FORM OF EXCHANGE AGREEMENT
Exhibit 10.5
FORM OF EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (the “Agreement”), dated as of _______, 2012, among Carlyle Group
Management L.L.C., The Carlyle Group L.P., Carlyle Holdings I GP Inc., Carlyle Holdings I GP Sub
L.L.C., Carlyle Holdings II GP L.L.C., Carlyle Holdings III GP L.P., Carlyle Holdings III GP Sub
L.L.C., Carlyle Holdings I L.P., Carlyle Holdings II L.P., Carlyle Holdings III L.P., Carlyle
Holdings II Sub L.L.C., and the Carlyle Holdings Limited Partners from time to time party hereto.
WHEREAS, the parties hereto desire to provide for the exchange of certain Carlyle Holdings
Partnership Units for Common Units, on the terms and subject to the conditions set forth herein;
WHEREAS, the right to exchange Carlyle Holdings Partnership Units set forth in Section 2.1(a)
below, once exercised, represents a several, and not a joint and several, obligation of the Carlyle
Holdings Partnerships (on a pro rata basis), and no Carlyle Holdings Partnership shall have any
obligation or right to acquire Carlyle Holdings Partnership Units issued by another Carlyle
Holdings Partnership;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions
The following definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement.
“Agreement” has the meaning set forth in the preamble of this Agreement.
“Business Day” means each day that is not a Saturday, Sunday or other day on which
banking institutions in New York, New York are authorized or required by law to close.
“Carlyle Entity Parties” means, collectively, Issuer General Partner, Issuer, Carlyle
Holdings I GP Parent, Carlyle Holdings III GP Parent, the Carlyle Holdings General Partners, the
Carlyle Holdings Partnerships and Subsidiary Company.
“Carlyle Holdings I” means Carlyle Holdings I L.P., a limited partnership formed under
the laws of the State of Delaware, and any successor thereto.
“Carlyle Holdings I General Partner” means Carlyle Holdings I GP Sub L.L.C., a
Delaware limited liability company and the general partner of Carlyle Holdings I, and any successor
thereof.
“Carlyle Holdings I GP Parent” means Carlyle Holdings I GP Inc., a corporation formed
under the laws of the State of Delaware and the sole member of Carlyle Holdings I General Partner,
and any successor thereof.
“Carlyle Holdings I Partnership Units” means the units of limited partner interest of
Carlyle Holdings I, issued pursuant to the Amended and Restated Limited Partnership Agreement of
Carlyle Holdings I, as it may be amended, supplemented or restated from time to time.
“Carlyle Holdings II” means Carlyle Holdings II L.P., a société en commandite formed
under the laws of the Province of Québec, and any successor thereto.
“Carlyle Holdings II General Partner” means Carlyle Holdings II GP L.L.C., a limited
liability company formed under the laws of the State of Delaware and the general partner of Carlyle
Holdings II, and any successor general partner thereof.
“Carlyle Holdings II Partnership Units” means the units of limited partner interest of
Carlyle Holdings II, issued pursuant to the Amended and Restated Limited Partnership Agreement of
Carlyle Holdings II, as it may be amended, supplemented or restated from time to time.
“Carlyle Holdings III” means Carlyle Holdings III L.P., a société en commandite formed
under the laws of the Province of Québec, and any successor thereto.
“Carlyle Holdings III General Partner” means Carlyle Holdings III GP Sub L.L.C., a
Delaware limited liability company and the general partner of Carlyle Holdings III, and any
successor thereof.
“Carlyle Holdings III GP Parent” means Carlyle Holdings III GP L.P., a société en
commandite formed under the laws of the Province of Québec and the sole member of Carlyle Holdings
III General Partner, and any successor thereof.
“Carlyle Holdings III Partnership Units” means the units of limited partner interest
of Carlyle Holdings III, issued pursuant to the Amended and Restated Limited Partnership Agreement
of Carlyle Holdings III, as it may be amended, supplemented or restated from time to time.
“Carlyle Holdings General Partners” means, collectively, Carlyle Holdings I General
Partner, Carlyle Holdings II General Partner and Carlyle Holdings III General Partner.
Carlyle Holdings Limited Partner” means each party hereto other than a Carlyle Entity
Party.
“Carlyle Holdings Partnership Agreements” means, collectively, the Amended and
Restated Limited Partnership Agreement of Carlyle Holdings I, the Amended and Restated Limited
Partnership Agreement of Carlyle Holdings II and the Amended and Restated Limited Partnership
Agreement of Carlyle Holdings III, as they may each be amended, supplemented or restated from time
to time.
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“Carlyle Holdings Partnership Unit” means, collectively, one Carlyle Holdings I
Partnership Unit, one Carlyle Holdings II Partnership Unit, and one Carlyle Holdings III
Partnership Unit.
“Carlyle Holdings Partnerships” means, collectively, Carlyle Holdings I, Carlyle
Holdings II and Carlyle Holdings III.
“Change of Control” means: (i) the occurrence of any Person, other than a Person
approved by the current Issuer General Partner, becoming the general partner of the Issuer; or (ii)
during any period of two consecutive years, Continuing Directors cease for any reason to constitute
a majority of the directors serving on the Issuer General Partner’s board of directors. For
purposes of this definition, “Continuing Director” means any director of the Issuer General Partner
(a) serving on the Issuer General Partner’s board of directors at the beginning of the relevant
period of two consecutive years referred to in the immediately preceding sentence, (b) appointed or
elected to the Issuer General Partner’s board of directors by the members of the Issuer General
Partner or (c) whose appointment or election to the Issuer General Partner’s board of directors by
such board, or nomination for election to the Issuer General Partner’s board of directors by the
limited partners of the Issuer, was approved by a majority of the directors of the Issuer General
Partner then still serving at the time of such approval who were so serving at the beginning of the
relevant period of two consecutive years, were so appointed or elected by the members of the Issuer
General Partner or whose appointment or election or nomination for election was so approved.
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Unit” means a limited partner interest in the Issuer representing a fractional
part of the limited partner interests in the Issuer of all limited partners of the Issuer having
the rights and obligations specified with respect to Common Units in the Issuer Partnership
Agreement.
“Dispute” has the meaning set forth in Section 3.9(a) of this Agreement.
“Exchange” has the meaning set forth in Section 2.1(a) of this Agreement.
“Exchange Rate” means the number of Common Units for which a Carlyle Holdings
Partnership Unit is entitled to be exchanged. On the date of this Agreement, the Exchange Rate
shall be 1 for 1, which Exchange Rate shall be subject to modification only as provided in Section
2.4.
“IPO” means the initial public offering and sale of Common Units, as contemplated by
the Issuer’s Registration Statement on Form S-1 (File No. 333-176685).
“Issuer” means The Carlyle Group L.P., a limited partnership formed under the laws of
the State of Delaware, and any successor thereto.
“Issuer General Partner” means Carlyle Group Management L.L.C., a limited liability
company formed under the laws of the State of Delaware, and any successor thereto.
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“Issuer Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of the Issuer to be dated substantially concurrently with the consummation of the IPO,
as such agreement of limited partnership may be amended, supplemented or restated from time to
time.
“Liens” means any and all liens, charges, security interests, options, claims,
mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or
arrangements or other restrictions on title or transfer of any nature whatsoever.
“Mubadala Holders” means, collectively, MDC/TCP Investments (Cayman) I, Ltd., a Cayman
Islands exempted company, MDC/TCP Investments (Cayman) II, Ltd., a Cayman Islands exempted company,
MDC/TCP Investments (Cayman) III, Ltd., a Cayman Islands exempted company, MDC/TCP Investments
(Cayman) IV, Ltd., a Cayman Islands exempted company, MDC/TCP Investments (Cayman) V, Ltd., a
Cayman Islands exempted company, MDC/TCP Investments (Cayman) VI, Ltd., a Cayman Islands exempted
company, and Five Overseas Investment L.L.C., a United Arab Emirates limited liability company
registered in the Emirate of Abu Dhabi, and, to the extent such Persons are Permitted Transferees,
each of Mubadala Development Company PJSC and its direct and indirect subsidiaries.
“Person” means an individual or a corporation, limited liability company, partnership,
joint venture, trust, estate, unincorporated organization, association (including any group,
organization, co-tenancy, plan, board, council or committee), government (including a country,
state, county, or any other governmental or political subdivision, agency or instrumentality
thereof) or other entity (or series thereof).
“Permitted Transferee” has the meaning set forth in Section 3.1 of this Agreement.
“Quarter” means, unless the context requires otherwise, a fiscal quarter of the
Issuer.
“Quarterly Exchange Date” means, unless the Issuer cancels such Quarterly Exchange
Date pursuant to Section 2.8 hereof, the date that is the later to occur of either: (1) the second
Business Day after the date on which the Issuer makes a public news release of its quarterly
earnings for the prior Quarter or (2) the first day each Quarter that directors and executive
officers of the Issuer General Partner are permitted to trade under the applicable polices of the
Issuer relating to trading by directors and executive officers; provided that there shall be no
Quarterly Exchange Date for any party other than the California Public Employees’ Retirement System
or a Mubadala Holder prior to the first anniversary of the closing of the IPO (or, if later, the
date of the initial filing by the Issuer of a registration statement with the U.S. Securities and
Exchange Commission to cover delivery of Common Units to Carlyle Holdings Limited Partners upon an
Exchange). At least seventy-five (75) days prior to each Quarterly Exchange Date, the Issuer will
provide notice thereof to each Carlyle Holdings Limited Partner eligible to Exchange Carlyle
Holdings Partnership Units for Common Units on such Quarterly Exchange Date.
“Sale Transaction” has the meaning set forth in Section 2.8 of this Agreement.
“Securities Act” has the meaning set forth in Section 2.3(a) of this Agreement.
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“Subsidiary Company” means Carlyle Holdings II Sub L.L.C., a limited liability company
organized under the laws of Delaware, and any successor thereto.
“Transfer Agent” means such bank, trust company or other Person as shall be appointed
from time to time by the Issuer pursuant to the Issuer Partnership Agreement to act as registrar
and transfer agent for the Common Units.
ARTICLE II
EXCHANGE OF CARLYLE HOLDINGS PARTNERSHIP UNITS
SECTION 2.1. Exchange of Carlyle Holdings Partnership Units.
(a) (i) Subject to adjustment as provided in this Article II, to the provisions of the Carlyle
Holdings Partnership Agreements and the Issuer Partnership Agreement and to the provisions of
Section 2.2 hereof, each Carlyle Holdings Limited Partner shall be entitled, on any Quarterly
Exchange Date, to surrender Carlyle Holdings Partnership Units to the Carlyle Holdings Partnerships
in exchange for the delivery by the Carlyle Holdings Partnerships of a number of Common Units equal
to the product of such number of Carlyle Holdings Partnership Units surrendered multiplied by the
Exchange Rate (an “Exchange”); provided that any such Exchange is for a minimum of the lesser of
100 Carlyle Holdings Partnership Units or all of the vested Carlyle Holdings Partnership Units held
by such Carlyle Holdings Limited Partner that are then permitted under the Carlyle Holdings
Partnership Agreements to be exchanged by such Limited Partner. In addition, subject to adjustment
as provided in this Article II, to the provisions of the Carlyle Holdings Partnership Agreements,
the Issuer Partnership Agreement and to the provisions of Section 2.2 hereof, the California Public
Employees’ Retirement System and the Mubadala Holders shall be entitled at any time from and after
the consummation of the IPO to Exchange Carlyle Holdings Partnership Units for Common Units,
provided that the number of Carlyle Holdings Partnership Units surrendered by the California Public
Employees’ Retirement System or the Mubadala Holders, respectively, in any such Exchange is greater
than two percent of the then-outstanding Carlyle Holdings Partnership Units (provided that such
Exchange constitutes a “Block Transfer” within the meaning of Treasury Regulation section 1.7704-1
(e)(2)).
(ii) Notwithstanding anything to the contrary herein, upon the occurrence of a Dissolution
Event (as defined in the Carlyle Holdings Partnership Agreements) with respect to any Carlyle
Holdings Partnership, each Carlyle Holdings Limited Partner shall be entitled, upon the terms and
subject to the conditions hereof, to elect to Exchange Carlyle Holdings Partnership Units for
Common Units; provided, that any such Exchange pursuant to this sentence shall be effective
immediately prior to the effectiveness of the applicable dissolution of such Carlyle Holdings
Partnership (and, for the avoidance of doubt, shall not be effective if such dissolution is not
effective).
(b) On the date Carlyle Holdings Partnership Units are surrendered for exchange, all rights of
the exchanging Carlyle Holdings Limited Partner as holder of such Carlyle Holdings Partnership
Units shall cease, and such exchanging Carlyle Holdings Limited Partner shall be treated for all
purposes as having become the Record Holder (as defined in the
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Issuer Partnership Agreement) of such Common Units and shall be admitted as a Limited Partner
(as defined in the Issuer Partnership Agreement) of the Issuer in accordance and upon compliance
with Section 10.2 of the Issuer Partnership Agreement.
(c) For the avoidance of doubt, any exchange of Carlyle Holdings Partnership Units shall be
subject to the provisions of the Carlyle Holdings Partnership Agreements, including without
limitation the provisions of Sections 8.01, 8.02, 8.03, 8.04 and 8.12 to the extent applicable to
an exchanging Carlyle Holdings Limited Partner.
(d) Where a Carlyle Holdings Limited Partner has exercised its right to
surrender its Carlyle Holdings Partnership Units to the Carlyle Holdings Partnerships in an
Exchange pursuant to Section 2.1(a), Carlyle Holdings I General Partner (with respect to Carlyle
Holdings I Partnership Units), Subsidiary Company (with respect to Carlyle Holdings II Partnership
Units) and Carlyle Holdings III General Partner (with respect to Carlyle Holdings III Partnership
Units), shall have a superseding right to acquire such interests for an amount of Common Units
equal to the amount of Common Units that would be received pursuant to such Exchange.
SECTION 2.2. Exchange Procedures. (a) A Carlyle Holdings Limited Partner may
exercise the right to exchange Carlyle Holdings Partnership Units set forth in Section 2.1(a) above
by providing a written notice of exchange at least sixty (60) days prior to the applicable
Quarterly Exchange Date (or in the case of an Exchange effected by the California Public Employees’
Retirement System or the Mubadala Holders pursuant to the last sentence of 2.1(a) above, ten (10)
days prior to the date of such Exchange) to each of the Carlyle Holdings Partnerships and each of
Carlyle Holdings I General Partner, Subsidiary Company and Carlyle Holdings III General Partner
substantially in the form of Exhibit A hereto, duly executed by such holder or such
holder’s duly authorized attorney in respect of the Carlyle Holdings Partnership Units to be
exchanged, in each case delivered during normal business hours at the principal executive offices
of the Carlyle Holdings Partnerships.
(b) As promptly as practicable following the surrender for exchange of the Carlyle Holdings
Partnership Units in the manner provided in this Article II, the Carlyle Holdings Partnerships
shall deliver or cause to be delivered at the offices of the then-acting Transfer Agent or, if
there is no then-acting Transfer Agent, at the principal executive offices of the Issuer, the
number of Common Units issuable upon such exchange, registered in the name of such exchanging
Carlyle Holdings Limited Partner, or its nominee. To the extent the Common Units are settled
through the facilities of The Depository Trust Company, the Carlyle Holdings Partnerships will,
subject to Section 2.2(c) below, upon the written instruction of the exchanging Carlyle Holdings
Limited Partner deliver the Common Units deliverable to such exchanging Carlyle Holdings Limited
Partner, through the facilities of The Depository Trust Company, to the account of the participant
of The Depository Trust Company designated by such exchanging Carlyle Holdings Limited Partner. The
Issuer General Partner, the Issuer and the Carlyle Holdings General Partners shall take such
actions as may be required to ensure the performance by the Carlyle Holdings Partnerships of their
respective obligations under this Article II, including causing the issuance and sale of Common
Units to or for the account of the Carlyle Holdings Partnerships in exchange for the delivery to
the Issuer of a number of Carlyle Holdings
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Partnership Units that is equal to the number of Carlyle Holdings Partnership Units
surrendered by an exchanging Carlyle Holdings Limited Partner.
(c) The Carlyle Holdings Partnerships on the one hand, and each exchanging Carlyle Holdings
Limited Partner, on the other hand, shall bear their own expenses in connection with the
consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except
that the Carlyle Holdings Partnerships and Subsidiary Company, as applicable, shall bear any
transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by
reason of, any such Exchange; provided, however, that if any Common Units are to be delivered in a
name other than that of the exchanging Carlyle Holdings Limited Partner that requested such
Exchange (other than in the name of The Depository Trust Company or its nominee), then such Carlyle
Holdings Limited Partner and/or the person in whose name such Common Units are to be delivered
shall pay to the Carlyle Holdings Partnerships the amount of any transfer taxes, stamp taxes or
duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall
establish to the reasonable satisfaction of the Carlyle Holdings Partnerships that such tax has
been paid or is not payable.
(d) The Carlyle Holdings Partnerships may adopt reasonable procedures for the implementation
of the exchange provisions set forth in this Article II, including, without limitation, procedures
for the giving of notice of an election for exchange. A Carlyle Holdings Limited Partner may not
revoke a notice of exchange delivered pursuant to Section 2.2(a) above, without the consent of the
Carlyle Holdings General Partners, which consent may be provided or withheld, or made subject to
such conditions, limitations or restrictions, as determined by the Carlyle Holdings General
Partners in their sole discretion. Such determinations need not be uniform and may be made
selectively among Carlyle Holdings Limited Partners, whether or not such Carlyle Holdings Limited
Partners are similarly situated.
SECTION 2.3. Limitations on Exchanges.
(a) Notwithstanding anything to the contrary, a Carlyle Holdings Limited Partner shall not be
entitled to exchange Carlyle Holdings Partnership Units, and the Issuer and the Carlyle Holdings
Partnerships shall have the right to refuse to honor any request for exchange of Carlyle Holdings
Partnership Units, at any time or during any period if the Issuer or the Carlyle Holdings
Partnerships shall determine, that such exchange (i) would be prohibited by law or regulation
(including, without limitation, the unavailability of any requisite registration statement filed
under the Securities Act of 1933, as amended (the “Securities Act”) or any exemption from
the registration requirements thereunder), or (ii) would not be permitted under any other
agreements with the Issuer or any of its subsidiaries to which such exchanging Carlyle Holdings
Limited Partner may be party (including, without limitation, the Carlyle Holdings Partnership
Agreements) or any written policies of the Issuer related to unlawful or inappropriate trading
applicable to its directors, officers or other personnel.
SECTION 2.4. Splits, Distributions and Reclassifications.
(a) The Exchange Rate shall be adjusted accordingly if there is: (i) any subdivision (by any
unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or
combination (by reverse unit split, reclassification, reorganization,
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recapitalization or otherwise) of the Carlyle Holdings Partnership Units that is not
accompanied by an identical subdivision or combination of the Common Units; or (ii) any subdivision
(by any unit split, unit distribution, reclassification, reorganization, recapitalization or
otherwise) or combination (by reverse unit split, reclassification, reorganization,
recapitalization or otherwise) of the Common Units that is not accompanied by an identical
subdivision or combination of the Carlyle Holdings Partnership Units. If there is any
reclassification, reorganization, recapitalization or other similar transaction in which the Common
Units are converted or changed into another security, securities or other property, then upon any
Exchange, an exchanging Carlyle Holdings Limited Partner shall be entitled to receive the amount of
such security, securities or other property that such exchanging Carlyle Holdings Limited Partner
would have received if such Exchange had occurred immediately prior to the effective date of such
reclassification, reorganization, recapitalization or other similar transaction, taking into
account any adjustment as a result of any subdivision (by any split, distribution or dividend,
reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split,
reclassification, recapitalization or otherwise) of such security, securities or other property
that occurs after the effective time of such reclassification, reorganization, recapitalization or
other similar transaction. Except as may be required in the immediately preceding sentence, no
adjustments in respect of distributions shall be made upon the exchange of any Carlyle Holdings
Partnership Unit.
SECTION 2.5. Common Units to be Issued.
(a) The Issuer and the Carlyle Holdings Partnerships covenant that all Common Units issued
upon an Exchange will be validly issued. Nothing contained herein shall be construed to preclude
the Issuer or Carlyle Holdings Partnerships from satisfying their obligations in respect of the
exchange of the Carlyle Holdings Partnership Units by delivery of Common Units which are held in
the treasury of the Issuer or the Carlyle Holdings Partnership or any of their subsidiaries.
(b) The Issuer and the Carlyle Holdings Partnerships covenant and agree that, to the extent
that a registration statement under the Securities Act is effective and available for Common Units
to be delivered with respect to any Exchange, Common Units that have been registered under the
Securities Act shall be delivered in respect of such exchange. In the event that any exchange in
accordance with this Agreement is to be effected at a time when any required registration has not
become effective or otherwise is unavailable, upon the request and with the reasonable cooperation
of the exchanging Carlyle Holdings Limited Partners requesting such exchange, the Issuer and the
Carlyle Holdings Partnerships shall promptly facilitate such exchange pursuant to any reasonably
available exemption from such registration requirements. The Issuer shall list the Common Units
required to be delivered upon exchange prior to such delivery upon each national securities
exchange or inter-dealer quotation system upon which the outstanding Common Units may be listed or
traded at the time of such delivery.
SECTION 2.6. Restrictions.
(a) The provisions of Sections 8.02, 8.03, 8.04, 8.06 and 8.11 of the Carlyle Holdings
Partnership Agreements and the restrictions on transfer under any other agreements with the Issuer
or any of its subsidiaries to which an exchanging Carlyle Holdings Limited
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Partner may be party shall apply, mutatis mutandis, to any Common Units. In each case, the
provisions of Sections 8.03 and 8.04 of the Carlyle Holdings Partnership Agreements shall apply in
the aggregate to Carlyle Holdings Partnership Units and Common Units received in exchange for
Carlyle Holdings Partnership Units held by each Carlyle Holdings Limited Partner or Limited Partner
(as defined in the Issuer Partnership Agreement) of the Issuer.
SECTION 2.7. Acquisition and Disposition of Common Units.
(a) A Carlyle Holdings Limited Partner (other than the California Public Employees’ Retirement
System or a Mubadala Holder) requesting an exchange under this Agreement covenants (i) to use
reasonable best efforts to sell or otherwise dispose of any Common Units received in such an
exchange within ten (10) days of the receipt thereof or any other specified period as the Issuer
General Partner may determine from time to time, and (ii) that no other Common Units are held by
such Carlyle Holdings Limited Partner, such Carlyle Holdings Limited Partner’s spouse, or any
entity disregarded as an entity separate from such Carlyle Holdings Limited Partner or such Carlyle
Holdings Limited Partner’s spouse for United States federal income tax purpose, at the time such
Xxxxxxx Xxxxxx Limited Partner gives notice of such exchange pursuant to this Agreement or will be
acquired by any such person from such time through the sale or disposition
described in clause (i). Any Carlyle Holdings Limited Partner (other than the California Public
Employees’ Retirement System or a Mubadala Holder) still holding any Common Units on the last day
of such period shall cause all such Common Units to be transferred immediately to a partnership,
trust or other entity (other than an entity disregarded as an entity separate from its parent for
United States federal income tax purposes).
SECTION 2.8. Subsequent Offerings.
(a) The Issuer may from time to time provide the opportunity for Carlyle Holdings Limited
Partners to sell their Carlyle Holdings Partnership Units to the Issuer, the Carlyle Holdings
Partnerships or any of their subsidiaries (a “Sale Transaction”); provided that no Sale
Transaction shall occur unless the Issuer cancels the nearest Quarterly Exchange Date scheduled to
occur in the same fiscal year of the Issuer as such Sale Transaction. A Carlyle Limited Partner
selling Carlyle Holdings Partnership Units in connection with a Sale Transaction must provide
notice to Issuer at least thirty (30) days prior to the cash settlement of such Sale Transaction in
respect of the Carlyle Holdings Partnership Units to be sold, in each case delivered during normal
business hours at the principal executive offices of the Issuer. For the avoidance of doubt, the
total aggregate number of Quarterly Exchange Dates and Sale Transactions occurring during any
fiscal year of the Issuer shall not exceed four (4).
ARTICLE III
GENERAL PROVISIONS
SECTION 3.1. Additional Carlyle Holdings Limited Partners. To the extent a Carlyle
Holdings Limited Partner validly transfers any or all of such xxxxxx’x Xxxxxxx Holdings Partnership
Units to another person in a transaction in accordance with, and not in contravention of, the
Carlyle Holdings Partnership Agreements or any other agreement or agreements with the
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Issuer or any of its subsidiaries to which a transferring Carlyle Holdings Limited Partner may
be party, then such transferee (each, a “Permitted Transferee”) shall have the right to
execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto,
whereupon such Permitted Transferee shall become a Carlyle Holdings Limited Partner hereunder. To
the extent the Carlyle Holdings Partnerships issue Carlyle Holdings Partnership Units in the
future, the Carlyle Holdings Partnerships shall be entitled, in their sole discretion, to make any
holder of such Carlyle Holdings Partnership Units a Carlyle Holdings Limited Partner hereunder
through such holder’s execution and delivery of a joinder to this Agreement, substantially in the
form of Exhibit B hereto.
SECTION 3.2. Amendment. (a) The provisions of this Agreement may be amended by the
affirmative vote or written consent of each of the Carlyle Holdings Partnerships and, after a
Change of Control, the holders of at least a majority of the Vested Percentage Interests (as such
term as defined in the Carlyle Holdings Partnership Agreements) of the Carlyle Holdings Partnership
Units (excluding Carlyle Holdings Partnership Units held by the Issuer or any direct or indirect
wholly-owned subsidiary thereof); provided, however, that any amendment of this Agreement that is
materially adverse to the California Public Employees’ Retirement System shall not be effective
with respect to the California Public Employees’ Retirement System unless the prior written consent
of the California Public Employees’ Retirement System shall have been obtained and any amendment of
this Agreement that is materially adverse to a Mubadala Holder shall not be effective with respect
to the Mubadala Holder unless the prior written consent of such Mubadala Holder shall have been
obtained.
(b) Each Carlyle Holdings Limited Partner hereby expressly consents and agrees that, whenever
in this Agreement it is specified that an action may be taken upon the affirmative vote or written
consent of less than all of the Carlyle Holdings Limited Partners, such action may be so taken upon
the concurrence of less than all of the Carlyle Holdings Limited Partners and each Carlyle Holdings
Limited Partner shall be bound by the results of such action.
SECTION 3.3. Addresses and Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by courier service, by fax, by electronic mail
(delivery receipt requested) or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such other address for a
party as shall be as specified in a notice given in accordance with this Section 3.3):
(a) If to any Carlyle Entity Party, to:
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Electronic Mail: xxxx_xxxxxxxxxxxxxx@xxxxxxx.xxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Electronic Mail: xxxx_xxxxxxxxxxxxxx@xxxxxxx.xxx
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(b) If to any Carlyle Holdings Limited Partner, to:
c/o The Carlyle Group L.P.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Electronic Mail: xxxx_xxxxxxxxxxxxxx@xxxxxxx.xxx
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Electronic Mail: xxxx_xxxxxxxxxxxxxx@xxxxxxx.xxx
The Issuer General Partner shall forward any such communication to the applicable
Carlyle Holdings Limited Partner’s address, email address or facsimile number as
shown in the books and records of the Carlyle Holdings Partnerships.
SECTION 3.4. Further Action. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action as may be necessary or appropriate
to achieve the purposes of this Agreement.
SECTION 3.5. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of all of the parties and, to the extent permitted by this Agreement, their successors,
executors, administrators, heirs, legal representatives and assigns.
SECTION 3.6. Severability. If any term or other provision of this Agreement is held
to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions is not affected in any manner
materially adverse to any party. Upon a determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
SECTION 3.7. Integration. This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
SECTION 3.8. Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy
consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant,
duty, agreement or condition.
SECTION 3.9. Dispute Resolution.
(a) Each party hereto other than the California Public Employees’ Retirement System and each
of the Mubadala Holders (i) irrevocably agrees that any and all disputes which cannot be settled
amicably, including any ancillary claims of any party, arising out of, relating to
11
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) (a “Dispute”) shall be finally settled by arbitration conducted by
three arbitrators (or, in the event the amount of quantified claims and/or estimated monetary value
of other claims contained in the applicable request for arbitration is less than $3.0 million, by a
sole arbitrator) in Wilmington, Delaware in accordance with the Rules of Arbitration of the
International Chamber of Commerce (including the rules relating to costs and fees) existing on the
date of this Agreement except to the extent those rules are inconsistent with the terms of this
Section 3.9, and that such arbitration shall be the exclusive manner pursuant to which any Dispute
shall be resolved; (ii) agrees that this Agreement involves commerce and is governed by the Federal
Arbitration Act, 9 U.S.C. Section 1, et seq., and any applicable treaties governing the recognition
and enforcement of international arbitration agreements and awards; (iii) agrees to take all steps
necessary or advisable, including the execution of documents to be filed with the International
Court of Arbitration or the International Centre for ADR in order to properly submit any Dispute
for arbitration pursuant to this Section 3.9; (iv) irrevocably waives, to the fullest extent
permitted by law, any objection it may have or hereafter have to the submission of any Dispute for
arbitration pursuant to this Section 3.9 and any right to lay claim to jurisdiction in any venue;
(v) agrees that (A) the arbitrator(s) shall be U.S. lawyers, U.S. law professors and/or retired
U.S. judges and all arbitrators, including the president of the arbitral tribunal, may be U.S.
nationals and (B) the arbitrator(s) shall conduct the proceedings in the English language; (vi)
agrees that except as required by law or as may be reasonably required in connection with ancillary
judicial proceedings to compel arbitration, to obtain temporary or preliminary judicial relief in
aid of arbitration, or to confirm or challenge an arbitration award, the arbitration proceedings,
including any hearings, shall be confidential, and the parties shall not disclose any awards, any
materials in the proceedings created for the purpose of the arbitration, or any documents produced
by another party in the proceedings not otherwise in the public domain; and (vii) agrees that
performance under this Agreement shall continue if reasonably possible during any arbitration
proceedings.
(b) Notwithstanding the provisions of paragraph (a), each party hereto may bring an action or
special proceeding for the purpose of compelling a party to arbitrate, seeking temporary or
preliminary relief in aid of an arbitration hereunder, or enforcing an arbitration award and, for
the purposes of this paragraph (b), each party hereto (i) irrevocably agrees that any such action
or special proceeding shall be exclusively brought in the Court of Chancery of the State of
Delaware or, if such court does not have subject matter jurisdiction thereof, any other court
located in the State of Delaware with subject matter jurisdiction; (ii) irrevocably submits to the
exclusive jurisdiction of such courts in connection with any such action or special proceeding;
(iii) irrevocably agrees not to, and waives any right to, assert in any such action or special
proceeding that (A) it is not personally subject to the jurisdiction of such courts or any other
court to which proceedings in such courts may be appealed, (B) such action or special proceeding is
brought in an inconvenient forum, or (C) the venue of such action or special proceeding is
improper; (iv) expressly waives any requirement for the posting of a bond by a party bringing such
action or special proceeding; (v) consents to process being served in any such action or special
proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at
the address in effect for notices hereunder, and agrees that such service shall constitute good and
sufficient service of process and notice thereof; provided that nothing
12
in clause (v) hereof shall affect or limit any right to serve process in any other manner
permitted by law; (vi) irrevocably waives any and all right to trial by jury in any such claim,
suit, action or proceeding; and (vii) 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.
(c) If the arbitrator(s) shall determine that any Dispute is not subject to arbitration, or
the arbitrator(s) or any court or tribunal of competent jurisdiction shall refuse to enforce
Section 3.9(a) or shall determine that any Dispute is not subject to arbitration as contemplated
thereby, then, and only then, shall the alternative provisions of this Section 3.9(c) be
applicable. Each party hereto, to the fullest extent permitted by law, (i) irrevocably agrees that
any Dispute shall be exclusively brought in the Court of Chancery of the State of Delaware or, if
such court does not have subject matter jurisdiction thereof, any other court located in the State
of Delaware with subject matter jurisdiction; (ii) irrevocably submits to the exclusive
jurisdiction of such courts in connection with any such claim, suit, action or proceeding; (iii)
irrevocably agrees not to, and waives any right to, assert in any such claim, suit, action or
proceeding that (A) it is not personally subject to the jurisdiction of such courts or any other
court to which proceedings in such courts may be appealed, (B) such claim, suit, action or
proceeding is brought in an inconvenient forum, or (C) the venue of such claim, suit, action or
proceeding is improper; (iv) expressly waives any requirement for the posting of a bond by a party
bringing such claim, suit, action or proceeding; (v) consents to process being served in any such
claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy
thereof to such party at the address in effect for notices hereunder, and agrees that such service
shall constitute good and sufficient service of process and notice thereof; provided that nothing
in clause (v) hereof shall affect or limit any right to serve process in any other manner permitted
by law; and (vi) irrevocably waives any and all right to trial by jury in any such claim, suit,
action or proceeding; and (vii) 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. 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.
SECTION 3.10. Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement. Copies of executed
counterparts transmitted by telecopy or other electronic transmission service shall be considered
original executed counterparts for purposes of this Section 3.10.
SECTION 3.11. Tax Treatment. To the extent this Agreement imposes obligations upon a
particular Carlyle Holdings Partnership or a Carlyle Holdings General Partner, this Agreement
shall be treated as part of the relevant Carlyle Holdings Partnership Agreement as described in
Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury
Regulations. The parties shall report any Exchange consummated hereunder, (x) in the case of
Carlyle Holdings I, as a taxable sale of Carlyle Holdings I Partnership Units by a Carlyle Holdings
Limited Partner to Carlyle Holdings I GP Parent, (y) in the case of Carlyle Holdings II, as a
taxable sale of Carlyle Holdings II Partnership Units by a Carlyle Holdings Limited Partner
13
to Subsidiary Company and (z) in the case of Carlyle Holdings III, as a taxable sale of
Carlyle Holdings III Partnership Units by a Carlyle Holdings Limited Partner to Carlyle Holdings
III GP Parent, and no party shall take a contrary position on any income tax return, amendment
thereof or communication with a taxing authority.
SECTION 3.12. Independent Nature of Holdings Unitholders’ Rights and Obligations.
The obligations of each Carlyle Holdings Limited Partner hereunder are several and not joint with
the obligations of any other Carlyle Holdings Limited Partner, and no Carlyle Holdings Limited
Partner shall be responsible in any way for the performance of the obligations of any other Carlyle
Holdings Limited Partner hereunder. The decision of each Carlyle Holdings Limited Partner to enter
into to this Agreement has been made by such Carlyle Holdings Limited Partner independently of any
other Carlyle Holdings Limited Partner. Nothing contained herein, and no action taken by any
Carlyle Holdings Limited Partner pursuant hereto, shall be deemed to constitute the Carlyle
Holdings Limited Partners as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Carlyle Holdings Limited Partners are in any way acting in
concert or as a group with respect to such obligations or the transactions contemplated hereby and
the Issuer acknowledges that the Carlyle Holdings Limited Partners are not acting in concert or as
a group, and the Issuer will not assert any such claim, with respect to such obligations or the
transactions contemplated hereby.
SECTION 3.13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Delaware.
[Remainder of Page Intentionally Left Blank]
14
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered,
all as of the date first set forth above.
| CARLYLE GROUP MANAGEMENT L.L.C. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| THE CARLYLE GROUP L.P. By: Carlyle Group Management L.L.C., its general partner |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CARLYLE HOLDINGS I GP INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CARLYLE HOLDINGS I GP SUB L.L.C. By: Carlyle Holdings I GP Inc., its sole member |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CARLYLE HOLDINGS II GP L.L.C. | ||||||||
| By: | The Carlyle Group L.P., its sole member | |||||||
| By: Carlyle Group Management L.L.C., its general partner | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| CARLYLE HOLDINGS III GP L.P. | ||||||||
| By: Carlyle Holdings III GP Management L.L.C., its general partner | ||||||||
| By: The Carlyle Group L.P., its sole member | ||||||||
| By: Carlyle Group Management L.L.C., its general partner | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| CARLYLE HOLDINGS III GP SUB L.L.C. | ||||||||
| By: Carlyle Holdings III GP L.P., its sole member | ||||||||
| By: Carlyle Holdings III GP Management L.L.C., its general partner | ||||||||
| By: The Carlyle Group L.P., its sole member | ||||||||
| By: Carlyle Group Management L.L.C., its general partner | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| CARLYLE HOLDINGS I L.P. | ||||||
| By: Carlyle Holdings I GP Sub L.L.C., its general partner | ||||||
| By: Carlyle Holdings I GP Inc., its sole member | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| CARLYLE HOLDINGS II L.P. | ||||||
| By: Carlyle Holdings II GP L.L.C., its general partner | ||||||
| By: The Carlyle Group L.P., its sole member | ||||||
| By: Carlyle Group Management L.L.C., its general partner | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| CARLYLE HOLDINGS III L.P. | ||||||||||
| By: Carlyle Holdings III GP Sub L.L.C., its general partner | ||||||||||
| By: Carlyle Holdings III GP L.P., its sole member | ||||||||||
| By: Carlyle Holdings III GP Management L.L.C., its general partner | ||||||||||
| By: The Carlyle Group L.P., its sole member | ||||||||||
| By: Carlyle Group Management L.L.C., its general partner | ||||||||||
| By: | ||||||||||
| Name: | ||||||||||
| Title: | ||||||||||
| CARLYLE HOLDINGS II SUB L.L.C. | ||||||||||
| By: The Carlyle Group L.P., its managing member | ||||||||||
| By: Carlyle Group Management L.L.C., its general partner | ||||||||||
| By: | ||||||||||
| Name: | ||||||||||
| Title: | ||||||||||
EXHIBIT A
[FORM OF]
NOTICE OF EXCHANGE
NOTICE OF EXCHANGE
Carlyle Holdings I X.X.
Xxxxxxx Holdings II X.X.
Xxxxxxx Holdings III X.X.
Xxxxxxx Holdings I GP Sub L.L.C.
Carlyle Holdings II Sub L.L.C.
Carlyle Holdings III GP Sub L.L.C.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Electronic Mail: xxxx_xxxxxxxxxxxxxx@xxxxxxx.xxx
Xxxxxxx Holdings II X.X.
Xxxxxxx Holdings III X.X.
Xxxxxxx Holdings I GP Sub L.L.C.
Carlyle Holdings II Sub L.L.C.
Carlyle Holdings III GP Sub L.L.C.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Electronic Mail: xxxx_xxxxxxxxxxxxxx@xxxxxxx.xxx
Reference is hereby made to the Exchange Agreement, dated as of , 2012 (the
“Exchange Agreement”), among Carlyle Group Management L.L.C., The Carlyle Group L.P.,
Carlyle Holdings I GP Inc., Carlyle Holdings I GP Sub L.L.C., Carlyle Holdings II GP L.L.C.,
Carlyle Holdings III GP L.P., Carlyle Holdings III GP Sub L.L.C., Carlyle Holdings I L.P., Carlyle
Holdings II L.P., Carlyle Holdings III L.P., Carlyle Holdings II Sub L.L.C., and the Carlyle
Holdings Limited Partners from time to time party thereto, as amended from time to time.
Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange
Agreement.
The undersigned Carlyle Holdings Limited Partner desires to exchange the number of Carlyle
Holdings Partnership Units set forth below in the form of exchange selected below to be issued in
its name as set forth below.
Legal Name of Carlyle Holdings Limited Partner:
|
||
Address:
|
||
Number of Carlyle Holdings Partnership Units to be exchanged:
|
||
The undersigned hereby represents and warrants that (i) the undersigned has full legal
capacity to execute and deliver this Notice of Exchange and to perform the undersigned’s
obligations hereunder; (ii) this Notice of Exchange has been duly executed and delivered by the
undersigned; (iii) the Carlyle Holdings Partnership Units subject to this Notice of Exchange will
be transferred to the Carlyle Holdings Partnerships free and clear of any Lien; (iv) in the case of
a Carlyle Holdings Limited Partner other than the California Public Employees’ Retirement System
and each of the Mubadala Holders, none of the undersigned, the undersigned’s spouse or any an
entity disregarded as an entity separate from the undersigned or the undersigned’s spouse for
United States federal income tax purposes holds any Common Units or will acquire any Common Units from the date
hereof through the sale or disposition of the Common Units acquired in the Exchange in accordance with the
Exchange Agreement and; (v) no consent, approval,
authorization, order, registration or qualification of any third party or with any court or
governmental agency or body having jurisdiction over the undersigned or the Carlyle Holdings
Partnership Units subject to this Notice of Exchange is required to be obtained by the
undersigned for the transfer of such Carlyle Holdings Partnership Units to the Carlyle
Holdings Partnerships.
The undersigned hereby irrevocably constitutes and appoints each officer of each Carlyle
Entity Party as the attorney of the undersigned, with full power of substitution and resubstitution
in the premises, to do any and all things and to take any and all actions that may be necessary to
exchange the Carlyle Holdings Partnership Units subject to this Notice of Exchange on the books of
the Carlyle Holdings Partnerships for Common Units on the books of the Issuer.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice of Exchange to
be executed and delivered by the undersigned or by its duly authorized attorney.
| Name: |
Dated:
EXHIBIT B
[FORM OF]
JOINDER AGREEMENT
[FORM OF]
JOINDER AGREEMENT
This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement,
dated as of , 2012 (the “Agreement”), among Carlyle Group Management
L.L.C., The Carlyle Group L.P., Carlyle Holdings I GP Inc., Carlyle Holdings I GP Sub L.L.C.,
Carlyle Holdings II GP L.L.C., Carlyle Holdings III GP L.P., Carlyle Holdings III GP Sub L.L.C.,
Carlyle Holdings I L.P., Carlyle Holdings II L.P., Carlyle Holdings III L.P., Carlyle Holdings II
Sub L.L.C., and the Carlyle Holdings Limited Partners from time to time party thereto, as amended
from time to time. Capitalized terms used but not defined in this Joinder Agreement shall have
their meanings given to them in the Agreement. This Joinder Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware. In the event of any conflict
between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall
control.
The undersigned hereby joins and enters into the Agreement having acquired Carlyle Holdings
Partnership Units in the Carlyle Holdings Partnerships. By signing and returning this Joinder
Agreement to the Issuer and the Carlyle Holdings Partnerships, the undersigned accepts and agrees
to be bound by and subject to all of the terms and conditions of and agreements of a Carlyle
Holdings Limited Partner contained in the Agreement, with all attendant rights, duties and
obligations of a Carlyle Holdings Limited Partner thereunder. The parties to the Agreement shall
treat the execution and delivery hereof by the undersigned as the execution and delivery of the
Agreement by the undersigned and, upon receipt of this Joinder Agreement by the Issuer and by the
Carlyle Holdings Partnerships, the signature of the undersigned set forth below shall constitute a
counterpart signature to the signature page of the Agreement.
Name:
|
||||||||
| Address for Notices: | With copies to: | |||||||
Attention: |
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