Reorganization Agreement, dated as of October 8, 2021, by and among KKR & Co. Inc., KKR Group Holdings Corp., KKR Group Partnership L.P., KKR Holdings L.P., KKR Holdings GP Limited, KKR Associates Holdings L.P., KKR Associates Holdings GP Limited and KKR Management LLP

 

 

 

 

 

 

 

 

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Section 1.04        KKR & Co. Inc. Merger.

 

as of such date, cancelled and extinguished for no further consideration and (ii) reflect the changes set forth in Section 3.02.

 

 

 

 

(e)          At the Closing Time:

 

 

 

Section 1.05          KKR Holdings L.P. Merger.

 

 

 

(c)          At the Closing Time:

 

 

 

 

Section 2.02         Treatment of Unvested and Unallocated Units of KKR Holdings L.P.

 

(a)          The unvested Holdings Units specified below as of the date hereof shall be treated as follows:

 

(b)          The unallocated Holdings Units as of the date hereof shall be allocated and treated as follows:

 

 

 

Section 3.01         Control of Series I Preferred Stock.

 

 

 

 

Section 3.02         Amended and Restated Certificate of Incorporation and Bylaws of New Pubco.

 

 

 

Section 3.03          Control of Carry Pool.

 

 

 

 

(d)          For purposes of this Agreement:

 

 

Section 4.01         Representations and Warranties. Each Party, severally and not jointly, hereby represents and warrants to the other Parties hereto:

 

(a)          such Party is duly organized or formed, as applicable, validly existing and in good standing under the laws of the jurisdiction in which it is organized (in the case of good standing, to the extent the concept is recognized by such jurisdiction), and has full power and authority to own, lease or otherwise hold and operate its properties, rights and assets and to carry on its business as it is now being conducted;

 

(b)          such Party is duly qualified to do business, and is in good standing, in each jurisdiction where the character of its properties or the nature of its activities make such qualification necessary;

 

(c)          subject to the Reorganization (including the conditions to the Mergers) and any amendments or changes contemplated hereby or thereby, the execution and delivery of this Agreement and the consummation of the transactions hereby will not at the Closing Time violate of any provisions of such Party’s  incorporation documents, bylaws, partnership agreements or similar governing documents; and

 

(d)          such Party has full power and authority to execute and deliver this Agreement and consummate the transactions applicable to such party contemplated by this Agreement.

 

Section 5.01         Termination. Prior to the Closing Time, subject to Section 6.03, this Agreement may be terminated and transactions contemplated hereby may be abandoned at any time (i) by mutual written consent of the Parties or (ii) by any Party if there shall be a law or regulation that makes the consummation of the transactions contemplated hereby illegal or otherwise prohibited, or if any judgment, injunction, order or decree enjoining any of the parties hereto from consummating the transactions contemplated hereby is entered and such judgment, injunction, order or decree shall become final and nonappealable.

 

Section 5.02         Effect of Termination. If this Agreement is terminated pursuant to Section 5.01, (i) this Agreement shall become void and of no effect, and none of the Parties or any of their respective stockholders, unit holders, directors, members, general partners, limited partners or officers, as applicable, shall have any liability with respect to such termination and abandonment and (ii) the Parties hereto shall consummate the Unwinding (as defined below), pursuant to Section 5.03, of any Reorganization Step consummated prior to such date of termination, including but not limited to such Reorganization Step consummated pursuant to Article I and Article II, and the actions consummated pursuant to Article III prior to such termination. The provisions of this Section 5.02 shall survive any such termination of this Agreement.

 

Section 5.03         Unwinding. Notwithstanding Section 5.01 or any other provision of this Agreement, if the Reorganization is not consummated prior to December 31, 2023 (the “Outside Date”), each of the Parties hereto shall, and shall cause its respective affiliates subsidiaries to, as soon as reasonably practicable following the receipt of such notice or following the Outside Date, use its respective reasonable best efforts to take or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable laws to undo, reverse, nullify, rescind and/or make ineffective each and any Reorganization Step consummated as of the time of such notice or the Outside Date such that each Party and its respective affiliates and/or subsidiaries will be in a substantially equivalent position to that as prior to the Reorganization (excluding Article II), including, without limitation, with respect to each and preceding or additional step that was undertaken by the relevant Party and its affiliates in connection with the Reorganization or to permit such Party and its affiliates to enter into any merger agreement contemplated by the Reorganization (such steps, collectively (the “Unwinding”) as promptly as reasonably practicable thereafter, but in any event no later than on or before December 31, 2024 (or such earlier date as may be agreed upon between the Parties).  Upon the consummation of the Unwinding, this Agreement shall be automatically terminated without any further action by any party hereto, and such termination shall have the effect set forth in Section 5.02.

 

 

Section 6.01          Amendments and Consents. This Agreement may not be amended except by an instrument in writing signed by each of the Parties; provided that any amendment that would have a material adverse effect on the stockholders of KKR & Co. Inc. prior to the Closing

Time or New Pubco after the Closing Time shall require (i) the affirmative vote of the holders of a majority in voting power of the common stock of KKR & Co. Inc. or New Pubco, as applicable, entitled to vote thereon (which, prior to the Closing Time, shall include the Series II Preferred Stock, voting with the common stock, as a group) or (ii) the approval by a majority of independent directors of KKR & Co. Inc. or New Pubco, as applicable; provided, further, that any amendment to the certificate of incorporation of KKR & Co. Inc. or New Pubco approved by the Existing Board or the New Pubco Board, as applicable, prior to the Sunset Date pursuant to Section 3.02(b) will be deemed not to have a material adverse effect on stockholders of KKR & Co. Inc. prior to the Closing Time or New Pubco after the Closing Time.

 

Section 6.02         Intended Tax Treatment. The Parties intend that (i) the Recapitalization shall not give rise to any gain or loss for U.S. federal income tax purposes and applicable state and local tax purposes and (ii) the Mergers shall be treated as a transaction governed by Section 351 of the U.S. Internal Revenue Code of 1986, as amended, and for applicable state and local tax purposes.  The parties shall, and shall cause their respective controlled affiliates to, report the transactions contemplated by this Agreement in a manner consistent with the foregoing and not take any position during the course of any Tax audit or other proceeding that is inconsistent therewith.

 

Section 6.03         Cooperation; Further Assurances. Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties hereto agrees (severally and not jointly), and shall cause its respective controlled affiliates to (a) vote and exercise its powers or rights in any process of the Reorganization to which they are legally entitled to participate and which require their voting, action or approval and (b) reasonably cooperate with the other Parties in doing all things necessary, proper or advisable under applicable laws to consummate and make effective the Reorganization and the other transactions contemplated by this Agreement.  In furtherance of the foregoing, each of the Parties will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement, including without limitation (a) executing and delivering all agreements, amendments, supplements, reports, certificates, applications and other documents, (b) supplying promptly any additional information and documentary material, and (c) promptly making any regulatory filings, notices and applications (including all appropriate filings with the U.S. Securities and Exchange Commission and any antitrust or other governmental authorities of competent jurisdiction).

 

Section 6.04         Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws, provisions or rules that would cause the application of the laws of any jurisdiction other than the State of Delaware.

 

Section 6.05         Arbitration; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)          Any dispute, disagreement, claim, or controversy (at law or in equity) arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement or any matter arising out of or in connection

with this Agreement and the rights and obligations arising hereunder or thereunder (a “Dispute”) shall be resolved in accordance with this Section 6.05.

 

(b)          The parties in dispute shall attempt in good faith to resolve such Dispute among themselves within thirty (30) calendar days from the date any Party sends written notice of such Dispute to the other party(ies) involved in such Dispute.

 

(c)          If such Dispute has not been resolved in writing for any reason within the 30-day period, the Dispute shall, at the request of any party, be settled exclusively by final and binding arbitration administered by the International Centre for Dispute Resolution (“ICDR”) in accordance with its International Arbitration Rules in effect at the time (the “Rules”), except as modified herein.

 

(i)	The seat of arbitration shall be New York, New York and the arbitration shall be conducted in the English language.

(ii)	The arbitration shall be conducted by three independent and impartial arbitrators.

(iii)

The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1 et seq.

(iv)	The fees and expenses of the arbitrators shall be shared equally by the parties to such arbitration and advanced by them from time to time as required.

(v)	The arbitrators shall permit and facilitate such discovery as they shall determine appropriate in the circumstances, taking into account the needs of the parties and the desirability of making discovery expeditious and cost effective.

(vi)	The parties to the Dispute shall keep confidential any proprietary information, trade secrets or other nonpublic information disclosed in discovery.

(vii)

The arbitrators shall endeavor to render their award within sixty (60) days of the conclusion of the final arbitration hearing, or as soon as practicable thereafter.

(viii)

Notwithstanding anything to the contrary provided in this Section 6.05 and without prejudice to the above procedures, any party may apply to the Delaware Chancery Court, or, if such court does not have jurisdiction, any federal court located in the State of Delaware, or, if neither of such courts has jurisdiction, any other Delaware state court (“Chosen Courts”) or any other court of competent jurisdiction for temporary injunctive or other provisional judicial relief if such action is necessary to avoid irreparable damage or to preserve the status quo.  Each of the parties irrevocably consents and submits for itself and in respect of its property, generally and unconditionally, to the non-exclusive jurisdiction of the Chosen Courts for such purpose and for the enforcement of any arbitral award rendered hereunder and to compel arbitration.  In any such action: (i) each party irrevocably waives, to the fullest extent it may effectively do so, any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens or any right of objection to jurisdiction on account of its place of incorporation or domicile, which it may now or hereafter have to the bringing of any such action or proceeding in any of the Chosen Courts; (ii) each of the parties irrevocably consents to service of process in any Dispute in any of the aforesaid courts or arbitration by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized overnight delivery service, to such party at 30 Hudson Yards, New York, New York 10001; and (iii) each of the parties waives any right to trial by jury in any court.

(ix)

Without prejudice to the provisional remedies that may be granted by a court, the arbitrator shall have full authority to grant provisional remedies, to order a party to request that a court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitrator’s orders to that effect.

(x)	The arbitrators shall not have any right or power to award punitive or treble damages.

(xi)	The award rendered by the arbitrators shall be final and not subject to judicial review.

(xii)

Any arbitration award may be entered in and enforced by any court having jurisdiction thereof or over any party or any of its assets and the parties hereby consent and submit to the jurisdiction of the courts of any competent jurisdiction for purposes of the enforcement of any arbitration award.

(xiii)

The parties to any Dispute agree that after the arbitrators have made a finding with respect to a particular factual matter pursuant to this Section 6.05, such finding of the arbitrators shall be deemed to have been finally determined by the parties for all purposes under this Agreement and, thereafter, no party shall have the right to seek any contrary determination in connection with any later arbitration procedure.

(d)          To the extent that any Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself, or to such Party’s property, each such Party hereby irrevocably waives such immunity in respect of such Party’s obligations with respect to this Agreement.

 

(e)          Each Party acknowledges that it is knowingly and voluntarily agreeing to the choice of Delaware law to govern this Agreement and to the arbitration and other provisions of this Section 6.05. The Parties intend this to be an effective choice of Delaware law and an effective consent to jurisdiction and service of process under 6 Del. C. §2708.

 

(f)          Each Party, for itself and its affiliates, hereby irrevocably and unconditionally waives to the fullest extent permitted by applicable law all right to trial by jury in any action or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to the actions of the Parties or their respective affiliates pursuant to this Agreement or the other transaction documents in the negotiation, administration, performance or enforcement hereof or thereof.

 

Section 6.06         Execution; Counterparts. This Agreement may be executed (including by facsimile, “.pdf” or other electronic transmission) in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the Parties consent to conduct the transactions contemplated hereunder by electronic means.

Section 6.07         Parties in Interest. This Agreement shall be binding upon and inure to the benefit of each Party and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

 

Section 6.08         Entire Agreement. This Agreement shall constitute the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede all prior negotiations, commitments, course of dealings and writings with respect to such subject matter.

 

Section 6.09         Remedies. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.  The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their respective obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement) in accordance with their specific terms or otherwise breach such provisions.  It is accordingly agreed that, prior to the valid termination of this Agreement pursuant to Section 5.01, the Parties shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement), in each case, without posting a bond or undertaking, this being in addition to any other remedy to which they are entitled at law or in equity.  Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms of this Agreement on the basis that the other Parties have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity.  No breach of any representation, warranty or covenant contained herein or in any certificate delivered pursuant to this Agreement shall give rise to any right on the part of any Party, after the consummation of the transactions contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby.

 

Section 6.10         No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, each Party, on behalf of itself and its affiliates and their respective successors and assigns, acknowledges and agrees that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement or the transactions contemplated hereby shall be had against any past, present or future director, officer, agent or employee of any past, present or future member of the other Party or of any affiliate or assignee thereof or any other person that is not a Party, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any past, present or future director, officer, agent or employee of any past, present or future member of any Party or of any affiliate or assignee thereof, as such, for any obligation of such Party under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

Section 6.11         No Waiver of Rights. The failure or delay of any Party to assert any of its rights or exercise any of its remedies hereunder shall not constitute a waiver of such rights or remedies.

 

Section 6.12         Severability. If any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable law, all other provisions of this Agreement shall 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.  Notwithstanding the foregoing, if such term or provision could be more narrowly drawn so as not to be invalid, illegal or unenforceable in any jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.  Upon a determination that any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable law, the Parties 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 6.13         Construction; Interpretation. The term “this Agreement” means this Reorganization Agreement together with the exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof.  The headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.  No Party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions hereof, and all provisions of this Agreement shall be construed according to their fair meaning and not strictly for or against any Party.  Unless otherwise indicated to the contrary herein by the context or use thereof: (i) the words, “herein,” “hereto,” “hereof” and words of similar import refer to this Agreement as a whole, including the exhibits, and not to any particular section, subsection, paragraph, subparagraph or clause contained in this Agreement; (ii) masculine gender shall also include the feminine and neutral genders, and vice versa; (iii) words importing the singular shall also include the plural, and vice versa; (iv) the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”; (v) financial terms shall have the meanings given to such terms under GAAP unless otherwise specified herein; (vi) references to “$” or “dollar” or “US$” shall be references to United States dollars and (vii) the word “or” means “and/or”.  If any action under this Agreement is required to be done or taken on a day that is not a Business Day or on which a government office is not open with respect to which a filing must be made, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter.  “Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York are not required or authorized by Law to be closed for the general transaction of business.

 

 

 

 

(a)

If there are only two parties to the arbitration, then the claimant and respondent shall each appoint one arbitrator within thirty (30) days of receipt by respondent of the demand for arbitration.  The two arbitrators so appointed shall appoint the third and presiding arbitrator (the “Presiding Arbitrator”) within thirty (30) days of the appointment of the second arbitrator.  If any party fails to appoint an arbitrator, or if the two party-appointed arbitrators fail to appoint the Presiding Arbitrator, within the time periods specified herein, then any such arbitrator shall, upon any party’s request, be appointed by the ICDR in accordance with the Rules.

(b)

If there are more than two parties to the arbitration, then the claimant or claimants collectively, and respondent or respondents collectively, shall each appoint one arbitrator within thirty (30) days of receipt by respondent or respondents of the demand for arbitration.  The two arbitrators so appointed shall appoint the Presiding Arbitrator within thirty (30) days of the appointment of the second arbitrator.  If the two party-appointed arbitrators cannot reach agreement on the Presiding Arbitrator within the time periods specified herein, then the ICDR shall appoint the Presiding Arbitrator in accordance with the Rules.  If either all of the claimants or all of the respondents, respectively, fail to make a joint appointment of an arbitrator within the time limits set forth herein, then the ICDR shall appoint all three arbitrators in accordance with the Rules.

	KKR & CO. INC.
	Name:
	Title:

	KKR AUBERGINE INC.
	Name:
	Title:

 

(a)

If there are only two parties to the arbitration, then the claimant and respondent shall each appoint one arbitrator within thirty (30) days of receipt by respondent of the demand for arbitration.  The

(b)

If there are more than two parties to the arbitration, then the claimant or claimants collectively, and respondent or respondents collectively, shall each appoint one arbitrator within thirty (30) days of receipt by respondent or respondents of the demand for arbitration.  The two arbitrators so appointed shall appoint the Presiding Arbitrator within thirty (30) days of the appointment of the second arbitrator.  If the two party-appointed arbitrators cannot reach agreement on the Presiding Arbitrator within the time periods specified herein, then the ICDR shall appoint the Presiding Arbitrator in accordance with the Rules.  If either all of the claimants or all of the respondents, respectively, fail to make a joint appointment of an arbitrator within the time limits set forth herein, then the ICDR shall appoint all three arbitrators in accordance with the Rules.

 

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