing underwriter advises the Partnership
and the Demand Committee that, in its view, the number of units of Registrable
Securities requested to be included in such registration exceeds the largest
number of units that can be sold without having a material adverse effect on
such offering, including the price at which such units can be sold (the “Maximum
Offering Size”), the Partnership shall include in such registration, in the
priority listed below, up to the Maximum Offering Size:

 

5

 

(i)                                     first, all Registrable Securities requested
to be registered in the Demand Registration by the Demand Committee (allocated,
if necessary for the offering not to exceed the Maximum Offering Size, in such
proportions as shall be determined by the Demand Committee);

 

(ii)                                  second, any securities proposed to be
registered by the Partnership or any securities proposed to be registered for
the account of any other persons, with such priorities among them as the
Partnership shall determine.

 

(d)                                 Upon notice to the Demand Committee, the
Partnership may postpone effecting a registration pursuant to this Section 2.2
on up to three occasions during any period of six consecutive months for a
reasonable time specified in the notice but not exceeding 120 days in the
aggregate (which period may not be extended or renewed), if (i) the General
Partner shall determine in good faith that effecting the registration would
materially and adversely affect an offering of securities of the Partnership
the preparation of which had then been commenced or (ii) the Partnership is in
possession of material non-public information the disclosure of which during
the period specified in such notice the General Partner believes in good faith
would not be in the best interests of the Partnership. 

 

Section 2.3                                      Piggyback
Registration.

 

(a)                                  Subject to any contractual obligations to the
contrary, if the Partnership proposes at any time to register any of the equity
securities issued by it under the Securities Act (other than a registration on
Form S-8 or Form S-4, or any successor forms, relating to Common Units issuable
in connection with any employee benefit or similar plan of the Partnership or
in connection with a direct or indirect acquisition by the Partnership of
another person or as a recapitalization or reclassification of securities of
the Partnership), whether or not for sale for its own account, the Partnership
shall each such time give prompt notice at least 15 business days prior to the
anticipated filing date of the registration statement relating to such
registration to the Demand Committee, which notice shall offer the Demand
Committee the opportunity to elect to include in such registration statement
the number of Registrable Securities of the same class or series as those
proposed to be registered held by Covered Persons as the Demand Committee may
request (a “Piggyback Registration”), subject to the provisions of
Section 2.3(b).  If the Demand Committee
elects to effect a Piggyback Registration, the Partnership shall give notice of
the registration statement relating to such registration to those Covered
Persons who the Demand Committee determines to afford participation in the
Piggyback Registration.  Upon the request
of the Demand Committee, the Partnership shall use its commercially reasonable
efforts to effect the registration under the Securities Act of all Registrable
Securities that the Partnership has been so requested to register by the Demand
Committee, to the extent necessary to permit the disposition of the Registrable
Securities to be so registered, provided that (i) if such registration involves
an underwritten Public Offering, all such Covered Persons to be included in the
Partnership’s registration must sell their Registrable Securities to the
underwriters selected by the Partnership on the same terms and conditions as
apply to the Partnership or any other selling person, as applicable, and (ii)
if, at any time after giving notice of its intention to register any securities
pursuant to this Section 2.3(a) and prior to the effective date of the
registration statement filed in connection with such registration, the
Partnership shall determine for any reason not to register such securities, the
Partnership shall give notice to all such Covered 

 

6

 

Persons
and, thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration.  No registration effected under this Section
2.3 shall relieve the Partnership of its obligations to effect an Exchange
Registration or Demand Registration to the extent required by Section 2.1 or
Section 2.2, respectively. The Partnership shall pay all Registration Expenses
in connection with each Piggyback Registration.

 

(b)                                 Subject to Section 2.2(c) and any other
contractual obligations to the contrary, if a Piggyback Registration involves
an underwritten Public Offering and the managing underwriter advises the
Partnership that, in its view, the number of Registrable Securities that the
Partnership and such Covered Persons intend to include in such registration
exceeds the Maximum Offering Size, the Partnership shall include in such
registration, in the following priority, up to the Maximum Offering Size:

 

(i)                                     first, the Partnership securities proposed to
be registered for the account of the Partnership;

 

(ii)                                  second, the Partnership securities proposed
to be registered pursuant to any demand registration rights of third parties;

 

(iii)                               third, all Registrable Securities requested
to be included in such registration by any Covered Persons (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, in such
proportions as shall be determined by the Demand Committee); and

 

(iv)                              fourth, any securities proposed to be
registered for the account of any other persons with such priorities among them
as the Partnership shall determine. 

 

(c)                                  Notwithstanding any provision in this Section
2.3 or elsewhere in this Agreement, no provision relating to the registration
of Registrable Securities shall be construed as permitting any Covered Person
to effect a transfer of securities that is otherwise prohibited by the terms of
any agreement between such Covered Person and the Partnership or any of its
subsidiaries.  Unless the Partnership
shall otherwise consent, the Partnership shall not be obligated to provide
notice or afford Piggyback Registration to the Demand Committee or any Covered
Person pursuant to this Section 2.3 unless some or all of such person’s
Registrable Securities are permitted to be transferred under the terms of
applicable agreements between such person and the Partnership or any of its
subsidiaries.

 

Section 2.4                                      Lock-Up
Agreements.  If any registration of
Registrable Securities shall be effected in connection with a Public Offering,
neither the Partnership nor any Covered Person shall effect any public sale or
distribution, including any sale pursuant to Rule 144, of any Common Units or
other security of the Partnership (except as part of such Public Offering)
during the period beginning 14 days prior to the effective date of the
applicable registration statement until the earlier of (i) such time as the
Partnership and the lead managing underwriter shall agree and (ii) 180 days
following the pricing of the Public Offering. 

 

Section 2.5                                      Registration
Procedures.  In connection with any
request by the Demand Committee that Registrable Securities be registered
pursuant to Sections 2.2 or 2.3, 

 

7

 

subject to the provisions of
such Sections, the paragraphs below shall be applicable, and in connection with
any Exchange Registration pursuant to Section 2.1, paragraphs (a), (c), (d),
(e) and (l) below shall be applicable:

 

(a)                                  The Partnership shall as expeditiously as
reasonably practicable prepare and file with the SEC a registration statement
on any form for which the Partnership then qualifies or that counsel for the
Partnership shall deem appropriate and which form shall be available for the
registration of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use its
commercially reasonable efforts to cause such filed registration statement to
become and remain effective for a period of not less than 40 days, or in the
case of an Exchange Registration until all of the Registrable Securities of the
Covered Persons included in any such registration statement (each, a “Registering
Covered Person”) shall have actually been exchanged thereunder.

 

(b)                                 Prior to filing a registration statement or
prospectus or any amendment or supplement thereto, the Partnership shall, if
requested, furnish to each Registering Covered Person and each underwriter, if
any, of the Registrable Securities covered by such registration statement
copies of such registration statement as proposed to be filed, and thereafter
the Partnership shall furnish to such Registering Covered Person and
underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A
under the Securities Act and such other documents as such Registering Covered
Person or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Registering Covered
Person.  The Registering Covered Person
shall have the right to request that the Partnership modify any information
contained in such registration statement, amendment and supplement thereto
pertaining to such Registering Covered Person and the Partnership shall use its
all commercially reasonable efforts to comply with such request, provided,
however, that the Partnership shall not have any obligation to so modify any
information if the Partnership reasonably expects that so doing would cause the
prospectus to contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.

 

(c)                                  After the filing of the registration
statement, the Partnership shall (i) cause the related prospectus to be
supplemented by any required prospectus supplement, and, as so supplemented, to
be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement during the
applicable period in accordance with the intended methods of disposition by the
Registering Covered Person thereof set forth in such registration statement or
supplement to such prospectus and (iii) promptly notify each Registering
Covered Person holding Registrable Securities covered by such registration
statement of any stop order issued or threatened by the SEC suspending the
effectiveness of such registration statement or any state securities 

 

8

 

commission and take all commercially
reasonable efforts to prevent the entry of such stop order or to obtain the
withdrawal of such order if entered.

 

(d)                                 To the extent any “free writing prospectus”
(as defined in Rule 405 under the Securities Act) is used, the Partnership
shall file with the SEC any free writing prospectus that is required to be
filed by the Partnership with the SEC in accordance with the Securities Act and
retain any free writing prospectus not required to be filed.

 

(e)                                  The Partnership shall use its commercially
reasonable efforts to (i) register or qualify the Registrable Securities
covered by such registration statement under such other securities or “blue sky”
laws of such jurisdictions in the United States as any Registering Covered
Person holding such Registrable Securities or each underwriter, if any,
reasonably (in light of such member’s intended plan of distribution) requests
and (ii) cause such Registrable Securities to be registered with or approved by
such other governmental agencies or authorities as may be necessary by virtue
of the business and operations of the Partnership and do any and all other acts
and things that may be reasonably necessary or advisable to enable such Registering
Covered Person to consummate the disposition of the Registrable Securities
owned by such person, provided that the Partnership shall not be required to
(A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 2.5(e), (B) subject
itself to taxation in any such jurisdiction or (C) consent to general service
of process in any such jurisdiction.

 

(f)                                    The Partnership shall immediately notify each
Registering Covered Person holding such Registrable Securities covered by such
registration statement or each underwriter, if any, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
promptly prepare and make available to each such Registering Covered Person or
underwriter, if any, and file with the SEC any such supplement or amendment.

 

(g)                                 The Demand Committee shall select an
underwriter or underwriters in connection with any Public Offering.  In connection with any Public Offering, the
Partnership shall enter into customary agreements (including an underwriting
agreement in customary form) and take such all other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities in any such Public Offering, including if necessary the engagement
of a “qualified independent underwriter” in connection with the qualification
of the underwriting arrangements with the NASD.

 

(h)                                 Subject to the execution of confidentiality
agreements satisfactory in form and substance to the Partnership in the
exercise of its good faith judgment, pursuant to the reasonable request of the
Demand Committee or underwriter (if any), the Partnership will give to each
Registering Covered Person, each underwriter (if any) and their respective
counsel and accountants (i) reasonable and customary access to its books and
records and 

 

9

 

(ii) such opportunities to
discuss the business of the Partnership with its directors, officers,
employees, counsel and the independent public accountants who have certified
its financial statements, as shall be appropriate, in the reasonable judgment
of counsel to such Registering Covered Person or underwriter, to enable them to
exercise their due diligence responsibility.

 

(i)                                     The Partnership shall use its commercially
reasonable efforts to furnish to each Registering Covered Person and to each
such underwriter, if any, a signed counterpart, addressed to such person or
underwriter, of (i) an opinion or opinions of counsel to the Partnership and
(ii) a comfort letter or comfort letters from the Partnership’s independent public
accountants, each in customary form and covering such matters of the kind
customarily covered by opinions or comfort letters, as the case may be, as the
Demand Committee or underwriter reasonably requests.

 

(j)                                     Each Registering Covered Person registering
securities under Sections 2.2 or 2.3 shall promptly furnish in writing to the
Partnership the information set forth in Appendix B and such other information
regarding itself, the distribution of the Registrable Securities as the
Partnership may from time to time reasonably request and such other information
as may be legally required or advisable in connection with such registration.

 

(k)                                  Each Registering Covered Person and each
underwriter, if any, agrees that, upon receipt of any notice from the Partnership
of the happening of any event of the kind described in Section 2.5(f), such
Registering Covered Person or underwriter shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Registering Covered Person’s or
underwriter’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.5(f), and, if so directed by the Partnership, such
Registering Covered Person or underwriter shall deliver to the Partnership all
copies, other than any permanent file copies then in such Registering Covered
Person’s possession, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice.  If the Partnership shall give such notice,
the Partnership shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 2.5(a)) by the number of days during the period from and including the
date of the giving of notice pursuant to Section 2.5(f) to the date when the
Partnership shall make available to such Registering Covered Person a
prospectus supplemented or amended to conform with the requirements of Section
2.5(f).

 

(l)                                     The Partnership shall use its commercially
reasonable efforts to list all Registrable Securities covered by such
registration statement on any securities exchange or quotation system on which
any of the Registrable Securities are then listed or traded.

 

(m)                               The Partnership shall have appropriate
officers of the General Partner, the Partnership or Blackstone Holdings (i)
prepare and make presentations at any “road shows” and before analysts and
rating agencies, as the case may be, (ii) take other actions to obtain ratings
for any Registrable Securities and (iii) otherwise use their commercially 

 

10

 

reasonable efforts to
cooperate as reasonably requested by the underwriters in the offering,
marketing or selling of the Registrable Securities.

 

(n)                                 The Partnership shall cooperate with the
Registering Covered Persons to facilitate the timely delivery of Registrable
Securities to be sold, which shall not bear any restrictive legends, and to
enable such Registrable Securities to be issued in such denominations and
registered in such names as such Registering Covered Persons may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities.

 

Section 2.6                                      Indemnification
by the Partnership.  In the event of
any registration of any Registrable Securities of the Partnership under the
Securities Act pursuant to this Article II, the Partnership will, and it hereby
does, indemnify and hold harmless, to the extent permitted by law, a
Registering Covered Person, each affiliate of such Registering Covered Person
and their respective directors and officers or general and limited partners or
members and managing members (including any director, officer, affiliate,
employee, agent and controlling person of any of the foregoing) and each other
person, if any, who controls such seller within the meaning of the Securities
Act (collectively, the “Indemnified Parties”), from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred),
joint or several, that arise out of, or are based upon, (1) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or amendment or supplement thereto under which such
Registrable Securities were registered or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (2) any untrue
statement or alleged untrue statement of a material fact contained in any
prospectus, any free writing prospectus or any “issuer information” filed or
required to be filed pursuant to Rule 433(d) under the Securities Act in
respect of the Registrable Securities, or amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, that the Partnership shall not
be liable to any Indemnified Party in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
prospectus, any free writing prospectus or any “issuer information” filed or
required to be filed pursuant to Rule 433(d) under the Securities Act in
respect of the Registrable Securities, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Partnership with respect to such seller or any underwriter specifically for use
in the preparation thereof.

 

Section 2.7                                      Indemnification
by Registering Covered Persons.  Each
Registering Covered Person hereby indemnifies and holds harmless, and the
Partnership may require, as a condition to including any Registrable Securities
in any registration statement filed in accordance with this Article II, that
the Partnership shall have received an undertaking reasonably satisfactory to
it from any underwriter to indemnify and hold harmless, the Partnership and all
other prospective sellers of Registrable Securities, the directors of the
General Partner, each officer of the General Partner or the Partnership who
signed the Registration 

 

11

 

Statement and each person, if
any, who controls the Partnership and all other prospective sellers of
Registrable Securities within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the indemnity set forth
in Section 2.6 above, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Partnership with respect
to such seller or any underwriter specifically for use in the preparation of
such registration statement, prospectus, any free writing prospectus or any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the
Securities Act in respect of the Registrable Securities, or amendment or
supplement thereto.  Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Partnership, any of the Registering Covered Persons or any
underwriter, or any of their respective affiliates, directors, officers or
controlling persons and shall survive the transfer of such securities by such
person.  In no event shall any such
indemnification liability of any Registering Covered Person be greater in
amount than the dollar amount of the proceeds received by such Registering
Covered Person upon the sale of the Registrable Securities giving rise to such
indemnification obligation.

 

Section 2.8                                      Conduct
of Indemnification Proceedings. 
Promptly after receipt by an Indemnified Party hereunder of written
notice of the commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Article II, such
Indemnified Party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, that the failure of the Indemnified Party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Article II, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. 

 

In case any such action is
brought against an Indemnified Party, unless in such Indemnified Party’s
reasonable judgment a conflict of interest between such Indemnified Party and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly with
any other indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to
such Indemnified Party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
of investigation.  It is understood and
agreed that the indemnifying person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Parties, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm (x) for any Covered
Person, its affiliates, directors and officers and any control persons of such
Indemnified Party shall be designated in writing by the Demand Committee, (y)
in all other cases shall be designated in writing by the General Partner.  The indemnifying person shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying person agrees to indemnify each Indemnified Party from and
against any loss or liability by reason of such settlement or judgment.  No indemnifying person shall, without the
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of 

 

12

 

which any Indemnified Party
is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Party, unless such settlement (A) includes an
unconditional release of such Indemnified Party, in form and substance
reasonably satisfactory to such Indemnified Party, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to or any admission of fault, culpability or a failure to act by
or on behalf of any Indemnified Party.

 

Section 2.9                                      Contribution.  If the indemnification provided for in this
Article II from the indemnifying party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and Indemnified Parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations.  The relative fault of such indemnifying party
and Indemnified Parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or Indemnified Parties, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.  The amount paid or payable by a
party under this Section 2.9 as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding. 

 

The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 2.9 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

Section 2.10                                Participation
in Public Offering.  No Covered
Person may participate in any Public Offering hereunder unless such Covered
Person (a) agrees to sell such Covered Person’s securities on the basis
provided in any underwriting arrangements approved by the Covered Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements and the provisions of this Agreement in respect of registration
rights.

 

Section 2.11                                Other
Indemnification.  Indemnification
similar to that specified herein (with appropriate modifications) shall be
given by the Partnership and the Registering Covered Person participating
therein with respect to any required registration or other qualification of
securities under any federal or state law or regulation or Governmental
Authority other than the Securities Act. 

 

13

 

Section 2.12                                Cooperation
by the Partnership.  If the Covered
Person shall transfer any Registrable Securities pursuant to Rule 144, the
Partnership shall use its commercially reasonable efforts to cooperate with the
Covered Person and shall provide to the Covered Person such information as may
be required to be provided under Rule 144.

 

Section 2.13                                Parties
in Interest.  Each Covered Person
shall be entitled to receive the benefits of this Agreement and shall be bound
by the terms and provisions of this Agreement by reason of such Covered Person’s
election to participate in a registration under this Article II.  To the extent Blackstone Holdings Partnership
Units
are effectively transferred in accordance with the terms of the Blackstone
Holdings
Partnership Agreements, the transferee of such Blackstone Holdings
Partnership Units shall be entitled to receive the benefits of this Agreement and
shall be bound by the terms and provisions of this Agreement upon
becoming bound hereby pursuant to Section 3.1(c).

 

Section 2.15                                Acknowledgement
Regarding the Partnership.  Other
than those determinations reserved expressly to the Demand Committee, all
determinations necessary or advisable under this Article II shall be made by
the General Partner, the determinations of which shall be final and binding.

 

Section 2.16                                Mergers,
Recapitalizations, Exchanges or Other Transactions Affecting Registrable
Securities.  The provisions of this
Agreement shall apply to the full extent set forth herein with respect to the
Registrable Securities, to any and all securities or units of Blackstone
Holdings or the Partnership or any successor or assign of any such person
(whether by merger, amalgamation, consolidation, sale of assets or otherwise)
that may be issued in respect of, in exchange for, or in substitution of such
Registrable Securities, by reason of any dividend, split, issuance, reverse
split, combination, recapitalization, reclassification, merger, amalgamation,
consolidation or otherwise.

 

ARTICLE
III

MISCELLANEOUS

 

Section 3.1                                      Term of the Agreement; Termination of Certain
Provisions.

 

(a)                                  The term of this Agreement shall continue
until the first to occur of (i) such time as no Covered Person holds any
Covered Blackstone Holdings Partnership Units or Registrable Securities and
(ii) such time as the Agreement is terminated by the Demand Committee.

 

(b)                                 Unless this Agreement is theretofore
terminated pursuant to Section 3.1(a) hereof, a Covered Person shall be bound
by the provisions of this Agreement with respect to any Covered Blackstone
Holdings Partnership Units or Registrable Securities until such time as such
Covered Person ceases to hold any Covered Blackstone Holdings Partnership Units
or Registrable Securities.  Thereafter,
such Covered Person shall no longer be bound by the provisions of this
Agreement other than Sections 2.7, 2.8, 2.9 and 2.11 and this Article III, and
such Covered Person’s name shall be removed from Appendix A to this Agreement.
Any person that has ceased to be a Covered Person and that reacquires Covered
Blackstone Holdings Partnership Units or Registrable Securities shall be added
to Appendix A as a Covered Person; 

 

14

 

provided,
that, such person shall first sign an agreement in the form approved by the
Partnership acknowledging that such person is bound by the terms and provisions
of the Agreement.

 

(c)                                  Any Permitted Transferee shall be added to
Appendix A as a Covered Person; provided, that, such Permitted Transferee shall
first sign an agreement in the form approved by the Partnership acknowledging
that such Permitted Transferee is bound by the terms and provisions of the
Agreement.

 

Section 3.2                                      Amendments; Waiver.

 

(a)                                  The provisions of this Agreement may be
amended by the Partnership and, except as provided in paragraph (b) below, the
Demand Committee. In addition to any other consent, vote or approval that may
be required under this Section 3.2, any amendment of this Agreement that has
the effect of changing the obligations of the Partnership hereunder to make
such obligations materially more onerous to the Partnership shall require the
approval of the Partnership.

 

(b)                                 Each Covered Person understands that from
time to time certain other persons may become Covered Persons and certain
Covered Persons will cease to be bound by the provisions of this Agreement
pursuant to the terms hereof.  This
Agreement may be amended from time to time by the Partnership (without the
approval of any other person), but solely for the purposes of (i) adding to
Appendix A Permitted Transferees of the Covered Blackstone Holdings Partnership
Units as provided in Section 3.1(c) who sign this Agreement and (ii) removing
from Appendix A such persons as shall cease to be bound by the provisions of
this Agreement pursuant to Sections 3.1(b) hereof, which additions and removals
shall be given effect from time to time by appropriate changes to Appendix A.

 

(c)                                  No provision of this Agreement may be waived
except by an instrument in writing executed by the party against whom the
waiver is to be effective.

 

Section 3.3                                      Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.

 

Section 3.4                                      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.

 

15

 

(b)                                 Notwithstanding the provisions of paragraph
(a), the General Partner may bring, or may cause the Partnership to bring, on
behalf of the General Partner or the Partnership, 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 Covered Person (i) expressly consents to
the application of paragraph (c) of this Section 3.4 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 General Partner as such Covered Person’s agent 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 Covered Person of any such service of
process, shall be deemed in every respect effective service of process upon the
Covered Person in any such action or proceeding.

 

(c)                                  (i)                                     EACH COVERED PERSON HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE
PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF
PARAGRAPH (B) OF THIS SECTION 3.4, 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
paragraph (c)(i) of this Section 3.4 and such parties agree not to plead or
claim the same.

 

Section 3.5                                      Notices.

 

(a)                                  All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
courier service, by fax, by electronic mail (delivery receipt requested) or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
3.5):

 

If to a Covered Person,

 

c/o The Blackstone Group
L.P.

345 Park Avenue

New
York, New York  10154

Attention: Chief Legal
Officer

 

16

 

Fax: (212) 583-5258

Electronic Mail:
friedman@blackstone.com

 

If to the Partnership, at

 

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

 

The Partnership shall be responsible for notifying
each Covered Person of the receipt of a notice, request, claim, demand or other
communication under this Agreement relevant to such Covered Person at the
address of such Covered Person then in the records of Blackstone Holdings (and
each Covered Person shall notify the Partnership of any change in such address
for notices, requests, claims, demands or other communications).

 

Section 3.6                                      Severability.  If
any provision of this Agreement is finally held to be invalid, illegal or
unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.

 

Section 3.7                                      Specific Performance.  Each
party hereto acknowledges that the remedies at law of the other parties for a
breach or threatened breach of this Agreement would be inadequate and, in
recognition of this fact, any party to this Agreement, without posting any
bond, and in addition to all other remedies that may be available, shall be
entitled to obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy that may be then available.

 

Section 3.8                                      Assignment; Successors.  This
Agreement shall be binding upon and inure to the benefit of the respective
legatees, legal representatives, successors and assigns of the Covered Persons;
provided, however, that a Covered Person may not assign this Agreement or any
of his rights or obligations hereunder, and any purported assignment in breach
hereof by a Covered Person shall be void; and provided further that no
assignment of this Agreement by the Partnership or to a successor of the
Partnership (by operation of law or otherwise) shall be valid unless such
assignment is made to a person which succeeds to the business of such person
substantially as an entirety.

 

Section 3.9                                      No Third-Party Rights. 
Other than as expressly provided herein, nothing in this Agreement will
be construed to give any person other than the parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. 
This Agreement and all of its provisions and conditions are for the sole
and exclusive benefit of the parties to this Agreement and their successors and
assigns.

 

17

 

Section 3.10                                Section Headings.  The
headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation.

 

Section 3.11                                Execution in Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute but one
and the same instrument.

 

18

 

IN WITNESS WHEREOF, the parties hereto have duly
executed or caused to be duly executed this Agreement as of the dates
indicated.

 

	
   

  	
  THE BLACKSTONE GROUP L.P.

  
	
   

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

  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

19

 

	
   

  	
  [COVERED PERSONS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

20

 

Appendix A

 

Covered Persons

 

 

Appendix B

 

THE BLACKSTONE
GROUP L.P.

 

Covered Person
Questionnaire

 

The undersigned Covered
Person understands that the Partnership has filed or intends to file with the
SEC a registration statement for the registration of the Common Units (as such
may be amended, the “Registration Statement”), in accordance with
Sections 2.2 or 2.3 of the Registration Rights Agreement, dated as of                      ,
2007 (the “Registration Rights Agreement”), among the Partnership and
the Covered Persons referred to therein. 
A copy of the Agreement is available from the Partnership upon request
at the address set forth below.  All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.

 

NOTICE

 

The undersigned Covered
Person hereby gives notice to the Partnership of its intention to register
Registrable Securities beneficially owned by it and listed below in Item 3
(unless otherwise specified under Item 3) pursuant to the Registration
Statement.  The undersigned, by signing
and returning this Questionnaire, understands that it will be bound by the
terms and conditions of this Questionnaire and the Registration Rights
Agreement.

 

Pursuant to the Registration
Rights Agreement, the undersigned has agreed to indemnify and hold harmless the
Partnership and all other prospective sellers of Registrable Securities, the
directors of the General Partner, each officer of the General Partner who
signed the Registration Statement and each person, if any, who controls the
Partnership and all other prospective sellers of Registrable Securities within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
arising in connection with statements made or omissions concerning the
undersigned in the Registration Statement, prospectus, any free writing
prospectus or any “issuer information” in reliance upon the information
provided in this Questionnaire.

 

The undersigned Covered Person
hereby provides the following information to the Partnership and represents and
warrants that such information is accurate and complete:

 

QUESTIONNAIRE

 

1.                                      Name.

 

(a)                                  Full Legal Name of Covered Person:

 

 

                                                                                                                                                                                                     

 

 

(b)                                 Full Legal Name of Covered Person (if not the
same as (a) above) through which Registrable Securities Listed in Item 3 below
are held:

 

 

                                                                                                                                                                                                     

 

 

 

2

 

(c)                                  Full Legal name of DTC Participant (if
applicable and if not the same as (b) above) through which Registrable
Securities listed in Item 3 below are held:

 

                                                                                                                                                                                                     

 

 

(d)                                 Full Legal Name of natural control person
(which means a natural person who directly or indirectly alone or with others
has power to vote or dispose of the Registrable Securities listed in Item 3
below):

 

                                                                                                                                                                                                     

 

 

2.                                      Address for Notices to
Covered Person:

 

 

                                                                                                                                                                                                     

 

                                                                                                                                                                                                     

 

                                                                                                                                                                                                     

 

Telephone:                                                                                                                                                                                   

 

Fax:                                                                                                                                                                                              

 

Email:                                                                                                                                                                                          

 

Contact Person:                                                                                                                                                                     

 

 

3.                                      Beneficial Ownership of
Registrable Securities:

 

Number
of Registrable Securities beneficially owned:

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

                                                                                                
                                                                                                 

 

4.                                      Broker-Dealer Status:

 

(a)                                  Are you a broker-dealer?

 

Yes    ̈                               No    ̈

 

Note:                   If yes, the SEC’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

 

(b)                                 Are you an affiliate of a broker-dealer?

 

Yes    ̈                               No    ̈

 

If
yes, please identify the broker-dealer with whom the Covered Person is
affiliated and the nature of the affiliation:

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

 

3

 

(c)                                  If you are an affiliate of a broker-dealer,
do you certify that you bought the Registrable Securities in the ordinary
course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable Securities?

 

Yes    ̈                               No    ̈

 

Note:                   If no, the SEC’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

 

(d)                                 If you are (1) a broker-dealer or (2) an
affiliate of a broker-dealer and answered “no” to Question 4(c), do you consent
to being named as an underwriter in the Registration Statement?

 

Yes    ̈                               No    ̈

 

5.                                      Beneficial Ownership of
Other Securities of the Partnership Owned by the Covered Person.

 

Except as set forth below in this Item 5, the
undersigned Covered Person is not the beneficial or registered owner of any
securities of the Partnership other than the Registrable Securities listed above
in Item 3.

 

Type and
Amount of Other Securities beneficially owned by the Covered Person:

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

 

6.                                      Relationships with the
Partnership:

 

Except as set forth below, neither the undersigned
Covered Person nor any of its affiliates, officers, directors or principal
equity holders (owners of 5% or more of the equity securities of the
undersigned) has held any position or office or has had any other material
relationship with the General Partner or the Partnership (or its predecessors
or affiliates) during the past three years.

 

State
any exceptions here:

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

                                                                                                

 

4

 

7.                                      Intended Method of
Disposition of Registrable Securities (Only Applicable to a Demand Registration
Effected Pursuant to Section 2.2 of the Registration Rights Agreement):

 

Intended
Method or Methods of Disposition of Registrable Securities beneficially owned:

 

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

 

                                                                                                                                                                                           

                                                                                                
                                                                                                 

 

5

 

The undersigned agrees to
promptly notify the Partnership of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof and at
any time while the Registration Statement remains in effect.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in
its answers to Items 1 through 7 and the inclusion of such information in the
Registration Statement and the related prospectus.  The undersigned understands that such
information will be relied upon by the Partnership in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

 

IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Questionnaire to be
executed and delivered either in person or by its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  	
  Beneficial Owner:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

PLEASE SEND A COPY OF THE COMPLETED AND EXECUTED
QUESTIONNAIRE BY FAX OR ELECTRONIC MAIL, AND RETURN THE ORIGINAL BY OVERNIGHT
MAIL, TO:

 

 

The Blackstone Group L.P.

345 Park Avenue

New York, NY 10154

Attention: Chief Legal
Officer

Facsimile: (212) 583-5258

Electronic Mail:
friedman@blackstone.com

 

6

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