Apollo Global Management LLC 2013 Form 10K

Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10- K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934
FOR THE TRANSITION PERIOD FROM
TO
Commission File Number: 001- 35107
APOLLO GLOBAL MANAGEMENT, LLC
(Exact name of Registrant as specified in its charter)
Delaware
20- 8880053
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
9 West 57th Street, 43rd Floor

New York, New York 10019
(Address of principal executive offices) (Zip Code)
(212) 515- 3200

(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class

Class A shares representing limited liability
company interests
Name of each exchange on which registered

New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well- known seasoned issuer, as defined in Rule 405 of the Securities. Yes 3 No q
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes q No 3
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes 3 No q
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S- T (232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes 3 No q
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S- K (229.405 of this chapter) is not contained herein
and will not be contained, to the best of the Registrants knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10- K or any amendment to this Form 10- K. 3
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b- 2 of the Exchange Act.
Large accelerated filer
T
Accelerated filer
q
Non- accelerated filer
o (Do not check if a smaller reporting company)
Smaller reporting company
q
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b- 2 of the Exchange Act). Yes q No T
The aggregate market value of the Class A shares of the Registrant held by non- affiliates as of June 30, 2013 was approximately $3,364.7 million,
which includes nonvoting Class A shares with a value of approximately $1,084.5 million.
As of February 26, 2014 there were 148,952,653 Class A shares and 1 Class B share outstanding.
Table of Contents
TABLE OF CONTENTS
Page
PART I
ITEM 1.
BUSINESS
ITEM 1A.
RISK FACTORS
22
ITEM 1B.
UNRESOLVED STAFF COMMENTS
55
ITEM 2.
PROPERTIES
55
ITEM 3.
LEGAL PROCEEDINGS
55
ITEM 4.
MINE SAFETY DISCLOSURES
57
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
58
ITEM 6.
SELECTED FINANCIAL DATA
60
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 62
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
146
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
149
ITEM 8A.
UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION
242
ITEM 9.
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
243
ITEM 9A.
CONTROLS AND PROCEDURES
244
ITEM 9B.
OTHER INFORMATION
245
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
246
ITEM 11.
EXECUTIVE COMPENSATION
251
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS
261
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
263
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
271
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
271
Part II
PART III
PART IV
ITEM 15.
SIGNATURES
277
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Forward- Looking Statements

This report may contain forward looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These statements include, but are not
limited to, discussions related to Apollos expectations regarding the performance of its business, its liquidity and capital resources and the other nonhistorical statements in the discussion and analysis. These forward- looking statements are based on managements beliefs, as well as assumptions
made by, and information currently available to, management. When used in this report, the words believe, anticipate, estimate, expect,
intend and similar expressions are intended to identify forward- looking statements. Although management believes that the expectations reflected
in these forward- looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements
are subject to certain risks, uncertainties and assumptions, including risks relating to our dependence on certain key personnel, our ability to raise new
private equity, credit or real estate funds, market conditions generally, our ability to manage our growth, fund performance, changes in our regulatory
environment and tax status, the variability of our revenues, net income and cash flow, our use of leverage to finance our businesses and investments
by our funds and litigation risks, among others. We believe these factors include but are not limited to those described under the section entitled Risk
Factors in this report; as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange
Commission ("SEC"), which are accessible on the SECs website at www.sec.gov. These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are included in this report and in other filings. We undertake no obligation to publicly
update or review any forward- looking statements, whether as a result of new information, future developments or otherwise, except as required by
applicable law.
Terms Used in This Report
In this report, references to Apollo, we, us, our and the Company refer collectively to Apollo Global Management, LLC, a Delaware
limited liability company, and its subsidiaries, including the Apollo Operating Group and all of its subsidiaries;
AMH refers to Apollo Management Holdings, L.P., a Delaware limited partnership, that is an indirect subsidiary of Apollo Global Management,
LLC;
Apollo funds and our funds refer to the funds, alternative asset companies and other entities that are managed by the Apollo Operating Group;
Apollo Operating Group refers to (i) the limited partnerships through which our Managing Partners currently operate our businesses and (ii) one or
more limited partnerships formed for the purpose of, among other activities, holding certain of our gains or losses on our principal investments in the
funds, which we refer to as our principal investments;
Assets Under Management, or AUM, refers to the investments we manage or with respect to which we have control, including capital we have
the right to call from our investors pursuant to their capital commitments to various funds. Our AUM equals the sum of:
(i)
the fair value of our private equity investments plus the capital that we are entitled to call from our investors pursuant to the terms of their
capital commitments;
(ii) the net asset value, or NAV, of our credit funds, other than certain collateralized loan obligations (CLOs) and collateralized debt obligations
(CDOs), which have a fee generating basis other than the mark- to- market value of the underlying assets, plus used or available leverage and/or
(iii) the gross asset value or net asset value of our real estate entities and the structured portfolio company investments included within the funds we
manage, which includes the leverage used by such structured portfolio companies;
(iv) the incremental value associated with the reinsurance investments of the portfolio company assets that we manage; and
(v)
the fair value of any other investments that we manage plus unused credit facilities, including capital commitments for investments that
may require pre- qualification before investment plus any other capital commitments available for investment that are not otherwise
included in the clauses above.
Our AUM measure includes Assets Under Management for which we charge either no or nominal fees. Our definition of AUM is not based on any
definition of Assets Under Management contained in our operating agreement or in any of our Apollo fund management agreements. We consider
multiple factors for determining what should be included in our definition of AUM. Such
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factors include but are not limited to (1) our ability to influence the investment decisions for existing and available assets; (2) our ability to generate
income from the underlying assets in our funds; and (3) the AUM measures that we use internally or believe are used by other investment managers.
Given the differences in the investment strategies and structures among other alternative investment managers, our calculation of AUM may differ
from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures
presented by other investment managers;
Fee- generating AUM consists of assets that we manage and on which we earn management fees or monitoring fees pursuant to management
agreements on a basis that varies among the Apollo funds. Management fees are normally based on net asset value, gross assets, adjusted par
asset value, adjusted cost of all unrealized portfolio investments, capital commitments, adjusted assets, stockholders equity, invested
capital or capital contributions, each as defined in the applicable management agreement. Monitoring fees, also referred to as advisory fees,
generally are based on the total value of certain structured portfolio company investments, which normally includes leverage, less any portion of such
total value that is already considered in feegenerating AUM;
Non- fee generating AUM consists of assets that do not produce management fees or monitoring fees. These assets generally consist of the following:
(i)
fair value above invested capital for those funds that earn management fees based on invested
capital;
(ii) net asset values related to general partner and coinvestment ownership;
(iii) unused credit facilities;
(iv) available commitments on those funds that generate management fees on invested capital;
(v) structured portfolio company investments that do not generate monitoring fees; and
(vi)
the difference between gross asset and net asset value for those funds that earn management fees based on net asset
value.
We use nonfee generating AUM combined with feegenerating AUM as a performance measurement of our investment activities, as well as to
monitor fund size in relation to professional resource and infrastructure needs. Non- fee generating AUM includes assets on which we could earn
carried interest income;
carried interest, carried interest income, and incentive income refer to interests granted to Apollo by an Apollo fund that entitle Apollo to
receive allocations, distributions or fees which are based on the performance of such fund or its underlying investments;
Contributing Partners refer to those of our partners and their related parties (other than our Managing Partners) who indirectly beneficially own
(through Holdings) Apollo Operating Group units;
feeder funds refer to funds that operate by placing substantially all of their assets in, and conducting substantially all of their investment and trading
activities through, a master fund, which is designed to facilitate collective investment by the participating feeder funds. With respect to certain of our
funds that are organized in a master- feeder structure, the feeder funds are permitted to make investments outside the master fund when deemed
appropriate by the funds investment manager;
gross IRR of a fund represents the cumulative investment- related cash flows for all of the investors in the fund on the basis of the actual timing of
investment inflows and outflows (for unrealized investments assuming disposition on December 31, 2013 or other date specified) aggregated on a
gross basis quarterly, and the return is annualized and compounded before management fees, carried interest and certain other fund expenses
(including interest incurred by the fund itself) and measures the returns on the funds investments as a whole without regard to whether all of the
returns would, if distributed, be payable to the funds investors;
Holdings means AP Professional Holdings, L.P., a Cayman Islands exempted limited partnership through which our Managing Partners and
Contributing Partners indirectly beneficially own their interests in the Apollo Operating Group units;
"IRS" refers to the Internal Revenue Service;
Managing Partners refer to Messrs. Leon Black, Joshua Harris and Marc Rowan collectively and, when used in reference to holdings of interests in
Apollo or Holdings, includes certain related parties of such individuals;
net IRR of a fund means the gross IRR applicable to all investors, including related parties which may not pay fees, net of management fees,
organizational expenses, transaction costs, and certain other fund expenses (including interest incurred by the fund itself). The realized and the
estimated unrealized value is adjusted such that up to 20.0% of the unrealized gain is allocated
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to the general partner, thereby reducing the balance attributable to fund investors carried interest all offset to the extent of interest income, and
measures returns based on amounts that, if distributed, would be paid to investors of the fund, to the extent that a fund exceeds all requirements
detailed within the applicable fund agreement;
net return represents the calculated return that is based on month- to- month changes in net assets and is calculated using the returns that have been
geometrically linked based on capital contributions, distributions and dividend reinvestments, as applicable;
our manager means AGM Management, LLC, a Delaware limited liability company that is controlled by our Managing Partners;
permanent capital means capital of publicly traded vehicles that do not have redemption provisions or a requirement to return capital to investors
upon exiting the investments made with such capital, except as required by applicable law, such as AP Alternative Assets, L.P. ("AAA"), Apollo
Investment Corporation ("AINV"), Apollo Commercial Real Estate Finance, Inc. ("ARI"), Apollo Residential Mortgage, Inc. ("AMTG"), Apollo
Tactical Income Fund Inc. ("AIF"), and Apollo Senior Floating Rate Fund Inc. ("AFT"); such publicly traded vehicles may be required, or elect, to
return all or a portion of capital gains and investment income;
private equity investments refer to (i) direct or indirect investments in existing and future private equity funds managed or sponsored by Apollo,
(ii) direct or indirect co- investments with existing and future private equity funds managed or sponsored by Apollo, (iii) direct or indirect
investments in securities which are not immediately capable of resale in a public market that Apollo identifies but does not pursue through its private
equity funds, and (iv) investments of the type described in (i) through (iii) above made by Apollo funds; and
Strategic Investors refer to the California Public Employees Retirement System, or CalPERS, and an affiliate of the Abu Dhabi Investment
Authority, or ADIA.
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PART I.
ITEM 1. BUSINESS
Overview
Founded in 1990, Apollo is a leading global alternative investment manager. We are contrarian, value- oriented investors in private equity, credit and
real estate, with significant distressed investment expertise. We have a flexible mandate in many of the funds we manage that enables the funds to
invest opportunistically across a companys capital structure. We raise, invest and manage funds on behalf of some of the worlds most prominent
pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. As of December 31, 2013, we had total AUM
of $161 billion, including approximately $50 billion in private equity, $101 billion in credit and $9 billion in real estate. We have consistently
produced attractive longterm investment returns in our private equity funds, generating a 39% gross IRR and a 26% net IRR on a compound annual
basis from inception through December 31, 2013.
Apollo is led by our Managing Partners, Leon Black, Joshua Harris and Marc Rowan, who have worked together for more than 23 years and lead a
team of 710 employees, including 277 investment professionals, as of December 31, 2013. This team possesses a broad range of transaction,
financial, managerial and investment skills. We have offices in New York, Los Angeles, Houston, Toronto, London, Frankfurt, Luxembourg,
Singapore, Hong Kong, and Mumbai. We operate our private equity, credit and real estate businesses in a highly integrated manner, which we believe
distinguishes us from other alternative investment managers. Our investment professionals frequently collaborate across disciplines. We believe that
this collaboration, including market insight, management, banking and consultant contacts, and investment opportunities, enables the funds we
manage to more successfully invest across a companys capital structure. This platform and the depth and experience of our investment team have
enabled us to deliver strong longterm investment performance for our funds throughout a range of economic cycles.
Our objective is to achieve superior longterm risk- adjusted returns for our fund investors. The majority of our investment funds are designed to
invest capital over periods of seven or more years from inception, thereby allowing us to generate attractive longterm returns throughout economic
cycles. Our investment approach is value- oriented, focusing on nine core industries in which we have considerable knowledge and experience, and
emphasizing downside protection and the preservation of capital. Our core industry sectors include chemicals, natural resources, consumer and retail,
distribution and transportation, financial and business services, manufacturing and industrial, media and cable and leisure, packaging and materials
and the satellite and wireless industries. We are frequently contrarian in our investment approach, which is reflected in a number of ways, including:
our willingness to invest in industries that our competitors typically avoid;
the often complex structures we employ in some of our investments, including our willingness to pursue difficult corporate carve- out transactions;
our experience investing during periods of uncertainty or distress in the economy or financial markets when many of our competitors simply reduce
their investment activity;
our orientation towards sole sponsored transactions when other firms have opted to partner with others; and
our willingness to undertake transactions that have substantial business, regulatory or legal complexity.
We have applied this investment philosophy to identify what we believe are attractive investment opportunities, deploy capital across the balance
sheet of industry leading, or franchise, businesses and create value throughout economic cycles.
We rely on our deep industry, credit and financial structuring experience, coupled with our strengths as a value- oriented, distressed investor, to
deploy significant amounts of new capital within challenging economic environments. Our approach towards investing in distressed situations often
requires our funds to purchase particular debt securities as prices are declining, since this allows us both to reduce our funds average cost and
accumulate sizable positions which may enhance our ability to influence any restructuring plans and maximize the value of our funds distressed
investments. As a result, our investment approach may produce negative shortterm unrealized returns in certain of the funds we manage. However,
we concentrate on generating attractive, longterm, risk- adjusted realized returns for our fund investors, and we therefore do not overly depend on
shortterm results and quarterly fluctuations in the unrealized fair value of the holdings in our funds.
In addition to deploying capital in new investments, we seek to enhance value in the investment portfolios of the funds we manage. We have relied on
our transaction, restructuring and credit experience to work proactively with our private equity funds portfolio company management teams to
identify and execute strategic acquisitions, joint ventures, and other transactions, generate cost and working capital savings, reduce capital
expenditures, and optimize capital structures through several means such as debt exchange offers and the purchase of portfolio company debt at
discounts to par value.
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We had total AUM of approximately $161 billion as of December 31, 2013, consisting of approximately $50 billion in our private equity business,
approximately $101 billion in our credit business and approximately $9 billion in our real estate business. We have grown our total AUM at a 34%
compound annual growth rate from December 31, 2004 to December 31, 2013. In addition, we benefit from mandates with longterm capital
commitments in our private equity, credit and real estate businesses. Our long- lived capital base allows us to invest our funds' assets with a longterm focus, which is an important component in generating attractive returns for our investors. We believe the longterm capital we manage also
leaves us well- positioned during economic downturns, when the fundraising environment for alternative assets has historically been more
challenging than during periods of economic expansion. As of December 31, 2013, approximately 96% of our AUM was in funds with a contractual
life at inception of seven years or more, and 7% of our AUM was in permanent capital vehicles with unlimited duration.
We expect our growth in AUM to continue over time by seeking to create value in our funds existing private equity, credit and real estate
investments, continuing to deploy our funds available capital in what we believe are attractive investment opportunities, and raising new funds and
investment vehicles as market opportunities present themselves. See Item 1A. Risk FactorsRisks Related to Our BusinessesWe may not be
successful in raising new funds or in raising more capital for certain of our funds and may face pressure on fee arrangements of our future funds.
Our financial results are highly variable, since carried interest (which generally constitutes a large portion of the income that we receive from the
funds we manage), and the transaction and advisory fees that we receive, can vary significantly from quarter to quarter and year to year. We manage
our business and monitor our performance with a focus on longterm performance, an approach that is generally consistent with the investment
horizons of the funds we manage and is driven by the investment returns of our funds.
Available Information
Our Annual Reports on Form 10- K, Quarterly Reports on Form 10- Q, Current Reports on Form 8- K and amendments to reports filed or furnished
pursuant to Section 13(a) of the Exchange Act are made available free of charge on or through our website at www.agm.com as soon as reasonably
practicable after such reports are filed with, or furnished to, the SEC. The information on our website is not, and shall not be deemed to be, part of
this report or incorporated into any other filings we make with the SEC.
Our Businesses
We have three business segments: private equity, credit and real estate. We also manage AP Alternative Assets, L.P., a publicly listed permanent
capital vehicle. The sole investment held by AAA is its investment in AAA Investments, L.P. (AAA Investments). AAA Investments owns through
its subsidiaries the majority of the economic equity of Athene Holding Ltd. (together with its subsidiaries, Athene). During 2009, Athene Holding
Ltd. was founded to capitalize on favorable market conditions in the dislocated life insurance sector. Athene Holding Ltd. is the ultimate parent of
various insurance company operating subsidiaries. Through its subsidiaries, Athene Holding Ltd. provides insurance products focused primarily on
the retirement market and its business centers primarily on issuing or reinsuring fixed and equityindexed annuities.
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In addition to AAA, we manage several strategic investment accounts (SIAs) established to facilitate investments by third- party investors directly
in Apollo- sponsored funds and other securities. We have also raised a dedicated natural resources fund, which we include within our private equity
segment that targets global private equity opportunities in energy, metals and mining and select other natural resources sub- sectors. The diagram
below summarizes our current businesses:
Apollo Global Management, LLC
Private Equity
Distressed Buyouts and Debt

Investments
Corporate Carve- outs
Opportunistic Buyouts
Natural Resources
AUM: $49.9 billion(1)(2)
Credit
U.S. Performing Credit
Structured Credit
Opportunistic Credit
Non- performing Loans
European Credit
Athene
Real Estate
Global opportunistic and value added

investments in distressed debt and equity
recapitalization transactions
Senior and subordinated debt
Commercial mortgage backed

securities
AUM: $100.9 billion(1)(2)(3)
AUM: $9.3 billion(2)(3)
Strategic Investment Accounts(4)

Generally invests in or alongside certain Apollo funds
and other Apollo- sponsored transactions
(1) All data is as of December 31, 2013.

(2) See Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information.
(3)
Includes funds that are denominated in Euros and translated into U.S. dollars at an exchange rate of 1.00 to $1.37 as of December 31,
2013.
(4) As of December 31, 2013, there was $1.1 billion that had yet to be deployed to an Apollo fund within our three segments.
Private Equity
As a result of our long history of private equity investing across market cycles, we believe we have developed a unique set of skills which we rely on
to make new investments and to maximize the value of our existing investments. As an example, through our experience with traditional private
equity buyouts, which we refer to herein also as buyout equity, we apply a highly disciplined approach towards structuring and executing
transactions, the key tenets of which include acquiring companies at below industry average purchase price multiples, and establishing flexible capital
structures with longterm debt maturities and few, if any, financial maintenance covenants.
We believe we have a demonstrated ability to adapt quickly to changing market environments and capitalize on market dislocations through our
traditional, distressed and corporate buyout approach. In prior periods of strained financial liquidity and economic recession, our private equity funds
have made attractive investments by buying the debt of quality businesses (which we refer to as classic distressed debt), converting that debt to
equity, seeking to create value through active participation with management and ultimately monetizing the investment. This combination of
traditional and corporate buyout investing with a distressed option has been deployed through prior economic cycles and has allowed our funds to
achieve attractive longterm rates of return in different economic and market environments. In addition, during prior economic downturns we have
relied on our restructuring experience and worked closely with our funds portfolio companies to seek to maximize the value of our funds
investments.
We seek to focus on investment opportunities where competition is limited or non- existent. We believe we are often sought out early in the
investment process because of our industry expertise, sizable amounts of available longterm capital, willingness to pursue investments in
complicated situations and ability to provide value- added advice to portfolio companies regarding operational improvements, acquisitions and
strategic direction. We generally prefer sole sponsored transactions and since inception approximately 80% of the investments made by our private
equity funds have been proprietary in nature. We
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believe that by emphasizing our proprietary sources of deal flow, our private equity funds will be able to acquire businesses at more compelling
valuations which will ultimately create a more attractive risk/reward proposition.
Distressed Buyouts and Debt Investments
During periods of market dislocation and volatility, we rely on our credit and capital markets expertise to build positions in distressed debt. We target
assets with high- quality operating businesses but low- quality balance sheets, consistent with our traditional buyout strategies. The distressed
securities our funds purchase include bank debt, public high- yield debt and privately held instruments, often with significant downside protection in
the form of a senior position in the capital structure, and in certain situations our funds also provide debtor- in- possession financing to companies in
bankruptcy. Our investment professionals generate these distressed buyout and debt investment opportunities based on their many years of experience
in the debt markets, and as such they are generally proprietary in nature.
We believe distressed buyouts and debt investments represent a highly attractive risk/reward profile. Our funds investments in debt securities have
generally resulted in two outcomes. The first and preferred potential outcome, which we refer to as a distressed for control investment, is when our
funds are successful in taking control of a company through its investment in the distressed debt. By working proactively through the restructuring
process, we are often able to equitize the debt position of our funds to create a well- financed buyout which would then typically be held for a threeto- five year period, similar to other traditional leveraged buyout transactions. The second potential outcome, which we refer to as a non- control
distressed investment is when our funds do not gain control of the company. This typically occurs as a result of an increase in the price of the debt
investments to levels which are higher than what we consider to be an attractive acquisition valuation. In these instances, we may forgo seeking
control, and instead our funds may seek to sell the debt investments over time, typically generating a higher shortterm IRR with a lower multiple of
invested capital than in the case of a typical distressed for control transaction. We believe that we are a market leader in distressed investing and that
this is one of the key areas that differentiates us from our peers.
Corporate Carve- outs are less market- dependent than distressed investing, but are equally complicated. In these transactions, Apollo funds seek to
extract a business that is highly integrated within a larger corporate parent to create a stand- alone business. These are labor- intensive transactions,
which we believe require deep industry knowledge, patience and creativity, to unlock value that has largely been overlooked or undermanaged.
Importantly, because of the highly negotiated nature of many of these transactions, Apollo believes it is often difficult for the seller to run a
competitive process, which ultimately allows Apollo funds to achieve compelling purchase prices.
We have extensive experience completing leveraged buyouts across various market cycles. We take an opportunistic and disciplined approach to
these transactions, generally avoiding highly competitive situations in favor of proprietary transactions where there may be opportunities to purchase
a company at a discount to prevailing market averages. Oftentimes, we will focus on complex situations such as outof- favor industries or broken
(or discontinued) sales processes where the inherent value may be less obvious to potential acquirers. To further alter the risk/reward profile in our
funds favor, we often focus on certain types of buyouts such as physical asset acquisitions and investments in non- correlated assets where
underlying values tend to change in a manner that is independent of broader market movements.
In the case of physical asset acquisitions, our private equity funds seek to acquire physical assets at discounts to where those assets trade in the
financial markets, and to lock in that value arbitrage through comprehensive hedging and structural enhancements.
We believe buyouts of non- correlated assets or businesses also represent attractive investments since they are generally less correlated to the broader
economy and provide an element of diversification to our overall portfolio of private equity investments.
In the case of more conventional buyouts, we seek investment opportunities where we believe our focus on complexity and sector expertise will
provide us with a significant competitive advantage, whereby we can leverage our knowledge and experience from the nine core industries in which
our investment professionals have historically invested private equity capital. We believe such knowledge and experience can result in our ability to
find attractive opportunities for our funds to acquire portfolio company investments at lower purchase price multiples.
Other Investments
In addition to our opportunistic, distressed and corporate partner buyout activities, we also maintain the flexibility to deploy capital of our private
equity funds in other types of investments such as the creation of new companies, which allows us
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to leverage our deep industry and distressed expertise and collaborate with experienced management teams to seek to capitalize on market
opportunities that we have identified, particularly in asset- intensive industries that are in distress. In these types of situations, we have the ability to
establish new entities that can acquire distressed assets at what we believe are attractive valuations without the burden of managing an existing
portfolio of legacy assets. Similar to our corporate partner buyout activities, other investments, such as the creation of new companies, historically
have not represented a large portion of our overall investment activities, although we do make these types of investments selectively.
Natural Resources
In 2011, Apollo established Apollo Natural Resources Partners, L.P. (together with its alternative investment vehicles, ANRP), and has assembled
a team of dedicated investment professionals to capitalize on private equity investment opportunities in the natural resources industry, principally in
the metals and mining, energy and select other natural resources sectors. In certain situations, capital from ANRP may be invested in sizable natural
resources transactions alongside our larger, more general private equity funds as appropriate on a pro- rata basis. ANRP completed its fundraising
period during the fourth quarter of 2012, and had over $1.3 billion of committed capital as of December 31, 2013.
AP Alternative Assets, L.P.
AAA is a Guernsey limited partnership whose partners are comprised of (i) AAA Guernsey Limited (AAA Guernsey ), which holds 100% of the
general partner interests in AAA, and (ii) the holders of common units representing limited partner interests in AAA. The common units are nonvoting and are listed on NYSE Euronext in Amsterdam under the symbol AAA. AAA Guernsey is a Guernsey limited company and is owned 55%
by an individual who is not an affiliate of Apollo and 45% by Apollo Principal Holdings III, L.P., an indirect subsidiary of Apollo. AAA Guernsey is
responsible for managing the business and affairs of AAA. AAA generally makes all of its investments through AAA Investments, of which AAA is
the sole limited partner.
AAA issued approximately $1.9 billion of equity capital in its initial public offering (IPO) in June 2006. AAA was originally designed to give
investors in its common units exposure as a limited partner to certain of the strategies that we employ and allowed us to manage the asset allocations
to those strategies by investing alongside our private equity funds and directly in our credit funds and certain other opportunistic investments that we
sponsor and manage.
On October 31, 2012, AAA Investments consummated a transaction whereby substantially all of its assets were contributed to Athene in exchange for
common shares of Athene Holding Ltd., cash and a short term promissory note (the AAA Transaction). Following receipt of required regulatory
consents, AAA Investments transferred its remaining investments to Athene Holding Ltd. on July 29, 2013. After the AAA Transaction, Athene
Holding Ltd. was AAAs only material investment and as of December 31, 2013 and 2012, AAA, through its investment in AAA Investments, was
the largest shareholder of Athene Holding Ltd. with an approximate 72.5% and 77.2%, respectively, economic ownership stake (without giving effect
to restricted common shares issued under Athenes management equity plan and conversion of AAA Investments note receivable), and effectively
45% of the voting power of Athene. As of December 31, 2013, Apollo did not own any equity in Athene directly. Apollo owned approximately 2.6%
of AAA as of December 31, 2013.
Building Value in Portfolio Companies
We are a hands- on investor organized around nine core industries where we believe we have significant knowledge and expertise, and we remain
actively engaged with the management teams of the portfolio companies of our private equity funds. We have established relationships with operating
executives that assist in the diligence review of new opportunities and provide strategic and operational oversight for portfolio investments. We
actively work with the management of each of the portfolio companies of the funds we manage to maximize the underlying value of the business. To
achieve this, we take a holistic approach to value- creation, concentrating on both the asset side and liability side of the balance sheet of a company.
On the asset side of the balance sheet, Apollo works with management of the portfolio companies to enhance the operations of such companies. Our
investment professionals assist portfolio companies in rationalizing non- core and underperforming assets, generating cost and working capital
savings, and maximizing liquidity. On the liability side of the balance sheet, Apollo relies on its deep credit structuring experience and works with
management of the portfolio companies to help optimize the capital structure of such companies through proactive restructuring of the balance sheet
to address near- term debt maturities. We also seek to capture discounts on publicly traded debt securities through exchange offers and potential debt
buybacks. In addition, we have established a group purchasing program to help portfolio companies to leverage the combined corporate spending
among Apollo and portfolio companies of the funds it manages in order to seek to reduce costs, optimize payment terms and improve service levels
for all program participants.
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Exiting Investments
The value of the investments that have been made by our funds are typically realized through either an IPO of common stock on a nationally
recognized exchange or through the private sale of the companies in which our funds have invested. We believe the advantage of having long- lived
funds and investment discretion is that we are able to time our funds exit to maximize value.
Private Equity Fund Holdings
The following table presents the current list of portfolio companies of our private equity funds, excluding AION Capital Partners Limited ("AION")
and Apollo Asia Private Credit Fund, L.P. ("APC"), as of December 31, 2013:
Year of Initial
Investment
Fund(s)
Buyout Type
American Gaming Systems

Apex Energy
Aurum
Double Eagle Energy
Hostess
2013
2013
2013
2013
2013
Fund VIII
ANRP
Fund VII
ANRP
Fund VII
Distressed Buyouts
McGraw- Hill Education
2013
Fund VII
Nine Entertainment
2013
Fund VII
Distressed Buyouts
Novitex
NRI
EP Energy
2013
2013
2012
Fund VII
Fund VII & ANRP
Fund VII & ANRP
Corporate Carve- Outs

Great Wolf Resorts

Pinnacle
Talos
Taminco
Ascometal
2012
2012
2012
2012
2011
Fund VII
Fund VII & ANRP
Fund VII & ANRP
Fund VII
Fund VII & ANRP
Brit Insurance
2011
Fund VII
CORE Media Group

Sprouts Farmers Markets
Welspun
Aleris International
Athlon
Constellium
2011
2011
2011
2010
2010
2010
Fund VII
Fund VI
Fund VII & ANRP
Fund VII & VI
Fund VII
Fund VII
Distressed Buyouts
Company
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Industry
Media, Cable &
Leisure
Natural Resources
Consumer & Retail
Natural Resources
Consumer & Retail
Media, Cable &
Leisure
Media, Cable &
Leisure
Financial & Business
Services
Natural Resources
Natural Resources
Media, Cable &
Leisure
Natural Resources
Natural Resources
Chemicals
Natural Resources
Services
Media, Cable &
Leisure
Consumer & Retail
Natural Resources
Natural Resources
Natural Resources
Natural Resources
Region
North America
North America
Western Europe
North America
North America
North America
Australia
North America
North America
North America
North America
North America
North America
Western Europe
Western Europe
Western Europe
North America
North America
India
Global
North America
Western Europe
Table of Contents
Media, Cable &
Leisure
Packing & Materials
Distribution &
Transportation
Media, Cable &
Leisure
Media, Cable &
Leisure
Media, Cable &
Leisure
Services
Consumer & Retail
Manufacturing &
Industrial
Natural Resources
Media, Cable &
Leisure
Gala Coral Group

Monier
2010
2010
Fund VII & VI

Fund VII
Distressed Buyouts
Distressed Buyouts
Veritable Maritime
2010
Fund VII
Dish TV
2009
Fund VII
Caesars Entertainment
2008
Fund VI
Norwegian Cruise Line
2008
Fund VI
Vantium
Claires
2008
2007
Fund VII
Fund VI
Debt Investments
Jacuzzi Brands
Noranda Aluminum
2007
2007
Fund VI
Fund VI
Prestige Cruise Holdings
2007
Fund VII & VI
Berry Plastics(1)
2006
Fund VI & V
Corporate
Carve- outs
CEVA Logistics(2)
2006
Fund VI
Rexnord(3)
Verso Paper
2006
2006
Fund VI
Fund VI
Affinion Group
2005
Fund V
Corporate
Carve- outs
2003
2000/2004/
2006
Fund V
Packaging & Materials

Distribution &
Transportation
Manufacturing &
Industrial
Packaging & Materials
Services
Services
Fund IV, V & VI
Chemicals
North America
Various
Fund VII
Debt Investments
Various
Various
Various
Fund VI
Debt Investments
Various
Various
PLASE Capital
Momentive Performance
Materials
Debt Investment Vehicles Fund VII
Debt Investment Vehicles Fund VI
(1)
Prior to merger with Covalence Specialty Material Holdings

Corp.
(2) Includes add- on investment in EGL, Inc.
(3) Includes add- on investment in Zurn Industries Inc.
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Western Europe
Western Europe
North America
India
North America
North America
North America
Global
North America
North America
North America
North America
Western Europe
North America
North America
North America
North America
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Credit
Since Apollos founding in 1990, we believe our expertise in credit has served as an integral component of our companys growth and success. Our
credit- oriented approach to investing commenced in 1990 with the management of a $3.5 billion high- yield bond and leveraged loan portfolio. Since
that time, our credit activities have grown significantly, through both organic growth and strategic acquisitions. As of December 31, 2013, Apollos
credit segment had total AUM and feegenerating AUM of $100.9 billion and $88.2 billion, respectively, across a diverse range of credit- oriented
investments that utilize the same disciplined, value- oriented investment philosophy that we employ with respect to our private equity funds.
Apollos broad credit platform, which we believe is adaptable to evolving market conditions and different risk tolerances, has been organized by the
following six functional groups:
Credit AUM as of December 31, 2013
(in billions)
(1) Excludes sub- advised AUM.

The U.S. performing credit group provides investment management services to funds, including SIAs, that primarily focus on income- oriented,
senior loan and bond investment strategies. The U.S. performing credit group also includes CLOs that we raise and manage internally. As of
December 31, 2013, our U.S. performing credit group had total AUM and feegenerating AUM of $22.2 billion and $17.5 billion, respectively.
Structured Credit
The structured credit group provides investment management services to funds, including SIAs, that primarily focus on structured credit investment
strategies that target multiple tranches of structured securities with favorable and protective lending terms, predictable payment schedules, well
diversified portfolios, and low historical defaults, among other characteristics. These strategies include investments in externally managed CLOs,
residential mortgage- backed securities, asset- backed securities and other structured instruments, including insurance- linked securities and
longevity- based products. The structured credit group also serves as substitute investment manager for a number of asset- backed CDOs and other
structured vehicles. As of December 31, 2013, our structured credit group had total AUM and feegenerating AUM of $12.8 billion and $9.4 billion,
respectively.
The opportunistic credit group provides investment management services to funds, including SIAs, that primarily focus on credit investment
strategies that are often less liquid in nature and that utilize a similar value- oriented investment philosophy as our private equity business. The
opportunistic credit funds and SIAs invest in a broad array of primary and secondary opportunities encompassing performing, stressed and distressed
public and private securities primarily within corporate credit, including senior loans, high yield, mezzanine, debtor in possession financings, rescue
or bridge financings, and other debt investments. Additionally, certain opportunistic credit funds will selectively invest in aircraft, energy and
structured credit investment opportunities. In certain cases, leverage can be employed in connection with these strategies by having fund subsidiaries
or special- purpose vehicles incur

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debt or by entering into credit facilities or other debt transactions to finance the acquisition of various credit investments. As of December 31, 2013,
our opportunistic credit group had total AUM and feegenerating AUM of $7.1 billion and $4.8 billion, respectively.
Non- performing Loans
The nonperforming loan group provides investment management services to funds, including SIAs, that primarily invest in European commercial
and residential real estate performing and nonperforming loans (NPLs) and unsecured consumer loans and acquiring assets as a result of
distressed market situations. Certain of the nonperforming loan investment vehicles that we manage own captive pan- European loan servicing and
property management platforms. These loan servicing and property management platforms currently operate in six European countries, employed
approximately 700 individuals as of December 31, 2013 and directly service consumer credit receivables and loans secured by commercial and
residential properties. The post- investment loan servicing and real estate asset management requirements, combined with the illiquid nature of NPLs,
limit participation by traditional long only investors, hedge funds, and private equity funds, resulting in what we believe to be a unique opportunity
for our credit business. As of December 31, 2013, our nonperforming loans group had total AUM and feegenerating AUM of $5.7 billion and $4.3
billion, respectively.
European Credit
The European credit group provides investment management services to funds, including SIAs, that focus on investment strategies in a variety of
credit opportunities in Europe across a companys capital structure. The European credit group invests in senior secured loans and notes, mezzanine
loans, subordinated notes, distressed and stressed credit and other idiosyncratic credit investments of companies established or operating in Europe,
with a focus on Western Europe. As of December 31, 2013, our European credit group had total AUM and feegenerating AUM of $2.8 billion and
$1.9 billion, respectively.
Athene
During 2009, Athene Holding Ltd. was founded to capitalize on favorable market conditions in the dislocated life insurance sector. Athene Holding
Ltd. is the ultimate parent of various insurance company operating subsidiaries. Through its subsidiaries, Athene Holding Ltd. provides insurance
products focused primarily on the retirement market and its business centers primarily on issuing or reinsuring fixed and equityindexed annuities.
On October 2, 2013, Athene Holding Ltd. closed its acquisition of the U.S. annuity operations of Aviva plc ("Aviva USA"), which added
approximately $44 billion of total and feegenerating AUM within Apollo's credit segment and as a result, Athene is estimated to be one of the
largest fixed annuity companies in the United States.
Apollo, through its consolidated subsidiary, Athene Asset Management, L.P. (Athene Asset Management), provides asset management services to
Athene, including asset allocation and portfolio management strategies, and receives fees from Athene for providing such services. As of
December 31, 2013, all of Athenes assets were managed by Athene Asset Management. Athene Asset Management had $59.5 billion of total AUM
as of December 31, 2013 in accounts owned by or related to Athene (the Athene Accounts), of which approximately $9.2 billion, or approximately
15.5%, was either sub- advised by Apollo or invested in Apollo funds and investment vehicles. The vast majority of such assets are in sub- advisory
managed accounts that manage high grade credit asset classes, such as CLO debt, commercial mortgage backed securities and insurance- linked
securities. We expect this percentage to increase over time provided that it continues to perform successfully in providing asset management services
to Athene. Athene Asset Management receives a gross management fee equal to 0.40% per annum on all AUM in the Athene Accounts, with certain
limited exceptions for all of the services which Athene Asset Management provides to Athene. In addition, the Company receives sub- advisory fees
with respect to a portion of the assets in the Athene Accounts.
Real Estate
Our real estate group has a dedicated team of multi- disciplinary real estate professionals whose investment activities are integrated and coordinated
with our private equity and credit business segments. We take a broad view of markets and property types in targeting debt and equity investment
opportunities, including the acquisition and recapitalization of real estate portfolios, platforms and operating companies and distressed for control
situations. As of December 31, 2013, our real estate group had total and fee generating AUM of approximately $9.3 billion and $5.9 billion,
respectively, through a combination of investment funds, strategic accounts and Apollo Commercial Real Estate Finance, Inc. ("ARI"), a publiclytraded, commercial mortgage real estate investment trust managed by Apollo.
With respect to our funds' equity investments, we take a value- oriented approach and our funds will invest in assets located in primary and secondary
markets. We pursue opportunistic investments in various real estate asset classes, which
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historically have included hospitality, office, industrial, retail, healthcare, residential and nonperforming loans. Our equity funds under management
currently include our legacy Citi Property Investors ("CPI") business, the real estate investment management business we acquired from Citigroup in
November 2010, and AGRE U.S. Real Estate Fund, L.P., our U.S. focused, opportunistic fund we closed in 2012.
With respect to our debt activities, our funds and accounts offer financing across a broad spectrum of property types and at various points within a
propertys capital structure, including first mortgage and mezzanine financing and preferred equity. In addition to ARI, we also manage strategic
accounts focused on investing in commercial mortgage- backed securities and other commercial real estate loans.
Strategic Investment Accounts
Institutional investors are expressing increasing levels of interest in SIAs since these accounts can provide investors with greater levels of
transparency, liquidity and control over their investments as compared to more traditional investment funds. Based on the trends we are currently
witnessing among a select group of large institutional investors, we expect our AUM that is managed through SIAs to continue to grow over time. As
of December 31, 2013, approximately $12 billion of our total AUM was managed through SIAs.
Fundraising and Investor Relations
We believe our performance track record across our funds and our focus on client service have resulted in strong relationships with our fund
investors. Our fund investors include many of the worlds most prominent pension and sovereign wealth funds, university endowments and financial
institutions, as well as individuals. We maintain an internal team dedicated to investor relations across our private equity, credit and real estate
businesses.
In our private equity business, fundraising activities for new funds begin once the investor capital commitments for the current fund are largely
invested or committed to be invested. The investor base of our private equity funds includes both investors from prior funds and new investors. In
many instances, investors in our private equity funds have increased their commitments to subsequent funds as our private equity funds have
increased in size. During the fundraising effort for Apollo Investment Fund VIII, L.P. ("Fund VIII"), investors representing over 92% of Apollo
Investment Fund VII, L.P.'s ("Fund VII") capital committed to Fund VIII. In addition, many of our investment professionals commit their own capital
to each private equity fund. The single largest unaffiliated investor in Fund VIII represents 5% of Fund VIII's commitments.
During the management of a private equity fund, we maintain an active dialogue with our limited partner investors. We host quarterly webcasts that
are led by members of our senior management team and we provide quarterly reports to the limited partner investors detailing recent performance by
investment. We also organize an annual meeting for our private equity investors that consists of detailed presentations by the senior management
teams of many of our current investments. From time to time, we also hold meetings for the advisory board members of our private equity funds.
In our credit business, we have raised private capital from prominent institutional investors and have also raised capital from public market investors,
as in the case of AINV, AFT, AIF and AMTG. AINV is listed on the NASDAQ Global Select Market and complies with the reporting requirements
of that exchange. AFT, AIF and AMTG are listed on the NYSE and comply with the reporting requirements of that exchange.
In our real estate business, we have raised capital from prominent institutional investors and we have also raised capital from public market investors,
as in the case of ARI. ARI is listed on the NYSE and complies with the reporting requirements of that exchange.
Investment Process
We maintain a rigorous investment process and a comprehensive due diligence approach across all of our funds. We have developed policies and
procedures, the adequacy of which are reviewed annually, that govern the investment practices of our funds. Moreover, each fund is subject to certain
investment criteria set forth in its governing documents that generally contain requirements and limitations for investments, such as limitations
relating to the amount that will be invested in any one company and the geographic regions in which the fund will invest. Our investment
professionals are familiar with our investment policies and procedures and the investment criteria applicable to the funds that they manage. Our
investment professionals interact frequently across our businesses on a formal and informal basis.
We have in place certain procedures to allocate investment opportunities among our funds. These procedures are meant to ensure that each fund is
treated fairly and that transactions are allocated in a way that is equitable, fair and in the best interests of each fund, subject to the terms of the
governing agreements of such funds.
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Private Equity Investment Process
Our private equity investment professionals are responsible for selecting, evaluating, structuring, due diligence, negotiating, executing, monitoring
and exiting investments for our traditional private equity funds, as well as pursuing operational improvements in our funds portfolio companies
through management consulting arrangements. These investment professionals perform significant research into each prospective investment,
including a review of the companys financial statements, comparisons with other public and private companies and relevant industry data. The due
diligence effort will also typically include:
on- site visits;
interviews with management, employees, customers and vendors of the potential portfolio company;
research relating to the companys management, industry, markets, products and services, and competitors; and
background checks.
After an initial selection, evaluation and diligence process, the relevant team of investment professionals will prepare a detailed analysis of the
investment opportunity for our private equity investment committee. Our private equity investment committee generally meets weekly to review the
investment activity and performance of our private equity funds.
After discussing the proposed transaction with the deal team, the investment committee will decide whether to give its preliminary approval to the
deal team to continue the selection, evaluation, diligence and negotiation process. The investment committee will typically conduct several meetings
to consider a particular investment before finally approving that investment and its terms. Both at such meetings and in other discussions with the
deal team, our Managing Partners and partners will provide guidance to the deal team on strategy, process and other pertinent considerations. Every
private equity investment requires the approval of our Managing Partners.
Our private equity investment professionals are responsible for monitoring an investment once it is made and for making recommendations with
respect to exiting an investment. Disposition decisions made on behalf of our private equity funds are subject to review and approval by the private
equity investment committee, including our Managing Partners.
Credit and Real Estate Investment Process
Our credit and real estate investment professionals are responsible for selecting, evaluating, structuring, due diligence, negotiating, executing,
monitoring and exiting investments for our credit funds and real estate funds, respectively. The investment professionals perform significant research
into and due diligence of each prospective investment, and prepare analyses of recommended investments for the investment committee of the
relevant fund.
Investment decisions are scrutinized by the investment committees where applicable, who review potential transactions, provide input regarding the
scope of due diligence and approve recommended investments and dispositions. Close attention is given to how well a proposed investment is aligned
with the distinct investment objectives of the fund in question, which in many cases have specific geographic or other focuses. The investment
committee of each of our credit funds and real estate funds generally is provided with a summary of the investment activity and performance of the
relevant funds on at least a monthly basis.
Overview of Fund Operations
Investors in our private equity funds and our real estate equity funds make commitments to provide capital at the outset of a fund and deliver capital
when called by us as investment opportunities become available. We determine the amount of initial capital commitments for any given private
equity fund by taking into account current market opportunities and conditions, as well as investor expectations. The general partners capital
commitment is determined through negotiation with the funds investor base. The commitments are generally available for six years during what we
call the investment period. We have typically invested the capital committed to our funds over a three to four year period. Generally, as each
investment is realized, our private equity funds first return the capital and expenses related to that investment and any previously realized investments
to fund investors and then distribute any profits. These profits are typically shared 80% to the investors in our private equity funds and 20% to us so
long as the investors receive at least an 8% compounded annual return on their investment, which we refer to as a preferred return or hurdle. Our
private equity funds typically terminate ten years after the final closing, subject to the potential for two one- year extensions. Dissolution of those
funds can be accelerated upon a majority vote of investors not affiliated with us and, in any case, all of our funds also may be terminated upon the
occurrence of certain other events. Ownership interests in our private equity funds and certain of our credit and real estate funds are not, however,
subject to redemption prior to termination of the funds.
The processes by which our credit and real estate funds receive and invest capital vary by type of fund. AINV, AMTG, AFT, AIF and ARI, for
instance, raise capital by selling shares in the public markets and these vehicles can also issue debt. Many
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of our opportunistic credit funds sell shares or limited partner interests, subscriptions which are payable in full upon a funds acceptance of an
investors subscription, via private placements. Other funds have drawdown structures, such as Apollo European Principal Finance Fund, L.P. (EPF
I), Apollo European Principal Finance Fund II, L.P. (EPF II), Apollo Investment Europe II, L.P. (AIE II), Apollo Credit Opportunity Fund I,
L.P. (COF I), Apollo Credit Opportunity Fund II, L.P. (COF II), Apollo Credit Opportunity Fund III, L.P. ("COF III"), and AGRE U.S. Real
Estate Fund, L.P. where investors made a commitment to provide capital at the formation of such funds and deliver capital when called by us as
investment opportunities become available. As with our private equity funds, the amount of initial capital commitments for our credit funds is
determined by taking into account current market opportunities and conditions, as well as investor expectations. The general partner commitments for
our credit funds that are structured as limited partnerships are determined through negotiation with the funds investor base. The fees and incentive
income we earn for management of our credit funds and the performance of these funds and the terms of such funds governing withdrawal of capital
and fund termination vary across our credit funds.
We conduct the management of our private equity, credit and real estate funds primarily through a partnership structure, in which limited partnerships
organized by us accept commitments and/or funds for investment from investors. Funds are generally organized as limited partnerships with respect
to private equity funds and other U.S. domiciled vehicles and limited partnership and limited liability (and other similar) companies with respect to
non- U.S. domiciled vehicles. Typically, each fund has an investment advisor registered under the Investment Advisers Act of 1940, as amended (the
Investment Advisers Act). Responsibility for the day- to- day operations of the funds is typically delegated to the funds respective investment
advisors pursuant to an investment advisory (or similar) agreement. Generally, the material terms of our investment advisory agreements relate to the
scope of services to be rendered by the investment advisor to the applicable funds, certain rights of termination in respect of our investment advisory
agreements and, generally, with respect to our credit funds (as these matters are covered in the limited partnership agreements of the private equity
funds), the calculation of management fees to be borne by investors in such funds, as well as the calculation of the manner and extent to which other
fees received by the investment advisor from fund portfolio companies serve to offset or reduce the management fees payable by investors in our
funds. The funds themselves generally do not register as investment companies under the Investment Company Act of 1940, as amended (the
Investment Company Act), in reliance on Section 3(c)(7) or Section 7(d) thereof or, typically in the case of funds formed prior to 1997,
Section 3(c)(1) thereof. Section 3(c)(7) of the Investment Company Act excepts from its registration requirements funds privately placed in the
United States whose securities are owned exclusively by persons who, at the time of acquisition of such securities, are qualified purchasers or
knowledgeable employees for purposes of the Investment Company Act. Section 3(c)(1) of the Investment Company Act exempts from its
registration requirements privately placed funds whose securities are beneficially owned by not more than 100 persons. In addition, under current
interpretations of the SEC, Section 7(d) of the Investment Company Act exempts from registration any non- U.S. fund all of whose outstanding
securities are beneficially owned either by non- U.S. residents or by U.S. residents that are qualified purchasers.
In addition to having an investment advisor, each fund that is a limited partnership, or partnership fund, also has a general partner that makes all
policy and investment decisions relating to the conduct of the funds business. The general partner is responsible for all decisions concerning the
making, monitoring and disposing of investments, but such responsibilities are typically delegated to the funds investment advisor pursuant to an
investment advisory (or similar) agreement. The limited partners of the funds take no part in the conduct or control of the business of the funds, have
no right or authority to act for or bind the funds and have no influence over the voting or disposition of the securities or other assets held by the funds.
These decisions are made by the funds general partner in its sole discretion, subject to the investment limitations set forth in the agreements
governing each fund. The limited partners often have the right to remove the general partner or investment advisor for cause or cause an early
dissolution by a simple majority vote. In connection with the private offering transactions that occurred in 2007 pursuant to which we sold shares of
Apollo Global Management, LLC to certain initial purchasers and accredited investors in transactions exempt from the registration requirements of
the Securities Act (Private Offering Transactions) and the reorganization of the Companys predecessor business (the 2007 Reorganization), we
deconsolidated certain of our private equity and credit funds that have historically been consolidated in our financial statements and amended the
governing agreements of those funds to provide that a simple majority of a funds investors have the right to accelerate the dissolution date of the
fund.
In addition, the governing agreements of our private equity funds and certain of our credit and real estate funds enable the limited partners holding a
specified percentage of the interests entitled to vote not to elect to continue the limited partners capital commitments for new portfolio investments in
the event certain of our Managing Partners do not devote the requisite time to managing the fund or in connection with certain triggering events (as
defined in the applicable governing agreements). In addition to having a significant, immeasurable negative impact on our revenue, net income and
cash flow, the occurrence of such an event with respect to any of our funds would likely result in significant reputational damage to us. Further, the
loss of one or more of our Managing Partners may result in the acceleration of our debt. The loss of the services of any of our Managing Partners
would have a material adverse effect on us, including our ability to retain and attract investors and raise new funds, and the performance of our funds.
We do not carry any key man insurance that would provide us with proceeds in the event of the death or disability of any of our Managing Partners.
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Fees and Carried Interest
Our revenues and other income consist principally of (i) management fees, which may be based upon a percentage of the committed or invested
capital, adjusted assets, gross invested capital, fund net asset value, stockholders' equity or the capital accounts of the limited partners of the funds,
and may be subject to offset as discussed in note 2 to the consolidated financial statements, (ii) advisory and transaction fees, net relating to certain
actual and potential private equity, credit and real estate investments as more fully discussed in note 2 to the consolidated financial statements, (iii)
income based on the performance of our funds, which consists of allocations, distributions or fees from our private equity, credit and real estate
funds, and (iv) investment income from our investments as general partner and other direct investments primarily in the form of net gains from
investment activities as well as interest and dividend income.
The composition of our revenues will vary based on market conditions and the cyclicality of the different businesses in which we operate. Our funds
returns are driven by investment opportunities and general market conditions, including the availability of debt capital on attractive terms and the
availability of distressed debt opportunities. Our funds initially record fund investments at cost and then such investments are subsequently recorded
at fair value. Fair values are affected by changes in the fundamentals of the underlying portfolio company investments of the funds, the industries in
which the portfolio companies operate, the overall economy as well as other market conditions.
General Partner and Professionals Investments and Co- Investments
General Partner Investments
Certain of our management companies, general partners and co- invest vehicles are committed to contribute to our funds and affiliates. As a limited
partner, general partner and manager of the Apollo funds, Apollo had unfunded capital commitments as of December 31, 2013, and 2012 of $843.7
million and $258.3 million, respectively.
Apollo has an ongoing obligation, subject to certain stipulations, to acquire additional common units of AAA in an amount equal to 25% of the
aggregate after- tax cash distributions, if any, that are made by AAA to Apollo's affiliates pursuant to the carried interest distribution rights that are
applicable to investments made through AAA Investments.
In September 2013, an indirect subsidiary of Apollo Global Management, LLC agreed to invest up to approximately 18.2 million ($23.9 million) in
a limited partnership (the "KBCD Partnership"), a wholly- owned subsidiary which has agreed to acquire a minority stake in KBC Bank Deutschland
AG, the German subsidiary of Belgian KBC Group NV (and certain third party purchasers agreed to acquire, in aggregate, all of the other shares in
KBC Bank Deutschland AG). The aforementioned indirect subsidiary of Apollo Global Management, LLC is the general partner of the KBCD
Partnership. The limited partners in the KBCD Partnership are managed by subsidiaries of Apollo Global Management, LLC. The acquisition is
subject to antitrust and regulatory approval, which is expected to take approximately nine months. Consequently, there is no assurance that the
acquisition will close.
Managing Partners and Other Professionals Investments
To further align our interests with those of investors in our funds, our Managing Partners and other professionals have invested their own capital in
our funds. Our Managing Partners and other professionals will either re- invest their carried interest to fund these investments or use cash on hand or
funds borrowed from third parties. We generally have not historically charged management fees or carried interest on capital invested by our
Managing Partners and other professionals directly in our private equity, credit, and real estate funds.
Co- Investments
Investors in many of our funds, as well as other investors, may have the opportunity to make co- investments with the funds. Co- investments are
investments in portfolio companies or other assets generally on the same terms and conditions as those to which the applicable fund is subject.
Regulatory and Compliance Matters
Our businesses, as well as the financial services industry generally, are subject to extensive regulation in the United States and elsewhere.
All of the investment advisors of our funds are registered as investment advisors either directly or as a "relying advisor" with the SEC. Registered
investment advisors are subject to the requirements and regulations of the Investment Advisers Act.
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Such requirements relate to, among other things, fiduciary duties to clients, maintaining an effective compliance program, managing conflicts of
interest and general anti- fraud prohibitions.
Each of AFT and AIF is a registered management investment company under the Investment Company Act. AINV is an investment company that has
elected to be treated as a business development company under the Investment Company Act. Each of AFT, AIF and AINV has elected for U.S.
Federal tax purposes to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
Internal Revenue Code). As such, each of AFT, AIF and AINV is required to distribute at least 90% of its ordinary income and realized, net shortterm capital gains in excess of realized net longterm capital losses, if any, to its shareholders. In addition, in order to avoid excise tax, each needs to
distribute during each calendar year at least 98% of its ordinary income and 98.2% of its capital gains, which would take into account shortterm and
longterm capital gains and losses. In addition, as a business development company, AINV must not acquire any assets other than qualifying assets
specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of AINVs total assets are qualifying assets (with
certain limited exceptions).
ARI elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code commencing with its taxable year ended
December 31, 2009. AMTG also elected to be taxed as a REIT under the Internal Revenue Code, commencing with its fiscal year ending
December 31, 2011. To maintain their qualification as REITs, ARI and AMTG must distribute at least 90% of their taxable income to their
shareholders and meet, on a continuing basis, certain other complex requirements under the Internal Revenue Code.
In addition, Apollo Global Securities, LLC (AGS) is a registered broker dealer with the SEC and is a member of the Financial Industry Regulatory
Authority, Inc. From time to time, this entity is involved in transactions with affiliates of Apollo, including portfolio companies of the funds we
manage, whereby AGS will earn underwriting and transaction fees for its services.
Broker- dealers are subject to regulations that cover all aspects of the securities business. In particular, as a registered broker- dealer and member of a
self regulatory organization, we are subject to the SECs uniform net capital rule, Rule 15c3- 1. Rule 15c3- 1 specifies the minimum level of net
capital a broker- dealer must maintain and also requires that a significant part of a broker- dealers assets be kept in relatively liquid form. The SEC
and various selfregulatory organizations impose rules that require notification when net capital falls below certain predefined criteria, limit the ratio
of subordinated debt to equity in the regulatory capital composition of a broker- dealer and constrain the ability of a broker- dealer to expand its
business under certain circumstances. Additionally, the SECs uniform net capital rule imposes certain requirements that may have the effect of
prohibiting a broker- dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital.
As the ultimate parent of the general partner or manager of certain shareholders of Athene Holding, Ltd. (Athene), we are subject to insurance
holding company system laws and regulations in Delaware, Iowa and New York, which are the states in which the insurance company subsidiaries of
Athene are domiciled. These regulations generally require each insurance company subsidiary to register with the insurance department in its state of
domicile and to furnish financial and other information about the operations of companies within its holding company system. These regulations also
impose restrictions and limitations on the ability of an insurance company subsidiary to pay dividends and make other distributions to its parent
company. In addition, transactions between an insurance company and other companies within its holding company system, including sales, loans,
reinsurance agreements, management agreements and service agreements, must be on terms that are fair and reasonable and, if material or within a
specified category, require prior notice and approval or non- disapproval by the applicable domiciliary insurance department.
The insurance laws of each of Delaware, Iowa and New York prohibit any person from acquiring control of a domestic insurance company or its
parent company unless that person has filed a notification with specified information with that states Commissioner or Superintendent of Insurance
(the Commissioner) and has obtained the Commissioners prior approval. Under applicable Delaware, Iowa and New York statutes, the acquisition
of 10% or more of the voting securities of an insurance company or its parent company is presumptively considered an acquisition of control of the
insurance company, although such presumption may be rebutted. Accordingly, any person or entity that acquires, directly or indirectly, 10% or more
of the voting securities of Apollo without the requisite prior approvals will be in violation of these laws and may be subject to injunctive action
requiring the disposition or seizure of those securities or prohibiting the voting of those securities, or to other actions that may be taken by the
applicable state insurance regulators.
In addition, many U.S. state insurance laws require prior notification to state insurance departments of an acquisition of control of a non- domiciliary
insurance company doing business in that state if the acquisition would result in specified levels of market concentration. While these prenotification statutes do not authorize the state insurance departments to disapprove the acquisition of control, they authorize regulatory action in the
affected state, including requiring the insurance company to cease and desist from doing certain types of business in the affected state or denying a
license to do business in the affected state, if particular conditions exist, such as substantially lessening competition in any line of business in such
state. Any transactions that
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would constitute an acquisition of control of Apollo may require prior notification in those states that have adopted pre- acquisition notification laws.
These laws may discourage potential acquisition proposals and may delay, deter or prevent an acquisition of control of Apollo (in particular through
an unsolicited transaction), even if Apollo might consider such transaction to be desirable for its shareholders.
Currently, there are proposals to increase the scope of regulation of insurance holding companies in both the United States and internationally. In the
United States, the National Association of Insurance Commissioners (NAIC) has promulgated amendments to its insurance holding company
system model law and regulations for consideration by the various states that would provide for more extensive informational reporting regarding
parents and other affiliates of insurance companies, with the purpose of protecting domestic insurers from enterprise risk, including requiring an
annual enterprise risk report by the ultimate controlling person identifying the material risks within the insurance holding company system that could
pose enterprise risk to domestic insurers. To date, both Iowa and New York have introduced bills to adopt such amendments.
Internationally, the International Association of Insurance Supervisors is in the process of adopting a framework for the group wide supervision of
internationally active insurance groups. Changes to existing laws or regulations must be adopted by individual states or foreign jurisdictions before
they will become effective. We cannot predict with any degree of certainty the additional capital requirements, compliance costs or other burdens
these requirements may impose on us and our insurance company affiliates.
In addition, state insurance departments also have broad administrative powers over the insurance business of our insurance company affiliates,
including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards, premium
rate regulation, admissibility of assets, policy form approval, unfair trade and claims practices and other matters.
Apollo Management International LLP is authorized and regulated by the U.K. Financial Conduct Authority.
AAA is regulated under the Authorized Closed- ended Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission
(GFSC) with effect from December 15, 2008 under The Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended (the New Rules).
AAA is deemed to be an authorized closed- ended investment scheme under the New Rules.
Apollo Advisors (Mauritius) Ltd (Apollo Mauritius), one of our subsidiaries, and AION Capital Management Limited (AION Manager), one of
our joint venture investments, are licensed providers of investment management services in the Republic of Mauritius and are subject to applicable
Mauritian securities laws and the oversight of the Financial Services Commission (Mauritius) (the FSC). Each of Apollo Mauritius and AION
Manager is subject to limited regulatory requirements under the Mauritian Securities Act 2005, Mauritian Financial Services Act 2007 and relevant
ancillary regulations, including, ongoing reporting and record keeping requirements, anti- money laundering obligations, obligations to ensure that it
and its directors, key officers and representatives are fit and proper and requirements to maintain positive shareholders equity. The FSC is
responsible for administering these requirements and ensuring the compliance of Apollo Mauritius and AION Manager with them. If Apollo
Mauritius or AION Manager contravenes any such requirements, such entities and/or their officers or representatives may be subject to a fine,
reprimand, prohibition order or other regulatory sanctions.
AGM India Advisors Private Limited is regulated by the Company Law Board (also known as the Ministry of Company Affairs) through the
Companies Act of 1956 in India. Additionally since there are foreign investments in the company, AGM India Advisors Private Limited is also
subject to the rules and regulations applicable under the Foreign Exchange Management Act of 1999 which falls within the purview of Reserve Bank
of India.
Apollo Management Singapore Ptc Ltd. was granted a Capital Markets Service License with the Monetary Authority of Singapore in October 2013.
In addition, Apollo Capital Management is registered with the Securities and Exchange Board of India as a foreign institutional investor.
The SEC and various selfregulatory organizations have in recent years increased their regulatory activities in respect of investment management
firms.
Certain of our businesses are subject to compliance with laws and regulations of U.S. Federal and state governments, non- U.S. governments, their
respective agencies and/or various selfregulatory organizations or exchanges relating to, among other things, the privacy of client information, and
any failure to comply with these regulations could expose us to liability and/or reputational damage. Our businesses have operated for many years
within a legal framework that requires our being able to monitor and comply with a broad range of legal and regulatory developments that affect our
activities.
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However, additional legislation, changes in rules promulgated by selfregulatory organizations or changes in the interpretation or enforcement of
existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability. For additional
information concerning the competitive risks that we face, see Item 1A. Risk Factors Risks related to our Businesses The investment
management business is intensely competitive, which could materially adversely impact us.
Rigorous legal and compliance analysis of our businesses and investments is important to our culture. We strive to maintain a culture of compliance
through the use of policies and procedures, such as our codes of ethics, compliance systems, communication of compliance guidance and employee
education and training. We have a compliance group that monitors our compliance with the regulatory requirements to which we are subject and
manages our compliance policies and procedures. Our Chief Compliance Officer supervises our compliance group, which is responsible for
addressing all regulatory and compliance matters that affect our activities. Our compliance policies and procedures address a variety of regulatory and
compliance risks such as the handling of material non- public information, personal securities trading, valuation of investments on a fund- specific
basis, document retention, potential conflicts of interest and the allocation of investment opportunities.
We generally operate without information barriers between our businesses. In an effort to manage possible risks resulting from our decision not to
implement these barriers, our compliance personnel maintain a list of issuers for which we have access to material, non- public information and for
whose securities our funds and investment professionals are not permitted to trade. We could in the future decide that it is advisable to establish
information barriers, particularly as our business expands and diversifies. In such event our ability to operate as an integrated platform will be
restricted.
Competition
The investment management industry is intensely competitive, and we expect it to remain so. We compete both globally and on a regional, industry
and niche basis.
We face competition both in the pursuit of outside investors for our funds and in acquiring investments in attractive portfolio companies and making
other investments. We compete for outside investors based on a variety of factors, including:
investment performance;
investor perception of investment managers drive, focus and alignment of interest;
quality of service provided to and duration of relationship with investors;
business reputation; and
the level of fees and expenses charged for services.
Depending on the investment, we expect to face competition in acquisitions primarily from other private equity, credit and real estate funds,
specialized funds, hedge fund sponsors, other financial institutions, corporate buyers and other parties. Several of these competitors have significant
amounts of capital and many of them have similar investment objectives to us, which may create additional competition for investment opportunities.
Some of these competitors may also have a lower cost of capital and access to funding sources that are not available to us, which may create
competitive disadvantages for us with respect to investment opportunities. Competitors may also be subject to different regulatory regimes or rules
that may provide them more flexibility or better access to pursue transactions or raise capital for their investment funds. In addition, some of these
competitors may have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to consider a wider
variety of investments and to bid more aggressively than us for investments that we want to make. Corporate buyers may be able to achieve
synergistic cost savings with regard to an investment that may provide them with a competitive advantage in bidding for an investment. Lastly, the
allocation of increasing amounts of capital to alternative investment strategies by institutional and individual investors could well lead to a reduction
in the size and duration of pricing inefficiencies that many of our funds seek to exploit.
Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively in our businesses
will depend upon our ability to attract new employees and retain and motivate our existing employees.
For additional information concerning the competitive risks that we face, see Item 1A. Risk FactorsRisks Related to Our BusinessesThe
investment management business is intensely competitive, which could materially adversely impact us.
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ITEM 1A. RISK FACTORS
Risks Related to Our Businesses
Poor performance of our funds would cause a decline in our revenue and results of operations, may obligate us to repay incentive income
previously paid to us and would adversely affect our ability to raise capital for future funds.
We derive revenues in part from:
management fees, which are based generally on the amount of capital invested in our funds;
transaction and advisory fees relating to the investments our funds make;
incentive income, based on the performance of our funds; and
investment income from our investments as general partner.
If a fund performs poorly, we will receive little or no incentive income with regard to the fund and little income or possibly losses from any principal
investment in the fund. Furthermore, if, as a result of poor performance of later investments in a funds life, the fund does not achieve total
investment returns that exceed a specified investment return threshold for the life of the fund, we may be obligated to repay the amount by which
incentive income that was previously distributed to us exceeds amounts to which we are ultimately entitled. Our fund investors and potential fund
investors continually assess our funds performance and our ability to raise capital. Accordingly, poor fund performance may deter future investment
in our funds and thereby decrease the capital invested in our funds and ultimately, our management fee income.
We depend on Leon Black, Joshua Harris and Marc Rowan, and the loss of any of their services would have a material adverse effect on us.
The success of our businesses depends on the efforts, judgment and personal reputations of our Managing Partners, Leon Black, Joshua Harris and
Marc Rowan. Their reputations, expertise in investing, relationships with our fund investors and relationships with members of the business
community on whom our funds depend for investment opportunities and financing are each critical elements in operating and expanding our
businesses. We believe our performance is strongly correlated to the performance of these individuals. Accordingly, our retention of our Managing
Partners is crucial to our success. Subject to the terms of their employment, noncompetition and nonsolicitation agreements, our Managing
Partners may resign, join our competitors or form a competing firm at any time. If any of our Managing Partners were to join or form a competitor,
some of our investors could choose to invest with that competitor rather than in our funds. The loss of the services of any of our Managing Partners
may have a material adverse effect on us, including our ability to retain and attract investors and raise new funds, and the performance of our funds.
We do not carry any key man insurance that would provide us with proceeds in the event of the death or disability of any of our Managing Partners.
In addition, the loss of one or more of our Managing Partners may result in the termination of our role as general partner of one or more of our funds
and the acceleration of our debt. Although our Managing Partners have entered into employment, noncompetition and nonsolicitation agreements,
which impose certain restrictions on competition and solicitation of our employees by our Managing Partners if they terminate their employment, a
court may not enforce these provisions. See Item 11. Executive CompensationNarrative Disclosure to the Summary Compensation Table and
Grants of Plan- Based Awards TableEmployment, Non- Competition and Non- Solicitation Agreement with Chairman and Chief Executive
Officer for a more detailed description of the terms of the agreement for one of our Managing Partners.
Changes in the debt financing markets may negatively impact the ability of our funds and their portfolio companies to obtain attractive
financing for their investments and may increase the cost of such financing if it is obtained, which could lead to lower- yielding investments
and potentially decreasing our net income.
In the event that our funds are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an increased interest rate
or on unfavorable terms, our funds may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would
otherwise be the case, either of which could lead to a decrease in the investment income earned by us. Any failure by lenders to provide previously
committed financing can also expose us to potential claims by sellers of businesses which we may have contracted to purchase. Our funds' portfolio
companies regularly utilize the corporate debt markets in order to obtain financing for their operations. Similarly, certain of our credit funds rely on
the availability of attractive financing for their investments. To the extent that the current credit markets have rendered such financing difficult to
obtain or more expensive, this may negatively impact the operating performance of such portfolio companies and lead to lower- yielding investments
with respect to such funds and, therefore, the investment returns on our funds. In addition, to the extent that the current markets make it difficult or
impossible to refinance debt that is maturing in the near term, a relevant portfolio company may face substantial doubt as to its status as a going
concern (which may result in an event of default under various agreements) or be unable to repay such debt at maturity and may be forced to sell
assets, undergo a recapitalization or seek bankruptcy protection.
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Difficult market conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the
performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital, each of which could
materially reduce our revenue, net income and cash flow and adversely affect our financial prospects and condition.
Our businesses are materially affected by conditions in the global financial markets and economic conditions throughout the world, such as interest
rates, availability of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation), trade barriers, commodity
prices, currency exchange rates and controls and national and international political circumstances (including wars, terrorist acts or security
operations). These factors are outside our control and may affect the level and volatility of securities prices and the liquidity and the value of
investments, and we may not be able to or may choose not to manage our exposure to these conditions. Global financial markets have experienced
considerable volatility in the valuations of equity and debt securities, a contraction in the availability of credit and an increase in the cost of financing.
Volatility in the financial markets can materially hinder the initiation of new, large- sized transactions for our private equity segment and, together
with volatility in valuations of equity and debt securities, may adversely impact our operating results. If market conditions deteriorate, our business
could be affected in different ways. In addition, these events and general economic trends are likely to impact the performance of portfolio companies
in many industries, particularly industries that are more impacted by changes in consumer demand, such as travel and leisure, gaming and real estate.
The performance of our funds and our performance may be adversely affected to the extent our fund portfolio companies in these industries
experience adverse performance or additional pressure due to downward trends. Our profitability may also be adversely affected by our fixed costs
and the possibility that we would be unable to scale back other costs, within a time frame sufficient to match any further decreases in net income or
increases in net losses relating to changes in market and economic conditions.
The financial downturn that began in 2007 adversely affected our operating results in a number of ways, and if the economy were to re- enter a period
of recession, it may cause our revenue and results of operations to decline by causing:
our AUM to decrease, lowering management fees from our

funds;
increases in costs of financial instruments;
adverse conditions for our portfolio companies (e.g., decreased revenues, liquidity pressures, increased difficulty in obtaining access to financing
and complying with the terms of existing financings as well as increased financing costs);
lower investment returns, reducing incentive income;
higher interest rates, which could increase the cost of the debt capital we use to acquire companies in our private equity business; and
material reductions in the value of our fund investments, affecting our ability to realize carried interest from these investments.
Lower investment returns and such material reductions in value may result, among other reasons, because during periods of difficult market
conditions or slowdowns (which may be across one or more industries, sectors or geographies), companies in which we invest may experience
decreased revenues, financial losses, difficulty in obtaining access to financing and increased funding costs. During such periods, these companies
may also have difficulty in expanding their businesses and operations and be unable to meet their debt service obligations or other expenses as they
become due, including expenses payable to us. In addition, during periods of adverse economic conditions, we may have difficulty accessing
financial markets, which could make it more difficult or impossible for us to obtain funding for additional investments and harm our AUM and
operating results. Furthermore, such conditions would also increase the risk of default with respect to investments held by our funds that have
significant debt investments, such as our opportunistic and European credit funds and our U.S. performing credit funds. Our funds may be affected by
reduced opportunities to exit and realize value from their investments, by lower than expected returns on investments made prior to the deterioration
of the credit markets, and by the fact that we may not be able to find suitable investments for the funds to effectively deploy capital, which could
adversely affect our ability to raise new funds and thus adversely impact our prospects for future growth.
A decline in the pace of investment in our funds or an increase in the amount of transaction and advisory fees we share with our fund
investors would result in our receiving less revenue from transaction and advisory fees.
The transaction and advisory fees that we earn are driven in part by the pace at which our funds make investments. Many factors could cause a
decline in the pace of investment, including the inability of our investment professionals to identify attractive investment opportunities, competition
for such opportunities among other potential acquirers, decreased availability of capital on attractive terms and our failure to consummate identified
investment opportunities because of business, regulatory or legal complexities and adverse developments in the U.S. or global economy or financial
markets. Any decline in the pace at which our funds make investments would reduce our transaction and advisory fees and could make it more
difficult for us to raise capital. In addition, some of our investors have requested, and we expect to continue to receive requests from investors, that
we share with
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them a larger share, or all, of the transaction and advisory fees generated by our funds' investments. To the extent we accommodate such requests, it
would result in a decrease in the amount of fee revenue we could earn.
If one or more of our Managing Partners or other investment professionals leave our company, the commitment periods of certain of our
funds may be terminated, and we may be in default under our credit agreement.
The governing agreements of certain of our funds provide that in the event certain key persons (such as one or more of Messrs. Black, Harris and
Rowan and/or certain other of our investment professionals) fail to devote the requisite time to our business, the commitment period will terminate if
a certain percentage in interest of the investors do not vote to continue the commitment period. This is true of Fund VI, Fund VII and Fund VIII, on
which our near- to medium- term performance will heavily depend. EPF I and II have a similar provision. In addition to having a significant negative
impact on our revenue, net income and cash flow, the occurrence of such an event with respect to any of our funds would likely result in significant
reputational damage to us.
Messrs. Black, Harris and Rowan may terminate their employment with us at any time.
We may not be successful in raising new funds or in raising more capital for certain of our funds and may face pressure on fee arrangements
of our future funds.
Our funds may not be successful in consummating their current capital- raising efforts or others that they may undertake, or they may consummate
them at investment levels far lower than those currently anticipated. Any capital raising that our funds do consummate may be on terms that are
unfavorable to us or that are otherwise different from the terms that we have been able to obtain in the past. These risks could occur for reasons
beyond our control, including general economic or market conditions, regulatory changes or increased competition.
Over the last few years, a large number of institutional investors that invest in alternative assets and have historically invested in our funds
experienced negative pressure across their investment portfolios, which may affect our ability to raise capital from them. As a result of the global
economic downturn during 2008 and 2009, these institutional investors experienced, among other things, a significant decline in the value of their
public equity and debt holdings and a lack of realizations from their existing private equity portfolios. Consequently, many of these investors were
left with disproportionately outsized remaining commitments to a number of private equity funds, and were restricted from making new commitments
to third- party managed private equity funds such as those managed by us. To the extent economic conditions remain volatile and these issues persist,
we may be unable to raise sufficient amounts of capital to support the investment activities of our future funds.
In addition, certain institutional investors have publicly criticized certain fund fee and expense structures, including management fees and transaction
and advisory fees. In September 2009, the Institutional Limited Partners Association, or ILPA, published a set of Private Equity Principles, or the
Principles, which were revised in January 2011. The Principles were developed in order to encourage discussion between limited partners and
general partners regarding private equity fund partnership terms. Certain of the Principles call for enhanced alignment of interests between general
partners and limited partners through modifications of some of the terms of fund arrangements, including proposed guidelines for fees and carried
interest structures. We provided ILPA our endorsement of the Principles, representing an indication of our general support for the efforts of ILPA.
Although we have no obligation to modify any of our fees with respect to our existing funds, we may experience pressure to do so.
The failure of our funds to raise capital in sufficient amounts and on satisfactory terms could result in a decrease in AUM and management fee and
transaction fee revenue or us being unable to achieve an increase in AUM and management fee and transaction fee revenue, and could have a material
adverse effect on our financial condition and results of operations. Similarly, any modification of our existing fee arrangements or the fee structures
for new funds could adversely affect our results of operations.
Third- party investors in our funds with commitment- based structures may not satisfy their contractual obligation to fund capital calls
when requested by us, which could adversely affect a funds operations and performance.
Investors in all of our private equity and certain of our credit and real estate funds make capital commitments to those funds that we are entitled to
call from those investors at any time during prescribed periods. We depend on investors fulfilling their commitments when we call capital from them
in order for those funds to consummate investments and otherwise pay their obligations when due. Any investor that did not fund a capital call would
be subject to several possible penalties, including having a significant amount of its existing investment forfeited in that fund. However, the impact of
the penalty is directly correlated to the amount of capital previously invested by the investor in the fund and if an investor has invested little or no
capital, for instance early in the life of the fund, then the forfeiture penalty may not be as meaningful. If investors were to fail to satisfy a significant
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amount of capital calls for any particular fund or funds, the operation and performance of those funds could be materially and adversely affected.
The historical returns attributable to our funds should not be considered as indicative of the future results of our funds or of our future
results or of any returns expected on an investment in our Class A shares.
We have presented in this report the returns relating to the historical performance of our private equity, credit and real estate funds. The returns are
relevant to us primarily insofar as they are indicative of incentive income we have earned in the past and may earn in the future, our reputation and
our ability to raise new funds. The returns of the funds we manage are not, however, directly linked to returns on our Class A shares. Therefore, you
should not conclude that continued positive performance of the funds we manage will necessarily result in positive returns on an investment in Class
A shares. However, poor performance of the funds we manage will cause a decline in our revenue from such funds, and would therefore have a
negative effect on our performance and the value of our Class A shares. An investment in our Class A shares is not an investment in any of the
Apollo funds. Moreover, most of our funds have not been consolidated in our financial statements for periods since either August 1, 2007 or
November 30, 2007 as a result of the deconsolidation of most of our funds as of August 1, 2007 and November 30, 2007.
Moreover, the historical returns of our funds should not be considered indicative of the future returns of these or from any future funds we may raise,
in part because:
market conditions during previous periods may have been significantly more favorable for generating positive performance, particularly in our
private equity business, than the market conditions we may experience in the future;
our funds returns have benefited from investment opportunities and general market conditions that may not repeat themselves, and there can
be no assurance that our current or future funds will be able to avail themselves of profitable investment opportunities;
our private equity funds rates of returns, which are calculated on the basis of net asset value of the funds investments, reflect unrealized gains,
which may never be realized;
our funds returns have benefited from investment opportunities and general market conditions that may not repeat themselves, including the
availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same
returns or profitable investment opportunities or deploy capital as quickly;
the historical returns that we present in this report derive largely from the performance of our current private equity funds, whereas future
fund returns will depend increasingly on the performance of our newer funds or funds not yet formed, which may have little or no realized
investment track record;
Fund VI, Fund VII and Fund VIII are larger private equity funds, and this capital may not be deployed as profitably as other funds;
the attractive returns of certain of our funds have been driven by the rapid return of invested capital, which has not occurred with respect to all of our
funds and we believe is less likely to occur in the future;
our track record with respect to our credit funds and real estate funds is relatively short as compared to our private equity funds;
in recent years, there has been increased competition for private equity investment opportunities resulting from the increased amount of capital
invested in private equity funds and high liquidity in debt markets; and
our newly established funds may generate lower returns during the period that they take to deploy their
capital.
Finally, our private equity IRRs have historically varied greatly from fund to fund. Accordingly, you should realize that the IRR going forward for
any current or future fund may vary considerably from the historical IRR generated by any particular fund, or for our private equity funds as a whole.
Future returns will also be affected by the risks described elsewhere in this report, including risks of the industries and businesses in which a
particular fund invests. See Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe Historical
Investment Performance of Our Funds.
Our reported net asset values, rates of return and incentive income from affiliates are based in large part upon estimates of the fair value of
our investments, which are based on subjective standards and may prove to be incorrect.
A large number of investments in our funds are illiquid and thus have no readily ascertainable market prices. We value these investments based on
our estimate of their fair value as of the date of determination. We estimate the fair value of our investments based on third- party models, or models
developed by us, which include discounted cash flow analyses and other
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techniques and may be based, at least in part, on independently sourced market parameters. The material estimates and assumptions used in these
models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute,
the timing of and the estimated proceeds from expected financings. The actual results related to any particular investment often vary materially as a
result of the inaccuracy of these estimates and assumptions. In addition, because many of the illiquid investments held by our funds are in industries
or sectors which are unstable, in distress, or undergoing some uncertainty, such investments are subject to rapid changes in value caused by sudden
company- specific or industry- wide developments.
We include the fair value of illiquid assets in the calculations of net asset values, returns of our funds and our AUM. Furthermore, we recognize
incentive income from affiliates based in part on these estimated fair values. Because these valuations are inherently uncertain, they may fluctuate
greatly from period to period. Also, they may vary greatly from the prices that would be obtained if the assets were to be liquidated on the date of the
valuation and often do vary greatly from the prices we eventually realize.
In addition, the values of our investments in publicly traded assets are subject to significant volatility, including due to a number of factors beyond
our control. These include actual or anticipated fluctuations in the quarterly and annual results of these companies or other companies in their
industries, market perceptions concerning the availability of additional securities for sale, general economic, social or political developments, changes
in industry conditions or government regulations, changes in management or capital structure and significant acquisitions and dispositions. Because
the market prices of these securities can be volatile, the valuation of these assets will change from period to period, and the valuation for any
particular period may not be realized at the time of disposition. In addition, because our private equity funds often hold very large amounts of the
securities of their portfolio companies, the disposition of these securities often takes place over a long period of time, which can further expose us to
volatility risk. Even if we hold a quantity of public securities that may be difficult to sell in a single transaction, we do not discount the market price
of the security for purposes of our valuations.
If we realize value on an investment that is significantly lower than the value at which it was reflected in a funds net asset values, we would suffer
losses in the applicable fund. This could in turn lead to a decline in asset management fees and a loss equal to the portion of the incentive income
from affiliates reported in prior periods that was not realized upon disposition. These effects could become applicable to a large number of our
investments if our estimates and assumptions used in estimating their fair values differ from future valuations due to market developments. See Item
7. Managements Discussion and Analysis of Financial Condition and Results of OperationsSegment Analysis for information related to fund
activity that is no longer consolidated. If asset values turn out to be materially different than values reflected in fund net asset values, fund investors
could lose confidence which could, in turn, result in redemptions from our funds that permit redemptions or difficulties in raising additional
investments.
We have experienced rapid growth, which may be difficult to sustain and which may place significant demands on our administrative,
operational and financial resources.
Our AUM has grown significantly in the past and we are pursuing further growth in the near future. Our rapid growth has caused, and planned
growth, if successful, will continue to cause, significant demands on our legal, accounting and operational infrastructure, and increased expenses. The
complexity of these demands, and the expense required to address them, is a function not simply of the amount by which our AUM has grown, but of
the growth in the variety, including the differences in strategy between, and complexity of, our different funds. In addition, we are required to
continuously develop our systems and infrastructure in response to the increasing sophistication of the investment management market and legal,
accounting, regulatory and tax developments.
Our future growth will depend in part, on our ability to maintain an operating platform and management system sufficient to address our growth and
will require us to incur significant additional expenses and to commit additional senior management and operational resources. As a result, we face
significant challenges:
in maintaining adequate financial, regulatory and business controls;
implementing new or updated information and financial systems and procedures;

and
in training, managing and appropriately sizing our work force and other components of our businesses on a timely and cost- effective basis.
We may not be able to manage our expanding operations effectively or be able to continue to grow, and any failure to do so could adversely affect
our ability to generate revenue and control our expenses.
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Extensive regulation of our businesses affects our activities and creates the potential for significant liabilities and penalties. The possibility of
increased regulatory focus could result in additional burdens on our businesses. Changes in tax or law and other legislative or regulatory
changes could adversely affect us.
Overview of Our Regulatory Environment. We are subject to extensive regulation, including periodic examinations, by governmental and selfregulatory organizations in the jurisdictions in which we operate around the world. Many of these regulators, including U.S. and foreign government
agencies and selfregulatory organizations, as well as state securities commissions in the United States, are empowered to conduct investigations and
administrative proceedings that can result in fines, suspensions of personnel or other sanctions, including censure, the issuance of cease- and- desist
orders or the suspension or expulsion of an investment advisor from registration or memberships. Even if an investigation or proceeding did not result
in a sanction or the sanction imposed against us or our personnel by a regulator were small in monetary amount, the adverse publicity relating to the
investigation, proceeding or imposition of these sanctions could harm our reputation and cause us to lose existing investors or fail to gain new
investors. The requirements imposed by our regulators are designed primarily to ensure the integrity of the financial markets and to protect investors
in our funds and may not necessarily be designed to protect our shareholders. Consequently, these regulations often serve to limit our activities. For
example, federal bank regulatory agencies have recently issued leveraged lending guidance covering transactions characterized by a degree of
financial leverage. To the extent that such guidance limits the amount or cost of financing our funds are able to obtain for transactions, the returns on
our funds investments may suffer.
Regulatory changes could adversely affect our business. As a result of highly publicized financial scandals, investors have exhibited concerns over
the integrity of the financial markets and the regulatory environment in which we operate both in the United States and outside the United States is
particularly likely to be subject to further regulation. There have been active debates both nationally and internationally over the appropriate extent of
regulation and oversight in a number of areas which are or may be relevant to us, including private investment funds and their managers and the socalled shadow banking sector. Any changes in the regulatory framework applicable to our businesses may impose additional expenses on us,
require the attention of senior management or result in limitations in the manner in which our business is conducted.
On July 21, 2010, President Obama signed into law the Dodd- Frank Wall Street Reform and Consumer Protection Act, or the Dodd- Frank Act,
which imposes significant new regulations on almost every aspect of the U.S. financial services industry, including aspects of our business and the
markets in which we operate. Among other things, the Dodd- Frank Act includes the following provisions that could have an adverse impact on our
ability to continue to operate our businesses.
The Dodd- Frank Act established the Financial Stability Oversight Council (the FSOC), which is comprised of representatives of all the major
U.S. financial regulators, to act as the financial systems systemic risk regulator with the authority to review the activities of nonbank financial
companies predominantly engaged in financial activities that are designated as systemically important. Such designation is applicable to
companies where material financial distress could pose risk to the financial stability of the United States. On April 3, 2012, the FSOC issued a final
rule and interpretive guidance regarding the process by which it will designate nonbank financial companies as systemically important. The final
rule and interpretive guidance detail a three- stage process, with the level of scrutiny increasing at each stage. Initially, the FSOC will apply a broad
set of uniform quantitative metrics to screen out financial companies that do not warrant additional review. The FSOC will consider whether a
company has at least $50 billion in total consolidated assets and whether it meets other thresholds relating to credit default swaps outstanding,
derivative liabilities, total debt outstanding, a minimum leverage ratio of total consolidated assets (excluding separate accounts) to total equity of 15
to 1, and a shortterm debt ratio of debt (with maturities of less than 12 months) to total consolidated assets (excluding separate accounts) of 10%. A
company that meets or exceeds both the asset threshold and one of the other thresholds will be subject to additional review. The review criteria
could, and is expected to, evolve over time. While we believe it to be unlikely that we would be designated as systemically important, if such
designation were to occur, we would be subject to significantly increased levels of regulation, which includes, without limitation, a requirement to
adopt heightened standards relating to capital, leverage, liquidity, risk management, credit exposure reporting and concentration limits, restrictions
on acquisitions and being subject to annual stress tests by the Board of Governors of the Federal Reserve System (the Federal Reserve).
The Dodd- Frank Act, under what has become known as the Volcker Rule, generally prohibits depository institution holding companies
(including certain foreign banks with U.S. branches and insurance companies with U.S. depository institution subsidiaries), insured
depository institutions and subsidiaries and affiliates of such entities (collectively, banking entities) from investing in, sponsoring or having
certain other relationships with private equity funds or hedge funds. The Volcker Rule became effective on July 21, 2012. The statute
provides banking entities a period of two years to conform their activities and investments to the requirement of the statute, i.e., until July 21,
2014. However, the Federal Reserve is permitted to extend this conformance
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period, one year at a time, for a total of no more than three additional years. Pursuant to this authority and in connection with the adoption on
December 10, 2013 of final rules implementing the Volcker Rule, the Federal Reserve extended the conformance period for an additional year, until
July 21, 2015. By the expiration of such date, banking entities must have wound down, sold or otherwise conformed their activities investments and
relationships to the requirements of the Volcker Rule. In addition, the Dodd- Frank Act includes a special provision to address the difficulty banking
entities may experience in conforming investments in a private equity fund that qualifies as an illiquid fund, specifically, a fund that as of May 1,
2010 was principally invested in, or was contractually committed to principally invest in, illiquid assets and makes all investments pursuant to, and
consistent with, an investment strategy to principally invest in illiquid assets. For such a fund, a banking entity may seek approval for an extended
conformance period of up to five years. While there remains substantial uncertainty regarding the availability of extensions and transition period
relief, as well as general practical implications under the Volcker Rule, there are likely to be adverse implications on our ability to raise funds from
banking organizations as a result of this prohibition.
The Dodd- Frank Act requires many private equity and hedge fund advisers to register with the SEC under the Investment Advisers Act, to maintain
extensive records and to file reports if deemed necessary for purposes of systemic risk assessment by certain governmental bodies. As described
elsewhere in this Form 10- K, all of the investment advisers of our investment funds operated in the U.S. are registered as investment advisers with
the SEC.
The Dodd- Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation arrangements at financial
institutions that give employees incentives to engage in conduct deemed to encourage inappropriate risk taking by covered financial
institutions. Such restrictions could limit our ability to recruit and retain investment professionals and senior management executives.
The Dodd- Frank Act imposes mandatory clearing and will impose exchange or swap execution facility trading and margin requirements on
many swaps and derivative transactions (including formerly unregulated over- the- counter derivatives). Dodd- Frank also creates new
categories of regulated market participants, such as swap- dealers, security- based swap dealers, major swap participants and major
security- based swap participants who will be subject to significant new capital, registration, recordkeeping, reporting, disclosure, business
conduct and other regulatory requirements, which will give rise to new administrative costs. Even if certain new requirements are not
directly applicable to us, they may still increase our costs of entering into transactions with the parties to whom the requirements are directly
applicable. Moreover, new exchange or swap execution facility trading and trade reporting requirements may lead to reductions in the
liquidity or price transparency of certain swaps and derivative transactions, causing higher pricing or reduced availability of derivatives, or
the reduction of arbitrage opportunities for us, which could adversely affect the performance of certain of our trading strategies. Position
limits imposed by various regulators, selfregulatory organizations or trading facilities on derivatives may also limit our ability to affect
desired trades. Position limits are the maximum amounts of net long or net short positions that any one person or entity may own or control
in a particular financial instrument. For example, the Commodities Futures Trading Commission ("CFTC"), on November 5, 2013, reproposed rules that would establish specific limits on positions in 28 physical commodity futures and option contracts as well as swaps that
are economically equivalent to such contracts. If the CFTC's proposed rules are adopted, we may be required to aggregate the positions of
our various investment funds and the positions of our funds' portfolio companies. It is possible that trading decisions may have to be
modified and that positions held may have to be liquidated in order to avoid exceeding such limits. Such modification or liquidation, if
required, could adversely affect our operations and profitability.
The Dodd- Frank Act requires public companies to adopt and disclose policies requiring, in the event the company is required to issue an accounting
restatement, the clawback of related incentive compensation from current and former executive officers.
The Dodd- Frank Act amends the Exchange Act to compensate and protect whistleblowers who voluntarily provide original information to
the SEC and establishes a fund to be used to pay whistleblowers who will be entitled to receive a payment equal to between 10% and 30% of
certain monetary sanctions imposed in a successful government action resulting from the information provided by the whistleblower.
Many of these provisions are subject to further rulemaking and to the discretion of regulatory bodies, such as the FSOC, the Federal Reserve and the
SEC.
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In June 2010, the SEC adopted a new pay- to- play rule that restricts politically active investment advisors from managing state pension funds. The
rule prohibits, among other things, a covered investment advisor from receiving compensation for advisory services provided to a government entity
(such as a state pension fund) for a two- year period after the advisor, certain covered employees of the advisor or any covered political action
committee controlled by the advisor or its employees makes a political contribution to certain government officials. In addition, a covered investment
advisor is prohibited from engaging in political fundraising activities for certain elected officials or candidates in jurisdictions where such advisor is
providing or seeking governmental business. This new rule complicates and increases the compliance burden for our investment advisors. It will be
imperative for a covered investment advisor to adopt an effective compliance program in light of the substantial penalties associated with the rule.
It is impossible to determine the full extent of the impact on us of the Dodd- Frank Act or any other new laws, regulations or initiatives that may be
proposed or whether any of the proposals will become law. Any changes in the regulatory framework applicable to our business, including the
changes described above, may impose additional costs on us, require the attention of our senior management or result in limitations on the manner in
which we conduct our business. Moreover, as calls for additional regulation have increased, there may be a related increase in regulatory
investigations of the trading and other investment activities of alternative asset management funds, including our funds. Compliance with any new
laws or regulations could make compliance more difficult and expensive, affect the manner in which we conduct our business and adversely affect
our profitability.
Exemptions from Certain Laws. We regularly rely on exemptions from various requirements of law or regulation, including the Securities Act, the
Exchange Act, the Investment Company Act, the Commodity Futures Trading Commission, the Commodity Exchange Act of 1936, as amended, and
the Employment Retirement Income Security Act of 1974, as amended in conducting our activities. These exemptions are sometimes highly complex
and may in certain circumstances depend on compliance by third parties whom we do not control. For example, in raising new funds, we typically
rely on private placement exemptions from registration under the Securities Act, including Regulation D, which was recently amended to prohibit
issuers (including our funds) from relying on certain of the exemptions from registration if the fund or any of its "covered persons" (including certain
officers and directors, but also including certain third parties including, among others, promoters, placement agents and beneficial owners of 20% of
outstanding voting securities of the fund) has been the subject of a "disqualifying event," or constitutes a "bad actor," which can result from a variety
of criminal, regulatory and civil matters. If any of the covered persons associated with our funds is subject to a disqualifying event, one or more of
our funds could lose the ability to raise capital in a Rule 506 private offering for a significant period of time, which could significantly impair our
ability to raise new funds, and, therefore, could materially adversely affect our business, financial condition and results of operations. In addition, if
certain of our employees or any potential significant fund investor has been the subject of a disqualifying event, we could be required to reassign or
terminate such an employee or we could be required to refuse the investment of such an investor, which could impair our relationships with investors,
harm our reputation, or make it more difficult to raise new funds. If for any reason these exemptions were to become unavailable to us, we could
become subject to regulatory action or third- party claims and our businesses could be materially and adversely affected. See, for example, Risks
Related to Our Organization and StructureIf we were deemed an investment company under the Investment Company Act, applicable restrictions
could make it impractical for us to continue our businesses as contemplated and could have a material adverse effect on our businesses and the price
of our Class A shares.
Fund Regulatory Environment. The regulatory environment in which our funds operate may affect our businesses. For example, changes in
antitrust laws or the enforcement of antitrust laws could affect the level of mergers and acquisitions activity, and changes in state laws may limit
investment activities of state pension plans. See Item 1. BusinessRegulatory and Compliance Matters for a further discussion of the regulatory
environment in which we conduct our businesses.
Portfolio Company Regulatory Environment. The regulatory environment in which our funds' portfolio companies operate may affect our
business. We or certain of our investment funds potentially could be held liable under ERISA for the pension obligations of one or more of our funds'
portfolio companies if we or the investment fund were determined to be engaged in a "trade or business" and deemed part of the same "controlled
group" as the portfolio company, and the pension obligations of any particular portfolio company could be material. In a recent decision of a federal
appellate court (Sun Capital Partners III LP v. New England Teamsters & Trucking Indus. Pension Fund), a private equity fund was held to be
engaged in a "trade or business" under ERISA. In addition, based on positions taken by European governmental authorities, we or certain of our
investment funds potentially could be liable for fines if portfolio companies deemed to be under our control are found to have violated European
antitrust laws. Such potential, or future, liability may materially affect our business.
Future Regulation. We may be adversely affected as a result of new or revised legislation or regulations imposed in the U.S. or elsewhere. As calls
for additional regulation have increased, there may be a related increase in regulatory investigations of the trading and other investment activities of
alternative asset management funds, including our funds. Such investigations may impose additional expenses on us, may require the attention of
senior management and may result in fines or other sanctions if any of our funds are deemed to have violated any regulations.
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We also may be adversely affected by changes in the interpretation or enforcement of existing laws and rules. New laws or regulations could make
compliance more difficult and expensive and affect the manner in which we conduct business and divert significant management and operational
resources and attention from our business.
Apollo provides investment management services through registered investment advisors. Investment advisors are subject to extensive regulation in
the United States and in the other countries in which our investment activities occur. The SEC oversees our activities as a registered investment
advisor under the Investment Advisers Act. In the United Kingdom, we are subject to regulation by the U.K. Financial Conduct Authority, which
replaced the Financial Services Authority as of April 1, 2013. Our other European operations, and our investment activities around the globe, are
subject to a variety of regulatory regimes that vary country by country. A failure to comply with the obligations imposed by regulatory regimes to
which we are subject, including the Investment Advisers Act, could result in investigations, sanctions and reputational damage.
In November 2010, the European Parliament adopted the Directive on Alternative Investment Fund Managers, or the AIFM, which was required to
be implemented in the national laws of the European Union (EU) member states by July 22, 2013. The AIFM is also likely to be implemented in
the countries which form part of the European Economic Area (the EEA). The AIFM imposes significant new regulatory requirements on
investment managers operating within the EEA, including with respect to conduct of business, regulatory capital, valuations, disclosures and
marketing. Alternative investment funds organized outside of the EU in which interests are marketed within the EEA are now subject to significant
conditions on their operations. In the immediate future, such funds may be marketed only in certain EEA jurisdictions and in compliance with
requirements to register the fund for marketing in each relevant jurisdiction and to undertake periodic investor and regulatory reporting. In some
countries, additional obligations are imposed, for example in Germany, marketing of a non- EEA fund now also requires the appointment of one or
more depositaries (with cost implications for the fund). In the longer term (late 2015 at the earliest) non- EEA managers of non- EEA funds may be
able to register under the AIFM. Where Apollo registers under the AIFM, Apollo will have more freedom to promote relevant funds in the EEA,
although this will be subject to full compliance with all the requirements of the AIFM, which include (among other things) satisfying the competent
authority of the robustness of internal arrangements with respect to risk management, in particular liquidity risks and additional operational and
counterparty risks associated with short selling; the management and disclosure of conflicts of interest; the fair valuation of assets; and the security of
depository/custodial arrangements. Additional requirements and restrictions apply where funds invest in an EEA portfolio company, including
restrictions that may impose limits on certain investment and realization strategies, such as dividend recapitalizations and reorganizations. Such rules
could potentially impose significant additional costs on the operation of our business or investments in the EEA and could limit our operating
flexibility within the relevant jurisdictions.
In July 2012, the European Parliament adopted the Regulation on OTC derivatives, central counterparties and trade repositories, known as EMIR.
EMIR comes into force in stages and implements requirements similar to, but not the same as, those in Title VII of Dodd Frank, in particular
requiring reporting of all derivative transactions, risk mitigation (in particular initial and variation margin) for OTC derivative transactions and central
clearing of certain OTC derivative contracts. EMIR has minimal impact on the Apollo funds at present but is likely to apply more fully as additional
implementation stages are reached. Compliance with the requirements is likely to increase the burdens and costs of doing business.
In Germany, legislative amendments have been adopted which may limit deductibility of interest and other financing expenses in companies in which
our funds have invested or may invest in the future. According to the German interest barrier rule, the tax deduction available to a company in respect
of a net interest expense (interest expense less interest income) is limited to 30% of its tax earnings before interest, taxes, depreciation and
amortization (EBITDA). Interest expense that does not exceed the threshold of 3m can be deducted without any limitations for income tax
purposes. Interest expense in excess of the interest deduction limitation may be carried forward indefinitely (subject to change in ownership
restrictions) and used in future periods against all profits and gains. In respect of a tax group, interest paid by the German tax group entities to nontax group parties (e.g. interest on bank debt, capex facility and working capital facility debt) will be restricted to 30% of the tax groups tax EBITDA.
However, the interest barrier rule may not apply where German companys gearing under International Financial Reporting Standards (IFRS)
accounting principles is at maximum of 2% higher than the overall groups leverage ratio at the level of the very top level entity which would be
subject to IFRS consolidation (the escape clause test). This test is failed where any worldwide company of the entire group pays more than 10% of
its net interest expense on debt to substantial (i.e. greater than 25%) shareholders, related parties of such shareholders (that are not members of the
group) or secured third parties (although security granted by group members should not be harmful). If the group does not apply IFRS accounting
principles, EU member countries generally accepted accounting principles or generally accepted accounting principles in the United States of
America (U.S. GAAP) may also be accepted for the purpose of the escape clause test. It should be noted that for trade tax purposes, there is
principally a 25% add back on all deductible interest paid or accrued by any German entity after the consideration of a tax exempt amount kEUR 100
which is applied to the sum of all add back amounts. For trade tax purposes interest payments within a German tax group will not be considered. Our
businesses are subject to the risk that similar measures might be introduced in other countries in which
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they currently have investments or plan to invest in the future, or that other legislative or regulatory measures might be promulgated in any of the
countries in which we operate that adversely affect our businesses. Additionally, the Organization for Economic Co- Operation and Development
("OECD") issued an action plan in July 2013 calling for a coordinated multi- jurisdictional approach to "base erosion and profit shifting" by
multinational companies. The action plan identified 15 actions the OECD determined are needed to address "base erosion and profit shifting" and
generally set target dates for completion of each of the items between 2014 and 2015. Any changes to international tax laws, including new
definitions of permanent establishment, could impact the tax treatment of our foreign earnings and adversely impact the investment returns of our
funds.
Insurance Regulation. State insurance departments have broad administrative powers over the insurance business of our insurance company
affiliates, including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards,
premium rate regulation, admissibility of assets, policy form approval, unfair trade and claims practices, payment of dividends and distributions to
shareholders, review and/or approval of transactions with affiliates and other matters. State regulators regularly review and update these and other
requirements. The National Association of Insurance Commissioners (NAIC) continues to move forward with its implementation of principlesbased reserving for life insurers, which may change the methodology used by our insurance company affiliates to calculate their reserves.
Currently, there are proposals to increase the scope of regulation of insurance holding companies in both the United States and internationally. In the
United States, the NAIC has promulgated amendments to its insurance holding company system model law and regulations for consideration by the
various states that would provide for more extensive informational reporting regarding parents and other affiliates of insurance companies, with the
purpose of protecting domestic insurers from enterprise risk, including requiring an annual enterprise risk report by the ultimate controlling person
identifying the material risks within the insurance holding company system that could pose enterprise risk to domestic insurers. To date, both Iowa
and New York have introduced bills to adopt such amendments. Internationally, the International Association of Insurance Supervisors is in the
process of adopting a framework for the group wide supervision of internationally active insurance groups. Changes to existing laws or regulations
must be adopted by individual states or foreign jurisdictions before they will become effective. We cannot predict with any degree of certainty the
additional capital requirements, compliance costs or other burdens these requirements may impose on us and our insurance company affiliates.
The Dodd- Frank Act created the Federal Insurance Office (the FIO) within the Department of Treasury headed by a Director appointed by the
Treasury Secretary. The FIO is designed principally to exercise a monitoring and information gathering role, rather than a regulatory role. In that
capacity, the FIO has been charged with providing reports to the U.S. Congress on (i) modernization of U.S. insurance regulation and (ii) the U.S. and
global reinsurance market. Such reports could ultimately lead to changes in the regulation of insurers and reinsurers in the U.S.
Our revenue, net income and cash flow are all highly variable, which may make it difficult for us to achieve steady earnings growth on a
quarterly basis and may cause the price of our Class A shares to decline.
Our revenue, net income and cash flow are all highly variable, primarily due to the fact that carried interest from our private equity funds and certain
of our credit and real estate funds, which constitutes the largest portion of income from our combined businesses, and the transaction and advisory
fees that we receive can vary significantly from quarter to quarter and year to year. In addition, the investment returns of most of our funds are
volatile. We may also experience fluctuations in our results from quarter to quarter and year to year due to a number of other factors, including
changes in the values of our funds investments, changes in the amount of distributions, dividends or interest paid in respect of investments, changes
in our operating expenses, the degree to which we encounter competition and general economic and market conditions. In addition, carried interest
income from our private equity funds and certain of our credit and real estate funds is subject to contingent repayment by the general partner if, upon
the final distribution, the relevant funds general partner has received cumulative carried interest on individual portfolio investments in excess of the
amount of carried interest it would be entitled to from the profits calculated for all portfolio investments in the aggregate. Such variability may lead to
volatility in the trading price of our Class A shares and cause our results for a particular period not to be indicative of our performance in a future
period. It may be difficult for us to achieve steady growth in net income and cash flow on a quarterly basis, which could in turn lead to large adverse
movements in the price of our Class A shares or increased volatility in our Class A share price generally.
The timing of carried interest generated by our funds is uncertain and will contribute to the volatility of our results. Carried interest depends on our
funds performance. It takes a substantial period of time to identify attractive investment opportunities, to raise all the funds needed to make an
investment and then to realize the cash value or other proceeds of an investment through a sale, public offering, recapitalization or other exit. Even if
an investment proves to be profitable, it may be several years before any profits can be realized in cash or other proceeds. We cannot predict when, or
if, any realization of investments will occur. Generally, with respect to our private equity funds, although we recognize carried interest income on an
accrual basis, we receive private equity carried interest payments only upon disposition of an investment by the relevant fund, which contributes to
the
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volatility of our cash flow. If we were to have a realization event in a particular quarter or year, it may have a significant impact on our results for that
particular quarter or year that may not be replicated in subsequent periods. We recognize revenue on investments in our funds based on our allocable
share of realized and unrealized gains (or losses) reported by such funds, and a decline in realized or unrealized gains, or an increase in realized or
unrealized losses, would adversely affect our revenue, which could further increase the volatility of our results. With respect to a number of our credit
funds, our incentive income is generally paid annually, semi- annually or quarterly, and the varying frequency of these payments will contribute to
the volatility of our revenues and cash flow. Furthermore, we earn this incentive income only if the net asset value of a fund has increased or, in the
case of certain funds, increased beyond a particular threshold. Certain of our credit funds also have high water marks with respect to the investors
in these funds. If the high water mark for a particular investor is not surpassed, we would not earn incentive income with respect to such investor
during a particular period even though such investor had positive returns in such period as a result of losses in prior periods. If such an investor
experiences losses, we will not be able to earn incentive income from such investor until it surpasses the previous high water mark. The incentive
income we earn is therefore dependent on the net asset value of investors investments in the fund, which could lead to significant volatility in our
results.
Because our revenue, net income and cash flow can be highly variable from quarter to quarter and year to year, we plan not to provide any guidance
regarding our expected quarterly and annual operating results. The lack of guidance may affect the expectations of public market analysts and could
cause increased volatility in our Class A share price.
The investment management business is intensely competitive, which could materially adversely impact us.
The investment management business is intensely competitive. We face competition both in the pursuit of outside investors for our funds and in
acquiring investments in attractive portfolio companies and making other investments. It is possible that it will become increasingly difficult for our
funds to raise capital as funds compete for investments from a limited number of qualified investors. Due to the global economic downturn and
generally poor returns in alternative asset investment businesses during the crisis, institutional investors have suffered from decreasing returns,
liquidity pressure, increased volatility and difficulty maintaining targeted asset allocations, and a significant number of investors have materially
decreased or temporarily stopped making new fund investments during this period. As the economy begins to recover, such investors may elect to
reduce their overall portfolio allocations to alternative investments such as private equity and hedge funds, resulting in a smaller overall pool of
available capital in our industry. Even if such investors continue to invest at historic levels, they may seek to negotiate reduced fee structures or other
modifications to fund structures as a condition to investing.
In the event all or part of this analysis proves true, when trying to raise new capital we will be competing for fewer total available assets in an
increasingly competitive environment which could lead to fee reductions and redemptions as well as difficulty in raising new capital. Such changes
would adversely affect our revenues and profitability.
Competition among funds is based on a variety of factors, including:
investment performance;
investor liquidity and willingness to invest;
investor perception of investment managers drive, focus and alignment of interest;
quality of service provided to and duration of relationship with investors;
business reputation; and
the level of fees and expenses charged for services.
We compete in all aspects of our businesses with a large number of investment management firms, private equity, credit and real estate fund sponsors
and other financial institutions. A number of factors serve to increase our competitive risks:
fund investors may develop concerns that we will allow a business to grow to the detriment of its
performance;
investors may reduce their investments in our funds or not make additional investments in our funds based upon current market conditions, their
available capital or their perception of the health of our businesses;
some of our competitors have greater capital, lower targeted returns or greater sector or investment strategy- specific expertise than we do, which
creates competitive disadvantages with respect to investment opportunities;
some of our competitors may also have a lower cost of capital and access to funding sources that are not available to us, which may create
competitive disadvantages for us with respect to investment opportunities;
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some of our competitors may perceive risk differently than we do, which could allow them either to outbid us for investments in particular
sectors or, generally, to consider a wider variety of investments;
some of our funds may not perform as well as competitors funds or other available investment products;
our competitors that are corporate buyers may be able to achieve synergistic cost savings in respect of an investment, which may provide them with
a competitive advantage in bidding for an investment;
some fund investors may prefer to invest with an investment manager that is not publicly traded;
there are relatively few barriers to entry impeding new private equity and capital markets fund management firms, and the successful efforts of new
entrants into our various businesses, including former star portfolio managers at large diversified financial institutions as well as such institutions
themselves, will continue to result in increased competition;
there are no barriers to entry to our businesses, implementing an integrated platform similar to ours or the strategies that we deploy at our
funds, such as distressed investing, which we believe are our competitive strengths, except that our competitors would need to hire
professionals with the investment expertise or grow it internally; and
other industry participants continuously seek to recruit our investment professionals away from us.
These and other factors could reduce our earnings and revenues and materially adversely affect our businesses. In addition, if we are forced to
compete with other alternative investment managers on the basis of price, we may not be able to maintain our current management fee and incentive
income structures. We have historically competed primarily on the performance of our funds, and not on the level of our fees or incentive income
relative to those of our competitors. However, there is a risk that fees and incentive income in the alternative investment management industry will
decline, without regard to the historical performance of a manager. Fee or incentive income reductions on existing or future funds, without
corresponding decreases in our cost structure, would adversely affect our revenues and profitability.
Our ability to retain our investment professionals is critical to our success and our ability to grow depends on our ability to attract additional
key personnel.
Our success depends on our ability to retain our investment professionals and recruit additional qualified personnel. We anticipate that it will be
necessary for us to add investment professionals as we pursue our growth strategy. However, we may not succeed in recruiting additional personnel
or retaining current personnel, as the market for qualified investment professionals is extremely competitive. Our investment professionals possess
substantial experience and expertise in investing, are responsible for locating and executing our funds investments, have significant relationships
with the institutions that are the source of many of our funds investment opportunities, and in certain cases have key relationships with our fund
investors. Therefore, if our investment professionals join competitors or form competing companies it could result in the loss of significant
investment opportunities and certain existing fund investors. Legislation has been proposed in the U.S. Congress to treat portions of carried interest as
ordinary income rather than as capital gain for U.S. Federal income tax purposes. Because we compensate our investment professionals in large part
by giving them an equity interest in our business or a right to receive carried interest, such legislation could adversely affect our ability to recruit,
retain and motivate our current and future investment professionals. See Risks Related to TaxationOur structure involves complex provisions of
U.S. Federal income tax law for which no clear precedent or authority may be available. Our structure is also subject to potential legislative, judicial
or administrative change and differing interpretations, possibly on a retroactive basis. The loss of even a small number of our investment
professionals could jeopardize the performance of our funds, which would have a material adverse effect on our results of operations. Efforts to retain
or attract investment professionals may result in significant additional expenses, which could adversely affect our profitability.
We may not be successful in expanding into new investment strategies, markets and businesses.
We actively consider the opportunistic expansion of our businesses, both geographically and into complementary new investment strategies. We may
not be successful in any such attempted expansion. Attempts to expand our businesses involve a number of special risks, including some or all of the
following:
the diversion of managements attention from our core

businesses;
the disruption of our ongoing businesses;
entry into markets or businesses in which we may have limited or no experience;
increasing demands on our operational systems;
potential increase in investor concentration; and
the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign
jurisdictions.
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Additionally, any expansion of our businesses could result in significant increases in our outstanding indebtedness and debt service requirements,
which would increase the risks in investing in our Class A shares and may adversely impact our results of operations and financial condition.
We also may not be successful in identifying new investment strategies or geographic markets that increase our profitability, or in identifying and
acquiring new businesses that increase our profitability. Because we have not yet identified these potential new investment strategies, geographic
markets or businesses, we cannot identify for you all the risks we may face and the potential adverse consequences on us and your investment that
may result from our attempted expansion. We also do not know how long it may take for us to expand, if we do so at all. We have also entered into
strategic partnerships and separately managed accounts, which lack the scale of our traditional funds and are more costly to administer. The
prevalence of these accounts may also present conflicts and introduce complexity in the deployment of capital. We have total discretion, at the
direction of our manager, without needing to seek approval from our board of directors or shareholders, to enter into new investment strategies,
geographic markets and businesses, other than expansions involving transactions with affiliates which may require board approval.
Many of our funds invest in relatively high- risk, illiquid assets and we may fail to realize any profits from these activities for a considerable
period of time or lose some or all of the principal amount we invest in these activities.
Many of our funds invest in securities that are not publicly traded. In many cases, our funds may be prohibited by contract or by applicable securities
laws from selling such securities for a period of time. Our funds will generally not be able to sell these securities publicly unless their sale is
registered under applicable securities laws, or unless an exemption from such registration requirements is available. Accordingly, our funds may be
forced, under certain conditions, to sell securities at a loss. The ability of many of our funds, particularly our private equity funds, to dispose of
investments is heavily dependent on the public equity markets, inasmuch as the ability to realize value from an investment may depend upon the
ability to complete an IPO of the portfolio company in which such investment is held. Furthermore, large holdings even of publicly traded equity
securities can often be disposed of only over a substantial period of time, exposing the investment returns to risks of downward movement in market
prices during the disposition period.
Dependence on significant leverage in investments by our funds could adversely affect our ability to achieve attractive rates of return on
those investments.
Because certain of our funds investments rely heavily on the use of leverage, our ability to achieve attractive rates of return on investments will
depend on our continued ability to access sufficient sources of indebtedness at attractive rates. For example, in many of our private equity
investments, indebtedness may constitute 70% or more of a portfolio companys total debt and equity capitalization, including debt that may be
incurred in connection with the investment, and a portfolio companys leverage may increase as a result of recapitalization transactions subsequent to
the companys acquisition by a private equity fund. The absence of available sources of senior debt financing for extended periods of time could
therefore materially and adversely affect our private equity funds. An increase in either the general levels of interest rates or in the risk spread
demanded by sources of indebtedness would make it more expensive to finance those investments. Increases in interest rates could also make it more
difficult to locate and consummate private equity investments because other potential buyers, including operating companies acting as strategic
buyers, may be able to bid for an asset at a higher price due to a lower overall cost of capital. In addition, a portion of the indebtedness used to
finance private equity investments often includes high- yield debt securities issued in credit funds. Availability of capital from the high- yield debt
markets is subject to significant volatility, and there may be times when we might not be able to access those markets at attractive rates, or at all. For
example, the dislocation in the credit markets which we believe began in July 2007 and the record backlog of supply in the debt markets resulting
from such dislocation materially affected the ability and willingness of banks to underwrite new high- yield debt securities until relatively recently.
Investments in highly leveraged entities are inherently more sensitive to declines in revenues, increases in expenses and interest rates and adverse
economic, market and industry developments. The incurrence of a significant amount of indebtedness by an entity could, among other things:
give rise to an obligation to make mandatory prepayments of debt using excess cash flow, which might limit the entitys ability to respond to
changing industry conditions to the extent additional cash is needed for the response, to make unplanned but necessary capital expenditures
or to take advantage of growth opportunities;
allow even moderate reductions in operating cash flow to render it unable to service its indebtedness, leading to a bankruptcy or other
reorganization of the entity and a loss of part or all of the equity investment in it;
limit the entitys ability to adjust to changing market conditions, thereby placing it at a competitive disadvantage compared to its competitors who
have relatively less debt;
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limit the entitys ability to engage in strategic acquisitions that might be necessary to generate attractive returns or further growth; and
limit the entitys ability to obtain additional financing or increase the cost of obtaining such financing, including for capital expenditures, working
capital or general corporate purposes.
As a result, the risk of loss associated with a leveraged entity is generally greater than for companies with comparatively less debt. For example,
many investments consummated by private equity sponsors during 2005, 2006 and 2007 that utilized significant amounts of leverage subsequently
experienced severe economic stress and in certain cases defaulted on their debt obligations due to a decrease in revenues and cash flow precipitated
by the economic downturn.
When our private equity funds existing portfolio investments reach the point when debt incurred to finance those investments matures in significant
amounts and must be either repaid or refinanced, those investments may materially suffer if they have generated insufficient cash flow to repay
maturing debt and there is insufficient capacity and availability in the financing markets to permit them to refinance maturing debt on satisfactory
terms, or at all. If a limited availability of financing for such purposes were to persist for an extended period of time, when significant amounts of the
debt incurred to finance our private equity funds existing portfolio investments came due, these funds could be materially and adversely affected.
Our credit funds may choose to use leverage as part of their respective investment programs and regularly borrow a substantial amount of their
capital. The use of leverage poses a significant degree of risk and enhances the possibility of a significant loss in the value of the investment portfolio.
The credit funds may borrow money from time to time to purchase or carry securities. The interest expense and other costs incurred in connection
with such borrowing may not be recovered by appreciation in the securities purchased or carried, and will be lost- and the timing and magnitude of
such losses may be accelerated or exacerbated- in the event of a decline in the market value of such securities. Gains realized with borrowed funds
may cause the funds net asset value to increase at a faster rate than would be the case without borrowings. However, if investment results fail to
cover the cost of borrowings, the funds net asset value could also decrease faster than if there had been no borrowings.
In addition, as a business development company under the Investment Company Act, AINV is permitted to issue senior securities in amounts such
that its asset coverage ratio equals at least 200% after each issuance of senior securities. Further, AFT and AIF, as registered investment companies,
are permitted to (i) issue preferred shares in amounts such that their respective asset coverage equals at least 200% after issuance and (ii) to incur
indebtedness, including through the issuance of debt securities, so long as immediately thereafter the fund will have an asset coverage of at least
300% after issuance. The ability of each of AFT, AIF and AINV to pay dividends will be restricted if its asset coverage ratio falls below 200% and
any amounts that it uses to service its indebtedness are not available for dividends to its common stockholders. An increase in interest rates could also
decrease the value of fixed- rate debt investments that our funds make. Any of the foregoing circumstances could have a material adverse effect on
our financial condition, results of operations and cash flow.
The potential requirement to convert our financial statements from being prepared in conformity with accounting principles generally
accepted in the United States of America to International Financial Reporting Standards may strain our resources and increase our annual
expenses.
As a public entity, the SEC may require in the future that we report our financial results under IFRS, instead of under U.S. GAAP. IFRS is a set of
accounting principles that has been gaining acceptance on a worldwide basis. These standards are published by the London- based International
Accounting Standards Board, or IASB, and are more focused on objectives and principles and less reliant on detailed rules than U.S. GAAP.
Today, there remain significant and material differences in several key areas between U.S. GAAP and IFRS which would affect Apollo. Additionally,
U.S. GAAP provides specific guidance in classes of accounting transactions for which equivalent guidance in IFRS does not exist. The adoption of
IFRS is highly complex and would have an impact on many aspects and operations of Apollo, including but not limited to financial accounting and
reporting systems, internal controls, taxes, borrowing covenants and cash management. It is expected that a significant amount of time, internal and
external resources and expenses over a multi- year period would be required for this conversion.
We face operational risk from errors made in the execution, confirmation or settlement of transactions and our dependence on our
headquarters in New York City and third- party providers may have an adverse impact on our ability to continue to operate our businesses
without interruption which could result in losses to us or limit our growth.
We face operational risk from errors made in the execution, confirmation or settlement of transactions. We also face operational risk from
transactions not being properly recorded, evaluated or accounted for in our funds. In particular, our capital markets oriented credit business is highly
dependent on our ability to process and evaluate, on a daily basis, transactions across markets and geographies in a time- sensitive, efficient and
accurate manner. Consequently, we rely heavily on our financial, accounting and other data processing systems. New investment products we may
introduce could create a significant risk that our
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existing systems may not be adequate to identify or control the relevant risks in the investment strategies employed by such new investment products.
In addition, our information systems and technology might not be able to accommodate our growth, and the cost of maintaining such systems might
increase from its current level. These risks could cause us to suffer financial loss, a disruption of our businesses, liability to our funds, regulatory
intervention and reputational damage.
Furthermore, we depend on our headquarters, which is located in New York City, for the operation of many of our businesses. A disaster or a
disruption in the infrastructure that supports our businesses, including a disruption involving electronic communications or other services used by us
or third parties with whom we conduct business, or directly affecting our headquarters, may have an adverse impact on our ability to continue to
operate our businesses without interruption which could have a material adverse effect on us. Although we have disaster recovery programs in place,
these may not be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other safeguards might
only partially reimburse us for our losses.
Finally, we rely on third- party service providers for certain aspects of our businesses, including for certain information systems, technology and
administration of our funds and compliance matters. Any interruption or deterioration in the performance of these third parties could impair the
quality of the funds operations and could impact our reputation, adversely affect our businesses and limit our ability to grow.
We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely
affect our business and results of operations. Additionally, if these systems fail or become unavailable for any significant period of time, our
business could be harmed.
The efficient operation of our business is dependent on computer hardware and software systems. Information systems are vulnerable to security
breaches by computer hackers and cyber terrorists. We rely on industry accepted security measures and technology to securely maintain confidential
and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent security
breaches. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could
disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer.
Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and results
of operations.
Our funds' portfolio companies also rely on data processing systems and the secure processing, storage and transmission of information, including
payment and health information. A disruption or compromise of these systems could have a material adverse effect on the value of these businesses.
We derive a substantial portion of our revenues from funds managed pursuant to management agreements that may be terminated or fund
partnership agreements that permit fund investors to request liquidation of investments in our funds on short notice.
The terms of our funds generally give either the general partner of the fund or the funds board of directors the right to terminate our investment
management agreement with the fund. However, insofar as we control the general partner of our funds that are limited partnerships, the risk of
termination of investment management agreement for such funds is limited, subject to our fiduciary or contractual duties as general partner. This risk
is more significant for certain of our funds which have independent boards of directors.
With respect to our funds that are subject to the Investment Company Act, following the initial two years of operation each funds investment
management agreement must be approved annually by such funds board of directors or by the vote of a majority of the shareholders and the majority
of the independent members of such funds board of directors and, as required by law. Each investment management agreement for such funds can
also be terminated by the majority of the shareholders. Termination of these agreements would reduce the fees we earn from the relevant funds,
which could have a material adverse effect on our results of operations. Currently, AFT and AIF, management investment companies under the
Investment Company Act, and AINV, a management investment company that has elected to be treated as a business development company under
the Investment Company Act, are subject to these provisions of the Investment Company Act.
In addition, after undergoing the 2007 Reorganization, we no longer consolidate in our financial statements certain of the funds that have historically
been consolidated in our financial statements. In connection with such deconsolidation, we amended the governing documents of those funds to
provide that a simple majority of a funds unaffiliated investors have the right to liquidate that fund, which would cause management fees and
incentive income to terminate. Our ability to realize incentive income from such funds also would be adversely affected if we are required to liquidate
fund investments at a time when market conditions
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result in our obtaining less for investments than could be obtained at later times. We do not know whether, and under what circumstances, the
investors in our funds are likely to exercise such right.
In addition, the management agreements of our funds would terminate if we were to experience a change of control without obtaining investor
consent. Such a change of control could be deemed to occur in the event our Managing Partners exchange enough of their interests in the Apollo
Operating Group into our Class A shares such that our Managing Partners no longer own a controlling interest in us. We cannot be certain that
consents required for the assignment of our management agreements will be obtained if such a deemed change of control occurs. Termination of
these agreements would affect the fees we earn from the relevant funds and the transaction and advisory fees we earn from the underlying portfolio
companies, which could have a material adverse effect on our results of operations.
Our use of leverage to finance our businesses will expose us to substantial risks, which are exacerbated by our funds use of leverage to
finance investments.
We have loans outstanding and an undrawn revolving credit facility under the 2013 AMH Credit Facilities described in note 14 to our consolidated
financial statements. We may choose to finance our business operations through further borrowings. Our existing and future indebtedness exposes us
to the typical risks associated with the use of leverage, including those discussed above under Dependence on significant leverage in investments
by our funds could adversely affect our ability to achieve attractive rates of return on those investments. These risks are exacerbated by certain of
our funds use of leverage to finance investments and, if they were to occur, could cause us to suffer a decline in the credit ratings assigned to our
debt by rating agencies, if any, which might result in an increase in our borrowing costs or result in other material adverse effects on our businesses.
Borrowings under the 2013 AMH Credit Facilities are scheduled to mature on January 18, 2019. As these borrowings and other indebtedness mature
(or are otherwise repaid prior to their scheduled maturities), we may be required to either refinance them by entering into new facilities, which could
result in higher borrowing costs, or issuing equity, which would dilute existing shareholders. We could also repay them by using cash on hand or cash
from the sale of our assets. We could have difficulty entering into new facilities or issuing equity in the future on attractive terms, or at all.
Borrowings under the 2013 AMH Credit Facilities are floating- rate obligations based on either the London Interbank Offered Rate (LIBOR) or the
Alternate Base Rate (ABR). As a result, an increase in shortterm interest rates will increase our interest costs to the extent such borrowings have
not been hedged into fixed rates.
We are subject to third- party litigation that could result in significant liabilities and reputational harm, which could materially adversely
affect our results of operations, financial condition and liquidity.
In general, we will be exposed to risk of litigation by our investors if our management of any fund is alleged to constitute bad faith, gross negligence,
willful misconduct, fraud, willful or reckless disregard for our duties to the fund or other forms of misconduct. Investors could sue us to recover
amounts lost by our funds due to our alleged misconduct, up to the entire amount of loss. Further, we may be subject to litigation arising from
investor dissatisfaction with the performance of our funds or from allegations that we improperly exercised control or influence over companies in
which our funds have large investments. By way of example, we, our funds and certain of our employees are each exposed to the risks of litigation
relating to investment activities in our funds and actions taken by the officers and directors (some of whom may be Apollo employees) of portfolio
companies, such as the risk of shareholder litigation by other shareholders of public companies in which our funds have large investments. We are
also exposed to risks of litigation or investigation relating to transactions that presented conflicts of interest that were not properly addressed. In
addition, our rights to indemnification by the funds we manage may not be upheld if challenged, and our indemnification rights generally do not
cover bad faith, gross negligence, willful misconduct, fraud, willful or reckless disregard for our duties to the fund or other forms of misconduct. If
we are required to incur all or a portion of the costs arising out of litigation or investigations as a result of inadequate insurance proceeds or failure to
obtain indemnification from our funds, our results of operations, financial condition and liquidity would be materially adversely affected.
In addition, with a workforce that includes many very highly paid investment professionals, we face the risk of lawsuits relating to claims for
compensation, which may individually or in the aggregate be significant in amount. Such claims are more likely to occur in the current environment
where individual employees may experience significant volatility in their year- to- year compensation due to trading performance or other issues and
in situations where previously highly compensated employees were terminated for performance or efficiency reasons. The cost of settling such claims
could adversely affect our results of operations.
If any civil or criminal lawsuits brought against us were to result in a finding of substantial legal liability or culpability, the lawsuit could, in addition
to any financial damage, cause significant reputational harm to us, which could seriously harm our business. We depend to a large extent on our
business relationships and our reputation for integrity and high- caliber professional
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services to attract and retain investors and qualified professionals and to pursue investment opportunities for our funds. As a result, allegations of
improper conduct by private litigants or regulators, whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and
press speculation about us, our investment activities or the private equity industry in general, whether or not valid, may harm our reputation, which
may be more damaging to our business than to other types of businesses. See Item 3. Legal Proceedings.
Our failure to deal appropriately with conflicts of interest could damage our reputation and adversely affect our businesses.
As we have expanded and as we continue to expand the number and scope of our businesses, we increasingly confront potential conflicts of interest
relating to our funds investment activities. Certain of our funds may have overlapping investment objectives, including funds that have different fee
structures, and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among those funds. For
example, a decision to acquire material non- public information about a company while pursuing an investment opportunity for a particular fund
gives rise to a potential conflict of interest when it results in our having to restrict the ability of other funds to take any action. In addition, fund
investors (or holders of Class A shares) may perceive conflicts of interest regarding investment decisions for funds in which our Managing Partners,
who have and may continue to make significant personal investments in a variety of Apollo funds, are personally invested. Similarly, conflicts of
interest may exist in the valuation of our investments and regarding decisions about the allocation of specific investment opportunities among us and
our funds and the allocation of fees and costs among us, our funds and their portfolio companies.
Pursuant to the terms of our operating agreement, whenever a potential conflict of interest exists or arises between any of the Managing Partners, one
or more directors or their respective affiliates, on the one hand, and us, any of our subsidiaries or any shareholder other than a Managing Partner, on
the other, any resolution or course of action by our board of directors shall be permitted and deemed approved by all shareholders if the resolution or
course of action (i) has been specifically approved by a majority of the voting power of our outstanding voting shares (excluding voting shares owned
by our manager or its affiliates) or by a conflicts committee of the board of directors composed entirely of one or more independent directors, (ii) is
on terms no less favorable to us or our shareholders (other than a Managing Partner) than those generally being provided to or available from
unrelated third parties or (iii) it is fair and reasonable to us and our shareholders taking into account the totality of the relationships between the
parties involved. All conflicts of interest described in this report will be deemed to have been specifically approved by all shareholders.
Notwithstanding the foregoing, it is possible that potential or perceived conflicts could give rise to investor dissatisfaction or litigation or regulatory
enforcement actions. Appropriately dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or
appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. Regulatory scrutiny of, or litigation in connection with,
conflicts of interest would have a material adverse effect on our reputation which would materially adversely affect our businesses in a number of
ways, including as a result of redemptions by our investors from our funds, an inability to raise additional funds and a reluctance of counterparties to
do business with us.
Our organizational documents do not limit our ability to enter into new lines of businesses, and we may expand into new investment
strategies, geographic markets and businesses, each of which may result in additional risks and uncertainties in our businesses.
We intend, to the extent that market conditions warrant, to grow our businesses by increasing AUM in existing businesses and expanding into new
investment strategies, geographic markets and businesses. Our organizational documents, however, do not limit us to the investment management
business. Accordingly, we may pursue growth through acquisitions of other investment management companies, acquisitions of critical business
partners or other strategic initiatives, which may include entering into new lines of business, such as the insurance, broker- dealer or financial
advisory industries. In addition, we expect opportunities will arise to acquire other alternative or traditional asset managers. To the extent we make
strategic investments or acquisitions, undertake other strategic initiatives or enter into a new line of business, we will face numerous risks and
uncertainties, including risks associated with (i) the required investment of capital and other resources, (ii) the possibility that we have insufficient
expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, (iii) combining or integrating operational and
management systems and controls and (iv) the broadening of our geographic footprint, including the risks associated with conducting operations in
foreign jurisdictions. Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar, or from which
we are currently exempt, and may lead to increased litigation and regulatory risk. If a new business generates insufficient revenues or if we are unable
to efficiently manage our expanded operations, our results of operations will be adversely affected. Our strategic initiatives may include joint
ventures, in which case we will be subject to additional risks and uncertainties in that we may be dependent upon, and subject to liability, losses or
reputational damage relating to, systems, controls and personnel that are not under our control.
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Employee misconduct could harm us by impairing our ability to attract and retain investors and by subjecting us to significant legal liability,
regulatory scrutiny and reputational harm.
Our reputation is critical to maintaining and developing relationships with the investors in our funds, potential fund investors and third parties with
whom we do business. In recent years, there have been a number of highly publicized cases involving fraud, conflicts of interest or other misconduct
by individuals in the financial services industry. There is a risk that our employees could engage in misconduct that adversely affects our businesses.
For example, if an employee were to engage in illegal or suspicious activities, we could be subject to regulatory sanctions and suffer serious harm to
our reputation, financial position, investor relationships and ability to attract future investors. It is not always possible to deter employee misconduct,
and the precautions we take to detect and prevent this activity may not be effective in all cases. Misconduct by our employees, or the employees of
our portfolio companies, or even unsubstantiated allegations, could result in a material adverse effect on our reputation and our businesses.
Underwriting activities expose us to risks.
Apollo Global Securities, LLC, a subsidiary of ours, may act as an underwriter in securities offerings. We may incur losses and be subject to
reputational harm to the extent that, for any reason, we are unable to sell securities or indebtedness we purchased as an underwriter at the anticipated
price levels. As an underwriter, we also are subject to potential liability for material misstatements or omissions in prospectuses and other offering
documents relating to offerings we underwrite.
The due diligence process that we undertake in connection with investments by our funds may not reveal all facts that may be relevant in
connection with an investment.
Before making investments in private equity and other fund investments, including real estate investments, we conduct due diligence that we deem
reasonable and appropriate based on the facts and circumstances applicable to each investment. When conducting due diligence, we may be required
to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors,
accountants and investment banks may be involved in the due diligence process in varying degrees depending on the type of investment.
Nevertheless, when conducting due diligence and making an assessment regarding an investment, we rely on the resources available to us, including
information provided by the target of the investment and, in some circumstances, third- party investigations. The due diligence investigation that we
will carry out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating
such investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful.
Certain of our funds utilize special situation and distressed debt investment strategies that involve significant risks.
Our funds often invest in obligors and issuers with weak financial conditions, poor operating results, substantial financial needs, negative net worth
and/or special competitive problems. These funds also invest in obligors and issuers that are involved in bankruptcy or reorganization proceedings. In
such situations, it may be difficult to obtain full information as to the exact financial and operating conditions of these obligors and issuers.
Additionally, the fair values of such investments are subject to abrupt and erratic market movements and significant price volatility if they are
publicly traded securities, and are subject to significant uncertainty in general if they are not publicly traded securities. Furthermore, some of our
funds distressed investments may not be widely traded or may have no recognized market. A funds exposure to such investments may be substantial
in relation to the market for those investments, and the assets are likely to be illiquid and difficult to sell or transfer. As a result, it may take a number
of years for the market value of such investments to ultimately reflect their intrinsic value as perceived by us.
A central feature of our distressed investment strategy is our ability to successfully predict the occurrence of certain corporate events, such as debt
and/or equity offerings, restructurings, reorganizations, mergers, takeover offers and other transactions, that we believe will improve the condition of
the business. If the corporate event we predict is delayed, changed or never completed, the market price and value of the applicable funds investment
could decline sharply.
In addition, these investments could subject us to certain potential additional liabilities that may exceed the value of our original investment. Under
certain circumstances, payments or distributions on certain investments may be reclaimed if any such payment or distribution is later determined to
have been a fraudulent conveyance, a preferential payment or similar transaction under applicable bankruptcy and insolvency laws. In addition, under
certain circumstances, a lender that has inappropriately exercised control of the management and policies of a debtor may have its claims
subordinated or disallowed, or may be found liable for damages suffered by parties as a result of such actions. In the case where the investment in
securities of troubled companies is made in connection with an attempt to influence a restructuring proposal or plan of reorganization in bankruptcy,
our funds may become involved in substantial litigation.
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We often pursue investment opportunities that involve business, regulatory, legal or other complexities.
As an element of our investment style, we often pursue unusually complex investment opportunities. This can often take the form of substantial
business, regulatory or legal complexity that would deter other investment managers. Our tolerance for complexity presents risks, as such transactions
can be more difficult, expensive and time- consuming to finance and execute; it can be more difficult to manage or realize value from the assets
acquired in such transactions; and such transactions sometimes entail a higher level of regulatory scrutiny or a greater risk of contingent liabilities.
Any of these risks could harm the performance of our funds.
Our funds make investments in companies that we do not control.
Investments by some of our funds will include debt instruments and equity securities of companies that we do not control. Such instruments and
securities may be acquired by our funds through trading activities or through purchases of securities from the issuer. In addition, in the future, our
funds may seek to acquire minority equity interests more frequently and may also dispose of a portion of their majority equity investments in
portfolio companies over time in a manner that results in the funds retaining a minority investment. Those investments will be subject to the risk that
the company in which the investment is made may make business, financial or management decisions with which we do not agree or that the majority
stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our interests. If any of the foregoing
were to occur, the values of investments by our funds could decrease and our financial condition, results of operations and cash flow could suffer as a
result.
Our funds may face risks relating to undiversified investments.
While diversification is generally an objective of our funds, we cannot give assurance as to the degree of diversification that will actually be achieved
in any fund investments. Because a significant portion of a funds capital may be invested in a single investment or portfolio company, a loss with
respect to such investment or portfolio company could have a significant adverse impact on such funds capital. Accordingly, a lack of diversification
on the part of a fund could adversely affect a funds performance and therefore our financial condition and results of operations.
Some of our funds invest in foreign countries and securities of issuers located outside of the United States, which may involve foreign
exchange, political, social, economic and tax uncertainties and risks.
Some of our funds invest all or a portion of their assets in the equity, debt, loans or other securities of issuers located outside the United States,
including Germany, China, India, Australia, and Singapore. In addition to business uncertainties, such investments may be affected by changes in
exchange values as well as political, social and economic uncertainty affecting a country or region. Many financial markets are not as developed or as
efficient as those in the United States, and as a result, liquidity may be reduced and price volatility may be higher. The legal and regulatory
environment may also be different, particularly with respect to bankruptcy and reorganization. Financial accounting standards and practices may
differ, and there may be less publicly available information in respect of such companies.
Restrictions imposed or actions taken by foreign governments may adversely impact the value of our fund investments. Such restrictions or actions
could include exchange controls, seizure or nationalization of foreign deposits or other assets and adoption of other governmental restrictions that
adversely affect the prices of securities or the ability to repatriate profits on investments or the capital invested itself. Income received by our funds
from sources in some countries may be reduced by withholding and other taxes. Any such taxes paid by a fund will reduce the net income or return
from such investments. While our funds will take these factors into consideration in making investment decisions, including when hedging positions,
our funds may not be able to fully avoid these risks or generate sufficient risk- adjusted returns.
In addition, as a result of the complexity of, and lack of clear precedent or authority with respect to, the application of various income tax laws to our
structures, the application of rules governing how transactions and structures should be reported is also subject to differing interpretations. For
example, certain countries such as Australia, China, and India, where our funds have made investments, have sought to tax investment gains derived
by nonresident investors, including private equity funds, from the disposition of the equity in companies operating in those countries. In some cases
this development is the result of new legislation or changes in the interpretation of existing legislation and local authority assertions that investors
have a local taxable presence or are holding companies for trading purposes rather than for capital purposes, or are not otherwise entitled to treaty
benefits. With respect to India, in 2012 the Supreme Court of India held in favor of a taxpayer finding that the sale of a foreign company that
indirectly held Indian assets was not subject to Indian tax. However, the tax laws were amended in 2012 to subject such gains to Indian tax with
retroactive effect. Further, a general anti- avoidance rule was also introduced that would provide a basis for the tax authorities to subject other sales
and investments through intermediate holding jurisdictions such as Mauritius to
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Indian tax. While such rule is effective for tax years beginning on or after April 1, 2015, concerns have been raised with respect to these new rules
including their retroactive effect in certain circumstances. Indian taxation of the capital gains of a foreign investor, upon a direct or indirect sale of an
Indian company, therefore remains uncertain.
Third- party investors in our funds will have the right under certain circumstances to terminate commitment periods or to dissolve the
funds, and investors in our credit funds may redeem their investments in our credit funds at any time after an initial holding period of 12 to
36 months. These events would lead to a decrease in our revenues, which could be substantial.
The governing agreements of certain of our funds allow the limited partners of those funds to (i) terminate the commitment period of the fund in the
event that certain key persons (for example, one or more of our Managing Partners and/or certain other investment professionals) fail to devote the
requisite time to managing the fund, (ii) (depending on the fund) terminate the commitment period, dissolve the fund or remove the general partner if
we, as general partner or manager, or certain key persons engage in certain forms of misconduct, or (iii) dissolve the fund or terminate the
commitment period upon the affirmative vote of a specified percentage of limited partner interests entitled to vote. Each of Fund VI, Fund VII and
Fund VIII, on which our near- to medium- term performance will heavily depend, include a number of such provisions. Also, after undergoing the
2007 Reorganization, subsequent to which we deconsolidated certain funds that have historically been consolidated in our financial statements, we
amended the governing documents of those funds to provide that a simple majority of a funds unaffiliated investors have the right to liquidate that
fund. In addition to having a significant negative impact on our revenue, net income and cash flow, the occurrence of such an event with respect to
any of our funds would likely result in significant reputational damage to us.
Investors in our credit funds may also generally redeem their investments on an annual, semiannual or quarterly basis following the expiration of a
specified period of time when capital may not be redeemed (typically between one and five years). Fund investors may decide to move their capital
away from us to other investments for any number of reasons in addition to poor investment performance. Factors which could result in investors
leaving our funds include changes in interest rates that make other investments more attractive, changes in investor perception regarding our focus or
alignment of interest, unhappiness with changes in or broadening of a funds investment strategy, changes in our reputation and departures or changes
in responsibilities of key investment professionals. In a declining market, the pace of redemptions and consequent reduction in our AUM could
accelerate. The decrease in revenues that would result from significant redemptions in these funds could have a material adverse effect on our
businesses, revenues, net income and cash flows.
In addition, the management agreements of all of our funds would be terminated upon an assignment, without the requisite consent, of these
agreements, which may be deemed to occur in the event the investment advisors of our funds were to experience a change of control. We cannot be
certain that consents required to assign our investment management agreements will be obtained if a change of control occurs. In addition, with
respect to our publicly traded closed- end funds, each funds investment management agreement must be approved annually by the independent
members of such funds board of directors and, in certain cases, by its stockholders, as required by law. Termination of these agreements would cause
us to lose the fees we earn from such funds.
Our financial projections for portfolio companies and other fund investments could prove inaccurate.
Our funds generally establish the capital structure of portfolio companies and certain other fund investments, including real estate investments, on the
basis of financial projections for such investments. These projected operating results will normally be based primarily on management judgments. In
all cases, projections are only estimates of future results that are based upon assumptions made at the time that the projections are developed. General
economic conditions, which are not predictable, along with other factors may cause actual performance to fall short of the financial projections we
used to establish a given investment's capital structure. Because of the leverage we typically employ in our investments, this could cause a substantial
decrease in the value of our equity holdings in such investments. The inaccuracy of financial projections could thus cause our funds performance to
fall short of our expectations.
Our private equity funds performance, and our performance, may be adversely affected by the financial performance of our portfolio
companies and the industries in which our funds invest.
Our performance and the performance of our private equity funds is significantly impacted by the value of the companies in which our funds have
invested. Our funds invest in companies in many different industries, each of which is subject to volatility based upon economic and market factors.
Over the last few years, the credit crisis has caused significant fluctuations in the value of securities held by our funds and the global economic
recession had a significant impact in overall performance activity and the demands for many of the goods and services provided by portfolio
companies of the funds we manage. Although the U.S. economy has improved, there remain many obstacles to continued growth in the economy
such as high unemployment, global geopolitical events, risks of inflation and high deficit levels for governmental agencies in the U.S. and abroad.
These factors and other general
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economic trends are likely to impact the performance of portfolio companies in many industries and in particular, industries that are more impacted
by changes in consumer demand, such as the packaging, manufacturing, chemical and refining industries, as well as travel and real estate industries.
The performance of our private equity funds, and our performance, may be adversely affected to the extent our fund portfolio companies in these
industries experience adverse performance or additional pressure due to downward trends. For example, the performance of certain of our portfolio
companies in the packaging, manufacturing, chemical and refining industries is subject to the cyclical and volatile nature of the supply- demand
balance in these industries. These industries historically have experienced alternating periods of capacity shortages leading to tight supply conditions,
causing prices and profit margins to increase, followed by periods when substantial capacity is added, resulting in oversupply, declining capacity
utilization rates and declining prices and profit margins. In addition to changes in the supply and demand for products, the volatility these industries
experience occurs as a result of changes in energy prices, costs of raw materials and changes in various other economic conditions around the world.
The performance of our investments in the commodities markets is also subject to a high degree of business and market risk, as it is substantially
dependent upon prevailing prices of oil and natural gas. Prices for oil and natural gas are subject to wide fluctuation in response to relatively minor
changes in the supply and demand for oil and natural gas, market uncertainty and a variety of additional factors that are beyond our control, such as
level of consumer product demand, the refining capacity of oil purchasers, weather conditions, government regulations, the price and availability of
alternative fuels, political conditions, foreign supply of such commodities and overall economic conditions. It is common in making investments in
the commodities markets to deploy hedging strategies to protect against pricing fluctuations but such strategies may or may not protect our
investments. Similarly, the performance of cruise ship operations is also susceptible to adverse changes in the economic climate, such as higher fuel
prices, as increases in the cost of fuel globally would increase the cost of cruise ship operations. Economic and political conditions in certain parts of
the world make it difficult to predict the price of fuel in the future. In addition, cruise ship operators could experience increases in other operating
costs, such as crew, insurance and security costs, due to market forces and economic or political instability beyond their control.
In respect of real estate, even though the U.S. residential real estate market has recently shown some signs of stabilizing from a lengthy and deep
downturn, various factors could halt or limit a recovery in the housing market and have an adverse effect on the performance of certain of our funds
investments, including, but not limited to, continued high unemployment, a low level of consumer confidence in the economy and/or the residential
real estate market and rising mortgage interest rates.
In addition, our funds investments in commercial mortgage loans and other commercial real- estate related loans are subject to risks of delinquency
and foreclosure, and risks of loss that are greater than similar risks associated with mortgage loans made on the security of residential properties. If
the net operating income of the commercial property is reduced, the borrowers ability to repay the loan may be impaired. Net operating income of a
commercial property can be affected by various factors, such as success of tenant businesses, property management decisions, competition from
comparable types of properties and declines in regional or local real estate values and rental or occupancy rates.
Fraud and other deceptive practices could harm fund performance.
Instances of bribery, fraud and other deceptive practices committed by senior management of portfolio companies in which an Apollo fund invests
may undermine our due diligence efforts with respect to such companies, and if such fraud is discovered, negatively affect the valuation of a funds
investments. In addition, when discovered, financial fraud may contribute to overall market volatility that can negatively impact an Apollo funds
investment program. As a result, instances of bribery, fraud and other deceptive practices could result in fund performance that is poorer than
expected.
Contingent liabilities could harm fund performance.
We may cause our funds to acquire an investment that is subject to contingent liabilities. Such contingent liabilities could be unknown to us at the
time of acquisition or, if they are known to us, we may not accurately assess or protect against the risks that they present. Acquired contingent
liabilities could thus result in unforeseen losses for our funds. In addition, in connection with the disposition of an investment in a portfolio company,
a fund may be required to make representations about the business and financial affairs of such portfolio company typical of those made in
connection with the sale of a business. A fund may also be required to indemnify the purchasers of such investment to the extent that any such
representations are inaccurate. These arrangements may result in the incurrence of contingent liabilities by a fund, even after the disposition of an
investment. Accordingly, the inaccuracy of representations and warranties made by a fund could harm such funds performance.
Our funds may be forced to dispose of investments at a disadvantageous time.
Our funds may make investments that they do not advantageously dispose of prior to the date the applicable fund is dissolved, either by expiration of
such funds term or otherwise. Although we generally expect that investments will be disposed of prior to dissolution or be suitable for in- kind
distribution at dissolution, and the general partners of the funds have a limited
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ability to extend the term of the fund with the consent of fund investors or the advisory board of the fund, as applicable, our funds may have to sell,
distribute or otherwise dispose of investments at a disadvantageous time as a result of dissolution. This would result in a lower than expected return
on the investments and, perhaps, on the fund itself.
Possession of material, non- public information could prevent Apollo funds from undertaking advantageous transactions; our internal
controls could fail; we could determine to establish information barriers.
Our Managing Partners, investment professionals or other employees may acquire confidential or material non- public information and, as a result, be
restricted from initiating transactions in certain securities. This risk affects us more than it does many other investment managers, as we generally do
not use information barriers that many firms implement to separate persons who make investment decisions from others who might possess material,
non- public information that could influence such decisions. Our decision not to implement these barriers could prevent our investment professionals
from undertaking advantageous investments or dispositions that would be permissible for them otherwise.
In order to manage possible risks resulting from our decision not to implement information barriers, our compliance personnel maintain a list of
restricted securities as to which we have access to material, non- public information and in which our funds and investment professionals are not
permitted to trade. This internal control relating to the management of material non- public information could fail with the result that we, or one of
our investment professionals, might trade when at least constructively in possession of material non- public information. Inadvertent trading on
material non- public information could have adverse effects on our reputation, result in the imposition of regulatory or financial sanctions and as a
consequence, negatively impact our financial condition. In addition, we could in the future decide that it is advisable to establish information barriers,
particularly as our business expands and diversifies. In such event, our ability to operate as an integrated platform will be restricted. The
establishment of such information barriers may also lead to operational disruptions and result in restructuring costs, including costs related to hiring
additional personnel as existing investment professionals are allocated to either side of such barriers, which may adversely affect our business.
Regulations governing AINVs operation as a business development company affect its ability to raise, and the way in which it raises,
additional capital.
As a business development company under the Investment Company Act, AINV may issue debt securities or preferred stock and borrow money from
banks or other financial institutions, which we refer to collectively as senior securities, up to the maximum amount permitted by the Investment
Company Act. Under the provisions of the Investment Company Act, AINV is permitted to issue senior securities only in amounts such that its asset
coverage, as defined in the Investment Company Act, equals at least 200% after each issuance of senior securities. If the value of its assets declines, it
may be unable to satisfy this test. If that happens, it may be required to sell a portion of its investments and, depending on the nature of its leverage,
repay a portion of its indebtedness at a time when such sales may be disadvantageous.
Business development companies may issue and sell common stock at a price below net asset value per share only in limited circumstances, one of
which is during the one- year period after stockholder approval. AINVs stockholders have, in the past, approved a plan so that during the subsequent
12- month period, AINV may, in one or more public or private offerings of its common stock, sell or otherwise issue shares of its common stock at a
price below the then current net asset value per share, subject to certain conditions including parameters on the level of permissible dilution, approval
of the sale by a majority of its independent directors and a requirement that the sale price be not less than approximately the market price of the
shares of its common stock at specified times, less the expenses of the sale. AINV may ask its stockholders for additional approvals from year to year.
There is no assurance such approvals will be obtained.
Regulations governing AFT's and AIFs operation affect their ability to raise, and the way in which they raise, additional capital.
As registered investment companies under the Investment Company Act, each of AFT and AIF may issue debt securities or preferred stock and
borrow money from banks or other financial institutions, up to the maximum amount permitted by the Investment Company Act. Under the
provisions of the Investment Company Act, each of AFT and AIF is permitted to (i) issue preferred shares in amounts such that their respective asset
coverage equals at least 200% after issuance and (ii) to incur indebtedness, including through the issuance of debt securities, so long as immediately
thereafter the fund will have an asset coverage of at least 300% after issuance. If the value of its assets declines, such fund may be unable to satisfy
this test. If that happens, such fund may be required to sell a portion of its investments and, depending on the nature of its leverage, repay a portion of
its indebtedness at a time when such sales may be disadvantageous. Further, each of AFT and AIF may raise capital by issuing common shares,
however, the offering price per common share must equal or exceed the net asset value per share, exclusive of any underwriting commissions or
discounts, of our shares.
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Our credit funds are subject to numerous additional risks.
Our credit funds are subject to numerous additional risks, including the risks set forth below.
Generally, there are few limitations on the execution of these funds investment strategies, which are subject to the sole discretion of the
management company or the general partner of such funds.
These funds may engage in short- selling, which is subject to a theoretically unlimited risk of loss.
These funds are exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute
over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing the fund to suffer a loss.
Credit risk may arise through a default by one of several large institutions that are dependent on one another to meet their liquidity or operational
needs, so that a default by one institution causes a series of defaults by the other institutions.
The efficacy of investment and trading strategies depend largely on the ability to establish and maintain an overall market position in a
combination of financial instruments, which can be difficult to execute.
These funds may make investments or hold trading positions in markets that are volatile and which may become illiquid.
These funds investments are subject to risks relating to investments in commodities, futures, options and other derivatives, the prices of which are
highly volatile and may be subject to a theoretically unlimited risk of loss in certain circumstances.
Risks Related to Our Class A Shares
The market price and trading volume of our Class A shares may be volatile, which could result in rapid and substantial losses for our
shareholders.
The market price of our Class A shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our Class
A shares may fluctuate and cause significant price variations to occur. If the market price of our Class A shares declines significantly, you may be
unable to resell your Class A shares at or above your purchase price, if at all. The market price of our Class A shares may fluctuate or decline
significantly in the future. Some of the factors that could negatively affect the price of our Class A shares or result in fluctuations in the price or
trading volume of our Class A shares include:
variations in our quarterly operating results or distributions, which variations we expect will be
substantial;
our policy of taking a longterm perspective on making investment, operational and strategic decisions, which is expected to result in significant
and unpredictable variations in our quarterly returns;
failure to meet analysts earnings estimates;
publication of research reports about us or the investment management industry or the failure of securities analysts to cover our Class A shares;
additions or departures of our Managing Partners and other key management personnel;
adverse market reaction to any indebtedness we may incur or securities we may issue in the future;
actions by shareholders;
changes in market valuations of similar companies;
speculation in the press or investment community;
changes or proposed changes in laws or regulations or differing interpretations thereof affecting our businesses or enforcement of these laws
and regulations, or announcements relating to these matters;
a lack of liquidity in the trading of our Class A shares;
adverse publicity about the asset management industry generally or individual scandals, specifically; and
general market and economic

conditions.
In addition, from time to time, management may also declare special quarterly distributions based on investment realizations. Volatility in the market
price of our Class A shares may be heightened at or around times of investment realizations as well as following such realization, as a result of
speculation as to whether such a distribution may be declared.
An investment in Class A shares is not an investment in any of our funds, and the assets and revenues of our funds are not directly available
to us.
Class A shares are securities of Apollo Global Management, LLC only. While our historical consolidated and combined financial information
includes financial information, including assets and revenues of certain Apollo funds on a consolidated basis, and our future financial information
will continue to consolidate certain of these funds, such assets and revenues are available to
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the fund and not to us except through management fees, incentive income, distributions and other proceeds arising from agreements with funds, as
discussed in more detail in this report.
Our Class A share price may decline due to the large number of shares eligible for future sale and for exchange into Class A shares.
The market price of our Class A shares could decline as a result of sales of a large number of our Class A shares or the perception that such sales
could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at
a time and price that we deem appropriate. As of December 31, 2013, we had 146,280,784 Class A shares outstanding. The Class A shares reserved
under our equity incentive plan are increased on the first day of each fiscal year by (i) the amount (if any) by which (a) 15% of the number of
outstanding Class A shares and Apollo Operating Group units (AOG Units) exchangeable for Class A shares on a fully converted and diluted basis
on the last day of the immediately preceding fiscal year exceeds (b) the number of shares then reserved and available for issuance under the Equity
Plan, or (ii) such lesser amount by which the administrator may decide to increase the number of Class A shares. Taking into account grants of
restricted share units (RSUs) and options made through December 31, 2013, 42,364,563 Class A shares remained available for future grant under
our equity incentive plan. In addition, Holdings may at any time exchange its AOG Units for up to 228,954,598 Class A shares on behalf of our
Managing Partners and Contributing Partners subject to the Amended and Restated Exchange Agreement. See "Item 13. Certain Relationships and
Related Party TransactionsAmended and Restated Exchange Agreement." We may also elect to sell additional Class A shares in one or more future
primary offerings.
Our Managing Partners and Contributing Partners, through their partnership interests in Holdings, owned an aggregate of 61.0% of the AOG Units as
of December 31, 2013. Subject to certain procedures and restrictions (including any transfer restrictions and lockup agreements applicable to our
Managing Partners and Contributing Partners), each Managing Partner and Contributing Partner has the right, upon 60 days notice prior to a
designated quarterly date, to exchange the AOG Units for Class A shares. These Class A shares are eligible for resale from time to time, subject to
certain contractual restrictions and Securities Act limitations.
Our Managing Partners and Contributing Partners (through Holdings) have the ability to cause us to register the Class A shares they acquire upon
exchange of their AOG Units, as was done in connection with the Company's Secondary Offering in May 2013. See Item 13. Certain Relationships
and Related Party TransactionsManaging Partner Shareholders Agreement Registration Rights.
The Strategic Investors have the ability to cause us to register any of their nonvoting Class A shares, as was done in connection with the Company's
Secondary Offering in May 2013. See Item 13. Certain Relationships and Related Party TransactionsLenders Rights Agreement.
We have on file with the SEC a registration statement on Form S- 8 covering the shares issuable under our equity incentive plan. Subject to vesting
and contractual lockup arrangements, such shares will be freely tradable.
We cannot assure you that our intended quarterly distributions will be paid each quarter or at all.
Our intention is to distribute to our Class A shareholders on a quarterly basis substantially all of our net after- tax cash flow from operations in excess
of amounts determined by our manager to be necessary or appropriate to provide for the conduct of our businesses, to make appropriate investments
in our businesses and our funds, to comply with applicable laws and regulations, to service our indebtedness or to provide for future distributions to
our Class A shareholders for any ensuing quarter. The declaration, payment and determination of the amount of our quarterly dividend, if any, will be
at the sole discretion of our manager, who may change our dividend policy at any time. We cannot assure you that any distributions, whether
quarterly or otherwise, will or can be paid. In making decisions regarding our quarterly dividend, our manager considers general economic and
business conditions, our strategic plans and prospects, our businesses and investment opportunities, our financial condition and operating results,
working capital requirements and anticipated cash needs, contractual restrictions and obligations, legal, tax, regulatory and other restrictions that may
have implications on the payment of distributions by us to our common shareholders or by our subsidiaries to us, and such other factors as our
manager may deem relevant.
Our Managing Partners beneficial ownership of interests in the Class B share that we have issued to BRH Holdings GP, Ltd. (BRH), the
control exercised by our manager and anti- takeover provisions in our charter documents and Delaware law could delay or prevent a change
in control.
Our Managing Partners, through their ownership of BRH, beneficially own the Class B share that we have issued to BRH. The Managing Partners
interests in such Class B share represented 69.3% of the total combined voting power of our shares entitled
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to vote as of December 31, 2013. As a result, they are able to exercise control over all matters requiring the approval of shareholders and are able to
prevent a change in control of our company. In addition, our operating agreement provides that so long as the Apollo control condition (as described
in Item 10. Directors, Executive Officers and Corporate GovernanceOur Manager) is satisfied, our manager, which is owned and controlled by
our Managing Partners, manages all of our operations and activities. The control of our manager will make it more difficult for a potential acquirer to
assume control of our Company. Other provisions in our operating agreement may also make it more difficult and expensive for a third party to
acquire control of us even if a change of control would be beneficial to the interests of our shareholders. For example, our operating agreement
requires advance notice for proposals by shareholders and nominations, places limitations on convening shareholder meetings, and authorizes the
issuance of preferred shares that could be issued by our board of directors to thwart a takeover attempt. In addition, certain provisions of Delaware
law may delay or prevent a transaction that could cause a change in our control. The market price of our Class A shares could be adversely affected to
the extent that our Managing Partners control over our Company, the control exercised by our manager as well as provisions of our operating
agreement discourage potential takeover attempts that our shareholders may favor.
We are a Delaware limited liability company, and there are certain provisions in our operating agreement regarding exculpation and
indemnification of our officers and directors that differ from the Delaware General Corporation Law (DGCL) in a manner that may be less
protective of the interests of our Class A shareholders.
Our operating agreement provides that to the fullest extent permitted by applicable law our directors or officers will not be liable to us. However,
under the DGCL, a director or officer would be liable to us for (i) breach of duty of loyalty to us or our shareholders, (ii) intentional misconduct or
knowing violations of the law that are not done in good faith, (iii) improper redemption of shares or declaration of dividend, or (iv) a transaction from
which the director derived an improper personal benefit. In addition, our operating agreement provides that we indemnify our directors and officers
for acts or omissions to the fullest extent provided by law. However, under the DGCL, a corporation can only indemnify directors and officers for
acts or omissions if the director or officer acted in good faith, in a manner he reasonably believed to be in the best interests of the corporation, and, in
criminal action, if the officer or director had no reasonable cause to believe his conduct was unlawful. Accordingly, our operating agreement may be
less protective of the interests of our Class A shareholders, when compared to the DGCL, insofar as it relates to the exculpation and indemnification
of our officers and directors.
Risks Related to Our Organization and Structure
Although not enacted, the U.S. Congress has considered legislation that would have: (i) in some cases after a tenyear transition period,
precluded us from qualifying as a partnership or required us to hold carried interest through taxable corporations; and (ii) taxed certain
income and gains at increased rates. If similar legislation were to be enacted and apply to us, the value of our Class A shares could be
adversely affected.
The U.S. Congress, the IRS and the U.S. Treasury Department have over the past several years examined the U.S. Federal income tax treatment of
private equity funds, hedge funds and other kinds of investment partnerships. The present U.S. Federal income tax treatment of a holder of Class A
shares and/or our own taxation may be adversely affected by any new legislation, new regulations or revised interpretations of existing tax law that
arise as a result of such examinations. In May 2010, the U.S. House of Representatives passed legislation (the May 2010 House Bill) that would
have, in general, treated income and gains, including gain on sale, attributable to an interest in an investment services partnership interest (ISPI) as
income subject to a new blended tax rate that is higher than under current law, except to the extent such ISPI would have been considered under the
legislation to be a qualified capital interest. The interests of Class A shareholders and our interests in the Apollo Operating Group that are entitled to
receive carried interest may be classified as ISPIs for purposes of this legislation. The United States Senate considered, but did not pass, similar
legislation. On February 14, 2012, Representative Levin introduced similar legislation (the 2012 Levin Bill) that would tax carried interest at
ordinary income rates (which would be higher than the proposed blended rate in the May 2010 House Bill). It is unclear whether or when the U.S.
Congress will pass such legislation or what provisions would be included in any legislation, if enacted.
Both the May 2010 House Bill and the 2012 Levin Bill provide that, for taxable years beginning ten years after the date of enactment, income derived
with respect to an ISPI that is not a qualified capital interest and that is treated as ordinary income under the rules discussed above would not meet the
qualifying income requirements under the publicly traded partnership rules. Therefore, if similar legislation were to be enacted, following such tenyear period, we would be precluded from qualifying as a partnership for U.S. Federal income tax purposes or be required to hold all such ISPIs
through corporations, possibly U.S. corporations. If we were taxed as a U.S. corporation or required to hold all ISPIs through corporations, our
effective tax rate would increase significantly. The federal statutory rate for corporations is currently 35%. In addition, we could be subject to
increased state and local taxes. Furthermore, holders of Class A shares could be subject to tax on our conversion into a corporation or any
restructuring required in order for us to hold our ISPIs through a corporation.
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On September 12, 2011, the Obama administration submitted similar legislation to Congress in the American Jobs Act that would tax income and
gain, now treated as capital gains, including gain on disposition of interests attributable to an ISPI, at rates higher than the capital gains rate
applicable to such income under current law, with an exception for certain qualified capital interests. The proposed legislation would also characterize
certain income and gain in respect of ISPIs as non- qualifying income under the publicly traded partnership rules after a tenyear transition period
from the effective date, with an exception for certain qualified capital interests. This proposed legislation follows several prior statements by the
Obama administration in support of changing the taxation of carried interest. In its published revenue proposal for 2014, the Obama administration
proposed that the current law regarding treatment of carried interest be changed to subject such income to ordinary income tax. The Obama
administration's published revenue proposals for 2010, 2011, 2012 and 2013 contained similar proposals.
States and other jurisdictions have also considered legislation to increase taxes with respect to carried interest. For example, New York has
periodically considered legislation under which non- residents of New York could be subject to New York state income tax on income in respect of
our Class A shares as a result of certain activities of our affiliates in New York, although it is unclear when or whether such legislation would be
enacted.
On February 22, 2012, the Obama administration announced its framework of key elements to change the U.S. Federal income tax rules for
businesses. Few specifics were included, and it is unclear what any actual legislation could provide, when it would be proposed, or its prospects for
enactment. Several parts of the framework, if enacted, could adversely affect us. First, the framework could reduce the deductibility of interest for
corporations in some manner not specified. A reduction in interest deductions could increase our tax rate and thereby reduce cash available for
distribution to investors or for other uses by us. Such a reduction could also limit our ability to finance new transactions and increase the effective
cost of financing by companies in which we invest, which could reduce the value of our carried interest in respect of such companies. The framework
also suggests that some entities currently treated as partnerships for tax purposes could be subject to an entity- level income tax similar to the
corporate income tax. If such a proposal caused us to be subject to additional entity- level taxes, it could reduce cash available for distribution to
investors or for other uses by us. The framework reiterates the President's support for treatment of carried interest as ordinary income, as provided in
the President's revenue proposal for 2014 is unknown, and the ultimate consequences of tax reform legislation, if any, are also presently not known.
Our shareholders do not elect our manager or vote and have limited ability to influence decisions regarding our businesses.
So long as the Apollo control condition is satisfied, our manager, AGM Management, LLC, which is owned and controlled by our Managing
Partners, will manage all of our operations and activities. AGM Management, LLC is managed by BRH, a Cayman entity owned by our Managing
Partners and managed by an executive committee composed of our Managing Partners. Our shareholders do not elect our manager, its manager or its
managers executive committee and, unlike the holders of common stock in a corporation, have only limited voting rights on matters affecting our
businesses and therefore limited ability to influence decisions regarding our businesses. Furthermore, if our shareholders are dissatisfied with the
performance of our manager, they will have little ability to remove our manager. As discussed below, the Managing Partners collectively had 69.3%
of the voting power of Apollo Global Management, LLC as of December 31, 2013. Therefore, they have the ability to control any shareholder vote
that occurs, including any vote regarding the removal of our manager.
Our board of directors has no authority over our operations other than that which our manager has chosen to delegate to it.
For so long as the Apollo control condition is satisfied, our manager, which is owned and controlled by our Managing Partners, manages all of our
operations and activities, and our board of directors has no authority other than that which our manager chooses to delegate to it. In the event that the
Apollo control condition is not satisfied, our board of directors will manage all of our operations and activities.
For so long as the Apollo control condition is satisfied, our manager (i) nominates and elects all directors to our board of directors, (ii) sets the
number of directors of our board of directors and (iii) fills any vacancies on our board of directors. After the Apollo control condition is no longer
satisfied, each of our directors will be elected by the vote of a plurality of our shares entitled to vote, voting as a single class, to serve until his or her
successor is duly elected or appointed and qualified or until his or her earlier death, retirement, disqualification, resignation or removal.
Control by our Managing Partners of the combined voting power of our shares and holding their economic interests through the Apollo
Operating Group may give rise to conflicts of interests.
Our Managing Partners controlled 69.3% of the combined voting power of our shares entitled to vote as of December 31, 2013. Accordingly, our
Managing Partners have the ability to control our management and affairs to the extent not controlled by our manager. In addition, they are able to
determine the outcome of all matters requiring shareholder approval (such as a
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proposed sale of all or substantially of our assets, the approval of a merger or consolidation involving the company, and an election by our manager to
dissolve the company) and are able to cause or prevent a change of control of our company and could preclude any unsolicited acquisition of our
company. The control of voting power by our Managing Partners could deprive Class A shareholders of an opportunity to receive a premium for their
Class A shares as part of a sale of our company, and might ultimately affect the market price of the Class A shares.
In addition, our Managing Partners and Contributing Partners, through their partnership interests in Holdings, are entitled to 61.0% of Apollo
Operating Groups economic returns through the AOG Units owned by Holdings as of December 31, 2013. Because they hold their economic interest
in our businesses directly through the Apollo Operating Group, rather than through the issuer of the Class A shares, our Managing Partners and
Contributing Partners may have conflicting interests with holders of Class A shares. For example, our Managing Partners and Contributing Partners
may have different tax positions from us, which could influence their decisions regarding whether and when to dispose of assets, and whether and
when to incur new or refinance existing indebtedness, especially in light of the existence of the tax receivable agreement. For a description of the tax
receivable agreement, see Item 13. Certain Relationships and Related Party TransactionsAmended and Restated Tax Receivable Agreement. In
addition, the structuring of future transactions may take into consideration the Managing Partners and Contributing Partners tax considerations even
where no similar benefit would accrue to us.
We qualify for, and rely on, exceptions from certain corporate governance and other requirements under the rules of the NYSE.
We qualify for exceptions from certain corporate governance and other requirements under the rules of the NYSE. Pursuant to these exceptions, we
may elect not to comply with certain corporate governance requirements of the NYSE, including the requirements (i) that a majority of our board of
directors consist of independent directors, (ii) that we have a nominating/corporate governance committee that is composed entirely of independent
directors and (iii) that we have a compensation committee that is composed entirely of independent directors. In addition, we are not required to hold
annual meetings of our shareholders. Pursuant to the exceptions available to a controlled company under the rules of the NYSE, we have elected not
to have a nominating and corporate governance committee comprised entirely of independent directors, nor a compensation committee comprised
entirely of independent directors. Although we currently have a board of directors comprised of a majority of independent directors, we plan to
continue to avail ourselves of these exceptions. Accordingly, you will not have the same protections afforded to equity holders of entities that are
subject to all of the corporate governance requirements of the NYSE.
Potential conflicts of interest may arise among our manager, on the one hand, and us and our shareholders on the other hand. Our manager
and its affiliates have limited fiduciary duties to us and our shareholders, which may permit them to favor their own interests to the
detriment of us and our shareholders.
Conflicts of interest may arise among our manager, on the one hand, and us and our shareholders, on the other hand. As a result of these conflicts, our
manager may favor its own interests and the interests of its affiliates over the interests of us and our shareholders. These conflicts include, among
others, the conflicts described below.
Our manager determines the amount and timing of our investments and dispositions, indebtedness, issuances of additional stock and amounts of
reserves, each of which can affect the amount of cash that is available for distribution to you.
Our manager is allowed to take into account the interests of parties other than us in resolving conflicts of interest, which has the effect of
limiting its duties (including fiduciary duties) to our shareholders; for example, our affiliates that serve as general partners of our funds have
fiduciary and contractual obligations to our fund investors, and such obligations may cause such affiliates to regularly take actions that might
adversely affect our near- term results of operations or cash flow; our manager has no obligation to intervene in, or to notify our shareholders
of, such actions by such affiliates.
Because our Managing Partners and Contributing Partners hold their AOG Units through entities that are not subject to corporate income
taxation and Apollo Global Management, LLC holds the AOG Units in part through a wholly- owned subsidiary that is subject to corporate
income taxation, conflicts may arise between our Managing Partners and Contributing Partners, on the one hand, and Apollo Global
Management, LLC, on the other hand, relating to the selection, structuring, and disposition of investments. For example, the earlier taxable
disposition of assets following an exchange transaction by a Managing Partner or Contributing Partner may accelerate payments under the
tax receivable agreement and increase the present value of such payments, and the taxable disposition of assets before an exchange or
transaction by a Managing Partner or Contributing Partner may increase the tax liability of a Managing Partner or Contributing Partner
without giving rise to any rights to such Managing Partner or Contributing Partner to receive payments under the tax receivable agreement.
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Other than as set forth in the noncompetition, nonsolicitation and confidentiality agreements to which our Managing Partners and other
professionals are subject, which may not be enforceable, affiliates of our manager and existing and former personnel employed by our manager are
not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us.
Our manager has limited its liability and reduced or eliminated its duties (including fiduciary duties) under our operating agreement, while
also restricting the remedies available to our shareholders for actions that, without these limitations, might constitute breaches of duty
(including fiduciary duty). In addition, we have agreed to indemnify our manager and its affiliates to the fullest extent permitted by law,
except with respect to conduct involving bad faith, fraud or willful misconduct. By purchasing our Class A shares, you will have agreed and
consented to the provisions set forth in our operating agreement, including the provisions regarding conflicts of interest situations that, in the
absence of such provisions, might constitute a breach of fiduciary or other duties under applicable state law.
Our operating agreement does not restrict our manager from causing us to pay it or its affiliates for any services rendered, or from entering
into additional contractual arrangements with any of these entities on our behalf, so long as the terms of any such additional contractual
arrangements are fair and reasonable to us as determined under the operating agreement.
Our manager determines how much debt we incur and that decision may adversely affect our credit
ratings.
Our manager determines which costs incurred by it and its affiliates are reimbursable by us.
Our manager controls the enforcement of obligations owed to us by it and its affiliates.
Our manager decides whether to retain separate counsel, accountants or others to perform services for us. See Item 13. Certain Relationships and
Related Party Transactions for a more detailed discussion of these conflicts.
Our operating agreement contains provisions that reduce or eliminate duties (including fiduciary duties) of our manager and limit remedies
available to shareholders for actions that might otherwise constitute a breach of duty. It will be difficult for a shareholder to challenge a
resolution of a conflict of interest by our manager or by its conflicts committee.
Our operating agreement contains provisions that waive or consent to conduct by our manager and its affiliates that might otherwise raise issues about
compliance with fiduciary duties or applicable law. For example, our operating agreement provides that when our manager is acting in its individual
capacity, as opposed to in its capacity as our manager, it may act without any fiduciary obligations to us or our shareholders whatsoever. When our
manager, in its capacity as our manager, is permitted to or required to make a decision in its sole discretion or discretion or that it deems
necessary or appropriate or necessary or advisable, then our manager will be entitled to consider only such interests and factors as it desires,
including its own interests, and will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting
us or any of our shareholders and will not be subject to any different standards imposed by our operating agreement, the Delaware Limited Liability
Company Act or under any other law, rule or regulation or in equity.
Whenever a potential conflict of interest exists between us and our manager, our manager may resolve such conflict of interest. If our manager
determines that its resolution of the conflict of interest is on terms no less favorable to us than those generally being provided to or available from
unrelated third parties or is fair and reasonable to us, taking into account the totality of the relationships between us and our manager, then it will be
presumed that in making this determination, our manager acted in good faith. A shareholder seeking to challenge this resolution of the conflict of
interest would bear the burden of overcoming such presumption. This is different from the situation with Delaware corporations, where a conflict
resolution by an interested party would be presumed to be unfair and the interested party would have the burden of demonstrating that the resolution
was fair.
The above modifications of fiduciary duties are expressly permitted by Delaware law. Hence, we and our shareholders will only have recourse and be
able to seek remedies against our manager if our manager breaches its obligations pursuant to our operating agreement. Unless our manager breaches
its obligations pursuant to our operating agreement, we and our unitholders will not have any recourse against our manager even if our manager were
to act in a manner that was inconsistent with traditional fiduciary duties. Furthermore, even if there has been a breach of the obligations set forth in
our operating agreement, our operating agreement provides that our manager and its officers and directors will not be liable to us or our shareholders
for errors of judgment or for any acts or omissions unless there has been a final and nonappealable judgment by a court of competent jurisdiction
determining that the manager or its officers and directors acted in bad faith or engaged in fraud or willful misconduct. These provisions are
detrimental to the shareholders because they restrict the remedies available to them for actions that without those limitations might constitute
breaches of duty, including fiduciary duties.
Also, if our manager obtains the approval of its conflicts committee, the resolution will be conclusively deemed to be fair and reasonable to us and
not a breach by our manager of any duties it may owe to us or our shareholders. This is different
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from the situation with Delaware corporations, where a conflict resolution by a committee consisting solely of independent directors may, in certain
circumstances, merely shift the burden of demonstrating unfairness to the plaintiff. If you purchase a Class A share, you will be treated as having
consented to the provisions set forth in the operating agreement, including provisions regarding conflicts of interest situations that, in the absence of
such provisions, might be considered a breach of fiduciary or other duties under applicable state law. As a result, shareholders will, as a practical
matter, not be able to successfully challenge an informed decision by the conflicts committee.
The control of our manager may be transferred to a third party without shareholder consent.
Our manager may transfer its manager interest to a third party in a merger or consolidation or in a transfer of all or substantially all of its assets
without the consent of our shareholders. Furthermore, at any time, the partners of our manager may sell or transfer all or part of their partnership
interests in our manager without the approval of the shareholders, subject to certain restrictions as described elsewhere in this report. A new manager
may not be willing or able to form new funds and could form funds that have investment objectives and governing terms that differ materially from
those of our current funds. A new owner could also have a different investment philosophy, employ investment professionals who are less
experienced, be unsuccessful in identifying investment opportunities or have a track record that is not as successful as Apollos track record. If any of
the foregoing were to occur, we could experience difficulty in making new investments, and the value of our existing investments, our businesses, our
results of operations and our financial condition could materially suffer.
Our ability to pay regular distributions may be limited by our holding company structure. We are dependent on distributions from the
Apollo Operating Group to pay distributions, taxes and other expenses.
As a holding company, our ability to pay distributions will be subject to the ability of our subsidiaries to provide cash to us. We intend to make
quarterly distributions to our Class A shareholders. Accordingly, we expect to cause the Apollo Operating Group to make distributions to its
unitholders (Holdings, which is 100% owned, directly and indirectly, by our Managing Partners and our Contributing Partners, and the three
intermediate holding companies, which are 100% owned by us), pro rata in an amount sufficient to enable us to pay such distributions to our Class A
shareholders; however, such distributions may not be made. In addition, our manager can reduce or eliminate our dividend at any time, in its
discretion. The Apollo Operating Group may make periodic distributions to its unitholders in amounts sufficient to cover hypothetical income tax
obligations attributable to allocations of taxable income resulting from their ownership interest in the various limited partnerships making up the
Apollo Operating Group, subject to compliance with any financial covenants or other obligations. By paying that cash distribution rather than
investing that cash in our business, we might risk slowing the pace of our growth or not having a sufficient amount of cash to fund our operations,
new investments or unanticipated capital expenditures, should the need arise.
There may be circumstances under which we are restricted from paying distributions under applicable law or regulation (for example, due to
Delaware limited partnership or limited liability company act limitations on making distributions if liabilities of the entity after the distribution would
exceed the value of the entitys assets).
Tax consequences to our Managing Partners and Contributing Partners may give rise to conflicts of interests.
As a result of unrealized built- in gain attributable to the value of our assets held by the Apollo Operating Group entities at the time of the Private
Offering Transactions, upon the sale, refinancing or disposition of the assets owned by the Apollo Operating Group entities, our Managing Partners
and Contributing Partners may incur different and greater tax liabilities as a result of the disproportionately greater allocations of items of taxable
income and gain to the Managing Partners and Contributing Partners upon a realization event. As the Managing Partners and Contributing Partners
will not receive a corresponding greater distribution of cash proceeds, they may, subject to applicable fiduciary or contractual duties, have different
objectives regarding the appropriate pricing, timing and other material terms of any sale, refinancing, or disposition, or whether to sell such assets at
all. Decisions made with respect to an acceleration or deferral of income or the sale or disposition of assets with unrealized built- in gains may also
influence the timing and amount of payments that are received by an exchanging or selling founder or partner under the tax receivable agreement. All
other factors being equal, earlier disposition of assets with unrealized built- in gains following such exchange will tend to accelerate such payments
and increase the present value of the tax receivable agreement, and disposition of assets with unrealized built- in gains before an exchange will
increase a Managing Partners or Contributing Partners tax liability without giving rise to any rights to receive payments under the tax receivable
agreement. Decisions made regarding a change of control also could have a material influence on the timing and amount of payments received by our
Managing Partners and Contributing Partners pursuant to the tax receivable agreement.
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We are required to pay our Managing Partners and Contributing Partners for most of the actual tax benefits we realize as a result of the tax
basis step- up we receive in connection with our acquisitions of units from our Managing Partners and Contributing Partners.
Subject to certain restrictions, each Managing Partner and Contributing Partner has the right to exchange the AOG Units that he holds through his
partnership interest in Holdings for our Class A shares in a taxable transaction. These exchanges, as well as our acquisitions of units from our
Managing Partners or Contributing Partners, may result in increases in the tax basis of the intangible assets of the Apollo Operating Group that
otherwise would not have been available. Any such increases may reduce the amount of tax that APO Corp. (APO Corp.), a wholly owned
subsidiary of Apollo Global Management, LLC, would otherwise be required to pay in the future.
We have entered into a tax receivable agreement with our Managing Partners and Contributing Partners that provides for the payment by APO Corp.,
to our Managing Partners and Contributing Partners of 85% of the amount of actual tax savings, if any, that APO Corp. realizes (or is deemed to
realize in the case of an early termination payment by APO Corp. or a change of control, as discussed below) as a result of these increases in tax
deductions and tax basis and certain other tax benefits, including imputed interest expense, related to entering into the tax receivable agreement. In
April 2013 and April 2012, the Apollo Operating Group made a distribution of $30.4 million and $5.8 million, respectively, to APO Corp. and APO
Corp. made a payment to satisfy the liability under the tax receivable agreement to the Managing Partners and Contributing Partners from a realized
tax benefit for the tax years 2012 and 2011. Future payments that APO Corp. may make to our Managing Partners and Contributing Partners could be
material in amount. In the event that any other of our current or future U.S. subsidiaries become taxable as corporations and acquire AOG Units in the
future, or if we become taxable as a corporation for U.S. Federal income tax purposes, we expect, and have agreed that, each U.S corporation will
become subject to a tax receivable agreement with substantially similar terms.
The IRS could challenge our claim to any increase in the tax basis of the assets owned by the Apollo Operating Group that results from the exchanges
entered into by the Managing Partners or Contributing Partners. The IRS could also challenge any additional tax depreciation and amortization
deductions or other tax benefits (including deductions for imputed interest expense associated with payments made under the tax receivable
agreement) we claim as a result of, or in connection with, such increases in the tax basis of such assets. If the IRS were to successfully challenge a tax
basis increase or tax benefits we previously claimed from a tax basis increase, Holdings would not be obligated under the tax receivable agreement to
reimburse APO Corp. for any payments previously made to them (although any future payments would be adjusted to reflect the result of such
challenge). As a result, in certain circumstances, payments could be made to our Managing Partners and Contributing Partners under the tax
receivable agreement in excess of 85% of the actual aggregate cash tax savings of APO Corp. APO Corp.s ability to achieve benefits from any tax
basis increase and the payments to be made under this agreement will depend upon a number of factors, including the timing and amount of its future
income.
In addition, the tax receivable agreement provides that, upon a merger, asset sale or other form of business combination or certain other changes of
control, APO Corp.s (or its successors) obligations with respect to exchanged or acquired units (whether exchanged or acquired before or after such
change of control) would be based on certain assumptions, including that APO Corp. would have sufficient taxable income to fully utilize the
deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement. See Item
13. Certain Relationships and Related Party TransactionsAmended and Restated Tax Receivable Agreement.
If we were deemed an investment company under the Investment Company Act, applicable restrictions could make it impractical for us to
continue our businesses as contemplated and could have a material adverse effect on our businesses and the price of our Class A shares.
We do not believe that we are an investment company under the Investment Company Act because the nature of our assets and the income derived
from those assets allow us to rely on the exception provided by Rule 3a- 1 issued under the Investment Company Act. In addition, we believe we are
not an investment company under Section 3(b)(1) of the Investment Company Act because we are primarily engaged in non- investment company
businesses. We intend to conduct our operations so that we will not be deemed an investment company. However, if we were to be deemed an
investment company, we would be taxed as a corporation and other restrictions imposed by the Investment Company Act, including limitations on
our capital structure and our ability to transact with affiliates that apply to us, could make it impractical for us to continue our businesses as
contemplated and would have a material adverse effect on our businesses and the price of our Class A shares.
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Risks Related to Taxation
You may be subject to U.S. Federal income tax on your share of our taxable income, regardless of whether you receive any cash distributions
from us.
Under current law, so long as we are not required to register as an investment company under the Investment Company Act and 90% of our gross
income for each taxable year constitutes qualifying income within the meaning of the Internal Revenue Code on a continuing basis, we will be
treated, for U.S. Federal income tax purposes, as a partnership and not as an association or a publicly traded partnership taxable as a corporation. You
may be subject to U.S. Federal, state, local and possibly, in some cases, foreign income taxation on your allocable share of our items of income, gain,
loss, deduction and credit for each of our taxable years ending with or within your taxable year, regardless of whether or not you receive cash
distributions from us. Accordingly, you may be required to make tax payments in connection with your ownership of Class A shares that significantly
exceed your cash distributions in any specific year.
If we are treated as a corporation for U.S. Federal income tax purposes, the value of the Class A shares would be adversely affected.
The value of your investment will depend in part on our company being treated as a partnership for U.S. Federal income tax purposes, which requires
that 90% or more of our gross income for every taxable year consist of qualifying income, as defined in Section 7704 of the Internal Revenue Code,
and that we are not required to register as an investment company under the Investment Company Act and related rules. Although we intend to
manage our affairs so that our partnership will meet the 90% test described above in each taxable year, we may not meet these requirements or, as
discussed below, current law may change so as to cause, in either event, our partnership to be treated as a corporation for U.S. Federal income tax
purposes. If we were treated as a corporation for U.S. Federal income tax purposes, (i) we would become subject to corporate income tax and (ii)
distributions to shareholders would be taxable as dividends for U.S. Federal income tax purposes to the extent of our earnings and profits.
Current law may change, causing us to be treated as a corporation for U.S. Federal or state income tax purposes or otherwise subjecting us to entity
level taxation. See "Risks Related to Our Organization and StructureAlthough not enacted, the U.S. Congress has considered legislation that
would have: (i) in some cases after a tenyear transition period, precluded us from qualifying as a partnership or required us to hold carried interest
through taxable corporations and (ii) taxed certain income and gains at increased rates. If similar legislation were to be enacted and apply to us, the
value of our Class A shares could be adversely affected." Because of widespread state budget deficits, several states are evaluating ways to subject
partnerships to entity level taxation through the imposition of state income, franchise or other forms of taxation. If any state were to impose a tax
upon us as an entity, our distributions to you would be reduced.
Our structure involves complex provisions of U.S. Federal income tax law for which no clear precedent or authority may be available. Our
structure is also subject to potential legislative, judicial or administrative change and differing interpretations, possibly on a retroactive
basis.
The U.S. Federal income tax treatment of holders of Class A shares depends in some instances on determinations of fact and interpretations of
complex provisions of U.S. Federal income tax law for which no clear precedent or authority may be available. You should be aware that the U.S.
Federal income tax rules are constantly under review by persons involved in the legislative process, the IRS and the U.S. Treasury Department,
frequently resulting in revised interpretations of established concepts, statutory changes, revisions to regulations and other modifications and
interpretations. The IRS pays close attention to the proper application of tax laws to partnerships and entities taxed as partnerships. The present U.S.
Federal income tax treatment of an investment in our Class A shares may be modified by administrative, legislative or judicial interpretation at any
time, and any such action may affect investments and commitments previously made. Changes to the U.S. Federal income tax laws and
interpretations thereof could make it more difficult or impossible to meet the exception for us to be treated as a partnership for U.S. Federal income
tax purposes that is not taxable as a corporation, affect or cause us to change our investments and commitments, affect the tax considerations of an
investment in us, change the character or treatment of portions of our income (including, for instance, the treatment of carried interest as ordinary
income rather than capital gain) and adversely affect an investment in our Class A shares. For example, as discussed above under Risks Related to
Our Organization and StructureAlthough not enacted, the U.S. Congress has considered legislation that would have: (i) in some cases after a tenyear transition period, precluded us from qualifying as a partnership or required us to hold carried interest through taxable corporations; and (ii) taxed
certain income and gains at increased rates. If similar legislation were to be enacted and apply to us, the value of our Class A shares could be
adversely affected, the U.S. Congress has considered various legislative proposals to treat all or part of the capital gain and dividend income that is
recognized by an investment partnership and allocable to a partner affiliated with the sponsor of the partnership (i.e., a portion of the carried interest)
as ordinary income to such partner for U.S. Federal income tax purposes.
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Our operating agreement permits our manager to modify our operating agreement from time to time, without the consent of the holders of Class A
shares, to address certain changes in U.S. Federal income tax regulations, legislation or interpretation. In some circumstances, such revisions could
have a material adverse impact on some or all holders of Class A shares. For instance, our manager could elect at some point to treat us as an
association taxable as a corporation for U.S. Federal (and applicable state) income tax purposes. If our manager were to do this, the U.S. Federal
income tax consequences of owning our Class A shares would be materially different. Moreover, we will apply certain assumptions and conventions
in an attempt to comply with applicable rules and to report income, gain, deduction, loss and credit to holders of Class A shares in a manner that
reflects such beneficial ownership of items by holders of Class A shares, taking into account variation in ownership interests during each taxable year
because of trading activity. However, those assumptions and conventions may not be in compliance with all aspects of applicable tax requirements. It
is possible that the IRS will assert successfully that the conventions and assumptions used by us do not satisfy the technical requirements of the
Internal Revenue Code and/or Treasury regulations and could require that items of income, gain, deductions, loss or credit, including interest
deductions, be adjusted, reallocated or disallowed in a manner that adversely affects holders of Class A shares.
Our interests in certain of our businesses are held through entities that are treated as corporations for U.S. Federal income tax purposes;
such corporations may be liable for significant taxes and may create other adverse tax consequences, which could potentially adversely affect
the value of your investment.
In light of the publicly traded partnership rules under U.S. Federal income tax law and other requirements, we hold our interests in certain of our
businesses through entities that are treated as corporations for U.S. Federal income tax purposes. Each such corporation could be liable for significant
U.S. Federal income taxes and applicable state, local and other taxes that would not otherwise be incurred, which could adversely affect the value of
your investment. Furthermore, it is possible that the IRS could challenge the manner in which such corporations taxable income is computed by us.
Changes in U.S. tax law could adversely affect our ability to raise funds from certain foreign investors.
Under the U.S. Foreign Account Tax Compliance Act, or FATCA, all entities in a broadly defined class of foreign entities including foreign financial
institutions, or FFIs, are required to comply with a complicated and expansive reporting regime or, beginning after June 30, 2014, be subject to a 30%
United States withholding tax on certain U.S. payments (and beginning in 2017, a 30% withholding tax on gross proceeds from the sale of U.S.
stocks and securities) and non- U.S. entities which are not FFIs are required to either certify they have no substantial U.S. beneficial ownership or to
report certain information with respect to their substantial U.S. beneficial ownership or, beginning after June 30, 2014, be subject to a 30% U.S.
withholding tax on certain U.S. payments (and beginning in 2017, a 30% withholding tax on gross proceeds from the sale of U.S. stocks and
securities). The reporting obligations imposed under FATCA require FFIs to comply with agreements with the IRS to obtain and disclose information
about certain investors to the IRS. The administrative and economic costs of compliance with FATCA may discourage some foreign investors from
investing in U.S. funds, which could adversely affect our ability to raise funds from these investors.
We may hold or acquire certain investments through an entity classified as a PFIC or CFC for U.S. Federal income tax purposes.
Certain of our investments may be in foreign corporations or may be acquired through foreign subsidiaries that would be classified as corporations for
U.S. Federal income tax purposes. Such entities may be passive foreign investment companies, or PFICs, or controlled foreign corporations, or
CFCs, for U.S. Federal income tax purposes. For example, APO (FC), LLC is considered to be a CFC for U.S. Federal income tax purposes. Class
A shareholders indirectly owning an interest in a PFIC or a CFC may experience adverse U.S. tax consequences, including the recognition of taxable
income prior to the receipt of cash relating to such income. In addition, gain on the sale of a PFIC or CFC may be taxable at ordinary income tax
rates.
Complying with certain tax- related requirements may cause us to forego otherwise attractive business or investment opportunities or enter
into acquisitions, borrowings, financings or arrangements we may not have otherwise entered into.
In order for us to be treated as a partnership for U.S. Federal income tax purposes, and not as an association or publicly traded partnership taxable as a
corporation, we must meet the qualifying income exception discussed above on a continuing basis and we must not be required to register as an
investment company under the Investment Company Act. In order to effect such treatment we (or our subsidiaries) may be required to invest through
foreign or domestic corporations, forego attractive business or investment opportunities or enter into borrowings or financings we may not have
otherwise entered into. This may cause us to incur additional tax liability and/or adversely affect our ability to operate solely to maximize our cash
flow. Our structure also may impede our ability to engage in certain corporate acquisitive transactions because we generally intend to hold all of our
assets through the Apollo Operating Group. In addition, we may be unable to participate in certain corporate reorganization transactions that would
be tax free to our holders if we were a corporation. To the extent we hold assets other than through the Apollo Operating Group, we will make
appropriate adjustments to the Apollo Operating Group agreements so that distributions to Holdings and us
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would be the same as if such assets were held at that level. Moreover, we are precluded by a contract with one of the Strategic Investors from
acquiring assets in a manner that would cause that Strategic Investor to be engaged in a commercial activity within the meaning of Section 892 of the
Internal Revenue Code.
Tax gain or loss on disposition of our Class A shares could be more or less than expected.
If you sell your Class A shares, you will recognize a gain or loss equal to the difference between the amount realized and your adjusted tax basis
allocated to those Class A shares. Prior distributions to you in excess of the total net taxable income allocated to you will have decreased the tax basis
in your Class A shares. Therefore, such excess distributions will increase your taxable gain, or decrease your taxable loss, when the Class A shares
are sold and may result in a taxable gain even if the sale price is less than the original cost. A portion of the amount realized, whether or not
representing gain, may be ordinary income to you.
We cannot match transferors and transferees of Class A shares, and we have therefore adopted certain income tax accounting conventions
that may not conform with all aspects of applicable tax requirements. The IRS may challenge this treatment, which could adversely affect
the value of our Class A shares.
Because we cannot match transferors and transferees of Class A shares, we have adopted depreciation, amortization and other tax accounting
positions that may not conform with all aspects of existing Treasury regulations. A successful IRS challenge to those positions could adversely affect
the amount of tax benefits available to holders of Class A shares. It also could affect the timing of these tax benefits or the amount of gain on the sale
of Class A shares and could have a negative impact on the value of Class A shares or result in audits of and adjustments to the tax returns of holders
of Class A shares.
The sale or exchange of 50% or more of our capital and profit interests will result in the termination of our partnership for U.S. Federal income tax
purposes. We will be considered to have been terminated for U.S. Federal income tax purposes if there is a sale or exchange of 50% or more of the
total interests in our capital and profits within a twelvemonth period. Our termination would, among other things, result in the closing of our taxable
year for all holders of Class A shares and could result in a deferral of depreciation deductions allowable in computing our taxable income.
Non- U.S. persons face unique U.S. tax issues from owning Class A shares that may result in adverse tax consequences to them.
In light of our investment activities, we may be, or may become, engaged in a U.S. trade or business for U.S. Federal income tax purposes, in which
case some portion of our income would be treated as effectively connected income with respect to non- U.S. holders of our Class A shares, or ECI.
Moreover, dividends paid by an investment that we make in a real estate investment trust, or REIT, that are attributable to gains from the sale of
U.S. real property interests and sales of certain investments in interests in U.S. real property, including stock of certain U.S. corporations owning
significant U.S. real property, may be treated as ECI with respect to non- U.S. holders of our Class A shares. In addition, certain income of non- U.S.
holders from U.S. sources not connected to any U.S. trade or business conducted by us could be treated as ECI. To the extent our income is treated as
ECI, each non- U.S. holder generally would be subject to withholding tax on its allocable share of such income, would be required to file a U.S.
Federal income tax return for such year reporting its allocable share of income effectively connected with such trade or business and any other
income treated as ECI, and would be subject to U.S. Federal income tax at regular U.S. tax rates on any such income (state and local income taxes
and filings may also apply in that event). Non- U.S. holders that are corporations may also be subject to a 30% branch profits tax on their allocable
share of such income. In addition, certain income from U.S. sources that is not ECI allocable to non- U.S. holders may be reduced by withholding
taxes imposed at the highest effective applicable tax rate.
An investment in Class A shares will give rise to UBTI to certain tax- exempt holders.
We will not make investments through taxable U.S. corporations solely for the purpose of limiting unrelated business taxable income ("UBTI") from
debt- financed property and, thus, an investment in Class A shares will give rise to UBTI to tax- exempt holders of Class A shares. For example,
APO Asset Co., LLC will hold interests in entities treated as partnerships, or otherwise subject to tax on a flowthrough basis, that will incur
indebtedness. Moreover, if the IRS successfully asserts that we are engaged in a trade or business, then additional amounts of income could be treated
as UBTI.
We do not intend to make, or cause to be made, an election under Section 754 of the Internal Revenue Code to adjust our asset basis or the
asset basis of certain of the Apollo Operating Group Partnerships. Thus, a holder of Class A shares could be allocated more taxable income
in respect of those Class A shares prior to disposition than if such an election were made.
We did not make and currently do not intend to make, or cause to be made, an election to adjust asset basis under Section 754 of the Internal Revenue
Code with respect to Apollo Principal Holdings I, L.P., Apollo Principal Holdings II, L.P., Apollo
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Principal Holdings III, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., Apollo Principal Holdings VI, L.P., Apollo
Principal Holdings VII, L.P., Apollo Principal Holdings VIII, L.P. and Apollo Principal Holdings IX, L.P. If no such election is made, there will
generally be no adjustment for a transferee of Class A shares even if the purchase price of those Class A shares is higher than the Class A shares
share of the aggregate tax basis of our assets immediately prior to the transfer. In that case, on a sale of an asset, gain allocable to a transferee could
include built- in gain allocable to the transferor at the time of the transfer, which built- in gain would otherwise generally be eliminated if a Section
754 election had been made.
Class A shareholders may be subject to state and local taxes and return filing requirements as a result of investing in our Class A shares.
In addition to U.S. Federal income taxes, our Class A shareholders may be subject to other taxes, including state and local taxes, unincorporated
business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or own property now
or in the future, even if our Class A shareholders do not reside in any of those jurisdictions. Our Class A shareholders may also be required to file
state and local income tax returns and pay state and local income taxes in some or all of these jurisdictions. Further, Class A shareholders may be
subject to penalties for failure to comply with those requirements. It is the responsibility of each Class A shareholder to file all U.S. Federal, state and
local tax returns that may be required of such Class A shareholder.
We may not be able to furnish to each Class A shareholder specific tax information within 90 days after the close of each calendar year,
which means that holders of Class A shares who are U.S. taxpayers should anticipate the need to file annually a request for an extension of
the due date of their income tax return. In addition, it is possible that Class A shareholders may be required to file amended income tax
returns.
As a publicly traded partnership, our operating results, including distributions of income, dividends, gains, losses or deductions and adjustments to
carrying basis, will be reported on Schedule K- 1 and distributed to each Class A shareholder annually. It may require longer than 90 days after the
end of our fiscal year to obtain the requisite information from all lower- tier entities so that K- 1s may be prepared for us. For this reason, Class A
shareholders who are U.S. taxpayers should anticipate the need to file annually with the IRS (and certain states) a request for an extension past April
15 or the otherwise applicable due date of their income tax return for the taxable year.
In addition, it is possible that a Class A shareholder will be required to file amended income tax returns as a result of adjustments to items on the
corresponding income tax returns of the partnership. Any obligation for a Class A shareholder to file amended income tax returns for that or any other
reason, including any costs incurred in the preparation or filing of such returns, are the responsibility of each Class A shareholder.
You may be subject to an additional U.S. Federal income tax on net investment income allocated to you by us and on gain on the sale of the
Class A shares.
As of 2013, individuals, estates and trusts are subject to an additional 3.8% tax on net investment income (or undistributed net investment
income, in the case of estates and trusts) for each taxable year, with such tax applying to the lesser of such income or the excess of such persons
adjusted gross income (with certain adjustments) over a specified amount. Net investment income includes net income from interest, dividends,
annuities, royalties and rents and net gain attributable to the disposition of investment property. It is anticipated that net income and gain attributable
to an investment in us will be included in a holder of the Class A share's net investment income subject to this additional tax.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal executive offices are located in leased office space at 9 West 57th Street, New York, New York 10019. We also lease the space for our
offices in New York, California, Houston, Toronto, London, Singapore, Frankfurt, Mumbai, Hong Kong and Luxembourg. We do not own any real
property. We consider these facilities to be suitable and adequate for the management and operation of our businesses.
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ITEM 3. LEGAL PROCEEDINGS
Litigation and ContingenciesApollo is, from time to time, party to various legal actions arising in the ordinary course of business, including
claims and litigation, reviews, investigations and proceedings by governmental and self regulatory agencies regarding our business
In March 2012, plaintiffs filed two putative class actions, captioned Kelm v. Chase Bank (No. 12- cv- 332) and Miller v. 1- 800- Flowers.com, Inc.
(No. 12- cv- 396), in the District of Connecticut on behalf of a class of consumers alleging online fraud. The defendants included, among others,
Trilegiant Corporation, Inc. (Trilegiant), its parent company, Affinion Group, LLC (Affinion), and Apollo Global Management, LLC (AGM),
which is affiliated with funds that are the beneficial owners of 68% of Affinions common stock. In both cases, plaintiffs allege that Trilegiant, aided
by its business partners, who include e- merchants and credit card companies, developed a set of business practices intended to create consumer
confusion and ultimately defraud consumers into unknowingly paying fees to clubs for unwanted services. Plaintiffs allege that AGM is a proper
defendant because of its indirect stock ownership and ability to appoint the majority of Affinions board. The complaints assert claims under the
Racketeer Influenced Corrupt Organizations Act; the Electronic Communications Privacy Act; the Connecticut Unfair Trade Practices Act; and the
California Business and Professional Code, and seek, among other things, restitution or disgorgement, injunctive relief, compensatory, treble and
punitive damages, and attorneys fees. The allegations in Kelm and Miller are substantially similar to those in Schnabel v. Trilegiant Corp. (No. 3:10cv- 957), a putative class action filed in the District of Connecticut in 2010 that names only Trilegiant and Affinion as defendants. The court has
consolidated the Kelm, Miller, and Schnabel cases under the caption In re: Trilegiant Corporation, Inc. and ordered that they proceed on the same
schedule. On June 18, 2012, the court appointed lead plaintiffs counsel, and on September 7, 2012, plaintiffs filed their consolidated amended
complaint (CAC), which alleges the same causes of action against AGM as did the complaints in the Kelm and Miller cases. Defendants filed
motions to dismiss on December 7, 2012, plaintiffs filed opposition papers on February 7, 2013, and defendants filed replies on April 5, 2013. On
December 5, 2012, plaintiffs filed another putative class action, captioned Frank v. Trilegiant Corp. (No. 12- cv- 1721), in the District of Connecticut,
naming the same defendants and containing allegations substantially similar to those in the CAC. On January 23, 2013, plaintiffs moved to transfer
and consolidate Frank into In re: Trilegiant. On June 13, 2013, the Court extended all defendants deadlines to respond to the Frank complaint until
21 days after a ruling on the motion to transfer and consolidate. On July 24, 2013 the Frank court transferred the case to Judge Bryant, who is
presiding over In re: Trilegiant, but the cases have not yet been consolidated. On September 25, 2013, the Court held oral argument on Defendants
motions to dismiss. AGM believes that plaintiffs claims against it in these cases are without merit. For this reason, and because the claims against
AGM are in their early stages, no reasonable estimate of possible loss, if any, can be made at this time.
Various state attorneys general and federal and state agencies have initiated industry- wide investigations into the use of placement agents in
connection with the solicitation of investments, particularly with respect to investments by public pension funds. Certain affiliates of Apollo have
received subpoenas and other requests for information from various government regulatory agencies and investors in Apollo's funds, seeking
information regarding the use of placement agents. CalPERS, one of our Strategic Investors, announced on October 14, 2009, that it had initiated a
special review of placement agents and related issues. The Report of the CalPERS Special Review was issued on March 14, 2011. That report does
not allege any wrongdoing on the part of Apollo or its affiliates. Apollo is continuing to cooperate with all such investigations and other reviews. In
addition, on May 6, 2010, the California Attorney General filed a civil complaint against Alfred Villalobos and his company, Arvco Capital Research,
LLC ("Arvco") (a placement agent that Apollo has used) and Federico Buenrostro Jr., the former CEO of CalPERS, alleging conduct in violation of
certain California laws in connection with CalPERS's purchase of securities in various funds managed by Apollo and another asset manager. Apollo
is not a party to the civil lawsuit and the lawsuit does not allege any misconduct on the part of Apollo. Likewise, on April 23, 2012, the United States
Securities and Exchange Commission filed a lawsuit alleging securities fraud on the part of Arvco, as well as Messrs. Buenrostro and Villalobos, in
connection with their activities concerning certain CalPERS investments in funds managed by Apollo. This lawsuit also does not allege wrongdoing
on the part of Apollo, and in fact alleges that Apollo was defrauded by Arvco, Villalobos, and Buenrostro. Finally, on March 14, 2013, the United
States Department of Justice unsealed an indictment against Messrs. Villalobos and Buenrostro alleging, among other crimes, fraud in connection
with those same activities; again, Apollo is not accused of any wrongdoing and in fact is alleged to have been defrauded by the defendants.
Additionally, on April 15, 2013, Mr. Villalobos, Arvco and related entities (the "Arvco Debtors") brought a civil action in the United States
Bankruptcy Court for the District of Nevada against Apollo. This action alleges that Arvco served as a placement agent for Apollo in connection with
several funds associated with Apollo, and seek to recover purported fees they claim Apollo has not paid them for a portion of Arvco's placement
agent services. In addition, the Arvco Debtors allege that Apollo has interfered with the Arvco Debtors' commercial relationships with third parties,
purportedly causing the Arvco Debtors to lose business and to incur fees and expenses in the defense of various investigations and litigations. The
Arvco Debtors also seek compensation from Apollo for these alleged lost profits and fees and expenses. The Arvco Debtors' complaint asserts
various theories of recovery under the Bankruptcy Code and the common law. Apollo denies the merit of all of the Arvco Debtors' claims and will
vigorously contest them. The Bankruptcy Court has stayed the civil action until April 2014. For these reasons, no estimate of possible loss, if any, can
be made at this time.
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On July 9, 2012, Apollo was served with a subpoena by the New York Attorney Generals Office regarding Apollos fee waiver program. The
subpoena is part of what we understand to be an industry- wide investigation by the New York Attorney General into the tax implications of the fee
waiver program implemented by numerous private equity and hedge funds. Under the fee waiver program, individual fund managers for certain
Apollo- managed funds prospectively elected to waive their management fees. Program participants received an interest in the future profits, if any,
that would be earned on the invested amounts representing waived fees. They receive such profits from time to time in the ordinary course when
distributions are made generally, as provided for in the applicable fund governing documents and waiver agreements. Four Apollo funds implemented
the program, but the investment period for all funds was terminated as of December 31, 2012. Apollo believes its fee waiver program complies with
all applicable laws, and is cooperating with the investigation.
On May 19, 2013, Apollo was served with a subpoena by the New York State Department of Financial Services (the DFS) regarding its
investments in any annuity or life businesses, or annuity contracts or life policies. The subpoena is part of what we understand to be an industry- wide
investigation by the DFS into investments by financial institutions in annuity and life insurance companies. Apollo is cooperating with the
investigation.
Although the ultimate outcome of these matters cannot be ascertained at this time, we are of the opinion, after consultation with counsel, that the
resolution of any such matters to which we are a party at this time will not have a material adverse effect on our consolidated financial statements.
Legal actions material to us could, however, arise in the future.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
Iran Related Activities
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act
On October 24, 2013, certain investment funds managed by affiliates of Apollo beneficially owned approximately 22% of the limited liability
company interests of CEVA Holdings, LLC (CEVA). Under the limited liability company agreement governing CEVA, certain investment funds
managed by affiliates of Apollo hold a majority of the voting power of CEVA and have the right to elect a majority of the board of CEVA. CEVA
may be deemed to be controlled by Apollo, but this statement is not meant to be an admission that control exists. As a result, it appears that we are
required to provide disclosures as set forth below pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012
(ITRA) and Section 13(r) of the Exchange Act.
CEVA has provided Apollo with the information below relevant to Section 13(r) of the Exchange Act. The disclosure below does not relate to any
activities conducted by Apollo and does not involve Apollo or its management. The disclosure relates solely to activities conducted by CEVA and its
consolidated subsidiaries. Apollo has not independently verified or participated in the preparation of the disclosure below.
Through an internal review of its global operations, CEVA has identified the following transactions in an Initial Notice of Voluntary SelfDisclosure that CEVA filed with the U.S. Treasury Department Office of Foreign Assets Control (OFAC) on October 28, 2013. CEVAs review is
ongoing. CEVA will file a further report with OFAC after completing its review.
The internal review indicates that, in February 2013, CEVA Freight Holdings (Malaysia) SDN BHD (CEVA Malaysia) provided customs
brokerage for export and local haulage services for a shipment of polyethylene resin to Iran shipped on a vessel owned and/or operated by HDS
Lines, also an SDN. The revenues and net profits for these services were approximately $779.54 USD and $311.13 USD, respectively. In September
2013, CEVA Malaysia provided customs brokerage services for the import into Malaysia of fruit juice from Alifard Co. in Iran via HDS Lines. The
revenues and net profits for these services were approximately $227.41 USD and $89.29 USD, respectively.
These transactions violate the terms of internal CEVA compliance policies, which prohibit transactions involving Iran. Upon discovering these
transactions, CEVA promptly launched an internal investigation, and is taking action to block and prevent such transactions in the future. CEVA
intends to cooperate with OFAC in its review of this matter.
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PART IIOTHER INFORMATION
ITEM 5. MARKETS FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
Our Class A shares are traded on the NYSE under the symbol APO. Our Class A shares began trading on the NYSE on March 30, 2011.
The number of holders of record of our Class A shares as of February 26, 2014 was 4. This does not include the number of shareholders that hold
shares in street name through banks or broker- dealers. As of February 26, 2014, there was 1 holder of our Class B share.
The following table sets forth the high and low intra- day sales prices per unit of our Class A shares, for the periods indicated, as reported by the
NYSE:
Sales Price
2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
Low
24.87 $
28.14
29.98
34.88
17.72
20.86
22.61
28.04
Sales Price
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
Low
15.48
14.70
15.06
17.85
12.50
10.42
12.00
13.83
Sales Price
2011
High
Low
First Quarter
$
19.00
$
17.91
Second Quarter
18.91
15.27
Third Quarter
17.94
9.83
Fourth Quarter
14.21
8.85
Cash Distribution Policy
With respect to fiscal year 2013, we paid four cash distributions of $1.05, $0.57, $1.32 and $1.01 per Class A share on February 28, 2013,
May 30, 2013, August 30, 2013, and November 29, 2013, respectively, (aggregating to $3.95 per Class A share) and we have declared an additional
cash distribution of $1.08 per Class A share in respect of the fourth quarter of 2013 which was paid on February 26, 2014 to holders of record of
Class A shares at the close of business on February 19, 2014. These distributions represented our net after- tax cash flow from operations in excess of
amounts determined by our manager to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our
business and our funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future distributions to our
shareholders for any ensuing quarter.
With respect to fiscal year 2012, we paid four cash distributions of $0.46, $0.25, $0.24 and $0.40 per Class A share on February 29, 2012,
May 30, 2012, August 31, 2012, and November 30, 2012, respectively, aggregating to $1.35 per Class A share. These distributions represented our
net after- tax cash flow from operations in excess of amounts determined by our manager to be necessary or appropriate to provide for the conduct of
our business, to make appropriate investments in our business and our funds, to comply with applicable law, any of our debt instruments or other
agreements, or to provide for future distributions to our shareholders for any ensuing quarter.
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With respect to fiscal year 2011, we paid four cash distributions of $0.17, $0.22, $0.24 and $0.20 per Class A share on January 14, 2011, June 1,
2011, August 29, 2011 and December 2, 2011, respectively, aggregating to $0.83 per Class A share. These distributions represented our net after- tax
cash flow from operations in excess of amounts determined by our manager to be necessary or appropriate to provide for the conduct of our business,
to make appropriate investments in our business and our funds, to comply with applicable law, any of our debt instruments or other agreements, or to
provide for future distributions to our shareholders for any ensuing quarter.
Our current intention is to distribute to our Class A shareholders on a quarterly basis substantially all of our net after- tax cash flow from operations in
excess of amounts determined by our manager to be necessary or appropriate to provide for the conduct of our businesses, to make appropriate
investments in our businesses and our funds, to comply with applicable law, to service our indebtedness or to provide for future distributions to our
Class A shareholders for any ensuing quarter. Because we will not know what our actual available cash flow from operations will be for any year
until sometime after the end of such year, our fourth quarter distribution may be adjusted to take into account actual net after- tax cash flow from
operations for that year.
The declaration, payment and determination of the amount of our quarterly distribution will be at the sole discretion of our manager, which may
change our cash distribution policy at any time. We cannot assure you that any distributions, whether quarterly or otherwise, will or can be paid. In
making decisions regarding our quarterly distribution, our manager will take into account general economic and business conditions, our strategic
plans and prospects, our businesses and investment opportunities, our financial condition and operating results, working capital requirements and
anticipated cash needs, contractual restrictions and obligations, legal, tax and regulatory restrictions, restrictions and other implications on the
payment of distributions by us to our common shareholders or by our subsidiaries to us and such other factors as our manager may deem relevant.
Because we are a holding company that owns intermediate holding companies, the funding of each distribution, if declared, will occur in three steps,
as follows.
First, we will cause one or more entities in the Apollo Operating Group to make a distribution to all of its partners, including our wholly- owned
subsidiaries APO Corp., APO Asset Co., LLC and APO (FC), LLC (as applicable), and Holdings, on a pro rata basis;
Second, we will cause our intermediate holding companies, APO Corp., APO Asset Co., LLC and APO (FC), LLC (as applicable), to
distribute to us, from their net after- tax proceeds, amounts equal to the aggregate distribution we have declared; and
Third, we will distribute the proceeds received by us to our Class A shareholders on a pro rata basis.
Payments that any of our intermediate holding companies make under the tax receivable agreement will reduce amounts that would otherwise be
available for distribution by us on our Class A shares. See note 17 to our consolidated financial statements.
Under Delaware law we are prohibited from making a distribution to the extent that our liabilities, after such distribution, exceed the fair value of our
assets. Our operating agreement does not contain any restrictions on our ability to make distributions, except that we may only distribute Class A
shares to holders of Class A shares. The 2013 AMH Credit Facilities, as defined in note 14 to our consolidated financial statements, do not contain
restrictions on our or our subsidiaries' ability to pay distributions; however, instruments governing indebtedness that we or our subsidiaries incur in
the future may contain restrictions on our or our subsidiaries' ability to pay distributions or make other cash distributions to equity holders.
In addition, the Apollo Operating Groups cash flow from operations may be insufficient to enable it to make tax distributions to its partners, in which
case the Apollo Operating Group may have to borrow funds or sell assets, and thus our liquidity and financial condition could be materially adversely
affected. Furthermore, by paying cash distributions rather than investing that cash in our businesses, we might risk slowing the pace of our growth, or
not having a sufficient amount of cash to fund our operations, new investments or unanticipated capital expenditures, should the need arise.
Our cash distribution policy has certain risks and limitations, particularly with respect to liquidity. Although we expect to pay distributions according
to our cash distribution policy, we may not pay distributions according to our policy, or at all, if, among other things, we do not have the cash
necessary to pay the intended distributions.
As of December 31, 2013, approximately 26.2 million RSUs granted to Apollo employees (net of forfeited awards) were entitled to distribution
equivalents, to be paid in the form of cash compensation.
Securities Authorized for Issuance Under Equity Compensation Plans
See the table under Securities Authorized for Issuance Under Equity Compensation Plans set forth in Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters.
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Class A Shares Repurchases in the Fourth Quarter of 2013
No purchases of our Class A shares were made by us or on our behalf in the fourth quarter of the year ended December 31, 2013.
Unregistered Sale of Equity Securities
On October 16, 2013 and November 13, 2013, we issued 6,878 and 297,634 Class A shares, net of taxes, to Apollo Management Holdings, L.P.,
respectively, for an aggregate purchase price of $219,683 and $9,038,609, respectively. The issuances were exempt from registration under the
Securities Act in accordance with Section 4(a)(2) and Rule 506(b) thereof, as transactions by the issuer not involving a public offering. We
determined that the purchaser of Class A shares in the transactions, Apollo Management Holdings, L.P., was an accredited investor.
ITEM 6. SELECTED FINANCIAL DATA
The following selected historical consolidated and combined financial and other data of Apollo Global Management, LLC should be read together
with Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements and
related notes included in Item 8. Financial Statements and Supplementary Data.
The selected historical consolidated statements of operations data of Apollo Global Management, LLC for each of the years ended December 31,
2013, 2012 and 2011 and the selected historical consolidated statements of financial condition data as of December 31, 2013 and 2012 have been
derived from our consolidated financial statements which are included in Item 8. Financial Statements and Supplementary Data.
We derived the selected historical consolidated statements of operations data of Apollo Global Management, LLC for the years ended December 31,
2010 and 2009 and the selected consolidated statements of financial condition data as of December 31, 2011, 2010 and 2009 from our audited
consolidated financial statements which are not included in this document.
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Year Ended December 31,
2012
2011
2010
(in thousands, except per share amounts)
2013
Statement of Operations Data
Revenues:
Advisory and transaction fees from affiliates, net
$
Management fees from affiliates
Carried interest income (loss) from affiliates
Total Revenues
Expenses:
Compensation and benefits:
Equity- based compensation
Salary, bonus and benefits
Profit sharing expense
Total Compensation and Benefits
Interest expense
Professional fees
General, administrative and other
Placement fees
Occupancy
Depreciation and amortization
Total Expenses
Other Income:
Net gains (losses) from investment activities
Net gains (losses) from investment activities of consolidated
variable interest entities
Income from equity method investments
Interest income
Gain from repurchase of debt(1)
Other income, net
Total Other Income
Income (loss) before income tax provision
Income tax provision
Net Income (Loss)
Net (income) loss attributable to Non- Controlling
Interests(2)(3)
Net Income (Loss) Attributable to Apollo Global
Management, LLC
$
Distributions Declared per Class A Share
$
Net Income (Loss) Available to Class A Share Basic
$
Net Income (Loss) Available to Class A Share Diluted
$
196,562
674,634
2,862,375
3,733,571
149,544
580,603
2,129,818
2,859,965
81,953
487,559
(397,880)
171,632
79,782
431,096
1,599,020
2,109,898
2009
56,075
406,257
504,396
966,728
126,227
294,753
1,173,255
1,594,235
29,260
83,407
98,202
42,424
39,946
54,241
1,941,715
598,654
274,574
872,133
1,745,361
37,116
64,682
87,961
22,271
37,218
53,236
2,047,845
1,149,753
251,095
(60,070)
1,340,778
40,850
59,277
75,558
3,911
35,816
26,260
1,582,450
1,118,412
249,571
575,367
1,943,350
35,436
61,919
65,107
4,258
23,067
24,249
2,157,386
1,100,106
227,356
167,548
1,495,010
50,252
33,889
61,066
12,364
29,625
24,299
1,706,505
330,235
288,244
(129,827)
367,871
510,935
199,742
107,350
12,266
40,114
689,707
2,481,563
(107,569)
2,373,994
(71,704)
110,173
9,693
1,964,679
2,301,085
3,113,205
(65,410)
3,047,795
48,206
69,812
1,528
195,032
682,449
634,961
(91,737)
543,224
83,113
1,450
36,193
41,410
673,101
(66,676)
(28,714)
(95,390)
(1,714,603)
(2,736,838)
(448,607)
(59,786)
659,391
3.95
4.06
4.03
$
$
$
$
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310,957
1.35
2.06
2.06
24,201
13,923
4,731
205,520
118,548
(1,292,270)
(11,929)
(1,304,199)
835,373
$
$
$
$
(468,826)
0.83
(4.18)
(4.18)
$
$
$
$
94,617
0.21
0.83
0.83
$
$
$
$
(155,176)
0.05
(1.62)
(1.62)
Table of Contents
2013
Statement of
Financial
Condition Data
Total assets
$
Debt (excluding
obligations of
consolidated
variable interest
entities)
Debt obligations
of consolidated
variable interest
entities
Total
shareholders
equity
Total NonControlling
Interests
$
2012
22,477,981
As of December 31,
2011
(in thousands)
20,636,858
7,975,873
2010
2009
6,552,372
3,385,197
750,000
737,818
738,516
751,525
933,834
12,423,962
11,834,955
3,189,837
1,127,180
6,688,722
5,703,383
2,648,321
3,081,419
1,299,110
4,051,453
3,036,565
1,921,920
2,930,517
1,603,146
(1) During April and May 2009, the Company repurchased a combined total of $90.9 million of face value of debt for $54.7 million and recognized a
net gain of $36.2 million which is included in other (loss) income in the consolidated and combined statements of operations for the year ended
December 31, 2009.
(2) Reflects Non- Controlling Interests attributable to AAA, consolidated variable interest entities and the remaining interests held by certain
individuals who receive an allocation of income from certain of our credit management companies.
(3) Reflects the Non- Controlling Interests in the net (loss) income of the Apollo Operating Group relating to the units held by our Managing Partners
and Contributing Partners after the 2007 Reorganization which is calculated by applying the ownership percentage of Holding in the Apollo
Operating Group.
The ownership interest was impacted by a share repurchase in February 2009, the Companys IPO in April 2011, issuances of Class A shares in
settlement of vested RSUs in 2010, 2011, 2012, and 2013, and the Company's secondary offering in May 2013. See Item 8. Financial Statements and
Supplementary Data for details of the ownership percentage. Additionally, in November 2013, certain AOG Units were exchanged for Class A
shares and sold, which also impacted the ownership interest.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with Apollo Global Management, LLCs consolidated financial statements and the
related notes as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012, and 2011. This discussion contains
forward- looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may
differ significantly from those expressed or implied in such forward- looking statements due to a number of factors, including those included
in the section of this report entitled Item 1A. Risk Factors. The highlights listed below have had significant effects on many items within
our consolidated financial statements and affect the comparison of the current periods activity with those of prior periods.
General
Our Businesses
Founded in 1990, Apollo is a leading global alternative investment manager. We are contrarian, value- oriented investors in private equity, credit and
real estate with significant distressed expertise and a flexible mandate in the majority of our funds that enables our funds to invest opportunistically
across a companys capital structure. We raise, invest and manage funds on behalf of some of the worlds most prominent pension, endowment and
sovereign wealth funds as well as other institutional and individual investors. Apollo is led by our Managing Partners, Leon Black, Joshua Harris and
Marc Rowan, who have worked together for more than 23 years and lead a team of 710 employees, including 277 investment professionals, as of
December 31, 2013.
Apollo conducts its management and incentive businesses primarily in the United States and substantially all of its revenues are generated
domestically. These businesses are conducted through the following three reportable segments:
(i) Private equityprimarily invests in control equity and related debt instruments, convertible securities and distressed debt instruments;
(ii) Creditprimarily invests in non- control corporate and structured debt instruments; and
(iii) Real estateprimarily invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating
companies, and real estate debt including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities.
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These business segments are differentiated based on the varying investment strategies. The performance is measured by management on an
unconsolidated basis because management makes operating decisions and assesses the performance of each of Apollos business segments based on
financial and operating metrics and data that exclude the effects of consolidation of any of the affiliated funds.
Our financial results vary since carried interest, which generally constitutes a large portion of the income we receive from the funds that we manage,
as well as the transaction and advisory fees that we receive, can vary significantly from quarter to quarter and year to year. As a result, we emphasize
longterm financial growth and profitability to manage our business.
In addition, the growth in our feegenerating AUM during the last year has primarily been in our credit segment. The average management fee rate
for these new credit products is at market rates for such products and in certain cases is below our historical rates. Also, due to the complexity of
these new product offerings, the Company has incurred and will continue to incur additional costs associated with managing these products. To date,
these additional costs have been offset by realized economies of scale and ongoing cost management.
As of December 31, 2013, approximately 96% of our total AUM was in funds with a contractual life at inception of seven years or more, and 7% of
our total AUM was in permanent capital vehicles with unlimited duration.
As of December 31, 2013, we had total AUM of $161.2 billion across all of our businesses. On December 31, 2013, Apollo Investment Fund VIII,
L.P. ("Fund VIII") held a final closing raising a total of $17.5 billion in third- party capital and approximately $880 million of additional capital from
Apollo and affiliated investors, and as of December 31, 2013, Fund VIII had $18.2 billion of uncalled commitments, or "dry powder," remaining.
Additionally, Fund VII held a final closing in December 2008, raising a total of $14.7 billion, and as of December 31, 2013, Fund VII had $3.4
billion of uncalled commitments remaining. We have consistently produced attractive longterm investment returns in our private equity funds,
generating a 39% gross IRR and a 26% net IRR on a compound annual basis from inception through December 31, 2013. For further detail related to
fund performance metrics across all of our businesses, see The Historical Investment Performance of Our Funds.
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Holding Company Structure

The diagram below depicts our current organizational structure:
Note: The organizational structure chart above depicts a simplified version of the Apollo structure. It does not include all legal entities in the
structure. Ownership percentages are as of the date of the filing of this Annual Report on Form 10- K.
(1) The Strategic Investors hold 30.21% of the Class A shares outstanding and 11.91% of the economic interests in the Apollo Operating Group. The
Class A shares held by investors other than the Strategic Investors represent 31.23% of the total voting power of our shares entitled to vote and
27.51% of the economic interests in the Apollo Operating Group. Class A shares held by the Strategic Investors do not have voting rights.
However, such Class A shares will become entitled to vote upon transfers by a Strategic Investor in accordance with the agreements entered into
in connection with the investments made by the Strategic Investors.
(2)
Our Managing Partners own BRH Holdings GP, Ltd., which in turn holds our only outstanding Class B share. The Class B share represents
68.77% of the total voting power of our shares entitled to vote but no economic interest in Apollo Global Management, LLC. Our
Managing Partners economic interests are instead represented by their indirect beneficial ownership, through Holdings, of 53.42% of the
limited partner interests in the Apollo Operating Group.
(3)
Through BRH Holdings, L.P., our Managing Partners indirectly beneficially own through estate planning vehicles, limited partner interests
in Holdings.
(4)
Holdings owns 60.58% of the limited partner interests in each Apollo Operating Group entity. The AOG Units held by Holdings are
exchangeable for Class A shares. Our Managing Partners, through their interests in BRH and Holdings, beneficially own 53.42% of the
AOG Units. Our Contributing Partners, through their ownership interests in Holdings, beneficially own 7.16% of the AOG Units.
(5)
BRH Holdings GP, Ltd is the sole member of AGM Management, LLC, our manager. The management of Apollo Global Management,
LLC is vested in our manager as provided in our operating agreement.
(6) Represents 39.42% of the limited partner interests in each Apollo Operating Group entity, held through intermediate holding companies. Apollo
Global Management, LLC, also indirectly owns 100% of the general partner interests in each Apollo Operating Group entity.
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Each of the Apollo Operating Group partnerships holds interests in different businesses or entities organized in different jurisdictions.
Our structure is designed to accomplish a number of objectives, the most important of which are as follows:
We are a holding company that is qualified as a partnership for U.S. Federal income tax purposes. Our intermediate holding companies enable
us to maintain our partnership status and to meet the qualifying income exception.
We have historically used multiple management companies to segregate operations for business, financial and other reasons. Going
forward, we may increase or decrease the number of our management companies or partnerships within the Apollo Operating Group based
on our views regarding the appropriate balance between (a) administrative convenience and (b) continued business, financial, tax and other
optimization.
Business Environment
As a global investment manager, we are affected by numerous factors, including the condition of financial markets and the economy. Fluctuations in
equity prices, which may be volatile, can significantly impact the valuation of our funds' portfolio companies and related income we may recognize.
In the U.S., the S&P 500 Index rose 9.9% in the fourth quarter of 2013, bringing the full year appreciation to 29.6% and closed at a new record high
at the end of the fourth quarter of 2013. Outside the U.S., world equity markets also continued to rise in the fourth quarter of 2013, completing a
strong year. The MSCI All Country World ex USA Index was up 4.4% in the fourth quarter of 2013 and 12.3% for the year ended December 31,
2013. Importantly, we believe that the continued strength in the equity markets has been accommodative for continued equity capital markets activity,
including IPOs and secondary offerings of the portfolio companies within our funds.
Conditions in the global credit markets also have a significant impact on our business. Credit indices rose in the fourth quarter of 2013, completing a
positive year, with the BoAML HY Master II Index up 3.5% in the fourth quarter of 2013 and 7.4% for the year ended December 31, 2013, while the
S&P/LSTA Leveraged Loan Index was up 1.7% during the fourth quarter of 2013 and 5.3% for the year ended December 31, 2013. Benchmark
interest rates increased sharply during the fourth quarter of 2013 with the U.S. 10- year Treasury up approximately 40 basis points to 3.0%, following
the Federal Reserves commencement of tapering its quantitative easing policy.
In terms of economic conditions, the Bureau of Economic Analysis reported that real GDP in the U.S. increased at an annual rate of 3.2% in the
fourth quarter of 2013 and 1.9% for the full year ended December 31, 2013. As of January 2014, The International Monetary Fund estimates that the
U.S. economy will expand by 2.8% in 2014. Additionally, the U.S. unemployment rate remained elevated at 7.0% as of December 31, 2013, despite
recent signs of improvement.
Amid the generally favorable backdrop of elevated asset prices, Apollo continued to generate significant realizations for fund investors. Apollo
returned $5.8 billion and $22.6 billion of capital and realized gains to the limited partners of the funds it manages during the fourth quarter of 2013
and the full year ended December 31, 2013, respectively. Apollos fundraising activities also continued at a strong pace, with $10.0 billion and $22.1
billion of new capital raised during the fourth quarter and full year 2013, respectively, as institutional investors continued to allocate capital towards
alternative investment managers for more attractive risk- adjusted returns in a low rate environment.
Regardless of the market or economic environment at any given time, Apollo relies on its contrarian, value- oriented approach to consistently invest
capital on behalf of its investors by focusing on opportunities that management believes are often overlooked by other investors. We believe Apollos
expertise in credit and its focus on nine core industry sectors, combined with more than 20 years of investment experience, has allowed Apollo to
respond quickly to changing environments. Apollos core industry sectors cover chemicals, natural resources, consumer and retail, distribution and
transportation, financial and business services, manufacturing and industrial, media and cable and leisure, packaging and materials and the satellite
and wireless industries. Apollo believes that these attributes have contributed to the success of its private equity funds investing in buyouts and credit
opportunities during both expansionary and recessionary economic periods.
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Market Considerations
Our revenues consist of the following:
Management fees, which are calculated based upon any of net asset value, gross assets, adjusted par asset value, adjusted costs of all
unrealized portfolio investments, capital commitments, adjusted assets, invested capital, capital contributions, or stockholders
equity, each as defined in the applicable management agreement of the unconsolidated funds;
Advisory and transaction fees relating to the investments our funds make, or individual monitoring agreements with individual portfolio companies
of the private equity funds and certain credit funds as well as advisory services provided to certain credit funds; and
Carried interest with respect to our funds.
Our ability to grow our revenues depends in part on our ability to attract new capital and investors, which in turn depends on our ability to
appropriately invest our funds capital, and on the conditions in the financial markets, including the availability and cost of leverage, and economic
conditions in the United States, Western Europe, Asia, and to some extent, elsewhere in the world. The market factors that impact this include the
following:
The strength of the alternative investment management industry, including the amount of capital invested and withdrawn from
alternative investments. Allocations of capital to the alternative investment sector are dependent, in part, on the strength of the economy
and the returns available from other investments relative to returns from alternative investments. Our share of this capital is dependent on the
strength of our performance relative to the performance of our competitors. The capital we attract and our returns are drivers of our Assets
Under Management, which, in turn, drive the fees we earn. In light of the current volatile conditions in the financial markets, our funds
returns may be lower than they have been historically and fundraising efforts may be more challenging.
The strength and liquidity of the U.S. and relevant global equity markets generally, and the initial public offering market specifically. The
strength of these markets affects the value of, and our ability to successfully exit, our equity positions in our private equity portfolio companies in a
timely manner.
The strength and liquidity of the U.S. and relevant global debt markets. Our funds and our portfolio companies borrow money to make
acquisitions and our funds utilize leverage in order to increase investment returns that ultimately drive the performance of our funds. Furthermore,
we utilize debt to finance the principal investments in our funds and for working capital purposes. To the extent our ability to borrow funds becomes
more expensive or difficult to obtain, the net returns we can earn on those investments may be reduced.
Stability in interest rate and foreign currency exchange rate markets. We generally benefit from stable interest rate and foreign currency
exchange rate markets. The direction and impact of changes in interest rates or foreign currency exchange rates on certain of our funds are
dependent on the funds expectations and the related composition of their investments at such time.
For the most part, we believe the trends in these factors have historically created a favorable investment environment for our funds. However, adverse
market conditions may affect our businesses in many ways, including reducing the value or hampering the performance of the investments made by
our funds, and/or reducing the ability of our funds to raise or deploy capital, each of which could materially reduce our revenue, net income and cash
flow, and affect our financial condition and prospects. As a result of our value- oriented, contrarian investment style which is inherently longterm in
nature, there may be significant fluctuations in our financial results from quarter to quarter and year to year.
The financial markets encountered a series of negative events in 2007 and 2008 which led to a global liquidity and broad economic crisis and
impacted the performance of many of our funds portfolio companies. The impact of such events on our private equity and credit funds resulted in
volatility in our revenue. If the market were to experience similar periods of volatility, we and the funds we manage may experience tightening of
liquidity, reduced earnings and cash flow, impairment charges, as well
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as challenges in raising additional capital, obtaining investment financing and making investments on attractive terms. These market conditions can
also have an impact on our ability to liquidate positions in a timely and efficient manner.
For a more detailed description of how economic and global financial market conditions can materially affect our financial performance and
condition, see Item 1A. Risk FactorsRisks Related to Our BusinessesDifficult market conditions may adversely affect our businesses in many
ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to
raise or deploy capital, each of which could materially reduce our revenue, net income and cash flow and adversely affect our financial prospects and
condition.
Uncertainty remains regarding Apollos future taxation levels. On May 28, 2010, the House of Representatives passed legislation that would, if
enacted in its present form, preclude us from qualifying for treatment as a partnership for U.S. Federal income tax purposes under the publicly traded
partnership rules. See Item 1A. Risk Factors- Risks Related to Our Organization and Structure- Although not enacted, the U.S. Congress has
considered legislation that would have: (i) in some cases after a tenyear transition period, precluded us from qualifying as a partnership or required
us to hold carried interest through taxable corporations; and (ii) taxed certain income and gains at increased rates. If similar legislation were to be
enacted and apply to us, the value of our Class A shares could be adversely affected and Item 1A. Risk FactorsRisks Related to TaxationOur
structure involves complex provisions of U.S. Federal income tax law for which no clear precedent or authority may be available. Our structure is
also subject to potential legislative, judicial or administrative change and differing interpretations, possibly on a retroactive basis.
Managing Business Performance
We believe that the presentation of Economic Net Income (Loss) supplements a readers understanding of the economic operating performance of
each of our segments.
Economic Net Income (Loss)
Economic Net Income (Loss) ("ENI") is a measure of profitability and does not take into account certain items included under U.S. GAAP. ENI
represents segment income (loss) attributable to Apollo Global Management, LLC, which excludes the impact of noncash charges related to RSUs
granted in connection with the 2007 private placement and amortization of AOG Units, income tax expense, amortization of intangibles associated
with the 2007 Reorganization, as well as acquisitions and Non- Controlling Interests (excluding the remaining interest held by certain individuals
who receive an allocation of income from certain of our credit management companies). In addition, segment data excludes the assets, liabilities and
operating results of the funds and VIEs that are included in the consolidated financial statements. Adjustments relating to income tax expense,
intangible asset amortization and Non- Controlling Interests are common in the calculation of supplemental measures of performance in our industry.
We believe the exclusion of the noncash charges related to the 2007 Reorganization for equitybased compensation provides investors with a
meaningful indication of our performance because these charges relate to the equity portion of our capital structure and not our core operating
performance.
During the second quarter of 2013, monitoring fees based on Athene's capital and surplus and the change in the market value of the derivative
contracts related to Athene's capital and surplus recorded in advisory and transaction fees from affiliates, net, as disclosed in note 17 to the
consolidated financial statements, were reclassified from the private equity segment to the credit segment to better evaluate the performance of
Apollo's private equity and credit segments in making key operating decisions. Reclassifications have been made to the prior period financial data for
Apollo's reportable segments to conform to the current presentation. The impact of this reclassification on the ENI for the private equity and credit
segment is reflected in the table below for the years ended December 31, 2012 and 2011:
Impact of Reclassification on Economic Net (Loss) Income
Credit
Private Equity Segment
Segment
For the year ended December 31, 2012
$(16,787)
$16,787
$(8,768)
$8,768
During the fourth quarter of 2013, certain reclassifications were made to prior period financial data within salary, bonus and benefits and profit
sharing expense to conform to the current presentation. The impact of these reclassifications on management business ENI and incentive business
ENI is reflected in the table below for Apollos three reportable segments for the years ended December 31, 2012 and 2011.
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Impact of Reclassification on Management

Business Economic Net Income (Loss)
Private
Equity
Credit
Real Estate
Segment
Segment
Segment
$24,397
$(17,082)
$(7,315)
3,434
(2,081)
(1,353)
Impact of Reclassification on Incentive
Business Economic Net (Loss) Income
Private
Equity
Credit
Real Estate
Segment
Segment
Segment
$(24,397)
$17,082
$7,315
(3,434)
2,081
1,353
As it relates to the reclassifications described above, the impact to the combined segments' ENI for all periods presented was zero.
ENI is a key performance measure used for understanding the performance of our operations from period to period and although not every company
in our industry defines these metrics in precisely the same way we do, we believe that this metric, as we use it, facilitates comparisons with other
companies in our industry. We use ENI to evaluate the performance of our private equity, credit and real estate segments. Management also believes
the components of ENI such as the amount of management fees, advisory and transaction fees, net and carried interest income are indicative of the
Companys performance. Management also uses ENI in making key operating decisions such as the following:
Decisions related to the allocation of resources such as staffing decisions including hiring and locations for deployment of the new hires. As the
amount of fees, investment income, and ENI is indicative of the performance of the management companies and advisors within each segment,
management can assess the need for additional resources and the location for deployment of the new hires based on the results of this measure. For
example, a positive ENI could indicate the need for additional staff to manage the respective segment whereas a negative ENI could indicate the
need to reduce staff assigned to manage the respective segment.
Decisions related to capital deployment such as providing capital to facilitate growth for our business and/or to facilitate expansion into new
businesses. As the amount of fees, investment income, and ENI is indicative of the performance of the management companies and advisors within
each segment, management can assess the availability and need to provide capital to facilitate growth or expansion into new businesses based on the
results of this measure. For example, a negative ENI may indicate the lack of performance of a segment and thus indicate a need for additional
capital to be deployed into the respective segment.
Decisions related to expenses, such as determining annual discretionary bonuses and equitybased compensation awards to its employees.
With respect to compensation, management seeks to align the interests of certain professionals and selected other individuals with those of
the investors in such funds and those of the Companys shareholders by providing such individuals a profit sharing interest in the carried
interest income earned in relation to the funds. To achieve that objective, a certain amount of compensation is based on the Companys
performance and growth for the year.
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ENI does not take into account certain items included when calculating net income under U.S. GAAP and as such, we do not rely solely on ENI as a
performance measure and also consider our U.S. GAAP results. The following items, which are significant to our business, are excluded when
calculating ENI:
(i) noncash charges related to RSUs granted in connection with the 2007 private placement and amortization of AOG Units (the costs associated
with the 2007 private placement are expected to be recurring components of our costs but at a diminishing rate, we may be able to incur lower cash
compensation costs with the granting of equitybased compensation). The AOG Units were fully vested and amortized as of June 30, 2013;
(ii)
income tax, which represents a necessary and recurring element of our operating costs and our ability to generate revenue because ongoing
revenue generation is expected to result in future income tax expense;
(iii)
amortization of intangible assets associated with the 2007 Reorganization and acquisitions, which is a recurring item until all intangibles
have been fully amortized; and
(iv)
Non- Controlling Interests, excluding the remaining interest held by certain individuals who receive an allocation of income from certain
of our credit management companies, which is expected to be a recurring item and represents the aggregate of the income or loss that is not
owned by the Company.
We believe that ENI is helpful for an understanding of our business and that investors should review the same supplemental financial measure that
management uses to analyze our segment performance. This measure supplements and should be considered in addition to and not in lieu of the
results of operations discussed below in Overview of Results of Operations that have been prepared in accordance with U.S. GAAP.
The following summarizes the adjustments to ENI that reconcile ENI to the net income (loss) attributable to Apollo Global Management, LLC
determined in accordance with U.S. GAAP:
Inclusion of the impact of RSUs granted in connection with the 2007 private placement and noncash equitybased compensation expense
comprising amortization of AOG Units. Management assesses our performance based on management fees, advisory and transaction fees,
and carried interest income generated by the business and excludes the impact of noncash charges related to RSUs granted in connection
with the 2007 private placement and amortization of AOG Units because these noncash charges are not viewed as part of our core
operations. The AOG Units were fully amortized as of June, 2013.
Inclusion of the impact of income taxes as we do not take income taxes into consideration when evaluating the performance of our segments or
when determining compensation for our employees. Additionally, income taxes at the segment level (which exclude APO Corp.s corporate taxes)
are not meaningful, as the majority of the entities included in our segments operate as partnerships and therefore are only subject to New York City
unincorporated business taxes and foreign taxes when applicable.
Inclusion of amortization of intangible assets associated with the 2007 Reorganization and subsequent acquisitions as these noncash charges are
not viewed as part of our core operations.
Carried interest income, management fees and other revenues from Apollo funds are reflected on an unconsolidated basis. As such, ENI
excludes the Non- Controlling Interests in consolidated funds, which remain consolidated in our consolidated financial statements.
Management views the business as an alternative investment management firm and therefore assesses performance using the combined total
of carried interest income and management fees from each of our funds. One exception is the Non- Controlling Interest related to certain
individuals who receive an allocation of income from certain of our credit management companies, which is deducted from ENI to better
reflect the performance attributable to shareholders.
ENI may not be comparable to similarly titled measures used by other companies and is not a measure of performance calculated in accordance with
U.S. GAAP. We use ENI as a measure of operating performance, not as a measure of liquidity. ENI
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should not be considered in isolation or as a substitute for operating income, net income, operating cash flows, investing and financing activities, or
other income or cash flow statement data prepared in accordance with U.S. GAAP. The use of ENI without consideration of related U.S. GAAP
measures is not adequate due to the adjustments described above. Management compensates for these limitations by using ENI as a supplemental
measure to U.S. GAAP results, to provide a more complete understanding of our performance as management measures it. A reconciliation of ENI to
our U.S. GAAP net income (loss) attributable to Apollo Global Management, LLC can be found in the notes to our consolidated financial statements.
Operating Metrics
We monitor certain operating metrics that are common to the alternative investment management industry. These operating metrics include Assets
Under Management, private equity dollars invested and uncalled private equity commitments.
Assets Under Management
Assets Under Management, or AUM, refers to the investments we manage or with respect to which we have control, including capital we have the
right to call from our investors pursuant to their capital commitments to various funds. Our AUM equals the sum of:
(i)
the fair value of our private equity investments plus the capital that we are entitled to call from our investors pursuant to the terms of their
(ii)
the NAV, of our credit funds, other than certain CLOs and CDOs, which have a fee generating basis other than the mark- to- market value
of the underlying assets, plus used or available leverage and/or capital commitments;
(iii) the gross asset value or net asset value of our real estate entities and the structured portfolio company investments included within the funds we
manage, which includes the leverage used by such structured portfolio companies;
(iv) the incremental value associated with the reinsurance investments of the portfolio company assets we manage; and
(v)
the fair value of any other investments that we manage plus unused credit facilities, including capital commitments for investments that
may require pre- qualification before investment plus any other capital commitments available for investment that are not otherwise
included in the clauses above.
Our AUM measure includes Assets Under Management for which we charge either no or nominal fees. Our definition of AUM is not based on any
definition of Assets Under Management contained in our operating agreement or in any of our Apollo fund management agreements. We consider
multiple factors for determining what should be included in our definition of AUM. Such factors include but are not limited to (1) our ability to
influence the investment decisions for existing and available assets; (2) our ability to generate income from the underlying assets in our funds; and
(3) the AUM measures that we believe are used by other investment managers. Given the differences in the investment strategies and structures
among other alternative investment managers, our calculation of AUM may differ from the calculations employed by other investment managers and,
as a result, this measure may not be directly comparable to similar measures presented by other investment managers.
We use AUM as a performance measurement of our investment activities, as well as to monitor fund size in relation to professional resource and
infrastructure needs.
Assets Under ManagementFee- Generating/Non- Fee Generating
Fee- generating AUM consists of assets that we manage and on which we earn management fees or monitoring fees pursuant to management
agreements on a basis that varies among the Apollo funds. Management fees are normally based on net asset value, gross assets, adjusted par
asset value, adjusted cost of all unrealized portfolio investments, capital commitments, adjusted assets, stockholders equity, invested
capital or capital contributions, each as defined in the applicable management agreement. Monitoring fees, also referred to as advisory fees,
generally are based on the total value of certain structured portfolio company investments, which normally includes leverage, less any portion of such
total value that is already considered in feegenerating AUM.
Non- fee generating AUM consists of assets that do not produce management fees or monitoring fees. These assets generally consist of the following:
(a) fair value above invested capital for those funds that earn management fees based on invested capital, (b) net asset values related to general
partner and coinvestment ownership, (c) unused credit facilities, (d) available
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commitments on those funds that generate management fees on invested capital, (e) structured portfolio company investments that do not generate
monitoring fees and (f) the difference between gross asset and net asset value for those funds that earn management fees based on net asset value.
We use nonfee generating AUM combined with feegenerating AUM as a performance measurement of our investment activities, as well as to
monitor fund size in relation to professional resource and infrastructure needs. Non- fee generating AUM includes assets on which we could earn
carried interest income.
The table below displays feegenerating and nonfee generating AUM by segment as of December 31, 2013, 2012 and 2011. Changes in market
conditions, additional funds raised and acquisitions have had significant impacts to our AUM:
As of
December 31,
2013
2012
2011
(in millions)
Total Assets Under
Management
$
161,177 (1)
$
113,379 (1)
$
75,222
Fee- generating
128,368
81,934
58,121
Non- fee generating
32,809 (1)
31,445 (1)
17,101
Private Equity
49,908
37,832
35,384
Fee- generating
34,173
27,932
28,031
Non- fee generating
15,735
9,900
7,353
Credit(2)
100,886
64,406
31,867
Fee- generating
88,249
49,518
26,553
Non- fee generating
12,637
14,888
5,314
Real Estate(2)
9,289
8,800
7,971
Fee- generating
5,946
4,484
3,537
Non- fee generating
3,343
4,316
4,434
(1)
As of December 31, 2013 and 2012, includes $1.1 billion and $2.3 billion of commitments, respectively, that have yet to be deployed to an
Apollo fund within our three segments.
(2) Includes feegenerating and nonfee generating AUM as of September 30, 2012 for certain publicly traded vehicles managed by Apollo.
During the year ended December 31, 2013, our total feegenerating AUM increased primarily due to acquisitions and increases in subscriptions, this
was partially offset by distributions, leverage, and movements between feegenerating and nonfee generating AUM. The feegenerating AUM of
our private equity funds increased primarily due to subscriptions, offset primarily by distributions and movement between feegenerating and nonfee generating AUM. The feegenerating AUM of our credit funds increased during the year ended December 31, 2013 primarily due to acquisitions
and subscriptions, and offset by decreases in leverage and distributions. The feegenerating AUM of our real estate segment increased primarily due
to net segment transfers in and subscriptions, and was partially offset by distributions.
When the fair value of an investment exceeds invested capital, we are normally entitled to carried interest income on the difference between the fair
value once realized and invested capital after also considering certain expenses and preferred return amounts, as specified in the respective
partnership agreements; however, we generally do not earn management fees on such excess. As a result of the growth in both the size and number of
funds that we manage, we have experienced an increase in our management fees and advisory and transaction fees. To support this growth, we have
also experienced an increase in operating expenses, resulting from hiring additional personnel, opening new offices to expand our geographical reach
and incurring additional professional fees.
With respect to our private equity funds and certain of our credit and real estate funds, we charge management fees on the amount of committed or
invested capital and we generally are entitled to realized carried interest on the realized gains on the disposition of such funds investments. Certain
funds may have current fair values below invested capital; however, the management fee would still be computed on the invested capital for such
funds. With respect to ARI and AMTG, we receive management fees on stockholders' equity as defined in the applicable management agreement. In
addition, our feegenerating AUM reflects leverage vehicles that generate monitoring fees on value in excess of fund commitments. As of
December 31, 2013, our total feegenerating AUM is comprised of approximately 97% of assets that earn management fees and the remaining
balance of assets earn monitoring fees.
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The Companys entire feegenerating AUM is subject to management or monitoring fees. The components of feegenerating AUM by segment as of
December 31, 2013, 2012 and 2011 are presented below:
As of
December 31, 2013
Private
Real
Equity
Credit
Estate
Total
(in millions)
Fee- generating AUM
based on capital
commitments
$
19,630
$
5,834 $
156 $
25,620
Fee- generating AUM
based on invested capital
11,923
1,649
3,753
17,325
Fee- generating AUM
based on gross/adjusted
assets
925
72,202
1,769
74,896
Fee- generating AUM
based on leverage
1,695
1,587
3,282
Fee- generating AUM
based on NAV
6,977
268
7,245
Total Fee- Generating
AUM
$
34,173 (1)
$
88,249 $
5,946 $
128,368
(1) The weighted average remaining life of the private equity funds excluding permanent capital vehicles at December 31, 2013
was 75 months.
As of
December 31, 2012
Private
Equity
Fee- generating AUM based
on capital commitments
$
on invested capital
on gross/adjusted assets
on leverage
on NAV
AUM
$
Real
Estate
Credit
(in millions)
15,854
5,156
Total
194
21,204
7,613
3,124
1,866
12,603
855
31,599
2,134
34,588
3,610
3,101
6,711
6,538
290
6,828
27,932
(1)
49,518
4,484
81,934
was 61 months.
As of
December 31, 2011
Private
Equity
on capital commitments
$
on invested capital
on gross/adjusted assets
on leverage
on NAV
AUM
$
Real
Estate
Credit
(in millions)
14,848
2,747
Total
279
17,874
8,635
2,909
1,820
13,364
948
15,862
1,213
18,023
3,600
3,213
6,813
1,822
225
2,047
28,031
(1)
26,553
3,537
was 65 months.
58,121
AUM as of December 31, 2013, 2012 and 2011 was as follows:
2013
AUM:
Private equity
Credit
Real estate
Total(1)
Total Assets Under Management

As of
December 31,
2012
(in millions)
49,908
100,886
9,289
161,177
2011
37,832
64,406
8,800
113,379
(1)
35,384
31,867
7,971
75,222
The following table presents total AUM and feegenerating AUM amounts for our private equity segment by strategy:
Total AUM
Fee- Generating AUM
As of
As of
December 31,
December 31,
2013
2012
2011
2013
2012
2011
(in millions)
Traditional
Private Equity
Funds
$
46,998
$
35,617
$
34,232 $
31,929
$
25,706
$
26,984
ANRP
1,367
1,284
1,295
1,295
Other
1,543 (1)
931 (1)
1,152
949 (1)
931 (1)
1,047
Total
$
49,908
$
37,832
$
35,384 $
34,173
$
27,932
$
28,031
(1) Represents co- investments contributed to Athene by AAA, through its investment in AAA Investments, as part of the AAA Transaction.
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The following table presents total AUM and feegenerating AUM amounts for our credit segment by strategy:
Total AUM
As of
December 31,
2012
2013
Athene(2)
$
U.S. Performing
Credit
$
Structured Credit
Opportunistic
Credit
Non- Performing
Loans
European Credit
Other
Total
$
2011(1)
50,345
10,970
22,177
12,779
27,509
11,436
2013
(in millions)
5,974 $
14,719
2,442
Fee- Generating AUM

As of
December 31,
2012
2011(1)
50,345
10,845
5,974
17,510
9,362
20,567
7,589
11,377
1,789
7,068
6,177
5,310
4,763
4,722
4,603
5,688
2,829
100,886
6,404
1,910
64,406
1,935
1,434
53
31,867
4,330
1,939
88,249
4,527
1,268
49,518
1,636
1,122
52
26,553
(1) Reclassified to conform to current presentation.

(2) Excludes AUM that is either sub- advised by Apollo or invested in Apollo funds and investment vehicles across its private equity, credit and real
estate funds.
The following table presents total AUM and feegenerating AUM amounts for our real estate segment by strategy:
Total AUM
As of
December 31,
2012
2013
Debt
Equity
Total
$
$
5,731
3,558
9,289
$
$
4,826
3,974
8,800
2011
$
$
2013
(in millions)
4,042 $
3,929
7,971 $
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Fee- Generating AUM

As of
December 31,
2012
3,701
2,245
5,946
$
$
2,332
2,152
4,484
2011
$
$
1,411
2,126
3,537
Table of Contents
The following tables summarize changes in total AUM and total AUM for each of our segments for the years ended December 31, 2013, 2012 and
2011:
For the
Year Ended
December 31,
2012
(in millions)
2013
Change in Total AUM:
Beginning of Period
Income (Loss)
Subscriptions/Capital raised
Other inflows/Acquisitions
Distributions
Redemptions
Leverage
End of Period
Change in Private Equity AUM:
Beginning of Period
Income (Loss)
Distributions
Redemptions(2)
Net segment transfers
Leverage
End of Period
Change in Credit AUM:
Beginning of Period
Income (Loss)
Distributions
Redemptions
Leverage
End of Period
Change in Real Estate AUM:
Beginning of Period
Income
Distributions
Redemptions (2)
Leverage
End of Period
$
$
$
$
$
$
113,379
15,150
22,142
43,832
(22,641)
(1,508)
(9,177)
161,177
(1)
(1)
37,832
10,656
17,613
(15,620)
(176)
2,133
(2,530)
49,908
64,406
4,082
3,439
43,832
(5,458)
(1,042)
(2,056)
(6,317)
100,886
8,800
399
1,090
(1,559)
(290)
1,179
(330)
9,289
(1)
2011
75,222
12,038
9,688
23,629
(10,858)
(1,221)
4,881
113,379
(1)
35,384
8,108
662
(6,537)
317
(102)
37,832
31,867
3,274
5,504
23,629
(3,197)
(948)
(1,023)
5,300
64,406
7,971
656
475
(1,124)
(273)
1,412
(317)
8,800
67,551
(1,477)
3,797
9,355
(5,153)
(532)
1,681
75,222
38,799
(1,612)
417
(3,464)
167
1,077
35,384
22,283
(110)
3,094
9,355
(1,237)
(532)
(1,353)
367
31,867
6,469
245
286
(452)
1,186
237
7,971
(2) Represents release of unfunded commitments primarily related to Fund III and several legacy CPI real estate funds that were past their investment
periods.
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The following tables summarize changes in total feegenerating AUM and feegenerating AUM for each of our segments for the years ended
December 31, 2013, 2012 and 2011:
For the
Year Ended
December 31,
2012
(in millions)
2013
Change in Total Fee- Generating AUM:
Beginning of Period
$
Income (Loss)
Distributions
Redemptions
Net movements between Fee- Generating
and Non- Fee Generating
Leverage
End of Period
$
Change in Private Equity FeeGenerating AUM:
Beginning of Period
$
Income (Loss)
Distributions
Redemptions
Leverage
End of Period
$
Change in Credit Fee- Generating AUM:
Beginning of Period
$
Income
Distributions
Redemptions
Leverage
End of Period
$
Change in Real Estate Fee- Generating
AUM:
Beginning of Period
$
Income (Loss)
Distributions
Leverage
End of Period
$
81,934
2,100
21,104
43,832
(7,517)
(946)
(6,215)
(5,924)
128,368
27,932
398
17,582
(3,430)
(19)
482
(6,858)
(1,914)
34,173
49,518
1,630
2,504
43,832
(3,118)
(927)
(1,611)
431
(4,010)
88,249
4,484
72
1,018
(969)
1,129
212
5,946
- 76-
$
$
2011
58,121
1,390
5,873
21,277
(3,728)
(909)
(564)
474
81,934
28,031
285
644
(1,256)
50
515
(337)
27,932
26,553
988
4,953
21,277
(2,029)
(909)
(1,096)
(1,030)
811
49,518
3,537
117
276
(443)
1,045
(48)
4,484
$
$
47,037
(393)
2,547
9,355
(734)
(481)
761
29
58,121
27,874
(112)
410
(272)
(88)
285
(66)
28,031
16,484
301
1,795
9,355
(283)
(481)
(638)
356
(336)
26,553
2,679
(582)
342
(179)
726
120
431
3,537
Table of Contents
Private Equity
During the year ended December 31, 2013, the AUM in our private equity segment increased by $12.1 billion, or 31.9%. This increase was a result of
subscriptions of $17.5 billion in Fund VIII and $10.7 billion of income from improved unrealized gains, including $5.9 billion from Fund VII and
$4.3 billion from Fund VI. Offsetting this increase was $15.6 billion of distributions, including $8.7 billion from Fund VII and $5.8 billion from Fund
VI, and $2.5 billion of decreased leverage, including $2.0 billion in Fund VII.
During the year ended December 31, 2012, the total AUM in our private equity segment increased by $2.4 billion, or 6.9%. This increase was
primarily a result of income of $8.1 billion attributable to improved unrealized gains in our private equity funds, including $4.5 billion from Fund VII
and $3.1 billion from Fund VI. In addition, contributing to this increase was an additional $0.7 billion in subscriptions from AION and ANRP.
Offsetting this increase was $6.5 billion in distributions, including $3.7 billion from Fund VII and $2.1 billion from Fund VI.
During the year ended December 31, 2011, the total AUM in our private equity segment decreased by $3.4 billion, or 8.8%. This decrease was
primarily a result of distributions of $3.5 billion, including $1.5 billion from Fund VII and $0.9 billion from Fund IV and $0.8 billion from Fund VI.
In addition, $1.6 billion of unrealized losses were incurred that were primarily attributable to Fund VI. Offsetting these decreases was a $1.1 billion
increase in leverage, primarily from Fund VII and capital raised of $0.4 billion, primarily in ANRP.
Credit
During the year ended December 31, 2013, AUM in our credit segment increased by $36.5 billion, or 56.6%. This increase consisted of $43.8 billion
in acquisitions related to the acquisition of Aviva USA by Athene Holding Ltd., $4.1 billion in unrealized gains, subscriptions of $3.4 billion,
including $0.9 billion in Financial Credit Investment II, L.P. ("FCI II") and $0.6 billion in COF III. This increase in AUM was partially offset by a
decrease in leverage of $6.3 billion, including $1.0 billion in U.S. performing credit strategy from net CLO vehicle wind- down, $1.3 billion in COF
II, and $0.8 billion in AMTG, $5.5 billion in distributions, including $1.9 billion from COF I, $0.6 billion from EPF I and $1.1 billion from COF II.
During the year ended December 31, 2012, total AUM in our credit segment increased by $32.5 billion, or 102.1%. This increase was primarily
attributable to $18.5 billion in acquisitions related to Stone Tower Capital LLC and its related management companies ("Stone Tower"), $5.1 billion
in other inflows related to Athene and $5.3 billion in increased leverage, including $3.4 billion from AMTG. The increase was also a result of $5.5
billion of additional subscriptions, including $3.0 billion by EPF II, $0.6 billion by Apollo Centre Street Partnership, L.P. (ACSP) and $0.4 billion
by AMTG. This increase was partially offset by $3.2 billion of distributions, including $1.5 billion collectively from COF I and COF II and $0.3
billion from EPF I.
During the year ended December 31, 2011, total AUM in our credit segment increased by $9.6 billion, or 43.0%. This increase was primarily
attributable to inflows of $9.4 billion related to $6.4 billion from Athene and $3.0 billion from the acquisition of Gulf Stream Asset Management,
LLC (Gulf Stream). Also contributing to this increase was $3.1 billion of capital raised driven by $0.8 billion in Apollo Palmetto Strategic
Partnership, L.P. (Palmetto), $0.4 billion in Financial Credit Investment I, L.P. (FCI), $0.3 billion in AFT, $0.5 billion in Apollo European
Strategic Investments, L.P. (AESI) and $0.2 billion in EPF II. Partially offsetting these increases were distributions of $1.2 billion and redemptions
of $0.5 billion, as well as $1.4 billion in net transfers between segments.
Real Estate
During the year ended December 31, 2013, AUM in our real estate segment increased by $0.5 billion, or 5.5%. This increase was the result of $1.2
billion in net segment transfers in, including $0.6 billion from Athene Accounts related to subordinate commercial estate loans ("Athene CRE
Lending") and $0.5 billion from Athene Accounts related to commercial mortgage backed securities, $1.1 billion in subscriptions, including $0.7
billion in AGRE Debt Fund I and $0.3 billion in Apollo Commercial Real Estate Finance Inc ("ARI"). These increases were partially offset by
distributions of $1.6 billion, including $0.4 billion from Athene CRE Lending and $0.4 billion from CPI Capital Partners Asia Pacific, L.P.
During the year ended December 31, 2012, total AUM in our real estate segment increased by $0.8 billion, or 10.4%. This increase was primarily a
result of $1.4 billion in net transfers from other segments and additional subscriptions of $0.5 billion, including $0.2 billion from a real estate
investment. In addition, also contributing to this increase was income of $0.7 billion attributable to improved unrealized gains in our real estate funds,
including $0.4 billion from CPI Capital Partners North America L.P., CPI Capital Partners Europe L.P., CPI Capital Partners Asia Pacific, L.P.
(collectively, the "CPI Funds"). Partially offsetting this increase was $1.1 billion in distributions, including $0.8 billion from the CPI Funds.
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During the year ended December 31, 2011, total AUM in our real estate segment increased by $1.5 billion, or 23.2%. This increase was primarily
attributable to $1.2 billion from other net segments. Also impacting this change was an increase in leverage of $0.2 billion, primarily from AGRE
CMBS Fund, L.P. and 2011 A- 4 Fund, L.P. In addition, there was $0.2 billion of income that was primarily attributable to improved unrealized gains
in our real estate funds. These increases were offset by $0.5 billion of distributions.
Private Equity Dollars Invested and Uncalled Private Equity Commitments
Private equity dollars invested represents the aggregate amount of capital invested by our private equity funds during a reporting period. Uncalled
private equity commitments, by contrast, represent unfunded commitments by investors in our private equity funds to contribute capital to fund future
investments or expenses incurred by the funds, fees and applicable expenses as of the reporting date. Private equity dollars invested and uncalled
private equity commitments are indicative of the pace and magnitude of fund capital that is deployed or will be deployed, and which therefore could
result in future revenues that include transaction fees and incentive income. Private equity dollars invested and uncalled private equity commitments
can also give rise to future costs that are related to the hiring of additional resources to manage and account for the additional capital that is deployed
or will be deployed. Management uses private equity dollars invested and uncalled private equity commitments as key operating metrics since we
believe the results measure our investment activities.
The following table summarizes the private equity dollars invested during the specified reporting periods:
For the Year Ended
December 31,
2012
(in millions)
2013
2011
Private equity dollars

invested
$
2,561
$
3,191
The following table summarizes the uncalled private equity commitments as of December 31, 2013, 2012 and 2011:
2013
Uncalled private equity commitments $
23,689
As of
December 31,
2012
(in millions)
$
3,350
2011
7,464
8,204
The Historical Investment Performance of Our Funds

Below we present information relating to the historical performance of our funds, including certain legacy Apollo funds that do not have a
meaningful amount of unrealized investments, and in respect of which the general partner interest has not been contributed to us.
When considering the data presented below, you should note that the historical results of our funds are not indicative of the future results
that you should expect from such funds, from any future funds we may raise or from your investment in our Class A shares.
An investment in our Class A shares is not an investment in any of the Apollo funds, and the assets and revenues of our funds are not directly
available to us. The historical and potential future returns of the funds we manage are not directly linked to returns on our Class A shares. Therefore,
you should not conclude that continued positive performance of the funds we manage will necessarily result in positive returns on an investment in
our Class A shares. However, poor performance of the funds that we manage would cause a decline in our revenue from such funds, and would
therefore have a negative effect on our performance and in all likelihood the value in our Class A shares. There can be no assurance that any Apollo
fund will continue to achieve the same results in the future.
Moreover, the historical returns of our funds should not be considered indicative of the future results you should expect from such funds or from any
future funds we may raise, in part because:
market conditions during previous periods were significantly more favorable for generating positive performance, particularly in our private
equity business, than the market conditions we have experienced for the last few years and may experience in the future;
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our funds returns have benefited from investment opportunities and general market conditions that may not exist and may not repeat
themselves, and there can be no assurance that our current or future funds will be able to avail themselves of profitable investment
opportunities;
our private equity funds rates of return, which are calculated on the basis of net asset value of the funds investments, reflect unrealized
gains, which may never be realized;
our funds returns have benefited from investment opportunities and general market conditions that may not repeat themselves, including the
availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same
returns or profitable investment opportunities or deploy capital as quickly;
the historical returns that we present are derived largely from the performance of our earlier private equity funds, whereas future fund returns
will depend increasingly on the performance of our newer funds, which may have little or no realized investment track record;
Fund VIII, Fund VII and Fund VI are several times larger than our previous private equity funds, and this additional capital may not be
deployed as profitably as our prior funds;
the attractive returns of certain of our funds have been driven by the rapid return of invested capital, which has not occurred with respect to all of our
funds and we believe is less likely to occur in the future;
our track record with respect to our credit and real estate funds is relatively short as compared to our private equity funds;
in recent years, there has been increased competition for private equity investment opportunities resulting from the increased amount of
capital invested in private equity funds and periods of high liquidity in debt markets, which may result in lower returns for the funds; and
our newly established funds may generate lower returns during the period that they take to deploy their capital; consequently, we do not
provide return information for any funds which have not been actively investing capital for at least 24 months prior to the valuation date as
we believe this information is not meaningful.
Finally, our private equity IRRs have historically varied greatly from fund to fund. For example, Fund IV has generated a 12% gross IRR and a 9%
net IRR since its inception through December 31, 2013, while Fund V has generated a 61% gross IRR and a 44% net IRR since its inception through
December 31, 2013. Accordingly, the IRR going forward for any current or future fund may vary considerably from the historical IRR generated by
any particular fund, or for our private equity funds as a whole. Future returns will also be affected by the applicable risks, including risks of the
industries and businesses in which a particular fund invests. See Item 1A. Risk FactorsRisks Related to Our BusinessesThe historical returns
attributable to our funds should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on
an investment in our Class A shares.
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Investment Record
Private Equity
The following table summarizes the investment record of our private equity funds. All amounts are as of December 31, 2013, unless otherwise noted:
As of
December 31, 2013
Vintage
Year
Committed
Capital Less
Unfunded Capital
Commitments(1)
Total
Invested
Capital
Committed
Capital
Realized
Total
Value
Unrealized(2)
Gross
IRR
Net
IRR
As of
December 31, 2012
Gross
IRR
Net
IRR
As of December 31,
2011
Gross
IRR
Net
IRR
(in millions)
Fund
VIII(3)
AION(3)
2013
18,377
376
100
55
183
67
100
57
100
57
(4)
(4)
NM
(4)
(4)
NM
NM
NM
ANRP
2012
1,323
370
415
19
437
456
2008
14,676
14,979
11,250
19,569
10,843
30,412
39
30
35%
Fund VI
2006
10,136
12,457
9,710
12,541
9,551
22,092
15
12
Fund V
2001
3,742
5,192
3,742
12,385
463
12,848
61
44
Fund IV
1998
Totals
AAA(7)
N/A
N/A
N/A
N/A
NM (4) NM (4)
26%
31%
11
6%
22%
5%
61
44
61%
44%
3,600
3,481
3,600
6,776
38
6,814
12
12
12%
9%
1,500
1,499
1,500
2,695
2,695
18
11
18
11
18%
12%
47
37
47
37
2,220
$
7%
N/A
NM (4) NM (4)
NM (4) NM (4)
Fund VII
Fund III 1995

Fund I,
II &
MIA(5) 1990/92
18%
N/A
55,950
3,773
$
41,906
2,220
$
32,687
7,924
$
61,909
Vintage
Current Net Asset Value as of
Year
December 31, 2013
2006 $
1,941.2
21,489
7,924
$
For the Year Ended

December 31, 2013
21%
83,398
39% (6) 26% (6)
Total Return
For the Year Ended
December 31, 2012
20%
39% (6) 25% (6)
47%
37%
39% (6)
25% (6)
For the Year Ended

December 31, 2011
(8)%
(1) Committed Capital Less Unfunded Capital Commitments represents capital commitments from limited partners to invest in a particular fund
less capital that is available for investment or reinvestment subject to the provisions of the applicable limited partnership agreements.
(2) Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.
(3) Fund VIII and AION were launched during 2013 and 2012, respectively. Fund VIII had its final capital raise in 2013, establishing its vintage year.
(4) Returns have not been presented as the fund commenced investing capital less than 24 months prior to the period indicated and therefore such
return information was deemed not meaningful.
(5)
Fund I and Fund II were structured such that investments were made from either fund depending on which fund had available capital.
"MIA" represents a "mirrored" investment account established to mirror Funds I and II for investment in debt securities. We do not
differentiate between Fund I and Fund II investments for purposes of performance figures because they are not meaningful on a separate
basis and do not demonstrate the progression of returns over time. The general partners and managers of Funds I, II and MIA, as well as
the general partner of Fund III were excluded assets in connection with the 2007 Reorganization of Apollo Global Management, LLC. As
a result, Apollo Global Management, LLC did not receive the economics associated with these entities. The investment performance of
these funds is presented to illustrate fund performance associated with our managing partners and other investment professionals.
(6) Total IRR is calculated based on total cash flows for all funds presented.
(7) AAA completed its initial public offering in June 2006 and is the sole limited partner in AAA Investments, L.P. (AAA Investments). AAA was
originally designed to give investors in its common units exposure as a limited partner to certain of the strategies that we employ and allowed us to
manage the asset allocations to those strategies by investing alongside our private equity funds and directly in our credit funds and certain other
opportunistic investments that we sponsor and manage. On October 31, 2012, AAA Investments consummated a transaction whereby substantially
all of its assets were contributed to Athene in exchange for common shares of Athene Holding Ltd., cash and a short term promissory note (the
AAA Transaction). Following receipt of required regulatory consents, AAA Investments transferred its remaining investments to Athene
Holding Ltd. on July 29, 2013. After the AAA Transaction, Athene Holding Ltd. was AAAs only material investment and as of December 31,
2013, AAA, through its investment in AAA Investments, was the largest shareholder of Athene Holding Ltd. with an economic ownership stake of
approximately 72.5% (without giving effect to restricted common shares issued under Athenes management equity plan and conversion of AAA
Investments' note receivable), and as of December 31, 2013, effectively held 45% of the voting power of Athene. Additional
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information related to AAA can be found on its website www.apolloalternativeassets.com. The information contained in AAAs website is not part of
this Annual Report on Form 10- K.
The following table summarizes the investment record for distressed investments made in our private equity fund portfolios excluding ANRP and
AION, since the Companys inception. All amounts are as of December 31, 2013:
Total Invested
Capital
Distressed for Control $
Non- Control Distressed
Total
Buyout Equity, Portfolio
Company Debt and Other
Credit(2)
Total
$
Gross IRR(1)
Total Value
(in millions)
5,608 $
6,078
11,686
16,593
9,023
25,616
29%
71
49
29,795
41,481
57,269
82,885
23
39%
(1) IRR information is presented gross and does not give effect to management fees, incentive compensation, certain other expenses and taxes.
(2) Other Credit is defined as investments in debt securities of issuers other than portfolio companies that are not considered to be distressed.
The following tables provide additional detail on the composition of our Fund VIII, Fund VII, Fund VI and Fund V private equity portfolios based on
investment strategy. All amounts are as of December 31, 2013:
Fund VIII
Total Invested
Capital
Total Value
(in millions)
Buyout Equity and Portfolio
Company Debt
$
100
$
100
Total
$
100
$
100
Fund VII
Total Invested
Capital
Total Value
(in millions)
Company Debt
$
10,302
$
22,785
Other Credit and Classic
Distressed(1)
4,677
7,627
Total
$
14,979
$
30,412
Fund VI
Total Invested
Capital
Total Value
(in millions)
Company Debt
$
10,312
$
18,402
Other Credit and Classic
Distressed(1)
2,145
3,690
Total
$
12,457
$
22,092
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Fund V
Total Invested
Capital
Buyout Equity
Classic Distressed(1)
Total
Total Value
(in millions)
4,412
$
780
5,192
$
$
$
11,874
974
12,848
(1) Classic Distressed is defined as investments in debt securities of issuers other than portfolio companies that are considered to be distressed.
During the recovery and expansionary periods of 1994 through 2000 and late 2003 through the first half of 2007, our private equity funds invested or
committed to invest approximately $13.7 billion primarily in traditional and corporate partner buyouts. During the recessionary periods of 1990
through 1993, 2001 through late 2003 and the current recessionary and post recessionary periods (second half of 2007 through December 31, 2013),
our private equity funds have invested $29.6 billion, of which $16.6 billion was in distressed buyouts and debt investments when the debt securities
of quality companies traded at deep discounts to par value. Our average entry multiple for Fund VII, VI and V was 6.1x, 7.7x and 6.6x, respectively
as of December 31, 2013. The average entry multiple for a private equity fund is the average of the total enterprise value over an applicable EBITDA
which we believe captures the true economics for our funds' purchases of portfolio companies.
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Credit
The following table summarizes the investment record for certain funds and SIAs with a defined maturity date and internal rate of return since
inception, which is computed for the purposes of this table based on the actual dates of capital contributions, distributions and ending limited
partners capital as of the specified date. Apollo also manages CLOs within our credit segment, with such CLOs representing a total AUM of
approximately $9.4 billion as of December 31, 2013. Such CLO performance information is not included in the following credit investment record
tables. All amounts are as of December 31, 2013, unless otherwise noted:
Strategy
Vintage
Year
Committed
Capital
Invested
Capital
Realized
Total
Value
Unrealized(1)
As of
December 31, 2013
Gross
Net
IRR
IRR
As of
December 31, 2012
Gross
Net
IRR
IRR
As of December 31,
2011
Gross
Net
IRR
IRR
(in millions)
ACRF II(2)
EPF
II(3)(5)
Structured Credit
Non- Performing
Loans
2012 $
(4)
NM (4) NM (4)
NM (4) NM (4)
(4)
NM
NM (4) NM (4)
(4)
(4)
NM
(4)
(4)
NM
NM
NM (4) NM (4)
558.8
443.2
170.5
457.6
628.1
292.5
461.9
316.0
204.3
520.3
18.8%
11.9%
NM (4) NM (4)
AESI(3)(5)
European Credit
2011
488.6
808.2
553.0
365.6
918.6
23.2
17.7
NM (4) NM (4)
NM (4) NM (4)
AIE II(5)
COF I
European Credit
U.S. Performing
Credit
2008
283.8
895.9
1,299.6
126.2
1,425.8
20.3
16.8
19.4%
15.6%
18.2%
14.2%
2008
1,484.9
1,611.3
3,842.4
544.2
4,386.6
30.4
27.4
30.7
27.6
25.0
22.4

Non- Performing
Loans
U.S. Performing
Credit
U.S. Performing
Credit
2008
1,583.0
2,176.4
2,783.4
346.4
3,129.8
13.8
11.2
14.3
11.7
10.3
8.5
2007
1,779.7
2,338.7
2,108.8
2,017.4
4,126.2
21.2
16.4
18.6
11.6
16.6
8.8
2007
984.0
1,448.5
2,420.3
122.4
2,542.7
13.0
11.3
13.0
11.2
10.1
9.2
2007
106.6
190.1
225.9
225.9
6.9
6.7
7.0
6.8
3.6
3.4
11,598.3
13,868.1
5,448.6
NM
(4)
2012
NM
(4)
2012
11,328.7
1,197.4
NM (4) NM (4)
European Credit
1,153.1
215.3
Structured Credit
Totals
44.3
111.4
FCI(3)
Artus(6)
1,021.8
103.9
AEC(3)
EPF I(5)
ACLF
3,662.4
202.3
NM
NM (4) NM (4)
COF II
2012
104.4
NM
19,316.7
(1) Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.
(2)
As part of the acquisition of Stone Tower, Apollo acquired the manager of Apollo Structured Credit Recovery Master Fund II, Ltd. (ACRF
II). Apollo became the manager of this fund upon completing the acquisition on April 2, 2012.
(3) Apollo European Strategic Investment, L.P. (AESI) was launched during 2011 and established its vintage year in the fourth quarter of 2011.
Apollo European Principal Finance Fund II, L.P. (EPF II), Apollo European Credit Master Fund, L.P., ("AEC"), and Financial Credit
Investment I, L.P. (FCI) deployed capital prior to their vintage year and had their final capital raises in 2012, establishing their vintage year.
(5) Funds are denominated in Euros and translated into U.S. dollars at an exchange rate of 1.00 to $1.37 as of December 31, 2013.
(6) Apollo/Artus Investors 2007- I, L.P. ("Artus") was liquidated during the fourth quarter 2013. Amounts presented represent the historical
performance and returns for the fund.
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The following table summarizes the investment record for certain funds and SIAs with no maturity date. All amounts are as of December 31, 2013,
unless otherwise noted:
Vintage
Year
Strategy
ACSP(1)
ACSF(3)
STCS(3)
SOMA(4)
ACF(3)
Value
Funds(5)
Totals
Opportunistic
Credit
Opportunistic
Credit
Opportunistic
Credit
Opportunistic
Credit
U.S. Performing
Credit
Opportunistic
Credit
Net Asset Value as of

December 31, 2013
(in millions)
Net Return
For the Year
For the Year
Ended December
Ended December
31, 2013
31, 2012
Since Inception
to December 31,
2013
(2)
2012
272.7
NM
2011
284.8
NM
2010
19.3
NM
2007
673.8
(2)
(3)
NM
(3)
NM
(3)
(3)
NM
58.4%
(2)
NM
(3)
NM
9.3%
(3)
2003/2006
NM
NM
(3)
2005
(2)
NM
(3)
For the Year

Ended December
31, 2011
15.1%
(3)
(3)
NM
(10.5)%
(3)
(3)
2,189.8
NM
NM
NM
NM
288.8
3,729.2
74.1
4.7
10.8
(9.6)
(1)
Apollo Centre Street Partnership, L.P. (ACSP) is a strategic investment account with $615.0 million of committed capital. Net asset value
is presented for the primary mandate and excludes investments in other Apollo funds.
(3) As part of the Stone Tower acquisition, Apollo acquired the manager of Apollo Credit Strategies Master Fund Ltd. (ACSF), Stone Tower Credit
Solutions Master Fund Ltd. (STCS), and Apollo Credit Master Fund Ltd. (ACF). As of December 31, 2013, the net returns from inception for
ACSF, ACF and STCS were 37.8%, 3.2%, and 36.2%, respectively. These returns were primarily achieved during a period in which Apollo did
not make the initial investment decisions. Apollo became the manager of these funds upon completing the acquisition on April 2, 2012.
(4)
Net asset value and returns are for the primary mandate and excludes investments made by Apollo Special Opportunities Managed
Account, L.P. ("SOMA") in other Apollo funds.
(5) Value Funds consist of Apollo Strategic Value Master Fund, L.P., together with its feeder funds, and Apollo Value Investment Master Fund, L.P.,
together with its feeder funds.
The following table summarizes the investment record for our publicly traded vehicles in our credit segment as of December 31, 2013:
Strategy
IPO Year(1) Raised Capital(2) Gross Assets Current Net Asset Value
Since
Inception to
December
31, 2013
Net Return
For the Year
For the Year
Ended
Ended
December
December
31, 2012
31, 2013
For the Year

Ended
December 31,
2011
(in millions)
AIF(3)
2013
AFT(3)
2011
275.7
294.6
420.2 $
282.2
451.1
NM (4)
297.7
AMTG(5)
Structured Credit
2011
790.8
3,911.6
757.6
AINV(6)
2004
2,977.7
3,379.7
1,925.3
4,338.8
8,162.6 $
21.7%
NM (4)
9.2%
N/A (5)
N/A (5)
70.2
15.7
NM (4)
NM(4)
N/A (5)
9.9%
NM
(4)
NM(4)
N/A
(5)
(5.1)%
3,262.8
(1) An initial public offering ("IPO") year represents the year in which the vehicle commenced trading on a national securities exchange. AIF, AFT
and AMTG are publicly traded vehicles traded on the New York Stock Exchange ("NYSE"). AINV is a public investment company traded on the
National Association of Securities Dealers Automated Quotation ("NASDAQ").
(2) Amounts represent gross raised capital net of offering and issuance costs.
(3)
AFT and AIF completed their initial public offerings during the first quarter of 2011 and 2013, respectively. Gross Assets represents
total managed assets of these closed- end funds. Refer to www.agmfunds.com for the most recent financial information on AFT and
AIF. The information contained in AFTs and AIFs website is not part of this Annual Report on Form 10- K.
(5)
Refer to www.apolloresidentialmortgage.com for the most recent financial information on AMTG. The information contained
in AMTGs website is not part of this Annual Report on Form 10- K.
(6) Net return for AINV represents net asset value return including reinvested dividends. Refer to www.apolloic.com for the most recent public
financial information on AINV. The information contained in AINVs website is not part of this Annual Report on Form 10- K.
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Real Estate
The following table summarizes the investment record for certain funds and SIAs with a defined maturity date and internal rate of return since
inception, which for the purposes of this table is computed based on the actual dates of capital contributions, distributions and ending limited
partners capital as of the specified date. All amounts are as of December 31, 2013, unless otherwise noted:
As of
December 31, 2013
Vintage
Year
Current
Net Asset
Value
Committed
Capital
Total
Invested
Capital
Realized
Total
Value
Unrealized(1)
Gross
IRR
As of
December 31, 2012
Net
IRR
Gross
IRR
Net
IRR
As of
December 31,
2011
Gross
IRR
Net
IRR
(in millions)
AGRE
U.S. Real
Estate
Fund,
L.P(3)
2012 $
AGRE
Debt Fund
I, LP
2011
2011 A4
Fund, L.P. 2011
AGRE
CMBS
Fund, L.P. 2009
CPI
Capital
Partners
North
America
2006
CPI
Capital
Partners
Asia
Pacific
2006
CPI
Capital
Partners
Europe(5) 2006
CPI
Other(6) Various
Totals
$
866.6
547.3
435.9
4.1
544.1
548.2
17.3%
13.7%
NM (2) NM (2)
NM(2) NM (2)
816.4
736.1
812.2
173.5
731.1
904.6
13.1
11.1
NM (2) NM (2)
NM(2) NM (2)
234.7
210.7
205.9
83.6
203.8
287.4
13.5
11.7
NM (2) NM (2)
NM(2) NM (2)
418.8
67.1
301.0
447.0
63.1
510.1
13.5
11.3
14.1%
NM(2) NM (2)
600.0
65.2
452.7
318.5
60.5
379.0
17.1 (4) 13.0 (4)
NM (4) NM (4)
NM(4) NM (4)
1,291.6
253.5
1,163.6
1,454.8
231.2
1,686.0
36.7 (4) 32.6 (4)
NM (4) NM (4)
NM(4) NM (4)
1,596.9
583.7
2,403.8
868.8
8,228.8
3,332.4
1,053.9
N/A
$
182.4
(6)
4,425.2
N/A
$
549.0
(6)
2,663.9
N/A
$
731.4
(6)
2,382.8
N/A
$
2.4 (4)
(6)
11.8%
0.6 (4)
NM (4) NM (4)
NM(4) NM (4)
NM (6) NM (6)
NM (6) NM (6)
NM(6) NM (6)
5,046.7
(1) Figures include estimated fair value of unrealized investments.

(3) AGRE U.S. Real Estate Fund, L.P., a closed- end private investment fund that intends to make real estate- related investments principally located
in the United States, held closings in January 2011, June 2011 and April 2012 for a total of $263.2 million in base capital commitments and $450
million in additional capital commitments. Additionally, there was $153.4 million of co- invest commitments raised, which is included in the
figures in the table above. A co- invest entity within AGRE U.S. Real Estate Fund is denominated in GBP and translated into U.S. dollars at an
exchange rate of 1.00 to $1.66 as of December 31, 2013.
(4) As part of the CPI acquisition, Apollo acquired general partner interests in fully invested funds. The gross and net IRRs are presented in the
investment record table above since acquisition on November 12, 2010. The net IRRs from the inception of the respective fund to December 31,
2013 were (6.8)%, 7.9% and (9.7)% for the CPI Capital Partners North America, Asia Pacific and Europe funds, respectively. These net IRRs
were primarily achieved during a period in which Apollo did not make the initial investment decisions and Apollo only became the general partner
or manager of these funds upon completing the acquisition on November 12, 2010.
(5) CPI Capital Partners Europe is denominated in Euros and translated into U.S. dollars at an exchange rate of 1.00 to $1.37 as of December 31,
2013.
(6)
CPI Other consists of funds or individual investments of which we are not the general partner or manager and only receive fees pursuant to
either a sub- advisory agreement or an investment management and administrative agreement. CPI Other fund performance is a result of
invested capital prior to Apollos management of these funds. Return and certain other performance data are therefore not considered
meaningful as we perform primarily an administrative role.
The following table summarizes the investment record for ARI as of December 31, 2013:
IPO Year
ARI(1)
2009
Raised Capital
Gross Assets
(in millions)
715.9 $
907.5
Current Net Asset Value

$
683.0
(1) ARI is a public company traded on the NYSE. Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained in ARIs
website is not part of this Annual Report on Form 10- K.
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Athene and SIAs

As of December 31, 2013, Athene Asset Management managed $59.5 billion of total AUM in accounts owned by or related to Athene, of which
approximately $9.2 billion, was either sub- advised by Apollo or invested in Apollo funds and investment vehicles. Of the approximately $9.2 billion
of assets, the vast majority were in sub- advisory managed accounts that manage high grade credit asset classes, such as CLO debt, commercial
mortgage backed securities, and insurance- linked securities.
In addition to certain funds and SIAs included in the investment record tables and capital deployed from certain SIAs across our private equity, credit
and real estate funds, we also managed an additional approximate $7.2 billion of total AUM in SIAs as of December 31, 2013. The above investment
record tables exclude certain funds and SIAs with an aggregate AUM of approximately $5.7 billion as of December 31, 2013, which were excluded
because management deemed them to be immaterial.
Performance information for our funds is included throughout this discussion and analysis to facilitate an understanding of our results of operations
for the periods presented. An investment in our Class A shares is not an investment in any of our funds. The performance information reflected in this
discussion and analysis is not indicative of the possible performance of our Class A shares and is also not necessarily indicative of the future results
of any particular fund. There can be no assurance that our funds will continue to achieve, or that our future funds will achieve, comparable results.
The following table provides a summary of the cost and fair value of our funds investments by segment:
As of
December 31,
2012(1)
(in millions)
2013(1)
Private Equity:
Cost
Fair Value
Credit:
Cost
Fair Value
Real Estate:
Cost
Fair Value
2011
14,213
23,432
16,927
25,867
15,642
16,656
15,097
16,287
(2)
4,246
4,160
3,848
3,680
(2)
15,956
20,700
10,917
11,696
4,791
4,344
(2)
(2)
(1) Cost and fair value amounts are presented for investments of the funds that are listed in the investment record tables.
(2)
AMTG and ARI cost and fair value amounts are as of September 30,
2012.
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Overview of Results of Operations
Revenues
Advisory and Transaction Fees from Affiliates, Net. As a result of providing advisory services with respect to actual and potential private equity,
credit, and real estate investments, we are entitled to receive fees for transactions related to the acquisition and, in certain instances, disposition of
portfolio companies as well as fees for ongoing monitoring of portfolio company operations and directors fees. We also receive an advisory fee for
advisory services provided to certain credit funds. In addition, monitoring fees are generated on certain structured portfolio company investments.
Under the terms of the limited partnership agreements for certain funds, the management fee payable by the funds may be subject to a reduction
based on a certain percentage of such advisory and transaction fees, net of applicable broken deal costs (Management Fee Offset). Such amounts
are presented as a reduction to advisory and transaction fees from affiliates, net, in the consolidated statements of operations. See note 2 to our
consolidated financial statements for more detail.
The Management Fee Offsets are calculated for each fund as follows:
65%- 100% for private equity funds, gross advisory, transaction and other special
fees;
65%- 100% for certain credit funds, gross advisory, transaction and other special fees;
and
100% for certain real estate funds, gross advisory, transaction and other special
fees.
Additionally, during the normal course of business, the Company incurs certain costs related to certain transactions that are not consummated
(broken deal costs"). These costs (e.g. research costs, due diligence costs, professional fees, legal fees and other related items) are determined to be
broken deal costs upon management's decision to no longer pursue the transaction. In accordance with the related fund agreement, in the event the
deal is deemed broken, all of the costs are reimbursed by the funds and then included as a component of the calculation of the Management Fee
Offset. If a deal is successfully completed, Apollo is reimbursed by the fund or funds portfolio company of all costs incurred and no offset is
generated.
As the Company acts as an agent for the funds it manages, any transaction costs incurred and paid by the Company on behalf of the respective funds
relating to successful or broken deals are presented net on the Companys consolidated statements of operations, and any receivable from the
respective funds is presented in Due from Affiliates on the consolidated statement of financial condition.
Management Fees from Affiliates. The significant growth of the assets we manage has had a positive effect on our revenues. Management fees are
typically calculated based upon any of net asset value, gross assets, adjusted par asset value, adjusted costs of all unrealized portfolio
investments, capital commitments, invested capital, adjusted assets, capital contributions, or stockholders equity, each as defined in the
applicable limited partnership agreement and/or management agreement of the unconsolidated funds.
Carried Interest Income from Affiliates. The general partners of our funds, in general, are entitled to an incentive return that can amount to as
much as 20% of the total returns on fund capital, depending upon performance of the underlying funds and subject to preferred returns and high water
marks, as applicable. The carried interest income from affiliates is recognized in accordance with U.S. GAAP guidance applicable to accounting for
arrangement fees based on a formula. In applying the U.S. GAAP guidance, the carried interest from affiliates for any period is based upon an
assumed liquidation of the funds assets at the reporting date, and distribution of the net proceeds in accordance with the funds allocation provisions.
As of December 31, 2013, approximately 70% of the value of our fund investments on a gross basis was determined using market- based valuation
methods (i.e., reliance on broker or listed exchange quotes) and the remaining 30% was determined primarily by comparable company and industry
multiples or discounted cash flow models. For our private equity, credit and real estate segments, the percentage determined using market- based
valuation methods as of December 31, 2013 was 56%, 84% and 48%, respectively. See Item 1A. Risk FactorsRisks Related to Our
BusinessesOur private equity funds performance, and our performance, may be adversely affected by the financial performance of our portfolio
companies and the industries in which our funds invest for a discussion regarding certain industry- specific risks that could affect the fair value of
our private equity funds portfolio company investments.
Carried interest income fee rates can be as much as 20% for our private equity funds. In our private equity funds, the Company does not earn carried
interest income until the investors in the fund have achieved cumulative investment returns on invested capital (including management fees and
expenses) in excess of an 8% hurdle rate. Additionally, certain of our credit and real estate funds have various carried interest rates and hurdle rates.
Certain credit funds allocate carried interest to the general partner in a similar manner as the private equity funds. In our private equity, certain credit
and certain real estate funds, so long
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as the investors achieve their priority returns, there is a catch- up formula whereby the Company earns a priority return for a portion of the return until
the Companys carried interest income equates to its incentive fee rate for that fund; thereafter, the Company participates in returns from the fund at
the carried interest income rate. Carried interest income is subject to reversal to the extent that the carried interest income distributed exceeds the
amount due to the general partner based on a funds cumulative investment returns. The accrual for potential repayment of previously received
carried interest income represents all amounts previously distributed to the general partner that would need to be repaid to the Apollo funds if these
funds were to be liquidated based on the current fair value of the underlying funds investments as of the reporting date. This actual general partner
obligation, however, would not become payable or realized until the end of a funds life.
The table below presents an analysis of our (i) carried interest receivable on an unconsolidated basis as of December 31, 2013 and 2012 and
(ii) realized and unrealized carried interest income (loss) for our combined segments' incentive business as of and for the years ended December 31,
2013, 2012 and 2011:
As of
December 31,
2013
2012
Carried Interest
Receivable on an
Unconsolidated Basis
Carried Interest
Receivable on an
Unconsolidated Basis
For the Year Ended December 31, 2013

Unrealized
Total
Carried
Realized
Carried
Interest
Carried
Interest
(Loss)
Interest
Income
Income
Income
(Loss)

Unrealized
Total
Carried
Realized
Carried
Interest
Carried
Interest
Income
Interest
Income
(Loss)
Income
(Loss)

Total
Unrealized
Realized
Carried
Carried
Carried
Interest
Interest
Interest
Income
(Loss) Income
Income
(Loss)
(in millions)
Private
Equity
Funds:
Fund VII
Fund VI
Fund V
Fund IV
AAA/Other(2)
Total Private
Equity
Funds
Credit
Funds:
U.S.
Performing
Credit
Opportunistic
Credit
Structured
Credit
European
Credit
NonPerforming
Loans
Total Credit
Funds
Real Estate
Funds:
CPI Funds
AGRE U.S.
Real Estate
Fund
Other
Total Real
Estate Funds
Total
890.8
904.3
(13.6)
1,163.6
1,150.0
697.6
270.3
427.3
760.3
43.0
134.3
(91.2)
99.1
7.9
7.7
10.9
(3.2)
1.7
(1.5)
228.7 (3)
93.6
135.4 (5)
435.5
907.6 $
(135.9)
294.0
639.6
(723.6) (5)
9.3
33.4
42.7
(7.0)
2.9
(4.1)
10.2
81.7
345.6 (5)
71.5 (5)
472.1
24.9
(26.7)
204.7
86.6
9.5
37.9
173.3
9.5 (5)
2,062.6
2,517.3
854.9
812.6
1,667.5
(1,019.7)
570.5
(449.2)
284.6
120.5
206.3
154.3
360.6
(79.6)
62.0
(17.6)
41.5
49.2
(21.8) (5)
43.4
21.6
59.8
36.7
20.4 (5)
36.7
57.1
54.3
21.2
32.7
11.2
43.9
18.5
13.4
31.9
35.6
18.4
2.1
27.8
29.9
18.0
8.5
26.5
154.2
102.1
52.3
33.0
85.3
50.6
50.6
53.2
483.8
580.1
(56.6)
393.3
336.7
301.1
217.7
518.8
(66.9)
5.3
10.8
(5.2)
0.5
(4.7)
10.4
4.7
15.1
5.6
5.6
5.6
4.3
4.3
4.3
15.2
10.8
4.7
0.5
5.2
10.4
4.7
124.3
(51.6)
401.7
402.8
(118.1)
179.9
2,004.3 (4) $
260.2
(642.9)
1,413.4
(164.1)
80.7
1,867.8
2,366.8 (4) $
454.7
1,187.6 (1)
2,456.4
2,859.2
7.7 (5)
1,166.4
1,035.0
(18.7)
13.2
(5.5)
53.2
118.6
51.7
15.1
2,201.4 $
(1,086.6)
689.1
(1) Includes $452.3 million for Fund VI related to the catch- up formula whereby the Company earns a disproportionate return (typically 80%) for a
portion of the return until the Companys carried interest income equates to its 20% of cumulative profits of the funds.
(2) Includes certain SIAs.
(3)
Includes $100.9 million and $69.0 million of carried interest receivable from AAA Investments' investment in Athene Holding Ltd., as of
December 31, 2013 and 2012, respectively, which may be settled in shares of Athene Holding Ltd. (valued at the then fair market value) if
there is a distribution in kind of shares of Athene Holding Ltd. or paid in cash if AAA sells the shares of Athene Holding Ltd. During years
ended December 31, 2013 and 2012 the Company earned $31.9 million 54.8 million, respectively, from AAA Investments' investment in
Athene Holding Ltd.
(4) There was a corresponding profit sharing payable of $992.2 million and $857.7 million as of December 31, 2013 and 2012, respectively, that
resulted in a net carried interest receivable on an unconsolidated basis amount of $1,374.6 million and $1,146.6 million as of December 31, 2013
and 2012, respectively. Included within profit sharing payable are contingent consideration obligations of $135.5 million and $141.0 million as of
December 31, 2013 and 2012, respectively.
(5)
Included in unrealized carried interest (loss) income from affiliates for the year ended December 31, 2013 was a reversal of $19.3 million
and $0.3 million of the entire general partner obligation to return previously distributed carried interest income to SOMA and APC,
respectively. Included in unrealized carried interest income (loss) from affiliates for the year ended December 31, 2012 was a reversal of
$75.3 million of the entire general partner obligation to return previously distributed carried interest income with respect to Fund VI and
reversal of previously realized carried interest income due to the general partner obligation to return previously distributed carried interest
income of $1.2 million and $0.3 million for SOMA and APC, respectively. Included in unrealized carried interest (loss) income from
affiliates for the year ended December 31, 2011 was a reversal of previously realized carried interest income due to the general partner
obligation to return previously distributed carried interest income of $75.3 million and $18.1 million for Fund VI and SOMA, respectively.
(397.5)
The general partners of the private equity, credit and real estate funds listed in the table above were accruing carried interest income as of December
31, 2013. As of December 31, 2013, AAA Investments (Co- Invest VI), L.P. ("AAA Co- Invest VI"), Fund VII and Fund VI were each above their
hurdle rate of 8% and generating carried interest income. AAA Co- Invest VI is one of the investment partnerships (the Contributed Partnerships)
that contributed to Athene in connection with the AAA Transaction. The Contributed Partnerships pay a quarterly management fee and carried
interest to Apollo with respect to the assets contributed in the AAA Transaction as further described under Liquidity and Capital
ResourcesAthene.
The investment manager of AINV accrues carried interest in the management company business as it is earned. Additionally, certain of our credit
funds, including AIE II, AESI, COF I, COF II, and EPF I were each above their hurdle rates or preferred return of 7.5%, 8.0%, 8.0%, 7.5%, and 8.0%
respectively, and generating carried interest income. As of December 31, 2013, the CPI Funds and AGRE U.S. Real Estate Fund, L.P. were above
their hurdle rate ranges of 8- 13% and 10%, respectively.
The investment manager of AINV accrues carried interest in the management company business as it is earned. The general partners of certain of our
credit funds accrue carried interest when the fair value of investments exceeds the cost basis of the individual investors investments in the fund,
including any allocable share of expenses incurred in connection with such investments. These high water marks are applied on an individual investor
basis. Certain of our credit funds have investors with various high water marks and are subject to market conditions and investment performance. As
of December 31, 2013, approximately 90% of the limited partners capital in the Value Funds was generating carried interest income.
Carried interest income from our private equity funds and certain credit and real estate funds is subject to contingent repayment by the general partner
in the event of future losses to the extent that the cumulative carried interest distributed from inception to date exceeds the amount computed as due
to the general partner at the final distribution. These general partner obligations, if applicable, are disclosed by fund in the table below and are
included in due to affiliates on the consolidated statements of financial condition. As of December 31, 2013, there were no such general partner
obligations related to our funds. Carried interest receivables are reported on a separate line item within the consolidated statements of financial
condition.
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The following table summarizes our carried interest income since inception for our combined segments through December 31, 2013:
Carried Interest Income Since Inception
Total
Undistributed
and
Distributed by
Distributed by
Fund and
Fund and
Recognized(2)
Recognized (1)
(in millions)
Undistributed
by Fund and
Recognized
Private Equity
Funds:
Fund VII
$
Fund VI
Fund V
Fund IV
AAA/Other
Total Private
Equity Funds
Credit Funds:
U.S. Performing
Credit
Opportunistic
Credit(4)
Structured
Credit
European Credit
NonPerforming
Loans
Total Credit
Funds
Real Estate
Funds:
CPI Funds
AGRE U.S.
Real Estate
Fund
Other
Total Real
Estate Funds
Total
$
890.8
697.6
43.0
7.7
228.7
1,959.7
1,178.7
1,410.2
597.2
67.4
2,850.5
1,876.3
1,453.2
604.9
296.1
Maximum Carried
Interest Income
Subject to
Potential Reversal(3)
General Partner
Obligation as of
December 31,
2013(2)
2,197.2
1,495.8
81.2
7.6
228.9
1,867.8
5,213.2
7,081.0
4,010.7
179.9
618.3
798.2
445.5
50.9
158.1
209.0
60.9
54.3
35.6
44.4
52.5
98.7
88.1
63.4
73.8
154.2
34.9
189.1
189.1
474.9
908.2
1,383.1
832.7
4.8
5.2
10.0
4.8
5.6
4.8
5.6
4.8
5.6
4.8
15.2
2,357.9
5.2
6,126.6
20.4
8,484.5
15.2
4,858.6
(1) Amounts in Distributed by Fund and Recognized for the CPI, Gulf Stream and Stone Tower funds and SIAs are presented for activity
subsequent to the respective acquisition dates.
(2)
Amounts were computed based on the fair value of fund investments on December 31, 2013. Carried interest income has been allocated to
and recognized by the general partner. Based on the amount of carried interest income allocated, a portion is subject to potential reversal
or, to the extent applicable, has been reduced by the general partner obligation to return previously distributed carried interest income or
fees at December 31, 2013. The actual determination and any required payment of any such general partner obligation would not take place
until the final disposition of the funds investments based on contractual termination of the fund.
(3) Represents the amount of carried interest income that would be reversed if remaining fund investments became worthless on December 31, 2013.
Amounts subject to potential reversal of carried interest income include amounts undistributed by a fund (i.e., the carried interest receivable), as
well as a portion of the amounts that have been distributed by a fund, net of taxes not subject to a general partner obligation to return previously
distributed carried interest income, except for those funds that are gross of taxes as defined in the respective funds' management agreement.
(4) Amounts exclude AINV, as carried interest income from this fund is not subject to contingent repayment by the general partner.
Expenses
Compensation and Benefits. Our most significant expense is compensation and benefits expense. This consists of fixed salary, discretionary and
non- discretionary bonuses, profit sharing expense associated with the carried interest income earned from private equity, credit and real estate funds
and compensation expense associated with the vesting of noncash equitybased awards.
Our compensation arrangements with certain partners and employees contain a significant performance- based incentive component. Therefore, as
our net revenues increase, our compensation costs also rise or can be lower when net revenues decrease. In addition, our compensation costs reflect
the increased investment in people as we expand geographically and create new funds. All payments for services rendered by our Managing Partners
prior to the 2007 Reorganization have been accounted for as partnership distributions rather than compensation and benefits expense. See note 1 to
our consolidated financial statements
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for further discussion of the 2007 Reorganization. Subsequent to the 2007 Reorganization, our Managing Partners are considered employees of
Apollo. As such, payments for services made to these individuals, including the expense associated with the AOG Units described below, have been
recorded as compensation expense. The AOG Units were granted to the Managing Partners and Contributing Partners at the time of the 2007
Reorganization, as discussed in note 1 to our consolidated financial statements.
In addition, certain professionals and selected other individuals have a profit sharing interest in the carried interest income earned in relation to our
private equity, certain credit and real estate funds in order to better align their interests with our own and with those of the investors in these funds.
Profit sharing expense is part of our compensation and benefits expense and is generally based upon a fixed percentage of private equity, credit and
real estate carried interest income on a pre- tax and a pre- consolidated basis. Profit sharing expense can reverse during periods when there is a
decline in carried interest income that was previously recognized. Profit sharing amounts are normally distributed to employees after the
corresponding investment gains have been realized and generally before preferred returns are achieved for the investors. Therefore, changes in our
unrealized gains (losses) for investments have the same effect on our profit sharing expense. Profit sharing expense increases when unrealized gains
increase. Realizations only impact profit sharing expense to the extent that the effects on investments have not been recognized previously. If losses
on other investments within a fund are subsequently realized, the profit sharing amounts previously distributed are normally subject to a general
partner obligation to return carried interest income previously distributed back to the funds. This general partner obligation due to the funds would be
realized only when the fund is liquidated, which generally occurs at the end of the funds term. However, indemnification obligations also exist for
pre- reorganization realized gains, which, although our Managing Partners and Contributing Partners would remain personally liable, may indemnify
our Managing Partners and Contributing Partners for 17.5% to 100% of the previously distributed profits regardless of the funds future performance.
See note 17 to our consolidated financial statements for further discussion of indemnification.
Each Managing Partner receives $100,000 per year in base salary for services rendered to us. Additionally, our Managing Partners can receive other
forms of compensation. In connection with the 2007 Reorganization, the Managing Partners and Contributing Partners received AOG Units with a
vesting period of five to six years (all of which have fully vested) and certain employees were granted RSUs with a vesting period of typically six
years (all of which have also fully vested). Managing Partners, Contributing Partners and certain employees have also been granted AAA RDUs, or
incentive units that provide the right to receive AAA RDUs, which both represent common units of AAA and generally vest over three years for
employees and are fully- vested for Managing Partners and Contributing Partners on the grant date. In addition, ARI RSUs, ARI restricted stock and
AMTG RSUs have been granted to the Company and certain employees in the real estate and credit segments, which generally vest over three years.
In addition, the Company grants equity awards to certain employees, including RSUs and options, that generally vest and become exercisable in
quarterly installments or annual installments depending on the contract terms over a period of three to six years. See note 16 to our consolidated
financial statements for further discussion of AOG Units and other equitybased compensation.
Other Expenses. The balance of our other expenses includes interest, professional fees, placement fees, occupancy, depreciation and amortization
and other general operating expenses. Interest expense consists primarily of interest related to the 2007 AMH Credit Agreement and 2013 AMH
Credit Facilities as discussed in note 14 to our consolidated financial statements. Placement fees are incurred in connection with our capital raising
activities. Occupancy expense represents charges related to office leases and associated expenses, such as utilities and maintenance fees. Depreciation
and amortization of fixed assets is normally calculated using the straightline method over their estimated useful lives, ranging from two to sixteen
years, taking into consideration any residual value. Leasehold improvements are amortized over the shorter of the useful life of the asset or the
expected term of the lease. Intangible assets are amortized based on the future cash flows over the expected useful lives of the assets. Other general
operating expenses normally include costs related to travel, information technology and administration.
Other Income (Loss)
Net Gains (Losses) from Investment Activities. The performance of the consolidated Apollo funds has impacted our net gains (losses) from
investment activities. Net gains (losses) from investment activities include both realized gains and losses and the change in unrealized gains and
losses in our investment portfolio between the opening reporting date and the closing reporting date. Net unrealized gains (losses) are a result of
changes in the fair value of unrealized investments and reversal of unrealized gains (losses) due to dispositions of investments during the reporting
period. For the Company's investments held by AAA, a portion of the net gains (losses) from investment activities are attributable to NonControlling Interests in the consolidated statements of operations. Significant judgment and estimation goes into the assumptions that drive these
models and the actual values realized with respect to investments could be materially different from values obtained based on the use of those models.
The valuation methodologies applied impact the reported value of investment company holdings and their underlying portfolios in our consolidated
financial statements.
Net Gains (Losses) from Investment Activities of Consolidated Variable Interest Entities. Changes in the fair value of the consolidated VIEs
assets and liabilities and related interest, dividend and other income and expenses subsequent to
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consolidation are presented within net gains (losses) from investment activities of consolidated variable interest entities and are attributable to NonControlling Interests in the consolidated statements of operations.
Interest Income. The Company recognizes security transactions on the trade date. Interest income is recognized as earned on an accrual basis.
Discounts and premiums on securities purchased are accreted or amortized over the life of the respective securities using the effective interest
method. Interest income also includes payment- in- kind interest (or "PIK" interest) on a convertible note and from one of our credit funds.
Other Income (Loss), Net. Other income (loss), net includes the recognition of bargain purchase gains as a result of Apollo acquisitions, gains
(losses) arising from the remeasurement of foreign currency denominated assets and liabilities of foreign subsidiaries, reversal of a portion of the tax
receivable agreement liability (see note 17 to our consolidated financial statements), gains (losses) arising from the remeasurement of derivative
instruments associated with fees from certain of the Companys affiliates and other miscellaneous non- operating income and expenses.
Income Taxes. The Apollo Operating Group and its subsidiaries generally operate as partnerships for U.S. Federal income tax purposes. As a result,
except as described below, the Apollo Operating Group has not been subject to U.S. income taxes. However, these entities in some cases are subject
to NYC UBT, and non- U.S. entities, in some cases, are subject to non- U.S. corporate income taxes. In addition, APO Corp., a wholly- owned
subsidiary of the Company, is subject to U.S. Federal, state and local corporate income tax, and the Companys provision for income taxes is
accounted for in accordance with U.S. GAAP.
As significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties, we recognize the
tax benefits of uncertain tax positions only where the position is more likely than not to be sustained upon examination, including resolutions of
any related appeals or litigation processes, based on the technical merits of the position. The tax benefit is measured as the largest amount of benefit
that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be
sustained, then no benefits of the position are recognized. The Companys tax positions are reviewed and evaluated quarterly to determine whether or
not we have uncertain tax positions that require financial statement recognition.
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amount of assets and
liabilities and their respective tax basis using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Non- Controlling Interests
For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than
Apollo. The aggregate of the income or loss and corresponding equity that is not owned by the Company is included in Non- Controlling Interests in
the consolidated financial statements. The Non- Controlling Interests relating to Apollo Global Management, LLC primarily include the 61.0%,
64.9% and 65.9% ownership interest in the Apollo Operating Group held by the Managing Partners and Contributing Partners through their limited
partner interests in Holdings as of December 31, 2013, 2012 and 2011, respectively, and other ownership interests in consolidated entities, which
primarily consist of the approximate 97.4%, 97.3% and 97.6% ownership interests held by limited partners in AAA as of December 31, 2013, 2012
and 2011, respectively. Non- Controlling Interests also include limited partner interests of Apollo managed funds in certain consolidated VIEs.
The authoritative guidance for Non- Controlling Interests in the consolidated financial statements requires reporting entities to present NonControlling Interest as equity and provides guidance on the accounting for transactions between an entity and Non- Controlling Interests. According
to the guidance, (1) Non- Controlling Interests are presented as a separate component of shareholders equity on the Companys consolidated
statements of financial condition, (2) net income (loss) includes the net income (loss) attributable to the Non- Controlling Interest holders on the
Companys consolidated statements of operations, (3) the primary components of Non- Controlling Interest are separately presented in the
Companys consolidated statements of changes in shareholders equity to clearly distinguish the interests in the Apollo Operating Group and other
ownership interests in the consolidated entities and (4) profits and losses are allocated to Non- Controlling Interests in proportion to their ownership
interests regardless of their basis.
On January 1, 2010, the Company adopted amended consolidation guidance issued by the FASB on issues related to VIEs. The amended guidance
significantly affects the overall consolidation analysis, changing the approach taken by companies in identifying which entities are VIEs and in
determining which party is the primary beneficiary. The amended guidance requires continuous assessment of the reporting entitys involvement with
such VIEs. The amended guidance also enhances the disclosure requirements for a reporting entitys involvement with VIEs, including presentation
on the consolidated statements of financial
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condition of assets and liabilities of consolidated VIEs that meet the separate presentation criteria and disclosure of assets and liabilities recognized in
the consolidated statements of financial condition and the maximum exposure to loss for those VIEs in which a reporting entity is determined to not
be the primary beneficiary but in which it has a variable interest. The guidance provides a limited scope deferral for a reporting entitys interest in an
entity that meets all of the following conditions: (a) the entity has all the attributes of an investment company as defined under the American Institute
of Certified Public Accountants (AICPA) Audit and Accounting Guide, Investment Companies, or does not have all the attributes of an investment
company but is an entity for which it is acceptable based on industry practice to apply measurement principles that are consistent with the AICPA
Audit and Accounting Guide, Investment Companies, (b) the reporting entity does not have explicit or implicit obligations to fund any losses of the
entity that could potentially be significant to the entity and (c) the entity is not a securitization entity, asset- backed financing entity or an entity that
was formerly considered a qualifying special- purpose entity. The reporting entity is required to perform a consolidation analysis for entities that
qualify for the deferral in accordance with previously issued guidance on variable interest entities. Apollos involvement with the funds it manages is
such that all three of the above conditions are met with the exception of certain vehicles which fail condition (c) above. As previously discussed, the
incremental impact of adopting the amended consolidation guidance has resulted in the consolidation of certain VIEs managed by the Company.
Additional disclosures related to Apollos involvement with VIEs are presented in note 5 to our consolidated financial statements.
Results of Operations
Below is a discussion of our consolidated results of operations for the years ended December 31, 2013, 2012 and 2011, respectively. For additional
analysis of the factors that affected our results at the segment level, see Segment Analysis below:
2013
Amount
Change
2012
Percentage
Change
2012
(in thousands)
Amount
Change
2011
Percentage
Change
(in thousands)
Revenues:
Advisory and
transaction fees
from affiliates, net $
Management fees
from affiliates
Carried interest
income (loss) from
affiliates
Total Revenues
196,562
149,544
47,018
31.4 %
149,544
81,953
487,559
67,591
82.5 %
93,044
19.1
674,634
580,603
94,031
16.2
580,603
2,862,375
2,129,818
732,557
34.4
2,129,818
(397,880)
2,527,698
NM
3,733,571
2,859,965
873,606
30.5
2,859,965
171,632
2,688,333
NM
126,227
598,654
(472,427)
(78.9)
598,654
1,149,753
(551,099)
(47.9)
294,753
274,574
20,179
7.3
274,574
251,095
23,479
9.4
1,173,255
872,133
301,122
34.5
872,133
(60,070)
932,203
NM
1,594,235
1,745,361
(151,126)
(8.7)
1,745,361
1,340,778
404,583
30.2
29,260
37,116
(7,856)
(21.2)
37,116
40,850
(3,734)
(9.1)
83,407
64,682
18,725
28.9
64,682
59,277
5,405
9.1
98,202
87,961
10,241
11.6
87,961
75,558
12,403
16.4
42,424
22,271
20,153
90.5
22,271
3,911
18,360
469.4
39,946
37,218
2,728
7.3
37,218
35,816
1,402
3.9
54,241
53,236
1,005
1.9
53,236
26,260
26,976
102.7
1,941,715
2,047,845
2,047,845
1,582,450
465,395
29.4
330,235
Expenses:
Compensation and
benefits:
Equity- based
compensation
Salary, bonus and
benefits
Profit sharing
expense
Total
Compensation and
Benefits
Interest expense
Professional fees
General,
administrative and
other
Placement fees
Occupancy
Depreciation and
amortization
Total Expenses
(106,130)
(5.2)
288,244
41,991
14.6
288,244
(129,827)
418,071
NM
199,742
(71,704)
271,446
NM
(71,704)
24,201
(95,905)
NM
107,350
110,173
(2,823)
(2.6)
110,173
13,923
96,250
NM
12,266
9,693
2,573
26.5
9,693
4,731
4,962
104.9
Other Income:
Net gains (losses)
from investment
activities
Net gains (losses)
from investment
activities of
consolidated
variable interest
entities
Income from
equity method
investments
Interest income
Other income, net
Total Other
Income
Income (loss)
before income tax
provision
Income tax
provision
Net Income
(Loss)
Net (income) loss
attributable to
Non- controlling
Interests
Net Income
(Loss)
Attributable to
Apollo Global
Management,
LLC
$
40,114
1,964,679
(1,924,565)
(98.0)
1,964,679
205,520
1,759,159
NM
689,707
2,301,085
(1,611,378)
(70.0)
2,301,085
118,548
2,182,537
NM
2,481,563
3,113,205
(631,642)
(20.3)
3,113,205
(42,159)
64.5
(673,801)
(22.1)
3,047,795
(37.4)
(2,736,838)
(107,569)
(65,410)
2,373,994
3,047,795
(1,714,603)
(2,736,838)
659,391
310,957
1,022,235
348,434
112.1 %
(1,292,270)
(65,410)
310,957
(11,929)
(1,304,199)
835,373
(468,826) $
4,405,475
(53,481)
NM
448.3
4,351,994
NM
(3,572,211)
NM
779,783
NM
Note: NM denotes not meaningful. Changes from negative to positive amounts and positive to negative amounts are not considered meaningful.
Increases or decreases from zero and changes greater than 500% are also not considered meaningful.
Revenues
Our revenues and other income include fixed components that result from measures of capital and asset valuations and variable components that
result from realized and unrealized investment performance, as well as the value of successfully completed transactions.
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Advisory and transaction fees from affiliates, net, increased by $47.0 million for the year ended December 31, 2013 as compared to the year ended
December 31, 2012. This was attributable to an increase in advisory and transaction fees, net in the credit segment of $87.1 million, offset by a
decrease in advisory and transaction fees, net in the private equity segment of $43.4 million. During the year ended December 31, 2013, gross and net
advisory fees, including directors fees, were $213.3 million and $140.0 million, respectively, and gross and net transaction fees were $133.5 million
and $56.6 million, respectively. During the year ended December 31, 2012, gross and net advisory fees, including directors fees, were $152.1 million
and $66.3 million, respectively, and gross and net transaction fees were $176.7 million and $88.5 million, respectively. The net transaction and
advisory fees were further offset by $5.2 million and $5.3 million in broken deal costs during the years ended December 31, 2013 and 2012,
respectively, primarily relating to Fund VII. Advisory and transaction fees are reported net of Management Fee Offsets as calculated under the terms
of the applicable limited partnership agreements. See Overview of Results of OperationsRevenuesAdvisory and Transaction Fees from
Affiliates, Net for a summary that addresses how the Management Fee Offsets are calculated.
Management fees from affiliates increased by $94.0 million for the year ended December 31, 2013 as compared to the year ended December 31,
2012. This change was primarily attributable to an increase in management fees earned by our credit, private equity and real estate segments of $92.8
million, $7.8 million and $7.1 million, respectively, as a result of corresponding increases in the net assets managed and feegenerating invested
capital with respect to these segments during the period. Part of the increase in management fees earned from the credit funds was attributable to an
increase of $13.6 million of fees earned from consolidated VIEs which are included in the credit segment results but were eliminated in consolidation.
Carried interest income from affiliates increased by $732.6 million for the year ended December 31, 2013 as compared to the year ended December
31, 2012. This change was primarily attributable to increased carried interest income driven by increases in the fair value of portfolio investments
held by certain funds and certain co- invest vehicles, primarily Fund VI, Fund VII, AAA Co- Invest VI, an indirect subsidiary of Athene Holding
Ltd., SOMA and EPF I which had increased carried interest income of $548.1 million, $242.4 million, $115.7 million, $40.0 million and $34.5
million, respectively. This was offset by COF I, COF II, CLOs and Fund V, which had decreased carried interest income of $100.1 million, $48.3
million, $44.5 million and $34.8 million, respectively, during the year ended December 31, 2013 as compared to the same period in 2012. The
remaining change was attributable to an overall increase in the fair value of portfolio investments of the other funds, which generated increased
carried interest income of $17.5 million during the period. Part of the change in carried interest income from affiliates was attributable to a decrease
in carried interest income of $37.9 million earned from consolidated VIEs which are included in the credit segment results but were eliminated in
consolidation during the year ended December 31, 2013 as compared to the same period in 2012.
December 31, 2011. This increase was primarily attributable to an increase in advisory and transaction fees in the private equity segment of $63.6
million during the period. During the year ended December 31, 2012, gross and net advisory fees, including directors fees, were $152.1 million and
$66.3 million, respectively, and gross and net transaction fees were $176.7 million and $88.5 million, respectively. During the year ended December
31, 2011, gross and net advisory fees, including directors fees, were $143.1 million and $56.1 million, respectively, and gross and net transaction
fees were $62.9 million and $30.7 million, respectively. The net transaction and advisory fees were further offset by $5.3 million and $4.8 million in
broken deal costs during the years ended December 31, 2012 and 2011, respectively, primarily relating to Fund VII. Advisory and transaction fees are
reported net of Management Fee Offsets as calculated under the terms of the respective limited partnership agreements. See Overview of Results
of OperationsRevenuesAdvisory and Transaction Fees from Affiliates for a summary that addresses how the Management Fee Offsets are
calculated for each fund.
2011. This change was primarily attributable to an increase in management fees earned by our credit, private equity and real estate segments of
$113.0 million, $13.8 million and $6.0 million, respectively, as a result of corresponding increases in the net assets managed and feegenerating
invested capital with respect to these segments during the period. The
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remaining change was attributable to an increase of $39.8 million of fees earned from VIEs eliminated in consolidation in our credit segment during
the year ended December 31, 2012 as compared to the year ended December 31, 2011.
Carried interest income from affiliates increased by $2,527.7 million for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. This change was primarily attributable to increased carried interest income driven by increases in the fair value of portfolio
investments held by certain funds and CLOs, primarily Fund VI, Fund VII, COF I, ACLF, CLOs, Fund V, COF II, AAA and ACF, which had
increased carried interest income of $1,282.5 million, $783.3 million, $134.9 million, $77.4 million, $72.2 million, $69.4 million, $69.1 million,
$47.6 million and $25.7 million, respectively, during the year ended December 31, 2012 as compared to the same period in 2011. The remaining
change was attributable to an overall increase in the fair value of portfolio investments of the remainder of funds, which generated increased carried
interest income of $36.8 million during the period. Included in the above for the year ended December 31, 2012 was a reversal of $75.3 million of the
general partner obligation to return previously distributed carried interest income with respect to Fund VI and reversal of previously recognized
carried interest income due to the general partner obligation to return previously distributed carried interest income of $1.2 million and $0.3 million
for SOMA and APC, respectively. Part of the increase in carried interest income from affiliates was attributable to an increase in carried interest
income of $71.2 million earned from consolidated VIEs which are included in the credit segment results but were eliminated in consolidation during
year ended December 31, 2012 as compared to the same period in 2011.
Expenses
Compensation and benefits decreased by $151.1 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012.
This change was primarily attributable to a reduction of equitybased compensation by $472.4 million, specifically the amortization of AOG Units
which decreased by $450.9 million due to the expiration of the vesting period for the Managing Partners in June 2013. This was partially offset by an
increase in profit sharing expense of $301.1 million as a result of the favorable performance of certain of our private equity and credit funds during
the period. Included in profit sharing expense was $62.4 million and $62.1 million of expenses related to the Incentive Pool (as defined below) for the
year ended December 31, 2013 and 2012, respectively. In addition, salary, bonus and benefits increased by $20.2 million as a result of an increase in
headcount during the period as compared to the same period in 2012.
The Company intends to, over time, seek to more directly tie compensation of its professionals to realized performance of the Companys business,
which will likely result in greater variability in compensation. In June 2011, the Company adopted a performance based incentive arrangement (the
Incentive Pool) whereby certain partners and employees earned discretionary compensation based on carried interest realizations earned by the
Company during the year, which amounts are reflected as profit sharing expense in the Companys consolidated financial statements. The Company
adopted the Incentive Pool to attract and retain, and provide incentive to, partners and employees of the Company and to more closely align the
overall compensation of partners and employees with the overall realized performance of the Company. Allocations to the Incentive Pool and to its
participants contain both a fixed and a discretionary component and may vary year- to- year depending on the overall realized performance of the
Company and the contributions and performance of each participant. There is no assurance that the Company will continue to compensate individuals
through performance- based incentive arrangements in the future and there may be periods when the Executive Committee of the Companys
manager determines that allocations of realized carried interest income are not sufficient to compensate individuals, which may result in an increase
in salary, bonus and benefits.
Interest expense decreased by $7.9 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This change
was primarily attributable to decreased interest expense related to expiring of interest rate swaps and a lower margin rate on the 2007 AMH Credit
Agreement during the year ended December 31, 2013 as compared to the same period in 2012.
Professional fees increased by $18.7 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This change
was attributable to higher legal and consulting fees incurred during the year ended December 31, 2013, as compared to the same period in 2012 due
to the continued expansion of our global investment platform.
General, administrative and other expenses increased by $10.2 million for the year ended December 31, 2013 as compared to the year ended
December 31, 2012. This change was primarily attributable to an increase in costs associated with the launch of new funds, increased travel,
information technology, recruiting and other expenses incurred during the year ended December 31, 2013 as compared to the same period in 2012.
Placement fees increased by $20.2 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. Placement fees
are incurred in connection with the raising of capital for new and existing funds. The fees are
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normally payable to placement agents, who are third parties that assist in identifying potential investors, securing commitments to invest from such
potential investors, preparing or revising offering marketing materials, developing strategies for attempting to secure investments by potential
investors and/or providing feedback and insight regarding issues and concerns of potential investors. This change was primarily attributable to $15.4
million related to the launch of Fund VIII during the year ended December 31, 2013.
Occupancy expense increased by $2.7 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This change
was primarily attributable to additional expenses incurred from the extension of existing leases along with additional office space leased as a result of
the increase in our headcount to support the expansion of our global investment platform during the year ended December 31, 2013 as compared to
the same period in 2012.
Compensation and benefits increased by $404.6 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011.
This change was primarily attributable to an increase in profit sharing expense of $932.2 million driven by an increase in unrealized and realized
carried interest income earned from our private equity and credit funds during the period. This increase was partially offset by a decrease in equitybased compensation of $551.1 million, specifically the amortization of AOG Units decreased by $551.8 million due to the expiration of the vesting
period for certain Managing Partners, along with an increase in equitybased compensation relating to RSUs and share options of $0.1 million due to
additional grants during the year ended December 31, 2012. Included in profit sharing expense is $25.8 million related to change in fair value of our
contingent consideration obligations. Also included in profit sharing expense is $62.1 million and $35.2 million of expense related to the Incentive
Pool for the years ended December 31, 2012 and 2011, respectively.
Interest expense decreased by $3.7 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to decreased interest expense of $4.9 million mainly due to a lower margin rate on the 2007 AMH Credit Agreement during
the year ended December 31, 2012 as compared to the same period in 2011.
Professional fees increased by $5.4 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was attributable to higher external accounting, tax, audit, legal and consulting fees incurred during the year ended December 31, 2012, as compared
to the same period during 2011.
General, administrative and other expenses increased by $12.4 million for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. This change was primarily attributable to increased travel, information technology, recruiting and other expenses incurred
associated with the launch of our new funds and continued expansion of our global investment platform during the year ended December 31, 2012 as
compared to the same period during 2011.
Placement fees increased by $18.4 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. Placement fees
are incurred in connection with the raising of capital for new and existing funds. The fees are normally payable to placement agents, who are third
parties that assist in identifying potential investors, securing commitments to invest from such potential investors, preparing or revising offering
marketing materials, developing strategies for attempting to secure investments by potential investors and/or providing feedback and insight
regarding issues and concerns of potential investors. This change was primarily attributable to increased fundraising efforts during the period in
connection with our credit funds, primarily EPF II, which incurred $12.9 million of placement fees during the year ended December 31, 2012.
Occupancy expense increased by $1.4 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to additional expenses incurred from additional office space leased as a result of the increase in our headcount to support
the expansion of our global investment platform during the year ended December 31, 2012 as compared to the same period during 2011.
Depreciation and amortization expense increased by $27.0 million for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. This change was primarily attributable to increased amortization expense due to amortization of intangible assets acquired
subsequent to December 31, 2011.
Other Income (Loss)
Net gains from investment activities increased by $42.0 million for the year ended December 31, 2013 as compared to the year ended December 31,
2012. This change was primarily attributable to a $54.3 million increase in net unrealized gains related to changes in the fair value of AAA
Investments portfolio investments, partially offset by an $11.5 million decrease in
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unrealized gains related to the change in the fair value of the investment in HFA during the year ended December 31, 2013 as compared to the same
period in 2012.
Net gains (losses) from investment activities of consolidated VIEs increased by $271.4 million during the year ended December 31, 2013 as
compared to the year ended December 31, 2012. This change was primarily attributable to a decrease in net realized and unrealized losses relating to
the debt held by the consolidated VIEs of $402.3 million and higher interest and other income of $92.7 million during the period. This was offset by a
decrease in the fair values of investments held by the consolidated VIEs of $191.9 million and an increase in other expenses of $31.7 million during
the year ended December 31, 2013 as compared to the same period in 2012.
Income from equity method investments decreased by $2.8 million for the year ended December 31, 2013 as compared to the year ended December
31, 2012. This change was primarily driven by changes in the fair values of certain Apollo funds in which the Company has a direct interest. Fund
VII, COF I and EPF I had the most significant impact and together generated $81.9 million of income from equity method investments during the
year ended December 31, 2013 as compared to a $84.2 million of income from equity method investments during the year ended December 31, 2012,
resulting in a net decrease of $2.3 million. See note 4 to our consolidated financial statements for a complete summary of income from equity method
investments by fund for the year ended December 31, 2013 and 2012.
Other income, net decreased by $1,924.6 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This
change was primarily attributable to a gain on acquisition of $1,951.1 million recorded on the Stone Tower acquisition during April 2012. See note 3
to our consolidated financial statements for further discussion of the Stone Tower acquisition. The remaining offset was primarily attributable to
income related to the reduction of the tax receivable agreement liability due to a change in estimated tax rates, and an unrealized gain on Athene
related derivative contracts (see note 17 to our consolidated financial statements) during the year ended December 31, 2012 as compared to the same
period in 2011. See note 12 to our consolidated financial statements for a complete summary of other income, net, for the years ended December 31,
2013 and 2012.
Net (losses) gains from investment activities increased by $418.1 million for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. This change was attributable to a $412.1 million increase in net unrealized gains related to changes in the fair value of AAA
Investments portfolio during the period. In addition, there was a $4.7 million increase in unrealized gain related to the change in the fair value of the
investment in HFA Holdings Limited (HFA) and a $1.2 million increase in net unrealized and realized gains related to changes in the fair value of
portfolio investments of Apollo Credit Senior Loan Fund, L.P. (Apollo Senior Loan Fund) during the year ended December 31, 2012.
Net losses from investment activities of consolidated VIEs increased by $95.9 million during the year ended December 31, 2012 as compared to the
year ended December 31, 2011. This was primarily attributable to a change in net realized and unrealized losses of $519.6 million relating to the debt
held by the consolidated VIEs, along with higher expenses which resulted in an increased loss of $329.4 million during the period, primarily due to
the acquisition of Stone Tower in April 2012. These changes were partially offset by higher net unrealized and realized gains relating to the increase
in the fair value of investments held by the consolidated VIEs of $246.5 million and higher interest income of $506.6 million during the year ended
December 31, 2012 as compared to the same period during 2011.
Income from equity method investments increased by $96.3 million for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. This change was primarily driven by changes in the fair values of certain Apollo funds in which Apollo has a direct interest.
Fund VII, COF I, COF II and ACLF had the most significant impact and together generated $89.5 million of income from equity method investments
during the year ended December 31, 2012 as compared to $11.5 million of income from equity method investments during the year ended
December 31, 2011 resulting in a net increase of income from equity method investments totaling $77.6 million. See note 4 to our consolidated
financial statements for a complete summary of income (loss) from equity method investments by fund for the years ended December 31, 2012 and
2011.
Other income, net increased by $1,759.2 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This
change was primarily attributable to an increase in gains on acquisitions of $1,755.7 million driven by the $1,951.1 million bargain purchase gain
recorded on the Stone Tower acquisition during April 2012, compared to a bargain purchase gain on the Gulf Stream acquisition of $195.5 million
during October 2011. See note 3 to our consolidated financial statements for further discussion of the Stone Tower and Gulf Stream acquisitions. The
remaining change was primarily attributable to losses resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of
subsidiaries during the year ended December 31, 2012 as compared to the same period in 2011. See note 12 to our consolidated financial statements
for a complete summary of other income, net, for the years ended December 31, 2012 and 2011.
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Income Tax Provision
The income tax provision increased by $42.2 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. As
discussed in note 13 to our consolidated financial statements, the Companys income tax provision primarily relates to the earnings generated by APO
Corp., a wholly- owned subsidiary of Apollo Global Management, LLC that is subject to U.S. federal, state and local taxes. APO Corp. had taxable
income of $209.5 million and $130.8 million for the year ended December 31, 2013 and 2012, respectively, after adjusting for permanent tax
differences. The $78.7 million change in income before taxes resulted in increased federal, state and local taxes of $42.6 million during the period
utilizing a marginal corporate tax rate and adjusting the estimated rate of tax Apollo expects to pay in the future. This was partially offset by a
decrease in the income tax provision of $0.5 million which primarily resulted from a decrease in the NYC UBT, as well as taxes on foreign
subsidiaries.
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The income tax provision increased by $53.5 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. As
discussed in note 13 to our consolidated financial statements, the Companys income tax provision primarily relates to the earnings generated by APO
Corp., which is subject to U.S. Federal, state and local taxes. APO Corp. had income before taxes of $130.8 million and $1.7 million for the years
ended December 31, 2012 and 2011, respectively, after adjusting for permanent tax differences. The $129.1 million change in income before taxes
resulted in increased federal, state and local taxes of $51.3 million during the period utilizing a marginal corporate tax rate, and an increase in the
NYC UBT and the taxes on foreign subsidiaries of $2.2 million.
The table below presents equity interests in Apollos consolidated, but not wholly- owned, subsidiaries and funds.
Net income attributable to Non- Controlling Interests consisted of the following:
For the Year Ended December 31,
2013
2012
2011
AAA(1)
$
Interest in management
companies and a coinvestment vehicle(2)
Other consolidated entities
Net (income) loss
attributable to NonControlling Interests in
consolidated entities
Net income attributable to
Appropriated Partners
Capital(3)
Net (income) loss
attributable to NonControlling Interests in the
Apollo Operating Group
Net (Income) Loss
attributable to NonControlling Interests
$
Capital(4)
Other Comprehensive
Income attributable to NonControlling Interests
Comprehensive (Income)
Loss Attributable to NonControlling Interests
$
(331,504)
(278,454)
(18,872)
43,357
(7,307)
50,956
(307,019)
(234,805)
(149,934)
(1,816,676)
(1,257,650)
(685,357)
(1,714,603)
149,934
97,296
(202,235)
940,312
(922,172)
835,373
202,235
(2,010)
123,400
(12,146)
(13,958)
1,816,676
(41)
(1,564,710)
(2,736,838)
(5,106)
1,032,502
(1)
Reflects the Non- Controlling Interests in the net (income) loss of AAA and is calculated based on the Non- Controlling Interests
ownership percentage in AAA, which was approximately 97.4% during the year ended December 31, 2013, approximately 97.3% during
the year ended December 31, 2012, and approximately 97.6% during the year ended December 31, 2011. As of December 31, 2013, 2012
and 2011, Apollo owned approximately 2.6%, 2.7% and 2.4% of AAA, respectively.
(2) Reflects the remaining interest held by certain individuals who receive an allocation of income from certain of our credit management companies.
(3)
Reflects net income of the consolidated CLOs classified as VIEs. Includes the bargain purchase gain from the Stone Tower acquisition of
$1,951.1 million for the year ended December 31, 2012 and the bargain purchase gain from the Gulf Stream acquisition of $0.8 million and
$195.4 million for the years ended December 31, 2012 and 2011, respectively.
(4)
Appropriated Partners Capital is included in total Apollo Global Management, LLC shareholders equity and is therefore not a
component of comprehensive income attributable to Non- Controlling Interests on the consolidated statements of comprehensive income.
Initial Public Offering and Secondary OfferingOn April 4, 2011, the Company completed the initial public offering (IPO) of its Class A
shares, representing limited liability company interests of the Company. Apollo Global Management, LLC received net proceeds from the IPO of
approximately $382.5 million, which were used to acquire additional AOG Units. As a result, Holdings ownership interest in the Apollo Operating
Group decreased from 70.7% to 66.5% and Apollo Global Management, LLCs ownership interest in the Apollo Operating Group increased from
29.3% to 33.5% upon consummation of the IPO. Additionally, on May 15, 2013, the Company completed its resale of approximately 24.3 million
Class A shares owned by Selling Shareholders (the "Secondary Offering"). In conjunction with the Secondary Offering there was an exchange of
approximately 8.8 million AOG Units into Class A shares. As a result of the exchange, the Company's economic interests in the Apollo Operating
Group increased from 35.6% to 38.0% and Holdings' economic interests in the Apollo Operating Group decreased from 64.4%
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to 62.0%. Additionally, in November 2013, approximately 2.3 million AOG Units were exchanged for Class A shares and sold, which also impacted
the economic interests of the Apollo Operating Group held by the Company and Holdings. See note 15 to our consolidated financial statements for
additional information regarding impacts to the Company's and Holding's ownership interests in the Apollo Operating Group.
Net income attributable to Non- Controlling Interests in the Apollo Operating Group consisted of the following:
Year Ended
December 31,
2012
(in thousands)
3,047,795
2013
Net income
$
Net income attributable
to Non- Controlling
Interests in consolidated
entities
Net income after NonControlling Interests in
Adjustments:
Income tax provision(1)
NYC UBT and foreign
tax provision(2)
Capital increase related
to equitybased
compensation
Net (loss) income in
non- Apollo Operating
Group entities
Total adjustments
Net income (loss) after
adjustments
Approximate ownership
percentage of Apollo
Operating Group
Net income (loss)
Apollo Operating
Group(3)
$
2,373,994
(456,953)
2011
$
(2,051,481)
(1,304,199)
(104,939)
1,917,041
996,314
107,569
65,410
11,929
(10,334)
(10,889)
(8,647)
(11,774)
85,461
2,002,502
61.0%
1,257,650
(1,409,138)
(22,797)
948
55,469
1,345
(18,170)
1,051,783
(1,427,308)
64.9%
685,357
65.9%
(940,312)
(1) Reflects all taxes recorded in our consolidated statements of operations. Of this amount, U.S. federal, state, and local corporate income taxes
attributable to APO Corp. are added back to income (loss) of the Apollo Operating Group before calculating Non- Controlling Interests as the
income (loss) allocable to the Apollo Operating Group is not subject to such taxes.
(2) Reflects NYC UBT and foreign taxes that are attributable to the Apollo Operating Group and its subsidiaries related to its operations in the U.S. as
partnerships and in non- U.S. jurisdictions as corporations. As such, these amounts are considered in the income (loss) attributable to the Apollo
Operating Group.
(3)
This amount is calculated by applying the weighted average ownership percentage range of approximately 62.7%, 65.2% and 67.4%
during the years ended December 31, 2013, 2012 and 2011, respectively, to the consolidated net income of the Apollo Operating Group
before a corporate income tax provision and after allocations to the Non- Controlling Interests in consolidated entities.
Segment Analysis
Discussed below are our results of operations for each of our reportable segments. They represent the segment information available and utilized by
our executive management, which consists of our Managing Partners, who operate collectively as our chief operating decision maker, to assess
performance and to allocate resources. Management divides its operations into three reportable segments: private equity, credit and real estate. These
segments were established based on the nature of investment activities in each underlying fund, including the specific type of investment made, the
frequency of trading, and the level of control over the investment. Segment results do not consider consolidation of funds, equitybased
compensation expense comprised of AOG Units, income taxes, amortization of intangibles associated with the 2007 Reorganization and acquisitions
and Non- Controlling Interests with the exception of allocations of income to certain individuals.
In addition to providing the financial results of our three reportable business segments, we further evaluate our individual reportable segments based
on what we refer to as our management and incentive businesses. Our management business is generally characterized by the predictability of its
financial metrics, including revenues and expenses. The management business includes management fee revenues, advisory and transaction revenues,
carried interest income from one of our opportunistic credit funds and expenses, each of which we believe are more stable in nature. The financial
performance of our incentive business is partially dependent upon quarterly mark- to- market unrealized valuations in accordance with U.S. GAAP
guidance applicable to fair value measurements. The incentive business includes carried interest income, income from equity method investments and
profit sharing expense that are associated with our general partner interests in the Apollo funds, which are generally less predictable and more volatile
in nature.
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Our financial results vary, since carried interest, which generally constitutes a large portion of the income from the funds that we manage, as well as
the transaction and advisory fees that we receive, can vary significantly from quarter to quarter and year to year. As a result, we emphasize longterm
financial growth and profitability to manage our business.
Private Equity
The following tables set forth our segment statement of operations information and our supplemental performance measure, ENI, for our private
equity segment for the years ended December 31, 2013, 2012, and 2011 respectively. ENI represents segment income, excluding the impact of noncash charges related to RSUs granted in connection with the 2007 private placement, equitybased compensation expense comprising of amortization
of AOG Units, income taxes, amortization of intangibles associated with the 2007 Reorganization and acquisitions and Non- Controlling Interests
with the exception of allocations of income to certain individuals. In addition, segment data excludes the assets, liabilities and operating results of the
Apollo funds and consolidated VIEs that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure.
Management
Incentive
Total
Management
Incentive
(in thousands)
Total
Management
Incentive
Total
Private Equity(1):
Revenues:
Advisory and transaction fees
from affiliates, net
$
Management fees from
affiliates
Carried interest income (loss)
from affiliates:
Unrealized gains (losses)(2)
Realized gains
Total Revenues
78,371
78,371
121,744
121,744
58,145
284,833
284,833
277,048
277,048
263,212
454,722
454,722
854,919
854,919
58,145
263,212
2,062,525
2,062,525
812,616
812,616
363,204
2,517,247
2,880,451
398,792
1,667,535
2,066,327
321,357
(1,019,748)
(1,019,748)
570,540
570,540
(449,208)
(127,851)
Expenses:
Compensation and Benefits:
Equity compensation
Total compensation and
benefits
Other expenses
Total Expenses
31,967
31,967
31,213
31,213
31,778
31,778
109,761
109,761
104,068
104,068
121,711
121,711
1,030,404
1,030,404
726,874
726,874
(96,833)
(96,833)
141,728
1,030,404
1,172,132
135,281
726,874
862,155
153,489
(96,833)
56,656
112,525
112,525
83,311
83,311
99,338
254,253
1,030,404
1,284,657
218,592
726,874
945,466
252,827
99,338
(96,833)
155,994
Other Income:
Income from equity method
investments
Other income, net
Total Other Income
78,811
78,811
74,038
74,038
7,960
13,006
1,695
14,701
4,653
4,653
7,081
7,081
13,006
80,506
93,512
4,653
74,038
78,691
7,081
7,960
15,041
121,957
1,567,349
1,689,306
184,853
1,014,699
1,199,552
75,611
(344,415)
7,960
(268,804)
(1) Reclassified to conform to current presentation. See note 20 to our consolidated financial statements for more detail on the reclassifications within
our three segments.
(2)
Included in unrealized carried interest income (loss) from affiliates for the year ended December 31, 2012 was a $75.3 million reversal of
the entire general partner obligation to return previously distributed carried interest income with respect to Fund VI. Included in unrealized
carried interest income (loss) from affiliates for the year ended December 31, 2011 was a reversal of previously realized carried interest
income due to the general partner obligation to return previously distributed carried interest income of $75.3 million for Fund VI. The
general partner obligation is recognized based upon a hypothetical liquidation of the funds' net assets as of the reporting date. The actual
determination and any required payment of any such general partner obligation would not take place until the final disposition of a fund's
investments based on the contractual termination of the fund.
- 101-
For the Year Ended

December 31,
2013
Private
Equity(1):
Revenues:
Advisory and
transaction
fees from
affiliates, net $
Management
fees from
affiliates
Carried
interest
income (loss)
from
affiliates:
Unrealized
gains
(losses)(2)
Realized
gains
Total carried
interest
income (loss)
from
affiliates
Total
Revenues
Expenses:
Compensation
and benefits:
Equity- based
compensation
Salary, bonus
and benefits
Profit sharing
expense
Total
compensation
and benefits
expense
Other
expenses
Total
Expenses
Other
Income:
Income from
equity
method
investments
Other
income, net
Total Other
Income
Economic
Net Income
(Loss)
$
Amount
Change
2012
(in thousands)
78,371
121,744
284,833
277,048
454,722
854,919
2,062,525
812,616
2,517,247
Percentage
Change
(43,373)
2012
121,744
58,145 $
63,599
109.4 %
13,836
5.3
1,874,667
NM
242,076
42.4
277,048
(46.8)
854,919
1,249,909
153.8
812,616
1,667,535
849,712
51.0
1,667,535
(449,208)
2,116,743
NM
2,880,451
2,066,327
814,124
39.4
2,066,327
(127,851)
2,194,178
NM
31,967
31,213
754
2.4
31,213
31,778
(565)
(1.8)
109,761
104,068
5,693
5.5
104,068
121,711
(17,643)
(14.5)
1,030,404
726,874
303,530
41.8
726,874
(96,833)
823,707
NM
1,172,132
862,155
309,977
36.0
862,155
56,656
805,499
NM
112,525
83,311
29,214
35.1
83,311
99,338
(16,027)
(16.1)
1,284,657
945,466
339,191
35.9
945,466
155,994
789,472
NM
78,811
74,038
4,773
6.4
74,038
7,960
66,078
NM
14,701
4,653
10,048
215.9
4,653
7,081
(2,428)
(34.3)
93,512
78,691
14,821
18.8
78,691
15,041
63,650
423.2
1,468,356
NM
1,199,552
(400,197)
489,754
40.8 % $
1,199,552
263,212
Percentage
Change
2.8
1,689,306
7,785
(35.6)% $
For the Year Ended

December 31,
Amount
2011
Change
(in thousands)
(1,019,748)
570,540
(268,804) $
our three segments.
(2)
Included in unrealized carried interest income (loss) from affiliates for the year ended December 31, 2012 was a $75.3 million reversal of
the entire general partner obligation to return previously distributed carried interest income with respect to Fund VI. Included in unrealized
carried interest income (loss) from affiliates for the year ended December 31, 2011 was a reversal of previously realized carried interest
income due to the general partner obligation to return previously distributed carried interest income of $75.3 million for Fund VI. The
general partner obligation is recognized based upon a hypothetical liquidation of the funds' net assets as of the reporting date. The actual
determination and any required payment of any such general partner obligation would not take place until the final disposition of a fund's
investments based on the contractual termination of the fund.
Revenues
Advisory and transaction fees from affiliates, net, decreased by $43.4 million for the year ended December 31, 2013 as compared to the year ended
December 31, 2012. This change was primarily attributable to a decrease of $35.4 million in net transaction and termination fees driven by the
portfolio company investments of Fund VI, AAA Investments and Fund VII. The net transaction and termination fees related to Fund VI and AAA
Investments decreased by $17.9 million and $8.8 million, respectively, due to termination fees earned in 2012 from Realogy, Rexnord and Smart &
Final, compared to zero termination fees earned during the year ended December 31, 2013. For the years ended December 31, 2013 and 2012, the net
transaction and termination fees related to Fund VII were $42.2 million and $50.9 million, respectively, a decrease of $8.7 million. For 2012, the fees
related to Fund VII were driven by net transaction fees earned from EP Energy LLC and Great Wolf Resorts of $42.4 million, whereas during 2013
the fees were driven by net transaction fees earned from McGraw- Hill Education of $14.8 million and net termination fees earned from Taminco and
Constellium (formerly Alcan) of $20.6 million. Net advisory fees also decreased by $8.0 million mainly due to decreased monitoring fees earned
from portfolio company investments of Fund VI and AAA Investments,
- 102-
which include Berry Plastics, CEVA Logistics, Momentive Performance Materials and Caesars Entertainment. Included in advisory and transaction
fees from affiliates is $19.1 million and $0.5 million recognized as a reversal of the Management Fee Offset for Fund V and Fund IV, respectively,
and $18.5 million of additional Management Fee Offsets related to director fees, net of director fee income.
Management fees from affiliates increased by $7.8 million for year ended December 31, 2013 as compared to the year ended December 31, 2012.
This increase was primarily attributable to Fund VIII, which launched in August 2013 and generated $65.0 million in management fees during the
year ended December 31, 2013. The increase was also attributed to the Contributed Partnerships, which began earning fees in Q4 2012 as a result of
the AAA Transaction and generated $10.3 million of management fees during the year ended December 31, 2013. See notes 4 and 17 to our
consolidated financial statements for a complete summary of the AAA Transaction and fee arrangements related to management fees earned from the
Contributed Partnerships. This increase was partially offset by decreased management fees earned from Fund VII of $42.4 million as a result of a
change in the management fee rate and basis from capital commitments to invested capital due to the end of its investment period. Management fees
earned from Fund VI also decreased by $8.3 million due to lower invested capital during the year ended December 31, 2013 as compared to the year
ended December 31, 2012.
31, 2012. This change was primarily attributable to increases in carried interest income earned from Fund VI of $548.1 million, Fund VII of $242.4
million and AAA Co- Invest VI of $115.7 million, partially offset by a decrease of $34.8 million from Fund V. Included in carried interest income
from affiliates was an increase of $1,249.9 million in realized gains mainly driven by increased dispositions of underlying portfolio investments held
during the year by Fund VII, Fund VI, Fund V and AAA Co- Invest VI of $691.3 million, $466.3 million, $65.7 million and $37.9 million,
respectively. The remaining change was attributable to a decrease in net unrealized carried interest income of $400.2 million mainly driven by Fund
VII and Fund V of $449.0 million and $100.5 million, respectively, resulting from the reversal of unrealized carried interest income to realized
carried interest income due to the realization of underlying portfolio investments held during the year. Partly offsetting the decrease in net unrealized
carried interest income were increases by Fund VI and AAA Co- Invest VI of $81.7 million and $77.7 million, respectively, due to increases in the
fair values of the underlying portfolio investments held during the year.
December 31, 2011. This change was primarily attributable to an increase in advisory and transaction fees, net, rendered during the year, primarily
relating to Fund VII of $46.1 million and Fund VI of $11.2 million, as well as $9.9 million relating to AGS and ANRP . Gross advisory and
transaction fees, including directors fees and termination fees, were $275.7 million and $155.7 million for the years ended December 31, 2012 and
2011, respectively, an increase of $120.0 million. The transaction and termination fees earned during the year ended December 31, 2012 primarily
related to seven portfolio investment transactions, specifically EP Energy LLC, Realogy, Rexnord, Great Wolf Resorts, Taminco, Smart & Final and
Athlon, which together generated $153.8 million and $78.4 million of the gross and net transaction fees, respectively, as compared to transaction and
termination fees earned during the year ended December 31, 2011 primarily in connection with five portfolio investment transactions, specifically
Athene Life Re Ltd., Constellium (formerly Alcan), Ascometal, Brit Insurance and CORE Media Group (formerly CKx), which together generated
$35.5 million and $18.4 million of the gross and net transaction fees, respectively. The advisory fees earned during the year ended December 31,
2012 were principally generated by advisory arrangements with seven portfolio investments including debt investment vehicles invested in by Fund
VI and Fund VII, EP Energy LLC, Caesars Entertainment, Berry Plastics, Momentive Performance Materials, CEVA Logistics and Realogy, which
generated gross and net fees of $70.7 million and $29.8 million, respectively. The advisory fees earned during the year ended December 31, 2011
were primarily generated by advisory and monitoring arrangements with five portfolio investments including Berry Plastics, Caesars Entertainment,
CEVA Logistics, debt investment vehicles invested in by Fund VI and Fund VII and Realogy, which generated gross and net fees of $69.3 million
and $26.2 million, respectively. Advisory and transaction fees, including directors fees and termination fees, are reported net of Management Fee
Offsets totaling $154.0 million and $97.6 million for the years ended December 31, 2012 and 2011, respectively, an increase of $56.4 million.
2011. This change was primarily attributable to increased management fees of $17.3 million earned from ANRP, which began paying fees during the
third quarter of 2011 based on committed capital. The increase was also attributed to the Contributed Partnerships, which began earning fees in Q4
2012 as a result of the AAA Transaction and generated $1.4 million of management during the year ended December 31, 2012. See notes 4 and 17 to
our consolidated financial statements for a complete summary of the AAA Transaction and fee arrangements related to management fees earned from
the Contributed Partnerships. This increase was partially offset by a decrease in the management fees earned from AAA Investments of $4.0 million
due to lower adjusted gross assets for the year ended December 31, 2012 as compared to the year ended December 31,
- 103-
2011. Also offsetting this increase was a decrease in management fees of $0.9 million as a result of lower management fees earned from Fund V,
Fund VI and other funds.
Carried interest income (loss) from affiliates increased by $2,116.7 million for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. This change was primarily attributable to increases in carried interest earned from Fund VI of $1,282.5 million, Fund VII of
$783.3 million and Fund V of $69.4 million, partially offset by carried interest loss of $90.7 million from Fund IV. Included in carried interest
income (loss) from affiliates for the year ended December 31, 2012, was an increase in net unrealized carried interest income (losses) of $1,874.7
million as a result of improvements in the fair values of the underlying portfolio investments held during the year, including an increase of $571.5
million from Fund VII, $60.9 million from Fund V and $62.0 million from AAA Investments and other funds. In addition, net unrealized carried
interest income increased by $1,069.2 as a result of unrealized carried interest income recorded in connection with Fund VI. For the year ended
December 31, 2011, Fund VI had significant unrealized carried interest losses which resulted in the recognition of a general partner obligation to
return previously distributed carried interest income. For the year ended December 31, 2012, the unrealized carried interest losses were recouped and
unrealized carried interest income was recognized which resulted in the reversal of the general partner obligation of $75.3 million. Also contributing
to the increase was a $111.1 million decrease to Fund IVs net unrealized carried interest loss during the year ended December 31, 2012. The
remaining increase in the carried interest income (loss) from affiliates relates to an increase in realized carried interest income of $242.1 million
resulting from increased dispositions of portfolio investments held by Fund VII, Fund VI, Fund V and AAA Investments of $211.8 million, $213.4
million, $8.5 million and $10.2 million, respectively, offset by a decrease in realized carried interest income in Fund IV of $201.8 million.
Expenses
Compensation and benefits expense increased by $310.0 million for the year ended December 31, 2013 as compared to the year ended December 31,
2012. This change was primarily a result of an increase of $303.5 million in profit sharing expense driven by an increase in carried interest income
earned by certain of our private equity funds during the year. Also, salary, bonus and benefits and equitybased compensation increased by $5.7
million and $0.8 million, respectively, due to an increase in headcount during the year ended December 31, 2013 as compared to the year ended
December 31, 2012. Included in profit sharing expense is $46.0 million and $50.3 million related to the Incentive Pool for the years ended December
31, 2013 and 2012, respectively.
Other expenses increased by $29.2 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This change
was primarily attributable to increased placement fees and organizational expenses incurred in connection with the capital raising activities for Fund
VIII. Professional fees also increased due to higher external accounting, tax, audit, legal and consulting fees incurred during the year ended December
31, 2013 as compared to the year ended December 31, 2012.
2011. This change was primarily attributable to a $823.7 million increase in profit sharing expense mostly driven by the increase in carried interest
income earned from our private equity funds during the year. Included in profit sharing expense is $50.3 million and $19.7 million of expenses
related to the Incentive Pool for the years ended December 31, 2012 and December 31, 2011, respectively.
Other expenses decreased by $16.0 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to decreased interest expense of $6.5 million mainly due to a lower margin rate on the 2007 AMH Credit Agreement. Also
contributing to this decrease were lower professional fees of $1.9 million attributable to lower external accounting, tax, audit, legal and consulting
fees incurred and lower occupancy expenses of $2.8 million due to the allocation of occupancy cost based on segment size due to acquisitions in the
credit segment during the year ended December 31, 2012 as compared to the same period during 2011. General, administrative and other expenses
also decreased by $3.4 million mainly due to a decrease in travel and related expenses and other non- compensation related expenses.
- 104-
Other Income
Income from equity method investments increased by $4.8 million for the year ended December 31, 2013 as compared to the year ended December
31, 2012. This change was driven by increases in the fair values of our private equity investments held, primarily from Apollo's ownership interest in
Fund VII, Vantium A/B, C and D and AAA Investments which in total contributed to increased income from equity method investments of $5.6
million during the year. The increase in income from equity method investments was partially offset by a decrease of $1.2 million from the equity
investment held in AION for the year ended December 31, 2013 as compared to the year ended December 31, 2012.
Other income, net increased by $10.0 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. This change
was primarily attributable to gains resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries and
reduction of the tax receivable agreement liability due to a change in estimated tax rates. See note 17 to our consolidated financial statements for
more information on the tax receivable agreement.
December 31, 2011. This change was driven by increases in the fair values of our private equity investments held, primarily relating to Apollos
ownership interest in Fund VII and AAA, which resulted in increased income from equity method investments of $51.7 million and $11.0 million,
respectively, during the year ended December 31, 2012 as compared to the year ended December 31, 2011.
Other income net, decreased by $2.4 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to losses resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries and other
adjustments during the year ended December 31, 2012 as compared to the year ended December 31, 2011.
- 105-
Credit
The following tables set forth segment statement of operations information and ENI for our credit segment for the years ended December 31, 2013,
2012, and 2011, respectively. ENI represents segment income (loss), excluding the impact of noncash charges related to RSUs granted in
connection with the 2007 private placement and equitybased compensation expense comprising amortization of AOG Units, income taxes,
amortization of intangibles associated with the 2007 Reorganization and acquisitions and Non- Controlling Interests with the exception of allocations
of income to certain individuals. In addition, segment data excludes the assets, liabilities and operating results of the Apollo funds and consolidated
VIEs that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure.
Management
Incentive
Total
Management
Incentive
(in thousands)
Total
Management
Incentive
Total
Credit(1):
Revenues:
Advisory and transaction fees from
affiliates, net
114,643
392,433
114,643
392,433
27,551
27,551
299,667
299,667
301,077
301,077
Carried interest income from

affiliates:
23,467
186,700
Unrealized (losses) gains (2)

Realized gains
Total Revenues
(56,568)
(56,568)
23,467
186,700
(66,852)
(66,852)
36,922
393,338
430,260
37,842
179,933
217,775
44,540
74,113
118,653
543,998
336,770
880,768
365,060
481,010
846,070
254,707
7,261
261,968
Expenses:
Total compensation and benefits
Other expenses
Total Expenses
24,167
24,167
26,988
26,988
23,283
23,283
153,056
153,056
139,895
139,895
94,980
94,980
142,728
142,728
138,444
138,444
36,762
36,762
177,223
142,728
319,951
166,883
138,444
305,327
118,263
36,762
155,025
162,064
162,064
149,051
149,051
94,995
94,995
339,287
142,728
482,015
315,934
138,444
454,378
213,258
36,762
250,020
(12,593)
(12,593)
Other Income (Loss):

Net (losses) from investment
activities
investments
Other income (loss), net
Total Other Income (Loss)
(1,142)
(1,142)
(5,881)
2,143
30,678
30,678
46,100
46,100
28,540
8,508
37,048
15,008
15,008
28,540
26,593
55,133
15,008
44,958
59,966
(1,978)
(13,985)
(8,730)
(8,730)
(12,146)
(13,985)
$
219,266
220,635
439,901
55,404
387,524
442,928
(1,978)
27,325
(5,881)
2,143
(1,978)
(3,738)
(5,716)
(33,239)
(12,146)
$
(5,914)
our three segments.
(2)
Included in unrealized carried interest income (loss) from affiliates for the year ended December 31, 2013 was a reversal of $19.3 million
previously realized carried interest income due to the general partner obligation to return previously distributed carried interest income for
SOMA and APC of $1.2 million and $0.3 million, respectively. Included in unrealized carried interest income (loss) from affiliates for the
year ended December 31, 2011 was a reversal of previously realized carried interest income due to the general partner obligation to return
previously distributed carried interest income for SOMA of $18.1 million. The general partner obligation is recognized based upon a
hypothetical liquidation of the funds' net assets as of the reporting date. The actual determination and any required payment of any such
general partner obligation would not take place until the final disposition of a fund's investments based on the contractual termination of
the fund.
- 106-
2013
Credit(1):
Revenues:
Advisory and
transaction
fees from
affiliates, net $
Management
fees from
affiliates
Carried
interest
income from
affiliates:
Unrealized
(losses) gain(2)
Realized gains
Total carried
interest
income from
affiliates
Total
Revenues
Expenses:
Compensation
and benefits
Equity- based
compensation
Salary, bonus
and benefits
Profit sharing
expense
Total
compensation
and benefits
Other
expenses
Total
Expenses
Other
Income:
Net losses
from
investment
activities
Income from
equity method
investments
Other income,
net
Total Other
Income
NonControlling
Interests
Economic Net
Income (Loss)$

Amount
2012
Change
(in thousands)
114,643 $
27,551 $
87,092
392,433
299,667
92,766
(56,568)
430,260
301,077
217,775
(357,645)
212,485
373,692
518,852
(145,160)
880,768
846,070
24,167
Percentage
Change
316.1 % $
2012

Amount
2011
Change
(in thousands)
27,551 $
23,467 $
4,084
Percentage
Change
17.4 %
31.0
299,667
186,700
112,967
60.5
NM
97.6
301,077
217,775
(66,852)
118,653
367,929
99,122
NM
83.5
(28.0)
518,852
51,801
467,051
NM
34,698
4.1
846,070
261,968
584,102
223.0
26,988
(2,821)
(10.5)
26,988
23,283
3,705
15.9
153,056
139,895
13,161
9.4
139,895
94,980
44,915
47.3
142,728
138,444
4,284
3.1
138,444
36,762
101,682
276.6
319,951
305,327
14,624
4.8
305,327
155,025
150,302
97.0
162,064
149,051
13,013
8.7
149,051
94,995
54,056
56.9
482,015
454,378
27,637
6.1
454,378
250,020
204,358
81.7
(12,593)
(1,142)
(11,451)
30,678
46,100
(15,422)
37,048
15,008
22,040
55,133
59,966
(4,833)
(13,985)
(8,730)
442,928 $
439,901 $
NM
(1,142)
(5,881)
4,739
(80.6)
(33.5)
46,100
2,143
43,957
NM
146.9
15,008
(1,978)
16,986
NM
(8.1)
59,966
(5,716)
65,682
NM
(5,255)
60.2
(8,730)
(12,146)
3,416
(28.1)
(3,027)
(0.7)% $
442,928 $
(5,914) $
448,842
NM
our three segments.
(2)
Included in unrealized carried interest income (loss) from affiliates for the year ended December 31, 2013 was a reversal of $19.3 million
previously realized carried interest income due to the general partner obligation to return previously distributed carried interest income for
SOMA and APC of $1.2 million and $0.3 million, respectively. Included in unrealized carried interest income (loss) from affiliates for the
previously distributed carried interest income for SOMA of $18.1 million. The general partner obligation is recognized based upon a
hypothetical liquidation of the funds' net assets as of the reporting date. The actual determination and any required payment of any such
general partner obligation would not take place until the final disposition of a fund's investments based on the contractual termination of
the fund.
Revenues
Advisory and transaction fees from affiliates, net, increased by $87.1 million, during the year ended December 31, 2013 as compared to the year
ended December 31, 2012. Net advisory fees earned were $108.5 million and $21.5 million during the years ended December 31, 2013 and 2012,
respectively, which was mainly driven by an increase in monitoring fees based on Athene capital and surplus fees of $91.1 million. Net transaction
fees earned were $6.1 million and $6.0 million during the years ended December 31, 2013 and 2012, respectively. Advisory and transaction fees,
including directors fees, are reported net of Management Fee Offsets which totaled $28.0 million and $26.6 million for the years ended December
31, 2013 and 2012, respectively, a decrease of $1.4 million or 5.2%.
2012. This change was primarily attributable to increases in management fees earned from Athene,
- 107-
EPF II, CLOs, and ACF of $72.5 million, $14.0 million, $10.4 million, and $8.7 million, respectively during the year ended December 31, 2013
compared to the same period in 2012. The increase in management fees was partially offset by a $7.8 million decrease in fees generated from COF II
and a $7.7 million decrease in fees generated from SVF, compared to the same period in 2012. The remaining change was attributable to other credit
funds, collectively, which contributed to an increase of $2.7 million in management fees during the year ended December 31, 2013 compared to the
same period in 2012.
Carried interest income from affiliates decreased by $145.2 million during the year ended December 31, 2013 as compared to the year ended
December 31, 2012. This change was primarily attributable to lower carried interest income related to COF I of $100.1 million, COF II of $48.3
million, CLOs of $44.5 million, offset by higher carried interest income related to SOMA of $40.0 million and EPF I of $34.5 million for the year
ended December 31, 2013 compared to 2012. Included in carried interest income from affiliates was realized carried interest income which increased
by $212.5 million, primarily resulting from increased dividends, interest income, and dispositions of portfolio investments held by COF I of $79.0
million, EPF I of $33.0 million, CLOs of $29.4 million, SOMA of $17.4 million, and CLF of $17.1 million as compared to 2012. The remaining
change was attributable to other credit funds, which in aggregate contributed to an increase of $36.6 million in realized carried interest income. The
increase in realized carried interest income was offset by a $357.6 million decrease in net unrealized carried interest loss. This offset primarily
resulted from reversals of unrealized carried interest income to realized carried interest income due to the realization of underlying portfolio
investments held during the period by COF I, CLOs, CLF, and COF II.
December 31, 2011. Gross advisory and transaction fees, including directors fees, were $54.1 million and $49.9 million for the years ended
December 31, 2012 and 2011, respectively, an increase of $4.2 million or 8.4%. The transaction fees earned during 2012 primarily related to portfolio
investments of EPF I and EPF II which together generated gross and net fees of $9.1 million and $2.4 million, respectively, whereas the transaction
fees earned during 2011 primarily related to two portfolio investment transactions of FCI and EPF I which together generated gross and net fees of
$9.6 million and $5.7 million, respectively. Net advisory fees earned were $21.5 million and $17.5 million during the year ended December 31, 2012
and 2011, respectively, which was mainly driven by an increase in monitoring fees based on Athene's capital and surplus of $8.0 million. Advisory
and transaction fees, including directors fees, are reported net of Management Fee Offsets totaling $26.6 million and $26.5 million for the years
ended December 31, 2012 and 2011, respectively, an increase of $0.1 million or 0.4%.
2011. This change was primarily attributable to EPF II which began earning management fees during the second quarter of 2012 totaling $43.1
million. In addition, management fees increased due to the acquisitions of Gulf Stream and Stone Tower in October 2011 and April 2012,
respectively, resulting in an increase in fees generated from CLOs of $29.3 million and Apollo Credit Fund of $11.6 million during the period. Also,
assets managed by Athene Asset Management, AMTG and AEC, together generated increased fees of $31.5 million during the year ended December
31, 2012 as compared to the same period in 2011. These increases were partially offset by decreased management fees earned from EPF I of $13.3
million during the period due to a change in management fee basis from committed to invested capital as a result of the launch of EPF II in April
2012. In addition, management fees earned from AINV decreased by $6.4 million as a result of a decrease in gross adjusted assets managed by the
Company during the period as compared to the same period in 2011. The remaining change was attributable to an overall increase in assets managed
by the other credit funds which collectively contributed to an increase of $17.2 million in management fees during the year ended December 31, 2012
as compared to the same period in 2011.
- 108-
31, 2011. This change was primarily attributable to higher carried interest income related to COF I of $134.9 million, CLF of $77.4 million, CLOs of
$72.2 million, and COF II of $69.1 million for the year ended December 31, 2012 compared to 2011. Included in carried interest income from
affiliates was realized carried interest income which increased by $99.1 million, primarily resulting from increased dividends, interest income, and
dispositions of portfolio investments held by COF I of $60.5 million, ACF of $16.7 million, and CLF of $11.5 million as compared to 2011. The
remaining change was attributable to other credit funds, which in aggregate contributed to an increase of $10.4 million in realized carried interest
income. The remaining increase relates to an increase in net unrealized carried interest income of $368.0 million driven by increases in the fair values
of the underlying portfolio investments held during the year primarily by COF I of $74.4 million, CLOs of $71.8 million, COF II of $65.9 million,
ACLF of $65.9 million, and AIE II of $27.0 million for the year ended December 31, 2012 as compared to 2011.
Expenses
Compensation and benefits expense increased by $14.6 million for the year ended December 31, 2013, as compared to the year ended December 31,
2012. The change was primarily due to an increase in salary, bonus, and benefits of $13.2 million during the period, due to increased headcount, and
an increase in profit- sharing expense of $4.3 million during the year ended December 31, 2013 as compared to the same period in 2012. Included in
the profit sharing expense is the Incentive Pool, with expenses of $16.3 million and $11.8 million for the years ended December 31, 2013 and 2012,
respectively.
Other expenses increased by $13.0 million during the year ended December 31, 2013, as compared to the year ended December 31, 2012. The change
was driven by a $7.1 million increase in placement fees mainly due to AIF, and a $5.0 million increase in professional fees attributable to higher legal
and IT consulting fees during the year ended December 31, 2013 as compared to the same period in 2012.
2011. This change was primarily a result of an increase in profit sharing expense of $101.7 million due to the favorable performance of certain of our
credit funds. In addition, salary, bonus and benefits expense increased by $44.9 million and equity based compensation increased by $3.7 million due
to an increase in headcount during the period, including new hires related to the Stone Tower acquisition in April 2012. Included in the profit sharing
expense is the Incentive Pool, with expenses of $11.8 million and $15.5 million for the years ended December 31, 2012 and 2011, respectively.
Other expenses increased by $54.1 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily a result of increased general, administrative and other expenses of $18.5 million due to higher travel, information technology,
recruiting and other expenses incurred during the year ended December 31, 2012 as compared to the same period in 2011. Placement fees also
increased by $19.0 million due to increased fundraising activities during the year ended December 31, 2012 as compared to the same period in
2011, primarily relating to EPF II and costs associated with the acquisition of Stone Tower for which the Company incurred fees of $12.9 million and
$4.9 million, respectively.
Other Income
Net losses from investment activities increased by $11.5 million for the year ended December 31, 2013 as compared to the year ended December 31,
2012. This change was related to an increase in unrealized loss resulting from the change in the fair value of the investment in HFA as of
December 31, 2013 as compared to the same period in 2012.
Income from equity method investments decreased by $15.4 million for the year ended December 31, 2013 as compared to the year ended December
31, 2012. This change was driven by decreases in the fair values of investments held by certain of our credit funds, primarily COF I and COF II,
which resulted in decreases in income from equity method investments of $13.3 million, and $4.0 million, respectively, during the year ended
December 31, 2013 as compared to the same period in 2012.
Other income increased by $22.0 million during the year ended December 31, 2013, as compared to December 31, 2012, primarily due to a reduction
of the tax receivable agreement liability due to a change in estimated tax rates and a $8.5 million unrealized gain on Athene- related derivative
contracts (see note 17 to our consolidated financial statements).
- 109-
Net losses from investment activities decreased by $4.7 million for the year ended December 31, 2012 as compared to the year ended December 31,
2011. This change was primarily attributable to an unrealized loss related to the change in the fair value of the investment in HFA, which resulted in a
decrease in losses from investment activities of $4.7 million during the period.
Income from equity method investments increased by $44.0 million for the year ended December 31, 2012 as compared to the year ended December
31, 2011. This change was driven by increases in the fair values of investments held by certain of our credit funds, primarily COF I, COF II, and
ACLF, which resulted in an increase in income from equity method investments of $17.3 million, $5.7 million and $4.5 million, respectively, during
the year ended December 31, 2012 as compared to the same period during 2011.
Other income (loss), net increased by $17.0 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. During
the year ended December 31, 2011, approximately $8.0 million of offering costs were incurred related to the launch of AMTG. The remaining change
was primarily attributable to higher interest income and rental income.
Real Estate
The following tables set forth our segment statement of operations information and our supplemental performance measure, ENI, for our real estate
segment for the years ended December 31, 2013, 2012, and 2011. ENI represents segment income (loss), excluding the impact of noncash charges
related to RSUs granted in connection with the 2007 private placement, equitybased compensation expense comprising amortization of AOG Units,
income taxes and Non- Controlling Interests. In addition, segment data excludes the assets, liabilities and operating results of the Apollo funds and
consolidated VIEs that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure.
Management
Incentive
Total
Management
Incentive
(in thousands)
Total
Management
Incentive
Total
Real Estate:(1)
Revenues:
Advisory and transaction fees from affiliates, net
3,548
3,548
53,436
53,436
749
46,326
749
46,326
698
40,279
698
40,279
Carried interest income from affiliates:

Unrealized gains
Realized gains
Total Revenues
4,681
4,681
10,401
10,401
541
541
4,673
4,673
56,984
5,222
62,206
47,075
15,074
62,149
40,977
40,977
Expenses:
Total compensation and benefits
Other expenses
Total Expenses
10,207
10,207
10,741
10,741
13,111
13,111
31,936
31,936
30,611
30,611
34,405
34,405
123
123
6,815
6,815
42,143
123
42,266
41,352
6,815
48,167
47,516
47,516
27,620
27,620
24,270
24,270
29,663
29,663
69,763
123
69,886
65,622
6,815
72,437
77,179
77,179
3,722
3,722
982
982
726
726
2,402
2,402
1,271
1,271
9,694
9,694
Other Income:
Income from equity method investments
Other income, net
Total Other Income
Economic Net (Loss) Income
2,402
$
(10,377)
3,722
$
8,821
6,124
$
(1,556)
1,271
$
(17,276)
982
$
9,241
2,253
$
(8,035)
9,694
$
(26,508)
726
$
726
10,420
$
(25,782)
our three segments.
- 110-
2013
Real Estate:(1)
Revenues:
Advisory and
transaction fees
from affiliates,
net
$
Management
fees from
affiliates
Carried interest
income from
affiliates:
Unrealized
gains
Realized gains
Total carried
interest income
from affiliates
Total Revenues
Expenses:
Compensation
and Benefits:
Equity- based
compensation
Salary, bonus
and benefits
Profit sharing
expense
Total
compensation
and benefits
Other expenses
Total Expenses
Other Income:
Income from
equity method
investments
Other income,
net
Total Other
Income
Economic Net
(Loss)
$

Amount
2012
Change
(in thousands)
3,548 $
53,436
749 $
46,326
2,799
7,110
Percentage
Change
373.7%

Amount
2011
Change
(in thousands)
2012
15.3
749 $
46,326
698 $
51
Percentage
Change
7.3 %
40,279
6,047
15.0
4,681
541
10,401
4,673
(5,720)
(4,132)
(55.0)
(88.4)
10,401
4,673
10,401
4,673
NM
NM
5,222
62,206
15,074
62,149
(9,852)
57
(65.4)
0.1
15,074
62,149
40,977
15,074
21,172
NM
51.7
10,207
10,741
(534)
(5.0)
10,741
13,111
(2,370)
(18.1)
31,936
30,611
1,325
4.3
30,611
34,405
(3,794)
(11.0)
123
6,815
(6,692)
(98.2)
6,815
6,815
NM
42,266
27,620
69,886
48,167
24,270
72,437
(5,901)
3,350
(2,551)
(12.3)
13.8
(3.5)
48,167
24,270
72,437
47,516
29,663
77,179
651
(5,393)
(4,742)
1.4
(18.2)
(6.1)
3,722
982
2,740
279.0
982
726
2,402
1,271
1,131
89.0
1,271
9,694
(8,423)
(86.9)
6,124
2,253
3,871
171.8
2,253
10,420
(8,167)
(78.4)
6,479
(80.6)% $
17,747
(68.8)%
(1,556) $
(8,035) $
(8,035) $
(25,782) $
256
35.3
our three segments.
Revenues
December 31, 2012. This change was attributable to additional capital raised and invested and the realization of underlying investments for which
transaction fees and termination fees, respectively, were earned during the year.
Management fees increased by $7.1 million for the year ended December 31, 2013 as compared to the year ended December 31, 2012. Of this
increase, $2.4 million was due to management fees earned from certain sub- advisory agreements and $1.2 million due to fees earned from 2012
CMBS- I Fund, L.P. and 2012 CMBS- II Fund, L.P., which began generating fees in the third quarter of 2012. Additionally, during 2013, ARI
invested additional capital and AGRE Debt Fund I, L.P. raised additional fee generating capital which resulted in higher management fees earned
during the year of $5.6 million. The increase in management fees was partially offset by a decrease in management fees earned from the CPI Funds of
$2.4 million as a result of the realization of underlying investments during the year ended December 31, 2013. Further offsetting the increase was a
decrease of $0.5 million in management fees from AGRE U.S. Real Estate Fund, L.P. which generated higher management fees in 2012 due to new
commitments to the fund for which the management fees were calculated retrospectively back to the initial closing date of the fund.
Carried interest income from affiliates decreased by $9.9 million for the year ended December 31, 2013 as compared to the year ended December 31,
2012. This change was primarily attributable to a $5.7 million decrease in net unrealized carried interest income driven by a decrease in the fair
values of the underlying portfolio investments for certain of the CPI Funds, partially offset by increases in the fair values of the underlying
investments of AGRE U.S. Real Estate Fund, L.P. Also driving the change was a decrease in realized carried interest of $4.1 million from the CPI
Funds during the year ended December 31, 2013 as compared to the year ended December 31, 2012.
- 111-
Management fees increased by $6.0 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to increased management fees earned of $4.1 million as a result of additional capital raised for certain sub- advisory
agreements and the launching of 2012 CMBS- I Fund, L.P. and 2012 CMBS- II Fund L.P. during the year ended December 31, 2012. In addition,
increased management fees were earned from AGRE U.S. Real Estate Fund, L.P. of $2.5 million due to additional capital commitments raised during
the year. Also contributing to the increase was a $0.9 million increase in management fees as a result of additional capital raised for ARI during the
year and a $1.1 million increase to management fees from other funds. These increases were offset by decreased management fees earned from the
CPI Funds of $3.6 million as a result of the realization of underlying investments.
Carried interest income from affiliates increased by $15.1 million for the year ended December 31, 2012 as compared to the year ended December 31,
2011. This change was primarily attributable to an increase in net unrealized gains of $10.4 million, driven by an increase in the fair values of the
underlying portfolio investments held during the year. The remaining change in the carried interest income from affiliates relates to an increase in
realized gains of $4.7 million resulting from increased dispositions of portfolio investments during the year.
Expenses
Compensation and benefits decreased by $5.9 million during the year ended December 31, 2013 as compared to the year ended December 31, 2012.
This change was primarily attributable to a decrease in profit sharing expense of $6.7 million driven by the decreased carried interest income earned
from our real estate funds during the year ended December 31, 2013 as compared to the year ended December 31, 2012. This decrease was partially
offset by an increase of $1.3 million in salary, bonus and benefits mainly driven by an increase in headcount during the year ended December 31,
2013 as compared to the year ended December 31, 2012.
Other expenses increased by $3.4 million during the year ended December 31, 2013 as compared to the year ended December 31, 2012. This change
was primarily attributable to increased professional fees of $3.4 million due to higher external accounting, tax, audit, legal and consulting fees
incurred during the year ended December 31, 2013 as compared to the year ended December 31, 2012. Also, general and administrative expenses
increased by $1.8 million due to higher fund- related organizational expenses incurred during the year ended December 31, 2013 as compared to the
year ended December 31, 2012. This increase was partially offset by a decrease in interest expense of $1.5 million due to the expiring of interest rate
swaps and due to a lower margin rate on the 2007 AMH Credit Agreement during the year ended December 31, 2013 as compared to the year ended
December 31, 2012.
Compensation and benefits increased in total by $0.7 million during the year ended December 31, 2012 as compared to the year ended December 31,
2011. The increase was primarily attributable to an increase of $6.8 million in profit sharing expense driven by the increase carried interest income
earned from our real estate funds. Offsetting this increase were decreases of $3.8 million and $2.4 million in salary, bonus and benefits and equitybased compensation, respectively, due to a decrease in headcount.
Other expenses decreased by $5.4 million during the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to decreased occupancy expense of $2.7 million due to headcount reductions and changes to the allocation of occupancy
cost based on segment size due to acquisitions in the credit segment. Also contributing to the decrease was decreased general, administrative and
other expenses of $2.5 million mainly due to a decrease in travel and related expenses during the year ended December 31, 2012 as compared to the
year ended December 31, 2011.
- 112-
Other Income
Income from equity method investments increased by $2.7 million during ended December 31, 2012 as compared to the year ended December 31,
2012. This change was primarily driven by an increase of $2.2 million in income from equity method investments in AGRE U.S. Real Estate Fund,
L.P.
Other income, net increased by $1.1 million during ended December 31, 2013 as compared to the year ended December 31, 2012. This change was
primarily attributable to gains resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries and reduction
of the tax receivable agreement liability due to a change in estimated tax rates. See note 17 in the consolidated financial statements for additional
information on the tax receivable agreement.
December 31, 2011. This change was driven by increases in the fair values of our real estate investments held, primarily relating to Apollos
ownership interest in ARI, which resulted in increased income from equity method investments of $0.5 million during the year ended December 31,
2012 as compared to the year ended December 31, 2011. This increase was offset by decreased income from equity method investments of $0.2
million from Apollos ownership interest in the CPI Funds and AGRE U.S. Real Estate Fund, L.P.
Other income, net decreased by $8.4 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This change
was primarily attributable to a decrease in reimbursed offering costs for the year ended December 31, 2012 as compared to the year ended
December 31, 2011. During the year ended December 31, 2011, approximately $8.0 million of reimbursed offering costs was recognized as a result
of a one time transaction related to the 2009 launch of ARI. The remaining change was mostly due to losses resulting from fluctuations in exchange
rates of foreign denominated assets and liabilities of subsidiaries during the year ended December 31, 2012 as compared to the year ended
December 31, 2011.
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Table of Contents
Summary Combined Segment Results for Management Business and Incentive Business
The following tables combine our reportable segments statements of operations information and supplemental performance measure, ENI, for our
management and incentive businesses for the years ended December 31, 2013, 2012 and 2011, respectively. ENI represents segment income (loss),
excluding the impact of noncash charges related to RSUs granted in connection with the 2007 private placement and equitybased compensation
expense comprising amortization of AOG Units, income taxes, amortization of intangibles associated with the 2007 Reorganization and acquisitions
and Non- Controlling Interests with the exception of allocations of income to certain individuals. In addition, segment data excludes the assets,
liabilities and operating results of the Apollo funds and consolidated VIEs that are included in the consolidated financial statements. ENI is not a U.S.
GAAP measure.
In addition to providing the financial results of our three reportable business segments, we evaluate our reportable segments based on what we refer to
as our management and incentive businesses. Our management business is generally characterized by the predictability of its financial metrics,
including revenues and expenses. This business includes management fee revenues, advisory and transaction fee revenues, carried interest income
from one of our opportunistic credit funds and expenses, each of which we believe are more stable in nature.
Year Ended
December 31,
2012
(in thousands)
2013
Management Business
Revenues:
$
affiliates
affiliates
Total Revenues
Expenses:
Interest expense
Professional fees(1)
General, administrative and
other(2)
Placement fees
Occupancy
Total Expenses
Other Income:
Interest income
Other income, net
Total Other Income
Economic Net Income
$
196,562
2011
150,044
82,310
730,702
623,041
490,191
36,922
964,186
37,842
810,927
44,540
617,041
66,341
294,753
29,260
82,448
68,942
274,574
37,116
63,250
68,172
251,095
40,850
58,315
97,085
42,424
39,946
11,046
663,303
86,550
22,271
37,218
10,227
600,148
73,972
3,911
35,816
11,132
543,263
10,763
33,185
43,948
(13,985)
330,846
8,149
12,783
20,932
(8,730)
222,981
4,731
10,066
14,797
(12,146)
76,429
(1) Excludes professional fees related to the consolidated funds.

(2) Excludes general and administrative expenses and interest income related to the consolidated funds.
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Table of Contents
The financial performance of our incentive business, which is dependent upon quarterly mark- to- market unrealized valuations in accordance with
U.S. GAAP guidance applicable to fair value measurements, includes carried interest income, income from equity method investments and profit
sharing expenses that are associated with our general partner interests in the Apollo funds, which are generally less predictable and more volatile in
nature.
Year Ended
December 31,
2013
2012
2011
(in thousands)
Incentive Business
Revenues:
Carried interest income
from affiliates:
Unrealized gains
(losses)(1)
$
402,835 $
1,166,397 $
(1,086,600)
Realized gains
2,456,404
997,222
644,653
Total Revenues
2,859,239
2,163,619
(441,947)
Expenses:
Profit sharing expense:
Unrealized profit
sharing expense(2)
195,298
426,098
(370,485)
Realized profit sharing
expense
977,957
446,035
310,415
Total Profit Sharing
Expense
1,173,255
872,133
(60,070)
Other Income:
Other income, net
10,203
Net losses from

investment activities(3)
(12,593)
(1,142)
(5,881)
Income from equity
method investments
113,211
121,120
10,829
Total Other Income
110,821
119,978
4,948
Economic Net Income
(Loss)
$
1,796,805 $
1,411,464 $
(376,929)
(1) Included in unrealized carried interest (loss) income from affiliates for the year ended December 31, 2013 was a reversal of $19.3 million and $0.3
million of the entire general partner obligation to return previously distributed carried interest income with respect to SOMA and APC,
respectively. Included in unrealized carried interest (loss) income from affiliates for the year ended December 31, 2012 was a reversal of $75.3
million of the entire general partner obligation to return previously distributed carried interest income with respect to Fund VI and reversal of
previously realized carried interest income due to the general partner obligation to return previously distributed carried interest income of $1.2
million and $0.3 million with respect to SOMA and APC, respectively. Included in unrealized carried interest (loss) income from affiliates for the
previously distributed carried interest income of $75.3 million and $18.1 million with respect to Fund VI and SOMA, respectively. The general
partner obligation is recognized based upon a hypothetical liquidation of the funds' net assets as of the reporting date. The actual determination
and any required payment of any such general partner obligation would not take place until the final disposition of a fund's investments based on
the contractual termination of the fund.
(2) Included in unrealized profit sharing expense for the year ended December 31, 2012 was a reversal of the entire receivable from Contributing
Partners and certain employees of $22.1 million due to the reversal of the general partner obligation to return previously distributed carried interest
income with respect to Fund VI. Included in unrealized profit sharing expense for the year ended December 31, 2011 was a reversal of previously
realized profit sharing expense for the amounts receivable from Contributing Partners and certain employees due to the general partner obligation
to return previously distributed carried interest income of $22.1 million with respect to Fund VI.
(3) Excludes investment income and net gains from investment activities related to consolidated funds and the consolidated VIEs.
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Table of Contents
Summary
Below is the summary of our total reportable segments, including management and incentive businesses, and a reconciliation of ENI to Net Income
Attributable to Apollo Global Management, LLC reported in our consolidated statements of operations:
Year Ended
December 31,
2012
(in thousands)
2013
Revenues
$
Expenses
Other income
Economic Net Income
Non- cash charges related
to equitybased
compensation
in Apollo Operating
Group
Amortization of intangible
assets
Net Income (Loss)
Attributable to Apollo
Global Management, LLC $
3,823,425
1,836,558
154,769
(13,985)
2,127,651
2011
2,974,546
1,472,281
140,910
(8,730)
1,634,445
175,094
483,193
19,745
(12,146)
(300,500)
(59,847)
(107,569)
(529,712)
(65,410)
(1,257,650)
(685,357)
940,312
(43,194)
(43,009)
(15,128)
659,391
310,957
(1,081,581)
(11,929)
(468,826)
Liquidity and Capital Resources

Historical
Although we have managed our historical liquidity needs by looking at deconsolidated cash flows, our historical consolidated statements of cash
flows reflects the cash flows of Apollo, as well as those of the consolidated Apollo funds.
The primary cash flow activities of Apollo are:
Generating cash flow from operations;
Making investments in Apollo funds;
Meeting financing needs through credit agreements; and
Distributing cash flow to equity holders and Non- Controlling Interests.
Primary cash flow activities of the consolidated Apollo funds are:
Raising capital from their investors, which have been reflected historically as Non- Controlling Interests of the consolidated subsidiaries in our
financial statements;
Using capital to make investments;
Generating cash flow from operations through distributions, interest and the realization of investments;
and
Distributing cash flow to investors.
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Table of Contents
While primarily met by cash flows generated through fee income and carried interest income received, working capital needs have also been met (to a
limited extent) through borrowings as follows:
As of December 31, 2013
Annualized
Weighted
Average
Outstanding
Interest Rate
Balance
2007 AMH Credit
Agreement
2013 AMH Credit
Facilities - Term
Facility
CIT secured loan
agreements
Total Debt
$
N/A

Annualized
Weighted
Average
Outstanding
Interest Rate
Balance
N/A
750,000
1.37%
N/A
750,000
N/A
1.37%
728,273
4.95%
N/A
(1)
N/A
9,545
737,818
3.47
4.93%
(1) Includes the effect of interest rate swaps.

Additionally the 2013 AMH Credit Facilities provide for a $500 million revolving credit facility, which was undrawn as of December 31, 2013. See
note 14 of our consolidated financial statements for information regarding the Company's debt arrangements.
We determine whether to make capital commitments to our funds in excess of our minimum required amounts based on a variety of factors, including
estimates regarding our liquidity resources over the estimated time period during which commitments will have to be funded, estimates regarding the
amounts of capital that may be appropriate for other funds that we are in the process of raising or are considering raising, and our general working
capital requirements.
Cash Flows
Significant amounts from our consolidated statements of cash flows for the years ended December 31, 2013, 2012 and 2011 are summarized and
discussed within the table and corresponding commentary below:
Year Ended
December 31,
2012
(in thousands)
2013
2011
Operating Activities
$
1,025,382
$
265,551
$
743,821
Investing Activities
111,727
(84,791)
(129,536)
Financing Activities
(1,005,023)
21,960
(251,823)
Net Increase in Cash and
Cash Equivalents
$
132,086
$
202,720
$
362,462
Net cash provided by operating activities was $1,025.4 million during the year ended December 31, 2013. During this period, there was
$2,374.0 million in net income, to which $126.2 million of equitybased compensation and a $60.8 million change in fair value of contingent
obligations were added to reconcile net loss to net cash provided by operating activities. Additional adjustments to reconcile cash provided by
operating activities during the year ended December 31, 2013 included $8,422.2 million in proceeds from sales of investments held by the
consolidated VIEs, a $27.3 million change in deferred revenue, $66.8 million of distributions from investment activities, a $232.5 million increase in
net unrealized losses on debt, a $587.5 million change in cash held at consolidated VIEs and a $141.2 million increase in profit sharing payable.
These favorable cash adjustments were offset by $309.1 million in net unrealized gains from investments held by the consolidated funds and VIEs,
$107.4 million of income from equity method investments, a $44.2 million decrease in due to affiliates, a $130.5 million decrease in due from
affiliates, $137.1 million of net realized gains on debt, a $64.1 million change in other liabilities of Apollo funds, a $408.8 million increase in carried
interest receivable and $9,841.8 million of purchases of investments held by the consolidated VIEs.
Net cash provided by operating activities was $265.6 million during the year ended December 31, 2012. During this period, there was
$3,047.8 million in net income, to which $598.7 million of equitybased compensation and a $1,951.9 million gain on business acquisitions and noncash expenses were added to reconcile net loss to net cash provided by operating activities. Additional adjustments to reconcile cash provided by
consolidated VIEs, a $497.7 million increase in net unrealized
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losses on debt and a $361.6 million increase in profit sharing payable. These favorable cash adjustments were offset by $458.0 million in net
unrealized gains from investments held by the consolidated funds and VIEs, a $103.8 million decrease in due to affiliates, a $348.1 million change in
cash held at consolidated VIEs, a $973.6 million increase in carried interest receivable and $7,525.5 million of purchases of investments held by the
consolidated VIEs.
Net cash provided by operating activities was $743.8 million during the year ended December 31, 2011. During this period, there was
$1,304.2 million in net losses, to which $1,149.8 million of equitybased compensation and a $196.2 million gain on business acquisitions and noncash expenses were added to reconcile net loss to net cash provided by operating activities. Additional adjustments to reconcile cash provided by
consolidated VIEs, $113.1 million in net unrealized losses from investments held by the consolidated funds and VIEs, a $43.8 million increase in due
to affiliates and a $998.5 million decrease in carried interest receivable. The decrease in our carried interest receivable balance during the year ended
December 31, 2011 was driven primarily by $304.5 million of carried interest losses from the change in fair value of funds for which we act as
general partner, along with fund cash distributions of $692.6 million. These favorable cash adjustments were offset by $1,294.5 million of purchases
of investments held by the consolidated VIEs, a $325.2 million decrease in profit sharing payable and $41.8 million of realized gains on debt of the
consolidated VIEs.
The operating cash flow amounts from the Apollo funds and consolidated VIEs represent the significant variances between net income (loss) and
cash flow from operations and were classified as operating activities pursuant to the American Institute of Certified Public Accountants, or AICPA,
Audit and Accounting Guide, Investment Companies. The increasing capital needs reflect the growth of our business while the fund- related
requirements vary based upon the specific investment activities being conducted at a point in time. These movements do not adversely affect our
liquidity or earnings trends because we currently have sufficient cash reserves compared to planned expenditures.
Investing Activities
Net cash provided by investing activities was $111.7 million for the year ended December 31, 2013, which was primarily comprised of $216.3
million relating to cash distributions received from equity method investments offset by $98.4 million of cash contributions to equity method
investments. Cash contributions to equity method investments were primarily related to Fund VII, Fund VIII, COF III, EPF I, EPF II, AESI, ACSP,
AION, AGRE U.S. Real Estate Fund, L.P. and Apollo SPN Investments I, L.P. Cash distributions from equity method investments were primarily
related to Fund VI, Fund VII, COF I, COF II, Vantium C, ACLF, AIE II, ACSP and EPF II.
Net cash used in investing activities was $84.8 million for the year ended December 31, 2012, which was primarily comprised of $11.3 million in
purchases of fixed assets, $99.2 million relating to the acquisition of Stone Tower (see note 3 to our consolidated financial statements), $126.9
million of cash contributions to equity method investments, partially offset by $152.6 million of cash distributions from equity method investments.
Cash contributions to equity method investments were primarily related to EPF I, EPF II, ASCP, Fund VII, AINV and AGRE U.S. Real Estate Fund.
Cash distributions from equity method investments were primarily related to Fund VII, ACLF, AGRE U.S. Real Estate Fund, COF I, COF II, Artus,
EPF I and EPF II.
Net cash used in investing activities was $129.5 million for the year ended December 31, 2011, which was primarily comprised of $21.3 million in
purchases of fixed assets, $64.2 million of cash contributions to equity method investments, a $52.1 million investment in HFA, the $29.6 million for
the acquisition of Gulf Stream and $26.0 million for the acquisition of investments in the Apollo Senior Loan Fund, partially offset by $64.8 million
of cash distributions from equity method investments. Cash contributions to equity method investments were primarily related to EPF I, Fund VII and
AGRE U.S. Real Estate Fund. Cash distributions from equity method investments were primarily related to Fund VII, ACLF, COF I, COF II, Artus,
EPF I and Vantium C.
Financing Activities
Net cash used in financing activities was $1,005.0 million for the year ended December 31, 2013, which was primarily comprised of $2,747.0 million
related to issuance of debt by consolidated VIEs, $750.0 million related to debt refinancing and $688.9 million in contributions from NonControlling Interests in consolidated variable interest entities. This amount was offset by $2,218.1 million in repayment of term loans by consolidated
VIEs, $334.2 million in distributions to consolidated VIEs, $147.4 million of distributions paid to Non- Controlling Interests in consolidated VIEs,
$975.5 million of distributions paid to Non- Controlling Interests in the Apollo Operating Group, $584.5 million in distributions, $85.9 million
related to employee tax withholding payments in connection with deliveries of Class A shares in settlement of RSUs, $12.2 million in distributions to
Non- Controlling Interests in consolidated entities, $737.8 million in principal repayments of debt and repurchases of debt, $30.4 million in
satisfaction of tax receivable agreements, $67.5 million in satisfaction of contingent obligations and $62.3 million in purchases of AAA units.
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Net cash provided by financing activities was $22.0 million for the year ended December 31, 2012, which was primarily comprised of $1,413.3
million related to issuance of debt by consolidated VIEs and $4.1 million in contributions from Non- Controlling Interests in consolidated entities.
This amount was offset by $515.9 million in repayment of term loans by consolidated VIEs, $486.7 million in distributions by consolidated VIEs,
$335.0 million of distributions paid to Non- Controlling Interests in the Apollo Operating Group, $202.4 million in distributions, $26.0 million
related to employee tax withholding payments in connection with deliveries of Class A shares in settlement of RSUs, $8.8 million in distributions to
Non- Controlling Interests in consolidated entities and $102.1 million in purchases of AAA units.
Net cash used in financing activities was $251.8 million for the year ended December 31, 2011, which was primarily comprised of $415.9 million in
repayment of term loans by consolidated VIEs, $308.8 million in distributions by consolidated VIEs, $199.2 million of distributions paid to NonControlling Interests in the Apollo Operating Group, $27.3 million of distributions paid to Non- Controlling Interests in consolidated funds, $102.6
million in distributions, $17.1 million related to employee tax withholding payments in connection with deliveries of Class A shares in settlement of
RSUs. These cash outflows were offset by $384.0 million in proceeds from the issuance of Class A shares and $454.4 million of debt issued by
consolidated VIEs.
Distributions
In addition to other distributions such as payments pursuant to the tax receivable agreement, the table below presents information regarding the
quarterly distributions which were made at the sole discretion of the Company's manager during 2011, 2012 and 2013 (in millions, except per share
amounts):
Distribution
Declaration
Date
Distribution
per
Class A Share
Amount
Distribution
Payment Date
Distribution
to
Class A
Shareholders
Distribution to
Non- Controlling
Interest Holders
in the Apollo
Operating Group
Total
Distributions
from
Apollo Operating
Group
Distribution
Equivalents on
Participating
Securities
January 4,
January 14,
2011
$
0.17
2011
$
16.6 $
40.8
$
57.4 $
May 12,
2011
0.22 June 1, 2011
26.8
52.8
79.6
August 9,
August 29,
2011
0.24
2011
29.5
57.6
87.1
November 3,
December 2,
2011
0.20
2011
24.8
48.0
72.8
For the year
ended
December
31, 2011
$
0.83
$
97.7 $
199.2
$
296.9 $
February 10,
February 29,
2012
$
0.46
2012
$
58.1 $
110.4
$
168.5 $
April 13,
2012
$
April 13, 2012 $
$
11.0 (1) $
11.0 $
May 8, 2012
0.25 May 30, 2012
31.6
60.0
91.6
August 2,
August 31,
2012
0.24
2012
31.2
57.6
88.8
November 9,
November 30,
2012
0.40
2012
52.0
96.0
148.0
For the year
ended
December
31, 2012
$
1.35
$
172.9 $
335.0
$
507.9 $
February 8,
February 28,
2013
$
1.05
2013
$
138.7 $
252.0
$
390.7 $
April 12,
2013
April 12, 2013
55.2 (1)
55.2
May 6, 2013
0.57 May 30, 2013
80.8
131.8
212.6
August 8,
August 30,
2013
1.32
2013
189.7
305.2
494.9
November 7,
November 29,
2013
1.01
2013
147.7
231.2
$
378.9 $
For the year
ended
December
31, 2013
$
3.95
$
556.9 $
975.4
$
1,532.3 $
(1) On April 13, 2012 and April 12, 2013, the Company made a $0.05 and a $0.23 distribution to the noncontrolling interest holders in the Apollo
Operating Group, respectively.
Future Cash Flows
Our ability to execute our business strategy, particularly our ability to increase our AUM, depends on our ability to establish new funds and to raise
additional investor capital within such funds. Our liquidity will depend on a number of factors, such as our ability to project our financial
performance, which is highly dependent on our funds and our ability to manage our projected costs, fund performance, having access to credit
facilities, being in compliance with existing credit agreements, as well
3.3
4.7
5.1
4.3
17.4
10.3
6.2
5.3
9.4
31.2
25.0
14.3
30.8
24.1
94.2
as industry and market trends. Also during economic downturns the funds we manage might experience cash flow issues or liquidate entirely. In these
situations we might be asked to reduce or eliminate the management fee and incentive fees we charge, which could adversely impact our cash flow in
the future.
For example, the investment performance of AIE I was adversely impacted due to market conditions in 2008 and early 2009, and on July 10, 2009, its
shareholders subsequently approved a monetization plan. The primary objective of the monetization plan was to maximize shareholder recovery
value by (i) opportunistically selling AIE Is assets over a three- year period from July 2009 to July 2012 and (ii) reducing the overall costs of the
fund. The Company waived management fees of $12.6 million for the year ended December 31, 2008 and an additional $2.0 million for the year
ended December 31, 2009 to limit the adverse impact that deteriorating market conditions were having on AIE Is performance. AIE I management
fees were terminated on August 23, 2012 as the fund received a majority vote from shareholders to approve the wind down resolution to terminate the
management agreement. AIE I was fully liquidated as of December 31, 2013.
An increase in the fair value of our funds investments, by contrast, could favorably impact our liquidity through higher management fees where the
management fees are calculated based on the net asset value, gross assets and adjusted assets. Additionally, higher carried interest income not yet
realized would generally result when investments appreciate over their cost basis which would not have an impact on the Companys cash flow.
On April 20, 2010, the Company announced that it entered into a strategic relationship agreement with CalPERS. The strategic relationship
agreement provides that Apollo will reduce fees charged to CalPERS on funds it manages, or in the future will manage, solely for CalPERS by $125
million over a five- year period or as close a period as required to provide CalPERS with that benefit. The agreement further provides that Apollo will
not use a placement agent in connection with securing any future capital commitments from CalPERS. As of December 31, 2013, the Company had
reduced fees charged to CalPERS on the funds it manages by approximately $87.3 million.
The Company granted approximately 2.1 million, 5.4 million and 8.1 million RSUs during the years ended December 31, 2013, 2012, and 2011
respectively. The average estimated fair value per share on the grant date was $26.95, $13.68 and $14.45 per RSU with a total fair value of the grants
of $56.6 million, $73.5 million and $116.6 million at December 31, 2013, 2012, and 2011, respectively. This will impact the Companys
compensation expense as these grants are amortized over their vesting term of three to six years. The Company expects to incur annual compensation
expenses on all grants, net of forfeitures, of approximately $51.9 million, $36.6 million, $24.3 million, $5.0 million, $3.2 million and $0.5 million
during the years ended December 31, 2014, 2015, 2016, 2017, 2018, 2019 and thereafter, respectively.
Although we expect to pay distributions according to our distribution policy, we may not pay distributions according to our policy, or at all, if, among
other things, we do not have the cash necessary to pay the intended distributions. To the extent we do not have cash on hand sufficient to pay
distributions, we may have to borrow funds to pay distributions, or we may determine not to pay distributions. The declaration, payment and
determination of the amount of our quarterly distributions are at the sole discretion of our manager.
Carried interest income from our funds can be distributed to us on a current basis, but is subject to repayment by the subsidiaries of the Apollo
Operating Group that act as general partner of such funds in the event that certain specified return thresholds are not ultimately achieved. The
Managing Partners, Contributing Partners and certain other investment professionals have personally guaranteed, to the extent of their ownership
interest, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several
and not joint and are limited to a particular Managing Partners or Contributing Partners distributions. Pursuant to the shareholders agreement dated
July 13, 2007 (the "Shareholders Agreement), we agreed to indemnify each of our Managing Partners and certain Contributing Partners against all
amounts that they pay pursuant to any of these personal guarantees in favor of Fund IV, Fund V and Fund VI (including costs and expenses related to
investigating the basis for or objecting to any claims made in respect of the guarantees) for all interests that our Managing Partners and Contributing
Partners have contributed or sold to the Apollo Operating Group.
Accordingly, in the event that our Managing Partners, Contributing Partners and certain investment professionals are required to pay amounts in
connection with a general partner obligation to return previously distributed carried interest income with respect to Fund IV, Fund V and Fund VI, we
will be obligated to reimburse our Managing Partners and certain Contributing Partners for the indemnifiable percentage of amounts that they are
required to pay even though we did not receive the distribution to which that general partner obligation related.
On February 7, 2014, the Company declared a cash distribution of $1.08 per Class A share, which was paid on February 26, 2014 to shareholders of
record on February 19, 2014.
On January 15, 2014, the Company issued 138,241 Class A shares in settlement of vested RSUs. This issuance did not cause a material change to the
Company's ownership interest in the Apollo Operating Group.
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On February 11, 2014, the Company issued 2,531,098 Class A shares in settlement of vested RSUs and vested options that were exercised. This
issuance caused the Company's ownership interest in the Apollo Operation Group to increase from 39.0% to 39.4%.
On February 26, 2014, the Company issued 2,530 Class A shares in settlement of the exercise of vested options. This issuance did not cause a
material change to the Company's ownership interest in the Apollo Operating Group.
Athene
Athene Holding Ltd. is the ultimate parent of various insurance company operating subsidiaries. Through its subsidiaries, Athene Holding Ltd.
provides insurance products focused primarily on the retirement market and its business centers primarily on issuing or reinsuring fixed and equityindexed annuities.
On October 2, 2013, Athene Holding Ltd. closed its acquisition of Aviva USA (the "Aviva USA Transaction"). Apollo had previously agreed to
provide up to $100 million of capital support to Athene to the extent such support was necessary in connection with the closing of the Aviva USA
transaction. The Company's commitment was not called in connection with the closing of the Aviva USA Transaction and as a result, the Company's
commitment terminated upon the closing of the Aviva USA Transaction.
AAA, through its investment in AAA Investments, owns the majority of the economic equity of Athene Holding Ltd. See the discussion of the AAA
Transaction in note 4 to our consolidated financial statements.
Apollo, through its consolidated subsidiary, Athene Asset Management, L.P. ("Athene Asset Management"), provides asset management services to
December 31, 2013, all of Athenes assets were managed by Athene Asset Management. Athene Asset Management had $59.5 billion of total AUM
as of December 31, 2013 in accounts owned by or related to Athene (the Athene Accounts), of which approximately $9.2 billion, or approximately
15.5%, was either sub- advised by Apollo or invested in Apollo funds and investment vehicles. The vast majority of such assets are in sub- advisory
managed accounts that manage high grade credit asset classes, such as CLO debt, commercial mortgage backed securities and insurance- linked
securities. We expect this percentage to increase over time provided that it continues to perform successfully in providing asset management services
to Athene.
Athene Asset Management receives a gross management fee equal to 0.40% per annum on all assets under management in the Athene Accounts, with
certain limited exceptions. In addition, the Company receives sub- advisory management fees and carried interest income with respect to a portion of
the assets in the Athene Accounts. Athene Asset Management and other Apollo subsidiaries incur all expenses associated with their provision of
services to Athene, including but not limited to, asset allocation services, direct asset management services, risk management, asset and liability
matching management, mergers and acquisitions asset diligence, hedging and other services.
In connection with the AAA Transaction, a subsidiary of AAA Investments contributed three investment partnerships to Athene. The Contributed
Partnerships pay a quarterly management fee and carried interest to Apollo with respect to the assets contributed in the AAA Transaction. The
quarterly management fee is calculated and paid by the Contributed Partnerships in arrears in an aggregate amount equal to one- fourth of (i) all
Adjusted Assets up to and including $3 billion multiplied by 1.25% plus (ii) all Adjusted Assets in excess of $3 billion multiplied by 1.0%. Adjusted
Assets means an amount equal to (i) the value of the gross assets of such Contributed Partnership minus (ii) the sum of (a) the amount of any
undistributed carried interest payable by such Contributed Partnerships, (b) an amount equal to the value of the Temporary Investments (as defined in
the relevant services agreement) held by such Contributed Partnerships, (c) an amount equal to the Capital Invested in Apollo Funds (as defined in the
relevant services agreement) by such Contributed Partnerships and (d) an amount equal to the liquidity discount applied by the Company in respect of
its investments in such Contributed Partnerships (provided such liquidity discount may not exceed 22.5% of the value of the assets contributed by
AAA). With respect to capital invested in an Apollo fund, Apollo receives management fees directly from the relevant funds under the investment
management agreements with such funds and not pursuant to the services agreement with the Contributed Partnerships. In addition, carried interest is
payable by the Contributed Partnerships with respect to each investment or group of investments (as specified in the particular partnership
agreement), at a rate of 20% of the profit of such investment or group of investments, subject to applicable hurdle rates. Each investment or group of
investments is treated separately for the purposes of calculating carried interest. The contributed assets also included certain investments in funds
managed by Apollo, carried interest on which is assessed at the fund level.
Under an amended services contract with Athene, effective February 5, 2013, Apollo earns a quarterly monitoring fee of 0.50% of Athenes capital
and surplus as of the end of the applicable quarter multiplied by 2.5, excluding the shares of Athene Holding Ltd. that were newly acquired (and not
in satisfaction of prior commitments to buy such shares) by AAA Investments in the AAA Transaction (the Excluded Athene Shares), at the end of
each quarter through December 31, 2014, the termination
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date. This quarterly monitoring fee is not applicable to the amount of invested capital attributable to the Excluded Athene Shares. All such monitoring
fees are paid pursuant to a derivative contract between Athene and Apollo. Each quarter, monitoring fees earned are translated into an accrued
notional number of shares of Athene Holding Ltd., and the accrued notional shares of Athene Holding Ltd. are fair valued. At Athenes option, all
notional shares accrued pursuant to the terms of the derivative contract are payable either in shares of Athene Holding Ltd. or cash equal to the fair
value of such shares of Athene Holding Ltd. at the time of settlement. Settlement occurs on the earlier of a change in control of Athene or October 31,
2017. For the years ended December 31, 2013 and 2012, Apollo earned $107.9 million and $16.8 million, respectively, related to this monitoring fee,
which is recorded in advisory and transaction fees from affiliates, net, in the consolidated statements of operations. As of December 31, 2013, Apollo
had a $116.4 million receivable, which is accounted for as a derivative, recorded in due from affiliates on the consolidated statements of financial
condition.
In accordance with the services agreement among AAA, AAA Investments and the other service recipients party thereto and Apollo, Apollo receives
a management fee for managing the assets of AAA Investments. In connection with the consummation of the AAA Transaction, on October 31, 2012,
the services agreement was amended (the "Amended AAA Services Agreement"). Pursuant to the Amended AAA Services Agreement, the parties
agreed that there will be no management fees payable by AAA Investments with respect to the Excluded Athene Shares. AAA Investments will
continue to pay Apollo the same management fee on its investment in Athene (other than with respect to the Excluded Athene Shares), except that
Apollo agreed that the obligation to pay the existing management fee shall terminate on December 31, 2014 (although services will continue through
December 31, 2020). In the event that AAA makes a tender offer for all or substantially all of its units where the consideration is to be paid in shares
of Athene Holding Ltd. (or an alternative transaction that is no less favorable in all material respects to the AAA unitholders as a whole), the
management fee will be unwound and a lump sum payment will be made to Apollo equal to the remaining management fee that would have been due
until the expiration date (December 31, 2020), using an 8% discount rate and assuming a 14% growth rate to then existing management fees,
compounded annually, until the expiration date, subject to a cap of $30.0 million had the tender offer or similar transaction commenced in 2013,
$25.0 million if the tender offer or similar transaction commences in 2014, $20.0 million if the tender offer or similar transaction commences in 2015
and zero if the tender offer or similar transaction commences in 2016 or thereafter. All such management fees are paid pursuant to a derivative
contract between AAA Investments and Apollo. Each quarter, management fees earned are translated into an accrued notional number of shares of
Athene Holding Ltd., and the accrued notional shares of Athene Holding Ltd. are fair valued. At the option of AAA Investments, all notional shares
accrued pursuant to the terms of the derivative contract are payable either in shares of Athene Holding Ltd. or cash equal to the fair value of such
shares of Athene Holding Ltd. at the time of settlement. Settlement occurs on the earlier of a change of control of Athene or October 31, 2017. As of
December 31, 2013 and 2012, Apollo had a receivable of $14.3 million and $2.1 million, respectively, related to the Amended AAA Services
Agreement, which is recorded in due from affiliates on the consolidated statements of financial condition. The total management fees earned by
Apollo related to the Amended AAA Services Agreement and the Contributed Partnerships for the years ended December 31, 2013 and 2012 were
$12.5 million (of which $2.2 million related to the derivative component, as described above) and $15.1 million (of which $0.6 million related to the
derivative component, as described above), respectively, which is recorded in management fees from affiliates in the consolidated statements of
operations.
In addition, Apollo, as general partner of AAA Investments, is generally entitled to a carried interest that allocates to it 20% of the realized returns
(net of related expenses, including borrowing costs) on the investments of AAA Investments, except that Apollo will not be entitled to receive any
carried interest in respect of the Excluded Athene Shares. Carried interest receivable from AAA Investments will be paid in shares of Athene Holding
Ltd. (valued at the then fair market value) if there is a distribution in kind of shares of Athene Holding Ltd., or paid in cash if AAA sells the shares of
Athene Holding Ltd. For the years ended December 31, 2013 and 2012, the Company recorded carried interest income less the related profit sharing
expense of $27.6 million and $35.3 million, respectively, from AAA Investments, which is recorded in the consolidated statements of operations. As
of December 31, 2013 and 2012, the Company had a $100.9 million and a $69.0 million carried interest receivable, respectively, related to AAA
Investments. As of December 31, 2013 and 2012, the Company had a related profit sharing payable of $28.8 million and $25.5 million, respectively,
recorded in profit sharing payable in the consolidated statements of financial condition.
For the years ended December 31, 2013 and 2012, Apollo earned revenues in the aggregate totaling $435.1 million and $164.7 million consisting of
management fees, sub- advisory and monitoring fees and carried interest income, respectively, from Athene after considering the related profit
sharing expense and changes in the market value of the Athene- related derivatives discussed above, which is recorded in the consolidated statement
of operations.
The amended services contract with Athene and Athene Life Re Ltd and the Amended AAA Services Agreement together with related derivative
contracts issued pursuant to these amended contracts, meet the definition of a derivative under U.S. GAAP. The Company has classified these
derivatives as Level III assets in the fair value hierarchy, as the pricing inputs into the determination of fair value require significant judgment and
estimation. The value of these derivatives is determined by multiplying the Athene share equivalents by the estimated price per share of Athene. See
note 6 to our consolidated financial statements for further discussion regarding fair value.
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The change in unrealized market value of these derivatives is reflected in other income, net in the consolidated statements of operations. For the year
ended December 31, 2013, there were $10.2 million of changes in market value recognized related to these derivatives.
Distributions to Managing Partners and Contributing Partners
The three Managing Partners who became employees of Apollo on July 13, 2007 are each entitled to a $100,000 base salary. Additionally, our
Managing Partners can receive other forms of compensation. Any additional consideration will be paid to them in their proportional ownership
interest in Holdings. Additionally, 85% of any tax savings APO Corp. recognizes as a result of the tax receivable agreement will be paid to the
Managing Partners.
Subsequent to the 2007 Reorganization, the Contributing Partners retained ownership interests in subsidiaries of the Apollo Operating Group.
Therefore, any distributions that flow up to management or general partner entities in which the Contributing Partners retained ownership interests
are shared pro rata with the Contributing Partners who have a direct interest in such entities prior to flowing up to the Apollo Operating Group. These
distributions are considered compensation expense after the 2007 Reorganization.
The Contributing Partners are entitled to receive the following:
Profit Sharing related to private equity carried interest income, from direct ownership of advisory entities. Any changes in fair value of the
underlying fund investments would result in changes to Apollo Global Management, LLCs profit sharing payable;
Additional consideration based on their proportional ownership interest in Holdings;

and
Additionally, 85% of any tax savings APO Corp. recognizes as a result of the tax receivable agreement will be paid to the Contributing
Partners.
Potential Future Costs
We may make grants of RSUs or other equitybased awards to employees and independent directors that we appoint in the future.
Critical Accounting Policies
This Managements Discussion and Analysis of Financial Condition and Results of Operations is based upon the consolidated financial statements,
which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP requires the use of
estimates and assumptions that could affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the
reported amounts of revenues and expenses. Actual results could differ from these estimates. A summary of our significant accounting policies is
presented in note 2 to our consolidated financial statements. The following is a summary of our accounting policies that are affected most by
judgments, estimates and assumptions.
Consolidation
The types of entities with which Apollo is involved generally include subsidiaries (i.e. general partners and management companies related to the
funds we manage), entities that have all the attributes of an investment company (e.g. funds) and securitization vehicles (e.g. collateralized loan
obligations). Each of these entities is assessed for consolidation on a case by case basis depending on the specific facts and circumstances
surrounding that entity.
Pursuant to our consolidation policy, we first consider the appropriate consolidation guidance to apply including consideration of whether the entity
qualifies for certain scope exceptions and whether the entity should be evaluated under either the previous rules on consolidation of variable interest
entities (VIEs) or the amended consolidation rules depending on whether or not the entity qualifies for the deferral as further described below. We
then perform an assessment to determine whether that entity qualifies as a VIE. An entity in which Apollo holds a variable interest is a VIE if any one
of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without
additional subordinated financial support, (b) the holders of equity investment at risk (as a group) lack either the direct or indirect ability through
voting rights or similar rights to make decisions about a legal entitys activities that have a significant effect on the success of the legal entity or the
obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some investors are disproportionate
to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns of the legal entity, or both and
substantially all of the legal entitys activities either involve or are conducted
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on behalf of an investor with disproportionately few voting rights. Entities that do not qualify as VIEs are generally assessed for consolidation as
voting interest entities (VOEs) under the voting interest model.
Under the voting interest model, Apollo consolidates those entities it controls through a majority voting interest or through other means, including
those VOEs in which the general partner is presumed to have control. Apollo does not consolidate those VOEs in which the presumption of control
by the general partner has been overcome through either the granting of substantive rights to the unaffiliated investors to either dissolve the fund or
remove the general partner (kick- out rights) or the granting of substantive participating rights.
As previously indicated, the consolidation assessment, including the determination as to whether an entity qualifies as a VIE depends on the facts and
circumstances surrounding each entity and therefore certain of our funds may qualify as VIEs whereas others may qualify as VOEs. The granting of
substantive kick- out rights is a key consideration in determining whether an entity is a VIE and whether or not that entity should be consolidated. For
example, when the unaffiliated holders of equity investment at risk of a fund with sufficient equity to permit the fund to finance its activities without
additional subordinated financial support are not granted substantive kick- out rights and the Company is not part of the group of holders of equity
investment at risk, the fund is generally determined to be a VIE, as the holders of equity investment at risk as a group lack the direct or indirect ability
through voting rights or similar rights to make decisions that have a significant effect on the success of the legal entity. Alternatively, when the
unaffiliated holders of equity investment at risk are granted substantive kick- out rights, the fund is generally determined to be a VOE. However, in
certain cases where the Company holds a substantive equity investment at risk in the fund, the fund may be determined to be a VOE even though
substantive kick- out rights were not granted to the unaffiliated holders of equity investment at risk. In these cases, the Company is part of the group
of holders of equity investment at risk and therefore the holders of equity investment at risk as a group do not lack the direct or indirect ability
through voting rights or similar rights to make decisions that have a significant effect on the success of the legal entity.
If the entity is determined to be a VIE under the conditions above, we then assess whether the entity should be consolidated by applying either the
previous consolidation rules or the amended consolidation rules depending on whether the entity qualifies for the deferral of the amended
consolidation rules as further described below.
VIEs that qualify for the deferral of the amended consolidation rules because certain conditions are met, including if the entities have all the attributes
of an investment company and are not securitization or asset- backed financing entities, will continue to apply the previous consolidation rules. VIEs
that are securitization or asset- backed financing entities will apply the amended consolidation rules. Under both sets of rules, VIEs for which Apollo
is determined to be the primary beneficiary are consolidated.
With respect to VIEs such as our funds that qualify for the deferral of the amended consolidation rules and therefore apply the previous consolidation
rules, Apollo is determined to be the primary beneficiary if its involvement, through holding interests directly or indirectly in the VIE or contractually
through other variable interests (e.g., carried interest and management fees), would be expected to absorb a majority of the VIEs expected losses,
receive a majority of the VIEs expected residual returns, or both. In cases where two or more Apollo related parties hold a variable interest in a VIE,
and the aggregate variable interest held by those parties would, if held by a single party, identify that party as the primary beneficiary, then the
Company is determined to be the primary beneficiary to the extent it is the party within the related party group that is most closely associated with the
VIE.
For VIEs such as our CLOs that apply the amended consolidation rules, Apollo is determined to be the primary beneficiary if it holds a controlling
financial interest defined as possessing both (a) the power to direct the activities of a VIE that most significantly impact the VIEs economic
performance and (b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the
VIE. CLOs are generally determined to be VIEs if they are formed solely to issue collateralized notes in the legal form of debt and therefore do not
have sufficient total equity investment at risk to permit the entity to finance its activities without additional subordinated financial support. With
respect to such CLOs, we generally possess a controlling financial interest in, and therefore consolidate, such CLOs in accordance with the amended
consolidation rules when our role as collateral manager provides us with the power to direct the activities that most significantly impact the CLOs
economic performance and we have the right to receive certain benefits from the CLO (e.g. incentive fees) that could potentially be significant to the
CLO.
Under the previous and the amended consolidation rules, Apollo determines whether it is the primary beneficiary of a VIE at the time it becomes
initially involved with the VIE and reconsiders that conclusion continuously. Investments and redemptions (either by Apollo, affiliates of Apollo or
third parties) or amendments to the governing documents of the respective entity may affect an entitys status as a VIE or the determination of the
primary beneficiary.
The assessment of whether an entity is a VIE and the determination of whether Apollo should consolidate such VIE requires judgments. Under both
sets of rules, those judgments include, but are not limited to: (i) determining whether the total
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equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (ii) evaluating
whether the holders of equity investment at risk, as a group, can make decisions that have a significant effect on the success of the entity,
(iii) determining whether two or more parties equity interests should be aggregated, (iv) determining whether the equity investors have proportionate
voting rights to their obligations to absorb losses or rights to receive returns from an entity, (v) and evaluating the nature of the relationship and
activities of the parties involved in determining which party within a related- party group is most closely associated with the VIE. Where the VIEs
have qualified for the deferral, judgments are also made in estimating cash flows to evaluate which member within the equity group absorbs a
majority of the expected profits or losses of the VIE. Where the VIEs have not qualified for the deferral, judgments are also made in determining
whether a member in the equity group has a controlling financial interest including power to direct activities that most significantly impact the VIEs
economic performance and rights to receive benefits or obligations to absorb losses that are potentially significant to the VIE.
Certain of the consolidated VIEs were formed to issue collateralized notes in the legal form of debt backed by financial assets. The difference
between the fair value of the assets and liabilities of these VIEs is presented within appropriated partners capital in the consolidated statements of
financial condition as these VIEs are funded solely with debt. Changes in the fair value of the assets and liabilities of these VIEs and the related
interest and other income is presented within net gains from investment activities of consolidated variable interest entities and net (income) loss
attributable to Non- Controlling Interests in the consolidated statements of operations. Such amounts are recorded within appropriated partners
capital as, in each case, the VIEs note holders, not Apollo, will ultimately receive the benefits or absorb the losses associated with the VIEs assets
and liabilities.
Assets and liability amounts of the consolidated VIEs are shown in separate sections within the consolidated statements of financial condition as of
December 31, 2013 and 2012.
Revenue Recognition
Carried Interest Income from Affiliates. We earn carried interest income from our funds as a result of such funds achieving specified performance
criteria. Such carried interest income generally is earned based upon a fixed percentage of realized and unrealized gains of various funds after
meeting any applicable hurdle rate or threshold minimum. Carried interest income from certain of the funds that we manage is subject to contingent
repayment and is generally paid to us as particular investments made by the funds are realized. If, however, upon liquidation of a fund, the aggregate
amount paid to us as carried interest exceeds the amount actually due to us based upon the aggregate performance of the fund, the excess (in certain
cases net of taxes) is required to be returned by us to that fund. For a majority of our credit funds, once the annual carried interest income has been
determined, there generally is no look- back to prior periods for a potential contingent repayment, however, carried interest income on certain other
credit funds can be subject to contingent repayment at the end of the life of the fund. We have elected to adopt Method 2 from U.S. GAAP guidance
applicable to accounting for management fees based on a formula, and under this method, we accrue carried interest income quarterly based on fair
value of the underlying investments and separately assess if contingent repayment is necessary. The determination of carried interest income and
contingent repayment considers both the terms of the respective partnership agreements and the current fair value of the underlying investments
within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary
depending on the valuation methodology that is used. See Investments, at Fair Value below for further discussion related to significant estimates
and assumptions used for determining fair value of the underlying investments in our private equity, credit and real estate funds.
Management Fees from Affiliates. The management fees related to our private equity funds are generally based on a fixed percentage of the
committed capital or invested capital. The corresponding fee calculations that consider committed capital or invested capital are both objective in
nature and therefore do not require the use of significant estimates or assumptions. Management fees related to our credit funds, by contrast, can be
based on net asset value, gross assets, adjusted cost of all unrealized portfolio investments, capital commitments, adjusted assets, capital
contributions, or stockholders' equity all as defined in the respective partnership agreements. The credit management fee calculations that consider net
asset value, gross assets, adjusted cost of all unrealized portfolio investments and adjusted assets, are normally based on the terms of the respective
partnership agreements and the current fair value of the underlying investments within the funds. Estimates and assumptions are made when
determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used. The
management fees related to our real estate funds are generally based on a specific percentage of the funds stockholders equity or committed or net
invested capital or the capital accounts of the limited partners. See Investments, at Fair Value below for further discussion related to significant
estimates and assumptions used for determining fair value of the underlying investments in our private equity, credit and real estate funds.
Investments, at Fair Value
The Company follows U.S. GAAP attributable to fair value measurements, which among other things, requires enhanced disclosures about
investments that are measured and reported at fair value. Investments at fair value represent investments
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of the consolidated funds, investments of the consolidated VIEs and certain financial instruments for which the fair value option was elected. The
unrealized gains and losses resulting from changes in the fair value are reflected as net gains (losses) from investment activities and net gains (losses)
from investment activities of the consolidated variable interest entities, respectively, in the consolidated statements of operations. In accordance with
U.S. GAAP, investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level IQuoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I
include listed equities and listed derivatives. As required by U.S. GAAP, the Company does not adjust the quoted price for these investments, even in
situations where the Company holds a large position and the sale of such position would likely deviate from the quoted price.
Level IIPricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and
fair value is determined through the use of models or other valuation methodologies. Investments that are generally included in this category include
corporate bonds and loans, less liquid and restricted equity securities and certain over- the- counter derivatives where the fair value is based on
observable inputs. These investments exhibit higher levels of liquid market observability as compared to Level III investments. The Company
subjects broker quotes to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level II
investment. These criteria include, but are not limited to, the number and quality of broker quotes, the standard deviation of obtained broker quotes,
and the percentage deviation from independent pricing services.
Level IIIPricing inputs are unobservable for the investment and includes situations where there is little observable market activity for the
investment. The inputs into the determination of fair value may require significant management judgment or estimation. Investments that are included
in this category generally include general and limited partner interests in corporate private equity and real estate funds, opportunistic credit funds,
distressed debt and non- investment grade residual interests in securitizations and CDOs and CLOs where the fair value is based on observable inputs
as well as unobservable inputs. When a security is valued based on broker quotes, the Company subjects those quotes to various criteria in making the
determination as to whether a particular investment would qualify for treatment as a Level II or Level III investment. Some of the factors we consider
include the number of broker quotes we obtain, the quality of the broker quotes, the standard deviations of the observed broker quotes and the
corroboration of the broker quotes to independent pricing services.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investments level
within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of
the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment
where the fair value is based on unobservable inputs.
In cases where an investment or financial instrument measured and reported at fair value is transferred into or out of Level III of the fair value
hierarchy, the Company accounts for the transfer as of the end of the reporting period.
Equity Method Investments. For investments in entities over which the Company exercises significant influence but which do not meet the
requirements for consolidation, the Company uses the equity method of accounting, whereby the Company records its share of the underlying income
or loss of such entities. Income (loss) from equity method investments is recognized as part of other income (loss) in the consolidated statements of
operations and income (loss) on available- for- sale securities (from equity method investments) is recognized as part of other comprehensive income
(loss), net of tax in the consolidated statements of comprehensive income (loss). The carrying amounts of equity method investments are reflected in
investments in the consolidated statements of financial condition. As the underlying entities that the Company manages and invests in are, for U.S.
GAAP purposes, primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Companys equity
method investments in such entities are at fair value.
Private Equity Investments. The majority of the illiquid investments within our private equity funds are valued using the market approach, which
provides an indication of fair value based on a comparison of the subject company to comparable publicly traded companies and transactions in the
industry.
Market Approach. The market approach is driven by current market conditions, including actual trading levels of similar companies and, to the
extent available, actual transaction data of similar companies. Judgment is required by management when assessing which companies are similar to
the subject company being valued. Consideration may also be given to any of the following factors: (1) the subject companys historical and
projected financial data; (2) valuations given to comparable companies; (3) the size and scope of the subject companys operations; (4) the subject
companys individual strengths and weaknesses; (5) expectations relating to the markets receptivity to an offering of the subject companys
securities; (6) applicable restrictions on transfer; (7) industry and market information; (8) general economic and market conditions; and (9) other
factors deemed
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relevant. Market approach valuation models typically employ a multiple that is based on one or more of the factors described above. Sources for
gaining additional knowledge related to comparable companies include public filings, annual reports, analyst research reports, and press releases.
Once a comparable company set is determined, we review certain aspects of the subject companys performance and determine how its performance
compares to the group and to certain individuals in the group. We compare certain measurements such as EBITDA margins, revenue growth over
certain time periods, leverage ratios, and growth opportunities. In addition, we compare our entry multiple and its relation to the comparable set at the
time of acquisition to understand its relation to the comparable set on each measurement date.
Income Approach. For investments where the market approach does not provide adequate fair value information, we rely on the income approach.
The income approach is also used to value investments or validate the market approach within our private equity funds. The income approach
provides an indication of fair value based on the present value of cash flows that a business or security is expected to generate in the future. The most
widely used methodology for the income approach is a discounted cash flow method. Inherent in the discounted cash flow method are significant
assumptions related to the subject companys expected results and a calculated discount rate, which is normally based on the subject companys
weighted average cost of capital, or WACC. The WACC represents the required rate of return on total capitalization, which is comprised of a
required rate of return on equity, plus the current tax- effected rate of return on debt, weighted by the relative percentages of equity and debt that are
typical in the industry. The most critical step in determining the appropriate WACC for each subject company is to select companies that are
comparable in nature to the subject company. Sources for gaining additional knowledge about the comparable companies include public filings,
annual reports, analyst research reports, and press releases. The general formula then used for calculating the WACC considers the after- tax rate of
return on debt capital and the rate of return on common equity capital, which further considers the risk- free rate of return, market beta, market risk
premium and small stock premium, if applicable. The variables used in the WACC formula are inferred from the comparable market data obtained.
The Company evaluates the comparable companies selected and concludes on WACC inputs based on the most comparable company or analyzes the
range of data for the investment.
The value of liquid investments, where the primary market is an exchange (whether foreign or domestic) is determined using period end market
prices. Such prices are generally based on the close price on the date of determination.
On a quarterly basis, Apollo utilizes a valuation committee consisting of members from senior management, to review and approve the valuation
results related to our funds' private equity investments. Management also retains independent valuation firms to provide third- party valuation
consulting services to Apollo, which consist of certain limited procedures that management identifies and requests them to perform. The limited
procedures provided by the independent valuation firms assist management with validating their valuation results or determining fair value. The
Company performs various back- testing procedures to validate their valuation approaches, including comparisons between expected and observed
outcomes, forecast evaluations and variance analysis. However, because of the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.
Credit Investments. The majority of investments in Apollos credit funds are valued based on quoted market prices and valuation models. Debt and
equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value utilizing recognized pricing
services, market participants or other sources. When market quotations are not available, a model based approach is used to determine fair value. The
credit funds also enter into foreign currency exchange contracts, total return swap contracts, credit default swap contracts, and other derivative
contracts, which may include options, caps, collars and floors. Foreign currency exchange contracts are marked- to- market by recognizing the
difference between the contract exchange rate and the current market rate as unrealized appreciation or depreciation. If securities are held at the end
of this period, the changes in value are recorded in income as unrealized. Realized gains or losses are recognized when contracts are settled. Total
return swap and credit default swap contracts are recorded at fair value as an asset or liability with changes in fair value recorded as unrealized
appreciation or depreciation. Realized gains or losses are recognized at the termination of the contract based on the difference between the close- out
price of the total return or credit default swap contract and the original contract price.
Forward contracts are valued based on market rates obtained from counterparties or prices obtained from recognized financial data service providers.
When determining fair value pricing when no observable market value exists, the value attributed to an investment is based on the enterprise value at
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Valuation approaches used to estimate the fair value of illiquid credit investments also may include the market approach and the income
approach, as previously described above. The valuation approaches used consider, as applicable, market risks, credit risks, counterparty risks and
foreign currency risks.
On a quarterly basis, Apollo also utilizes a valuation committee, consisting of members from senior management, to review and approve the valuation
results related to our credit investments. For certain publicly traded vehicles, a review is performed by an independent board of directors. The
Company also retains independent valuation firms to provide third- party valuation
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outcomes, forecast evaluations and variance analysis.
Real Estate Investments. For the CMBS portfolio of Apollos funds, the estimated fair value of the CMBS portfolio is determined by reference to
market prices provided by certain dealers who make a market in these financial instruments. Broker quotes are only indicative of fair value and may
not necessarily represent what the funds would receive in an actual trade for the applicable instrument. Additionally, the loans held- for- investment
are stated at the principal amount outstanding, net of deferred loan fees and costs. The Company evaluates its loans for possible impairment on a
quarterly basis. For Apollos opportunistic and value added real estate funds, valuations of non- marketable underlying investments are determined
using methods that include, but are not limited to (i) discounted cash flow estimates or comparable analysis prepared internally, (ii) third party
appraisals or valuations by qualified real estate appraisers, and (iii) contractual sales value of investments/properties subject to bona fide purchase
contracts. Methods (i) and (ii) also incorporate consideration of the use of the income, cost, or sales comparison approaches of estimating property
values.
On a quarterly basis, Apollo also utilizes a valuation committee, consisting of members from senior management, to review and approve the valuation
results related to our real estate investments. For certain publicly traded vehicles, a review is performed by an independent board of directors. The
Company also retains independent valuation firms to provide third- party valuation consulting services to Apollo, which consist of certain limited
procedures that management identifies and requests them to perform. The limited procedures provided by the independent valuation firms assist
management with validating their valuation results or determining fair value. The Company performs various back- testing procedures to validate
their valuation approaches, including comparisons between expected and observed outcomes, forecast evaluations and variance analysis.
The fair values of the investments in our private equity, credit and real estate funds can be impacted by changes to the assumptions used in the
underlying valuation models. For further discussion on the impact of changes to valuation assumptions see Item 7A. Quantitative and Qualitative
Disclosures About Market RiskSensitivity. There have been no material changes to the underlying valuation models during the periods that our
financial results are presented.
Fair Value of Financial Instruments
U.S. GAAP guidance requires the disclosure of the estimated fair value of financial instruments. The fair value of a financial instrument is the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Except for the Companys debt obligation related to the 2013 AMH Credit Facilities (as defined in note 14 to our consolidated financial statements),
Apollos financial instruments are recorded at fair value or at amounts whose carrying value approximates fair value. See Investments, at Fair
Value above. While Apollos valuations of portfolio investments are based on assumptions that Apollo believes are reasonable under the
circumstances, the actual realized gains or losses will depend on, among other factors, future operating results, the value of the assets and market
conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may ultimately differ significantly
from the assumptions on which the valuations were based. Other financial instruments carrying values generally approximate fair value because of
the shortterm nature of those instruments or variable interest rates related to the borrowings. As disclosed in note 14 to our consolidated financial
statements, the Companys long term debt obligation related to the 2013 AMH Credit Facilities is believed to have an estimated fair value of
approximately $750.0 million based on a yield analysis using available market data of comparable securities with similar terms and remaining
maturities as of December 31, 2013. However, the carrying value that is recorded on the consolidated statements of financial condition is the amount
for which we expect to settle the long term debt obligation. The Company has determined that the long term debt obligation related to the 2013 AMH
Credit Facilities would be categorized as a Level III liability in the fair- value hierarchy.
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Valuation of Financial Instruments Held by Consolidated VIEs
The consolidated VIEs hold investments that are traded over- the- counter. Investments in securities that are traded on a securities exchange or
comparable over- the- counter quotation systems are valued based on the last reported sale price at that date. If no sales of such investments are
reported on such date, and in the case of over- the- counter securities or other investments for which the last sale date is not available, valuations are
based on independent market quotations obtained from market participants, recognized pricing services or other sources deemed relevant, and the
prices are based on the average of the bid and ask prices, or at ascertainable prices at the close of business on such day. Market quotations are
generally based on valuation pricing models or market transactions for similar securities adjusted for security- specific factors such as relative capital
structure priority and interest and yield risks, among other factors. When market quotations are not available, a model based approach is used to
determine fair value.
The consolidated VIEs also have debt obligations that are recorded at fair value. The primary valuation methodology used to determine fair value for
debt obligation is market quotation. Prices are based on the average of the bid and ask prices. In the event that market quotations are not
available, a model based approach is used. The valuation approach used to estimate the fair values of debt obligations for which market quotations are
not available is the discounted cash flow method, which includes consideration of the cash flows of the debt obligation based on projected quarterly
interest payments and quarterly amortization. Debt obligations are discounted based on the appropriate yield curve given the loans respective
maturity and credit rating. Management uses its discretion and judgment in considering and appraising relevant factors for determining the valuations
of its debt obligations.
Fair Value Option. Apollo elected the fair value option for the assets and liabilities of the consolidated VIEs. Such election is irrevocable and is
applied to financial instruments on an individual basis at initial recognition. Apollo applied the fair value option for certain corporate loans, other
investments and debt obligations held by these entities that otherwise would not have been carried at fair value. For the convertible note issued by
HFA, Apollo elected to separately present interest income from other changes in the fair value of the convertible note within the consolidated
statement of operations. See notes 4 and 5 to our consolidated financial statements for further disclosure on the investment in HFA and financial
instruments of the consolidated VIEs for which the fair value option has been elected.
Goodwill and Intangible AssetsGoodwill and indefinite- life intangible assets must be reviewed annually for impairment or more frequently if
circumstances indicate impairment may have occurred. Identifiable finite- life intangible assets, by contrast, are amortized over their estimated useful
lives, which are periodically reevaluated for impairment or when circumstances indicate an impairment may have occurred. Apollo amortizes its
identifiable finite- life intangible assets using a method of amortization reflecting the pattern in which the economic benefits of the finite- life
intangible asset are consumed or otherwise used up. If that pattern cannot be reliably determined, Apollo uses the straightline method of
amortization. At June 30, 2013, the Company performed its annual impairment testing and determined there was no impairment of goodwill or
indefinite life intangible assets at such time.
Compensation and Benefits
Compensation and benefits include salaries, bonuses and benefits, profit sharing expense and equitybased compensation.
Salaries, Bonus and Benefits. Salaries, bonus and benefits include base salaries, discretionary and non- discretionary bonuses, severance and
employee benefits. Bonuses are accrued over the related service period.
Also included within salaries, bonus and benefits is the expense related to profits interests issued to certain employees whereby they are entitled to a
share in earnings of and any appreciation of the value in a subsidiary of the Company during their term of employment. The expense related to these
profits interests is recognized ratably over the requisite service period and thereafter will be recognized at the time the distributions are determined.
The Company sponsors a 401(k) Savings Plan whereby U.S.- based employees are entitled to participate in the plan based upon satisfying certain
eligibility requirements. The Company may provide discretionary contributions from time to time. No contributions relating to this plan were made
by the Company for the years ended December 31, 2013, 2012 and 2011.
Profit Sharing Expense. Profit sharing expense is primarily a result of agreements with our Contributing Partners and employees to compensate
them based on the ownership interest they have in the general partners of the Apollo funds. Therefore, changes in the fair value of the underlying
investments in the funds we manage and advise affect profit sharing expense. As of December 31, 2013, our total private equity investments were
approximately $23.4 billion. The Contributing Partners and employees are allocated approximately 30% to 50% of the total carried interest income
which is driven primarily by changes in
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fair value of the underlying funds investments and is treated as compensation expense. Additionally, profit sharing expenses paid may be subject to
clawback from employees, former employees and Contributing Partners to the extent not indemnified.
Changes in the fair value of the contingent obligations that were recognized in connection with certain Apollo acquisitions are reflected in the
Companys consolidated statements of operations as profit sharing expense.
In June 2011, the Company adopted a performance based incentive arrangement for certain Apollo partners and employees designed to more closely
align compensation on an annual basis with the overall realized performance of the Company. This arrangement, which we refer to herein as the
Incentive Pool, enables certain partners and employees to earn discretionary compensation based on carried interest realizations earned by the
Company in a given year, which amounts are reflected in profit sharing expense in the accompanying consolidated financial statements. The
Company adopted the Incentive Pool to attract and retain, and provide incentive to, partners and employees of the Company and to more closely align
the overall compensation of partners and employees with the overall realized performance of the Company. Allocations to the Incentive Pool and to
its participants contain both a fixed and a discretionary component and may vary year- to- year depending on the overall realized performance of the
Company and the contributions and performance of each participant. There is no assurance that the Company will continue to compensate individuals
through performance- based incentive arrangements in the future and there may be periods when the Executive Committee of the Companys
manager determines that allocations of realized carried interest income are not sufficient to compensate individuals, which may result in an increase
in salary, bonus and benefits.
Equity- Based Compensation. Equity- based compensation is accounted for in accordance with U.S. GAAP, which requires that the cost of
employee services received in exchange for an award is generally measured based on the grant date fair value of the award. Equity- based awards that
do not require future service (i.e., vested awards) are expensed immediately. Equity- based employee awards that require future service are
recognized over the relevant service period. Further, as required under U.S. GAAP, the Company estimates forfeitures using industry comparables or
historical trends for equitybased awards that are not expected to vest. Apollos equitybased awards consist of, or provide rights with respect to
AOG Units, RSUs, share options, AAA RDUs, ARI restricted stock awards, ARI RSUs and AMTG RSUs. For more information regarding Apollos
equitybased compensation awards, see note 16 to our consolidated financial statements. The Companys assumptions made to determine the fair
value on grant date and the estimated forfeiture rate are embodied in the calculations of compensation expense.
Additionally, the value of the AOG Units have been reduced to reflect the transfer restrictions imposed on units issued to the Managing Partners and
Contributing Partners as well as the lack of rights to participate in future Apollo Global Management, LLC equity offerings. These awards have the
following characteristics:
Awards granted to the Managing Partners (i) are not permitted to be sold to any parties outside of the Apollo Global Management, LLC control
group and transfer restrictions lapse pro rata during the forfeiture period over 60 or 72 months, and (ii) allow the Managing Partners to initiate a
change in control; and
Awards granted to the Contributing Partners (i) are not permitted to be sold or transferred to any parties except to the Apollo Global Management,
LLC control group and (ii) the transfer restriction period lapses over six years (which is longer than the forfeiture period which lapses ratably over
60 months).
As noted above, the AOG Units issued to the Managing Partners and Contributing Partners have different restrictions which affect the liquidity of and
the discounts applied to each grant.
We utilized the Finnerty Model to calculate a discount on the AOG Units granted to the Contributing Partners. The Finnerty Model provides for a
valuation discount reflecting the holding period restriction embedded in a restricted security preventing its sale over a certain period of time. Along
with the Finnerty Model we applied adjustments to account for the existence of liquidity clauses specific to the AOG Units granted to the
Contributing Partners and a minority interest consideration as compared to the units sold in the Strategic Investors Transaction in 2007. The
combination of these adjustments yielded a fair value estimate of the AOG Units granted to the Contributing Partners.
The Finnerty Model proposes to estimate a discount for lack of marketability such as transfer restrictions by using an option pricing theory. This
model has gained recognition through its ability to address the magnitude of the discount by considering the volatility of a companys stock price and
the length of restriction. The concept underpinning the Finnerty Model is that a restricted security cannot be sold over a certain period of time.
Further simplified, a restricted share of equity in a company can be viewed as having forfeited a put on the average price of the marketable equity
over the restriction period (also known as an Asian Put Option). If we price an Asian Put Option and compare this value to that of the assumed fully
marketable underlying security, we can effectively estimate the marketability discount.
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The assumptions utilized in the model were (i) length of holding period, (ii) volatility, (iii) dividend yield and (iv) risk free rate. Our assumptions
were as follows:
(i) We assumed a maximum two year holding period.
(ii)
We concluded based on industry peers, that our volatility annualized would be approximately
40%.
(iii) We assumed no distributions.
(iv) We assumed a 4.88% risk free rate based on U.S. Treasuries with a two year maturity.
For the Contributing Partners grants, the Finnerty Model calculation, as detailed above, yielded a marketability discount of 25%. This marketability
discount, along with adjustments to account for the existence of liquidity clauses and consideration of noncontrolling interests as compared to units
sold in the Strategic Investors Transaction in 2007, resulted in an overall discount for these grants of 29%.
We determined a 14% discount for the grants to the Managing Partners based on the equity value per share of $24. We determined that the value of
the grants to the Managing Partners was supported by the 2007 sale of an identical security to Credit Suisse Management, LLC at $24 per share.
Based on an equity value per share of $24, the implied discount for the grants to the Managing Partners was 14%. The Contributing Partners yielded a
larger overall discount of 29%, as they are unable to cause a change in control of Apollo. This results in a lower fair value estimate, as their units
have fewer beneficial features than those of the Managing Partners.
Another significant part of our compensation expense is derived from amortization of RSUs. The fair value of all RSU grants after March 29, 2011 is
based on the grant date fair value, which considers the public share price of the Company. RSUs are comprised of Plan Grants, which do not pay
distributions until vested and, for grants made after 2011, the underlying shares are generally issued by March 15th after the year in which they vest,
and Bonus Grants, which pay distributions on both vested and unvested grants and are generally issued after vesting on an approximate two- month
lag. For Plan Grants, the grant date fair value is based on the public share price of the Company, and is discounted for transfer restrictions and lack of
distributions until vested. For Bonus Grants, the grant date fair value is based on the public share price of the Company, and is discounted for transfer
restrictions.
We utilized the present value of a growing annuity formula to calculate a discount for the lack of pre- vesting distributions on Plan Grant RSUs. The
weighted average for the inputs utilized for the shares granted during the years ended December 31, 2013, 2012 and 2011 are presented in the table
below for Plan Grants:
For the Year Ended December
31,
2013
2012
2011
Distribution Yield(1)
9.5%
8.4%
2.2%
Distribution Growth Rate(2)
3.0%
3.2%
6.0%
Cost of Equity Capital Rate(3)
17.6%
17.6%
18.2%
(1) Based on the distribution then in effect.
(2)
Quarterly growth rate based on the then current
distribution.
(3) We assumed discount rate was equivalent to a cost of equity capital rate as of the valuation date, based on the Capital Asset Pricing Model
("CAPM"). CAPM is a commonly used mathematical model for developing expected returns.
For the Plan Grants, the discount for the lack of distributions until vested based on the present value of a growing annuity calculation had a weighted
average of 30.5%, 23.3% and 7.1% for the years ending December 31, 2013, 2012 and 2011, respectively.
We utilized the Finnerty Model, as previously described above, to calculate a marketability discount on the Plan Grant and Bonus Grant RSUs to
account for the lag between vesting and issuance. The Finnerty Model provides for a valuation discount reflecting the holding period restriction
embedded in a restricted security preventing its sale over a certain period of time.
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The inputs utilized in the Finnerty Model were (i) length of holding period, (ii) volatility, (iii) risk- free rate and (iv) dividend yield. The weighted
average for the inputs utilized for the shares granted during the years ended December 31, 2013, 2012 and 2011 are presented in the table below for
Plan Grants and Bonus Grants:
For the Year Ended December
31,
2013
2012
2011
Plan Grants
Holding Period Restriction (in years)
0.6
0.6
1.1
Volatility(1)
30.4%
34.0%
35.9%
Risk- free Rate(2)
%
0.1%
0.6%
8.2%
8.0%
2.2%
Bonus Grants
Holding Period Restriction (in years)
0.2
0.2
0.6
Volatility(1)
30.0%
30.5%
33.8%
Risk- free Rate(2)
%
%
0.2%
12.2%
7.8%
2.2%
(1) Annualized based on industry peers.
(2) Based on U.S. Treasuries for a comparable term on a continuously compounded basis.
(3) Based on the distribution then in effect.
For the Plan Grants, the marketability discount for transfer restrictions based on the Finnerty Model calculation, after considering the discount for
lack of pre- vesting distributions, had a weighted average of 6.0%, 5.0%, and 8.6% for the years ending December 31, 2013, 2012 and 2011,
respectively. For the Bonus Grants, the marketability discount for transfer restrictions based on the Finnerty Model calculation had a weighted
average of 3.2%, 4.9%, and 6.5% for the years ending December 31, 2013, 2012 and 2011, respectively.
After the grant date fair value is determined we apply an estimated forfeiture rate. The estimated fair value was determined and recognized over the
vesting period on a straightline basis. We have estimated a 6% forfeiture rate for RSUs, based on the Companys historical attrition rate as well as
industry comparable rates. If employees are no longer associated with Apollo or if there is no turnover, we will revise our estimated compensation
expense to the actual amount of expense based on the units vested at the reporting date in accordance with U.S. GAAP.
Income Taxes
The Apollo Operating Group and its subsidiaries generally operate as partnerships for U.S. Federal income tax purposes. As a result, except as
described below, the Apollo Operating Group has not been subject to U.S. income taxes. However, these entities in some cases are subject to NYC
UBT and non- U.S. entities, in some cases, are subject to non- U.S. corporate income taxes. In addition, APO Corp., a wholly- owned subsidiary of
the Company, is subject to U.S. Federal, state and local corporate income tax, and the Companys provision for income taxes is accounted for in
accordance with U.S. GAAP.
As significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties, we recognize the
tax benefits of uncertain tax positions only where the position is more likely than not to be sustained upon examination, including resolutions of
any related appeals or litigation processes, based on the technical merits of the position. The tax benefit is measured as the largest amount of benefit
that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be
sustained, then no benefits of the position are recognized. The Companys tax positions are reviewed and evaluated quarterly to determine whether or
not we have uncertain tax positions that require financial statement recognition.
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Table of Contents
Fair Value Measurements
The following tables summarize the valuation of the Companys financial assets and liabilities by the fair value hierarchy as of December 31, 2013
and 2012, respectively:
Level II(5)
Level III
Level I(5)
Assets
Investment in AAA Investments(1)
Investments held by Apollo Senior Loan Fund(1)
Investments in HFA and Other(1)
Athene and AAA Management Fee Derivatives(2)
Investments of VIEs, at fair value(4)
Total Assets
Liabilities
Debt of VIEs, at fair value(4)
Contingent Consideration Obligations(3)
Total Liabilities
3,455
3,455
$
$
Liabilities
Liabilities of VIEs, at fair value(4)
Total Liabilities
$
$
(1)
2,429,815
2,429,815
1,942,051
892
40,373
130,709
1,919,537
4,033,562
9,994,147
135,511
10,129,658

Level II(5)
Level III
Level I(5)
Assets
Total Assets
28,711
12,203,370
12,232,081
Total
168
168
27,063
11,045,902
11,072,965
1,942,051
29,603
40,373
130,709
14,126,362
16,269,098
12,423,962
135,511
12,559,473
Total
1,666,448
590
50,311
2,126
1,643,465
3,362,940
11,834,955
142,219
11,977,174
1,666,448
27,653
50,311
2,126
12,689,535
14,436,073
11,834,955
142,219
11,977,174
See note 4 to our consolidated financial statements for further disclosure regarding the investment in AAA Investments, investments held
by Apollo Senior Loan Fund, and investments in HFA and Other.
(2) See note 17 to our consolidated financial statements for further disclosure regarding the Athene and AAA Management Fee Derivatives.
(3) See note 18 to our consolidated financial statements for further disclosure regarding Contingent Consideration Obligations.
(4) See note 5 to our consolidated financial statements for further disclosure regarding VIEs.
(5) All level I and II investments and liabilities were valued using third party pricing.
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Table of Contents
The following table summarizes the fair value transfers of financial assets between Level I and Level II and Level II and Level III for positions that
existed as of December 31, 2013, 2012 and 2011, respectively:
2013
$
1,253,090
978,194
Transfers from Level II into Level I(1)

Transfers from Level III into Level II(2)
Transfers from Level II into Level III(2)

2012
$164
712,975
833,791
2011
$
802,533
160,390
(1) Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the
identical asset. The transfer during the year ended December 31, 2012 related to investments of the consolidated VIEs.
(2) Transfers between Level II and III were a result of subjecting the broker quotes on these investments to various criteria which include the number
and quality of broker quotes, the standard deviation of obtained broker quotes and the percentage deviation from independent pricing services.
For the year ended December 31, 2013, transfers of financial liabilities from Level III to Level II relating to liabilities held by the consolidated VIEs
totaled $2.5 billion. There was a transfer of debt held by the consolidated VIEs that are valued using broker quotes from Level III into Level II as a
result of subjecting broker quotes on these liabilities to various criteria which include the number and quality of broker quotes, the standard deviation
of obtained broker quotes, and the percentage deviation from independent pricing services. For the years ended December 31, 2012 and 2011, there
were no transfers of financial liabilities between Level I, Level II and Level III.
The following tables summarize the changes in fair value in financial assets, which are measured at fair value and characterized as Level III
investments, for the years ended December 31, 2013, 2012, and 2011:
Investments
held by Apollo
Athene and AAA
Investment in AAA Senior Loan
Investments in
Management Fee
Investments of
Investments
Fund
HFA and Other
Derivatives
Consolidated VIEs
Total
Balance, Beginning of
Period
$
1,666,448 $
590 $
50,311 $
2,126 $
1,643,465 $
3,362,940
Elimination of
investments
attributable to
consolidation of VIEs
(35,410)
(35,410)
Fees
118,380
118,380
Purchases
520
4,901
1,326,095
1,331,516
Sale of
investments/Distributions
(66,796)
(6)
(2,541)
(724,666)
(794,009)
Net realized losses
(28,717)
(28,717)
Changes in net
unrealized gains
(losses)
342,399
15
(12,298)
10,203
13,439
353,758
Transfer into Level III
831
977,363
978,194
Transfer out of
Level III
(1,058)
(1,252,032)
(1,253,090)
Balance, End of Period $
1,942,051 $
892 $
40,373 $
130,709 $
1,919,537 $
4,033,562
Change in net
unrealized gains
(losses) included in Net
Gains (Losses) from
Investment Activities
related to investments
still held at reporting
date
$
342,399 $
15 $
(12,298) $
$
$
330,116
Change in net
unrealized (losses)
included in Net Gains
(Losses) from
of Consolidated VIEs
date
$
$
$
$
$
9,083 $
9,083
Change in net
unrealized gains
included in Other
Income, net related to
assets still held at
reporting date
$
$
$
$
10,203 $
$
10,203
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Table of Contents
Investments
Athene and AAA
held by Apollo
Management Fee
Investments of
Investments in
Derivatives
Consolidated VIEs
Fund
HFA and Other
Investments
Total
Period
$
1,480,152 $
456 $
47,757
$
$
246,609 $
1,774,974
Transfer in due to
consolidation and
acquisition
46,148 (1)
1,706,145
1,752,293
Transfer out due to
deconsolidation
(48,037) (1)
(48,037)
Elimination of
investments
attributable to
(69,437)
(69,437)
Fees
2,126
2,126
Purchases
496
5,759
1,236,232
1,242,487
Sale of
(101,844)
(1,291)
(1,561,589)
(1,664,724)
Net realized gains
20
21,603
21,623
Changes in net
unrealized gains
(losses)
288,140
8
(1,316)
(56,013)
230,819
1,836
831,955
833,791
Transfer out of
Level III
(935)
(712,040)
(712,975)
1,666,448 $
590 $
50,311
$
2,126 $
1,643,465 $
3,362,940
Change in net
unrealized gains
Gains (Losses) from
date
$
288,140 $
8 $
(1,316) $
$
$
286,832
Change in net
unrealized gains
included in Net
Gains(Losses) from
date
$
$
$
$
$
7,464 $
7,464
(1)
During the third quarter of 2012, the Company deconsolidated GSS Holding (Cayman), L.P., which was consolidated by the Company
during the second quarter of 2012.
Investment in AAA
Investments
Period
Transfer in due to
consolidation and
acquisition
Expenses incurred
Purchases
Sale of
Net realized gains
Changes in net unrealized
losses
Transfer out of Level III

Investments held
by Apollo Senior Investments in HFA
Investments of
Loan Fund
and Other
Consolidated VIEs
1,637,091 $
432
456
(33,425)
(123,946)
(3,871)
57,509
(5,881)
170,369 $
Total
1,807,460
335,353
663,438
335,809
(3,871)
721,379
(273,719)
980
(307,144)
980
(7,669)
160,390
(802,533)
(137,496)
160,390
(802,533)
Balance, End of Period

$
Change in net unrealized
losses included in Net Gains
(Losses) from Investment
Activities related to
investments still held at
reporting date
$
losses included in Net
Gains(Losses) from
Investment Activities of
Consolidated VIEs related
to investments still held at
reporting date
$
1,480,152 $
456 $
47,757 $
246,609 $
(123,946) $
(5,881) $
(129,827)
(7,253) $
(7,253)
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1,774,974
Table of Contents
The following table summarizes the changes in fair value in financial liabilities, which are measured at fair value and characterized as Level III
liabilities:
Debt of Consolidated
VIEs
Balance,
Beginning
of Period $
Transfer in
due to
consolidation
and
acquisition
Elimination
of debt
attributable
to
consolidation
of VIEs
Purchase
accounting
adjustments
Additions
Payments
Net realized
gains
Changes in
net
unrealized
losses / fair
value
Transfers
into Level
III
Transfers
out of Level
III
Balance,
End of
Period
$
Change in
net
unrealized
(gains)
losses
included in
Net Gains
(Losses)
from
Investment
Activities of
consolidated
VIEs related
to liabilities
still held at
reporting
date
$
(1)
11,834,955 $
2013
Contingent
Consideration
Obligations
VIEs
Total
142,219
11,977,174 $
3,950
3,950
2012
Contingent
Consideration
Obligations
3,189,837 $
7,317,144
(67,167)
VIEs
Total
5,900
117,700
2011
Contingent
Consideration
Obligations
3,195,737 $
1,127,180 $
1,200
7,434,844
2,046,157
4,700
(67,167)
(48)
Total
1,128,380
2,050,857
(48)
1,000
1,000
2,747,033
2,747,033
1,639,271
1,639,271
454,356
454,356
(415,869)
(415,869)
(41,819)
(41,819)
523,491
19,880
19,880
(2,218,060)
(67,534)
(2,285,594)
(741,834)
(750,002)
(137,098)
(137,098)
232,510
60,826 (1)
293,336
497,704
(2,469,143)
(2,469,143)
(8,168)
25,787 (1)
9,994,147 $
135,511
10,129,658 $
11,834,955 $
142,219
11,977,174 $
3,189,837 $
5,900
(18,578) $
(18,578) $
446,649 $
446,649 $
(25,347) $
3,195,737
(25,347)
Changes in fair value of contingent consideration obligations are recorded in profit sharing expense in the consolidated statement of
operations.
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Table of Contents
The following tables summarize the quantitative inputs and assumptions used for financial assets and liabilities categorized in Level III of the fair
value hierarchy as of December 31, 2013 and 2012, respectively:
Valuation Techniques
Unobservable Inputs
Ranges
Weighted
Average
1,942,051
892
Net Asset Value

Third Party Pricing(2)
N/A
N/A
N/A
N/A
N/A
N/A
40,373
N/A
Discount Rate
N/A
N/A
15.0%
15.0%
Implied Multiple
1.1x
1.1x
N/A
N/A
N/A
Comparable Multiples
N/A
6.0x - 9.5x
7.9x
N/A
N/A
Discount Rate
Default Rate
Recovery Rate
Discount Rate
Default Rate
Recovery Rate
10.0% - 12.0%
10.8%
Discounted Cash Flow
Fair Value
Financial Assets
Investments of Consolidated
Apollo Funds:
AAA Investments(1)
$
Apollo Senior Loan Fund
Investments in HFA and
Other
Athene and AAA
Management Fee
Derivatives
VIEs:
Bank Debt Term Loans
Stocks
Corporate loans/ bonds
Total Investments of
Consolidated VIEs
Total Financial Assets
Financial Liabilities
Liabilities of Consolidated
VIEs:
Subordinated Notes
18,467
7,938
1,893,132
1,919,537
4,033,562
835,149
Senior Secured Notes

Senior Secured and
Subordinated Notes
Total Liabilities of
Consolidated VIEs
Contingent Consideration
Obligation
Total Financial Liabilities
130,709
2,132,576
7,026,422
Discounted Cash Flows
Other
Market Comparable
Companies
1.0% - 1.5%
1.3%
75.0%
75.0%
1.9% - 2.2%
2.0%
2.0%
2.0%
30.0% - 70.0%
65.2%
N/A
N/A
N/A
Discount Rate
10.5% - 18.5%
15.3%
9,994,147
135,511
10,129,658
(1) The following table summarizes a look- through of the Companys Level III investments by valuation methodology of the underlying securities
held by AAA Investments:
% of
Investment
of AAA
Investments
Approximate values based on net asset
value of the underlying funds, which
are based on the funds underlying
investments that are valued using the
following:
Discounted cash flow models
$
Total Investments
Other net liabilities(4)
Total Net Assets
$
1,950,010
1,950,010
(7,959)
1,942,051
(3)
100%
100%
(2) These securities are valued using broker quotes.

(3)
Represents the investment by AAA Investments in Athene, which is valued using a discounted cash flow model. The unobservable inputs
and respective ranges used in the discounted cash flow model are the same as noted for the Athene and AAA Management Fee Derivatives
in the table above.
(4) Balances include other assets, liabilities and general partner interests of AAA Investments. Balance at December 31, 2013 is primarily comprised
of net assets allocated to the general partner of $102.1 million less $89.0 million in note receivable from an affiliate. Carrying values approximate
fair value for other assets and liabilities (except for the note receivable from an affiliate) and, accordingly, extended valuation procedures are not
required. The note receivable from an affiliate is a level III asset valued using a discounted cash flow model. The unobservable inputs and
respective ranges used in the discounted cash flow model are the same as noted for the Athene and AAA Management Fee Derivatives in the table
above.
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Table of Contents
Unobservable Inputs
Ranges
Weighted
Average
1,666,448
590
Net Asset Value

N/A
N/A
N/A
N/A
N/A
N/A
50,311
N/A
Discount Rate
N/A
N/A
15.0%
15.0%
Implied Multiple
1.23x
1.23x
Discount Rate
11.8%- 25.2%
16.3%
N/A
6.63x
6.63x
N/A
N/A
17.0%
17.0%
Fair Value
Financial Assets
Apollo Funds:
AAA Investments(1)
$
Other
Athene and AAA
Management Fee
Derivatives
VIEs
Stocks
Consolidated VIEs
Total
VIEs:
Subordinated Notes
67,920
3,624
1,571,921
1,643,465
3,362,940
195,357

Senior Secured and
Subordinated Notes
Consolidated VIEs
Obligation
Total
2,126
2,066,250
9,573,348

Comparable Yields
Market Comparable
Companies
Discount Rate
Default Rate
Recovery Rate
Discount Rate
Default Rate
Recovery Rate
1.5%- 4.0%
2.4%
80.0%
80.0%
1.65%- 1.95%
1.8%
2.0%
2.0%
30.0%- 60.0%
59.9%
N/A
N/A
N/A
Discount Rate
7.0%- 11.6%
9.4%
11,834,955
142,219
11,977,174
% of
Investment
of AAA
Investments
value of the underlying funds, which are
based on the funds underlying
following:
$
Listed quotes
Total Investments
Other net assets(4)
Total Net Assets
$
1,581,975
22,029
1,604,004
62,444
1,666,448
(3)
98.6%
1.4%
100%

(3)
in the table above.
of $113.3 million in notes receivable from an affiliate less the portion of AAA investments net assets allocated to the general partner of $70.0
million. Carrying values approximate fair value for other assets and liabilities(except for the note receivable from affiliate) and, accordingly,
extended valuation procedures are not required. The note receivable from affiliate is a level III investment valued using a discounted cash flow
model. The unobservable inputs and respective ranges used in the discounted cash flow model are the same as noted for the Athene and AAA
Management Fee Derivatives in the table above.
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Table of Contents
Athene and AAA Management Fee Derivatives
The significant unobservable input used in the fair value measurement of the Athene and AAA management fee derivatives is the discount rate
applied in the valuation model. This input in isolation can cause significant increases or decreases in fair value. Specifically, when a discounted cash
flow model is used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected
cash flows. An increase in the discount rate can significantly lower the fair value of an investment; conversely a decrease in the discount rate can
significantly increase the fair value of an investment. The discount rate is determined based on the expected required rate of return based on the risk
profile of similar cash flows. See note 17 to our consolidated financial statements for further information regarding the Athene and AAA management
fee derivatives.
Consolidated VIEs
Investments
The significant unobservable inputs used in the fair value measurement of the bank debt term loans and stocks include the discount rate applied and
the multiples applied in the valuation models. These unobservable inputs in isolation can cause significant increases or decreases in fair value.
Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation model is the discount rate
applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of an investment; conversely
decreases in the discount rate can significantly increase the fair value of an investment. The discount rate is determined based on the market rates an
investor would expect for a similar investment with similar risks. When a comparable multiple model is used to determine fair value, the comparable
multiples are generally multiplied by the underlying companies EBITDA to establish the total enterprise value of the company. The comparable
multiple is determined based on the implied trading multiple of public industry peers.
Liabilities
The significant unobservable inputs used in the fair value measurement of the subordinated and senior secured notes include the discount rate applied
in the valuation models, default and recovery rates applied in the valuation models. These inputs in isolation can cause significant increases or
decreases in fair value. Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation
model is the discount rate applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of
subordinated and senior secured notes; conversely a decrease in the discount rate can significantly increase the fair value of subordinated and senior
secured notes. The discount rate is determined based on the market rates an investor would expect for similar subordinated and senior secured notes
with similar risks.
Contingent Consideration Obligations
The significant unobservable input used in the fair value measurement of the contingent consideration obligations is the discount rate applied in the
valuation models. This input in isolation can cause significant increases or decreases in fair value. Specifically, when a discounted cash flow model is
used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected cash flows.
Increases in the discount rate can significantly lower the fair value of the contingent consideration obligations; conversely a decrease in the discount
rate can significantly increase the fair value of the contingent consideration obligations. The discount rate was based on the weighted average cost of
capital for the Company. See note 18 to our consolidated financial statements for further discussion of the contingent consideration obligation.
See notes 2 and 6 to our consolidated financial statements for further disclosure regarding fair value measurements.
Recent Accounting Pronouncements
A list of recent accounting pronouncements that are relevant to Apollo and its industry is included in note 2 to our consolidated financial statements.
Off- Balance Sheet Arrangements
In the normal course of business, we engage in off- balance sheet arrangements, including transactions in derivatives, guarantees, commitments,
indemnifications and potential contingent repayment obligations. See note 18 to our consolidated financial statements for a discussion of guarantees
and contingent obligations.
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Table of Contents
Contractual Obligations, Commitments and Contingencies
As of December 31, 2013, the Companys material contractual obligations consisted of lease obligations, contractual commitments as part of the
ongoing operations of the funds and debt obligations. Fixed and determinable payments due in connection with these obligations are as follows:
2014
Operating lease
obligations(1) $
Other longterm
obligations(2)
2013 AMH
Credit
Facilities Term Facility(3)
2013 AMH
Credit
Facilities Revolver
Facility(4)
Obligations as
of December
31, 2013
$
2015
38,649
2016
38,246
2017
(in thousands)
36,946
35,020
2018
Thereafter
31,416
Total
53,138
233,415
6,447
929
7,376
10,259
10,259
10,259
10,259
10,259
750,513
801,808
625
625
625
625
625
31
3,156
55,980
50,059
47,830
(1)
45,904
42,300
803,682
1,045,755
The Company has entered into sublease agreements and is expected to contractually receive approximately
$11.2
million over the remaining periods of 2014 and thereafter.
(2)
Includes (i) payments on management service agreements related to certain assets and (ii) payments with respect to certain consulting
agreements entered into by the Company. Note that a significant portion of these costs are reimbursable by funds.
(3) $750 million of the outstanding Term Facility matures in January 2019. The interest rate on the $750 million Term Facility as of December 31,
2013 was 1.37%. See note 14 of the consolidated financial statements for further discussion of the 2013 AMH Credit Facilities.
(4)
The commitment fee as of December 31, 2013 on the $500 million undrawn Revolver Facility was 0.125%. See note 14 of the consolidated
financial statements for further discussion of the 2013 AMH Credit Facilities.
Note: Due to the fact that the timing of certain amounts to be paid cannot be determined or for other reasons discussed below, the following
contractual commitments have not been presented in the table above.
(i) As noted previously, we have entered into a tax receivable agreement with our Managing Partners and Contributing Partners which requires us to
pay to our Managing Partners and Contributing Partners 85% of any tax savings received by APO Corp. from our step- up in tax basis. The tax
savings achieved may not ensure that we have sufficient cash available to pay this liability and we might be required to incur additional debt to
satisfy this liability.
(ii) Debt amounts related to the consolidated VIEs are not presented in the table above as the Company is not a guarantor of these nonrecourse
liabilities. See note 5 of our consolidated financial statements for the contractual maturities for the debt of the consolidated VIEs.
Commitments
Certain of our management companies and general partners are committed to contribute to the funds and affiliates. While a small percentage of these
amounts are funded by us, the majority of these amounts have historically been funded by our affiliates, including certain of our employees and
certain Apollo funds. The table below presents the commitment and remaining commitment amounts of Apollo and its affiliates, the percentage of
total fund commitments of Apollo and its affiliates, the commitment and remaining commitment amounts of Apollo only (excluding affiliates), and
the percentage of total fund commitments of Apollo only (excluding affiliates) for each private equity, credit and real estate fund as of December 31,
2013 as follows ($ in millions):
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Apollo and
Affiliates
Commitments
Fund
Private Equity:
Fund VIII
% of Total
Fund
Commitments
Apollo Only
(Excluding
Affiliates)
Remaining
Commitments
Apollo and
Affiliates
Remaining
Commitments
1,543.5 (1)(2)
8.4
612.5
3.33
467.2 (1)
3.18
177.8
1.21
246.2
2.43
6.1
0.06
9.7
0.2
100.0
2.67
0.5
0.01
6.3
(3)
100.0
2.78
0.2
0.01
0.5
(3)
100.6
6.71
15.5
426.1 (1)(2)
32.21
10.1
0.76
137.6 (2)
36.61
37.6
10.00
158.4
70.56
0.1
0.04
215.7 (2)(4)
100
EPF I(5)
369.2 (1)(6)
20.74
24.3
1.37
64.1 (1)(7)
5.8
EPF II(5)
415.2 (1)(2)
11.34
69.1
1.89
286.1 (1)(2)
49.6
Fund VII
Fund VI
Fund V
Fund IV
Fund III
ANRP
AION
APC
Apollo Rose, L.P.
Apollo Only
(Excluding
Affiliates)
Commitments
Apollo Only
(Excluding
Affiliates)
% of
Total Fund
Commitments
1,525.2 (1)(2)
112.5 (1)
607.9
41.4
293.0 (1)(2)
7.1
113.0 (2)
30.7
86.1
0.1
88.3 (2)(4)
Credit:
SOMA(8)
COF I
450.7 (9)
COF II
30.5
COF III
296.2 (2)
30.35
29.7
2.00
1.93
23.4
1.48
34.14
21.2
2.44
237.4 (9)
4.2
0.8
0.6
205.2 (2)
14.7
ACLF(10)
23.9
2.43
23.9
2.43
19.3
19.3
Palmetto(11)
18.0
1.19
18.0
1.19
7.6
7.6
8.9
3.15
5.5
1.94
0.9
0.5
50.0
100.00
150.5
26.93
72.8
169.8
16.95
164.4
9.9
9.09
9.9
9.09
300.0 (1)
100.00
200.0 (1)
AIE II(5)
ESDF
FCI
FCI II
Franklin Fund
Apollo/Palmetto Loan Portfolio, L.P.
Apollo/Palmetto Short- Maturity Loan Portfolio, L.P.
AESI(5)
AEC
ACSP
Apollo SK Strategic Investments, L.P.
Stone Tower Structured Credit Recovery Master Fund II, Ltd.
Stone Tower Credit Solutions Master Fund, Ltd.
Stone Tower Credit Strategies Master Fund, Ltd.
Apollo Zeus Strategic Investments, L.P. ("Zeus")
85.0 (1)
100.00
(1)
4.8
0.99
4.8
0.99
2.0
2.0
7.3
2.50
3.2
1.08
2.5
1.1
15.0
2.44
15.0
2.44
8.7
8.7
2.0
0.99
2.0
0.99
0.5
0.5
8.1
7.75
0.9
0.83
0.9
9.5
11.68
14
3.38
14
3.38
12.3
12.3
72.95
16.5
1.90
1.03
0.5
1.03
50.0 (2)
100.00
19.9 (12)
92.13
3.8
7.6
1.27
2.1
0.35
0.6
0.2
7.5
0.47
0.6
6.9
0.53
0.5
0.04
0.3
18.8
7.80
0.6
0.23
8.7
0.3
Real Estate:
AGRE U.S. Real Estate Fund, L.P.
632.2 (1)(2)
BEA/ AGRE China Real Estate Fund, L.P.
0.5
AGRE Asia Co- Invest I Limited

CAI Strategic European Real Estate Ltd.
CPI Capital Partners North America
CPI Capital Partners Europe(5)
CPI Capital Partners Asia Pacific
London Prime Apartments Guernsey Holdings Limited (Guernsey)(13)
2012 CMBS I Fund, L.P.
2012 CMBS II Fund, L.P.
2011 A4 Fund, L.P.
AGRE CMBS Fund, L.P.
339.3 (1)(2)
5.0
0.4
0.4
35.9 (2)
88.2
100.00
93.5
100.00
234.7
100.00
418.8
100.00
27.8
0.92
27.8
0.92
Other:
Apollo SPN Investments I, L.P.
Total
7,656.1
1,156.9
23.5
$
3,833.7
23.5
$
843.7
(1) As of December 31, 2013, Palmetto had commitments and remaining commitment amounts in Fund VII of $110.0 million and $25.6 million,
respectively, ANRP of $150.0 million and $103.0 million, respectively, Apollo/Palmetto Loan Portfolio, L.P. of $300.0 million and $85.0 million,
respectively, Apollo/Palmetto Short- Maturity Loan Portfolio, L.P. of $200.0 million and $0.0 million, respectively, AGRE U.S. Real Estate Fund,
L.P. of $300 million and $216.6 million, respectively, EPF I of $145.6 million and $24.0 million, respectively, EPF II of $75.0 million and $51.2
million, respectively, and Fund VIII of $81.0 million and $79.7 million, respectively. Figures for AGRE U.S. Real Estate Fund, L.P. include Base,
Additional, and Co- Invest commitments. A co- invest entity within AGRE U.S. Real Estate Fund, L.P. is denominated in pound sterling and
translated into U.S. dollars at an exchange rate of 1.00 to $1.66 as of December 31, 2013.
(2)
As of December 31, 2013, Apollo SPN Investments I, L.P. had commitments and remaining commitment amounts in AGRE U.S. Real
Estate Fund, L.P. of $150.0 million and $58.0 million, respectively, AGRE Asia Co- Invest I Limited of $50.0 million and $35.9 million,
respectively, AION of $100.0 million and $82.3 million, respectively, ANRP of $200.0 million and $137.5 million,
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respectively, Apollo Rose of $129.4 million and $53.0 million, respectively, COF III of $150.0 million and $104.0 million, respectively, Fund VIII of
$850.0 million and $837.5 million respectively, and EPF II of $200.0 million and $135.5 million, respectively. Figures include base, additional, and
co- invest commitments, as it relates to AGRE U.S. Real Estate Fund, L.P.
(3)
As of December 31, 2013, Apollo had an immaterial amount of remaining commitments in Fund IV and Fund V. Accordingly, presentation
of such remaining commitments was not deemed meaningful for inclusion in the table above.
(4)
Of the total commitment and remaining commitment amounts in Apollo Rose, SOMA had $23.5 million and $9.6 million, respectively, and
AESI had $23.5 million and $9.6 million respectively.
(5)
Apollos commitment in these funds is denominated in Euros and translated into U.S. dollars at an exchange rate of 1.00 to $1.37 as of
December 31, 2013.
(6) Of the total remaining commitment amount in EPF I, AAA Investments (Other), L.P., SOMA and Palmetto have approximately 9.0 million,
12.3 million and 17.4 million, respectively.
(7) Of the total commitment amount in EPF I, AAA Investments (Other), L.P., SOMA and Palmetto have approximately 54.5 million, 75.0 million
and 106.0 million, respectively.
(8)
Apollo and affiliated investors must maintain an aggregate capital balance in an amount not less than 1% of total capital account balances
of the partnership. As of December 31, 2013, Apollo and affiliated investors capital balances exceeded the 1% requirement and therefore
they are not required to fund a capital commitment.
(9)
As of December 31, 2013, SOMA had commitments and remaining commitment amounts in COF I of $250.0 million and $202.0 million,
respectively.
(10) As of December 31, 2013, the general partner of ACLF Co- Invest, a coinvestment vehicle that invests alongside ACLF, had committed an
immaterial amount to ACLF Co- Invest. Accordingly, presentation of such commitment was not deemed meaningful for inclusion in the table
above.
(11) As of December 31, 2013, commitments in Palmetto also included commitments related to Apollo Palmetto Athene Partnership, L.P.
(12) As of December 31, 2013, EPF I had commitments and remaining commitment amounts in CAI Strategic European Real Estate of 7.5 million
and 1.4 million, respectively.
(13)
Apollos commitment in these investments is denominated in pound sterling and translated into U.S. dollars at an exchange rate of 1.00
to $1.66 as of December 31, 2013.
As a limited partner, the general partner and manager of the Apollo private equity, credit and real estate funds, Apollo has unfunded capital
commitments at December 31, 2013 and December 31, 2012 of $843.7 million and $258.3 million, respectively.
Apollo has an ongoing obligation to acquire additional common units of AAA in an amount equal to 25% of the aggregate after- tax cash
distributions, if any, that are made by AAA to Apollo's affiliates pursuant to the carried interest distribution rights that are applicable to investments
made through AAA Investments.
On December 21, 2012, the Company agreed to provide up to $100 million of capital support to Athene to the extent such support was necessary in
connection with Athenes then pending acquisition of Aviva USA. The Companys commitment was not called in connection with the closing of the
transaction, and as a result, the Companys commitment to provide capital support terminated upon the closing of the transaction on October 2, 2013.
a limited partnership (the "KBCD Partnership"), a wholly- owned subsidiary of which has agreed to acquire a minority stake in KBC Bank
Deutschland AG, the German subsidiary of Belgian KBC Group NV (and certain third party purchasers agreed to acquire, in aggregate, all of the
other shares in KBC Bank Deutschland AG). The aforementioned indirect subsidiary of Apollo Global Management, LLC is the general partner of
the KBCD Partnership. The limited partners in the KBCD Partnership are managed by subsidiaries of Apollo Global Management, LLC. The
acquisition is subject to antitrust and regulatory approval, which is expected to take approximately nine months. Consequently, there is no assurance
that the acquisition will close.
On October 2, 2013, Athene Holding Ltd. completed the acquisition of Aviva USA, which markets and sells a variety of fixed annuity and life
insurance products in the U.S. through its wholly owned subsidiaries Aviva Life and Annuity Company, an Iowa- domiciled stock life insurance
company. Athene also announced that it had completed the sale of Aviva USA's life insurance operations to PLIC USA.
The 2013 AMH Credit Facilities, which provide for a variable- rate term loan, will have future impacts on our cash uses. On December 18, 2013,
AMH and its consolidated subsidiaries and certain other subsidiaries of the Company (collectively, the "Borrowers") entered into new credit facilities
(the "2013 AMH Credit Facilities") with JPMorgan Chase Bank, N.A. The 2013 AMH Credit Facilities provide for (i) a term loan facility to AMH
(the Term Facility) that includes $750 million of term loan from third- party lenders and $27l.7 million of term loan held by a subsidiary of the
Company and (ii) a $500 million revolving credit facility (the Revolver Facility), in each case, with a final maturity date of January 18, 2019.
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Interest on the borrowings is based on an adjusted LIBOR rate or alternate base rate, in each case plus an applicable margin, and undrawn revolving
commitments bear a commitment fee. Under the terms of the 2013 AMH Credit Facilities, the applicable margin ranges from 1.125% to 1.75% for
LIBOR loans and 0.125% to 0.75% for alternate base rate loans, and the undrawn revolving commitment fee ranges from 0.125% to 0.25%, in each
case depending on the Companys corporate rating assigned by Standard & Poors Ratings Group, Inc. The 2013 AMH Credit Facilities do not
require any scheduled amortization payments or other mandatory prepayments (except with respect to overadvances on the Revolver Facility) prior to
the final maturity date, and the Borrowers may prepay the loans and/or terminate or reduce the revolving commitments under the 2013 AMH Credit
Facilities at any time without penalty. The interest rate on the $750 million Term Facility as of December 31, 2013 was 1.37% and the commitment
fee as of December 31, 2013 on the $500 million undrawn Revolver Facility was 0.125%. Interest expense incurred by the Company related to the
2013 AMH Credit Facilities was $0.4 million for the year ended December 31, 2013.
As of December 31, 2013, $750 million of the Term Facility was outstanding with third- party lenders and there is approximately $271.7 million of
the Term Facility that is held by a subsidiary of the Company. As of December 31, 2013 the Revolver Facility was undrawn. The estimated fair value
of the Companys longterm debt obligation related to the 2013 AMH Credit Facilities is believed to be approximately $750.0 million based on a
yield analysis using available market data of comparable securities with similar terms and remaining maturities. The $750 million carrying value of
debt that is recorded on the consolidated statement of financial condition at December 31, 2013 is the amount for which the Company expects to
settle the 2013 AMH Credit Facilities.
In accordance with U.S. GAAP, the Company determined that the refinancing of the outstanding loans under the 2007 AMH Credit Agreement
resulted in a debt extinguishment. As a result, the Company recorded a loss on extinguishment of $2.7 million, of which $1.6 million related to
previously capitalized costs incurred in relation to the 2007 AMH Credit Agreement and $1.1 million related to expenses incurred in relation to the
2013 AMH Credit Facilities, in other income, net in the consolidated statement of operations for the year ended December 31, 2013. In addition, the
Company capitalized debt issuance costs of $6.6 million incurred in relation to the 2013 AMH Credit Facilities which was recorded in other assets in
the consolidated statement of financial condition as of December 31, 2013 to be amortized over the life of the term loan and line of credit.
The 2013 AMH Credit Facilities are guaranteed and collateralized by AMH and its consolidated subsidiaries, Apollo Management, L.P., Apollo
Capital Management, L.P., Apollo International Management, L.P., AAA Holdings, L.P., Apollo Principal Holdings I, L.P., Apollo Principal
Holdings II, L.P., Apollo Principal Holdings III, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., Apollo Principal
Holdings VI, L.P., Apollo Principal Holdings VII, L.P., Apollo Principal Holdings VIII, L.P., Apollo Principal Holdings IX L.P., ST Holdings GP,
LLC and ST Management Holdings, LLC. The 2013 AMH Credit Facilities contain affirmative and negative covenants which limit the ability of the
Borrowers, the guarantors and certain of their subsidiaries to, among other things, incur indebtedness and create liens. Additionally, the 2013 AMH
Credit Facilities contain financial covenants which require the Borrowers and their subsidiaries to maintain (1) at least $40 billion of feegenerating
Assets Under Management and (2) a maximum total net leverage ratio of not more than 4.00 to 1.00 (subject to customary equity cure rights). The
2013 AMH Credit Facilities also contain customary events of default, including events of default arising from non- payment, material
misrepresentations, breaches of covenants, cross default to material indebtedness, bankruptcy and changes in control of the Company. As of
December 31, 2013, the Company was not aware of any instances of noncompliance with the financial covenants contained in the 2013 AMH
Credit Facilities.
Borrowings under the Revolver Facility may be used for working capital and general corporate purposes, including, without limitation, permitted
acquisitions. In addition, the Borrowers may incur incremental facilities in respect of the Revolver Facility and the Term Facility in an aggregate
amount not to exceed $500 million plus additional amounts so long as the Borrowers are in compliance with a net leverage ratio not to exceed 3.75 to
1.00.
On June 30, 2008, the Company entered into a credit agreement with Fund VI, pursuant to which, in July 2008, Fund VI advanced $18.9 million of
cash that was otherwise distributable to the Company as carried interest pursuant to the Fund VI limited partnership agreement. As of March 10,
2011, $8.0 million of the loan principal was settled and as of August 31, 2013, the remaining principal balance of $10.9 million was settled. Based on
a rate of 3.45%, cumulative interest on the loan was $2.4 million.
In accordance with the Shareholders Agreement, we have indemnified the Managing Partners and certain Contributing Partners (at varying
percentages) for any carried interest income distributed from Fund IV, Fund V and Fund VI that is subject to contingent repayment by the general
partner. As of December 31, 2013 and December 31, 2012, the Company had not recorded an obligation for any previously made distributions.
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Contingent ObligationsCarried interest income in private equity and certain credit and real estate funds is subject to reversal in the event of future
losses to the extent of the cumulative carried interest recognized in income to date. If all of the existing investments became worthless, the amount of
cumulative revenues that has been recognized by Apollo through December 31, 2013 and that would be reversed approximates $4.9 billion.
Management views the possibility of all of the investments becoming worthless as remote. Carried interest income is affected by changes in the fair
values of the underlying investments in the funds that Apollo manages. Valuations, on an unrealized basis, can be significantly affected by a variety
of external factors including, but not limited to, bond yields and industry trading multiples. Movements in these items can affect valuations quarter to
quarter even if the underlying business fundamentals remain stable. The table below indicates the potential future reversal of carried interest income:
As of
December 31, 2013
Private Equity Funds:
Fund VII
$
2,197,158
Fund VI
1,495,767
Fund V
81,218
Fund IV
7,647
AAA/Other
228,909
Total Private Equity Funds
4,010,699
Credit Funds:
445,465
Structured Credit
63,429
European Credit Funds
73,800
Non- Performing Loans
189,113
60,874
Total Credit Funds
832,681
Real Estate Funds:
CPI Funds
4,755
5,631
Other
4,831
Total Real Estate Funds
15,217
Total
$
4,858,597
Additionally, at the end of the life of certain funds that the Company manages, there could be a payment due to a fund by the Company if the
Company as general partner has received more carried interest income than was ultimately earned. This general partner obligation amount, if any,
will depend on final realized values of investments at the end of the life of each fund.
Certain funds may not generate carried interest income as a result of unrealized and realized losses that are recognized in the current and prior
reporting period. In certain cases, carried interest income will not be generated until additional unrealized and realized gains occur. Any appreciation
would first cover the deductions for invested capital, unreturned organizational expenses, operating expenses, management fees and priority returns
based on the terms of the respective fund agreements.
AGS, one of the Companys subsidiaries, provides underwriting commitments in connection with security offerings to the portfolio companies of the
funds we manage. As of December 31, 2013, there were no underwriting commitments outstanding related to such offerings.
In connection with the acquisition of Stone Tower in April 2012, the Company agreed to pay the former owners of Stone Tower a specified
percentage of any future carried interest income earned from certain of the Stone Tower funds, CLOs, and strategic investment accounts. This
contingent consideration liability had an acquisition date fair value of $117.7 million, which was determined based on the present value of estimated
future carried interest payments, and is recorded in profit sharing payable in the consolidated statements of financial condition. The fair value of the
contingent obligation was $121.4 million and $126.9 million as of December 31, 2013 and December 31, 2012, respectively.
In connection with the Gulf Stream acquisition, the Company agreed to make payments to the former owners of Gulf Stream under a contingent
consideration obligation which required the Company to transfer cash to the former owners of Gulf
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Stream based on a specified percentage of carried interest income. The contingent liability had a fair value of $14.1 million as of December 31, 2013
and December 31, 2012, which was recorded in profit sharing payable in the consolidated statements of financial condition.
In connection with the acquisition of CPI on November 12, 2010, Apollo had a contingent liability to Citigroup Inc. based on a specified percentage
of future earnings from the CPI business. From the date of acquisition through December 31, 2012, the estimated fair value of the contingent liability
was $1.2 million, which was determined based on discounted cash flows from the date of acquisition through December 31, 2012 using a discount
rate of 7%. On March 28, 2013, Apollo satisfied the contingent liability in cash in the amount of approximately $0.5 million, which equaled 25% of
the net realized after tax profit from the closing date through December 31, 2012. The satisfaction of the liability resulted in the Company
recognizing $0.7 million of other income, net in the Companys consolidated statements of operations, for the year ended December 31, 2013. No
remaining contingency existed at December 31, 2013.
The contingent consideration obligations will be remeasured to fair value at each reporting period until the obligations are satisfied. The changes in
the fair value of the contingent consideration obligations will be reflected in profit sharing expense in the consolidated statements of operations.
During the one year measurement period, any changes resulting from facts and circumstances that existed as of the acquisition date will be reflected
as a retrospective adjustment to the bargain purchase gain and the respective asset acquired or liability assumed.
The Company has determined that the contingent consideration obligations are categorized as a Level III liability in the fair value hierarchy as the
pricing inputs used to determine fair value require significant management judgment and estimation. See note 6 of the consolidated financial
statements for further disclosure regarding fair value of the contingent consideration obligation.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our predominant exposure to market risk is related to our role as investment manager and general partner for our funds and the sensitivity to
movements in the fair value of their investments and resulting impact on carried interest income and management fee revenues. Our direct
investments in the funds also expose us to market risk whereby movements in the fair values of the underlying investments will increase or decrease
both net gains (losses) from investment activities and income (loss) from equity method investments. For a discussion of the impact of market risk
factors on our financial instruments see Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsCritical
Accounting PoliciesInvestments, at Fair Value.
The fair value of our financial assets and liabilities of our funds may fluctuate in response to changes in the value of investments, foreign exchange,
commodities and interest rates. The net effect of these fair value changes impacts the gains and losses from investments in our consolidated
statements of operations. However, the majority of these fair value changes are absorbed by the Non- Controlling Interests.
The Company is subject to a concentration risk related to the investors in its funds. Although there are more than approximately 1,000 limited partner
investors in Apollos active private equity, credit and real estate funds, no individual investor accounts for more than 10% of the total committed
capital to Apollos active funds.
Risks are analyzed across funds from the bottom up and from the top down with a particular focus on asymmetric risk. We gather and analyze
data, monitor investments and markets in detail, and constantly strive to better quantify, qualify and circumscribe relevant risks.
Each risk management process is subject to our overall risk tolerance and philosophy and our enterprise- wide risk management framework. This
framework includes identifying, measuring and managing market, credit and operational risks at each segment, as well as at the fund and Company
level.
Each segment runs its own investment and risk management process subject to our overall risk tolerance and philosophy:
The investment process of our private equity funds involves a detailed analysis of potential acquisitions, and investment management teams
assigned to monitor the strategic development, financing and capital deployment decisions of each portfolio investment.
Our credit funds continuously monitor a variety of markets for attractive trading opportunities, applying a number of traditional and
customized risk management metrics to analyze risk related to specific assets or portfolios, as well as, fund- wide risks.
At the direction of the Companys manager, the Company has established a risk committee comprised of the Companys President, Chief Financial
Officer, Chief Legal and Compliance Officer and the Companys global head of risk. The risk committee is tasked with assisting the Companys
manager in monitoring and managing enterprise- wide risk. The risk committee generally meets on a weekly basis and reports to the executive
committee of the Companys manager at such times as the committee deems appropriate and at least on an annual basis.
On at least a monthly basis, the Companys risk department provides a summary analysis of fund level market and credit risk to the portfolio
managers of the Companys funds and the heads of the various business segments. On a periodic basis, the Companys risk department presents a
consolidated summary analysis of fund level market and credit risk to the Companys risk committee. In addition, the Companys global head of risk
reviews specific investments from the perspective of risk mitigation and discusses such analysis with the Companys risk committee and/or the
executive committee of the Companys manager at such times as the Companys global head of risk determines such discussions are warranted. On
an annual basis, the Companys global head of risk provides the executive committee of the Companys manager with a comprehensive overview of
risk management along with an update on current and future risk initiatives.
Impact on Management FeesOur management fees are based on one of the following:
capital commitments to an Apollo fund;
capital invested in an Apollo fund;
the gross, net or adjusted asset value of an Apollo fund, as defined; or
as otherwise defined in the respective agreements.
Management fees could be impacted by changes in market risk factors and management could consider an investment permanently impaired as a
result of (i) such market risk factors causing changes in invested capital or in market values to below
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cost, in the case of our private equity funds and certain credit funds, or (ii) such market risk factors causing changes in gross or net asset value, for the
credit funds. The proportion of our management fees that are based on NAV is dependent on the number and types of our funds in existence and the
current stage of each funds life cycle.
Impact on Advisory and Transaction FeesWe earn transaction fees relating to the negotiation of private equity, credit and real estate transactions
and may obtain reimbursement for certain outof- pocket expenses incurred. Subsequently, on a quarterly or annual basis, ongoing advisory fees, and
additional transaction fees in connection with additional purchases, dispositions, or follow- on transactions, may be earned. Management Fee Offsets
and any broken deal costs are reflected as a reduction to advisory and transaction fees from affiliates, net. Advisory and transaction fees will be
impacted by changes in market risk factors to the extent that they limit our opportunities to engage in private equity, credit and real estate transactions
or impair our ability to consummate such transactions. The impact of changes in market risk factors on advisory and transaction fees is not readily
predicted or estimated.
Impact on Carried Interest IncomeWe earn carried interest income from our funds as a result of such funds achieving specified performance
criteria. Our carried interest income will be impacted by changes in market risk factors. However, several major factors will influence the degree of
impact:
the performance criteria for each individual fund in relation to how that funds results of operations are impacted by changes in market risk factors;
whether such performance criteria are annual or over the life of the fund;
to the extent applicable, the previous performance of each fund in relation to its performance criteria; and
whether each funds carried interest income is subject to contingent repayment.
As a result, the impact of changes in market risk factors on carried interest income will vary widely from fund to fund. The impact is heavily
dependent on the prior and future performance of each fund, and therefore is not readily predicted or estimated.
Market RiskWe are directly and indirectly affected by changes in market conditions. Market risk generally represents the risk that values of assets
and liabilities or revenues and expenses will be adversely affected by changes in market conditions. Market risk is inherent in each of our investments
and activities, including equity investments, loans, shortterm borrowings, longterm debt, hedging instruments, credit default swaps, and
derivatives. Just a few of the market conditions that may shift from time to time, thereby exposing us to market risk, include fluctuations in interest
and currency exchange rates, equity prices, changes in the implied volatility of interest rates and price deterioration. For example, subsequent to the
second quarter of 2007, debt capital markets around the world began to experience significant dislocation, severely limiting the availability of new
credit to facilitate new traditional buyouts, and the markets remain volatile. Volatility in debt and equity markets can impact our pace of capital
deployment, the timing of receipt of transaction fee revenues, and the timing of realizations. These market conditions could have an impact on the
value of investments and our rates of return. Accordingly, depending on the instruments or activities impacted, market risks can have wide ranging,
complex adverse affects on our results from operations and our overall financial condition. We monitor our market risk using certain strategies and
methodologies which management evaluates periodically for appropriateness. We intend to continue to monitor this risk going forward and continue
to monitor our exposure to all market factors.
Interest Rate RiskInterest rate risk represents exposure we have to instruments whose values vary with the change in interest rates. These
instruments include, but are not limited to, loans, borrowings and derivative instruments. We may seek to mitigate risks associated with the exposures
by taking offsetting positions in derivative contracts. Hedging instruments allow us to seek to mitigate risks by reducing the effect of movements in
the level of interest rates, changes in the shape of the yield curve, as well as, changes in interest rate volatility. Hedging instruments used to mitigate
these risks may include related derivatives such as options, futures and swaps.
Credit RiskCertain of our funds are subject to certain inherent risks through their investments.
Certain of our entities invest substantially all of their excess cash in open- end money market funds and money market demand accounts, which are
included in cash and cash equivalents. The money market funds invest primarily in government securities and other shortterm, highly liquid
instruments with a low risk of loss. We continually monitor the funds performance in order to manage any risk associated with these investments.
Certain of our entities hold derivative instruments that contain an element of risk in the event that the counterparties may be unable to meet the terms
of such agreements. We seek to minimize our risk exposure by limiting the counterparties with
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which we enter into contracts to banks and investment banks who meet established credit and capital guidelines. We do not expect any counterparty
to default on its obligations and therefore do not expect to incur any loss due to counterparty default.
Foreign Exchange RiskForeign exchange risk represents exposures we have to changes in the values of current holdings and future cash flows
denominated in other currencies and investments in non- U.S. companies. The types of investments exposed to this risk include investments in
foreign subsidiaries, foreign currency- denominated loans, foreign currency- denominated transactions, and various foreign exchange derivative
instruments whose values fluctuate with changes in currency exchange rates or foreign interest rates. Instruments used to mitigate this risk are foreign
exchange options, currency swaps, futures and forwards. These instruments may be used to help insulate us against losses that may arise due to
volatile movements in foreign exchange rates and/or interest rates.
Non- U.S. OperationsWe conduct business throughout the world and are continuing to expand into foreign markets. We currently have offices
outside the U.S. in Toronto, London, Frankfurt, Luxembourg, Mumbai, Hong Kong and Singapore, and have been strategically growing our
international presence. Our fund investments and our revenues are primarily derived from our U.S. operations. With respect to our non- U.S.
operations, we are subject to risk of loss from currency fluctuations, social instability, changes in governmental policies or policies of central banks,
expropriation, nationalization, unfavorable political and diplomatic developments and changes in legislation relating to non- U.S. ownership. Our
funds also invest in the securities of companies which are located in non- U.S. jurisdictions. As we continue to expand globally, we will continue to
focus on monitoring and managing these risk factors as they relate to specific non- U.S. investments.
Sensitivity
Our assets and unrealized gains, and our related equity and net income are sensitive to changes in the valuations of our funds underlying investments
and could vary materially as a result of changes in our valuation assumptions and estimates. See Item 7. Managements Discussion and Analysis of
Financial Conditions and Results of Operations- Critical Accounting Policies- Investments, at Fair Value for details related to the valuation methods
that are used and the key assumptions and estimates employed by such methods. We also quantify the Level III investments that are included on our
consolidated statements of financial condition by valuation methodology in Item 7. Managements Discussion and Analysis of Financial Conditions
and Results of Operations- Fair Value Measurements. We employ a variety of valuation methods. Furthermore, the investments that we manage but
are not on our consolidated statements of financial condition, and therefore impact carried interest, also employ a variety of valuation methods of
which no single methodology is used more than any other. A 10% change in any single key assumption or estimate that is employed by any of the
valuation methodologies that we use will generally not have a material impact on our financial results. Changes in fair value will have the following
impacts before a reduction of profit sharing expense and Non- Controlling Interests in the Apollo Operating Group and on a pre- tax basis on our
results of operations for the years ended December 31, 2013 and 2012:
Management fees from the funds in our credit segment are based on the net asset value of the relevant fund, gross assets, capital commitments or
invested capital, each as defined in the respective management agreements. Changes in the fair values of the investments in credit funds that earn
management fees based on net asset value or gross assets will have a direct impact on the amount of management fees that are earned. Management
fees earned from our credit segment on a segment basis that were dependent upon estimated fair value during the years ended December 31, 2013
and 2012 would decrease by approximately $21.3 million and $11.9 million, respectively, if the fair values of the investments held by such funds
were 10% lower during the same respective periods. By contrast, a 10% increase in fair value would increase management fees for the years ended
December 31, 2013 and 2012 by approximately $21.0 million and $9.8 million, respectively.
Management fees for our private equity funds, excluding AAA, range from 0.65% to 1.50% and are charged on either (a) a fixed percentage of
committed capital over a stated investment period or (b) a fixed percentage of invested capital of unrealized portfolio investments. Changes in
values of investments could indirectly affect future management fees from private equity funds by, among other things, reducing the funds access to
capital or liquidity and their ability to currently pay the management fees or if such change resulted in a write- down of investments below their
associated invested capital.
Other income, net earned from derivative contracts related to the amended services contract with Athene and Athene Life Re Ltd. and the Amended
AAA Services Agreement would decrease by approximately $8.5 million and $0.0 million for the years ended December 31, 2013 and 2012,
respectively, if the fair value of the accrued notional shares of Athene Holding Ltd. decreased by 10% during the same respective periods. By
contrast, a 10% increase in fair value of the accrued notional shares of Athene Holding Ltd. would increase other income, net for the years ended
December 31, 2013 and 2012 by approximately $8.5 million and $0.0 million, respectively.
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Carried interest income from most of our credit funds, which are quantified in Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations- Segment Analysis, are impacted directly by changes in the fair value of their investments. Carried interest
income from most of our credit funds generally is earned based on achieving specified performance criteria. We anticipate that a 10% decline in the
fair values of investments held by all of the credit funds at December 31, 2013 and 2012 would decrease carried interest income on a segment basis
for the years ended December 31, 2013 and 2012 by approximately $203.7 million and $289.4 million, respectively. Additionally, the changes to
carried interest income from most of our credit funds assume there is no loss in the fund for the relevant period. If the fund had a loss for the period,
no carried interest income would be earned by us. By contrast, a 10% increase in fair value would increase carried interest income on a segment
basis for the years ended December 31, 2013 and 2012 by approximately $240.1 million and $256.6 million, respectively.
Carried interest income from private equity funds generally is earned based on achieving specified performance criteria and is impacted by
changes in the fair value of their fund investments. We anticipate that a 10% decline in the fair values of investments held by all of the private
equity funds at December 31, 2013 and 2012 would decrease carried interest income on a segment basis for the years ended December 31,
2013 and 2012 by $524.8 million and $848.4 million, respectively. The effects on private equity fees and income assume that a decrease in
value does not cause a permanent write- down of investments below their associated invested capital. By contrast, a 10% increase in fair
value would increase carried interest income on a segment basis for the years ended December 31, 2013 and 2012 by $484.5 million and
$789.2 million, respectively.
Carried interest income from real estate funds generally is earned based on achieving specified performance criteria and is impacted by
changes in the fair value of their fund investments. We anticipate that a 10% decline in the fair values of investments held by all of the real
estate funds at December 31, 2013 and 2012 would decrease carried interest income on a segment basis for the years ended December 31,
2013 and 2012 by $6.0 million and $4.4 million, respectively. The effects on real estate fees and income assume that a decrease in value does
not cause a permanent write- down of investments below their associated invested capital. By contrast, a 10% increase in fair value would
increase carried interest income on a segment basis for the years ended December 31, 2013 and 2012 by $16.1 million and $1.9 million,
respectively.
For select Apollo funds, our share of investment income as a limited partner in such funds is derived from unrealized gains or losses on
investments in funds included in the consolidated financial statements. For funds in which we have an interest, but are not included in our
consolidated financial statements, our share of investment income is limited to our ARI and AMTG RSUs and direct investments in the funds,
which ranges from 0.01% to 9.97%. A 10% decline in the fair value of investments at December 31, 2013 and 2012 would result in an
approximate $39.8 million and $35.9 million decrease in investment income at the consolidated level, respectively. By contrast, a 10%
increase in the fair value of investments at December 31, 2013 and 2012 would result in an approximate $39.8 million and $35.9 million
increase in investment income at the consolidated level, respectively.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements

Page
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
151
Consolidated Statements of Financial Condition as of December 31, 2013 and 2012
152
Consolidated Statements of Operations for the Years Ended December 31, 2013, 2012, and
2011
153
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 154
2013, 2012, and 2011
Consolidated Statements of Changes in Shareholders Equity for the Years Ended December 31, 155
2013, 2012, and 2011
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012, and
2011
156
Notes to Consolidated Financial Statements
157
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
New York, New York
We have audited the accompanying consolidated statements of financial condition of Apollo Global Management, LLC and subsidiaries (the
"Company") as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in
shareholders equity and cash flows for each of the three years in the period ended December 31, 2013. We also have audited the Companys internal
control over financial reporting as of December 31, 2012, based on criteria established in Internal Control- Integrated Framework (1992) issued by
the Committee of Sponsoring Organizations of the Treadway Commission. The Companys management is responsible for these financial statements,
for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on these financial statements and an opinion on the Companys internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such
other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
A companys internal control over financial reporting is a process designed by, or under the supervision of, the companys principal executive and
principal financial officers, or persons performing similar functions, and effected by the companys board of directors, management, and other
personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Apollo Global
Management, LLC and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on
the criteria established in Internal Control- Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
/s/ Deloitte & Touche LLP
New York, New York
March 3, 2014
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2013 AND DECEMBER 31, 2012
(dollars in thousands, except share data)
December 31,
2013
Assets:
Cash and cash equivalents
$
Cash and cash equivalents held at
consolidated funds
Restricted cash
Investments
Assets of consolidated variable
interest entities:
Investments, at fair value
Other assets
Carried interest receivable
Due from affiliates
Fixed assets, net
Deferred tax assets
Other assets
Goodwill
Intangible assets, net
Total Assets
$
Liabilities and Shareholders
Equity
Liabilities:
Accounts payable and accrued
expenses
$
Accrued compensation and benefits
Deferred revenue
Due to affiliates
Profit sharing payable
Debt
Liabilities of consolidated variable
interest entities:
Debt, at fair value
Other liabilities
Other liabilities
Total Liabilities
Commitments and Contingencies
(see note 18)
Shareholders Equity:
shareholders equity:
Class A shares, no par value,
unlimited shares authorized,
146,280,784 shares and 130,053,993
shares issued and outstanding at
December 31, 2013 and
December 31, 2012, respectively
Class B shares, no par value,
unlimited shares authorized, 1 share
issued and outstanding at December
31, 2013 and December 31, 2012
Additional paid in capital
Accumulated deficit
Appropriated partners capital
Accumulated other comprehensive
income
Total Apollo Global Management,
LLC shareholders equity
Non- Controlling Interests in
Non- Controlling Interests in Apollo
Operating Group
1,078,120
2012
946,225
1,417
9,199
2,393,883
1,226
8,359
2,138,096
1,095,170
14,126,362
280,718
2,287,075
317,247
40,251
660,199
44,170
49,243
94,927
22,477,981
1,682,696
12,689,535
299,978
1,878,256
173,312
53,452
542,208
36,765
48,894
137,856
20,636,858
38,159
41,711
279,479
595,371
992,240
750,000
38,337
56,125
252,157
477,451
857,724
737,818
12,423,962
605,063
63,274
15,789,259
11,834,955
634,053
44,855
14,933,475
2,624,582
(1,568,487)
1,581,079
3,043,334
(2,142,020)
1,765,360
95
144
2,637,269
2,666,818
2,669,730
1,893,212
1,381,723
1,143,353
Total Shareholders Equity

Total Liabilities and
Shareholders Equity
6,688,722
$
22,477,981
$
See accompanying notes to consolidated financial statements.
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5,703,383
20,636,858
Table of Contents

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
2013
Revenues:
$
Carried interest income (loss)
from affiliates
Total Revenues
Expenses:
Compensation and benefits:
Total Compensation and Benefits
Interest expense
Professional fees
General, administrative and other
Placement fees
Occupancy
Total Expenses
Other Income:
Net gains (losses) from
investment activities
investment activities of
consolidated variable interest
entities
investments
Interest income
Other income, net
Total Other Income
Income (loss) before income tax
provision
Net Income (Loss)
Net (income) loss attributable to
Non- controlling Interests
Net Income (Loss) Attributable
to Apollo Global Management,
LLC
$
Distributions Declared per
Class A Share
$
Net Income Per Class A Share:
Net Income (Loss) Available to
Class A Share Basic
$
Net Income (Loss) Available to
Class A Share Diluted
$
Weighted Average Number of
Class A Shares Basic
Weighted Average Number of
Class A Shares Diluted
2012
196,562
674,634
2011
149,544
580,603
81,953
487,559
2,862,375
3,733,571
2,129,818
2,859,965
(397,880)
171,632
126,227
294,753
1,173,255
1,594,235
29,260
83,407
98,202
42,424
39,946
54,241
1,941,715
598,654
274,574
872,133
1,745,361
37,116
64,682
87,961
22,271
37,218
53,236
2,047,845
1,149,753
251,095
(60,070)
1,340,778
40,850
59,277
75,558
3,911
35,816
26,260
1,582,450
330,235
288,244
(129,827)
199,742
(71,704)
24,201
107,350
12,266
40,114
689,707
110,173
9,693
1,964,679
2,301,085
2,481,563
(107,569)
2,373,994
3,113,205
(65,410)
3,047,795
(1,714,603)
(2,736,838)
13,923
4,731
205,520
118,548
(1,292,270)
(11,929)
(1,304,199)
835,373
659,391
310,957
3.95
1.35
0.83
4.06
2.06
(4.18)
4.03
2.06
(4.18)
139,173,386
(468,826)
127,693,489
116,364,110
142,214,350
129,540,377
116,364,110
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CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
2013
Net Income (Loss)
$
Other Comprehensive Income, net
of tax:
Net unrealized gain on interest rate
swaps (net of taxes of $0, $410, and
$855 for Apollo Global
Management, LLC and $0 for NonControlling Interests in Apollo
Operating Group for the years
ended December 31, 2013, 2012,
and 2011, respectively)
Net loss on available- for- sale
securities (from equity method
investment)
Total Other Comprehensive (Loss)
Income, net of tax
Comprehensive Income (Loss)
Comprehensive (Income) Loss
attributable to Non- Controlling
Interests
Comprehensive Income (Loss)
Attributable to Apollo Global
Management, LLC
$
2012
2,373,994
2011
3,047,795
2,653
(8)
(8)
2,373,986
(1,564,710)
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6,728
(11)
(225)
2,642
3,050,437
6,503
(1,297,696)
(922,172)
809,276 $
2,128,265
(1,304,199)
1,032,502
(265,194)
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS EQUITY
Apollo Global Management, LLC Shareholders
Class A
Shares
Balance at
January 1,
2011
Issuance of
Class A
Shares
Dilution
impact of
issuance
Class A
shares
Capital
increase
related to
equity based
compensation
Distributions
Additional
Paid in
Capital
Class B
Shares
97,921,232
21,500,000
382,488
Distributions
related to
deliveries of
Class A
shares for
RSUs
4,631,906
Repurchase
for net
settlement of
Class A
shares
(130,096)
Non- cash
distribution
Net transfers
of AAA
ownership
interest to
(from) NonControlling
Interests in
consolidated
entities
Satisfaction
of liability
related to
AAA RDUs
Net (loss)
income
Net loss on
available- forsale securities
(from equity
method
investment)
Net
unrealized
gain on
interest rate
swaps (net of
taxes of $855
and $0 for
Apollo Global
Management,
LLC and
NonControlling
Interests in
Apollo
Operating
Group,
respectively
Balance at
December
31, 2011
123,923,042
Dilution
impact of
issuance of
Class A
shares
Capital
increase
related to
equitybased
compensation
Capital
contributions
Distributions
6,130,951
2,078,890 $
Accumulated
Other
Comprehensive
(Loss) Income
Appropriated
Partners
Capital
Accumulated
Deficit
(1,937,818) $
Total Apollo
Global
Management,
LLC Total
Shareholders
Equity
NonControlling
Interests in
Apollo
Operating
Group
NonControlling
Interests in
Consolidated
Entities
150,902 $
11,359 $
(1,529) $
382,488
132,709
(356)
132,353
451,543
451,543
(115,139)
(115,139)
11,680
(17,081)
(5,401)
(5,401)
(2,472)
(2,472)
(2,472)
(3,176)
(3,176)
6,524
3,845
(6,524)
(6,524)
3,845
3,845
202,235
2,939,492 $
(468,826)
(2,426,197) $
213,594 $
(225)
1,622
(266,591)
(225)
1,622
(488) $
726,401 $
1,589
1,589
282,288
(203,997)
9,090
(25,992)
(264,910)
1,888,224 $
Total
Shareholders
Equity
(349,509)
(97,296)
1,042,293 $
(127,096)
696,361
(199,199)
(940,312)
5,106
1,444,767 $
477,153 $
3,081,419
382,488
5,257
1,147,904
(663,847)
(1,304,199)
(225)
6,728
2,648,321
1,589
282,288
313,856
596,144
551,154
(468,907)
(16,902)
(495,506)
(335,023)
551,154
(1,299,436)
(16,902)
Distributions
related to
deliveries of
Class A
shares for
RSUs
Purchase of
AAA units
Non- cash
distributions
Non- cash
contribution
to NonControlling
Interests
Capital
increase
related to
business
acquisition
(note 3)
NonControlling
Interests in
consolidated
entities at
acquisition
date
Deconsolidation
Net transfers
of AAA
ownership
interest to
Interests in
consolidated
entities
Satisfaction
of liability
related to
AAA RDUs
Net income
(788)
14,001
(919)
1,790
(11)
643
Net loss on
(from equity
method
investment)
Net
unrealized
gain on
interest rate
swaps (net of
taxes of $410
and $0 for
Apollo Global
Management,
LLC and
NonControlling
Interests in
Apollo
Operating
Group,
respectively)
Balance at
December
31, 2012
130,053,993
Dilution
impact of
issuance of
Class A
shares
Capital
increase
related to
equitybased
compensation
Capital
contributions
Distributions
Distributions
related to
deliveries of
Class A
shares for
RSUs
5,181,389
Purchase of
AAA units
Net transfers
of AAA
ownership
interest to
Interests in
consolidated
entities
Satisfaction
of liability
related to
AAA RDUs
3,043,334 $
(102,072)
(102,072)
(788)
(3,605)
(4,393)
2,547
2,547
14,001
14,001
306,351
306,351
(46,148)
(46,148)
(919)
1,790
1,790
310,957
1,816,676
2,127,633
234,805
685,357
3,047,795
(11)
643
2,010
(2,142,020) $
1,765,360 $
144 $
2,666,818 $
4,865
4,865
104,935
(650,189)
37,263
(85,858)
(334,215)
(11)
2,653
5,703,383
4,865
104,935
19,163
124,098
689,172
(48,595)
1,143,353 $
(984,404)
1,893,212 $
919
(2,226)
(2,226)
1,205
1,205
(159,573)
(975,488)
689,172
(2,119,465)
(48,595)
(62,326)
(62,326)
2,226
1,205
Exchange of
AOG Units
for Class A
Shares
Net income
11,045,402
85,395
85,395
659,391
149,934
809,325
307,019
1,257,650
41
Net (loss)
gain on
(from equity
method
investment)
Balance at
December
31, 2013
146,280,784
2,624,582 $
(1,568,487) $
1,581,079 $
(49)
95 $
(49)
2,637,269 $

- 155-
2,669,730 $
(62,996)
1,381,723 $
22,399
2,373,994
(8)
6,688,722
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
2013
Cash Flows from
Operating Activities:
Net income (loss)
$
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Equity- based
compensation
Depreciation and
amortization
Amortization of
intangible assets
Amortization of debt
issuance costs
Unrealized losses from
investment in HFA and
other investments
Non- cash interest
income
Income (Loss) from
equity awards received
for directors fees
Income from equity
method investment
Unrealized gain on
market value on
derivatives
Waived management
fees
Non- cash compensation
expense related to
waived management fees
Change in fair value of
contingent obligations
Excess tax benefits from
share- based payment
arrangements
Deferred taxes, net
Loss on fixed assets
Gain on business
acquisitions
Changes in assets and
liabilities:
Carried interest
receivable
Due from affiliates
Other assets
Accounts payable and
accrued expenses
Accrued compensation
and benefits
Deferred revenue
Due to affiliates
Other liabilities
Apollo Funds related:
Net realized (gains)
losses from investment
activities
2012
2,373,994
2011
3,047,795
(1,304,199)
126,227
598,654
1,149,753
11,047
10,226
11,132
43,194
43,010
15,128
765
511
511
12,962
1,316
5,881
(3,403)
(3,187)
(2,486)
(2,536)
(19)
(110,173)
(13,923)
378
(107,350)
(10,203)
(6,161)
(23,549)
6,161
23,549
60,826
25,787
(37,263)
62,701
963
55,309
923
10,580
570
(408,819)
(130,525)
6,250
34,034
(1,951,897)
(196,193)
(973,578)
5,779
(7,901)
998,491
(30,241)
(7,019)
559
3,079
(17,244)
27,322
(44,223)
141,225
(5,822)
8,007
15,000
(103,773)
361,606
(5,052)
(6,128)
(21,934)
43,767
(325,229)
5,778
(87,881)
(309,138)
(77,408)
(458,031)
11,313
113,114
Net unrealized (gains)

losses from investment
activities
Net realized gains on
debt
Net unrealized losses on
debt
Distributions from
Cash transferred from
consolidated funds
Change in cash held at
consolidated variable
interest entities
Purchases of investments
Proceeds from sale of
investments and
liquidating distributions
Change in other assets
Change in other
liabilities
Net Cash Provided by
$
Cash Flows from
Investing Activities:
Purchases of fixed assets
Acquisitions (net of cash
assumed) (see note 3)
Proceeds from disposals
of fixed assets
Purchase of investment
in HFA (see note 4)
Investment in Apollo
Senior Loan Fund (see
note 4)
Cash contributions to
equity method
investments
Cash distributions from
equity method
investments
Change in restricted cash
Net Cash Provided by
(Used in) Investing
Activities
$
Cash Flows from
Financing Activities:
Issuance of Class A
$
shares
Repurchase of Class A
shares related to net
share settlement
Principal repayments of
debt and repurchase of
debt
Issuance costs
Issuance of debt
Satisfaction of tax
receivable agreement
Satisfaction of
contingent obligations
Distributions related to
deliveries of Class A
shares for RSUs
Distributions to NonControlling Interests in
(137,098)
(41,819)
232,510
497,704
19,880
66,796
99,675
30,248
6,052
587,526
(9,841,763)
(348,138)
(7,525,473)
(17,400)
(1,294,477)
8,422,195
19,260
7,182,392
(71,921)
1,530,194
(7,109)
(64,061)
1,025,382
(49,634)
$
(7,577)
265,551
56,526
$
(11,259)
(99,190)
743,821
(21,285)
(29,632)
2,282
631
(52,142)
(26,000)
(98,422)
(126,917)
(64,226)
216,284
152,645
64,844
(840)
(70)
111,727
(84,791)
(1,726)
(129,536)
383,990
(2,472)
(737,818)
(698)
(1,939)
(7,750)
750,000
(30,403)
(1,502)
(67,535)
(85,858)
(25,992)
(17,081)
(12,171)
(8,779)
(13,440)
273
4,069
Contributions from NonControlling Interests in

Distributions paid
Distributions paid to
Non- Controlling
Interests in Apollo
Operating Group
Excess tax benefits from
share- based payment
arrangements
Apollo Funds related:
Issuance of debt
Principal repayment of
debt
Purchase of AAA units
Distributions paid
Distributions paid to
Non- Controlling
Contributions from NonControlling Interests in
interest entities
Distributions to Non
Controlling Interests in
Subscriptions received in
advance
Net Cash (Used in)
Provided by Financing
Activities
$
Net Increase in Cash
and Cash Equivalents
Cash and Cash
Equivalents, Beginning
of Period
Cash and Cash
$
Equivalents, End of
Period
Supplemental
Disclosure of Cash
Flow Information:
Interest paid
$
Interest paid by
interest entities
Income taxes paid
Supplemental
Disclosure of NonCash Investing
Activities:
Non- cash contributions $
on equity method
investments
Non- cash distributions
from equity method
investments
Transfer of fixed assets
held- for- sale
Non- cash sale of assets
held- for- sale for
repayment of CIT loan
Non- cash contributions
from investing activities
Change in accrual for
purchase of fixed assets
(584,465)
(975,488)
(202,430)
(335,023)
37,263
(102,598)
(199,199)
2,747,033
(2,218,060)
1,413,334
(515,897)
454,356
(415,869)
(62,326)
(334,215)
(147,402)
(102,072)
(264,910)
(486,727)
(308,785)
688,899
547,085
35,000
(1,005,023)
132,086
947,451
21,960
202,720
(27,284)
744,731
(251,823)
362,462
382,269
1,079,537
947,451
744,731
43,760
120,149
49,590
116,392
49,296
20,892
9,233
(1,303)
7,128
4,866
(2,807)
10,732
9,847
(703)
6,486
(11,069)
3,176
(659)
967
Supplemental
Disclosure of NonCash Financing
Activities:
Non- cash distributions $
Declared and unpaid
distributions
Non- cash distributions
to Non- Controlling
entities
from Non- Controlling
Interests in Apollo
Operating Group related
to equitybased
compensation
from Non- Controlling
entities
Unrealized gain on
interest rate swaps to
Non- Controlling
Interests in Apollo
Operating Group, net of
taxes
Satisfaction of liability
related to AAA RDUs
Net transfers of AAA
ownership interest to
Non- Controlling
entities
Net transfer of AAA
ownership interest from
Apollo Global
Management, LLC
Unrealized gain on
interest rate swaps
Unrealized loss on
available for sale
securities (from equity
method investment)
Capital increases related
to equitybased
compensation
Dilution impact of
issuance of Class A
shares
Dilution impact of
issuance of Class A
shares on NonControlling Interests in
Deferred tax asset related
to interest rate swaps
Tax benefits related to
deliveries of Class A
shares for RSUs
Capital increase related
to business acquisition
Satisfaction of liability
related to repayment on
CIT
Net Assets Transferred
from Consolidated
Funds
Cash
$
(65,724)
(788)
(1,567)
(3,605)
(12,541)
(3,176)
19,163
313,856
696,361
2,547
2,010
5,106
1,205
1,790
3,845
2,226
919
6,524
(2,226)
(919)
(6,524)
1,053
(49)
2,477
(11)
(225)
104,935
282,228
451,543
4,865
1,589
132,353
(410)
(855)
(9,090)
(11,680)
14,001
11,069
(127,096)
6,052
Investments
Other assets
Other liabilities
Net Assets Transferred
from Consolidated
Variable Interest
Entity:
Cash
$
Investments
Other assets
Debt
Other liabilities
Non- Controlling interest
in consolidated entities
related to acquisition
Adjustments related to
exchange of Apollo
Operating Group units:
Deferred tax assets
$
Due to affiliates
Non- Controlling Interest
in Apollo Operating
Group
149,327
(126,928)
(22,399)
1,161,016
8,805,916
169,937
(7,255,172)
(560,262)
24,213
609
(4,874)
260,203
62,996

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68,586
2,195,986
14,039
(2,046,157)
(31,959)
Table of Contents
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION

Apollo Global Management, LLC (together with its consolidated subsidiaries, the Company or Apollo) is a global alternative investment
manager whose predecessor was founded in 1990. Its primary business is to raise, invest and manage private equity, credit and real estate funds as
well as strategic investment accounts ("SIAs"), on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and
individual investors. For these investment management services, Apollo receives management fees generally related to the amount of assets managed,
transaction and advisory fees for the investments made and carried interest income related to the performance of the respective funds that it manages.
Apollo has three primary business segments:
Private equityprimarily invests in control equity and related debt instruments, convertible securities and distressed debt
investments;
Creditprimarily invests in non- control corporate and structured debt instruments; and
Real estateprimarily invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating
Basis of Presentation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP). The consolidated financial statements include the accounts of the Company, its wholly- owned or majority- owned
subsidiaries, the consolidated entities which are considered to be variable interest entities and for which the Company is considered the primary
beneficiary, and certain entities which are not considered variable interest entities but which the Company controls through a majority voting interest.
Intercompany accounts and transactions have been eliminated upon consolidation.
Certain reclassifications, when applicable, have been made to the prior period's consolidated financial statements and notes to conform to the current
period's presentation and are disclosed accordingly.
Organization of the Company
The Company was formed as a Delaware limited liability company on July 3, 2007 and completed a reorganization of its predecessor businesses on
July 13, 2007 (the 2007 Reorganization). The Company is managed and operated by its manager, AGM Management, LLC, which in turn is
indirectly wholly- owned and controlled by Leon Black, Joshua Harris and Marc Rowan (the "Managing Partners").
As of December 31, 2013, the Company owned, through three intermediate holding companies that include APO Corp., a Delaware corporation that
is a domestic corporation for U.S. Federal income tax purposes, APO Asset Co., LLC, a Delaware limited liability company that is a disregarded
entity for U.S. Federal income tax purposes, and APO (FC), LLC, an Anguilla limited liability company that is treated as a corporation for U.S.
Federal income tax purposes (collectively, the Intermediate Holding Companies), 39.0% of the economic interests of, and operated and controlled
all of the businesses and affairs of, the Apollo Operating Group through its wholly- owned subsidiaries.
A.P. Professional Holdings, L.P., a Cayman Islands exempted limited partnership ("Holdings") is the entity through which the Managing Partners and
certain of the Company's other partners (the "Contributing Partners") indirectly beneficially own interests in each of the partnerships that comprise
the Apollo Operating Group (AOG Units). As of December 31, 2013, Holdings owned the remaining 61.0% of the economic interests in the Apollo
Operating Group. The Company consolidates the financial results of the Apollo Operating Group and its consolidated subsidiaries. Holdings
ownership interest in the Apollo Operating Group is reflected as a Non- Controlling Interest in the accompanying consolidated financial statements.
Apollo also entered into an exchange agreement with Holdings (as amended, the Exchange Agreement) that allows the holders of the AOG Units
(and certain permitted transferees thereof), subject to the applicable vesting and minimum retained ownership requirements and transfer restrictions to
exchange, upon notice (subject to the terms of the Exchange Agreement), their AOG Units for the Companys Class A shares on a one- for- one basis
up to four times each year, subject to customary conversion rate adjustments for splits, distributions and reclassifications. Under the Exchange
Agreement, a holder of AOG Units must
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simultaneously exchange one partnership unit in each of the Apollo Operating Group partnerships to effectuate an exchange for one Class A share.
As a holder exchanges its AOG Units, the Companys indirect interest in the Apollo Operating Group will be correspondingly increased.
On April 4, 2011, the Company completed the initial public offering (IPO) of its Class A shares, representing limited liability company interests of
the Company. The Company received net proceeds from the IPO of approximately $382.5 million, which were used to acquire additional AOG Units.
As a result, Holdings ownership interest in the Apollo Operating Group decreased from 70.7% to 66.5% and Apollo Global Management, LLCs
ownership interest in the Apollo Operating Group increased from 29.3% to 33.5% upon consummation of the IPO. As such, the difference between
the fair value of the consideration paid for the Apollo Operating Group level ownership interest and the book value on the date of the IPO is reflected
in Additional Paid in Capital.
On May 15, 2013, the Company completed its public offering for resale of approximately 24.3 million Class A shares owned by the California Public
Employees' Retirement System, or "CalPERS," and an affiliate of the Abu Dhabi Investment Authority (the "Strategic Investors") and certain of its
Managing Partners, Contributing Partners and employees (collectively, the Selling Shareholders) at a price to the public of $25.00 per Class A
share, which included approximately 3.2 million Class A shares sold by the Selling Shareholders upon the exercise in full of the underwriters' option
to purchase additional shares (the Secondary Offering). In connection with the Secondary Offering, certain holders of AOG Units exchanged their
AOG Units for Class A shares and approximately 8.8 million Class A shares were issued by the Company in the exchange. No proceeds were
received by the Company from the sale of Class A shares by the Selling Shareholders in the Secondary Offering. All underwriting costs were borne
by the Selling Shareholders. The Company incurred approximately $3.0 million of fees for the year ended December 31, 2013, consisting of legal and
professional fees and filing costs, as a result of the Secondary Offering.
As a result of the exchange of AOG Units into Class A shares from the Secondary Offering, the Company's economic interest in the Apollo Operating
Group increased from 35.6% to 38.0% and Holdings' economic interest in the Apollo Operating Group decreased from 64.4% to 62.0%. The dilution
of Holdings' economic interests in the Apollo Operating Group from the Secondary Offering is reflected in the consolidated statements of changes in
shareholders' equity in the line titled Exchange of AOG Units for Class A shares, where $50.8 million was transferred to Apollo Global Management,
LLC's shareholders' equity from Non- Controlling Interests in the Apollo Operating Group. Additionally, as a result of the exchange of AOG Units
into Class A shares, the Company recognized a step- up in tax basis of certain assets and liabilities. Similar to in our 2007 Reorganization, the
Company recognized an increase in the Company's deferred tax assets, tax receivable agreement liability and shareholders' equity as a result of the
exchange of AOG Units into Class A shares. See note 13 and note 17 for a discussion of the increase in the Company's deferred tax assets, tax
receivable agreement liability and additional paid in capital as a result of the exchange of AOG Units into Class A shares.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of ConsolidationThe types of entities with which Apollo is involved generally include subsidiaries (i.e. general partners and
management companies related to the funds the Company manages), entities that have all the attributes of an investment company (e.g., funds) and
securitization vehicles (e.g., collateralized loan obligations). Each of these entities is assessed for consolidation on a case by case basis depending on
the specific facts and circumstances surrounding that entity.
Pursuant to its consolidation policy, the Company first considers the appropriate consolidation guidance to apply including consideration of whether
the entity qualifies for certain scope exceptions and whether the entity should be evaluated under either the previous rules on consolidation of variable
interest entities (VIEs) or the amended consolidation rules depending on whether or not the entity qualifies for the deferral as further described
below. The Company then performs an assessment to determine whether that entity qualifies as a VIE. An entity in which Apollo holds a variable
interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the legal entity to finance
its activities without additional subordinated financial support, (b) the holders of equity investment at risk (as a group) lack either the direct or
indirect ability through voting rights or similar rights to make decisions about a legal entitys activities that have a significant effect on the success of
the legal entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some
investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the expected residual returns
of the legal entity, or both and substantially all of the legal entitys activities
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either involve or are conducted on behalf of an investor with disproportionately few voting rights. Entities that do not qualify as VIEs are generally
assessed for consolidation as voting interest entities (VOEs) under the voting interest model.
Under the voting interest model, Apollo consolidates those entities it controls through a majority voting interest or through other means, including
those VOEs in which the general partner is presumed to have control. Apollo does not consolidate those VOEs in which the presumption of control
by the general partner has been overcome through either the granting of substantive rights to the unaffiliated investors to either dissolve the fund or
remove the general partner (kick- out rights) or the granting of substantive participating rights.
As previously indicated, the consolidation assessment, including the determination as to whether an entity qualifies as a VIE depends on the facts and
circumstances surrounding each entity and therefore certain of Apollo's funds may qualify as VIEs whereas others may qualify as VOEs. The
granting of substantive kick- out rights is a key consideration in determining whether an entity is a VIE and whether or not that entity should be
consolidated. For example, when the unaffiliated holders of equity investment at risk of a fund with sufficient equity to permit the fund to finance its
activities without additional subordinated financial support are not granted substantive kick- out rights and the Company is not part of the group of
holders of equity investment at risk, the fund is generally determined to be a VIE, as the holders of equity investment at risk as a group lack the direct
or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the legal entity.
Alternatively, when the unaffiliated holders of equity investment at risk are granted substantive kick- out rights, the fund is generally determined to
be a VOE. However, in certain cases where the Company holds a substantive equity investment at risk in the fund, the fund may be determined to be
a VOE even though substantive kick- out rights were not granted to the unaffiliated holders of equity investment at risk. In these cases, the Company
is part of the group of holders of equity investment at risk and therefore the holders of equity investment at risk as a group do not lack the direct or
indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the legal entity.
If the entity is determined to be a VIE under the conditions above, the Company then assesses whether the entity should be consolidated by applying
either the previous consolidation rules or the amended consolidation rules depending on whether the entity qualifies for the deferral of the amended
consolidation rules as further described below.
VIEs that qualify for the deferral of the amended consolidation rules because certain conditions are met, including if the entities have all the attributes
of an investment company and are not securitization or asset- backed financing entities, will continue to apply the previous consolidation rules. VIEs
that are securitization or asset- backed financing entities will apply the amended consolidation rules. Under both sets of rules, VIEs for which Apollo
is determined to be the primary beneficiary are consolidated.
With respect to VIEs such as Apollo's funds that qualify for the deferral of the amended consolidation rules and therefore apply the previous
consolidation rules, Apollo is determined to be the primary beneficiary if its involvement, through holding interests directly or indirectly in the VIE
or contractually through other variable interests (e.g., carried interest and management fees), would be expected to absorb a majority of the VIEs
expected losses, receive a majority of the VIEs expected residual returns, or both. In cases where two or more Apollo related parties hold a variable
interest in a VIE, and the aggregate variable interest held by those parties would, if held by a single party, identify that party as the primary
beneficiary, then the Company is determined to be the primary beneficiary to the extent it is the party within the related party group that is most
closely associated with the VIE.
For VIEs such as the Apollo's CLOs that apply the amended consolidation rules, the Company is determined to be the primary beneficiary if it holds
a controlling financial interest defined as possessing both (a) the power to direct the activities of a VIE that most significantly impact the VIEs
economic performance and (b) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be
significant to the VIE. CLOs are generally determined to be VIEs if they are formed solely to issue collateralized notes in the legal form of debt and
therefore do not have sufficient total equity investment at risk to permit the entity to finance its activities without additional subordinated financial
support. With respect to such CLOs, Apollo generally possesses a controlling financial interest in, and therefore consolidates, such CLOs in
accordance with the amended consolidation rules when Apollo's role as collateral manager provides the Company with the power to direct the
activities that most significantly impact the CLOs economic performance and the Company has the right to receive certain benefits from the CLO
(e.g., incentive fees) that could potentially be significant to the CLO.
Under the previous and the amended consolidation rules, Apollo determines whether it is the primary beneficiary of a VIE at the time it becomes
initially involved with the VIE and reconsiders that conclusion continuously. Investments and
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redemptions (either by Apollo, affiliates of Apollo or third parties) or amendments to the governing documents of the respective entity may affect an
entitys status as a VIE or the determination of the primary beneficiary.
The assessment of whether an entity is a VIE and the determination of whether Apollo should consolidate such VIE requires judgments. Under both
sets of rules, those judgments include, but are not limited to: (i) determining whether the total equity investment at risk is sufficient to permit the
entity to finance its activities without additional subordinated financial support, (ii) evaluating whether the holders of equity investment at risk, as a
group, can make decisions that have a significant effect on the success of the entity, (iii) determining whether two or more parties equity interests
should be aggregated, (iv) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to
receive returns from an entity, (v) and evaluating the nature of the relationship and activities of the parties involved in determining which party within
a related- party group is most closely associated with the VIE. Where the VIEs have qualified for the deferral, judgments are also made in estimating
cash flows to evaluate which member within the equity group absorbs a majority of the expected profits or losses of the VIE. Where the VIEs have
not qualified for the deferral, judgments are also made in determining whether a member in the equity group has a controlling financial interest
including power to direct activities that most significantly impact the VIEs economic performance and rights to receive benefits or obligations to
absorb losses that are potentially significant to the VIE.
Certain of the consolidated VIEs were formed to issue collateralized notes in the legal form of debt backed by financial assets. The difference
between the fair value of the assets and liabilities of these VIEs is presented within appropriated partners capital in the consolidated statements of
financial condition as these VIEs are funded solely with debt. Changes in the fair value of the assets and liabilities of these VIEs and the related
interest and other income is presented within net gains from investment activities of consolidated variable interest entities and net (income) loss
attributable to Non- Controlling Interests in the consolidated statements of operations. Such amounts are recorded within appropriated partners
capital as, in each case, the VIEs note holders, not Apollo, will ultimately receive the benefits or absorb the losses associated with the VIEs assets
and liabilities.
Assets and liability amounts of the consolidated VIEs are shown in separate sections within the consolidated statements of financial condition as of
December 31, 2013 and 2012.
For additional disclosures regarding VIEs, see note 5. Intercompany transactions and balances, if any, have been eliminated in the consolidation.
Equity Method InvestmentsFor investments in entities over which the Company exercises significant influence but which do not meet the
requirements for consolidation, the Company uses the equity method of accounting, whereby the Company records its share of the underlying income
or loss of such entities. Income (loss) from equity method investments is recognized as part of other income (loss) in the consolidated statements of
operations. The carrying amounts of equity method investments are reflected in investments in the consolidated statements of financial condition. As
the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, primarily investment companies which reflect their
investments at estimated fair value, the carrying value of the Companys equity method investments in such entities are at fair value.
Non- Controlling InterestsFor entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is
allocated to owners other than Apollo. The aggregate of the income or loss and corresponding equity that is not owned by the Company is included in
Non- Controlling Interests in the consolidated financial statements. As of December 31, 2013, the Non- Controlling Interests relating to Apollo
Global Management, LLC primarily includes the 61.0% ownership interest in the Apollo Operating Group held by the Managing Partners and
Contributing Partners through their limited partner interests in Holdings and other ownership interests in consolidated entities, which primarily
consist of the approximately 97.4% ownership interest held by limited partners in AP Alternative Assets, L.P. ("AAA") as of December 31, 2013.
Non- Controlling Interests also include limited partner interests of Apollo managed funds in certain consolidated VIEs.
Non- Controlling Interests are presented as a separate component of shareholders equity on the Companys consolidated statements of financial
condition. The primary components of Non- Controlling Interests are separately presented in the Companys consolidated statements of changes in
shareholders equity to clearly distinguish the interest in the Apollo Operating Group and other ownership interests in the consolidated entities. Net
income (loss) includes the net income (loss) attributable to the holders of Non- Controlling Interests on the Companys consolidated statements of
operations. Profits and losses are allocated to Non- Controlling Interests in proportion to their relative ownership interests regardless of their basis.
Cash and Cash EquivalentsApollo considers all highly liquid shortterm investments with original maturities of 90 days or less when purchased
to be cash equivalents. Substantially all amounts are on deposit in interest- bearing accounts with major financial institutions and exceed insured
limits.
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Table of Contents
Restricted CashRestricted cash represents cash deposited at a bank, which is pledged as collateral in connection with leased premises.
RevenuesRevenues are reported in three separate categories that include (i) advisory and transaction fees from affiliates, net, which relate to the
investments of the funds and may include individual monitoring agreements the Company has with the portfolio companies and debt investment
vehicles of the private equity funds and credit funds; (ii) management fees from affiliates, which are based on committed capital, invested capital, net
asset value, gross assets or as otherwise defined in the respective agreements; and (iii) carried interest income (loss) from affiliates, which is normally
based on the performance of the funds subject to preferred return.
Advisory and Transaction Fees from Affiliates, NetAdvisory and transaction fees, including directors fees, are recognized when the underlying
services rendered are substantially completed in accordance with the terms of the transaction and advisory agreements. Additionally, during the
normal course of business, the Company incurs certain costs related to certain transactions that are not consummated (broken deal costs). These
costs (e.g. research costs, due diligence costs, professional fees, legal fees and other related items) are determined to be broken deal costs upon
managements decision to no longer pursue the transaction. In accordance with the related fund agreement, in the event the deal is deemed broken, all
of the costs are reimbursed by the funds and then included as a component of the calculation of the Management Fee Offset described below. If a deal
is successfully completed, Apollo is reimbursed by the fund or funds portfolio company for all costs incurred and no offset is generated. As the
Company acts as an agent for the funds it manages, any transaction costs incurred and paid by the Company on behalf of the respective funds relating
to successful or broken deals are presented net on the Companys statement of operations, and any receivable from the respective funds is presented
in Due from Affiliates on the statement of financial condition.
Advisory and transaction fees from affiliates, net, also includes underwriting fees. Underwriting fees include gains, losses and fees, net of syndicate
expenses, arising from securities offerings in which one of the Companys subsidiaries participates in the underwriter syndicate. Underwriting fees
are recognized at the time the underwriting is completed and the income is reasonably assured and are included in the consolidated statements of
operations. Underwriting fees recognized but not received are included in other assets on the consolidated statements of financial condition.
As a result of providing advisory services to certain private equity and credit portfolio companies, Apollo is generally entitled to receive fees for
transactions related to the acquisition, in certain cases, and disposition of portfolio companies as well as ongoing monitoring of portfolio company
operations and directors fees. The amounts due from portfolio companies are included in Due from Affiliates, which is discussed further in note
17. Under the terms of the limited partnership agreements for certain funds, the management fee payable by the funds may be subject to a reduction
based on a certain percentage of such advisory and transaction fees, net of applicable broken deal costs (Management Fee Offset). Advisory and
transaction fees from affiliates are presented net of the Management Fee Offset in the consolidated statements of operations.
Management Fees from AffiliatesManagement fees for private equity, real estate and credit funds are recognized in the period during which the
related services are performed in accordance with the contractual terms of the related agreement, and are generally based upon (1) a percentage of the
capital committed during the commitment period, and thereafter based on the remaining invested capital of unrealized investments, or (2) net asset
value, gross assets or as otherwise defined in the respective agreements.
Carried Interest Income from AffiliatesApollo is entitled to an incentive return that can normally amount to as much as 20% of the total returns
on funds capital, depending upon performance. Performance- based fees are assessed as a percentage of the investment performance of the funds.
The carried interest income from affiliates for any period is based upon an assumed liquidation of the funds net assets on the reporting date, and
distribution of the net proceeds in accordance with the funds income allocation provisions. Carried interest receivable is presented separately in the
consolidated statements of financial condition. The carried interest income from affiliates may be subject to reversal to the extent that the carried
interest income recorded exceeds the amount due to the general partner based on a funds cumulative investment returns. When applicable, the
accrual for potential repayment of previously received carried interest income, which is a component of due to affiliates, represents all amounts
previously distributed to the general partner that would need to be repaid to the Apollo funds if these funds were to be liquidated based on the current
fair value of the underlying funds investments as of the reporting date. The actual general partner obligation, however, would not become payable or
realized until the end of a funds life.
Management Fee Waiver and Notional Investment ProgramUnder the terms of certain investment fund partnership agreements, Apollo elected
to forgo a portion of the management fee revenue that was due from the funds and instead received a right to a proportionate interest in future
distributions of profits of those funds. Waived fees recognized during the period were
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included in management fees from affiliates in the consolidated statements of operations. This election allowed certain employees of Apollo to waive
a portion of their respective share of future income from Apollo and receive, in lieu of a cash distribution, title and ownership of the profits interests
in the respective fund. Apollo immediately assigned the profits interests received to its employees. Such assignments of profits interests were treated
as compensation and benefits when assigned. The investment period for Fund VII and ANRP for the management fee waiver plan was terminated as
of December 31, 2012.
Deferred RevenueApollo earns management fees subject to the Management Fee Offset. When advisory and transaction fees are earned by the
management company, the Management Fee Offset reduces the management fee obligation of the fund. When the management company receives
cash for advisory and transaction fees, a certain percentage of such advisory and/or transaction fees, as applicable, is allocated as a credit to reduce
future management fees, otherwise payable by such fund. Such credit is classified as deferred revenue in the consolidated statements of financial
condition. A portion of any excess advisory and transaction fees may be required to be returned to the limited partners of certain funds upon such
fund's liquidation. As the management fees earned by the management company are presented on a gross basis, any Management Fee Offsets
calculated are presented as a reduction to Advisory and Transaction Fees from Affiliates in the consolidated statements of operations.
Additionally, Apollo earns advisory fees pursuant to the terms of the advisory agreements with certain of the portfolio companies that are owned by
the funds. When Apollo receives a payment from a portfolio company that exceeds the advisory fees earned at that point in time, the excess payment
is classified as deferred revenue in the consolidated statements of financial condition. The advisory agreements with the portfolio companies vary in
duration and the associated fees are received monthly, quarterly or annually. Deferred revenue is reversed and recognized as revenue over the period
that the agreed upon services are performed.
Under the terms of the funds partnership agreements, Apollo is normally required to bear organizational expenses over a set dollar amount and
placement fees or costs in connection with the offering and sale of interests in the funds to investors. The placement fees are payable to placement
agents, who are independent third parties that assist in identifying potential investors, securing commitments to invest from such potential investors,
preparing or revising offering and marketing materials, developing strategies for attempting to secure investments by potential investors and/or
providing feedback and insight regarding issues and concerns of potential investors, when a limited partner either commits or funds a commitment to
a fund. In certain instances the placement fees are paid over a period of time. Based on the management agreements with the funds, Apollo considers
placement fees and organizational costs paid in determining if cash has been received in excess of the management fees earned. Placement fees and
organizational costs are normally the obligation of Apollo but can be paid for by the funds. When these costs are paid by the fund, the resulting
obligations are included within deferred revenue. The deferred revenue balance will also be reduced during future periods when management fees are
earned but not paid.
Interest and Other IncomeApollo recognizes security transactions on the trade date. Interest income is recognized as earned on an accrual basis.
Discounts and premiums on securities purchased are accreted or amortized over the life of the respective securities using the effective interest
method. Realized gains and losses are recorded based on the specific identification method. Interest income also includes payment- in- kind interest
(or "PIK" interest) on a convertible note and from one of our credit funds.
Due from/to AffiliatesApollo considers its existing partners, employees, certain former employees, portfolio companies of the funds and
nonconsolidated private equity, credit and real estate funds to be affiliates or related parties.
Investments, at Fair ValueThe Company follows U.S. GAAP attributable to fair value measurements which, among other things, requires
enhanced disclosures about investments that are measured and reported at fair value. Investments, at fair value, represent investments of the
consolidated funds, investments of the consolidated VIEs and certain financial instruments for which the fair value option was elected. The unrealized
gains and losses resulting from changes in the fair value are reflected as net gains (losses) from investment activities and net gains (losses) from
investment activities of the consolidated variable interest entities, respectively, in the consolidated statements of operations. In accordance with U.S.
GAAP, investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level IQuoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I
include listed equities and listed derivatives. As required by U.S. GAAP, the Company does not adjust the quoted price for these investments, even in
situations where the Company holds a large position and the sale of such position would likely deviate from the quoted price.
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Level IIPricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and
fair value is determined through the use of models or other valuation methodologies. Investments that are generally included in this category include
corporate bonds and loans, less liquid and restricted equity securities and certain over- the- counter derivatives where the fair value is based on
observable inputs. These investments exhibit higher levels of liquid market observability as compared to Level III investments. The Company
subjects broker quotes to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level II
investment. These criteria include, but are not limited to, the number and quality of broker quotes, the standard deviation of obtained broker quotes,
and the percentage deviation from independent pricing services.
Level IIIPricing inputs are unobservable for the investment and includes situations where there is little observable market activity for the
investment. The inputs into the determination of fair value may require significant management judgment or estimation. Investments that are included
in this category generally include general and limited partner interests in corporate private equity and real estate funds, opportunistic credit funds,
distressed debt and non- investment grade residual interests in securitizations and CDOs and CLOs where the fair value is based on observable inputs
as well as unobservable inputs. When a security is valued based on broker quotes, the Company subjects those quotes to various criteria in making the
determination as to whether a particular investment would qualify for treatment as a Level II or Level III investment. Some of the factors the
Company considers include the number of broker quotes obtained, the quality of the broker quotes, the standard deviations of the observed broker
quotes and the corroboration of the broker quotes to independent pricing services.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investments level
within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of
the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment
when the fair value is based on unobservable inputs.
In cases where an investment or financial instrument that is measured and reported at fair value is transferred between levels of the fair value
hierarchy, the Company accounts for the transfer as of the end of the reporting period.
Private Equity Investments
The value of liquid investments, where the primary market is an exchange (whether foreign or domestic) is determined using period end market
prices. Such prices are generally based on the close price on the date of determination.
Valuation approaches used to estimate the fair value of investments that are less liquid include the market approach and the income approach. The
market approach provides an indication of fair value based on a comparison of the subject company to comparable publicly traded companies and
transactions in the industry. The market approach is driven more by current market conditions, including actual trading levels of similar companies
and, to the extent available, actual transaction data of similar companies. Judgment is required by management when assessing which companies are
similar to the subject company being valued. Consideration may also be given to such factors as the Companys historical and projected financial
data, valuations given to comparable companies, the size and scope of the Companys operations, the Companys strengths, weaknesses, expectations
relating to the markets receptivity to an offering of the Companys securities, applicable restrictions on transfer, industry and market information and
assumptions, general economic and market conditions and other factors deemed relevant. The income approach provides an indication of fair value
based on the present value of cash flows that a business or security is expected to generate in the future. The most widely used methodology in the
income approach is a discounted cash flow method. Inherent in the discounted cash flow method are assumptions of expected results and a calculated
discount rate.
On a quarterly basis, Apollo utilizes a valuation committee, consisting of members from senior management, to review and approve the valuation
results related to its funds' private equity investments. The Company also retains independent valuation firms to provide third- party valuation
outcomes, forecast evaluations and variance analyses. However, because of the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.
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Credit Investments
The majority of the investments in Apollos credit funds are valued based on quoted market prices and valuation models. Debt and equity securities
that are not publicly traded or whose market prices are not readily available are valued at fair value utilizing recognized pricing services, market
participants or other sources. When market quotations are not available, a model based approach is used to determine fair value. The credit funds also
enter into foreign currency exchange contracts, total return swap contracts, credit default swap contracts, and other derivative contracts, which may
include options, caps, collars and floors. Foreign currency exchange contracts are marked- to- market by recognizing the difference between the
contract exchange rate and the current market rate as unrealized appreciation or depreciation. If securities are held at the end of this period, the
changes in value are recorded in income as unrealized. Realized gains or losses are recognized when contracts are settled. Total return swap contracts
and credit default swap contracts are recorded at fair value as an asset or liability with changes in fair value recorded as unrealized appreciation or
depreciation. Realized gains or losses are recognized at the termination of the contract based on the difference between the close- out price of the total
return or credit default swap contract and the original contract price.
Forward contracts are valued based on market rates obtained from counterparties or prices obtained from recognized financial data service providers.
When determining fair value pricing when no market value exists, the value attributed to an investment is based on the enterprise value at the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Valuation approaches used to estimate the fair value of illiquid credit investments also may use the income approach or market approach. The
valuation approaches used consider, as applicable, market risks, credit risks, counterparty risks and foreign currency risks.
On a quarterly basis, Apollo utilizes a valuation committee consisting of members from senior management, to review and approve the valuation
results related to its funds' credit investments. For certain publicly traded vehicles, a review is performed by an independent board of directors. The
Company also retains independent valuation firms to provide third- party valuation consulting services to Apollo, which consist of certain limited
their valuation approaches, including comparisons between expected and observed outcomes, forecast evaluations and variance analyses.
Real Estate Investments
The estimated fair value of commercial mortgage- backed securities (CMBS) in Apollos funds is determined by reference to market prices
provided by certain dealers who make a market in these financial instruments. Broker quotes are only indicative of fair value and may not necessarily
represent what the funds would receive in an actual trade for the applicable instrument. Additionally, the loans held- for- investment are stated at the
principal amount outstanding, net of deferred loan fees and costs for certain investments. The Company evaluates its loans for possible impairment on
a quarterly basis. For Apollos opportunistic and value added real estate funds, valuations of non- marketable underlying investments are determined
using methods that include, but are not limited to (i) discounted cash flow estimates or comparable analysis prepared internally, (ii) third party
appraisals or valuations by qualified real estate appraisers, and (iii) contractual sales value of investments/properties subject to bona fide purchase
contracts. Methods (i) and (ii) also incorporate consideration of the use of the income, cost, or sales comparison approaches of estimating property
values.
On a quarterly basis, Apollo utilizes a valuation committee, consisting of members from senior management, to review and approve the valuation
results related to its funds' real estate investments. For certain publicly traded vehicles, a review is performed by an independent board of directors.
The Company also retains independent valuation firms to provide third- party valuation consulting services to Apollo, which consist of certain limited
their valuation approaches, including comparisons between expected and observed outcomes, forecast evaluations and variance analyses.
Fair Value of Financial Instruments
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
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Except for the Companys debt obligation related to the 2013 AMH Credit Facilities (as defined in note 14), Apollos financial instruments are
recorded at fair value or at amounts whose carrying value approximates fair value. See Investments, at Fair Value above. While Apollos valuations
of portfolio investments are based on assumptions that Apollo believes are reasonable under the circumstances, the actual realized gains or losses will
depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related
transaction costs and the timing and manner of sale, all of which may ultimately differ significantly from the assumptions on which the valuations
were based. Other financial instruments carrying values generally approximate fair value because of the shortterm nature of those instruments or
variable interest rates related to the borrowings. As disclosed in note 14, the Companys long term debt obligation related to the 2013 AMH Credit
Facilities are believed to have an estimated fair value of approximately $750.0 million based on a yield analysis using available market data of
comparable securities with similar terms and remaining maturities as of December 31, 2013. However, the carrying value that is recorded on the
consolidated statements of financial condition is the amount for which the Company expects to settle the long term debt obligation. The Company has
determined that the long term debt obligation related to the 2013 AMH Credit Facilities would be categorized as a Level III liability in the fair- value
hierarchy.
Fair Value OptionApollo has elected the fair value option for the convertible notes issued by HFA Holdings Limited (HFA) and for the assets
and liabilities of the consolidated VIEs. Such election is irrevocable and is applied to financial instruments on an individual basis at initial
recognition. Apollo has applied the fair value option for certain corporate loans, other investments and debt obligations held by the consolidated VIEs
that otherwise would not have been carried at fair value. For the convertible notes issued by HFA, Apollo has elected to separately present interest
income from other changes in the fair value of the convertible notes in the consolidated statements of operations. See notes 4, 5, and 6 for further
disclosure on the investment in HFA and financial instruments of the consolidated VIEs for which the fair value option has been elected.
Interest Rate Swap AgreementsApollo recognizes derivatives as either an asset or liability measured at fair value. In order to reduce interest rate
risk, Apollo entered into interest rate swap agreements which were formally designated as cash flow hedges. To qualify for cash flow hedge
accounting, interest rate swaps must meet certain criteria, including (a) the items to be hedged expose Apollo to interest rate risk and (b) the interest
rate swaps are highly effective in reducing Apollos exposure to interest rate risk. Apollo formally documents at inception its hedge relationships,
including identification of the hedging instruments and the hedged items, its risk management objectives, its strategy for undertaking the hedge
transaction and Apollos evaluation of effectiveness. Effectiveness is periodically assessed based upon a comparison of the relative changes in the
cash flows of the interest rate swaps and the items being hedged.
For derivatives that have been formally designated as cash flow hedges, the effective portion of changes in the fair value of the derivatives are
recorded in accumulated other comprehensive (loss) income (OCI). Amounts in OCI are reclassified into earnings when interest expense on the
underlying borrowings is recognized. If, at any time, the swaps are determined to be ineffective, in whole or in part, due to changes in the interest rate
swap or underlying debt agreements, the fair value of the portion of the interest rate swap determined to be ineffective will be recognized as a gain or
loss in the consolidated statements of operations.
Financial Instruments held by Consolidated VIEs
The consolidated VIEs hold investments that could be traded over- the- counter. Investments in securities that are traded on a securities exchange or
comparable over- the- counter quotation systems are valued based on the last reported sale price at that date. If no sales of such investments are
reported on such date, and in the case of over- the- counter securities or other investments for which the last sale date is not available, valuations are
based on independent market quotations obtained from market participants, recognized pricing services or other sources deemed relevant, and the
prices are based on the average of the bid and ask prices, or at ascertainable prices at the close of business on such day. Market quotations are
generally based on valuation pricing models or market transactions of similar securities adjusted for security- specific factors such as relative capital
structure priority and interest and yield risks, among other factors. When market quotations are not available, a model based approach is used to
determine fair value.
The consolidated VIEs also have debt obligations that are recorded at fair value. The primary valuation methodology used to determine fair value for
debt obligation is market quotation. Prices are based on the average of the bid and ask prices. In the event that market quotations are not
available, a model based approach is used. The model based approach used to estimate the fair values of debt obligations for which market quotations
are not available is the discounted cash flow method, which includes consideration of the cash flows of the debt obligation based on projected
quarterly interest payments and quarterly amortization. Debt obligations are discounted based on the appropriate yield curve given the loans
respective maturity and credit rating.
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Management uses its discretion and judgment in considering and appraising relevant factors for determining the valuations of its debt obligations.
Pending Deal Costs
Pending deal costs consist of certain costs incurred (e.g. research costs, due diligence costs, professional fees, legal fees and other related items)
related to private equity, credit and real estate fund transactions that the Company is pursuing but which have not yet been consummated. These costs
are deferred until such transactions are broken or successfully completed. A transaction is determined to be broken upon managements decision to no
longer pursue the transaction. In accordance with the related fund agreements, in the event the deal is broken, all of the costs are generally reimbursed
by the funds and considered in the calculation of the Management Fee Offset. These offsets are included in Advisory and Transaction Fees from
Affiliates in the Companys consolidated statements of operations. If a deal is successfully completed, Apollo is reimbursed by the fund or a funds
portfolio company for all costs incurred.
Fixed Assets
Fixed Assets consist primarily of ownership interests in aircraft, leasehold improvements, furniture, fixtures and equipment, computer hardware and
software and are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization is calculated using the straightline method over the assets estimated useful lives and in the case of leasehold improvements the lesser of the useful life or the term of the lease.
Aircraft engine overhauls are capitalized and depreciated until the next expected overhaul. Expenditures for repairs and maintenance are charged to
expense when incurred. The Company evaluates long- lived assets for impairment periodically and whenever events or changes in circumstances
indicate the carrying amounts of the assets may be impaired.
Business Combinations
The Company accounts for acquisitions using the purchase method of accounting in accordance with U.S. GAAP. Under the purchase method of
accounting, the purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by
management as of the acquisition date.
Goodwill and Intangible Assets
Goodwill and indefinite- life intangible assets must be reviewed annually for impairment or more frequently if circumstances indicate impairment
may have occurred. Identifiable finite- life intangible assets, by contrast, are amortized over their estimated useful lives, which are periodically reevaluated for impairment or when circumstances indicate an impairment may have occurred. Apollo amortizes its identifiable finite- life intangible
assets using a method of amortization reflecting the pattern in which the economic benefits of the finite- life intangible asset are consumed or
otherwise used up. If that pattern cannot be reliably determined, Apollo uses the straightline method of amortization. At June 30, 2013, the
Company performed its annual impairment testing. As the fair value of the Companys reporting units was well in excess of the carrying value as of
June 30, 2013, there was no impairment of goodwill or indefinite life intangible assets at such time.
Profit Sharing Payable
Profit sharing payable primarily represents the amounts payable to employees and former employees who are entitled to a proportionate share of
carried interest income in one or more funds. This portion of the liability is calculated based upon the changes to realized and unrealized carried
interest and is therefore not payable until the carried interest itself is realized.
Profit sharing payable also includes contingent obligations that were recognized in connection with certain Apollo acquisitions.
Debt Issuance Costs
Debt issuance costs consist of costs incurred in obtaining financing and are amortized over the term of the financing using the effective interest
method. These costs are included in Other Assets on the consolidated statements of financial condition.
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Foreign Currency
The Company may, from time to time, hold foreign currency denominated assets and liabilities. Such assets and liabilities are translated using the
exchange rates prevailing at the end of each reporting period. The functional currency of the Companys international subsidiaries is the U.S. Dollar,
as their operations are considered an extension of U.S. parent operations. Non- monetary assets and liabilities of the Companys international
subsidiaries are remeasured into the functional currency using historical exchange rates specific to each asset and liability. The results of the
Companys foreign operations are normally remeasured using an average exchange rate for the respective reporting period. All currency
remeasurement adjustments are included within other income (loss), net in the consolidated statements of operations. Gains and losses on the
settlement of foreign currency transactions are also included within other income (loss), net in the consolidated statements of operations.
Compensation and Benefits
Equity- Based CompensationEquity- based awards granted to employees as compensation are measured based on the grant date fair value of the
award. Equity- based awards that do not require future service (i.e., vested awards) are expensed immediately. Equity- based employee awards that
require future service are expensed over the relevant service period. The Company estimates forfeitures for equitybased awards that are not expected
to vest. Equity- based awards granted to non- employees for services provided to affiliates are remeasured to fair value at the end of each reporting
period and expensed over the relevant service period.
Salaries, Bonus and BenefitsSalaries, bonus and benefits include base salaries, discretionary and non- discretionary bonuses, severance and
employee benefits. Bonuses are generally accrued over the related service period.
Also included within salaries, bonus and benefits is the expense related to profits interests issued to certain employees whereby they are entitled to a
share in earnings and any appreciation in the value of a subsidiary of the Company during their term of employment. The expense related to these
profits interests is recognized ratably over the requisite service period and thereafter will be recognized at the time the distributions are determined.
From time to time, the Company may assign profits interests received in lieu of management fees to certain investment professionals. Such
assignments of profits interests are treated as compensation and benefits when assigned.
The Company sponsors a 401(k) Savings Plan whereby U.S. based employees are entitled to participate in the plan based upon satisfying certain
eligibility requirements. The Company may provide discretionary contributions from time to time. No contributions relating to this plan were made
by the Company for the years ended December 31, 2013, 2012, and 2011.
Profit Sharing ExpenseProfit sharing expense primarily consists of a portion of carried interest recognized in one or more funds allocated to
employees and former employees. Profit sharing expense is recognized on an accrued basis as the related carried interest income is earned. Profit
sharing expense can be reversed during periods when there is a decline in carried interest income that was previously recognized. Additionally, profit
sharing expenses previously distributed may be subject to clawback from employees, former employees and Contributing Partners.
Changes in the fair value of the contingent obligations that were recognized in connection with certain Apollo acquisitions are reflected in the
Companys consolidated statements of operations as profit sharing expense.
The Company has a performance based incentive arrangement for certain Apollo partners and employees designed to more closely align
compensation on an annual basis with the overall realized performance of the Company. This arrangement enables certain partners and employees to
earn discretionary compensation based on carried interest realizations earned by the Company in a given year, which amounts are reflected in profit
sharing expense in the accompanying consolidated financial statements.
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Other Income (Loss)
Net Gains (Losses) from Investment ActivitiesNet gains (losses) from investment activities include both realized gains and losses and the change
in unrealized gains and losses in the Companys investment portfolio between the opening reporting date and the closing reporting date. The
consolidated financial statements include the net realized and unrealized gains (losses) of investments, at fair value. For the Company's investments
held by AAA (see note 4), a portion of the net gains (losses) from investment activities are attributable to Non- Controlling Interests in the
consolidated statements of operations.
Net Gains (Losses) from Investment Activities of Consolidated Variable Interest EntitiesChanges in the fair value of the consolidated VIEs
assets and liabilities and related interest, dividend and other income and expenses subsequent to consolidation are presented within net gains (losses)
from investment activities of consolidated variable interest entities and are attributable to Non- Controlling Interests in the consolidated statements of
operations.
Other Income (Loss), NetOther income (loss), net includes the recognition of bargain purchase gains as a result of Apollo acquisitions, gains
(losses) arising from the remeasurement of foreign currency denominated assets and liabilities of foreign subsidiaries, reversal of a portion of the tax
receivable agreement liability (see note 17), gains (losses) arising from the remeasurement of derivative instruments associated with fees from certain
of the Companys affiliates and other miscellaneous non- operating income and expenses.
Comprehensive (Loss) IncomeU.S. GAAP guidance establishes standards for reporting comprehensive income and its components in a financial
statement that is displayed with the same prominence as other financial statements. U.S. GAAP requires that the Company classify items of OCI by
their nature in the financial statements and display the accumulated balance of OCI separately in the shareholders equity section of the Companys
consolidated statements of financial condition. Comprehensive income (loss) consists of net income (loss) and OCI. Apollos OCI is primarily
comprised of the effective portion of changes in the fair value of the interest rate swap agreements discussed previously. If, at any time, any of the
Companys subsidiaries functional currency becomes non- U.S. dollar denominated, the Company will record foreign currency cumulative
translation adjustments in OCI.
Income TaxesThe Apollo Operating Group and its subsidiaries generally operate as partnerships for U.S. Federal income tax purposes. As a result,
except as described below, the Apollo Operating Group has not been subject to U.S. income taxes. However, these entities in some cases are subject
to New York City unincorporated business taxes (NYC UBT) and non- U.S. entities, in some cases, are subject to non- U.S. corporate income
taxes. In addition, APO Corp., a wholly- owned subsidiary of the Company, is subject to U.S. Federal, state and local corporate income tax, and the
Companys provision for income taxes is accounted for in accordance with U.S. GAAP.
As significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties, the Company
recognizes the tax benefits of uncertain tax positions only where the position is more likely than not to be sustained upon examination, including
resolutions of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit is measured as the largest
amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely
than not to be sustained, then no benefits of the position are recognized. The Companys tax positions are reviewed and evaluated quarterly to
determine whether or not the Company has uncertain tax positions that require financial statement recognition.
Net Income (Loss) Per Class A ShareU.S. GAAP requires use of the two- class method of computing earnings per share for all periods presented
for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two- class method, during
periods of net income, the net income is first reduced for distributions declared on all classes of securities to arrive at undistributed earnings. During
periods of net losses, the net loss is reduced for distributions declared on participating securities only if the security has the right to participate in the
earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.
The remaining earnings are allocated to Class A shares and participating securities to the extent that each security shares in earnings as if all of the
earnings for the period had been distributed. Earnings or losses allocated to each class of security are
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then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all
outstanding common shares and all potential common shares assumed issued if they are dilutive. The numerator is adjusted for any changes in
income or loss that would result from a hypothetical conversion of these potential common shares.
Use of EstimatesThe preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the consolidated financial statements, the disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Apollos most
significant estimates include goodwill, intangible assets, income taxes, carried interest income from affiliates, contingent consideration obligations
related to acquisitions, noncash compensation, fair value of investments and debt in the consolidated and unconsolidated funds and VIEs and fair
value of the derivative contracts related to Athene's capital and surplus. Actual results could differ materially from those estimates.
Recent Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (FASB) issued guidance to enhance disclosures about financial instruments and
derivative instruments that are either (1) offset or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of
whether they are offset. Under the guidance, an entity is required to disclose quantitative information relating to recognized assets and liabilities that
are offset or subject to an enforceable master netting arrangement or similar agreement, including the gross amounts of those recognized assets and
liabilities, the amounts offset to determine the net amount presented in the statement of financial position, and the net amount presented in the
statement of financial position. With respect to amounts subject to an enforceable master netting arrangement or similar agreement which are not
offset, disclosure is required of the amounts related to recognized financial instruments and other derivative instruments, the amount related to
financial collateral (including cash collateral), and the overall net amount after considering amounts that have not been offset. The guidance is
effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods and retrospective
application is required. As the amendments are limited to disclosure only, the adoption of this guidance did not have a material impact on the
Company's consolidated financial statements.
In January 2013, the FASB issued guidance to clarify the scope of disclosures about offsetting assets and liabilities. The amendments clarify that the
scope of guidance issued in December 2011 to enhance disclosures around financial instruments and derivative instruments that are either (1) offset,
or (2) subject to a master netting arrangement or similar agreement, irrespective of whether they are offset, applies to derivatives, including bifurcated
embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that
are either offset or subject to an enforceable master netting arrangement or similar agreement. The amendments are effective for interim and annual
periods beginning on or after January 1, 2013. As the amendments are limited to disclosure only, the adoption of this guidance did not have a material
impact on the Company's consolidated financial statements.
In July 2012, the FASB issued amended guidance related to testing indefinite- lived intangible assets, other than goodwill, for impairment. Under the
revised guidance, entities have the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite- lived
intangible asset is impaired. If an entity determines, on the basis of qualitative factors, that the fair value of the indefinite- lived intangible asset is
more likely than not to be less than the carrying amount, then the entity must perform the quantitative impairment test; otherwise, further testing
would not be required. The amendments are effective for all entities for annual and interim impairment tests performed for fiscal years beginning
after September 15, 2012. In conjunction with the annual goodwill impairment test as of June 30, 2013, utilizing the two- step method described
above, the Company concluded these amendments did not have an impact on the Company's consolidated financial statements.
In February 2013, the FASB issued guidance on the reporting of amounts reclassified out of accumulated other comprehensive income. The guidance
does not change the requirement for reporting net income or other comprehensive income in financial statements. However, the amendments require
an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity
is required to present, either on the face of the statement where net income is presented or in the notes to the financial statements, significant amounts
reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required
under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S.
GAAP to be reclassified in their entirety to net income, an entity is required to cross- reference to other disclosures required under U.S. GAAP that
provide additional detail about those amounts. The guidance is effective prospectively for periods beginning after December 15, 2012. As the
amendments are limited to presentation and disclosure only, the adoption of this guidance did not have a material impact on the Company's
consolidated financial statements.
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In April 2013, the FASB issued guidance that requires an entity to prepare its financial statements using the liquidation basis of accounting when
liquidation is imminent. The financial statements prepared using the liquidation basis of accounting should present relevant information about the
expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should
include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use
in settling liabilities. Liabilities should be recognized and measured in accordance with U.S. GAAP that otherwise applies to those liabilities. The
guidance requires an entity to accrue and separately present the costs that it expects to incur and the income that it expects to earn during the expected
duration of the liquidation, including any costs associated with the sale or settlement of those assets and liabilities. Additionally, the amended
guidance requires disclosures about an entity's plan for liquidation, the methods and significant assumptions used to measure assets and liabilities, the
type and amount of costs and income accrued, and the expected duration of the liquidation process. The guidance is effective for entities that
determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities
should apply the requirements prospectively from the day that liquidation becomes imminent and early adoption is permitted. The adoption of this
guidance is not expected to have a material impact on the Company's consolidated financial statements.
In June 2013, the FASB issued guidance to change the assessment of whether an entity is an investment company by developing a new two- tiered
approach that requires an entity to possess certain fundamental characteristics while allowing judgment in assessing certain typical characteristics.
The fundamental characteristics that an investment company must have include the following: (1) it obtains funds from one or more investors and
provides the investor(s) with investment management services; (2) it commits to its investor(s) that its business purpose and only substantive
activities are investing the funds solely for returns from capital appreciation, investment income or both; and (3) it does not obtain returns or benefits
from an investee or its affiliates that are not normally attributable to ownership interests. The typical characteristics of an investment company that an
entity should consider before concluding whether it is an investment company include the following: (1) it has more than one investment; (2) it has
more than one investor; (3) it has investors that are not related parties of the parent or the investment manager; (4) it has ownership interests in the
form of equity or partnership interests; and (5) it manages substantially all of its investments on a fair value basis. The new approach requires an
entity to assess all of the characteristics of an investment company and consider its purpose and design to determine whether it is an investment
company. The guidance includes disclosure requirements about an entity's status as an investment company and financial support provided or
contractually required to be provided by an investment company to its investees. The guidance is effective for interim and annual reporting periods in
fiscal years beginning after December 15, 2013. Earlier application is prohibited. The Company is in the process of evaluating the impact that this
guidance will have on its consolidated financial statements.
In July 2013, the FASB issued guidance to eliminate the diversity in practice on the financial statement presentation of an unrecognized tax benefit
when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Under the new guidance, an unrecognized tax benefit, or
a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss
carryforward, a similar tax loss, or a tax credit carry forward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or
a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that
would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does
not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statement as a liability and
should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit
and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date (e.g. an
entity should not evaluate whether the deferred tax asset expires before the statute of limitations on the tax position or whether the deferred tax asset
may be used prior to the unrecognized tax benefit being settled). The guidance does not require new recurring disclosures. The guidance applies to all
entities that have unrecognized tax benefits when a net operating loss carryforward, similar tax loss, or a tax credit carryforward exists at the
reporting date. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption
is permitted. The guidance should be applied prospectively to all unrecognized tax benefits that exist at the effective date, although retrospective
application is permitted. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements.
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3. ACQUISITIONS AND BUSINESS COMBINATIONS

Business Combinations
Stone Tower
On April 2, 2012, the Company completed its previously announced acquisition of the membership interests of Stone Tower Capital LLC and its
related management companies (Stone Tower), a leading alternative credit manager. The acquisition was consummated by the Company for total
consideration at fair value of approximately $237.2 million. The transaction added significant scale and several new credit product capabilities and
increased the assets under management of the credit segment.
Consideration exchanged at closing included a payment of approximately $105.5 million, which the Company funded from its existing cash
resources, and equity granted to the former owners of Stone Tower with grant date fair value of $14.0 million valued using the closing price of the
Company's Class A shares on April 2, 2012 of $14.40. Additionally, the Company will also make payments to the former owners of Stone Tower
under a contingent consideration obligation which requires the Company to transfer cash to the former owners of Stone Tower based on a specified
percentage of carried interest income. The contingent consideration obligation had an acquisition date fair value of approximately $117.7 million,
which was determined based on the present value of the estimated future carried interest payments of approximately $139.4 million using a discount
rate of 9.5%, and is reflected in profit sharing payable in the consolidated statements of financial condition. See note 18 for additional disclosure
regarding the contingent consideration obligation.
As a result of the acquisition, the Company incurred $4.6 million in acquisition costs, of which $2.8 million and $1.8 million was incurred during the
years ended December 31, 2012 and 2011, respectively.
Tangible assets acquired in the acquisition consisted of management and carried interest receivable and other assets. Intangible assets acquired
consisted primarily of certain management contracts providing economic rights to management fees, senior fees, subordinate fees, and carried interest
from existing CLOs, funds and strategic investment accounts.
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The Company has performed an analysis and an evaluation of the net assets acquired and liabilities assumed. The estimated fair value of the assets
acquired exceeded the estimated fair value of the liabilities assumed as of the acquisition date resulting in a bargain purchase gain of approximately
$1,951.1 million for the year ended December 31, 2012. The bargain purchase gain is reflected in other income, net within the consolidated
statements of operations with corresponding amounts reflected as components of appropriated partners capital within the consolidated statements of
changes in shareholders equity. The estimated fair values for the net assets acquired and liabilities assumed are summarized in the following table:
Tangible Assets:
Cash
$
6,310
Carried Interest Receivable
36,097
Due from Affiliates
1,642
Other Assets
2,492
Total assets of consolidated variable interest entities
10,136,869
Intangible Assets:
Management Fees Contracts
9,658
Senior Fees Contracts
568
Subordinate Fees Contracts
2,023
Carried Interest Contracts
85,071
Non- Compete Covenants
200
Fair Value of Assets Acquired
10,280,930
Liabilities Assumed:
Accounts payable and accrued expenses
3,570
Due to Affiliates
4,410
Other Liabilities
8,979
Total liabilities of consolidated variable interest entities
7,815,434
Fair Value of Liabilities Assumed
7,832,393
Fair Value of Net Assets Acquired
2,448,537
Less: Net assets attributable to Non- Controlling Interests in
260,203
Less: Fair Value of Consideration Transferred
237,201
Gain on Acquisition
$
1,951,133
The bargain purchase gain was recorded in other income, net in the consolidated statements of operations. During the one year measurement period,
any changes resulting from facts and circumstances that existed as of the acquisition date will be reflected as a retrospective adjustment to the bargain
purchase gain and the respective asset acquired or liability assumed.
The acquisition related intangible assets valuation and related amortization are as follows:
As of
December 31,
Management Fees contracts

Senior Fees Contracts
Subordinate Fees Contracts
Carried Interest Contracts
Non- Compete Covenants
Total Intangible Assets
Less: Accumulated amortization
Net Intangible Assets
Weighted Average Useful

Life in Years
2.2
2.4
2.5
3.7
2.0
2013
$
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2012
9,658
568
2,023
85,071
200
97,520
(48,586)
48,934
9,658
568
2,023
85,071
200
97,520
(20,456)
77,064
Table of Contents
The results of operations of the acquired business since the acquisition date included in the Companys consolidated statements of operations for the
period from April 2, 2012 to December 31, 2012 were as follows:
For the Period from April 2, 2012 to
December 31, 2012
Total Revenues
Net Income Attributable to Non- Controlling Interest
Net Income Attributable to Apollo Global Management, LLC
$
$
$
51,719
(1,925,053)
12,446
Unaudited Supplemental Pro Forma Information

Unaudited supplemental pro forma results of operations of the combined entity for the years ended December 31, 2012 and 2011 assuming the
acquisition had occurred as of January 1, 2011 are presented below. This pro forma information has been prepared for comparative purposes only and
is not intended to be indicative of what the Companys results would have been had the acquisition been completed on January 1, 2011, nor does it
purport to be indicative of any future results.
For the
Year Ended
December 31,
Total Revenues
Net Income (Loss) Attributable to Apollo Global Management, LLC
Net Income (Loss) per Class A Share:
Net Income (Loss) per Class A Share - Basic and Diluted
Weighted Average Number of Class A Shares - Basic
Weighted Average Number of Class A Shares - Diluted
$
$
$
$
2012
2011
(in millions, except for per share data)
2,873,903 $
217,347
(739,862) $
(1,194,226)
321,420 $
(456,112)
2.14
127,693,489
129,540,377
(4.07)
116,364,110
116,364,110
The supplemental pro forma earnings include an adjustment to exclude $5.5 million of compensation expense not expected to recur due to
termination of certain contractual arrangements as part of the closing of the acquisition.
Gulf Stream
On October 24, 2011, the Company completed its previously announced acquisition of 100% of the membership interests of Gulf Stream Asset
Management, LLC (Gulf Stream), a manager of collateralized loan obligations. The acquisition was consummated by the Company for total
consideration at fair value of approximately $39.0 million.
The transaction broadened Apollos senior credit business by expanding Apollos credit coverage as well as investor relationships and increasing the
assets under management of Apollo's credit business.
Consideration exchanged at closing consisted of payment of approximately $29.6 million, of which $6.7 million was used to repay subordinated notes
and debt due to the existing shareholder on behalf of Gulf Stream. The Company funded the consideration exchanged at closing from its existing cash
resources. Under the terms of the acquisition, additional consideration of $4.0 million having an acquisition date fair value of $3.9 million will be
paid to the former owners of Gulf Stream on the fourteen- month anniversary of the closing date. This liability was settled on March 8, 2013. The
Company will also make payments to the former owners of Gulf Stream under a contingent consideration obligation which requires the Company to
transfer cash to the former owners of Gulf Stream based on a specified percentage of carried interest income. The contingent consideration liability
had an acquisition date fair value of approximately $5.4 million, which was determined based on the present value of the estimated range of future
carried interest payments between $0.0 and approximately $8.7 million using a discount rate of 13.7%. See note 18 for additional disclosure
regarding the contingent consideration obligation.
Tangible assets acquired in the acquisition consisted of a management fee receivable. Intangible assets acquired consisted primarily of certain
management contracts providing economic rights to senior fees, subordinate fees, and incentive fees from existing CLOs managed by Gulf Stream.
Additionally, as part of the acquisition, the Company acquired the assets and liabilities of six consolidated CLOs.
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The Company has performed an analysis and an evaluation of the net assets acquired and liabilities assumed. The estimated fair value of the assets
acquired exceeded the estimated fair value of the liabilities assumed as of the acquisition date resulting in a bargain purchase gain of approximately
$196.2 million. The bargain purchase gain is reflected in other income, net within the consolidated statements of operations with a corresponding
amount reflected in appropriated partners capital within the consolidated statements of changes in shareholders equity. The estimated fair values for
the net assets acquired and liabilities assumed are summarized in the following table:
Tangible Assets:
Receivable, management fees
$
1,720
Total assets of consolidated CLOs
2,278,612
Intangible Assets:
Management Contracts
33,900
Fair Value of Assets Acquired
2,314,232
Liabilities assumed:
Deferred Tax Liability
871
Total liabilities of consolidated CLOs
2,078,117
Fair Value of Liabilities Assumed
2,078,988
Fair Value of Net Assets Acquired
235,244
Less: Fair Value of Consideration Transferred
39,026
Gain on Acquisition
$
196,218
The Companys rights under all management contracts acquired will be amortized over six years. The management contract valuation and related
amortization are as follows:
As of December 31,
Weighted Average
Useful Life in Years
3.7
2013
2012
Management contracts
$
33,900
$
33,900 (1)
Less: Accumulated amortization
(16,562)
(9,351)
Net intangible assets
$
17,338
$
24,549
(1) During 2012 the Company recorded a purchase price adjustment of $1.5 million to management contracts acquired as part of the Gulf Stream
acquisition.
The results of operations of the acquired business since the acquisition date included in the Companys consolidated statements of operations for the
period from October 24, 2011 to December 31, 2011 were as follows:
For the Period from October 24, 2011 to
December 31, 2011
Total Revenues
$
2,107
$
194,852
Net Income Attributable to Apollo Global Management, LLC $
473
Unaudited Supplemental Pro Forma Information
Unaudited supplemental pro forma results of operations of the combined entity for the year ended December 31, 2011 and 2010, assuming the Gulf
Stream acquisition had occurred as of January 1, 2010 are presented below. This pro forma information
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has been prepared for comparative purposes only and is not intended to be indicative of what the Companys results would have been had the
acquisition been completed on January 1, 2010, nor does it purport to be indicative of any future results.
2011
2010
(in millions, except for share data)
Total Revenues
$
174.9
$
2,115.7
Net (Income) Loss Attributable to
Non- Controlling Interest
$
(1,097.1)
$
652.1
Net (Loss) Income Attributable to
$
(468.7)
$
95.9
Net (Loss) Income per Class A
Share:
Net (Loss) Income per Class A Share
- Basic and Diluted
$
(4.18)
$
0.84
Weighted Average Number of Class
A Shares - Basic and Diluted
116,364,110
96,964,769
The 2011 and 2010 supplemental pro forma earnings include an adjustment to exclude $4.9 million and $9.7 million, respectively of compensation
expense not expected to recur due to termination of certain contractual arrangements as part of the closing of the acquisition.
Other Acquisitions
On October 2, 2013, the Company acquired specified assets and liabilities of Aviva Investors North America, Inc., a wholly- owned subsidiary of
Aviva plc. The acquisition provides the Company additional asset management allocation and related service capabilities for similar assets that it
directly manages across its investment platform. The transaction was accounted for as a business combination. Identifiable assets having a combined
fair value of $0.4 million were acquired in exchange for fair value of liabilities assumed of $0.8 million, which resulted in goodwill of $0.4 million as
of the acquisition date. There was no consideration transferred relating to this acquisition.
Intangible Assets
Intangible assets, net consists of the following:
As of
December 31,
2013
2012
Finite- lived intangible assets/management
$
240,285
$
240,020
contracts
Accumulated amortization
(145,358)
(102,164)
$
94,927
$
137,856
The changes in intangible assets, net consist of the following:
For the Year Ended
December 31,
2013
2012
2011
Balance, beginning of year $
137,856
$
81,846
$
64,574
Amortization expense
(43,194)
(43,009)
(15,128)
Acquisitions
265
99,019 (1)
32,400
Balance, end of year
$
94,927
$
137,856
$
81,846
(1) Includes impact of purchase price adjustments related to Gulf Stream acquisition
Amortization expense related to intangible assets was $43.2 million, $43.0 million, and $15.1 million for the years ended December 31, 2013, 2012,
and 2011, respectively.
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Expected amortization of these intangible assets for each of the next 5 years and thereafter is as follows:
2014
2015
2016
2017
2018
Amortization of
intangible assets $
34,642 $
33,704 $
7,917 $
4,952 $
3,677
Thereafter
$
Total
10,035
94,927
4. INVESTMENTS
The following table represents Apollos investments:
As of
December 31,
2013
Other investments
Total Investments
2012
2,012,027
381,856
2,393,883
1,744,412
393,684
2,138,096
Investments, at Fair Value

Investments, at fair value, consist of financial instruments held by AAA, investments held by the Apollo Senior Loan Fund, the Companys
investment in HFA and other investments held by the Company at fair value. As of December 31, 2013 and December 31, 2012, the net assets of the
consolidated funds (excluding VIEs) were $1,971.1 million and $1,691.3 million, respectively. The following investments, except the investment in
HFA and Other Investments, are presented as a percentage of net assets of the consolidated funds:
Fair Value
Investments, at
Fair Value
Affiliates
Investments
held by:
AAA
$
Apollo
Senior Loan
Fund
HFA
Other
Investments
Total
$
Private
Equity
Credit
1,942,051
839
1,942,890
Total
29,603
39,534
69,137
1,942,051
Cost
29,603
39,534
839
2,012,027
% of Net
Assets of
Consolidated
Funds
1,494,358
29,226
61,218
4,159
1,588,961
98.5% $
1.5
N/A
N/A
100.0% $

Fair Value
Private Equity
1,666,448
Credit
1,588
1,668,036
Total
27,653
48,723
76,376
1,666,448
Cost
27,653
48,723
1,588
1,744,412
% of Net
Assets of
Consolidate
Funds
1,561,154
98.5
27,296
57,815
1.5
N/A
3,563
1,649,828
N/A
100.0
Securities
At December 31, 2013 and 2012, the sole investment held by AAA was its investment in AAA Investments, L.P. (AAA Investments), which is
measured based on AAAs share of net asset value of AAA Investments. The following tables represent each investment of AAA Investments
constituting more than five percent of the net assets of the funds that the Company consolidates (excluding VIEs) as of the aforementioned dates:
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Table of Contents
Instrument
Type
Athene
Holding
Ltd.
Equity
Fair Value
1,950,010
Cost
1,331,942

% of Net
Assets of
Consolidated
Funds
98.9%
Instrument
Type
Equity $
Fair Value
1,578,954
Cost
1,276,366
% of Net
Assets of
Consolidated
Funds
93.4%
AAA Investments owns through its subsidiaries the majority of the economic equity of Athene Holding Ltd. (together with its subsidiaries,
Athene). Athene Holding Ltd. is the ultimate parent of various insurance company operating subsidiaries. Through its subsidiaries, Athene Holding
Ltd. provides insurance products focused primarily on the retirement market and its business centers primarily on issuing or reinsuring fixed and
equityindexed annuities. See note 17 for further information regarding Athene and its recently completed acquisition of the U.S. annuity operations
of Aviva plc ("Aviva USA").
On October 31, 2012, AAA Investments consummated a transaction whereby substantially all of its assets were contributed to Athene in exchange for
common shares of Athene Holding Ltd., cash and a short term promissory note (the AAA Transaction). Following receipt of required regulatory
consents, AAA Investments transferred its remaining investments to Athene Holding Ltd. on July 29, 2013. After the AAA Transaction, Athene
Holding Ltd. was AAAs only material investment and as of December 31, 2013 and 2012, AAA, through its investment in AAA Investments was
the largest shareholder of Athene Holding Ltd. with an economic ownership stake of approximately 72.5% and 77.2%, respectively (without giving
effect to restricted common shares issued under Athene's management equity plan and conversion of AAA Investments' note receivable), and as of
December 31, 2013 and 2012, effectively held 45% of the voting power of Athene.
Athenes fair value is determined using the embedded value method which is based on the present value of the future expected regulatory
distributable income generated by the net assets plus the excess capital (i.e., the capital in excess of what is required to be held against Athenes
liabilities). The net assets of Athene consist of the current and projected assets less the current and projected liabilities related to in force insurance
contracts. The assets considered capital in excess are fair valued in accordance with the fair value policies disclosed in note 2. The approach of using
actuarially projected asset and liability income to value an insurance company is widely used by market participants in the insurance industry,
particularly in private company acquisitions. The embedded value of the in force insurance contracts incorporates actuarial projections of expected
income utilizing most recently available policyholder contract and experience data, industry information and assumptions, general economic and
market conditions, and other factors deemed relevant, including the cost of capital. In addition, consideration is also given to comparable company
multiples in the determination of fair value.
The Company, through its consolidation of AAA, has an approximate 68% fully diluted ownership interest in Athene (after giving effect to restricted
common shares issued under Athene's management equity plan and conversion of AAA Investments' note receivable) through AAAs investment in
AAA Investments as of December 31, 2013. AAA Investments ownership interest in Athene is held indirectly through its subsidiaries and is
comprised of common shares and a promissory note which can be settled in cash or common shares of Athene at AAA Investments option. The fair
value of AAA Investments investment in Athene is determined by calculating the total fair value of Athene multiplied by AAA Investments
ownership percentage in Athene. The Company has an approximate 1.9% economic ownership interest in Athenes equity, as of December 31, 2013.
The approximate 1.9% economic ownership interest is calculated as the Companys approximate 2.6% economic ownership interest in AAA plus the
Companys approximate 0.06% economic ownership interest in AAA Investments multiplied by AAA Investments approximate 68% fully diluted
ownership interest in Athene. The remaining ownership interest in AAA is recognized in the Companys statement of operations and financial
condition as noncontrolling interest.
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On December 31, 2011, the Company invested $26.0 million in the Apollo Senior Loan Fund. As a result, the Company became the sole investor in
the fund and therefore consolidated the assets and liabilities of the fund. The fund invests in U.S. denominated senior secured loans, senior secured
bonds and other income generating fixed- income investments. At least 90% of the Apollo Senior Loan Funds portfolio of investments must consist
of senior secured, floating rate loans or cash or cash equivalents. Up to 10% of the Apollo Senior Loan Funds portfolio may consist of non- first lien
fixed income investments and other income generating fixed income investments, including but not limited to senior secured bonds. The Apollo
Senior Loan Fund may not purchase assets rated (tranche rating) at B3 or lower by Moodys, or equivalent rating by another nationally recognized
rating agency.
The Company has classified the instruments associated with the Apollo Senior Loan Fund investment as Level II and Level III investments. All Level
II and Level III investments of the Apollo Senior Loan Fund were valued using broker quotes. See note 6 for further discussion regarding fair value
leveling.
HFA
On March 7, 2011, the Company invested $52.1 million (including expenses related to the purchase) in a convertible note with an aggregate principal
amount of $50.0 million and received 20,833,333 stock options issued by HFA, an Australian based specialist global funds management company.
The terms of the convertible note allow the Company to convert the note, in whole or in part, into common shares of HFA at an exchange rate equal
to the principal plus accrued payment- in- kind interest (or PIK interest) divided by US$0.98 at any time, and convey participation rights, on an asconverted basis, in any dividends declared in excess of $6.0 million per annum, as well as seniority rights over HFA common equity holders. Unless
previously converted, repurchased or canceled, the note will be converted on the eighth anniversary of its issuance, on March 11, 2019. Additionally,
the note has a percentage coupon interest of 6% per annum, paid via principal capitalization (PIK interest) for the first four years, and thereafter either
in cash or via principal capitalization at HFAs discretion. The PIK interest provides for the Company to receive additional common shares of HFA if
the note is converted. The Company has elected the fair value option for the convertible note. The convertible note is valued using an if- converted
basis, which is based on a hypothetical exit through conversion to common equity (for which a quoted price exists) as of the valuation date. The
Company separately presents interest income in the consolidated statements of operations from other changes in the fair value of the convertible note.
For the years ended December 31, 2013, 2012 and 2011, the Company recorded $4.0 million, $3.1 million and $2.5 million, respectively, in PIK
interest income included in interest income in the consolidated statements of operations. The terms of the stock options allow for the Company to
acquire 20,833,333 fully paid ordinary shares of HFA at an exercise price in Australian Dollars (A$) of A$8.00 (exchange rate of A$1.00 to $0.89
and A$1.00 to $1.04 as of December 31, 2013 and 2012, respectively) per stock option. The stock options became exercisable upon issuance and
expire on the eighth anniversary of the issuance date. The stock options are accounted for as a derivative and are valued at their fair value under U.S.
GAAP at each reporting date. For the years ended December 31, 2013, 2012 and 2011, the Company recorded an unrealized loss of approximately
$12.6 million, $1.1 million and $5.9 million, respectively, related to the convertible note and stock options within net gains from investment activities
in the consolidated statements of operations.
The Company has classified the instruments associated with the HFA investment as Level III investments. See note 6 for further discussion regarding
fair value leveling.
Net Gains (Losses) from Investment Activities
Net gains (losses) from investment activities in the consolidated statements of operations include net realized gains from sales of investments, and the
change in net unrealized gains (losses) resulting from changes in fair value of the consolidated funds investments and realization of previously
unrealized gains (losses). Additionally, net gains (losses) from investment activities include changes in the fair value of the investment in HFA and
other investments held at fair value. The following tables present Apollos net gains (losses) from investment activities for the years ended
December 31, 2013, 2012, and 2011:
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Private Equity
Realized gains on sales of
investments
$
gains (losses) due to
changes in fair values
Net Gains (Losses) from
$
342,398
Realized gains on sales of

investments
$
gains (losses) due to
changes in fair values
Net Gains from Investment
Activities
$
409
(12,572)
$
329,826
(12,163)

Credit
288,140
443
330,235
Total
$
443
(339)
288,140
Private Equity
Total
409
342,398
Private Equity

losses due to changes in
fair values
$
Net Losses from
$

Credit
104
287,801
$

Credit
288,244
Total
(123,946)
(5,881)
(129,827)
(123,946)
(5,881)
(129,827)
Other Investments
Other Investments primarily consist of equity method investments. Apollos share of operating income (loss) generated by these investments is
recorded within income from equity method investments in the consolidated statements of operations.
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The following table presents income from equity method investments for the years ended December 31, 2013, 2012, and 2011:
2013
Investments:
AAA Investments
Apollo Investment Fund IV, L.P. ("Fund IV")
Apollo Investment Fund V, L.P. (Fund V)
Apollo Investment Fund VI, L.P. (Fund VI)
Apollo Investment Fund VII, L.P. (Fund VII)
Apollo Investment Fund VIII, L.P. (Fund VIII)
Apollo Natural Resources Partners, L.P. (ANRP)
AION Capital Partners Limited (AION)
Apollo Asia Private Credit Fund, L.P. (APC)
Credit Funds:
Apollo Special Opportunities Managed Account, L.P. (SOMA)
Apollo Value Investment Fund, L.P. (VIF)
Apollo Strategic Value Fund, L.P. (SVF)
Apollo Credit Liquidity Fund, L.P. (ACLF)
Apollo/Artus Investors 2007- I, L.P. (Artus)
Apollo Credit Opportunity Fund I, L.P. (COF I)
Apollo Credit Opportunity Fund II, L.P. (COF II)
Apollo Credit Opportunity Fund III, L.P. ("COF III")
Apollo European Principal Finance Fund, L.P. (EPF I)
Apollo European Principal Finance Fund II, L.P. (EPF II)
Apollo Investment Europe II, L.P. (AIE II)
Apollo Palmetto Strategic Partnership, L.P. (Palmetto)
Apollo Senior Floating Rate Fund Inc. (AFT)
Apollo/ JH Loan Portfolio
Apollo Residential Mortgage, Inc. (AMTG)
Apollo European Credit, L.P. (AEC)
Apollo European Strategic Investments, L.P. (AESI)
Apollo Centre Street Partnership, L.P. (ACSP)
Apollo Investment Corporation (AINV)
Apollo SK Strategic Investments, L.P. ("SK")
Apollo SPN Investments I, L.P.
Apollo Tactical Income Fund Inc. (AIF)
Apollo Franklin Partnership, L.P. ("Franklin Fund")
Apollo Zeus Strategic Investments, L.P. ("Zeus")
Real Estate:
Apollo Commercial Real Estate Finance, Inc. (ARI)
CPI Capital Partners North America LP
CPI Capital Partners Asia Pacific, L.P.
Apollo GSS Holding (Cayman), L.P.
BEA/AGRE China Real Estate Fund, L.P.
Other Equity Method Investments:
VC Holdings, L.P. Series A (Vantium A/B)
VC Holdings, L.P. Series C (Vantium C)
VC Holdings, L.P. Series D (Vantium D)
Total Income from Equity Method Investments
206
4
3,708
69,217
(246)
779
(1,103)
6
950
10
(1)
986
(2)
6,470
1,016
227
6,201
2,256
1,924
2,406
(4)
193
354
580
964
4,190
162
219
(6)
278
(20)
693
1,981
111
37
539
(9)
(1) Amounts are for the twelve months ended September 30, 2013, respectively.
- 180-
For the Year Ended

December 31,
2012
13
1,804
257
107,350
195
(2)
20
3,947
60,576
(71)
71
843
19
15
4,219
1,466
19,731
4,989
3,933
568
1,948
2,228
14
5
1,053
203
576
433
1,761
18
(10)
(1)
(1)
(1)
1,100
(172)
17
72
(39)
(306)
165
588
110,173
2011
(55)
8
(9)
2,090
10,156
(141)
(793)
(25)
(21)
(295)
368
2,410
(737)
1,729
(308)
(100)
(16)
(80)
(10)
21
(2)
(2)
(2)
636
(79)
98
71
(1,860)
580
285
13,923
(3)
(3)
Table of Contents
Other investments as of December 31, 2013 and December 31, 2012 consisted of the following:
Equity Held as of
% of
Ownership
December 31, 2013

Investments:
AAA Investments
$
Fund IV
Fund V
Fund VI
Fund VII
Fund VIII
ANRP
AION
APC
Credit Funds:
SOMA
VIF
SVF
ACLF
Artus
COF I
COF II
COF III
EPF I
EPF II
AIE II
Palmetto
AFT
AMTG(3)
AEC
AESI
ACSP
AINV(4)
SK
Apollo SPN
Investments I, L.P.
CION Investment
Corporation
AIF
Franklin Fund
Zeus
Real Estate:
ARI(3)
AGRE U.S. Real Estate
Fund, L.P.
CPI Capital Partners
North America
Europe
Asia Pacific
Apollo GSS Holding
(Cayman), L.P.
BEA/AGRE China Real
Estate Fund, L.P.
Other Equity Method
Investments:
Vantium A/B
Vantium C
Vantium D
Total Other Investments $
(1) Amounts are as of September 30, 2013.

(2) Amounts are as of September 30, 2012.
(3)
1,168
9
94
9,964
137,960
4,310
3,735
6,425
49
6,833
151
17
4,559
10,077
5,015
6,720
19,332
23,212
4,500
16,054
95
4,015
2,482
3,732
7,690
55,951
1,714
0.057%
0.019
0.020
0.103
1.258
3.996
0.831
9.970
0.046
(1)
(1)
0.853
0.124
0.079
3.341
1.850
1.428
2.450
1.363
1.994
2.772
1.186
0.034
0.632
1.230
0.956
2.465
2.933
0.997
% of
Ownership
December 31, 2012
(1)
(1)
998
9
173
9,814
164,773
2,355
625
17
0.057%
0.015
0.014
0.094
1.316
0.903
10.000
0.058
5,887
141
137
9,281
667
39,416
19,654
18,329
5,337
7,207
13,614
98
4,380
1,604
3,076
5,327
51,761
1,002
0.643
0.093
0.076
2.579
6.156
1.924
1.429
1.363
1.316
2.205
1.186
0.034
0.811
1.079
0.991
2.457
2.955
0.988
(2)
(2)
4,457
0.828
90
0.083
1,000
94
10,178
1,678
0.716
0.036
9.107
3.383
1,000
22.207
11,550
(1)
1.500
(1)
11,469
(2)
2.729
9,473
1.845
5,210
1.845
272
0.416
455
0.413
0.001
0.001
106
0.042
186
0.039
3,670
3.460
2,428
4.621
72
1.031
15
1,233
2,190
381,856
6.450
2.071
6.345
54
5,172
1,933
393,684
6.450
2.071
6.345
(2)
(2)
(2)
Investment value includes the fair value of RSUs granted to the Company as of the grant date. These amounts are not considered in the
percentage of ownership until the RSUs are vested and issued to the Company, at which point the RSUs are converted to common stock and
delivered to the Company.
(4) The value of the Companys investment in AINV was $57,249 and $51,351 based on the quoted market price as of December 31, 2013 and
December 31, 2012, respectively.
The tables below represent summarized aggregated financial information of the funds and other equity method investments in which Apollo has an
equity method investment as of December 31, 2013 and 2012, and for the years ended December 31, 2013, 2012 and 2011:
Private Equity
Credit
As of
December 31,
As of
December 31,
2013(1)
2012(1)(2)
Balance Sheet Information

2013(1)
$ 23,539,644
24,265,145
111,285
24,153,860
Investments
Assets
Liabilities
Equity
Income
Statement
Information
2013(1)
Revenues/Investment
Income
$
675,844
Expenses
Net Investment
Income
Net Realized
and Unrealized
Gain (Loss)
Net Income
$ 16,043,142
17,636,723
6,071,182
11,565,541
Aggregate Totals
As of
December 31,
As of
December 31,
2012(1)
17,060,353
19,368,801
7,823,046
11,545,755
2013(1)
$ 2,260,989
2,465,780
300,517
2,165,263
$ 1,912,369
2,038,877
290,392
1,748,485
Private Equity
Credit
Real Estate
For the Years Ended

December 31,
For the Years Ended

December 31,
For the Years Ended

December 31,
2012(1)(2)
$
30,350
862,313
1,006,453
436,094
1,406,593
1,144,846
713,914
632,028
561,439
34,276
22,643
16,304
1,184,284
2,061,264
1,7
(537,017)
214,764
953,227
2,053,100
$
2,685,128
24,422 $
249,040
275,659
$
298,302
46,654
172,018
$
188,322
2,046,597
11,579,547
$
12,763,831
3,067,717
20
32,077
1,667,141
54,720
2012
39,153
2013
73,429
3,384,219
2011(1)
290,843
2,239,373
1,326,142
2012(1)
852,282 $
2013(1)
Aggregate Totals
For the Years Ended
December 31,
694,114
8,263,007
1,297,324
2011(1)
2012
44,897,944
48,042,780
8,215,469
39,827,311
583,410
6,856,414
2012(1)(2)
377,985
1,522,831
2013(1)
2013
41,843,775
44,367,648
6,482,984
37,884,664
280,262
10,847,650
1,686,855
2011(1)
239,750
10,411,556
$
2012(1)(2)
$ 25,925,222
26,635,102
102,031
26,533,071
Real Estate
9,185,173
$
11,246,437
(1)
Certain private equity, credit and real estate fund amounts are as of and for the years ended September 30, 2013, 2012 and
2011.
(2) Reclassified to conform to current period presentation.
5. VARIABLE INTEREST ENTITIES

As described in note 2, the Company consolidates entities that are VIEs for which the Company has been designated as the primary beneficiary. The
purpose of such VIEs is to provide strategy- specific investment opportunities for investors in exchange for management and performance based fees.
The investment strategies of the entities that the Company manages may vary by entity; however, the fundamental risks of such entities have similar
characteristics, including loss of invested capital and the return of carried interest income previously distributed to the Company by certain private
equity, credit, and real estate entities. The nature of the Companys involvement with VIEs includes direct and indirect investments and fee
arrangements. The Company does not provide performance guarantees and has no other financial obligations to provide funding to VIEs other than its
own capital commitments. There is no recourse to the Company for the consolidated VIEs liabilities.
The assets and liabilities of the consolidated VIEs are comprised primarily of investments and debt, at fair value, and are included within assets and
liabilities of consolidated variable interest entities, respectively, in the consolidated statements of financial condition.
Consolidated Variable Interest Entities
Apollo has consolidated VIEs in accordance with the policy described in note 2. The majority of the consolidated VIEs were formed for the sole
purpose of issuing collateralized notes to investors. The assets of these VIEs are primarily comprised of senior secured loans and the liabilities are
primarily comprised of debt. Through its role as collateral manager of these VIEs, it was determined that Apollo had the power to direct the activities
that most significantly impact the economic performance of these
- 182-
2,4
1,8
$
3,5
Table of Contents
VIEs. Additionally, Apollo determined that the potential fees that it could receive directly and indirectly from these VIEs represent rights to returns
that could potentially be significant to such VIEs. As a result, Apollo determined that it is the primary beneficiary and therefore should consolidate
the VIEs.
The assets of these consolidated VIEs are not available to creditors of the Company. In addition, the investors in these consolidated VIEs have no
recourse against the assets of the Company. The Company has elected the fair value option for financial instruments held by its consolidated VIEs,
which includes investments in loans and corporate bonds, as well as debt obligations held by such consolidated VIEs. Other assets include amounts
due from brokers and interest receivables. Other liabilities include payables for securities purchased, which represent open trades within the
consolidated VIEs and primarily relate to corporate loans that are expected to settle within the next 60 days.
Net Gains (Losses) from Investment Activities of Consolidated Variable Interest Entities
The following table presents net gains (losses) from investment activities of the consolidated VIEs for the years ended December 31, 2013, 2012, and
2011 respectively:
For the Year Ended
December 31,
2013
2012
2011
Net unrealized (losses) gains
from investment activities $
(33,275) $
169,087
$
10,832
Net realized gains (losses)
from investment activities
87,472
76,965
(11,313)
54,197
246,052
(481)
Net unrealized losses from
debt
(232,509)
(497,704)
(19,880)
Net realized gains from debt
137,098
41,819
Net (losses) gains from debt
(95,411)
(497,704)
21,939
Interest and other income
674,324
581,610
75,004
Interest and other expenses
(433,368)
(401,662)
(72,261)
Net Gains (Losses) from
Consolidated VIEs
$
199,742
$
(71,704) $
24,201
Senior Secured Notes and Subordinated NotesIncluded within debt are amounts due to third- party institutions by the consolidated VIEs. The
following table summarizes the principal provisions of the debt of the consolidated VIEs as of December 31, 2013 and December 31, 2012:
Principal
Outstanding
Senior Secured
Notes(2)(3)
$
Subordinated
Notes(2)(3)
Total
$

Weighted
Average
Remaining
Maturity in
Years
Weighted
Average
Interest
Rate
11,877,744
1.31%
963,099
12,840,843
N/A
(1)
Principal
Outstanding
7.3 $
11,409,825
1.30%
8.1
1,074,904
12,484,729
N/A
Weighted
Average
Remaining
Maturity in
Years
Weighted
Average
Interest
Rate
7.3
(1)
7.7
(1) The subordinated notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the VIEs.
(2)
The fair value of Senior Secured Notes and Subordinated Notes as of December 31, 2013 and December 31, 2012 was $12,424 million and
$11,835 million, respectively.
(3)
The debt at fair value of the consolidated VIEs is collateralized by assets of the consolidated VIEs and assets of one vehicle may not be
used to satisfy the liabilities of another vehicle. As of December 31, 2013 and December 31, 2012, the fair value of the consolidated VIE
assets was $15,502 million and $14,672 million, respectively. This collateral consisted of cash and cash equivalents, investments, at fair
value, and other assets.
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Table of Contents
The consolidated VIEs debt obligations contain various customary loan covenants as described above. As of December 31, 2013, the Company was
not aware of any instances of noncompliance with any of these covenants.
As of December 31, 2013, the table below presents the contractual maturities for debt of the consolidated VIEs:
2014
Senior Secured
Notes
$
Subordinated
Notes
Total Obligations
as of December
31, 2013
$
2015
$
2016
$
2,225,000
2017
$
2,225,000
2018
$
Thereafter
234,731
9,418,013
60,000
294,731
Total
$
11,877,744
903,099
10,321,112
963,099
12,840,843
Variable Interest Entities Which are Not Consolidated

The Company holds variable interests in certain VIEs which are not consolidated, as it has been determined that Apollo is not the primary
beneficiary.
The following tables present the carrying amounts of the assets and liabilities of the VIEs for which Apollo has concluded that it holds a significant
variable interest, but that it is not the primary beneficiary as of December 31, 2013 and 2012. In addition, the tables present the maximum exposure to
losses relating to those VIEs.
Total Liabilities
Total Assets
Private
Equity
$
Credit
Real Estate
Total
$
7,631,592
3,926,347
1,308,559
12,866,498
(1)
(38,970)
(321,888)
(950,421)
(1,311,279)
Apollo Exposure
$
(2)
3,424
31,241
34,665
(3)
(1) Consists of $354,686 in cash, $12,034,487 in investments and $477,325 in receivables.

(2) Represents $1,161,549 in debt and other payables, $106,532 in securities sold, not purchased, and $43,198 in capital withdrawals payable.
(3)
Represents Apollos direct equity method investment in those entities in which Apollo holds a significant variable interest. Additionally,
cumulative carried interest income is subject to reversal in the event of future losses. The maximum amount of future reversal of carried
interest income from all of Apollo's funds, including those entities in which Apollo holds a significant variable interest, is $4,858 million as
of December 31, 2013 as discussed in note 18.
Total Assets
Total Liabilities
Apollo Exposure
Private
Equity
$
13,498,100
$
(34,438)
$
7,105
Credit
3,276,198
(545,547)
12,605
Real Estate
1,685,793
(1,237,462)
Total
$
18,460,091 (1) $
(1,817,447) (2) $
19,710 (3)
(1) Consists of $452,116 in cash, $17,092,814 in investments and $915,161 in receivables.
(2) Represents $1,752,294 in debt and other payables, $32,702 in securities sold, not purchased, and $32,451 in capital withdrawals payable.
(3) Represents Apollos direct equity method investment in those entities in which Apollo holds a significant variable interest. Additionally,
cumulative carried interest income is subject to reversal in the event of future losses. The maximum amount of future reversal of carried interest
income from all of Apollo's funds, including those entities in which Apollo holds a significant variable interest, was $3,209 million as of
December 31, 2012.
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Table of Contents
6. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
The following tables summarize the valuation of the Companys financial assets and liabilities by the fair value hierarchy as of December 31, 2013
and 2012, respectively:
Level II(5)
Level III
Level I(5)
Assets
Total Assets
Liabilities
Debt of VIEs, at fair value(4)
Total Liabilities
3,455
3,455
$
$
Liabilities
Liabilities of VIEs, at fair value(4)
Total Liabilities
$
$
(1)
2,429,815
2,429,815
1,942,051
892
40,373
130,709
1,919,537
4,033,562
9,994,147
135,511
10,129,658

Level II(5)
Level III
Level I(5)
Assets
Total Assets
28,711
12,203,370
12,232,081
Total
168
168
27,063
11,045,902
11,072,965
1,942,051
29,603
40,373
130,709
14,126,362
16,269,098
12,423,962
135,511
12,559,473
Total
1,666,448
590
50,311
2,126
1,643,465
3,362,940
11,834,955
142,219
11,977,174
1,666,448
27,653
50,311
2,126
12,689,535
14,436,073
11,834,955
142,219
11,977,174
See note 4 for further disclosure regarding the investment in AAA Investments, investments held by Apollo Senior Loan Fund, and
investments in HFA and Other.
(2) See note 17 for further disclosure regarding the Athene and AAA Management Fee Derivatives.
(3) See note 18 for further disclosure regarding Contingent Consideration Obligations.
(4) See note 5 for further disclosure regarding VIEs.
(5) All level I and II investments and liabilities were valued using third party pricing.
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Table of Contents
The following table summarizes the fair value transfers of financial assets between Level I and Level II and Level II and Level III for positions that
existed as of December 31, 2013, 2012 and 2011, respectively:
Transfers from Level II into Level I(1)

Transfers from Level III into Level II(2)
Transfers from Level II into Level III(2)
2013
$
1,253,090
978,194

2012
$164
712,975
833,791
2011
$
802,533
160,390
(1) Transfers into Level I represent those financial instruments for which an unadjusted quoted price in an active market became available for the
identical asset. The transfer during the year ended December 31, 2012 related to investments of the consolidated VIEs.
(2) Transfers between Level II and III were a result of subjecting the broker quotes on these investments to various criteria which include the number
and quality of broker quotes, the standard deviation of obtained broker quotes and the percentage deviation from independent pricing services.
For the year ended December 31, 2013, transfers of financial liabilities from Level III to Level II relating to liabilities held by the consolidated VIEs
totaled $2.5 billion. There was a transfer of debt held by the consolidated VIEs that are valued using broker quotes from Level III into Level II as a
result of subjecting broker quotes on these liabilities to various criteria which include the number and quality of broker quotes, the standard deviation
of obtained broker quotes, and the percentage deviation from independent pricing services. For the years ended December 31, 2012 and 2011, there
were no transfers of financial liabilities between Level I, Level II and Level III.
The following tables summarize the changes in fair value in financial assets, which are measured at fair value and characterized as Level III
investments, for the years ended December 31, 2013, 2012, and 2011:
Investments
held by Apollo
Athene and AAA
Investments in
Management Fee
Investments of
Investments
Fund
HFA and Other
Derivatives
Consolidated VIEs
Total
Period
$
1,666,448 $
590 $
50,311 $
2,126 $
1,643,465 $
3,362,940
Elimination of
investments
attributable to
(35,410)
(35,410)
Fees
118,380
118,380
Purchases
520
4,901
1,326,095
1,331,516
Sale of
(66,796)
(6)
(2,541)
(724,666)
(794,009)
Net realized losses
(28,717)
(28,717)
Changes in net
unrealized gains
(losses)
342,399
15
(12,298)
10,203
13,439
353,758
831
977,363
978,194
Transfer out of
Level III
(1,058)
(1,252,032)
(1,253,090)
1,942,051 $
892 $
40,373 $
130,709 $
1,919,537 $
4,033,562
Change in net
unrealized gains
Gains (Losses) from
date
$
342,399 $
15 $
(12,298) $
$
$
330,116
Change in net
unrealized (losses)
included in Net Gains
(Losses) from
date
$
$
$
$
$
9,083 $
9,083
Change in net
unrealized gains
included in Other
Income, net related to
assets still held at
reporting date
$
$
$
$
10,203 $
$
10,203
Investments
Athene and AAA
held by Apollo
Management Fee
Investments of
Investments in
Derivatives
Consolidated VIEs
Fund
HFA and Other
Investments
Total
Period
$
1,480,152 $
456 $
47,757
$
$
246,609 $
1,774,974
Transfer in due to
consolidation and
acquisition
46,148 (1)
1,706,145
1,752,293
Transfer out due to
deconsolidation
(48,037) (1)
(48,037)
Elimination of
investments
attributable to
(69,437)
(69,437)
Fees
2,126
2,126
Purchases
496
5,759
1,236,232
1,242,487
Sale of
(101,844)
(1,291)
(1,561,589)
(1,664,724)
Net realized gains
20
21,603
21,623
Changes in net
unrealized gains
(losses)
288,140
8
(1,316)
(56,013)
230,819
1,836
831,955
833,791
Transfer out of
Level III
(935)
(712,040)
(712,975)
1,666,448 $
590 $
50,311
$
2,126 $
1,643,465 $
3,362,940
Change in net
unrealized gains
Gains (Losses) from
date
$
288,140 $
8 $
(1,316) $
$
$
286,832
Change in net
unrealized gains
included in Net
Gains(Losses) from
date
$
$
$
$
$
7,464 $
7,464
(1)
During the third quarter of 2012, the Company deconsolidated GSS Holding (Cayman), L.P., which was consolidated by the Company
during the second quarter of 2012.
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Investments held
by Apollo Senior Investments in HFA
Investments of
Loan Fund
and Other
Consolidated VIEs
Investment in AAA
Investments
Total
Period
$
1,637,091 $
$
$
170,369 $
1,807,460
Transfer in due to
consolidation and
acquisition
456
335,353
335,809
Expenses incurred
(3,871)
(3,871)
Purchases
432
57,509
663,438
721,379
Sale of
(33,425)
(273,719)
(307,144)
Net realized gains
980
980
Changes in net unrealized
losses
(123,946)
(5,881)
(7,669)
(137,496)
160,390
160,390
Transfer out of Level III
(802,533)
(802,533)
Balance, End of Period
$
1,480,152 $
456 $
47,757 $
246,609 $
1,774,974
losses included in Net Gains
(Losses) from Investment
Activities related to
investments still held at
reporting date
$
(123,946) $
$
(5,881) $
$
(129,827)
losses included in Net
Gains(Losses) from
Consolidated VIEs related
to investments still held at
reporting date
$
$
$
$
(7,253) $
(7,253)
The following table summarizes the changes in fair value in financial liabilities, which are measured at fair value and characterized as Level III
liabilities:
VIEs
Balance,
Beginning
of Period $
Transfer in
due to
consolidation
and
acquisition
Elimination
of debt
attributable
to
consolidation
of VIEs
Purchase
accounting
adjustments
Additions
Payments
Net realized
gains
Changes in
net
unrealized
losses / fair
value
Transfers
into Level
III
Transfers
out of Level
III
Balance,
End of
Period
$
Change in $
net
unrealized
11,834,955 $
2013
Contingent
Consideration
Obligations
VIEs
Total
142,219
11,977,174 $
3,950
3,950
3,189,837 $
7,317,144
(67,167)
2012
Contingent
Consideration
Obligations
VIEs
Total
5,900
117,700
2011
Contingent
Consideration
Obligations
3,195,737 $
1,127,180 $
1,200
7,434,844
2,046,157
4,700
(67,167)
(48)
Total
1,128,380
2,050,857
(48)
1,000
1,000
2,747,033
2,747,033
1,639,271
1,639,271
454,356
454,356
(415,869)
(415,869)
(41,819)
(41,819)
523,491
19,880
19,880
(2,218,060)
(67,534)
(2,285,594)
(741,834)
(750,002)
(137,098)
232,510
60,826 (1)
293,336
497,704
(2,469,143)
9,994,147 $
(18,578) $
135,511
(2,469,143)
$
$
10,129,658 $
(18,578) $
(8,168)
(137,098)
11,834,955 $
446,649 $
25,787 (1)
142,219
$
$
11,977,174 $
446,649 $
3,189,837 $
(25,347) $
5,900
$
$
3,195,737
(25,347)
(gains)
losses
included in
Net Gains
(Losses)
from
Investment
Activities of
consolidated
VIEs related
to liabilities
still held at
reporting
date
(1)
Changes in fair value of contingent consideration obligations are recorded in profit sharing expense in the consolidated statement of
operations.
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The following tables summarize the quantitative inputs and assumptions used for financial assets and liabilities categorized in Level III of the fair
value hierarchy as of December 31, 2013 and 2012, respectively:
Unobservable Inputs
Ranges
Weighted
Average
1,942,051
892
Net Asset Value

N/A
N/A
N/A
N/A
N/A
N/A
40,373
N/A
Discount Rate
N/A
N/A
15.0%
15.0%
Implied Multiple
1.1x
1.1x
N/A
N/A
N/A
N/A
6.0x - 9.5x
7.9x
N/A
N/A
Discount Rate
Default Rate
Recovery Rate
Discount Rate
Default Rate
Recovery Rate
10.0% - 12.0%
10.8%
2.0%
2.0%
30.0% - 70.0%
65.2%
N/A
N/A
N/A
Discount Rate
10.5% - 18.5%
15.3%
Fair Value
Financial Assets
Apollo Funds:
AAA Investments(1)
$
Other
Athene and AAA
Management Fee
Derivatives
VIEs:
Stocks
Consolidated VIEs
Total Financial Assets
VIEs:
Subordinated Notes
18,467
7,938
1,893,132
1,919,537
4,033,562
835,149

Senior Secured and
Subordinated Notes
Total Liabilities of
Consolidated VIEs
Obligation
Total Financial Liabilities
130,709
2,132,576
7,026,422
Other
Market Comparable
Companies
1.0% - 1.5%
1.3%
75.0%
75.0%
1.9% - 2.2%
2.0%
9,994,147
135,511
10,129,658
% of
Investment
of AAA
Investments
value of the underlying funds, which
are based on the funds underlying
following:
$
Total Investments
Other net liabilities(4)
Total Net Assets
$
1,950,010
1,950,010
(7,959)
1,942,051
(3)
100%
100%

(3)
in the table above.
(4)
Balances include other assets, liabilities and general partner interests of AAA Investments. Balance at December 31, 2013 is primarily
comprised of net assets allocated to the general partner of $102.1 million less $89.0 million in note receivable from an affiliate. Carrying
values approximate fair value for other assets and liabilities (except for the note receivable from an affiliate) and, accordingly, extended
valuation procedures are not required. The note receivable from an affiliate is a level III asset valued using a discounted cash flow model.
The unobservable inputs
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and respective ranges used in the discounted cash flow model are the same as noted for the Athene and AAA Management Fee Derivatives in the
table above.
Unobservable Inputs
Ranges
Weighted
Average
1,666,448
590
Net Asset Value

N/A
N/A
N/A
N/A
N/A
N/A
50,311
N/A
Discount Rate
N/A
N/A
15.0%
15.0%
Implied Multiple
1.23x
1.23x
Discount Rate
11.8%- 25.2%
16.3%
N/A
6.63x
6.63x
N/A
N/A
17.0%
17.0%
Fair Value
Financial Assets
Apollo Funds:
AAA Investments(1)
$
Other
Athene and AAA
Management Fee
Derivatives
VIEs
Stocks
Consolidated VIEs
Total
VIEs:
Subordinated Notes
67,920
3,624
1,571,921
1,643,465
3,362,940
195,357

Senior Secured and
Subordinated Notes
Consolidated VIEs
Obligation
Total
2,126
2,066,250
9,573,348

Comparable Yields
Market Comparable
Companies
Discount Rate
Default Rate
Recovery Rate
Discount Rate
Default Rate
Recovery Rate
2.0%
2.0%
30.0%- 60.0%
59.9%
N/A
N/A
N/A
Discount Rate
7.0%- 11.6%
9.4%
1.5%- 4.0%
2.4%
80.0%
80.0%
1.65%- 1.95%
1.8%
11,834,955
142,219
11,977,174
% of
Investment
of AAA
Investments
value of the underlying funds, which are
based on the funds underlying
following:
$
Listed quotes
Total Investments
Other net assets(4)
Total Net Assets
$
1,581,975
22,029
1,604,004
62,444
1,666,448
(3)
98.6%
1.4%
100%

(3)
in the table above.
of $113.3 million in notes receivable from an affiliate less the portion of AAA investments net assets allocated to the general partner of $70.0
million. Carrying values approximate fair value for other assets and liabilities(except for the note receivable from affiliate) and, accordingly, extended
valuation procedures are not required. The note receivable from affiliate is a level III investment valued using a discounted cash flow model. The
unobservable inputs and respective ranges used in the discounted cash flow model are the same as noted for the Athene and AAA Management Fee
Derivatives in the table above.
Athene and AAA Management Fee Derivatives
The significant unobservable input used in the fair value measurement of the Athene and AAA management fee derivatives is the discount rate
applied in the valuation model. This input in isolation can cause significant increases or decreases in fair value. Specifically, when a discounted cash
flow model is used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected
cash flows. An increase in the discount rate can significantly lower the fair value of an investment; conversely a decrease in the discount rate can
significantly increase the fair value of an investment. The discount rate is determined based on the expected required rate of return based on the risk
profile of similar cash flows. See note 17 for further information regarding the Athene and AAA management fee derivatives.
Consolidated VIEs
Investments
The significant unobservable inputs used in the fair value measurement of the bank debt term loans and stocks include the discount rate applied and
the multiples applied in the valuation models. These unobservable inputs in isolation can cause significant increases or decreases in fair value.
Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation model is the discount rate
applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of an investment; conversely
decreases in the discount rate can significantly increase the fair value of an investment. The discount rate is determined based on the market rates an
investor would expect for a similar investment with similar risks. When a comparable multiple model is used to determine fair value, the comparable
multiples are generally multiplied by the underlying companies earnings before interest, taxes, depreciation and amortization ("EBITDA") to
establish the total enterprise value of the company. The comparable multiple is determined based on the implied trading multiple of public industry
peers.
Liabilities
The significant unobservable inputs used in the fair value measurement of the subordinated and senior secured notes include the discount rate applied
in the valuation models, default and recovery rates applied in the valuation models. These inputs in isolation can cause significant increases or
decreases in fair value. Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation
model is the discount rate applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of
subordinated and senior secured notes; conversely a decrease in the discount rate can significantly increase the fair value of subordinated and senior
secured notes. The discount rate is determined based on the market rates an investor would expect for similar subordinated and senior secured notes
with similar risks.
Contingent Consideration Obligations
The significant unobservable input used in the fair value measurement of the contingent consideration obligations is the discount rate applied in the
valuation models. This input in isolation can cause significant increases or decreases in fair value. Specifically, when a discounted cash flow model is
used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected cash flows.
Increases in the discount rate can significantly lower the fair value of the contingent consideration obligations; conversely a decrease in the discount
rate can significantly increase the fair value of the contingent consideration obligations. The discount rate was based on the weighted average cost of
capital for the Company. See note 18 for further discussion of the contingent consideration obligation.
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7. CARRIED INTEREST RECEIVABLE

Carried interest receivable from private equity, credit and real estate funds consisted of the following:
As of December 31,
2013
Private Equity
$
1,867,771
$
Credit
408,342
Real Estate
10,962
Total Carried Interest Receivable$
2,287,075
$
2012
1,413,306
454,155
10,795
1,878,256
The table below provides a roll- forward of the carried interest receivable balance for the years ended December 31, 2013 and 2012:
Private Equity
Carried interest
receivable, January
1, 2012
$
Change in fair value
of funds (1)
Acquisition of Stone
Tower
Fund cash
distributions to the
Company
Carried interest
receivable,
December 31, 2012 $
Change in fair value
of funds (1)
Fund cash
distributions to the
Company
Carried interest
receivable,
December 31, 2013 $
(1)
Credit
672,952
Real Estate
195,630
Total
868,582
1,592,234
448,670
15,074
2,055,978
36,097
36,097
(851,880)
1,413,306
(226,242)
454,155
(4,279)
10,795
(1,082,401)
1,878,256
2,516,990
324,859
967
2,842,816
(2,062,525)
(370,672)
(800)
(2,433,997)
1,867,771
408,342
10,962
2,287,075
Included in change in fair value of funds for the year ended December 31, 2013 was a reversal of $19.3 million and $0.3 million of the
entire general partner obligation to return previously distributed carried interest income to SOMA and APC, respectively. Included in
change in fair value of funds for the year ended December 31, 2012 was a reversal of $75.3 million of the entire general partner obligation
to return previously distributed carried interest income with respect to Fund VI and reversal of previously realized carried interest income
due to the general partner obligation to return previously distributed carried interest income of $1.2 million and $0.3 million for SOMA
and APC, respectively. The general partner obligation is recognized based upon a hypothetical liquidation of the funds net assets as of the
reporting date. The actual determination and any required payment of any such general partner obligation would not take place until the
final disposition of a funds investments based on the contractual termination of the fund.
The timing of the payment of carried interest due to the general partner or investment manager varies depending on the terms of the applicable fund
agreements. Generally, carried interest with respect to the private equity funds and certain credit and real estate funds, is payable and is distributed to
the fund's general partner upon realization of an investment if the fund's cumulative returns are in excess of the preferred return. For most credit
funds, carried interest is payable based on realizations after the end of the relevant fund's fiscal year or fiscal quarter, subject to high watermark
provisions.
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8. PROFIT SHARING PAYABLE
Profit sharing payable from private equity, credit and real estate funds consisted of the following:
As of
December 31,
2013
2012
Private Equity
$ 751,192 $ 596,427
Credit
234,504
254,629
Real Estate
6,544
6,668
Total Profit Sharing Payable
$ 992,240 $ 857,724
The table below provides a roll- forward of the profit sharing payable balance for the years ended December 31, 2013 and 2012:
Private Equity
Profit sharing
payable, January 1,
2012
$
Acquisition of Stone
Tower(1)
Profit sharing
expense (2)(3)
Payments
Profit sharing
payable,
December 31, 2012 $
Profit sharing
expense (2)
Payments
Profit sharing
payable, December
31, 2013
$
Credit
296,672
56,224
254,629
234,504
6,668
850,056
(462,928)
123
(247)
6,544
352,896
117,700
6,815
(147)
142,728
(162,853)
Total
138,444
(57,739)
1,030,404
(875,639)
751,192
117,700
704,797
(405,042)
596,427
Real Estate
857,724
1,173,255
(1,038,739)
992,240
(1) See note 3 as it relates to the Stone Tower acquisition.

(2) Includes both of the following: i) changes in amounts payable to employees and former employees entitled to a share of carried interest income in
one or more funds and ii) changes to the fair value of the contingent consideration obligations (see notes 6 and 18) recognized in connection with
certain Apollo acquisitions.
(3) Included in profit sharing expense for the year ended December 31, 2012 was a reversal of the entire receivable from Contributing Partners and
certain employees of $22.1 million due to the reversal of the general partner obligation as discussed in note 18.
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9. FIXED ASSETS
Fixed assets consisted of the following:
Ownership interests in aircraft

Leasehold improvements
Furniture, fixtures and other
equipment
Computer software and hardware
Other
Total fixed assets
Less - accumulated depreciation and
amortization
Fixed Assets, net
Useful Life in
Years
15
8- 16
December 31,
2013
$
2012
50,478
4- 10
2- 4
N/A
10,184
48,610
16,750
31,200
509
98,937
(58,686)
40,251
16,047
27,744
509
103,094
(49,642)
53,452
In December 2013, the Company committed to a plan to sell its ownership interests in certain aircraft. The sale of the ownership interest in one
aircraft was completed in December 2013 while the sale of the remaining ownership interest is expected to be completed in the first quarter of 2014.
Accordingly, in December 2013, the Company recorded the completed sale and reclassified the remaining aircraft interests committed for sale to
assets held for sale which is included in other assets in the consolidated statement of financial condition. The aircraft reclassified to assets held for
sale were recorded at the lower of cost or fair value less costs to sell. As a result of both the completed sale and reclassification, the Company
recognized a net loss of approximately $1.0 million which is included in other income, net in the consolidated statements of operations for the year
ended December 31, 2013.
Depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $11.0 million, $10.2 million and $11.1 million, respectively.
10. OTHER ASSETS

Other assets consisted of the following:
As of December 31,
2013
Prepaid expenses
Tax receivables
Assets held for sale
Debt issuance costs, net
Underwriting fee receivable
Receivable from broker
Rent deposits
Interest Receivable
Other
Total Other Assets
2012
9,867
6,549
6,413
6,407
2,090
1,436
1,224
6,420
3,764
44,170
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12,650
5,380
2,113
5,569
3,537
1,336
2,598
3,582
36,765
Table of Contents
11. OTHER LIABILITIES
Other liabilities consisted of the following:
As of December 31,
2013
Deferred tax liabilities
Deferred rent
Unsettled trades and redemption
payable
Other
Total Other Liabilities
2012
37,272
14,701
2,516
8,785
63,274
$
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13,717
14,829
3,986
12,323
44,855
Table of Contents
12. OTHER INCOME, NET

Other income, net consisted of the following:
For the Year Ended
December 31,
2012
2013
Gain on derivatives
$
Tax receivable agreement
adjustment
Gain on acquisitions
AMTG offering costs
ARI reimbursed offering costs
Foreign exchange gain (loss)
Rental income
Loss on assets held for sale
Loss on extinguishment of debt
Other
Total Other Income, Net
$
10,203
13,038
4,142
5,334
(1,087)
(2,741)
11,225
40,114
2011
3,937
1,951,897
(790)
4,387
5,248
1,964,679
(137)
196,193
(8,000)
8,000
6,169
1,999
1,296
205,520
13. INCOME TAXES

The Company is treated as a partnership for income tax purposes and is therefore not subject to U.S. Federal, State and local income taxes. APO
Corp., a wholly- owned subsidiary of the Company, is subject to U.S. Federal, State and Local corporate income taxes. Certain other subsidiaries of
the Company are subject to New York City Unincorporated Business Tax (NYC UBT) attributable to the Companys operations apportioned to
New York City. In addition, certain non- U.S. subsidiaries of the Company are subject to income taxes in their local jurisdictions.
The Companys provision for income taxes totaled $(107.6) million, $(65.4) million, and $(11.9) million for the years ended December 31, 2013,
2012, and 2011, respectively. The Companys effective tax rate was approximately 4.33%, 2.10% and (0.92)% for the years ended December 31,
2013, 2012, and 2011, respectively.
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The provision for income taxes is presented in the following table:
For the Year Ended
December 31,
2013
2012
2011
Current:
Federal income tax
$
(30,422) $
$
(856)
Foreign income tax
(4,733)
(3,411)
(3,705)
State and local income
tax
(9,728)
(7,722)
(6,943)
Subtotal
(44,883)
(11,133)
(11,504)
Deferred:
Federal income tax
(40,955)
(55,114)
248
Foreign income tax
(130)
277
301
State and local income
tax (net of federal
(benefit) provision)
(21,601)
560
(974)
Subtotal
(62,686)
(54,277)
(425)
Total Income Tax
Provision
$
(107,569) $
(65,410) $
(11,929)
For the years ended December 31, 2013, 2012 and 2011, the amount of federal income tax provision netted in the deferred state and local income tax
amounts was $3.5 million, $(0.4) million and $1.4 million, respectively.
The following table reconciles the provision for taxes to the U.S. Federal statutory tax rate:
For the Year Ended
December 31,
2013
2012
2011
U.S. Statutory Tax Rate

35.00 %
35.00 %
35.00 %
Income Passed Through to Non- Controlling
Interests
(24.15)
(30.88)
(24.67)
Income passed through to Class A holders
(7.85)
(4.41)
(1.28)
Equity Based Compensation - AOG Units
0.16
1.84
(9.12)
Foreign income tax
0.12
0.10
(0.17)
State and Local Income Taxes (net of Federal
Benefit)
1.13
0.20
(0.56)
Amortization & Other Accrual Adjustments
(0.08)
0.25
(0.12)
Effective Income Tax Rate
4.33 %
2.10 %
(0.92)%
During the year ended December 31, 2013, the Company adjusted its estimated rate of tax it expects to pay in the future and thereby reduced its net
deferred tax assets, and increased its income tax provision, by $16.9 million (see note 17 for details regarding the impact on tax receivable
agreement).
Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in
the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years.
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The Companys deferred tax assets and liabilities on the consolidated statements of financial condition consist of the following:
As of
December 31,
2013
Deferred Tax Assets:
Revenue recognition
Net operating loss carryforwards
Equity- based compensation - RSUs and
AAA RDUs
Foreign tax credit
Other
Total Deferred Tax Assets
Deferred Tax Liabilities:
Unrealized gains from investments
Other
Total Deferred Tax Liabilities
2012
553,251
51,790
776
448,372
40,597
5,514
42,784
7,528
4,070
660,199
41,083
6,494
148
542,208
36,939
333
37,272
12,882
835
13,717
As of December 31, 2013, the Company had approximately $9.3 million of state and local net operating loss carryforwards that will expire in 2031.
In addition, the Companys foreign tax credit carryforwards will begin to expire in 2020.
The Company considered its historical and current year earnings, current utilization of existing deferred tax assets, and the 15 year amortization
periods of the tax basis of its intangible assets in evaluating whether it should establish a valuation allowance. The Companys shortterm and longterm projections anticipate positive book income. In addition, the Companys projection of future taxable income, including the effects of originating
and reversing temporary differences including those for the tax basis intangibles, indicates that deferred tax liabilities will reverse substantially in the
same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets. Based upon this positive
evidence, the Company has concluded it is more likely than not, that the deferred tax assets will be realized and that no valuation allowance is needed
at December 31, 2013.
Under U.S. GAAP, a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained
upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. Based upon the
Companys review of its federal, state, local and foreign income tax returns and tax filing positions, the Company determined that no unrecognized
tax benefits for uncertain tax positions were required to be recorded. In addition, the Company does not believe that it has any tax positions for which
it is reasonably possible that it will be required to record significant amounts of unrecognized tax benefits within the next twelve months.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the
Company is subject to examination by federal and certain state, local and foreign tax authorities. With a few exceptions, as of December 31, 2013,
Apollo and its predecessor entities U.S. Federal, state, local and foreign income tax returns for the years 2010 through 2013 are open under the
general statute of limitations provisions and therefore subject to examination. In addition, the State of New York is examining APO Corp.s tax
returns for tax years 2008 to 2010. The Internal Revenue Service is examining the tax return of Apollo Management Holdings, L.P. for the tax year
2011. The tax returns of APO Corp. for tax years 2010 and 2011 are being examined by the Internal Revenue Service in connection with the filing of
a net operating loss carryback claim to the 2010 tax year.
The Company has recorded a deferred tax asset for the future amortization of tax basis intangibles as a result of the 2007 Reorganization. In
connection with the Secondary Offering, as disclosed in note 1, the Company recognized an additional step- up in tax basis of intangibles as a result
of the exchange of AOG Units for Class A shares in May 2013. The Company recognized an additional step- up in tax basis of intangibles as a result
of an exchange of AOG Units for Class A shares in November 2013. As a result of the exchange of AOG Units for Class A shares, there was an
increase in the deferred tax asset established from the
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2007 Reorganization, which was recorded in the consolidated statements of financial condition for the expected income tax benefit associated with
this increase. A related tax receivable agreement liability was recorded in due to affiliates in the consolidated statements of financial condition for the
expected payments under the tax receivable agreement entered into by and among APO Corp., the Managing Partners, the Contributing Partners, and
other parties thereto (as amended, the "tax receivable agreement") (see note 17). The increase in the deferred tax asset less the related liability resulted
in an increase to additional paid- in capital of which was recorded in the consolidated statements of changes in shareholders equity for the year ended
December 31, 2013. The amortization period for these tax basis intangibles is 15 years. Accordingly, the related deferred tax assets will reverse over
a similar period. The following table below presents the transactions during the year related to the Exchange of AOG Units for Class A Shares and
the resulting impact to the Deferred Tax Asset, Tax Receivable Agreement Liability and additional paid- in capital.
Date of Exchange of
AOG Units
for Class A Shares
May 15, 2013
$
November 11, 2013
Total
$
Increase in Deferred Tax Asset

92,080
57,247
149,327
Increase in Tax Receivable Agreement

Liability
$
78,268
48,660
$
126,928
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Increase to Additional Paid In Capital

$
13,812
8,587
$
22,399
Table of Contents
14. DEBT
Debt consisted of the following:
Annualized
Weighted
Average
Outstanding
Interest Rate
Balance
2007 AMH Credit
Agreement
2013 AMH Credit
Facilities - Term
Facility
CIT secured loan
agreements
Total Debt
$
N/A
N/A
750,000
1.37%
N/A
750,000
N/A
1.37%

Annualized
Weighted
Average
Outstanding
Interest Rate
Balance
$
728,273
N/A
9,545
737,818
4.95%
(1)
N/A
3.47
4.93%
(1) Includes the effect of interest rate swaps.

2007 AMH Credit AgreementOn April 20, 2007, Apollo Management Holdings, L.P. (AMH), a subsidiary of the Company which is a
Delaware limited partnership, entered into a $1.0 billion seven year credit agreement (the 2007 AMH Credit Agreement). Interest payable under the
2007 AMH Credit Agreement was based on Eurodollar LIBOR or Alternate Base Rate ("ABR") as determined by the borrower. Through the use of
interest rate swaps, AMH irrevocably elected three- month LIBOR for $167 million of the debt for five years from the closing date of the 2007 AMH
Credit Agreement, which expired in May 2012. The interest rate of the Eurodollar loan, which was amended as discussed below, was the daily
Eurodollar rate plus the applicable margin rate (3.75% for $995 million of the loan, as discussed below, and 1.00% for $5 million of the loan as of
December 31, 2012. The interest rate on the ABR term loan, which was amended as discussed below, for any day, was the greatest of (a) the prime
rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.5% and (c) the onemonth Eurodollar Rate plus 1.00%, in each
case plus the applicable margin. The 2007 AMH Credit Agreement originally had a maturity date of April 2014.
On December 20, 2010, Apollo amended the 2007 AMH Credit Agreement to extend the maturity date of $995.0 million (including the $90.9 million
of fair value debt repurchased by the Company) of the term loan from April 20, 2014 to January 3, 2017 and modified certain other terms of the 2007
AMH Credit Agreement. The interest rate for the highest applicable margin for the loan portion extended changed to LIBOR plus 4.25% and ABR
plus 3.25%. On December 20, 2010, an affiliate of AMH that was a guarantor under the 2007 AMH Credit Agreement repurchased approximately
$180.8 million of the term loan in connection with the extension of the maturity date of such loan and thus the 2007 AMH Credit Agreement
(excluding the portions held by AMH affiliates) had a remaining balance of $728.3 million.
The interest rate on the $723.3 million, net ($995.0 million portion less amount repurchased by the Company) of the loan at December 31, 2012 was
4.07% and the interest rate on the remaining $5.0 million portion of the loan at December 31, 2012 was 1.32%. The estimated fair value of the
Companys longterm debt obligation related to the 2007 AMH Credit Agreement was believed to be approximately $795.6 million based on a yield
analysis using available market data of comparable securities with similar terms and remaining maturities as of December 31, 2012. The $728.3
million carrying value of debt that is recorded on the consolidated statement of financial condition at December 31, 2012 is the amount for which the
Company expected to settle the 2007 AMH Credit Agreement. Interest expense incurred by the Company related to the 2007 AMH Credit Agreement
was $28.3 million, $36.0 million, and $39.3 million for the years ended December 31, 2013, 2012, and 2011, respectively.
As of December 31, 2012, the 2007 AMH Credit Agreement was guaranteed by, and collateralized by, substantially all of the assets of AMH and its
subsidiaries, Apollo Principal Holdings II, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., and Apollo Principal
Holdings IX, L.P., as well as cash proceeds from the sale of assets or similar recovery events and any cash deposited pursuant to the excess cash flow
covenant, which was deposited as cash collateral to the extent necessary as set forth in the 2007 AMH Credit Agreement.
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The consolidated net (deficit) assets of each Borrower are summarized as follows:
Consolidated Net (Deficit)
Assets as of December 31,
2012
Borrower
AMH and subsidiaries
$(858,804)
Apollo Principal Holdings II,
L.P.
94,884
Apollo Principal Holdings IV,
L.P.
91,104
Apollo Principal Holdings V,
L.P.
62,283
Apollo Principal Holdings IX,
L.P.
217,480
The 2007 AMH Credit Agreement contained customary events of default, including events of default arising from non- payment, material
misrepresentations, breaches of covenants, cross default to material indebtedness, bankruptcy and changes in control of AMH.
The outstanding loans under the 2007 AMH Credit Agreement were refinanced on December 18, 2013 with the net proceeds from the 2013 AMH
Credit Facilities (as defined below). Additionally, the net proceeds were used to pay fees and expenses associated with the 2013 AMH Credit
Facilities. The 2007 AMH Credit Agreement and all related loan documents and security with respect thereto were terminated in connection with the
refinancing.
2013 AMH Credit FacilitiesOn December 18, 2013, AMH and its consolidated subsidiaries and certain other subsidiaries of the Company
(collectively, the "Borrowers") entered into new credit facilities (the "2013 AMH Credit Facilities") with JPMorgan Chase Bank, N.A. The 2013
AMH Credit Facilities provide for (i) a term loan facility to AMH (the Term Facility) that includes $750 million of the term loan from third- party
lenders and $271.7 million of the term loan held by a subsidiary of the Company and (ii) a $500 million revolving credit facility (the Revolver
Facility), in each case, with a final maturity date of January 18, 2019.
Interest on the borrowings is based on an adjusted LIBOR rate or alternate base rate, in each case plus an applicable margin, and undrawn revolving
commitments bear a commitment fee. Under the terms of the 2013 AMH Credit Facilities, the applicable margin ranges from 1.125% to 1.75% for
LIBOR loans and 0.125% to 0.75% for alternate base rate loans, and the undrawn revolving commitment fee ranges from 0.125% to 0.25%, in each
case depending on the Companys corporate rating assigned by Standard & Poors Ratings Group, Inc. The 2013 AMH Credit Facilities do not
require any scheduled amortization payments or other mandatory prepayments (except with respect to overadvances on the Revolver Facility) prior to
the final maturity date, and the Borrowers may prepay the loans and/or terminate or reduce the revolving commitments under the 2013 AMH Credit
Facilities at any time without penalty. The interest rate on the $750 million Term Facility as of December 31, 2013 was 1.37% and the commitment
fee as of December 31, 2013 on the $500 million undrawn Revolver Facility was 0.125%. Interest expense incurred by the Company related to the
2013 AMH Credit Facilities was $0.4 million for the year ended December 31, 2013.
As of December 31, 2013, $750 million of the Term Facility was outstanding with third- party lenders and there is approximately $271.7 million of
the Term Facility that is held by a subsidiary of the Company. As of December 31, 2013 the Revolver Facility was undrawn. The estimated fair value
of the Companys longterm debt obligation related to the 2013 AMH Credit Facilities is believed to be approximately $750 million based on a yield
analysis using available market data of comparable securities with similar terms and remaining maturities. The $750 million carrying value of debt
that is recorded on the consolidated statement of financial condition at December 31, 2013 is the amount for which the Company expects to settle the
2013 AMH Credit Facilities.
In accordance with U.S. GAAP, the Company determined that the refinancing of the outstanding loans under the 2007 AMH Credit Agreement
resulted in a debt extinguishment. As a result, the Company recorded a loss on extinguishment of $2.7 million, of which $1.6 million related to
previously capitalized costs incurred in relation to the 2007 AMH Credit Agreement and $1.1 million related to expenses incurred in relation to the
2013 AMH Credit Facilities, in other income, net in the consolidated statement of operations for the year ended December 31, 2013. In addition, the
Company capitalized debt issuance costs of $6.6 million incurred in relation to the 2013 AMH Credit Facilities which was recorded in other assets in
the consolidated statement of financial condition as of December 31, 2013 to be amortized over the life of the term loan and line of credit.
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The 2013 AMH Credit Facilities are guaranteed and collateralized by AMH and its consolidated subsidiaries, Apollo Management, L.P., Apollo
Capital Management, L.P., Apollo International Management, L.P., AAA Holdings, L.P., Apollo Principal Holdings I, L.P., Apollo Principal
Holdings II, L.P., Apollo Principal Holdings III, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., Apollo Principal
Holdings VI, L.P., Apollo Principal Holdings VII, L.P., Apollo Principal Holdings VIII, L.P., Apollo Principal Holdings IX L.P., ST Holdings GP,
LLC and ST Management Holdings, LLC. The 2013 AMH Credit Facilities contain affirmative and negative covenants which limit the ability of the
Borrowers, the guarantors and certain of their subsidiaries to, among other things, incur indebtedness and create liens. Additionally, the 2013 AMH
Credit Facilities contain financial covenants which require the Borrowers and their subsidiaries to maintain (1) at least $40 billion of feegenerating
Assets Under Management and (2) a maximum total net leverage ratio of not more than 4.00 to 1.00 (subject to customary equity cure rights). The
2013 AMH Credit Facilities also contain customary events of default, including events of default arising from non- payment, material
misrepresentations, breaches of covenants, cross default to material indebtedness, bankruptcy and changes in control of the Company. As of
December 31, 2013, the Company was not aware of any instances of noncompliance with the financial covenants contained in the 2013 AMH
Credit Facilities.
Borrowings under the Revolver Facility may be used for working capital and general corporate purposes, including, without limitation, permitted
acquisitions. In addition, the Borrowers may incur incremental facilities in respect of the Revolver Facility and the Term Facility in an aggregate
amount not to exceed $500 million plus additional amounts so long as the Borrowers are in compliance with a net leverage ratio not to exceed 3.75 to
1.00.
The consolidated net (deficit) assets of each Borrower are summarized as follows:
Consolidated Net (Deficit)
Assets as of December 31,
Borrower
2013
AMH and subsidiaries (1)
$(689,958)
Apollo Principal Holdings I,
L.P.
1,570,336
Apollo Principal Holdings II,
L.P. (2)
167,844
Apollo Principal Holdings III,
L.P.
661,106
Apollo Principal Holdings IV,
L.P.
163,329
L.P.
53,116
Apollo Principal Holdings VI,
L.P.
239,876
Apollo Principal Holdings VII,
L.P.
99,250
Apollo Principal Holdings VIII,
L.P.
16,784
Apollo Principal Holdings IX
L.P.
152,010
(1) Includes Apollo Management, L.P., Apollo Capital Management, L.P., Apollo International Management, L.P., AAA Holdings, L.P. and ST
Management Holdings, LLC, which are consolidated by AMH.
(2) Includes ST Holdings GP, LLC, which is consolidated by Apollo Principal Holdings II, L.P.
CIT Secured Loan AgreementsDuring 2011, the Company had secured loan agreements totaling $10.2 million with CIT Group/Equipment
Financing Inc. ("CIT") to finance the purchase of certain fixed assets. The loans bore interest at LIBOR plus 318 basis points per annum with interest
and principal to be repaid monthly and a balloon payment of the remaining principal totaling $9.4 million due at the end of the terms in April 2013.
At December 31, 2012 and 2011, the interest rate was 3.40% and 3.45%, respectively. In April 2013, the CIT loan balance was repaid. Interest
expense incurred by the Company related to the CIT loan was $0.1 million, $0.3 million, and $0.5 million during the years ended December 31, 2013,
2012 and 2011, respectively.
As of December 31, 2013, the table below presents the contractual maturities for the 2013 AMH Credit Facilities:
2014
2015
2016
2017
2018
2013 AMH Credit
Facilities(1)
$
$
$
$
$
$
Total Obligations as of
December 31, 2013
$
$
$
$
$
$
(1)
Excludes a $500 million undrawn revolving credit facility with a final maturity of January 18,
2019.
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Thereafter
Total
750,000
750,000
750,000
750,000
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15. NET INCOME (LOSS) PER CLASS A SHARE

U.S. GAAP requires use of the two- class method of computing earnings per share for all periods presented for each class of common stock and
participating security as if all earnings for the period had been distributed. Under the two- class method, during periods of net income, the net income
is first reduced for distributions declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is
reduced for distributions declared on participating securities only if the security has the right to participate in the earnings of the entity and an
objectively determinable contractual obligation to share in net losses of the entity.
The remaining earnings are allocated to Class A shares and participating securities to the extent that each security shares in earnings as if all of the
earnings for the period had been distributed. Earnings or losses allocated to each class of security are then divided by the applicable number of shares
to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding common shares and all potential common
shares assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed
conversion of these potential common shares.
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The table below presents basic and diluted net income (loss) per Class A share using the two- class method for the years ended December 31, 2013,
2012, and 2011:
Basic and Diluted
For the Year Ended
December 31,
2013
2012
2011
Numerator:
Net income (loss)
attributable to Apollo
Global Management,
LLC
$
659,391
$
310,957
$
(468,826)
Distributions declared
on Class A shares
(556,954) (1)
(172,887) (2)
(97,758) (3)
Distributions on
participating securities
(93,235)
(31,175)
(17,381)
Earnings allocable to
(1,394)
(16,855)
(4)
Undistributed income
(loss) attributable to
Class A shareholders:
Basic
7,808
90,040
(583,965)
Dilution effect on
undistributed income
attributable to Class A
shareholders
9,106
3,425
Dilution effect on
distributable income
attributable to
(1,329)
(85)
Undistributed Income
(Loss) attributable to
Class A shareholders:
Diluted
$
15,585
$
93,380
$
(583,965)
Denominator:
Weighted average
number of Class A
shares outstanding:
Basic
139,173,386
127,693,489
116,364,110
Dilution effect of share
options and unvested
RSUs
3,040,964
1,846,888
Weighted average
number of Class A
shares outstanding:
Diluted
142,214,350
129,540,377
116,364,110
Net income (loss) per
Class A share: Basic
Distributed Income
$
4.00
$
1.35
$
0.84
Undistributed (Loss)
Income
0.06
0.71
(5.02)
Net Income (Loss) per
Class A Share: Basic $
4.06
$
2.06
$
(4.18)
Class A Share:
Diluted(5)
Distributed income
$
3.92
$
1.34
$
0.84
Undistributed (loss)
income
0.11
0.72
(5.02)
Class A Share: Diluted $
4.03
$
2.06
$
(4.18)
(1)
The Company declared a $1.05 distribution on Class A shares on February 8, 2013, a $0.57 distribution on May 6, 2013, a $1.32 distribution
on August 8, 2013 and a $1.01 distribution on November 7, 2013.
(2)
The Company declared a $0.46 distribution on Class A shares on February 10, 2012, a $0.25 distribution on May 8, 2012, a $0.24
distribution on August 12, 2012, and a $0.40 distribution on November 9, 2012.
(3)
The Company declared a $0.17 distribution on Class A shares on January 4, 2011, a $0.22 distribution on May 12, 2011, a $0.24 distribution
on August 9, 2011, and a $0.20 distribution on November 3, 2011.
(4)
No allocation of losses was made to the participating securities as the holders do not have a contractual obligation to share in the losses of
the Company with Class A shareholders.
(5) For the year ended December 31, 2013, share options and unvested RSUs were determined to be dilutive, and were accordingly included in the
diluted earnings per share calculation. For the year ended December 31, 2012, share options and unvested RSUs were determined to be dilutive,
and were accordingly included in the diluted earnings per share calculation. For the year ended December 31, 2011, the Company had losses
attributable to Class A shareholders and as such there was no dilution. AOG Units and participating securities were determined to be anti- dilutive
for the years ended December 31, 2013, 2012, and 2011, and were accordingly excluded from the diluted earnings per share calculation.
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On October 24, 2007, the Company commenced the granting of restricted share units ("RSUs") that provide the right to receive, subject to vesting,
Class A shares of Apollo Global Management, LLC, pursuant to the Companys 2007 Omnibus Equity Incentive Plan. Certain RSU grants to
employees provide the right to receive distribution equivalents on vested RSUs on an equal basis any time a distribution is declared. The Company
refers to these RSU grants as Plan Grants. For certain Plan Grants, distribution equivalents are paid in January of the calendar year next following
the calendar year in which a distribution on Class A shares was declared. In addition, certain RSU grants to employees provide that both vested and
unvested RSUs participate in distribution equivalents on an equal basis with the Class A shareholders any time a distribution is declared. The
Company refers to these as Bonus Grants." As of December 31, 2013, approximately 22.8 million vested RSUs and 3.4 million unvested RSUs were
eligible for participation in distribution equivalents.
Any distribution equivalent paid to an employee will not be returned to the Company upon forfeiture of the award by the employee. Vested and
unvested RSUs that are entitled to non- forfeitable distribution equivalents qualify as participating securities and are included in the Companys basic
and diluted earnings per share computations using the two- class method. The holder of an RSU participating security would have a contractual
obligation to share in the losses of the entity if the holder is obligated to fund the losses of the issuing entity or if the contractual principal or
mandatory redemption amount of the participating security is reduced as a result of losses incurred by the issuing entity. Because the RSU
participating securities do not have a mandatory redemption amount and the holders of the participating securities are not obligated to fund losses,
neither the vested RSUs nor the unvested RSUs are subject to any contractual obligation to share in losses of the Company.
Holders of AOG Units are subject to the vesting requirements and transfer restrictions set forth in the agreements with the respective holders, and
may up to four times each year, upon notice (subject to the terms of the Exchange Agreement), exchange their AOG Units for Class A shares on a
one- for- one basis. A limited partner must exchange one partnership unit in each of the Apollo Operating Group partnerships to effectuate an
exchange for one Class A share. As disclosed in note 1, in connection with the Secondary Offering, certain holders of AOG Units exchanged their
AOG Units for Class A shares and approximately 8.8 million Class A shares were issued by the Company in the exchange. In November 2013, as
disclosed in note 13, certain holders of AOG Units exchanged their AOG Units for Class A shares and approximately 2.3 million Class A shares were
issued by the Company in the exchange. If all of the outstanding AOG Units were exchanged for Class A shares as of December 31, 2013, the result
would be an additional 228,954,598 Class A shares added to the diluted earnings per share calculation.
Apollo Global Management, LLC has one Class B share outstanding, which is held by BRH Holdings GP, Ltd. ("BRH"). The voting power of the
Class B share is reduced on a one vote per one AOG Unit basis in the event of an exchange of AOG Units for Class A shares, as discussed above. The
Class B share has no net income (loss) per share as it does not participate in Apollos earnings (losses) or distributions. The Class B share has no
distribution or liquidation rights. The Class B share has voting rights on a pari passu basis with the Class A shares. The Class B share had a super
voting power of 228,954,598 votes as of December 31, 2013.
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The table below presents transactions in Class A shares during the years ended December 31, 2013, 2012, and 2011 and the resulting impact on the
Companys and Holdings ownership interests in the Apollo Operating Group:
Type of Class A
Shares
Transaction
Date
Quarter Ended
March 31,
2011
Issuance
Quarter Ended
June 30, 2011
Issuance
Quarter Ended
September 30,
2011
Issuance
Quarter Ended
December 31,
2011
Issuance/Net Settlement
Quarter Ended
March 31,
2012
Issuance
Quarter Ended
June 30, 2012
Issuance
Quarter Ended
September 30,
2012
Issuance
Quarter Ended
December 31,
2012
Issuance
Quarter Ended
March 31,
2013
Issuance
Quarter Ended
June 30, 2013
Issuance/Offering
Quarter Ended
September 30,
2013
Issuance
Quarter Ended
December 31,
2013
Issuance/Offering
Apollo Global
Apollo Global
Management, LLC Management, LLC
ownership%
ownership%
in Apollo
in Apollo
Operating
Operating
Number of
Group after
Group before
Shares Issued in
Class A
Class A
Class A Shares
Shares
Shares
Transaction
Transaction
Transaction
(in thousands)
Holdings
ownership%
in Apollo
Operating
Group before
Class A
Shares
Transaction
Holdings
ownership%
in Apollo
Operating
Group after
Class A
Shares
Transaction
1,550
29.0%
29.3%
71.0%
70.7%
22,250
29.3%
33.7%
70.7%
66.3%
1,268
33.7%
33.9%
66.3%
66.1%
933
33.9%
34.1%
66.1%
65.9%
2,388
34.1%
34.5%
65.9%
65.5%
150
34.5%
34.5%
65.5%
65.5%
3,414
34.5%
35.1%
65.5%
64.9%
180
35.1%
35.1%
64.9%
64.9%
2,091
35.1%
35.5%
64.9%
64.5%
9,577
35.5%
38.0%
64.5%
62.0%
1,977
38.0%
38.3%
62.0%
61.7%
2,581
38.3%
39.0%
61.7%
61.0%
(1)
(1)
(1) Certain holders of AOG Units exchanged their AOG Units for Class A shares. Approximately 8.8 million Class A shares were issued by the
Company in the exchange, which settled on May 14, 2013. See note 1 for details regarding the Secondary Offering. In November 2013, as
disclosed in note 13, certain holders of AOG Units exchanged their AOG Units for Class A shares and approximately 2.3 million Class A shares
were issued by the Company in the exchange.
16. EQUITY- BASED COMPENSATION

AOG Units
The fair value of the AOG Units of approximately $5.6 billion is charged to compensation expense on a straightline basis over the five or six year
service period, as applicable. For the years ended December 31, 2013, 2012, and 2011, $30.0 million, $480.9 million, and $1,032.8 million of
compensation expense was recognized, respectively. As of December 31, 2013, there was no unrecognized compensation expense related to unvested
AOG Units.
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Table of Contents
The following table summarizes the activity of the AOG Units for the years ended December 31, 2013, 2012, and 2011:
Weighted Average
Grant Date
Fair Value
AOG Units
Balance at January 1, 2011
66,742,906
$
23.13
Vested
(44,149,696)
23.39
Balance at December 31, 2011
22,593,210
22.64
Granted
199,050
17.36
Forfeited
(199,050)
20.00
Vested
(21,092,844)
22.80
1,500,366
20.00
Vested
(1,500,366)
20.00
RSUs
On October 24, 2007, the Company commenced the granting of RSUs under the Companys 2007 Omnibus Equity Incentive Plan. These grants are
accounted for as a grant of equity awards in accordance with U.S. GAAP. The fair value of all grants after March 29, 2011 is based on the grant date
fair value, which considers the public share price of the Company. For Plan Grants, the fair value is based on grant date fair value, and is discounted
primarily for transfer restrictions and lack of distributions until vested. For Bonus Grants, the valuation methods are discounted primarily for transfer
restrictions and in certain cases timing of distributions. For Plan Grants, the discount for the lack of distributions until vested based on the present
value of a growing annuity calculation had a weighted average of 30.5%, 23.3% and 7.1% for the years ending December 31, 2013, 2012, and 2011,
respectively. Additionally, for Plan Grants, the marketability discount for transfer restrictions based on the Finnerty Model calculation, after
considering the discount for lack of pre- vesting distributions, had a weighted average of 6.0%, 5.0%, and 8.6% for the years ending December 31,
2013, 2012, and 2011, respectively. For Bonus Grants, the marketability discount for transfer restrictions based on the Finnerty Model calculation had
a weighted average of 3.2%, 4.9%, and 6.5% for the years ending December 31, 2013, 2012, and 2011, respectively. The total fair value is charged to
compensation expense on a straightline basis over the vesting period, which is generally up to six years, with the first installment vesting one year
after grant and quarterly vesting thereafter (for Plan Grants) or annual vesting over three years (for Bonus Grants).
The fair value of grants made in 2013, 2012, and 2011 is $56.6 million, $73.5 million and $116.6 million, respectively. Of the awards granted in
2012, 972,266 RSUs relate to awards granted as part of the Stone Tower acquisition. The fair value of these awards was not charged to compensation
expense, but charged to additional paid in capital in the consolidated statements of changes in shareholder's equity. See note 3 for further discussion
of the Stone Tower acquisition. The actual forfeiture rate was 5.3%, 3.9%, and 2.3% for the years ended December 31, 2013, 2012, and 2011
respectively. For the years ended December 31, 2013, 2012, and 2011, $87.7 million, $110.2 million, and $108.2 million of compensation expense
was recognized, respectively.
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Table of Contents
The following table summarizes RSU activity for the years ended December 31, 2013, 2012, and 2011:
Weighted Average
Grant Date Fair
Value
Unvested
Balance at January
1, 2011
Granted
Forfeited
Delivered
Vested
Balance at
December 31, 2011
Granted
Forfeited
Delivered
Vested
Balance at
December 31, 2012
Granted
Forfeited
Delivered
Vested
Balance at
December 31, 2013
23,442,916
8,068,735
(737,372)
(10,293,506)
10.25
14.45
12.59
10.12
11.13
15,642,921
(5,696,419)
10,293,506
39,085,837
8,068,735
(737,372)
(5,696,419)
20,480,773
5,377,562
(966,725)
(10,167,136)
11.38
13.68
11.02
11.69
12.28
20,240,008
(7,894,214)
10,167,136
40,720,781
5,377,562
(966,725)
(7,894,214)
(1)
14,724,474
2,101,277
(888,594)
(7,159,871)
11.62
26.95
13.30
12.30
12.60
22,512,930
(6,879,050)
7,159,871
37,237,404
2,101,277
(888,594)
(6,879,050)
(1)
14.32
22,793,751
31,571,037
(1)
8,777,286
Vested
Total Number of
RSUs
Outstanding
(1) Amount excludes RSUs which have vested and have been issued in the form of Class A shares.
Units Expected to VestAs of December 31, 2013, approximately 8,300,000 RSUs were expected to vest over the next 2.9 years.
Share Options
Under the Companys 2007 Omnibus Equity Incentive Plan, the following options were granted:
Date of Grant
December 2, 2010
Options Granted
5,000,000
Vesting Terms
Vested and became exercisable with respect to 4/24 of the option shares on December 31, 2011
and the remainder vest in equal installments over each of the remaining 20 quarters with full
vesting on December 31, 2016.
January 22, 2011
555,556
Half of such options that vested and became exercisable on December 31, 2011 were exercised on
March 5, 2012 and the other half that were due to become exercisable on December 31, 2012 were
forfeited during the quarter ended March 31, 2012.
April 9, 2011
25,000
Vested and became exercisable with respect to half of the option shares on December 31, 2011 and
the other half vested in four equal quarterly installments starting on March 31, 2012 and ending on
December 31, 2012 and are fully vested as of the date of this report.
July 9, 2012
50,000
Will vest and become exercisable with respect to 4/24 of the option shares on June 30, 2013 and
the remainder will vest in equal installments over each of the remaining 20 quarters with full
vesting on June 30, 2018.
December 28, 2012
200,000
Will vest and become exercisable with respect to 4/24 of the option shares on June 30, 2013 and
the remainder will vest in equal installments over each of the remaining 20 quarters with full
vesting on June 30, 2018.
For the years ended December 31, 2013, 2012, and 2011, $4.7 million, $4.8 million, and $6.9 million of compensation expense was recognized as a
result of these grants, respectively.
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There were no share options granted during the year ended December 31, 2013. Apollo measures the fair value of each option award on the date of
grant using the Black- Scholes option- pricing model with the following weighted average assumptions used for options awarded during 2012 and
2011:
Assumptions:
Risk- free interest rate
Weighted average expected dividend yield
Expected volatility factor(1)
Expected life in years
Fair value of options per share
2012(2)
2011(2)
1.11%
8.13%
45.00%
6.66
3.01
2.79%
2.25%
40.22%
5.72
8.44
(1) The Company determined its expected volatility based on comparable companies using daily stock prices and the Companys volatility.
(2) Represents weighted average of 2012 and 2011 grants, respectively.
The following table summarizes the share option activity for the years ended December 31, 2013, 2012, and 2011:
Options
Outstanding
Weighted
Average
Exercise
Price
Aggregate
Fair
Value
Weighted
Average
Remaining
Contractual
Term
Balance at January 1,
2011
5,000,000
$
8.00 $
28,100
9.92
Granted
580,556
9.39
4,896
9.09
Exercised
Forfeited
Balance at December
31, 2011
5,580,556
8.14
32,996
8.93
Granted
250,000
16.26
752
9.90
Exercised
(277,778)
9.00
(2,364)
Forfeited
(277,778)
9.00
(2,364)
Balance at December
31, 2012
5,275,000
8.44
29,020
8.01
Granted
Exercised
(2,324,997)
8.12
(12,896)
Forfeited
Balance at December
31, 2013
2,950,003
8.69 $
16,124
7.08
Exercisable at
December 31, 2013
262,500
$
9.83 $
1,342
7.34
Options Expected to VestAs of December 31, 2013, approximately 2,526,000 options were expected to vest.
The expected life of the options granted represents the period of time that options are expected to be outstanding and is based on the contractual term
of the option. Unamortized compensation cost related to unvested share options at December 31, 2013 was $13.8 million and is expected to be
recognized over a weighted average period of 3.0 years. The intrinsic value of options exercised was $42.9 million and $1.4 million for the years
ended December 31, 2013 and 2012, respectively.
Delivery of Class A Shares - RSUs and Share Options
During the years ended December 31, 2013, 2012, and 2011, the Company delivered Class A shares in settlement of vested RSUs and exercised share
options. The Company has generally allowed holders of vested RSUs and exercised share options to settle their tax liabilities by reducing the number
of Class A shares delivered to them, which the Company refers to as "net share settlement." Additionally, the Company has generally allowed holders
of share options to settle their exercise price by reducing
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the number of Class A Shares delivered to them at the time of exercise by an amount sufficient to cover the exercise price. The net share settlement
results in a tax liability for the Company and a corresponding accumulated deficit adjustment. This adjustment for the years ended December 31,
2013, 2012 and 2011 was $85.9 million, $26.0 million and $19.6 million, respectively, which is recorded as accumulated deficit in the consolidated
statements of changes in shareholders equity.
The delivery of Class A shares in settlement of vested RSUs and exercised share options does not cause a transfer of amounts in the consolidated
statements of changes in shareholders equity to the Class A shareholders. The delivery of Class A shares in settlement of vested RSUs and exercised
share options causes the income allocated to the Non- Controlling Interests to shift to the Class A shareholders from the date of delivery forward.
During the year ended December 31, 2013, the Company delivered 5,181,389 Class A shares in settlement of vested RSUs and exercised share
options, which caused the Companys ownership interest in the Apollo Operating Group to increase to 36.0% from 35.1%.
AAA RDUs
Incentive units that provide the right to receive AAA restricted depositary units (RDUs) following vesting are granted periodically to employees of
Apollo. These grants are accounted for as equity awards in accordance with U.S. GAAP. The incentive units granted to employees generally vest over
three years. In contrast, the Companys Managing Partners and Contributing Partners have received distributions of fully- vested AAA RDUs. The
fair value at the date of the grants is recognized on a straightline basis over the vesting period (or upon grant in the case of fully vested AAA
RDUs). The grant date fair value is based on the public share price of AAA. Vested AAA RDUs can be converted into ordinary common units of
AAA subject to applicable securities law restrictions. During the years ended December 31, 2013, 2012, and 2011, the actual forfeiture rate was 0%.
For the years ended December 31, 2013, 2012, and 2011, $1.2 million, $1.0 million, and $0.5 million of compensation expense was recognized,
respectively.
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During the years ended December 31, 2013, 2012, and 2011 the Company delivered 114,896, 60,702, and 389,785 RDUs, respectively. The
deliveries in 2013, 2012, and 2011 resulted in a satisfaction of liability of $1.2 million, $1.8 million, and $3.8 million, respectively, and the
recognition of a net decrease of additional paid in capital in 2013 of $1.0 million and a net decrease in 2012 and 2011 of $2.5 million and $2.7
million, respectively. These amounts are presented in the consolidated statements of changes in shareholders equity. There was $1.2 million and $1.0
million of liability for undelivered RDUs included in accrued compensation and benefits in the consolidated statements of financial condition as of
December 31, 2013 and December 31, 2012, respectively. The following table summarizes RDU activity for the years ended December 31, 2013,
2012, and 2011, respectively:
Weighted
Average
Grant Date
Fair Value
Unvested
2011
Granted
Forfeited
Delivered
Vested
Balance at December
31, 2011
Granted
Forfeited
Delivered
Vested
Balance at December
31, 2012
Granted
Forfeited
Delivered
Vested
Balance at December
31, 2013
166,667
90,688
(60,702)
7.20
10.30
10.54
8.69
389,785
(389,785)
60,702
556,452
90,688
(389,785)
196,653
256,673
(114,896)
8.17
9.45
8.69
9.02
60,702
(60,702)
114,896
257,355
256,673
(60,702)
338,430
27,286
(120,354)
8.85
26.90
9.02
9.83
114,896
(114,896)
120,354
453,326
27,286
(114,896)
10.38
120,354
365,716
245,362
Vested
Total Number
of RDUs
Outstanding
Units Expected to VestAs of December 31, 2013, approximately 231,000 RDUs were expected to vest over the next three years.
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The following table summarizes the activity of RDUs available for future grants:
RDUs Available
For Future
Grants
Balance at January 1, 2011
1,979,031
Purchases
59,494
Granted
(90,688)
Forfeited

1,947,837
Purchases
187,261
(1 )
Granted/Issued
(449,753)
Forfeited

1,685,345
Purchases
6,236
(1 )
Granted/Issued
(39,272)
Forfeited

1,652,309
(1) During 2013 and 2012, the Company delivered 11,986 and 193,080 to certain employees as part of AAA's carry reinvestment program,
respectively. This resulted in a decrease in profit sharing payable of $0.2 million and $1.2 million in 2013 and 2012, respectively in the
consolidated statements of financial condition.
Restricted Stock and Restricted Stock Unit Awards Apollo Commercial Real Estate Finance, Inc.
ARI restricted stock awards and ARI restricted stock unit awards ("ARI RSUs") granted to the Company and certain of the Companys employees
generally vest over three years, either quarterly or annually. The awards granted to the Company are accounted for as investments and deferred
revenue in the consolidated statements of financial condition. As these awards vest, the deferred revenue is recognized as management fees. The
investment is accounted for using the equity method of accounting for awards granted to the Company and as a deferred compensation asset for the
awards granted to employees. Compensation expense is recognized on a straight line- basis over the vesting period for the awards granted to the
employees. The Company recorded an asset and a liability upon receiving the awards on behalf of the Companys employees. The fair value of the
awards to employees is based on the grant date fair value, which utilizes the public share price of ARI, less discounts for transfer restrictions. The
awards granted to the Companys employees are remeasured each period to reflect the fair value of the asset and other liabilities and any changes in
these values are recorded in the consolidated statements of operations. For the years ended December 31, 2013, 2012, and 2011, $2.8 million, $2.3
million, and $2.9 million of management fees and $2.0 million, $1.5 million, and $1.3 million of compensation expense were recognized in the
consolidated statements of operations, respectively. The actual forfeiture rate for unvested ARI restricted stock awards and ARI RSUs was 2%, 1%,
and 7% for the years ended December 31, 2013, 2012, and 2011, respectively.
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The following table summarizes activity for the ARI restricted stock awards and ARI RSUs that were granted to both the Company and certain of its
employees for the years ended December 31, 2013, 2012, and 2011:
ARI
Restricted
Stock
Unvested
ARI RSUs
Unvested
Weighted
Average
Grant Date
Fair Value
ARI RSUs
Vested
Total
Number of
ARI RSUs
Outstanding
Balance at January
1, 2011
65,002
96,250 $
17.57
22,709
Granted to
employees of the
Company
203,337
14.34
Granted to the
Company
156,000
14.85
Forfeited by
employees of the
Company
(30,000)
14.85
Vested awards for

employees of the
Company
(50,833)
16.95
50,833
Vested awards of
the Company
(32,500)
18.48
Balance at
December 31, 2011
32,502
374,754
15.12
73,542
Granted to
employees of the
Company
20,000
15.17
Granted to the
Company
Forfeited by
employees of the
Company
(5,522)
14.09
Vested awards for

employees of the
Company
(99,690)
15.43
99,690
Vested awards of
the Company
(32,502)
(52,000)
16.25
52,000
Balance at
December 31, 2012
237,542
14.62
225,232
Granted to
employees of the
Company
205,000
16.58
Granted to the
Company
40,000
17.59
Forfeited by
employees of the
Company
(5,000)
16.66
Vested awards of
the employees of
the Company
(137,807)
15.48
137,807
Vested awards of
the Company
(65,333)
15.41
65,333
Balance at
December 31, 2013
274,402 $
15.86
428,372
Units Expected to VestAs of December 31, 2013, approximately 263,000 ARI RSUs were expected to vest over the next three years.
118,959
203,337
156,000
(30,000)
448,296
20,000
(5,522)
462,774
205,000
40,000
(5,000)
702,774
Restricted Stock Unit AwardsApollo Residential Mortgage, Inc.

AMTG restricted stock units (AMTG RSUs) granted to the Company and certain of the Companys employees generally vest over three years,
either quarterly or annually. The awards granted to the Company are accounted for as investments and deferred revenue in the consolidated
statements of financial condition. As these awards vest, the deferred revenue is recognized as management fees. The investment is accounted for
using the equity method of accounting for awards granted to the Company and as a deferred compensation asset for the awards granted to employees.
Compensation expense is recognized on a straight line- basis over the vesting period for the awards granted to the employees. The Company recorded
an asset and a liability upon receiving the awards on behalf of the Companys employees. The awards granted to the Companys employees are
remeasured each period to reflect the fair value of the asset and other liabilities and any changes in these values are recorded in the consolidated
statements of operations.
The fair value of the awards to employees is based on the grant date fair value, which utilizes the public share price of AMTG less discounts for
transfer restrictions and timing of distributions. For the years ended December 31, 2013, 2012, and 2011, $0.9 million, $0.2 million, and $0.1 million
of management fees were recognized in the consolidated statements of operations, respectively. For the years ended December 31, 2013, 2012, and
2011, $0.8 million, $0.1 million, and $0.0 million of compensation expense was recognized in the consolidated statements of operations, respectively.
The actual forfeiture rate for AMTG RSUs was 1% for the year ended December 31, 2013 and 0% for the years ended December 31, 2012 and 2011.
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The following table summarizes activity for the AMTG RSUs that were granted to both the Company and certain of its employees for the years ended
December 31, 2013, 2012, and 2011:
AMTG RSUs
Unvested
Weighted
Average
Grant Date
Fair Value
AMTG RSUs
Vested
Total
Number of
AMTG RSUs
Outstanding
2011
Granted to employees
of the Company
12,125
16.57
12,125
Granted to the
Company
18,750
18.20
18,750
Forfeited by employees
of the Company
Vested awards of the

employees of the
Company
(1,008)
16.57
1,008

Company
(1,562)
18.20
1,562
Balance at December
31, 2011
28,305
17.56
2,570
30,875
of the Company
143,244
20.62
143,244
Granted to the
Company
of the Company

employees of the
Company
(4,042)
16.57
4,042

Company
(6,250)
18.20
6,250
Balance at December
31, 2012
161,257
20.28
12,862
174,119
of the Company
25,848
14.73
25,848
of the Company
(2,359)
18.74
(2,359)
employees of the
Company
(51,259)
20.30
51,259

Company
(6,250)
18.20
6,250
Balance at December
31, 2013
127,237
$
19.28
70,371
197,608
Units Expected to VestAs of December 31, 2013, approximately 120,000 AMTG RSUs were expected to vest over three years.
Equity- Based Compensation Allocation
Equity- based compensation is allocated based on ownership interests. Therefore, the amortization of the AOG Units is allocated to shareholders
equity attributable to Apollo Global Management, LLC and the Non- Controlling Interests, which results in a difference in the amounts charged to
equitybased compensation expense and the amounts credited to shareholders equity attributable to Apollo Global Management, LLC in the
Companys consolidated financial statements.
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Below is a reconciliation of the equitybased compensation allocated to Apollo Global Management, LLC for the year ended December 31, 2013:
Total
Amount
AOG Units
$
RSUs and Share
Options
ARI Restricted Stock
Awards, ARI RSUs and
AMTG RSUs
AAA RDUs
Total Equity- Based
Compensation
$
Less ARI Restricted
Stock Awards, ARI
RSUs and AMTG
RSUs
Capital Increase
Related to EquityBased Compensation
30,007
Allocated to
NonControlling
Interest in
Apollo
Operating
Group(1)
NonControlling
Interest % in
Apollo
Operating
Group
61.0%
Allocated to
Apollo
Global
Management,
LLC
19,163
10,844
92,185
92,185
2,852
1,183
61.0
61.0
1,763
731
1,089
452
21,657
104,570
126,227
(2,494)
19,163
365
104,935
(1) Calculated based on average ownership percentage for the period considering Class A share issuances during the period.
Total
Amount
AOG Units
$
RSUs and Share
Options
Awards, ARI RSUs
and AMTG RSUs
AAA RDUs
Total Equity- Based
Compensation
$
Less ARI Restricted
Stock Awards, ARI
RSUs and AMTG
RSUs
Capital Increase
480,931
NonControlling
Interest % in
Apollo
Operating
Group
64.9%
Allocated to
NonControlling
Interest in
Apollo
Operating
Group(1)
$
Allocated to
Apollo
Global
Management,
LLC
313,856
167,075
115,013
115,013
1,674
1,036
64.9
64.9
1,093
676
581
360
315,625
283,029
598,654
(1,769)
313,856
(741)
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Allocated to
NonNonAllocated to
Controlling
Controlling
Apollo
Interest in
Interest % in
Global
Apollo
Apollo
Management,
Operating
Operating
Total
LLC
Group(1)
Group
Amount
AOG Units
$
1,032,762
65.9% $
696,361 $
336,401
RSUs and Share
Options
115,142
115,142
Awards, ARI RSUs
and AMTG RSUs
1,320
65.9
870
450
AAA RDUs
529
65.9
349
180
Total Equity- Based
Compensation
$
1,149,753
697,580
452,173
Less ARI Restricted
Stock Awards, ARI
RSUs and AMTG
RSUs
(1,219)
(630)
Capital Increase
$
696,361 $
451,543
17. RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED ENTITIES

The Company typically facilitates the initial payment of certain operating costs incurred by the funds that it manages as well as their affiliates. These
costs are normally reimbursed by such funds and are included in due from affiliates.
Due from affiliates and due to affiliates are comprised of the following:
As of
December 31,
2013
2012
Due from Affiliates:
Due from private equity funds
$
57,582
$
28,201
Due from portfolio companies
23,484
46,048
Due from credit funds(2)
216,750
68,278 (1)
Due from Contributing Partners,
employees and former employees
2,659
9,536
Due from real estate funds
12,119
17,950
Other
4,653
3,299
Total Due from Affiliates
$
317,247
$
173,312
Due to Affiliates:
Due to Managing Partners and
Contributing Partners in connection
with the tax receivable agreement
$
525,483
$
441,997
Due to private equity funds
825
12,761
Due to credit funds
1,773
19,926
Due to real estate funds
1,200
Distributions payable to employees
67,290
1,567
Total Due to Affiliates
$
595,371
$
477,451
(1) Reclassified to conform to current period presentation.
(2) Includes monitoring fee receivable as discussed in "Athene" below.
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Tax Receivable Agreement and Other
Subject to certain restrictions, each of the Managing Partners and Contributing Partners has the right to exchange their vested AOG Units for the
Companys Class A shares. Certain Apollo Operating Group entities have made an election under Section 754 of the U.S. Internal Revenue Code of
1986, as amended (the "Internal Revenue Code"), which will result in an adjustment to the tax basis of the assets owned by the Apollo Operating
Group at the time of the exchange. These exchanges will result in increases in tax deductions that will reduce the amount of tax that APO Corp. will
otherwise be required to pay in the future.
The tax receivable agreement provides for the payment to the Managing Partners and Contributing Partners of 85% of the amount of cash savings, if
any, in U.S. Federal, state, local and foreign income taxes that APO Corp. would realize as a result of the increases in tax basis of assets that resulted
from the 2007 Reorganization and the Secondary Offering. If the Company does not make the required annual payment on a timely basis as outlined
in the tax receivable agreement, interest is accrued on the balance until the payment date. These payments are expected to occur approximately over
the next 20 years. In connection with the amendment of the AMH partnership agreement in April of 2010, the tax receivable agreement was revised
to reflect the Managing Partners agreement to defer 25%, or $12.1 million, of the required payments pursuant to the tax receivable agreement that
are attributable to the 2010 fiscal year for a period of four years until 2015.
In April 2012, Apollo made a $5.8 million cash payment pursuant to the TRA resulting from the realized tax benefit for the 2011 tax year. Included in
the payment was approximately $1.2 million and approximately $0.1 million of interest paid to the Managing Partners and Contributing Partners,
respectively. In April 2013, Apollo made a $30.4 million cash payment pursuant to the tax receivable agreement resulting from the realized tax
benefit for the 2012 tax year. Included in the payment was approximately $7.6 million and approximately $0.3 million of interest paid to the
Managing Partners and Contributing Partners, respectively.
As disclosed in notes 1 and 13, on May 15, 2013, the Intermediate Holding Companies acquired approximately 8.8 million Class A shares of Apollo
Global Management, LLC, which were used to acquire an equal number of AOG Units from certain Managing Partners and Contributing Partners in
connection with the Secondary Offering. This exchange was taxable for U.S. federal income tax purposes, and resulted in APO Corp. recording a
U.S. federal income tax basis adjustment of approximately $145.7 million in the intangible assets in the Apollo Operating Group. Additionally, as
disclosed in note 13, in November 2013 there was an exchange of 2.3 million AOG Units for Class A shares. This exchange was taxable for U.S.
federal income tax purposes, and resulted in APO Corp. recording a U.S. federal income tax basis adjustment of approximately $97.4 million in the
intangible assets in the Apollo Operating Group.
Pursuant to the tax receivable agreement, the Managing Partners and Contributing Partners who exchanged AOG Units for Class A Shares in the
Secondary Offering will receive payment from APO Corp. of 85% of the amount of the actual cash tax savings, if any, in U.S. Federal, state, local
and foreign income tax that APO Corp. realizes as a result of these increases in tax deductions and tax basis, and certain other tax benefits, including
imputed interest expense. APO Corp. retains the benefit from the remaining 15% of actual cash tax savings. A $78.3 million and $48.7 million
liability relating to the May 2013 and November 2013 transactions, respectively, were recorded to estimate the amount of these future expected
payments to be made by APO Corp. to the Managing Partners and Contributing Partners pursuant to the tax receivable agreement.
In addition, the Company reduced the liability and recorded $13.0 million and $3.9 million in other income, net for the years ended December 31,
2013 and 2012, respectively, and increased the liability and recorded $(0.1) million in other income, net for the year ended 2011 in the consolidated
statement of operations due to changes in projected income estimates and in estimated tax rates. See note 13 for discussion of the Deferred Tax Asset.
Due from Contributing Partners, Employees and Former Employees
As of December 31, 2013 and 2012, due from Contributing Partners, Employees and Former Employee balances include various amounts due to the
Company including director fee receivables. The Company had also accrued $6.5 million as of December 31, 2012 from the Contributing Partners
and certain employees associated with a credit agreement with Fund VI as described below in Due to Private Equity Funds. As of December 31,
2013, this agreement was satisfied and as a result there was no longer a related amount accrued.
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Management Fee Waiver and Notional Investment Program
In 2012, Apollo had forgone a portion of management fee revenue that it would have been entitled to receive in cash from Fund VII and ANRP and
instead received profits interests and assigned these profits interests to employees and partners. The amount of management fees waived and related
compensation expense amounted to $6.2 million and $23.5 million for the years ended December 31, 2012 and 2011, respectively. The investment
period for Fund VII and ANRP for the management fee waiver plan was terminated as of December 31, 2012 and as a result there was no related
compensation expense for the year ended December 31, 2013.
Distributions
In addition to other distributions such as payments pursuant to the tax receivable agreement, the table below presents information regarding the
quarterly distributions which were made at the sole discretion of the manager of the Company during 2011, 2012 and 2013 (in millions, except per
share amounts):
Distribution
Declaration
Date
Distribution
per
Class A Share
Amount
Distribution
Payment Date
Distribution to
Non- Controlling
Interest Holders
in the Apollo
Operating Group
Distribution
to
Class A
Shareholders
Total
Distributions
from
Apollo Operating
Group
Distribution
Equivalents on
Participating
Securities
January 4,
January 14,
2011
$
0.17
2011
$
16.6 $
40.8
$
57.4 $
May 12,
2011
0.22
June 1, 2011
26.8
52.8
79.6
August 9,
August 29,
2011
0.24
2011
29.5
57.6
87.1
November
December 2,
3, 2011
0.20
2011
24.8
48.0
72.8
For the year
ended
December
31, 2011
$
0.83
$
97.7 $
199.2
$
296.9 $
February 10,
February 29,
2012
$
0.46
2012
$
58.1 $
110.4
$
168.5 $
April 13,
2012
April 13, 2012
11.0 (1)
11.0
May 8, 2012
0.25 May 30, 2012
31.6
60.0
91.6
August 2,
August 31,
2012
0.24
2012
31.2
57.6
88.8
November
November 30,
9, 2012
0.40
2012
52.0
96.0
148.0
For the year
ended
December
31, 2012
$
1.35
$
172.9 $
335.0
$
507.9 $
February 8,
February 28,
2013
$
1.05
2013
$
138.7 $
252.0
$
390.7 $
April 12,
2013
April 12, 2013
55.2 (1)
55.2
May 6, 2013
0.57 May 30, 2013
80.8
131.8
212.6
August 8,
August 30,
2013
1.32
2013
189.7
305.2
494.9
November
November 29,
7, 2013
1.01
2013
147.7
231.2
$
378.9 $
For the year
ended
December
31, 2013
$
3.95
$
556.9 $
975.4
$
1,532.3 $
(1) On April 12, 2013 and April 13, 2012, the Company made a $0.23 and a $0.05 distribution to the noncontrolling interest holders in the Apollo
Operating Group, respectively.
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3.3
4.7
5.1
4.3
17.4
10.3
6.2
5.3
9.4
31.2
25.0
14.3
30.8
24.1
94.2
Table of Contents
Indemnity
Carried interest income from certain funds that the Company manages can be distributed to us on a current basis, but is subject to repayment by the
subsidiary of the Apollo Operating Group that acts as general partner of the fund in the event that certain specified return thresholds are not ultimately
achieved. The Managing Partners, Contributing Partners and certain other investment professionals have personally guaranteed, subject to certain
limitations, the obligation of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited
to a particular Managing Partners or Contributing Partners distributions. An existing shareholders agreement includes clauses that indemnify each
of the Companys Managing Partners and certain Contributing Partners against all amounts that they pay pursuant to any of these personal guarantees
in favor of certain funds that the Company manages (including costs and expenses related to investigating the basis for or objecting to any claims
made in respect of the guarantees) for all interests that the Companys Managing Partners and Contributing Partners have contributed or sold to the
Apollo Operating Group.
Accordingly, in the event that the Companys Managing Partners, Contributing Partners and certain investment professionals are required to pay
amounts in connection with a general partner obligation for the return of previously made distributions, we will be obligated to reimburse the
Companys Managing Partners and certain Contributing Partners for the indemnifiable percentage of amounts that they are required to pay even
though we did not receive the certain distribution to which that general partner obligation related. There was no indemnification liability recorded as
of December 31, 2013 and 2012.
Athene
Athene Holding Ltd. is the ultimate parent of various insurance company operating subsidiaries. Through its subsidiaries, Athene Holding Ltd.
provides insurance products focused primarily on the retirement market and its business centers primarily on issuing or reinsuring fixed and equityindexed annuities.
On December 21, 2012, Athene Holding Ltd. entered into an agreement to acquire Aviva USA. On October 2, 2013, Athene Holding Ltd. closed its
acquisition of Aviva USA (the "Aviva USA Transaction"). Apollo had previously agreed to provide up to $100 million of capital support to Athene to
the extent such support was necessary in connection with the closing of the Aviva USA transaction. The Company's commitment was not called in
connection with the closing of the Aviva USA Transaction and as a result, the Company's commitment terminated upon the closing of the Aviva USA
Transaction.
AAA, through its investment in AAA Investments, owns the majority of the economic equity of Athene Holding Ltd. See the discussion of the AAA
Transaction in note 4.
Apollo, through its consolidated subsidiary, Athene Asset Management, L.P. ("Athene Asset Management"), provides asset management services to
December 31, 2013, all of Athenes assets were managed by Athene Asset Management.
Athene Asset Management receives a gross management fee equal to 0.40% per annum on all assets under management in accounts owned by or
related to Athene (the Athene Accounts), with certain limited exceptions. In addition, the Company receives sub- advisory management fees and
carried interest income with respect to a portion of the assets in the Athene Accounts. Athene Asset Management and other Apollo subsidiaries incur
all expenses associated with their provision of services to Athene, including but not limited to, asset allocation services, direct asset management
services, risk management, asset and liability matching management, mergers and acquisitions asset diligence, hedging and other services.
In connection with the AAA Transaction, a subsidiary of AAA Investments contributed three investment partnerships to Athene (the "Contributed
Partnerships"). The Contributed Partnerships pay a quarterly management fee and carried interest to Apollo with respect to the assets contributed in
the AAA Transaction. With respect to capital invested in an Apollo fund, Apollo receives management fees directly from the relevant funds under the
investment management agreements with such funds and not pursuant to the services agreement with the Contributed Partnerships. In addition,
carried interest is payable by the Contributed Partnerships with respect to each investment or group of investments (as specified in the particular
partnership agreement), at a rate of 20% of the profit of such investment or group of investments, subject to applicable hurdle rates. Each investment
or group of investments is treated separately for the purposes of calculating carried interest. The contributed assets also included certain investments
in funds managed by Apollo, carried interest on which is assessed at the fund level.
Under an amended services contract with Athene, effective February 5, 2013, Apollo earns a quarterly monitoring fee of 0.50% of Athenes capital
and surplus as of the end of the applicable quarter multiplied by 2.5, excluding the shares of Athene Holding Ltd. that were newly acquired (and not
in satisfaction of prior commitments to buy such shares) by AAA Investments in
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the AAA Transaction (the Excluded Athene Shares), at the end of each quarter through December 31, 2014, the termination date. This quarterly
monitoring fee is not applicable to the amount of invested capital attributable to the Excluded Athene Shares. All such monitoring fees are paid
pursuant to a derivative contract between Athene and Apollo. Each quarter, monitoring fees earned are translated into an accrued notional number of
shares of Athene Holding Ltd., and the accrued notional shares of Athene Holding Ltd. are fair valued. At Athenes option, all notional shares
accrued pursuant to the terms of the derivative contract are payable either in shares of Athene Holding Ltd. or cash equal to the fair value of such
shares of Athene Holding Ltd. at the time of settlement. Settlement occurs on the earlier of a change in control of Athene or October 31, 2017. For the
years ended December 31, 2013 and 2012, Apollo earned $107.9 million and $16.8 million, respectively, related to this monitoring fee, which is
recorded in advisory and transaction fees from affiliates, net, in the consolidated statements of operations. As of December 31, 2013, Apollo had a
$116.4 million receivable, which is accounted for as a derivative, recorded in due from affiliates on the consolidated statements of financial
condition.
In accordance with the services agreement among AAA, AAA Investments and the other service recipients party thereto and Apollo, Apollo receives
a management fee for managing the assets of AAA Investments. In connection with the consummation of the AAA Transaction, on October 31, 2012,
the services agreement was amended (the "Amended AAA Services Agreement"). Pursuant to the Amended AAA Services Agreement, the parties
agreed that there will be no management fees payable by AAA Investments with respect to the Excluded Athene Shares. AAA Investments will
continue to pay Apollo the same management fee on its investment in Athene (other than with respect to the Excluded Athene Shares), except that
Apollo agreed that the obligation to pay the existing management fee shall terminate on December 31, 2014 (although services will continue through
December 31, 2020). In the event that AAA makes a tender offer for all or substantially all of its units where the consideration is to be paid in shares
of Athene Holding Ltd. (or an alternative transaction that is no less favorable in all material respects to the AAA unitholders as a whole), the
management fee will be unwound and a lump sum payment will be made to Apollo equal to the remaining management fee that would have been due
until the expiration date (December 31, 2020), using an 8% discount rate and assuming a 14% growth rate to then existing management fees,
compounded annually, until the expiration date, subject to a cap of $30.0 million if the tender offer or similar transaction commences in 2013, $25.0
million if the tender offer or similar transaction commences in 2014, $20.0 million if the tender offer or similar transaction commences in 2015 and
zero if the tender offer or similar transaction commences in 2016 or thereafter. All such management fees are paid pursuant to a derivative contract
between AAA Investments and Apollo. Each quarter, management fees earned are translated into an accrued notional number of shares of Athene
Holding Ltd., and the accrued notional shares of Athene Holding Ltd. are fair valued. At the option of AAA Investments, all notional shares accrued
pursuant to the terms of the derivative contract are payable either in shares of Athene Holding Ltd. or cash equal to the fair value of such shares of
Athene Holding Ltd. at the time of settlement. Settlement occurs on the earlier of a change of control of Athene or October 31, 2017. As of
December 31, 2013 and 2012, Apollo had a receivable of $14.3 million and $2.1 million, respectively, related to the Amended AAA Services
Agreement, which is recorded in due from affiliates on the consolidated statements of financial condition. The total management fees earned by
Apollo related to the Amended AAA Services Agreement and the Contributed Partnerships for the years ended December 31, 2013 and 2012 were
$12.5 million (of which $2.2 million related to the derivative component, as described above) and $15.1 million (of which $0.6 million related to the
derivative component, as described above), respectively, which is recorded in management fees from affiliates in the consolidated statements of
operations.
In addition, Apollo, as general partner of AAA Investments, is generally entitled to a carried interest that allocates to it 20% of the realized returns
(net of related expenses, including borrowing costs) on the investments of AAA Investments, except that Apollo will not be entitled to receive any
carried interest in respect of the Excluded Athene Shares. Carried interest receivable from AAA Investments will be paid in shares of Athene Holding
Ltd. (valued at the then fair market value) if there is a distribution in kind of shares of Athene Holding Ltd., or paid in cash if AAA sells the shares of
Athene Holding Ltd. For the years ended December 31, 2013 and 2012, the Company recorded carried interest income less the related profit sharing
expense of $27.6 million and $35.3 million, respectively, from AAA Investments, which is recorded in the consolidated statements of operations. As
of December 31, 2013 and 2012, the Company had a $100.9 million and a $69.0 million carried interest receivable, respectively, related to AAA
Investments. As of December 31, 2013 and 2012, the Company had a related profit sharing payable of $28.8 million and $25.5 million, respectively,
recorded in profit sharing payable in the consolidated statements of financial condition.
For the years ended December 31, 2013 and 2012, Apollo earned revenues in the aggregate totaling $435.1 million and $164.7 million consisting of
management fees, sub- advisory and monitoring fees and carried interest income, respectively, from Athene after considering the related profit
sharing expense and changes in the market value of the Athene- related derivatives discussed above, which is recorded in the consolidated statement
of operations.
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The amended services contract with Athene and Athene Life Re Ltd and the Amended AAA Services Agreement together with related derivative
contracts issued pursuant to these amended contracts, meet the definition of a derivative under U.S. GAAP. The Company has classified these
derivatives as Level III assets in the fair value hierarchy, as the pricing inputs into the determination of fair value require significant judgment and
estimation. The value of these derivatives is determined by multiplying the Athene share equivalents by the estimated price per share of Athene. See
note 6 for further discussion regarding fair value measurements.
The change in unrealized market value of these derivatives is reflected in other income, net in the consolidated statements of operations. For the year
ended December 31, 2013, there were $10.2 million of changes in market value recognized related to these derivatives.
Due to Private Equity Funds
On June 30, 2008, the Company entered into a credit agreement with Fund VI, pursuant to which, in July 2008, Fund VI advanced $18.9 million of
cash that was otherwise distributable to the Company as carried interest pursuant to the Fund VI limited partnership agreement. As of March 10,
2011, $8.0 million of the loan principal was settled and as of August 31, 2013, the remaining principal balance of $10.9 million was settled. Based on
a rate of 3.45%, cumulative interest on the loan was $2.4 million.
Due to Credit Funds
In connection with the acquisition of Gulf Stream Asset Management, LLC during October 2011, the Company agreed to make payments to the
former owners of Gulf Stream under a contingent consideration obligation which required the Company to transfer cash to the former owners of Gulf
Stream based on a specified percentage of incentive fee revenue. Additionally, the Company deferred a payment obligation to the former owners.
This obligation was $3.9 million at the date of acquisition and was paid in December 2012. The contingent consideration liability had a fair value of
$14.1 million as of December 31, 2013 and 2012. As of December 31, 2013 and 2012, the former owner was no longer an employee of Apollo and
therefore the contingent consideration was reported within profit sharing payable in the consolidated statements of financial condition.
Similar to the private equity funds, certain credit funds allocate carried interest income to the Company. Assuming SOMA and APC liquidated on
December 31, 2012, the Company had accrued a liability to SOMA and APC of $19.3 million, and $0.3 million, respectively, in connection with the
potential general partner obligation to return previously distributed carried interest income from SOMA and APC. These amounts reversed during the
year ended December 31, 2013; as such there was no general partner obligation accrued as of December 31, 2013.
Due to Real Estate Funds
In connection with the acquisition of Citi Property Investors ("CPI") on November 12, 2010, Apollo had a contingent liability to Citigroup Inc. based
on a specified percentage of future earnings from the CPI business. From the date of acquisition through December 31, 2012, the estimated fair value
of the contingent liability was $1.2 million, which was determined based on discounted cash flows from the date of acquisition through December 31,
2012 using a discount rate of 7%. On March 28, 2013, Apollo satisfied the contingent liability in cash in the amount of approximately $0.5 million,
which equaled a percentage of net realized after tax profits from the closing date through December 31, 2012. The satisfaction of the liability resulted
in the Company recognizing $0.7 million of other income, net in the Companys consolidated statements of operations for the year ended December
31, 2013. No remaining obligation existed at December 31, 2013.
Regulated Entities
Apollo Global Securities, LLC (AGS) is a registered broker dealer with the United States Securities and Exchange Commission ("SEC") and is a
member of the Financial Industry Regulatory Authority, subject to the minimum net capital requirements of the SEC. AGS was in compliance with
these requirements at December 31, 2013. From time to time, this entity is involved in transactions with affiliates of Apollo, including portfolio
companies of the funds we manage, whereby AGS earns underwriting and transaction fees for its services. Apollo Management International LLP,
based in London, is subject to the capital requirements of the U.K. Financial Conduct Authority. This entity has continuously operated in excess of
these regulatory capital requirements.
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All of the investment advisors of the Apollo funds are registered as investment advisors, either directly or as a "relying advisor" with the SEC.
Registered investment advisors are subject to the requirements and regulations of the Investment Advisers Act of 1940, as amended.
Apollo Management Singapore Ptc Ltd. was granted a Capital Markets Service License with the Monetary Authority of Singapore in October 2013.
In addition, Apollo Capital Management is registered with the Securities and Exchange Board of India as a foreign institutional investor.
Underwriting Fee Paid for ARI
During 2009, the Company incurred $8.0 million in underwriting expenses for the benefit of ARI, which may be repaid to the Company if during any
period of four consecutive calendar quarters during the sixteen full calendar quarters after the consummation of ARIs IPO on September 29, 2009,
ARIs core earnings, as defined in the corresponding management agreement, for any such four- quarter period exceeds an 8% performance hurdle
rate. During the second quarter of 2011, the core earnings had exceeded the hurdle rate and the Company recorded $8.0 million of other income in the
consolidated statement of operations.
Interests in Consolidated Entities
The table below presents equity interests in Apollos consolidated, but not wholly- owned, subsidiaries and funds.
Net income attributable to Non- Controlling Interests consisted of the following:
For the
Year Ended
December 31,
2013
2012
2011
(in thousands)
AAA(1)
$
(331,504) $
(278,454) $
123,400
Interest in management
companies and a coinvestment vehicle(2)
(18,872)
(7,307)
(12,146)
Other consolidated entities
43,357
50,956
(13,958)
Net (income) loss
(307,019)
(234,805)
97,296
Capital(3)
(149,934)
(1,816,676)
(202,235)
Net (income) loss
attributable to NonControlling Interests in the
(1,257,650)
(685,357)
940,312
Net (Income) Loss
attributable to NonControlling Interests
$
(1,714,603) $
(2,736,838) $
835,373
Capital(4)
149,934
1,816,676
202,235
Other Comprehensive
Income attributable to NonControlling Interests
(41)
(2,010)
(5,106)
Comprehensive (Income)
Loss Attributable to NonControlling Interests
$
(1,564,710) $
(922,172) $
1,032,502
(1)
Reflects the Non- Controlling Interests in the net (income) loss of AAA and is calculated based on the Non- Controlling Interests
ownership percentage in AAA, which was approximately 97.4% during the year ended December 31, 2013, approximately 97.3% during
the year ended December 31, 2012, and approximately 97.6% during the year ended December 31, 2011. As of December 31, 2013, 2012
and 2011, Apollo owned approximately 2.6%, 2.7% and 2.4% of AAA, respectively.
(2) Reflects the remaining interest held by certain individuals who receive an allocation of income from certain of our credit management companies.
(3)
Reflects net income of the consolidated CLOs classified as VIEs. Includes the bargain purchase gain from the Stone Tower acquisition of
$1,951.1 million for the year ended December 31, 2012 and the bargain purchase gain from the Gulf Stream acquisition of $0.8 million and
$195.4 million for the years ended December 31, 2012 and 2011, respectively.
(4)
Appropriated Partners Capital is included in total Apollo Global Management, LLC shareholders equity and is therefore not a
component of comprehensive (income) loss attributable to Non- Controlling Interests on the consolidated statements of comprehensive
income (loss).
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18. COMMITMENTS AND CONTINGENCIES
Financial GuaranteesApollo has provided financial guarantees on behalf of certain employees for the benefit of unrelated third- party lenders in
connection with their capital commitment to certain funds managed by the Company. As of December 31, 2013, the maximum exposure relating to
these financial guarantees approximated $0.3 million. Apollo has historically not incurred any liabilities as a result of these agreements and does not
expect to in the future. Accordingly, no liability has been recorded in the accompanying consolidated financial statements.
Investment CommitmentsAs a limited partner, general partner and manager of the Apollo private equity, credit and real estate funds, Apollo has
unfunded capital commitments as of December 31, 2013, and 2012 of $843.7 million and $258.3 million, respectively.
Apollo has an ongoing obligation to acquire additional common units of AAA in an amount equal to 25% of the aggregate after- tax cash
distributions, if any, that are made by AAA to Apollo's affiliates pursuant to the carried interest distribution rights that are applicable to investments
made through AAA Investments.
On December 21, 2012, the Company agreed to provide up to $100 million of capital support to Athene to the extent such support was necessary in
connection with Athenes then pending acquisition of Aviva USA. The Company's commitment was not called in connection with the closing of the
Aviva USA Transaction and as a result, the Company's commitment terminated upon the closing of the Aviva USA Transaction on October 2, 2013.
a limited partnership (the "KBCD Partnership"), a wholly- owned subsidiary of which has agreed to acquire a minority stake in KBC Bank
Deutschland AG, the German subsidiary of Belgian KBC Group NV (and certain third party purchasers agreed to acquire, in aggregate, all of the
other shares in KBC Bank Deutschland AG). The aforementioned indirect subsidiary of Apollo Global Management, LLC is the general partner of
the KBCD Partnership. The limited partners in the KBCD Partnership are managed by subsidiaries of Apollo Global Management, LLC. The
acquisition is subject to antitrust and regulatory approval, which is expected to take approximately nine months. Consequently, there is no assurance
that the acquisition will close.
Debt CovenantsApollos debt obligations contain various customary loan covenants. As of December 31, 2013, the Company was not aware of
any instances of noncompliance with the financial covenants contained in the 2013 AMH Credit Facilities.
Litigation and ContingenciesApollo is, from time to time, party to various legal actions arising in the ordinary course of business including
claims and litigations, reviews, investigations or proceedings by governmental and self regulatory agencies regarding its business.
In March 2012, plaintiffs filed two putative class actions, captioned Kelm v. Chase Bank (No. 12- cv- 332) and Miller v. 1- 800- Flowers.com, Inc.
(No. 12- cv- 396), in the District of Connecticut on behalf of a class of consumers alleging online fraud. The defendants included, among others,
Trilegiant Corporation, Inc. (Trilegiant), its parent company, Affinion Group, LLC (Affinion), and Apollo Global Management, LLC (AGM),
which is affiliated with funds that are the beneficial owners of 68% of Affinions common stock. In both cases, plaintiffs allege that Trilegiant, aided
by its business partners, who include e- merchants and credit card companies, developed a set of business practices intended to create consumer
confusion and ultimately defraud consumers into unknowingly paying fees to clubs for unwanted services. Plaintiffs allege that AGM is a proper
defendant because of its indirect stock ownership and ability to appoint the majority of Affinions board. The complaints assert claims under the
Racketeer Influenced Corrupt Organizations Act; the Electronic Communications Privacy Act; the Connecticut Unfair Trade Practices Act; and the
California Business and Professional Code, and seek, among other things, restitution or disgorgement, injunctive relief, compensatory, treble and
punitive damages, and attorneys fees. The allegations in Kelm and Miller are substantially similar to those in Schnabel v. Trilegiant Corp. (No. 3:10cv- 957), a putative class action filed in the District of Connecticut in 2010 that names only Trilegiant and Affinion as defendants. The court has
consolidated the Kelm, Miller, and Schnabel cases under the caption In re: Trilegiant Corporation, Inc. and ordered that they proceed on the same
schedule. On June 18, 2012, the court appointed lead plaintiffs counsel, and on September 7, 2012, plaintiffs filed their consolidated amended
complaint (CAC), which alleges the same causes of action against AGM as did the complaints in the Kelm and Miller cases. Defendants filed
motions to dismiss on December 7, 2012, plaintiffs filed opposition papers on February 7, 2013, and defendants filed replies on April 5, 2013. On
December 5, 2012, plaintiffs filed another putative class action, captioned Frank v. Trilegiant Corp. (No. 12- cv- 1721), in the District of Connecticut,
naming the same defendants and containing allegations substantially similar to those in
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the CAC. On January 23, 2013, plaintiffs moved to transfer and consolidate Frank into In re: Trilegiant. On June 13, 2013, the Court extended all
defendants deadlines to respond to the Frank complaint until 21 days after a ruling on the motion to transfer and consolidate. On July 24, 2013 the
Frank court transferred the case to Judge Bryant, who is presiding over In re: Trilegiant, but the cases have not yet been consolidated. On September
25, 2013, the Court held oral argument on Defendants motions to dismiss. AGM believes that plaintiffs claims against it in these cases are without
merit. For this reason, and because the claims against AGM are in their early stages, no reasonable estimate of possible loss, if any, can be made at
this time.
Various state attorneys general and federal and state agencies have initiated industry- wide investigations into the use of placement agents in
connection with the solicitation of investments, particularly with respect to investments by public pension funds. Certain affiliates of Apollo have
received subpoenas and other requests for information from various government regulatory agencies and investors in Apollo's funds, seeking
information regarding the use of placement agents. CalPERS, one of our Strategic Investors, announced on October 14, 2009, that it had initiated a
special review of placement agents and related issues. The Report of the CalPERS Special Review was issued on March 14, 2011. That report does
not allege any wrongdoing on the part of Apollo or its affiliates. Apollo is continuing to cooperate with all such investigations and other reviews. In
addition, on May 6, 2010, the California Attorney General filed a civil complaint against Alfred Villalobos and his company, Arvco Capital Research,
LLC ("Arvco") (a placement agent that Apollo has used) and Federico Buenrostro Jr., the former CEO of CalPERS, alleging conduct in violation of
certain California laws in connection with CalPERS's purchase of securities in various funds managed by Apollo and another asset manager. Apollo
is not a party to the civil lawsuit and the lawsuit does not allege any misconduct on the part of Apollo. Likewise, on April 23, 2012, the United States
Securities and Exchange Commission filed a lawsuit alleging securities fraud on the part of Arvco, as well as Messrs. Buenrostro and Villalobos, in
connection with their activities concerning certain CalPERS investments in funds managed by Apollo. This lawsuit also does not allege wrongdoing
on the part of Apollo, and in fact alleges that Apollo was defrauded by Arvco, Villalobos, and Buenrostro. Finally, on March 14, 2013, the United
States Department of Justice unsealed an indictment against Messrs. Villalobos and Buenrostro alleging, among other crimes, fraud in connection
with those same activities; again, Apollo is not accused of any wrongdoing and in fact is alleged to have been defrauded by the defendants.
Additionally, on April 15, 2013, Mr. Villalobos, Arvco and related entities (the "Arvco Debtors") brought a civil action in the United States
Bankruptcy Court for the District of Nevada against Apollo. This action alleges that Arvco served as a placement agent for Apollo in connection
with several funds associated with Apollo, and seek to recover purported fees they claim Apollo has not paid them for a portion of Arvco's placement
agent services. In addition, the Arvco Debtors allege that Apollo has interfered with the Arvco Debtors' commercial relationships with third parties,
purportedly causing the Arvco Debtors to lose business and to incur fees and expenses in the defense of various investigations and litigations. The
Arvco Debtors also seek compensation from Apollo for these alleged lost profits and fees and expenses. The Arvco Debtors' complaint asserts
various theories of recovery under the Bankruptcy Code and the common law. Apollo denies the merit of all of the Arvco Debtors' claims and will
vigorously contest them. The Bankruptcy Court has stayed the civil action until April 2014. For these reasons, no estimate of possible loss, if any,
can be made at this time.
On July 9, 2012, Apollo was served with a subpoena by the New York Attorney Generals Office regarding Apollos fee waiver program. The
subpoena is part of what we understand to be an industry- wide investigation by the New York Attorney General into the tax implications of the fee
waiver program implemented by numerous private equity and hedge funds. Under the fee waiver program, individual fund managers for certain
Apollo- managed funds prospectively elected to waive their management fees. Program participants received an interest in the future profits, if any,
that would be earned on the invested amounts representing waived fees. They receive such profits from time to time in the ordinary course when
distributions are made generally, as provided for in the applicable fund governing documents and waiver agreements. Four Apollo funds implemented
the program, but the investment period for all funds was terminated as of December 31, 2012. Apollo believes its fee waiver program complies with
all applicable laws, and is cooperating with the investigation.
On May 19, 2013, Apollo was served with a subpoena by the New York State Department of Financial Services (the DFS) regarding its
investments in any annuity or life businesses, or annuity contracts or life policies. The subpoena is part of what we understand to be an industry- wide
investigation by the DFS into investments by financial institutions in annuity and life insurance companies. Apollo is cooperating with the
investigation.
Although the ultimate outcome of these matters cannot be ascertained at this time, Apollo is of the opinion, after consultation with counsel, that the
resolution of any such matters to which it is a party at this time will not have a material adverse effect on the consolidated financial statements. Legal
actions material to Apollo could, however, arise in the future.
CommitmentsApollo leases office space and certain office equipment under various lease and sublease arrangements, which expire on various
dates through 2024. As these leases expire, it can be expected that in the normal course of
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business, they will be renewed or replaced. Certain lease agreements contain renewal options, rent escalation provisions based on certain costs
incurred by the landlord or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and
inducements provided by the landlord, if any, on a straightline basis over the lease term and renewal periods where applicable. Apollo has entered
into various operating lease service agreements in respect of certain assets.
As of December 31, 2013, the approximate aggregate minimum future payments required for operating leases were as follows:
2014
2015
2016
2017
2018
Thereafter
Total
Aggregate
minimum
future
payments
$
38,649 $
38,246 $
36,946 $
35,020 $
31,416 $
53,138 $
233,415
Expenses related to non- cancellable contractual obligations for premises, equipment, auto and other assets were $42.0 million, $41.2 million, $38.3
million for the years ended December 31, 2013, 2012, and 2011, respectively.
Other Long- term ObligationsThese obligations relate to payments on management service agreements related to certain assets and payments
with respect to certain consulting agreements entered into by Apollo Investment Consulting LLC, a subsidiary of Apollo. A significant portion of
these costs are reimbursable by funds or portfolio companies. As of December 31, 2013, fixed and determinable payments due in connection with
these obligations are as follows:
2014
Other longterm
obligations
2015
6,447
2016
929
2017
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2018
Thereafter
Total
7,376
Table of Contents
Contingent ObligationsCarried interest income with respect to private equity funds and certain credit and real estate funds is subject to reversal in
the event of future losses to the extent of the cumulative carried interest recognized in income to date. If all of the existing investments became
worthless, the amount of cumulative revenues that have been recognized by Apollo through December 31, 2013 and that would be reversed
approximates $4.9 billion. Management views the possibility of all of the investments becoming worthless as remote. Carried interest income is
affected by changes in the fair values of the underlying investments in the funds that Apollo manages. Valuations, on an unrealized basis, can be
significantly affected by a variety of external factors including, but not limited to, bond yields and industry trading multiples. Movements in these
items can affect valuations quarter to quarter even if the underlying business fundamentals remain stable. The table below indicates the potential
future reversal of carried interest income:
Fund VII
$
2,197,158
Fund VI
1,495,767
Fund V
81,218
Fund IV
7,647
AAA/Other
228,909
Total Private Equity Funds
4,010,699
Credit Funds:
445,465
Structured Credit
63,429
European Credit Funds
73,800
Non- Performing Loans
189,113
60,874
Total Credit Funds
832,681
Real Estate Funds:
CPI Funds
4,755
5,631
Other
4,831
Total Real Estate Funds
15,217
Total
$
4,858,597
Additionally, at the end of the life of certain funds that the Company manages, there could be a payment due to a fund by the Company if the
Company, as general partner, has received more carried interest income than was ultimately earned. The general partner obligation amount, if any,
will depend on final realized values of investments at the end of the life of each fund. As discussed in note 17, as of December 31, 2013 the Company
has reversed the general partner obligations to return previously distributed carried interest income of $19.3 million and $0.3 million relating to
SOMA and APC, respectively.
Certain funds may not generate carried interest income as a result of unrealized and realized losses that are recognized in the current and prior
reporting period. In certain cases, carried interest income will not be generated until additional unrealized and realized gains occur. Any appreciation
would first cover the deductions for invested capital, unreturned organizational expenses, operating expenses, management fees and priority returns
based on the terms of the respective fund agreements.
One of the Companys subsidiaries, AGS, provides underwriting commitments in connection with security offerings to the portfolio companies of the
funds we manage. As of December 31, 2013, there were no underwriting commitments outstanding related to such offerings.
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In connection with the acquisition of Stone Tower in April 2012, the Company agreed to pay the former owners of Stone Tower a specified
percentage of any future carried interest income earned from certain of the Stone Tower funds, CLOs, and strategic investment accounts. This
contingent consideration liability had an acquisition date fair value of $117.7 million, which was determined based on the present value of estimated
future carried interest payments, and is recorded in profit sharing payable in the consolidated statements of financial condition. The fair value of the
contingent obligation was $121.4 million and $126.9 million as of December 31, 2013 and 2012, respectively, and was recorded in profit sharing
payable in the consolidated statements of financial condition.
In connection with the Gulf Stream acquisition, the Company agreed to make payments to the former owners of Gulf Stream under a contingent
consideration obligation which required the Company to transfer cash to the former owners of Gulf Stream based on a specified percentage of carried
interest income. The contingent liability had a fair value of $14.1 million and $14.1 million as of December 31, 2013 and 2012, respectively, which
was recorded in profit sharing payable in the consolidated statements of financial condition.
In connection with the acquisition of CPI on November 12, 2010, Apollo had a contingent liability to Citigroup Inc. based on a specified percentage
of future earnings. From the date of acquisition through December 31, 2012, the estimated fair value of the contingent liability was $1.2 million,
which was determined based on discounted cash flows from the date of acquisition through December 31, 2012 using a discount rate of 7%. On
March 28, 2013, Apollo satisfied the contingent liability in cash in the amount of approximately $0.5 million, which equaled 25% of the net realized
after tax profit from the closing date through December 31, 2012. The satisfaction of the liability resulted in the Company recognizing $0.7 million of
other income, net in the Companys consolidated statements of operations, for the year ended December 31, 2013. No remaining contingency existed
at December 31, 2013.
The contingent consideration obligations will be remeasured to fair value at each reporting period until the obligations are satisfied. The changes in
the fair value of the contingent consideration obligations will be reflected in profit sharing expense in the consolidated statements of operations.
During the one year measurement period, any changes resulting from facts and circumstances that existed as of the acquisition date will be reflected
as a retrospective adjustment to the bargain purchase gain and the respective asset acquired or liability assumed.
The contingent consideration obligations are measured at fair value and are characterized as Level III liabilities. See note 6 for further information
regarding fair value measurements.
19. MARKET AND CREDIT RISK
In the normal course of business, Apollo encounters market and credit risk concentrations. Market risk reflects changes in the value of investments
due to changes in interest rates, credit spreads or other market factors. Credit risk includes the risk of default on Apollos investments, where the
counterparty is unable or unwilling to make required or expected payments.
The Company is subject to a concentration risk related to the investors in its funds. As of December 31, 2013, there were more than 1,000 investors in
Apollos active private equity, credit and real estate funds, and no individual investor accounted for more than 10% of the total committed capital to
Apollos active funds.
Apollos derivative financial instruments contain credit risk to the extent that its counterparties may be unable to meet the terms of the agreements.
Apollo seeks to minimize this risk by limiting its counterparties to highly rated major financial institutions with good credit ratings. Management
does not expect any material losses as a result of default by other parties.
Substantially all amounts on deposit with major financial institutions that exceed insured limits are invested in interest- bearing accounts with U.S.
money center banks.
Apollo is exposed to economic risk concentrations insofar as Apollo is dependent on the ability of the funds that it manages to compensate it for the
services it provides to these funds. Further, the incentive income component of this compensation is based on the ability of such funds to generate
returns above certain specified thresholds.
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Additionally, Apollo is exposed to interest rate risk. Apollo has debt obligations that have variable rates. Interest rate changes may therefore affect the
amount of interest payments, future earnings and cash flows. At December 31, 2013 and 2012, $750.0 million and $737.8 million of Apollos debt
balance (excluding debt of the consolidated VIEs) had a variable interest rate, respectively.
20. SEGMENT REPORTING
Apollo conducts its management and incentive businesses primarily in the United States and substantially all of its revenues are generated
domestically. These businesses are conducted through the following three reportable segments:
Private Equityprimarily invests in control equity and related debt instruments, convertible securities and distressed debt
investments;
Creditprimarily invests in non- control corporate and structured debt instruments; and
Real Estateprimarily invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating
These business segments are differentiated based on the varying investment strategies. The performance is measured by management on an
unconsolidated basis because management makes operating decisions and assesses the performance of each of Apollos business segments based on
financial and operating metrics and data that exclude the effects of consolidation of any of the affiliated funds.
The Companys financial results vary since carried interest, which generally constitutes a large portion of the income from the funds that Apollo
manages, as well as the transaction and advisory fees that the Company receives, can vary significantly from quarter to quarter and year to year. As a
result, the Company emphasizes longterm financial growth and profitability to manage its business.
The tables below present the financial data for Apollos reportable segments further separated between the management business and incentive
business as of December 31, 2013, 2012, and 2011 and for the years ended December 31, 2013, 2012, 2011, respectively, which management
believes is useful to the reader. The Companys management business has fairly stable revenues and expenses except for transaction fees, while its
incentive business is more volatile and can have significant fluctuations as it is affected by changes in the fair value of investments due to market
performance. The financial results of the management entities, as reflected in the management business section of the segment tables that follow,
generally include management fee revenues, advisory and transaction fees and expenses exclusive of profit sharing expense. The financial results of
the advisory entities, as reflected in the incentive business sections of the segment tables that follow, generally include carried interest income,
investment income and profit sharing expense.
During the second quarter of 2013, monitoring fees based on Athene's capital and surplus and the change in the market value of the derivative
contracts related to Athene's capital and surplus recorded in advisory and transaction fees from affiliates, net, as disclosed in note 17 to the
consolidated financial statements, were reclassified from the private equity segment to the credit segment to better evaluate the performance of
Apollo's private equity and credit segments in making key operating decisions. Reclassifications have been made to the prior period financial data for
Apollo's reportable segments to conform to the current presentation. The impact of this reclassification on the Companys Economic Net Income
(ENI) for the private equity and credit segment is reflected in the table below for the years ended December 31, 2012 and 2011:
Impact of Reclassification on Economic Net (Loss) Income
Private Equity Segment
Credit Segment
$(16,787)
$16,787
(8,768)
8,768
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During the fourth quarter of 2013, certain reclassifications were made to prior period financial data within salary, bonus and benefits and profit
sharing expense to conform to the current presentation. The impact of these reclassifications on management business ENI and incentive business
ENI is reflected in the table below for Apollos three reportable segments for the years ended December 31, 2012 and 2011.
Impact of Reclassification on Management
Business Economic Net Income (Loss)
Private
Equity
Credit
Real Estate
Segment
Segment
Segment
$24,397
$(17,082)
$(7,315)
3,434
(2,081)
(1,353)
Impact of Reclassification on Incentive
Business Economic Net (Loss) Income
Private
Equity
Credit
Real Estate
Segment
Segment
Segment
$(24,397)
$17,082
$7,315
(3,434)
2,081
1,353
As it relates to the reclassifications described above, the impact to the combined segments Economic Net Income (Loss) for all periods presented was
zero.
ENI is a key performance measure used by management in evaluating the performance of Apollos private equity, credit and real estate segments.
Management also believes the components of ENI such as the amount of management fees, advisory and transaction fees and carried interest income
are indicative of the Companys performance. Management also uses ENI in making key operating decisions such as the following:
Decisions related to the allocation of resources such as staffing decisions including hiring and locations for deployment of the new hires;
Decisions related to capital deployment such as providing capital to facilitate growth for the business and/or to facilitate expansion into new
businesses; and
Decisions relating to expenses, such as determining annual discretionary bonuses and equitybased compensation awards to its employees.
With respect to compensation, management seeks to align the interests of certain professionals and selected other individuals with those of
the investors in such funds and those of the Companys shareholders by providing such individuals a profit sharing interest in the carried
interest income earned in relation to the funds. To achieve that objective, a certain amount of compensation is based on the Companys
performance and growth for the year.
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ENI is a measure of profitability and has certain limitations in that it does not take into account certain items included under U.S. GAAP. ENI
represents segment income (loss) attributable to Apollo Global Management, LLC, which excludes the impact of (i) noncash charges related to
RSUs granted in connection with the 2007 private placement and amortization of AOG Units, (ii) income tax expense, (iii) amortization of
intangibles associated with the 2007 Reorganization as well as acquisitions and (iv) Non- Controlling Interests excluding the remaining interest held
by certain individuals who receive an allocation of income from certain of our credit management companies. In addition, segment data excludes the
assets, liabilities and operating results of the funds and VIEs that are included in the consolidated financial statements.
The following table presents the financial data for Apollos reportable segments as of and for the year ended December 31, 2013:
As of and For the Year Ended
December 31, 2013
Real
Estate
Credit
Segment
Segment
Private
Equity
Segment
Revenues:
Advisory and
transaction fees
Management fees
from affiliates
Carried interest
income from
affiliates
Total Revenues
Expenses
Other Income
Non- Controlling
Interests
Economic Net
Income (Loss)
$
Total Assets
$
78,371
114,643
Total
Reportable
Segments
3,548
196,562
284,833
392,433
53,436
730,702
2,517,247
2,880,451
1,284,657
93,512
373,692
880,768
482,015
55,133
5,222
62,206
69,886
6,124
2,896,161
3,823,425
1,836,558
154,769
1,689,306
3,148,975
(13,985)
$
$
439,901
1,918,565
$
$
(13,985)
(1,556) $
145,996 $
2,127,651
5,213,536
The following table reconciles the total segments to Apollo Global Management, LLCs consolidated financial statements as of and for the year
ended December 31, 2013:
Total
Reportable
Segments
Revenues
$
Expenses
Other income
Non- Controlling
Interests
Economic Net
Income
$
Total Assets
$
3,823,425
1,836,558
154,769
As of and for the Year Ended

December 31, 2013
Consolidation
Adjustments
and Other
(89,854)
105,157
534,938
(13,985)
2,127,651
5,213,536
Consolidated
(1)
(2)
(3)
(1,700,618)
(5)
N/A
17,264,445
(1)
3,733,571
1,941,715
689,707
(1,714,603)
(6)
N/A
22,477,981
Represents advisory, management fees and carried interest income earned from consolidated VIEs which are eliminated in
consolidation.
(2)
Represents the addition of expenses of consolidated funds and the consolidated VIEs and expenses related to RSUs granted in connection
with the 2007 private placement and equitybased compensation expense comprising amortization of AOG Units and amortization of
intangible assets.
(3) Results from the following:
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For the Year Ended
December 31, 2013
Net gains from investment activities
$
Net gains from investment activities of consolidated variable
interest entities
Loss from equity method investments(4)
Other Income, net
Total Consolidation Adjustments
$
342,828
199,742
(5,860)
(1,772)
534,938
(4) Included is $(4,888) reflecting remaining interest of certain individuals who receive an allocation of income from a private equity coinvestment
vehicle.
(5)
The reconciliation of Economic Net Income to Net Income Attributable to Apollo Global Management, LLC reported in the consolidated
statements of operations consists of the following:
For the Year Ended
December 31, 2013
Economic Net Income
$
2,127,651
(107,569)
Net income attributable to Non- Controlling Interests in Apollo
Operating Group
(1,257,650)
Non- cash charges related to equitybased compensation(7)
(59,847)
Amortization of intangible assets
(43,194)
659,391
(6) Represents the addition of assets of consolidated funds and the consolidated VIEs.
(7) Includes impact of noncash charges related to amortization of AOG Units and RSU Plan Grants made in connection with the 2007 private
placement as discussed in note 16 to our consolidated financial statements.
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The following tables present additional financial data for Apollos reportable segments for the year ended December 31, 2013:
For the Year Ended
December 31, 2013
Private Equity
Credit
Management
Incentive
Total
Management
Incentive
Revenues:
Advisory and
transaction
fees from
affiliates, net $
78,371 $
$
78,371 $
114,643 $
$
Management
fees from
affiliates
284,833
284,833
392,433
Carried
interest
income (loss)
from affiliates:
Unrealized
gains
(losses)(1)
454,722
454,722
(56,568)
Realized gains
2,062,525
2,062,525
36,922
393,338
Total
Revenues
363,204
2,517,247
2,880,451
543,998
336,770
Compensation
and benefits(2)
141,728
1,030,404
1,172,132
177,223
142,728
Other
expenses(3)
112,525
112,525
162,064
Total
Expenses
254,253
1,030,404
1,284,657
339,287
142,728
Other Income
13,006
80,506
93,512
28,540
26,593
NonControlling
Interests
(13,985)
Economic Net
Income
$
121,957 $
1,567,349 $
1,689,306 $
219,266 $
220,635 $
(1)
Total
114,643
392,433
(56,568)
430,260
880,768
319,951
162,064
482,015
55,133
(13,985)
439,901
Included in unrealized carried interest income from affiliates for the year ended December 31, 2013 was reversal of $19.3 million and $0.3
million of the entire general partner obligation to return previously distributed carried interest income with respect to SOMA and APC,
respectively. The general partner obligation is recognized based upon a hypothetical liquidation of the funds net assets as of the reporting
date. The actual determination and any required payment of a general partner obligation would not take place until the final disposition of a
funds investments based on the contractual termination of the fund.
(2) Compensation and benefits include equitybased compensation expense related to the management business for RSUs (excluding RSUs granted in
connection with the 2007 private placement) and share options.
(3) Other expenses exclude amortization of intangibles associated with the 2007 Reorganization as well as acquisitions.
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For the Year Ended
December 31, 2013
Real Estate
Incentive
Management
Revenues:
$
affiliates
affiliates:
Unrealized gains
Realized gains
Total Revenues
Compensation and benefits(1)
Other expenses(2)
Total Expenses
Other Income
Economic Net (Loss) Income $
3,548
53,436
56,984
42,143
27,620
69,763
2,402
(10,377)
Total
4,681
541
5,222
123
123
3,722
8,821
3,548
53,436
4,681
541
62,206
42,266
27,620
69,886
6,124
(1,556)
(1) Compensation and benefits include equitybased compensation expense related to the management business for RSUs (excluding RSUs granted in
connection with the 2007 private placement) and share options.
(2) Other expenses exclude amortization of intangibles associated with the 2007 Reorganization as well as acquisitions.
December 31, 2012
Private
Real
Total
Equity
Credit
Estate
Reportable
Segment(1)
Segment(1)
Segment
Segments
Revenues:
Advisory and
transaction fees
121,744 $
27,551 $
749 $
150,044
Management fees
from affiliates
277,048
299,667
46,326
623,041
Carried interest
income from
affiliates
1,667,535
518,852
15,074
2,201,461
Total Revenues
2,066,327
846,070
62,149
2,974,546
Expenses
945,466
454,378
72,437
1,472,281
Other Income
78,691
59,966
2,253
140,910
Non- Controlling
Interests
(8,730)
(8,730)
Economic Net
Income (Loss)
$
1,199,552 $
442,928 $
(8,035) $
1,634,445
Total Assets
$
2,583,373 $
1,798,086 $
76,851 $
4,458,310
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The following table reconciles the total reportable segments to Apollo Global Management, LLCs financial statements as of and for the year ended
December 31, 2012:
Total
Reportable
Segments
Revenues
$
Expenses
Other income
Non- Controlling
Interests
Economic Net
Income
$
Total Assets
$
2,974,546
1,472,281
140,910

December 31, 2012
Consolidation
Adjustments
and Other
(114,581)
575,564
2,160,175
(8,730)
1,634,445
4,458,310
Consolidated
(1)
(2)
(3)
(2,728,108)
(5)
N/A
16,178,548
2,859,965
2,047,845
2,301,085
(2,736,838)
(6)
N/A
20,636,858
(1)
consolidation.
(2) Represents the addition of expenses of consolidated funds and the consolidated VIEs and expenses related to RSUs granted in connection with the
2007 private placement and equitybased compensation expense comprising of amortization of AOG Units and amortization of intangible assets.
For the Year Ended
December 31, 2012
Net gains from investment activities
$
289,386
Net losses from investment activities of consolidated
(71,704)
Loss from equity method investments(4)
(10,947)
Other income and interest income
1,543
Gain on acquisition
1,951,897
$
2,160,175
(4)
Included is $1,423, reflecting remaining interest of certain individuals who receive an allocation of income from a private equity coinvestment vehicle.
(5)
For the Year Ended
December 31, 2012
Economic Net Income
$
1,634,445
(65,410)
Net income attributable to Non- Controlling Interests in Apollo
Operating Group
(685,357)
(529,712)
(43,009)
310,957
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For the Year Ended
December 31, 2012
Private Equity(1)
Incentive
Management
Revenues:
Advisory and
transaction
fees from
affiliates, net $
Management
fees from
affiliates
Carried
interest
income from
affiliates:
Unrealized
gains(2)
Realized gains
Total
Revenues
Compensation
and benefits(3)
Other
expenses(4)
Total
Expenses
Other Income
NonControlling
Interests
Economic Net
Income
$
Total
Management
Total
121,744 $
121,744 $
277,048
277,048
299,667
299,667
854,919
812,616
854,919
812,616
37,842
301,077
179,933
301,077
217,775
398,792
1,667,535
2,066,327
365,060
481,010
846,070
135,281
726,874
862,155
166,883
138,444
305,327
83,311
83,311
149,051
149,051
218,592
4,653
726,874
74,038
945,466
78,691
315,934
15,008
138,444
44,958
454,378
59,966
184,853 $
1,014,699 $
1,199,552 $
27,551 $
Credit(1)
Incentive
(8,730)
55,404 $
387,524 $
27,551
(8,730)
442,928

(2)
Included in unrealized carried interest income from affiliates for December 31, 2012 was a reversal of $75.3 million of the entire general
partner obligation to return previously distributed carried interest income with respect to Fund VI and reversal of previously recognized
realized carried interest income due to the general partner obligation to return previously distributed carried interest income of $1.2 million
and $0.3 million with respect to SOMA and APC, respectively. The general partner obligation is recognized based upon a hypothetical
liquidation of the funds' net assets as of December 31, 2012. The actual determination and any required payment of a general partner
obligation would not take place until the final disposition of a fund's investments based on the contractual termination of the fund.
(3) Compensation and benefits includes equitybased compensation expense related to the management business for RSUs (excluding RSUs granted
in connection with the 2007 private placement) and share options.
(4) Other expenses excludes amortization of intangibles associated with the 2007 Reorganization as well as acquisitions.
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For the Year Ended
December 31, 2012
Real Estate
Incentive
Management
Revenues:
$
affiliates
affiliates:
Unrealized gains
Realized gains
Total Revenues
Other expenses(2)
Total Expenses
Other Income
749
46,326
47,075
41,352
24,270
65,622
1,271
(17,276)
Total
10,401
4,673
15,074
6,815
6,815
982
9,241
749
46,326
10,401
4,673
62,149
48,167
24,270
72,437
2,253
(8,035)
December 31, 2011
Private
Real
Total
Equity
Credit
Estate
Reportable
Segment(1)
Segment(1)
Segment
Segments
Revenues:
Advisory and
transaction fees
58,145 $
23,467 $
698 $
82,310
Management fees
from affiliates
263,212
186,700
40,279
490,191
Carried interest
(loss) income
from affiliates
(449,208)
51,801
(397,407)
Total Revenues
(127,851)
261,968
40,977
175,094
Expenses
155,994
250,020
77,179
483,193
Other Income
15,041
(5,716)
10,420
19,745
Non- Controlling
Interests
(12,146)
(12,146)
Economic Net
Loss
$
(268,804) $
(5,914) $
(25,782) $
(300,500)
Total Assets
$
1,760,376 $
1,127,444 $
61,970 $
2,949,790
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The following table reconciles the total reportable segments to Apollo Global Management, LLCs financial statements as of and for the year ended
December 31, 2011:
Total
Reportable
Segments
Revenues
$
Expenses
Other income
Non- Controlling
Interests
Economic Net Loss $
Total Assets
$
175,094
483,193
19,745
(12,146)
(300,500)
2,949,790

December 31, 2011
Consolidation
Adjustments
and Other
(3,462)
1,099,257
98,803
847,519
N/A
5,026,083
(4)
Consolidated
(1)
(2)
(3)
(5)
171,632
1,582,450
118,548
835,373
N/A
7,975,873
(1)
consolidation.
(2) Represents the addition of expenses of consolidated funds and the consolidated VIEs and expenses related to RSUs granted in connection with the
2007 private placement and equitybased compensation expense comprising of amortization of AOG Units and amortization of intangible assets.
Net losses from investment activities
$
(123,946)
Net gains from investment activities of consolidated
24,201
Gain from equity method investments
3,094
Gain on acquisition
195,454
$
98,803
(4)
Economic Net Loss
$
(300,500)
(11,929)
Net loss attributable to Non- Controlling Interests in Apollo
Operating Group
940,312
(1,081,581)
(15,128)
Net Loss Attributable to Apollo Global Management, LLC
$
(468,826)
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Private Equity(1)
Incentive
Management
Revenues:
Advisory and
transaction
fees from
affiliates, net $
Management
fees from
affiliates
Carried
interest
income (loss)
from affiliates:
Unrealized
losses(2)
Realized gains
Total
Revenues
Compensation
and benefits(3)
Other
expenses(4)
Total
Expenses
Other Income
(Loss)
NonControlling
Interests
Economic Net
Income (Loss) $
58,145 $
263,212
Total
Management
58,145 $
263,212
23,467 $
186,700
Credit(1)
Incentive
Total
23,467
186,700
(1,019,748)
570,540
(1,019,748)
570,540
44,540
(66,852)
74,113
(66,852)
118,653
321,357
(449,208)
(127,851)
254,707
7,261
261,968
153,489
(96,833)
56,656
118,263
36,762
155,025
99,338
94,995
94,995
(96,833)
155,994
213,258
36,762
250,020
7,081
7,960
15,041
(1,978)
(12,146)
99,338
252,827
75,611 $
(344,415) $
(268,804) $
27,325 $
(3,738)
(33,239) $
(5,716)
(12,146)
(5,914)

(2) Included in unrealized carried interest (loss) income from affiliates for the year ended December 31, 2011 was a reversal of previously recognized
realized carried interest income due to the general partner obligation to return previously distributed carried interest income of $75.3 million and
$18.1 million with respect to Fund VI and SOMA, respectively. The general partner obligation is recognized based upon a hypothetical liquidation
of the funds' net assets as of December 31, 2011. The actual determination and any required payment of a general partner obligation would not
take place until the final disposition of a fund's investments based on the contractual termination of the fund.
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Table of Contents
Management
Revenues:
$
affiliates
Total Revenues
Other expenses(2)
Total Expenses
Other Income

Real Estate
Incentive
698
40,279
40,977
47,516
29,663
77,179
9,694
(26,508)
726
726
Total
698
40,279
40,977
47,516
29,663
77,179
10,420
(25,782)
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Table of Contents
21. SUBSEQUENT EVENTS

On February 7, 2014, the Company declared a cash distribution of $1.08 per Class A share, which was paid on February 26, 2014 to holders of record
on February 19, 2014.
On January 15, 2014, the Company issued 138,241 Class A shares in settlement of vested RSUs. This issuance did not cause a material change to the
Company's ownership interest in the Apollo Operating Group.
On February 11, 2014, the Company issued 2,531,098 Class A shares in settlement of vested RSUs and vested options that were exercised. This
issuance caused the Company's ownership interest in the Apollo Operation Group to increase from 39.0% to 39.4%.
On February 26, 2014, the Company issued 2,530 Class A shares in settlement of the exercise of vested options. This issuance did not cause a
material change to the Company's ownership interest in the Apollo Operating Group.
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Table of Contents
22. QUARTERLY FINANCIAL DATA (UNAUDITED)
Revenues
Expenses
Other Income (Loss)
Income Before Provision for Taxes
Net Income
Income attributable to Apollo Global Management, LLC
Net Income per Class A Share - Basic
Net Income per Class A Share - Diluted
$
$
$
$
$
Revenues
Expenses
Other Income
Income Before Provision for Taxes
Net Income
Income (Loss) attributable to Apollo Global Management, LLC
Net Income (Loss) per Class A Share- Basic
Net Income (Loss) per Class A Share - Diluted
Revenues
Expenses
Other Income (Loss)
Income (Loss) Before Provision for Taxes
Net Income (Loss)
Income (Loss) attributable to Apollo Global Management, LLC
Net Income (Loss) per Class A Share- Basic
Net Income (Loss) per Class A Share - Diluted
$
$
$
$
$
$
$
$
$
$
March 31,
2013
1,309,073
622,602
132,173
818,644
800,065
248,978
1.60
1.59
$
$
$
$
$
March 31,
2012
776,743
523,230
192,188
445,701
431,141
98,043
0.66
0.66
March 31,
2011
696,342
641,581
205,164
259,925
251,105
38,156
0.33
0.33
- 241-
$
$
$
$
$
$
$
$
$
$
For the Three Months Ended

June 30,
September 30,
2013
2013
497,261 $
1,132,089
322,787
600,115
(8,165)
210,820
166,309 $
742,794
148,170 $
695,590
58,737 $
192,516
0.32 $
1.13
0.32 $
1.13
December 31, 2013

$
795,148
396,211
354,879
$
753,816
$
730,169
$
159,160
$
0.94
$
0.93

June 30,
September 30,
2012
2012
211,628 $
712,373
316,962
520,008
1,950,461
27,348
1,845,127 $
219,713
1,834,477 $
197,796
(41,386) $
82,791
(0.38) $
0.55
(0.38) $
0.55
December 31, 2012

$
1,159,221
687,645
131,088
$
602,664
$
584,381
$
171,509
$
1.12
$
1.12

June 30,
September 30,
2011
2011
308,876 $
(1,479,580)
480,006
(158,100)
70,035
(442,310)
(101,095) $
(1,763,790)
(104,645) $
(1,743,943)
(50,989) $
(466,926)
(0.46) $
(3.86)
(0.46) $
(3.86)
December 31, 2011

$
645,994
618,963
285,659
$
312,690
$
293,284
$
10,933
$
0.05
$
0.05
Table of Contents
ITEM 8A. UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS
OF FINANCIAL CONDITION

CONSOLIDATING STATEMENTS OF FINANCIAL CONDITION (Unaudited)
December 31, 2013
Apollo Global Management,
LLC and Consolidated
Consolidated
Subsidiaries
Funds and VIE's Eliminations
Assets:
Cash and cash equivalents held at Consolidated Funds
Restricted cash
Investments
Assets of consolidated variable interest entities
Other assets
Due from Affiliates
Fixed assets, net
Deferred tax assets
Other assets
Goodwill
Total Assets
Liabilities and Shareholders' Equity
Liabilities:
Deferred revenue
Due to affiliates
Debt
Liabilities of consolidated variable interest entities:
Debt, at fair value
Other liabilities
Due to affiliates
Other Liabilities
Total Liabilities
Stockholders' Equity:
Apollo Global Management, LLC shareholders' equity:
Accumulated deficit
Appropriated partners' capital
Accumulated other comprehensive income (loss)
Total Apollo Global Management, LLC shareholders' equity
Non- Controlling Interests in Consolidated Entities
Non- Controlling Interests in Apollo Operating Group
Total Stockholders' Equity
Total Liabilities and Shareholders' Equity
1,078,120
9,199
509,712
2,366,766
323,177
40,251
660,199
42,333
88,852
94,927
5,213,536
1,417
1,971,654
1,095,170
14,127,480
280,718
1,837
17,478,276
37,880
41,711
279,479
594,518
992,240
750,000
279
853
60,647
2,756,475
12,424,839
609,413
81,272
2,627
13,119,283
2,624,113
(1,587,536)
33,774
1,070,351
4,987
1,381,723
2,457,061
5,213,536
1,971,682
1,620,928
3,592,610
766,383
4,358,993
17,478,276
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(87,483)
(1,118)
(79,691)
(5,930)
(39,609)
(213,831)
Consolidated
$
(877)
(4,350)
(81,272)
(86,499)
469
(1,952,633)
(39,849)
(33,679)
(2,025,692)
1,898,360
(127,332)
(213,831)
1,078,120
1,417
9,199
2,393,883
1,095,170
14,126,362
280,718
2,287,075
317,247
40,251
660,199
44,170
49,243
94,927
22,477,981
38,159
41,711
279,479
595,371
992,240
750,000
12,423,962
605,063
63,274
15,789,259
2,624,582
(1,568,487)
1,581,079
95
2,637,269
2,669,730
1,381,723
6,688,722
22,477,981
Table of Contents
CONSOLIDATING STATEMENTS OF FINANCIAL CONDITION (Unaudited)
December 31, 2012
Apollo Global
Management, LLC Consolidated
and Consolidated Funds and
Subsidiaries
VIE's
Eliminations Consolidated
Assets:
$
Cash and cash equivalents held at Consolidated
Funds
Restricted cash
Investments
Assets of consolidated variable interest entities
Other assets
Due from Affiliates
Fixed assets, net
Deferred tax assets
Other assets
Goodwill
Total Assets
$
Liabilities and Shareholders' Equity
Liabilities:
Deferred revenue
Due to affiliates
Debt
Liabilities of consolidated variable interest entities:
Debt, at fair value
Other liabilities
Due to affiliates
Other Liabilities
Total Liabilities
$
Stockholders' Equity:
Apollo Global Management, LLC shareholders'
equity:
Accumulated deficit
Appropriated partners' capital
Accumulated other comprehensive income (loss)
Total Apollo Global Management, LLC
shareholders' equity
Non- Controlling Interests in Consolidated Entities
Non- Controlling Interests in Apollo Operating
Group
Total Stockholders' Equity
Total Liabilities and Shareholders' Equity
$
946,225 $
8,359
467,640
$
1,226
1,694,101
(23,645)
946,225
1,226
8,359
2,138,096
1,682,696
1,682,696
12,692,508
(2,973)
12,689,535
299,978
299,978
2,004,310
(126,054)
1,878,256
180,188
(6,876)
173,312
53,452
53,452
542,208
542,208
32,844
3,921
36,765
85,228
(36,334)
48,894
137,856
137,856
4,458,310 $ 16,374,430 $ (195,882) $ 20,636,858
37,686
56,125
252,157
474,123
857,724
737,818
651
3,224
104
38,337
56,125
252,157
477,451
857,724
737,818
11,837,784
(2,829)
11,834,955
634,053
634,053
133,035
(133,035)
40,755
4,100
44,855
2,456,388 $ 12,612,847 $ (135,760) $ 14,933,475
3,041,845
(2,196,821)
7,053
852,077
6,492
1,691,502
1,801,838
1,489
(1,636,701)
(36,478)
(6,909)
3,043,334
(2,142,020)
1,765,360
144
3,493,340
268,243
(1,678,599)
1,618,477
2,666,818
1,893,212
1,143,353
1,143,353
2,001,922
3,761,583
(60,122)
5,703,383
4,458,310 $ 16,374,430 $ (195,882) $ 20,636,858
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures, as such term is defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act, that are
designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its
judgment in evaluating the cost- benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and
procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired objectives.
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures pursuant to Rule 13a- 15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and
procedures (as defined in Rule 13a- 15(e) under the Exchange Act) are effective at the reasonable assurance level to accomplish their objectives of
ensuring that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
Managements Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial
reporting is a process designed by, or under the supervision of, its principal executive and principal financial officers, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in
accordance with accounting principles generally accepted in the United States of America.
The internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect transactions and disposition of assets; provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made
only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the companys assets that could have a material effect on its financial statements.
Management conducted an assessment of the effectiveness of Apollos internal control over financial reporting as of December 31, 2013 based on the
framework established in Internal Control- Integrated Framework issued by the Committee of Organizations of the Treadway Commission in 1992.
Based on this assessment, management has determined that Apollos internal control over financial reporting as of December 31, 2013 was effective.
No changes in our internal control over financial reporting (as such term is defined in Rules 13a- 15(f) and 15d- 15(f) under the Securities Exchange
Act) occurred during the fourth quarter of 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Our independent registered public accounting firm, Deloitte & Touche LLP, has issued its attestation report on our internal control over financial
reporting which is included in Item 8. Financial Statements and Supplementary Data.
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ITEM 9B. OTHER INFORMATION

None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table presents certain information concerning our board of directors and executive officers:
Name
Age
Position(s)
Leon Black
62
Chairman, Chief Executive Officer and Director
Joshua Harris
49
Senior Managing Director and Director
Marc Rowan
51
Marc Spilker
49
President
Martin Kelly
46
Chief Financial Officer
John Suydam
54
Chief Legal Officer and Chief Compliance Officer
James Zelter
51
Managing Director- Credit
Christopher Weidler
39
Chief Accounting Officer and Controller
Michael Ducey
65
Director
Paul Fribourg
59
Director
A.B. Krongard
77
Director
Pauline Richards
65
Director
Leon Black. Mr. Black is the Chairman of the board of directors and Chief Executive Officer of Apollo and a Managing Partner of Apollo
Management, L.P. In 1990, Mr. Black founded Apollo Management, L.P. and Lion Advisors, L.P. to manage investment capital on behalf of a group
of institutional investors, focusing on corporate restructuring, leveraged buyouts and taking minority positions in growth- oriented companies. From
1977 to 1990, Mr. Black worked at Drexel Burnham Lambert Incorporated, where he served as a Managing Director, head of the Mergers &
Acquisitions Group, and co- head of the Corporate Finance Department. Mr. Black also serves on the board of directors of the general partner of
AAA and previously served on the board of directors of Sirius XM Radio Inc. Mr. Black is a trustee of The Museum of Modern Art, The Mount Sinai
Medical Center, The Metropolitan Museum of Art, and The Asia Society. He is also a member of The Council on Foreign Relations and The
Partnership for New York City. He is also a member of the boards of directors of FasterCures and the Port Authority Task Force. Mr. Black
graduated summa cum laude from Dartmouth College in 1973 with a major in Philosophy and History and received an MBA from Harvard Business
School in 1975. Mr. Black has significant experience making and managing private equity investments on behalf of Apollo and has over 34 years
experience financing, analyzing and investing in public and private companies. In his prior positions with Drexel and in his positions at Apollo,
Mr. Black is responsible for leading and overseeing teams of professionals. His extensive experience allows Mr. Black to provide insight into various
aspects of Apollos business and is of significant value to the board of directors.
Joshua Harris. Mr. Harris is a Senior Managing Director and a member of the board of directors of Apollo and a Managing Partner of Apollo
Management, L.P., which he co- founded in 1990. Prior to 1990, Mr. Harris was a member of the Mergers and Acquisitions group of Drexel
Burnham Lambert Incorporated. Mr. Harris currently serves on the board of directors of Berry Plastics Group Inc. Mr. Harris has previously served
on the board of directors of EPE Acquisition, LLC and the holding company for Alcan Engineered Products, LyondellBasell Industries B.V., CEVA
Logistics, Momentive Performance Materials Holdings LLC, Verso Paper Corp., Metals USA, Inc., Nalco Corporation, Allied Waste Industries, Inc.,
Pacer International, Inc., General Nutrition Centers, Inc., Furniture Brands International Inc., Compass Minerals International, Inc., Alliance Imaging,
Inc., NRT Inc., Covalence Specialty Materials Corp., United Agri Products, Inc., Quality Distribution, Inc., Whitmire Distribution Corp. and Noranda
Aluminum Holding Corporation. Mr. Harris is the Managing Partner of the Philadelphia 76ers and the Managing Member of the New Jersey Devils.
Mr. Harris is also actively involved in charitable and political organizations. He is a member of The Federal Reserve Bank of New York Investors
Advisory Committee on Financial Markets and a member of the Corporate Affairs Committee of the Council on Foreign Relations. Mr. Harris serves
as Chairman of the Department of Medicine Advisory Board for The Mount Sinai Medical Center and is on the Board of Trustees of the Mount Sinai
Medical Center and the Board of Trustees for the United States Olympic Committee. He is a member of The University of Pennsylvania's Wharton
Undergraduate Executive Board and is on the Board of Trustees for the Field School, the Allen- Stevenson School and the Harvard Business School.
Mr. Harris
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graduated summa cum laude and Beta Gamma Sigma from the University of Pennsylvanias Wharton School of Business with a BS in Economics
and received his MBA from the Harvard Business School, where he graduated as a Baker and Loeb Scholar. Mr. Harris has significant experience in
making and managing private equity investments on behalf of Apollo and has over 24 years experience in financing, analyzing and investing in
public and private companies. Mr. Harriss extensive knowledge of Apollos business and experience in a variety of senior leadership roles enhance
the breadth of experience of the board of directors.
Marc Rowan. Mr. Rowan is a Senior Managing Director and member of the board of directors of Apollo and a Managing Partner of Apollo
Management, L.P., which he co- founded in 1990. Prior to 1990, Mr. Rowan was a member of the Mergers & Acquisitions Group of Drexel Burnham
Lambert Incorporated, with responsibilities in high yield financing, transaction idea generation and merger structure negotiation. Mr. Rowan
currently serves on the boards of directors of the general partner of AAA, Athene Holding Ltd, Athene Life Re Ltd., Caesars Entertainment
Corporation and Norwegian Cruise Lines. He has previously served on the boards of directors of AMC Entertainment, Inc., Cablecom GmbH,
Culligan Water Technologies, Inc., Countrywide Holdings Limited, Furniture Brands International Inc., Mobile Satellite Ventures, LLC, National
Cinemedia, Inc., National Financial Partners, Inc., New World Communications, Inc., Quality Distribution, Inc., Samsonite Corporation, SkyTerra
Communications Inc., Unity Media SCA, Vail Resorts, Inc. and Wyndham International, Inc. Mr. Rowan is also active in charitable activities. He is a
founding member and Chairman of the Youth Renewal Fund and is a member of the boards of directors of the National Jewish Outreach Program,
Inc., the Undergraduate Executive Board of the University of Pennsylvanias Wharton School of Business and the New York City Police Foundation.
Mr. Rowan graduated summa cum laude from the University of Pennsylvanias Wharton School of Business with a BS and an MBA in Finance. Mr.
Rowan has significant experience making and managing private equity investments on behalf of Apollo and has over 26 years experience financing,
analyzing and investing in public and private companies. Mr. Rowans extensive financial background and expertise in private equity investments
enhance the breadth of experience of the board of directors.
Marc Spilker. Mr. Spilker joined Apollo as President in 2010 and sits on the firms Executive Committee. Mr. Spilker retired from Goldman Sachs
in May 2010 following a 20- year career with the firm. He more recently served as the co- head of Goldman Sachs Investment Management Division
(IMD) and was also a member of the firm- wide Management Committee. Mr. Spilker joined IMD in 2006 as head of Global Alternative Asset
Management and became chief operating officer in 2007. Prior to that, Mr. Spilker was responsible for Goldman Sachs U.S. Equities Trading and
Global Equity Derivatives and was head of Fixed Income, Currency and Commodities in Japan from 1997 to 2000. He was named partner in 1996.
Mr. Spilker is a member of the University of Pennsylvanias Wharton Undergraduate Executive Board, is on the board of directors of The New 42nd
Street, Inc., is the Founder of Third Ways Capital Markets Initiative and chairs the RFK Leadership Council at the Robert F. Kennedy Center for
Justice & Human Rights. Mr. Spilker is also a board member of the Samuel Bronfman Department of Medicine Advisory Board at Mount Sinai
School of Medicine, and an Advisory Board member for Mount Sinais Institute for Genomics and Multiscale Biology. He previously had been a
member of the Google Investment Advisory Committee, the American Stock Exchange and the Chicago Mercantile Exchange, and had served on the
Boards of the Philadelphia Stock Exchange, the Stone and Bridge Street funds, BrokerTec and Bondbook, LLC. Mr. Spilker graduated with a B.S. in
Economics from the Wharton School of the University of Pennsylvania.
Martin Kelly. Mr. Kelly joined Apollo as Chief Financial Officer in 2012. Prior to that time, Mr. Kelly was a Managing Director at Barclays and
served as the Chief Financial Officer of Barclays Americas division since 2009 and also served as the Global Head of Financial Control for
Barclays Corporate and Investment Bank since 2011. From September 2008 to March 2009, Mr. Kelly served in a variety of senior finance roles at
Barclays. Prior to his tenure at Barclays, Mr. Kelly was employed in a variety of roles at Lehman Brothers since 2000, including serving as a
Managing Director and as Global Financial Controller from 2007 to 2008. From 2000 to 2007, Mr. Kelly provided accounting and regulatory
expertise to support the development and distribution of investment and financing products to corporate and financial institution clients. Prior to
joining Lehman Brothers in 2000, Mr. Kelly spent thirteen years with PricewaterhouseCoopers, where he served in the Financial Services Group in
New York from 1994 to 2000. He was appointed a partner of the firm in 1999. Mr. Kelly received a degree in Commerce, majoring in Finance and
Accounting, from the University of New South Wales in 1989.
John Suydam. Mr. Suydam joined Apollo in 2006 and serves as Apollos Chief Legal Officer and Chief Compliance Officer. From 2002 to 2006,
Mr. Suydam was a partner at OMelveny & Myers LLP where he served as head of Mergers and Acquisitions and co- head of the Corporate
Department. Prior to that time, Mr. Suydam served as Chairman of the law firm OSullivan, LLP which specialized in representing private equity
investors. Mr. Suydam serves on the boards of Environmental Solutions Worldwide, Inc. and New York University School of Law, and is a member
of the Department of Medicine Advisory Board of the Mount Sinai Medical Center. Mr. Suydam received his J.D. from New York University and
graduated magna cum laude with a B.A. in History from the State University of New York at Albany.
James Zelter. Mr. Zelter joined Apollo in 2006. Mr. Zelter is the Managing Director of Apollos credit business, Chief Executive Officer and
director of AINV. Prior to joining Apollo, Mr. Zelter was with Citigroup Inc. and its predecessor companies from 1994 to 2006. From 2003 to 2005,
Mr. Zelter was Chief Investment Officer of Citigroup Alternative Investments, and prior
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to that he was responsible for the firms Global High Yield franchise. Prior to joining Citigroup in 1994, Mr. Zelter was a High Yield Trader at
Goldman, Sachs & Co. Mr. Zelter has significant experience in global credit markets and has overseen the broad expansion of Apollos credit
platform. Mr. Zelter is a board member of DUMAC, the investment management company that oversees the Duke Endowment and Duke Foundation,
and is on the board of the Dalton School. Mr. Zelter has a degree in Economics from Duke University.
Christopher Weidler. Mr. Weidler joined Apollo in 2013. Prior to joining Apollo, Mr. Weidler was with Barclays, where he most recently served as
a Managing Director and the Financial Controller of the Americas. Since February 2005, Mr. Weidler served in a variety of leadership roles at
Barclays that included Global Head of U.S. GAAP Technical Accounting and Global Head of Financial Reporting and Legal Entity Control for the
Investment Bank. Prior to joining Barclays, Mr. Weidler spent eight years with PricewaterhouseCoopers LLP in the firm's New York Audit and
Assurance practice and in London in the firms Global Capital Markets Group. Mr. Weidler received a Bachelor of Science in Accounting from
Villanova University in 1997.
Paul Fribourg. Mr. Fribourg has served as an independent director of Apollo and as a member of the conflicts committee of our board of directors
since 2011. From 1997 to the present, Mr. Fribourg has served as Chairman and Chief Executive Officer of Continental Grain Company. Prior to
1997, Mr. Fribourg served in a variety of other roles at Continental Grain Company, including Merchandiser, Product Line Manager, Group President
and Chief Operating Officer. Mr. Fribourg serves on the boards of directors of Burger King Holdings, Inc., Loews Corporation, Castleton
Commodities International LLC and The Estee Lauder Companies, Inc. He also serves as a board member of the Rabobank International North
American Agribusiness Advisory Board, the Harvard Business School Board of Deans Advisors, the New York University Mitchell Jacobson
Leadership Program in Law and Business Advisory Board, the America- China Society, Endeavor Global Inc. and Teach For America- New York.
Mr. Fribourg is also a member of the Council on Foreign Relations, the Brown University Advisory Council on China, the International Business
Leaders Advisory Council for The Mayor of Shanghai. Mr. Fribourg graduated magna cum laude from Amherst College and completed the Advanced
Management Program at Harvard Business School. Mr. Fribourgs extensive corporate experience enhances the breadth of experience and
independence of the board of directors.
A.B. Krongard. Mr. Krongard has served as an independent director of Apollo and as a member of the audit committee of our board of directors
since 2011. From 2001 to 2004, Mr. Krongard served as Executive Director of the Central Intelligence Agency. From 1998 to 2001, Mr. Krongard
served as Counselor to the Director of Central Intelligence. Prior to 1998, Mr. Krongard served in various capacities at Alex Brown, Incorporated,
including serving as Chief Executive Officer beginning in 1991 and assuming additional duties as Chairman of the board of directors in 1994. Upon
the merger of Alex Brown, Incorporated with Bankers Trust Corporation in 1997, Mr. Krongard served as Vice- Chairman of the Board of Bankers
Trust Corporation and served in such capacity until joining the Central Intelligence Agency. Mr. Krongard serves as the Lead Director and audit
committee Chairman of Under Armour, Inc. and also serves as a board member of Iridium Communications Inc. Mr. Krongard graduated with honors
from Princeton University and received a J.D. from the University of Maryland School of Law, where he also graduated with honors. Mr. Krongard
also serves as the Vice Chairman of the Johns Hopkins Health System. Mr. Krongards comprehensive corporate background contributes to the range
of experience of the board of directors.
Pauline Richards. Ms. Richards has served as an independent director of Apollo and as Chairman of the audit committee of our board of directors
since 2011. From 2008 to the present, Ms. Richards served as Chief Operating Officer of Armour Group Holdings Limited. Prior to 2008, Ms.
Richards served as Director of Development of Saltus Grammar School from 2003 to 2008, as Chief Financial Officer of Lombard Odier Darier
Hentsch (Bermuda) Limited from 2001 to 2003, and as Treasurer of Gulf Stream Financial Limited from 1999 to 2000. Ms. Richards also served as a
member of the audit committee and chair of the corporate governance committee of the board of directors of Butterfield Bank and serves as a member
of the audit and compensation committees of the board of directors of Wyndham Worldwide. Ms. Richards also serves as the Treasurer of the board
of directors of PRIDE (Bermuda), a drug prevention organization. Ms. Richards graduated from Queens University, Ontario, Canada, with a BA in
psychology and has obtained certification as a Certified Management Accountant. Ms. Richards extensive finance experience and her service on the
boards of other public companies add significant value to the board of directors.
Michael Ducey. Mr. Ducey has served as an independent director of Apollo and a member of the audit committee and as Chairman of the conflicts
committee of our board of directors since 2011. Most recently, Mr. Ducey was with Compass Minerals International, Inc., from March 2002 to May
2006, where he served in a variety of roles, including as President, Chief Executive Officer and Director prior to his retirement in May 2006. Prior to
joining Compass Minerals International, Inc., Mr. Ducey worked for nearly 30 years at Borden Chemical, Inc., in various management, sales,
marketing, planning and commercial development positions, and ultimately as President, Chief Executive Officer and Director. Mr. Ducey is
currently a director of and serves as the Chairman of the audit committee of Verso Paper Holdings, Inc. He is also the Chairman of the compliance
and governance committee and the nominations committee of the board of directors of HaloSource, Inc. From September 2009 to December 2012,
Mr. Ducey was the non- executive Chairman of TPC Group, Inc. and served on the audit committee and the environmental health and safety
committee. From June 2006 to May 2008, Mr. Ducey served on the board of directors of and as a member of the governance and compensation
committee of the board of directors of UAP Holdings Corporation. Also, from July 2010 to May
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2011, Mr. Ducey was a member of the board of directors and served on the audit committee of Smurfit- Stone Container Corporation. Mr. Ducey
graduated from Otterbein University with a degree in Economics and an M.B.A. in finance from the University of Dayton. Mr. Duceys
comprehensive corporate background and his experience serving on various boards and committees add significant value to the board of directors.
Our Manager
Our operating agreement provides that so long as the Apollo Group beneficially owns at least 10% of the aggregate number of votes that may be cast
by holders of outstanding voting shares, our manager, which is owned and controlled by our Managing Partners, will manage all of our operations
and activities and will have discretion over significant corporate actions, such as the issuance of securities, payment of distributions, sales of assets,
making certain amendments to our operating agreement and other matters, and our board of directors will have no authority other than that which our
manager chooses to delegate to it. We refer to the Apollo Groups beneficial ownership of at least 10% of such voting power as the Apollo control
condition. For purposes of our operating agreement, the Apollo Group means (i) our manager and its affiliates, including their respective general
partners, members and limited partners, (ii) Holdings and its affiliates, including their respective general partners, members and limited partners, (iii)
with respect to each managing partner, such managing partner and such managing partners group (as defined in Section 13(d) of the Exchange
Act), (iv) any former or current investment professional of or other employee of an Apollo employer (as defined below) or the Apollo Operating
Group (or such other entity controlled by a member of the Apollo Operating Group), (v) any former or current executive officer of an Apollo
employer or the Apollo Operating Group (or such other entity controlled by a member of the Apollo Operating Group); and (vi) any former or current
director of an Apollo employer or the Apollo Operating Group (or such other entity controlled by a member of the Apollo Operating Group). With
respect to any person, Apollo employer means Apollo Global Management, LLC or such other entity controlled by Apollo Global Management,
LLC or its successor as may be such persons employer.
Decisions by our manager are made by its executive committee, which is composed of our three Managing Partners and our President, the latter of
which serves as a nonvoting member. Each Managing Partner will remain on the executive committee for so long as he is employed by us, provided
that Mr. Black, upon his retirement, may at his option remain on the executive committee until his death or disability or any commission of an act that
would constitute cause if Mr. Black had still been employed by us. Other than those actions that require unanimous consent, actions by the executive
committee are determined by majority vote of its voting members, except as to the following matters, as to which Mr. Black will have the right of
veto: (i) the designations of directors to our board, or (ii) a sale or other disposition of the Apollo Operating Group and/or its subsidiaries or any
portion thereof, through a merger, recapitalization, stock sale, asset sale or otherwise, to an unaffiliated third party (other than through an exchange of
Apollo Operating Group units and interests in our Class B share for Class A shares, transfers by a founder or a permitted transferee to another
permitted transferee, or the issuance of bona fide equity incentives to any of our non- founder employees) that constitutes (x) a direct or indirect sale
of a ratable interest (or substantially ratable interest) in each entity that constitutes the Apollo Operating Group or (y) a sale of all or substantially all
of the assets of Apollo. Exchanges of Apollo Operating Group units for Class A shares that are not pro rata among our Managing Partners or in which
each Managing Partner has the option not to participate are not subject to Mr. Blacks right of veto.
Subject to limited exceptions described in our operating agreement, our manager may not sell, exchange or otherwise dispose of all or substantially
all of our assets and those of our subsidiaries, taken as a whole, in a single transaction or a series of related transactions without the approval of
holders of a majority of the aggregate number of voting shares outstanding; provided, however, that this does not preclude or limit our managers
ability, in its sole discretion, to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of our assets and those of our
subsidiaries (including for the benefit of persons other than us or our subsidiaries, including affiliates of our manager).
We will reimburse our manager and its affiliates for all costs incurred in managing and operating us, and our operating agreement provides that our
manager will determine the expenses that are allocable to us. The agreement does not limit the amount of expenses for which we will reimburse our
manager and its affiliates.
Board Composition and Limited Powers of Our Board of Directors
For so long as the Apollo control condition is satisfied, our manager shall (i) nominate and elect all directors to our board of directors, (ii) set the
number of directors of our board of directors and (iii) fill any vacancies on our board of directors. After the Apollo control condition is no longer
satisfied, each of our directors will be elected by the vote of a plurality of our shares entitled to vote, voting as a single class, to serve until his or her
successor is duly elected or appointed and qualified or until his or her earlier death, retirement, disqualification, resignation or removal. Our board
currently consists of seven members. For so long as the Apollo control condition is satisfied, our manager may remove any director, with or without
cause, at anytime. After such condition is no longer satisfied, a director or the entire board of directors may be removed by the affirmative vote of
holders of 50% or more of the total voting power of our shares.
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As noted, so long as the Apollo control condition is satisfied, our manager will manage all of our operations and activities, and our board of directors
will have no authority other than that which our manager chooses to delegate to it. In the event that the Apollo control condition is not satisfied, our
board of directors will manage all of our operations and activities.
Pursuant to a delegation of authority from our manager, which may be revoked, our board of directors has established and at all times will maintain
audit and conflicts committees of the board of directors that have the responsibilities described below under - Committees of the Board of DirectorsAudit Committee and - Committees of the Board of Directors- Conflicts Committee.
Where action is required or permitted to be taken by our board of directors or a committee thereof, a majority of the directors or committee members
present at any meeting of our board of directors or any committee thereof at which there is a quorum shall be the act of our board or such committee,
as the case may be. Our board of directors or any committee thereof may also act by unanimous written consent.
Under the Agreement Among Managing Partners (as described under Item 13. Certain Relationships and Related TransactionsLenders Rights
AgreementAmendments to Managing Partner Transfer Restrictions), the vote of a majority of the independent members of our board of directors
will decide the following: (i) in the event that a vacancy exists on the executive committee of our manager and the remaining members of the
executive committee cannot agree on a replacement, the independent members of our board of directors shall select one of the two nominees to the
executive committee of our manager presented to them by the remaining members of such executive committee to fill the vacancy on such executive
committee and (ii) in the event that at any time after December 31, 2009, Mr. Black wishes to exercise his ability to cause (x) the direct or indirect
sale of a ratable interest (or substantially ratable interest) in each Apollo Operating Group entity, or (y) a sale of all or substantially all of our assets,
through a merger, recapitalization, stock sale, asset sale or otherwise, to an unaffiliated third party, the affirmative vote of the majority of the
independent members of our board of directors shall be required to approve such a transaction. We are not a party to the Agreement Among
Managing Partners, and neither we nor our shareholders (other than our Strategic Investors, as described under Item 13. Certain Relationships and
Related TransactionsLenders Rights AgreementAmendments to Managing Partner Transfer Restrictions) have any right to enforce the
provisions described above. Such provisions can be amended or waived upon agreement of our Managing Partners at any time.
Committees of the Board of Directors
We have established an audit committee as well as a conflicts committee. Our audit committee has adopted a charter that complies with current SEC
and NYSE rules relating to corporate governance matters. Our board of directors may from time to time establish other committees of our board of
directors.
Audit Committee
The primary purpose of our audit committee is to assist our manager in overseeing and monitoring (i) the quality and integrity of our financial
statements, (ii) our compliance with legal and regulatory requirements, (iii) our independent registered public accounting firms qualifications and
independence and (iv) the performance of our independent registered public accounting firm.
The current members of our audit committee are Messrs. Ducey, Krongard and Ms. Richards. Ms. Richards currently serves as Chairman of the
committee. Each of the members of our audit committee meets the independence standards and financial literacy requirements for service on an audit
committee of a board of directors pursuant to the Exchange Act and NYSE rules applicable to audit committees and corporate governance.
Furthermore, our manager has determined that Ms. Richards is an audit committee financial expert within the meaning of Item 407(d)(5) of
Regulation S- K. Our audit committee has a charter which is available at the Investor Relations section of our Internet website at www.agm.com.
Conflicts Committee
The current members of our conflicts committee are Messrs. Ducey and Fribourg. Mr. Ducey currently serves as Chairman of the committee. The
purpose of the conflicts committee is to review specific matters that our manager believes may involve conflicts of interest. The conflicts committee
will determine whether the resolution of any conflict of interest submitted to it is fair and reasonable to us. Any matters approved by the conflicts
committee will be conclusively deemed to be fair and reasonable to us and not a breach by us of any duties that we may owe to our shareholders. In
addition, the conflicts committee may review and approve any related person transactions, other than those that are approved pursuant to our related
person policy, as described under Item 13. Certain Relationships and Related Party TransactionsStatement of Policy Regarding Transactions with
Related Persons, and may establish guidelines or rules to cover specific categories of transactions.
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Code of Business Conduct and Ethics
We have a Code of Business Conduct and Ethics, which applies to, among others, our principal executive officer, principal financial officer and
principal accounting officer. A copy of our Code of Business Conduct and Ethics is available on our Internet website at www.agm.com under the
Investor Relations section. We intend to disclose any amendment to or waiver of the Code of Business Conduct and Ethics on behalf of an
executive officer or director either on our Internet website or in an 8- K filing.
Corporate Governance Guidelines
We have Corporate Governance Guidelines that address significant issues of corporate governance and set forth procedures by which our manager
and board of directors carry out their respective responsibilities. The guidelines are available for viewing on our website at www.agm.com under the
Investor Relations section. We will also provide the guidelines, free of charge, to shareholders who request them. Requests should be directed to
our Secretary at Apollo Global Management, LLC, 9 West 57th Street, 43rd Floor, New York, New York 10019.
Communications with the Board of Directors
A shareholder or other interested party who wishes to communicate with our directors, a committee of our board of directors, our independent
directors as a group or our board of directors generally may do so in writing. Any such communications may be sent to our board of directors by U.S.
mail or overnight delivery and should be directed to our Secretary at Apollo Global Management, LLC, 9 West 57th Street, 43rd Floor, New York,
New York 10019, who will forward them to the intended recipient(s). Any such communications may be made anonymously. Unsolicited
advertisements, invitations to conferences or promotional materials, in the discretion of our Secretary, are not required, however, to be forwarded to
the directors.
Executive Sessions of Independent Directors
The independent directors serving on our board of directors meet periodically in executive sessions during the year at regularly scheduled meetings of
our board of directors. These executive sessions will be presided over by one of the independent directors serving on our board of directors selected
on an ad- hoc basis.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent of a registered class of
the Companys equity securities to file initial reports of ownership and reports of changes in ownership with the SEC and furnish us with copies of all
Section 16(a) forms they file. To our knowledge, based solely on our review of the copies of such reports furnished to us or written representations
from such persons that they were not required to file a Form 5 to report previously unreported ownership or changes in ownership, we believe that,
with respect to the fiscal year ended December 31, 2013, such persons complied with all such filing requirements.
ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis
Overview of Compensation Philosophy
Alignment of Interests with Investors and Shareholders. Our principal compensation philosophy is to align the interests of our Managing Partners,
Contributing Partners, and other senior professionals with those of our Class A shareholders and fund investors. This alignment, which we believe is
a key driver of our success, has been achieved principally by our Managing Partners, Contributing Partners, and other investment professionals
direct beneficial ownership of equity in our business in the form of AOG Units and Class A shares, their ownership of rights to receive a portion of
the incentive income earned from our funds, the direct investment by our investment professionals in our funds, and our practice of paying annual
incentive compensation partly in the form of equitybased grants that are subject to vesting. As a result of this alignment, the compensation of our
professionals is closely tied to the performance of our businesses.
Significant Personal Investment. Like our fund investors, certain of our investment professionals make significant personal investments in our
funds (as more fully described under Item 13. Certain Relationships and Related Party Transactions), directly or indirectly, and our professionals
who receive carried interests in our funds are generally required to invest their own capital in the funds they manage in amounts that are generally
proportionate to the size of their participation in incentive income. We believe that these investments help to ensure that our professionals have
capital at risk and reinforce the linkage between the success of the funds we manage, the success of the Company and the compensation paid to our
professionals.
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Long- Term Performance and Commitment. Most of our professionals have been issued RSUs, which provide rights to receive Class A shares and
distributions on those shares. In connection with his hiring in 2010, our president was granted options to acquire Class A shares that vest over six
years. The vesting requirements and minimum retained ownership requirements for these awards contribute to our professionals focus on longterm
performance while enhancing retention of these professionals.
Discouragement of Excessive Risk- Taking. Although investments in alternative assets can pose risks, we believe that our compensation program
includes significant elements that discourage excessive risk- taking while aligning the compensation of our professionals with our longterm
performance. For example, notwithstanding that we accrue compensation for our carried interest programs (described below) as increases in the value
of the portfolio investments are recorded in the related funds, we generally make payments in respect of carried interest allocations to our employees
only after profitable investments have actually been realized. This helps to ensure that our professionals take a longterm view that is consistent with
the interests of the Company, our shareholders and the investors in our funds. Moreover, if a fund fails to achieve specified investment returns due to
diminished performance of later investments, our carried interest program relating to that fund generally permits, for the benefit of the limited partner
investors in that fund, the return of carried interest payments (generally net of tax) previously made to us, our Contributing Partners or our other
employees. These provisions discourage excessive risk- taking and promote a longterm view that is consistent with the interests of our investors and
shareholders. Our general requirement that our professionals invest in the funds we manage further aligns the interests of our professionals, fund
investors and Class A shareholders. Finally, the minimum retained ownership requirements of our RSUs, options and AOG Units noted above
discourage excessive risk- taking because the value of these units is tied directly to the longterm performance of our Class A shares.
Compensation Elements for Named Executive Officers
Consistent with our emphasis on alignment of interests with our fund investors and Class A shareholders, compensation elements tied to the
profitability of our different businesses and that of the funds that we manage are the primary means of compensating our five executive officers listed
in the tables below, or the named executive officers. The key elements of the compensation of our named executive officers during fiscal year 2013
are described below. We distinguish among the compensation components applicable to our named executive officers as appropriate in the below
summary. Mr. Black is a member of the group referred to elsewhere in this report as the Managing Partners, and Mr. Zelter is a member of the
group referred to elsewhere in this report as the Contributing Partners.
Annual Salary. Each of our named executive officers, other than Mr. Zelter, receives an annual salary. The base salaries of our named executive
officers are set forth in the Summary Compensation Table below, and those base salaries were set by our Managing Partners in their judgment after
considering the historic compensation levels of the officer, competitive market dynamics, and each officers level of responsibility and anticipated
contributions to our overall success.
RSUs. In 2013, a portion of our named executive officers compensation (other than for Messrs. Black and Spilker) was paid in the form of RSUs.
We refer to our annual grants of RSUs as Bonus Grants. The RSUs are subject to multi- year vesting and minimum retained ownership requirements.
In 2013, all named executive officers were required to retain at least 85% of any Class A shares issued to them pursuant to RSU awards, net of the
number of gross shares sold or netted to pay applicable income or employment taxes. The named executive officer Plan Grants and Bonus Grants are
described below under Narrative Disclosure to the Summary Compensation Table and Grants of Plan- Based Awards TableAwards of
Restricted Share Units Under the Equity Plan.
Carried Interest. Carried interests with respect to our funds confer rights to receive distributions if a distribution is made to investors following the
realization of an investment or receipt of operating profit from an investment by the fund. These rights provide their holders with substantial
incentives to attain strong returns in a manner that does not subject their capital investment in the Company to excessive risk. Distributions of carried
interest generally are subject to contingent repayment (generally net of tax) if the fund fails to achieve specified investment returns due to diminished
performance of later investments. The actual gross amount of carried interest allocations available is a function of the performance of the applicable
fund. For these reasons, we believe that carried interest participation aligns the interests of our professionals with those of our Class A shareholders
and fund investors.
We currently have two principal types of carried interest programs, dedicated and incentive pool. Messrs. Zelter and Suydam have been awarded
rights to participate in a dedicated percentage of the carried interest income earned by the general partners of certain of our funds. Participation in
dedicated carried interest in our private equity funds is typically subject to vesting, which rewards longterm commitment to the firm and thereby
enhances the alignment of participants interests with the Company. Our financial statements characterize the carried interest income allocated to
participating professionals in respect of their dedicated interests as compensation. Actual distributions in respect of dedicated carried interests are
included in the All Other Compensation column of the summary compensation table.
Our performance based incentive arrangement referred to as the incentive pool further aligns the overall compensation
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of our professionals to the realized performance of our business. The incentive pool provides for compensation based on carried interest realizations
earned by us during the year and enhances our capacity to offer competitive compensation opportunities to our professionals. Carried interest
realizations earned means carried interest earned by the general partners of our funds under the applicable fund limited partnership agreements based
upon transactions that have closed or other rights to cash that have become fixed in the applicable calendar year period. Under this arrangement,
Messrs. Kelly, Zelter, and Suydam, among other of our professionals, were awarded incentive pool compensation based on carried interest
realizations we earned during 2013. Allocations to participants in the incentive pool contain both a fixed component (approximately $50,000 in 2013)
and a discretionary component, both of which may vary year- to- year, including as a result of our overall realized performance and the contributions
and performance of each participant. The managing partners determine the amount of the carried interest realizations to place into the incentive pool
in their discretion after considering various factors, including Company profitability, management company cash requirements and anticipated future
costs, provided that the incentive pool consists of an amount equal to at least one percent (1%) of the carried interest realizations attributable to
profits generated after creation of the incentive pool program that were taxable in the applicable year and not allocable to dedicated carried interests.
Each participant in the incentive pool is entitled to receive, as a fixed component of participation in the incentive pool, his or her pro rata allocation of
this 1% amount each year, provided the participant remains employed by us at the time of allocation. Our financial statements characterize the carried
interest income allocated to participating professionals in respect of incentive pool interests as compensation. The All Other Compensation column
of the summary compensation table includes actual distributions paid from the incentive pool.
Bonus. Two of our named executive officers, Messrs. Zelter and Suydam, received cash bonuses in 2013. The inclusion of discretionary annual
bonuses as part of our overall compensation rewards superior performance and enables us to attract and retain talented professionals by enhancing our
capacity to offer competitive compensation opportunities while retaining our flexibility to adjust or eliminate these payments from year to year.
Determination of Compensation of Named Executive Officers
Our Managing Partners make all final determinations regarding named executive officer compensation. Decisions about the variable elements of a
named executive officers compensation, including participation in our carried interest programs and grants of equitybased awards, are based
primarily on our Managing Partners assessment of such named executive officers individual performance, operational performance for the
department or division in which the officer (other than a Managing Partner) serves, and the officers impact on our overall operating performance and
potential to contribute to longterm shareholder value. In evaluating these factors, our Managing Partners do not utilize quantitative performance
targets but rather rely upon their judgment about each named executive officers performance to determine an appropriate reward for the current
years performance. The determinations by our Managing Partners are ultimately subjective, are not tied to specified annual, qualitative or individual
objectives or performance factors, and reflect discussions among the Managing Partners. Factors that our Managing Partners typically consider in
making such determinations include the officers type, scope and level of responsibilities and the officers overall contributions to our success. Our
Managing Partners also consider each named executive officers prior- year compensation, the appropriate balance between incentives for longterm
and shortterm performance, competitive market dynamics and the compensation paid to the named executive officers peers within the Company.
Note on Distributions on Apollo Operating Group Units
We note that all of our Managing Partners and Contributing Partners, including Messrs. Black and Zelter, beneficially own AOG Units. In particular,
as of December 31, 2013, the Managing Partners beneficially owned, through their interest in Holdings, approximately 54% of the total limited
partner interests in the Apollo Operating Group. When made, distributions on these units (which are made on both vested and unvested units) are in
the same amount per unit as distributions made to us in respect of the AOG Units we hold. Accordingly, although distributions on AOG Units are
distributions on equity rather than compensation, they play a central role in aligning our Managing Partners and Contributing Partners interests with
those of our Class A shareholders, which is consistent with our compensation philosophy. In 2013, the Managing Partners, including Mr. Black, and
Contributing Partners, including Mr. Zelter, were required to retain 92.5% of their AOG Units.
Compensation Committee Interlocks and Insider Participation
Our board of directors does not have a compensation committee. Our Managing Partners make all such compensation determinations, as discussed
above under Determination of Compensation of Named Executive Officers. For a description of certain transactions between us and the
managing partners, see Item 13. Certain Relationships and Related Party Transactions.
Compensation Committee Report
As noted above, our board of directors does not have a compensation committee. The executive committee of our manager identified below has
reviewed and discussed with management the foregoing Compensation Discussion and Analysis and, based
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on such review and discussion, has determined that the Compensation Discussion and Analysis should be included in this Annual Report on Form 10K.
Leon Black
Joshua Harris
Marc Rowan
Summary Compensation Table
The following summary compensation table sets forth information concerning the compensation earned by, awarded to or paid to our principal
executive officer, our principal financial officer, and our three other most highly compensated executive officers for the fiscal year ended
December 31, 2013. Managing Partners Messrs. Harris and Rowan are not included in the table because their compensation, as tabulated in
accordance with applicable rules, does not result in either of them being among the three most highly compensated executive officers after our
principal executive officer and principal financial officer. Our Managing Partners earnings derive predominantly from distributions they receive as a
result of their indirect beneficial ownership of AOG Units and their rights under the tax receivable agreement (described elsewhere in this report,
including above under Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
SecuritiesCash Distribution Policy), rather than from compensation, and accordingly are not included in the below tables. The officers named in
the table are referred to as the named executive officers.
All
Other
Non- Equity
Stock
Compensation
Total
Incentive Plan
Awards
Name and
Salary
Bonus
($)(4)
($)
($)(3)
($)(2)
Principal Position
Year
($)
($)(1)
Leon Black,
2013
100,000
---173,053
273,053
Chairman, Chief
2012
100,000
---187,368
287,368
Executive Officer
and Director
2011
100,000
--372,996
472,996
Martin Kelly,
2013
1,000,000
-541,246
-950,000
2,491,246
Chief Financial
Officer
2012
300,000
200,000
4,687,530
-1,433,411
6,620,941
James Zelter,
2013
-3,749,788
3,065,771
-32,599,739
39,415,298
Managing Director,
2012
--2,606,310
5,099,193
14,959,920
22,665,423
Credit
2011
--2,631,239
2,230,843
8,227,188
13,089,270
John Suydam,
2013
3,000,000
949,788
504,345
-7,148,168
11,602,301
Chief Legal Officer
2012
3,000,000
-496,715
-3,405,953
6,902,668
and Chief
Compliance Officer
2011
3,000,000
-1,555,133
-1,786,111
6,341,244
Marc Spilker,
2013
2,000,000
----2,000,000
President
(1) Amounts shown for 2013 represent cash bonuses earned in 2013.
(2) Represents the aggregate grant date fair value of stock awards granted, as applicable, computed in accordance with FASB ASC Topic 718. See
note 16 to our consolidated financial statements for further information concerning the assumptions made in valuing our RSU awards. The
amounts shown do not reflect compensation actually received by the named executive officers, but instead represent the aggregate grant date fair
value of the awards.
(3) Because Mr. Zelters 2013 income did not include distributions of management fee or incentive income, he did not receive distributions from a
non- equity incentive plan in 2013.
(4) Amounts included for 2013 represent, in part, actual distributions in respect of dedicated carried interest allocations for Messrs. Zelter and
Suydam of $32,549,527 and $7,061,133, respectively. Of these 2013 distribution amounts, $5,116 and $1,527, respectively, was paid in the form
of AAA RDUs for Messrs. Zelter and Suydam, which RDUs are not subject to vesting. The 2013 amounts also include actual incentive pool
distributions of $950,000 for Mr. Kelly and $50,212 for each of Messrs. Zelter and Suydam.
The All Other Compensation column for 2013 also includes costs relating to Company- provided cars and drivers for the business and personal use
of Messrs. Black and Suydam. We provide this benefit because we believe that its cost is outweighed by the convenience, increased efficiency and
added security and confidentiality that it offers. The personal use cost was approximately $164,803 for Mr. Black and $35,323 for Mr. Suydam. For
Mr. Black, this amount includes both fixed and variable costs, including lease costs, driver compensation, driver meals, fuel, parking, tolls, repairs,
maintenance and insurance. For Mr. Suydam, this amount includes the costs to the Company associated with his use of a car service. Except as
discussed in this paragraph, no 2013 perquisites or personal benefits individually exceeded the greater of $25,000 or 10% of the total amount of all
perquisites and other personal benefits reported for the named executive officer. The cost of excess liability insurance provided to our named
executive officers falls below this threshold. None of Messrs. Kelly, Zelter or Spilker received perquisites or personal benefits in 2013, except for
incidental benefits having an aggregate value of less than $10,000 per individual. Our named executive officers also receive occasional secretarial
support with respect to personal matters. We incur no incremental cost for the provision of such additional benefits. Accordingly, no such amount is
included in the Summary Compensation Table.
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Narrative Disclosure to the Summary Compensation Table and Grants of Plan- Based Awards Table
Employment, Non- Competition and Non- Solicitation Agreement with Chairman and Chief Executive Officer
In July 2012, we entered into an employment, noncompetition and nonsolicitation agreement with Leon Black, our chairman and chief executive
officer and a member of our managers executive committee, which agreement superseded and is substantially similar to the agreement we entered
into with Mr. Black dated July 13, 2007. The term of the agreement concludes on July 19, 2015. Mr. Black has the right to terminate his employment
voluntarily at any time, but we may terminate his employment only for cause or by reason of disability (as such terms are defined in his employment
agreement).
Mr. Black is entitled during his employment to an annual salary of $100,000 and to participate in our employee benefit plans, as in effect from time to
time.
The employment agreement requires Mr. Black to protect the confidential information of Apollo both during and after employment. In addition, until
one year after his employment terminates, Mr. Black is required to refrain from soliciting employees under specified circumstances or interfering
with our relationships with investors and to refrain from competing with us in a business that involves primarily (i.e., more than 50%) third- party
capital, whether or not the termination occurs during the term of the agreement or thereafter. These post- termination covenants survive any
termination or expiration of the Agreement Among Managing Partners (described elsewhere in this report under Item 13. Certain Relationships and
Related Party TransactionsAgreement Among Managing Partners).
If Mr. Black becomes subject to a potential termination for cause or by reason of disability, our manager may appoint an investment professional to
perform his functional responsibilities and duties until cause or disability definitively results in his termination or is determined not to have occurred,
but the manager may so appoint an investment professional only if Mr. Black is unable to perform his responsibilities and duties or, as a matter of
fiduciary duty, should be prohibited from doing so. During any such period, Mr. Black shall continue to serve on the executive committee of our
manager unless otherwise prohibited from doing so pursuant to the Agreement Among Managing Partners.
Under his employment agreement, if we terminate Mr. Blacks employment for cause or his employment is terminated by reason of death or
disability, or he terminates his employment voluntarily, he will be paid only his accrued but unpaid salary through the date of termination.
Employment, Non- Competition and Non- Solicitation Agreement with Chief Financial Officer
On July 2, 2012, we entered into an employment, noncompetition and nonsolicitation agreement with Martin Kelly, our chief financial officer. His
annual base salary is $1,000,000. As provided in his employment agreement, Mr. Kelly received a Plan Grant of 375,000 RSUs in connection with
his commencement of employment. He is eligible for an annual bonus in an amount to be determined by us in our discretion, except that his
minimum bonus for services performed in 2013 was $1,500,000, a portion of which is subject to payment in the form of Bonus Grants. Mr. Kellys
employment agreement does not provide for a minimum bonus for services performed after 2013. Consistent with his employment agreement, Mr.
Kelly participates in the incentive pool carried interest program and is eligible to receive discretionary distributions thereunder. Any distributions
actually received under the incentive pool reduced his 2013 bonus by an equivalent amount.
We may terminate Mr. Kellys employment with or without cause, and we will provide 90 days notice (or payment in lieu of such period of notice)
prior to a termination without cause. Under the employment agreement, Mr. Kelly will give us 90 days notice prior to a resignation for any reason. If
Mr. Kellys employment is terminated by us without cause or he resigns for good reason, he will be entitled to severance of six months base pay and
reimbursement of health insurance premiums paid in the six months following his employment termination.
The employment agreement obligates Mr. Kelly to protect the confidential information of Apollo both during and after employment. In addition, the
agreement provides that during the term and for 12 months after employment, Mr. Kelly will refrain from soliciting our employees, interfering with
our relationships with investors or other business relations, and competing with us in a business that manages or invests in assets substantially similar
to those managed or invested in by Apollo or its affiliates. If we terminate Mr. Kellys employment without cause or he resigns for good reason, he
will vest in 50% of any unvested portion of his RSU Plan Grant. If his employment is terminated by reason of death or disability, he will vest in 50%
of any unvested portion of his Bonus Grant RSUs.
Employment, Non- Competition and Non- Solicitation Agreement and Roll- Up Agreement with Managing Director- Credit
We entered into an employment agreement with our Managing Director- Credit, James Zelter, on May 15, 2006. The agreement was amended in
connection with the 2007 Reorganization, when Mr. Zelter entered into a Roll- Up Agreement dated as of July 13, 2007, and this discussion refers to
the employment agreement as so amended. The agreement provided that Mr.
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Zelter would have the right to participate in management fee net income and incentive income attributable to specified funds managed by us, some of
which are no longer in existence. Accordingly, the Company no longer treats his employment agreement as operational with regard to his
compensation during employment, which is determined by the Executive Committee. Mr. Zelter has acknowledged that he has received all
compensation to which he is entitled for services performed in 2013, recognizing that after 2013 he may receive carried interest distributions that
relate to events occurring in 2013 and prior years. Pursuant to his employment agreement, Mr. Zelter holds dedicated carried interests in a certain of
our investment funds that remain in existence, some of which carried interest rights are subject to vesting. Mr. Zelter receives a portion of his total
annual compensation in the form of a Bonus Grant, as discussed below under the section entitled, Awards of Restricted Share Units Under the
Equity Plan. As required by his employment agreement, Mr. Zelter has made investments of his own capital in various of our funds.
In the event of his termination without cause and other than by reason of death or disability, Mr. Zelters employment agreement provides for
continued payments with respect to certain specified funds that remain in existence for one year after his employment termination. Upon his
termination by reason of death or disability, Mr. Zelter will vest in 50% of his then unvested RSUs.
Mr. Zelter is subject to the restrictive covenants contained in his Roll- Up Agreement, as discussed under Certain Relationships and Related Party
Transactions- Roll- Up Agreements.
Employment Terms of Chief Legal Officer and Chief Compliance Officer
John Suydam, our chief legal officer and chief compliance officer, does not have an employment agreement with us. Pursuant to the RSU award
agreement provided in connection with his Plan Grant, Mr. Suydam is required to protect our confidential information at all times. The Plan Grant
agreement also provides that during his employment and for one year thereafter, Mr. Suydam will refrain from soliciting our employees, interfering
with our relationships with investors or other business relations, and competing with us in a business that manages or invests in assets substantially
similar to those invested in or managed by Apollo or its affiliates. If Mr. Suydams employment is terminated by reason of death or disability, he will
vest in 50% of his then unvested RSUs.
Employment, Non- Competition and Non- Solicitation Agreement with President
On November 24, 2010, we entered into an employment, noncompetition and nonsolicitation agreement with Marc Spilker, our president and a
nonvoting member of our executive committee. The agreements initial term commenced on December 1, 2010 and ended on December 31, 2012,
and thereafter it has automatically renewed in one- year increments. Under his employment agreement, Mr. Spilker is entitled to an annual base salary
of $2,000,000. As provided in his employment agreement, he received a Plan Grant of 2,500,000 RSUs and options to purchase 5,000,000 Class A
shares in connection with his commencement of employment. During his employment, Mr. Spilker is eligible to participate in our employee benefit
plans as in effect from time to time. If Mr. Spilkers employment is terminated by the Company without cause (including as a result of non- renewal
of the employment term) or by him for good reason, the employment agreement entitles him to a lump sum payment in an amount equal to six
months base salary. Upon his termination by the Company without cause, by him for good reason, or by reason of his death or disability, the
employment agreement also provides for additional immediate vesting of 50% of his Plan Grant RSUs and options that are unvested as of the date of
notice of employment termination.
The employment agreement requires Mr. Spilker to protect the confidential information of Apollo both during and after employment. In addition, the
agreement provides that during the term and for 12 months after notice of his employment termination, he will refrain from soliciting our employees,
interfering with our relationships with investors and other business relations, and competing with us in a business that manages or invests in assets
substantially similar to Apollo or its affiliates, whether or not the termination occurs during the term of the agreement or thereafter. Mr. Spilker is
required to give us 90 days notice prior to his resignation for any reason.
Awards of Restricted Share Units Under the Equity Plan
On October 23, 2007, we adopted our 2007 Omnibus Equity Incentive Plan. Grants of RSUs under the plan have been made to certain of our named
executive officers primarily pursuant to two programs, which we call the Plan Grants and the Bonus Grants. Following the 2007 Reorganization,
Plan Grants were made to Mr. Suydam and a broad range of our other employees. Plan Grants have also been made to subsequent hires, including
Messrs. Kelly and Spilker. The Plan Grants generally vest over six years, with the first installment becoming vested approximately one year after
grant and the balance vesting thereafter in equal quarterly installments. Holders of Plan Grant RSUs become entitled to distribution equivalents on
their vested RSUs if we pay ordinary distributions on our outstanding Class A shares. Once vested, the Class A shares underlying Plan Grants granted
prior to 2012 generally are issued on fixed dates, with 7.5% of the shares generally issued once each year over a four- year period and the remaining
70% issued in seven equal quarterly installments commencing in the fifth year. Vested Class A shares underlying Plan Grants issued after 2011 are
generally issuable by March 15th after the year in which they vest. The administrator of the 2007
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Omnibus Equity Incentive Plan determines when shares issued pursuant to the RSU awards may be disposed of, except that a participant will
generally be permitted to sell shares if necessary to cover taxes. Under our retained ownership requirements, in 2013, all named executive officers
were required to retain at least 85% of any Class A shares issued to them pursuant to RSU awards (net of the number of gross shares sold or netted to
pay applicable income or employment taxes).
During the restricted period set forth in a participants award agreement evidencing his Plan Grant (or, for Messrs. Kelly and Spilker, his employment
agreement, or Mr. Zelter, his Roll- Up Agreement), the participant will not (i) engage in any business activity in which the Company operates,
(ii) render any services to any competitive business or (iii) acquire a financial interest in, or become actively involved with, any competitive business
(other than as a passive holding of less than a specified percentage of publicly traded companies). In addition, the grant recipient will be subject to
nonsolicitation, nonhire and noninterference covenants during employment and for a specified period thereafter. Each grant recipient is generally
also bound to a nondisparagement covenant with respect to us and the Managing Partners and to confidentiality restrictions. Any resignation by a
grant recipient shall generally require at least 90 days notice. Any restricted period applicable to the grant recipient will commence after the notice of
termination period.
The RSUs advance several goals of our compensation program. The Plan Grants align employee interests with those of our shareholders by making
our employees, upon delivery of the underlying Class A shares, shareholders themselves. Because they vest over time, the Plan Grants reward
employees for sustained contributions to the Company and foster retention. The size of the Plan Grants is determined by the Plan administrator based
on the grantees level of responsibility and contributions to the Company. The restrictive covenants contained in the RSU agreements reinforce our
culture of fiduciary protection of our investors by requiring RSU holders to abide by the provisions regarding noncompetition, confidentiality and
other limitations on behavior described in the immediately preceding paragraph.
The Bonus Grants are also grants of RSUs under the 2007 Omnibus Equity Incentive Plan. However, the Bonus Grants constitute payment of a
portion of the annual compensation earned by certain of our professionals, including Messrs. Kelly, Zelter and Suydam, subject to the employees
continued service through the vesting dates. Our named executive officers Bonus Grants generally differ from their Plan Grants in the following
principal ways:
The RSU Shares underlying Bonus Grants are scheduled to vest in three equal annual installments.
Distribution equivalents are earned on Bonus Grant RSUs (whether or not vested) when ordinary distributions are made on Class A shares
after the grant date, but distribution equivalents are earned on Plan Grant RSUs only after they have vested.
Bonus Grants generally do not contain restrictive covenants (however, an individual who has received both a Plan Grant and a Bonus Grant
remains subject to the restrictive covenants contained in his or her Plan Grant).
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Grants of Plan- Based Awards

The following table presents information regarding the awards granted to the named executive officers under a plan in 2013. All were awards of
RSUs granted under our 2007 Omnibus Equity Incentive Plan. No options were granted to a named executive officer in 2013.
Grant Date Fair Value of
Stock Awards:
Stock Awards
Number of Shares of
($)
Stock or Units
Name
Grant Date
Leon Black
---Martin Kelly
December 26, 2013
18,114(1)
541,246(2)
James Zelter
May 9, 2013
67,440(1)
1,638,792(2)
December 26, 2013
47,757(1)
1,426,979(2)
John Suydam
December 26, 2013
16,879(1)
504,345(2)
Marc Spilker
---(1) Represents the aggregate number of RSUs covering our Class A shares (none of the Bonus Grants awarded in 2013 vested in 2013 except for Mr.
Zelters May 9, 2013 Bonus Grant, the first vesting date for which was December 31, 2013). For a discussion of these grants, please see the
discussion above under Narrative Disclosure to the Summary Compensation Table and Grants of Plan- Based Awards Table- Awards of
Restricted Share Units Under the Equity Plan.
(2) Represents the aggregate grant date fair value of the RSUs granted in 2013, computed in accordance with FASB ASC Topic 718. The amount
shown does not reflect compensation actually received, but instead represents the aggregate grant date fair value of the award.
Outstanding Equity Awards at Fiscal Year- End
The following table presents information regarding outstanding unvested RSU awards and an unexercised option award made by us to our named
executive officers on or prior to December 31, 2013 under our 2007 Omnibus Equity Incentive Plan.
Option Awards
Stock Awards
Market or
Payout
Value of
Number of
Unearned
Unearned
Shares, Units
Number of Shares
Shares, Units or
or Other
Underlying
Number of Shares
Option
Other Rights
Rights
Unexercised
Underlying
Exercise
That
That Have Not
Options (#
Unexercised Options
Price
Option
Have Not
Vested
Name
Date of Grant
Exercisable)
(# Unexercisable)
($/Share) Expiration Date
Vested
($) (8)
Leon Black
-------Martin
December 26,
Kelly
2013
----18,114 (1)
572,584
December 28,
2012
----18,022 (2)
569,675
September 30,
2012
----296,875 (3)
9,384,219
James
December 26,
Zelter
2013
----47,757 (1)
1,509,599
May 9, 2013
----44,960 (2)
1,421,186
December 28,
2012
----123,347 (4)
3,898,999
April 5, 2012
----18,301 (5)
578,495
John
December 26,
Suydam
2013
----16,879 (1)
533,545
December 28,
2012
----20,229 (2)
639,439
December 28,
2011
----13,855 (5)
437,957
Marc
December 2,
December 2,
39,512,500
Spilker
2010
208,334
2,500,000(6)
$8.00
2020
1,250,000 (7)
(1) Bonus Grant RSUs that vest in substantially equal annual installments on December 31 of each of 2014, 2015 and 2016.
(2) Bonus Grant RSUs that vest in substantially equal annual installments on December 31 of each of 2014 and 2015.
(3) Plan Grant RSUs that vest in substantially equal installments over the 19 calendar quarters beginning March 31, 2014.
(4) Plan Grant RSUs that vest in substantially equal installments over the 20 calendar quarters beginning March 31, 2014.
(5) Bonus Grant RSUs that vest on December 31, 2014.
(6) Options that vest in substantially equal installments over the 12 calendar quarters beginning March 31, 2014.
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(7) RSUs that vest in substantially equal installments over the 12 calendar quarters beginning March 31, 2014.
(8)
Amounts calculated by multiplying the number of unvested RSUs held by the named executive officer by the closing price of $31.61 per
Class A share on December 31, 2013.
Option Exercises and Stock Vested
The following table presents information regarding the number of outstanding initially unvested RSUs or AOG Units held by our named executive
officers that vested during 2013 and the number of options exercised by our named executive officers in 2013. With respect to the RSUs and AOG
Units, the amounts shown below do not reflect compensation actually received by the named executive officers, but instead are calculations of the
number of RSUs or AOG Units that vested during 2013 based on the closing price of our Class A shares on the date of vesting. Shares received by
our named executive officers are subject to our retained ownership requirements.
Option Awards
Stock Awards
Number of Shares
Number of Shares
Acquired on
Value Realized on
Acquired on
Value Realized on
Vesting(#)
Vesting($)
Exercise(#)
Exercise($)
Name
Type of Award
Leon Black
-----Martin Kelly
RSUs
--87,136
2,544,994(2)
James Zelter
AOG Units
--200,160
4,753,466(3)
RSUs
--116,473
3,681,712(2)
John Suydam
RSUs
--140,811
3,616,481(2)
(1)
Marc Spilker
Options
2,291,666
42,475,673
--RSUs
--416,667
11,001,077(2)
(1)
Amounts calculated based on the difference between the exercise price of the options and the price of the underlying Class A shares on the
applicable exercise date.
(2) Amounts calculated by multiplying the number of RSUs held by the named executive officer that vested on each applicable quarter- end or yearend vesting date in 2013 by the closing price per Class A share on that date. Class A shares underlying these vested RSUs are issued to the named
executive officer in accordance with the schedules described above under Narrative Disclosure to the Summary Compensation Table and
Grants of Plan- Based Awards Table- Awards of Restricted Share Units Under the Equity Plan.
(3) Amounts calculated by multiplying the number of AOG Units beneficially held by the named executive officer that vested on each month- end
vesting date in 2013 by the closing price per Class A share on that date. Mr. Zelter's AOG Units vested in full on June 30, 2013.
Potential Payments upon Termination or Change in Control
None of the named executive officers is entitled to payment or other benefits in connection with a change in control.
Mr. Blacks employment agreement does not provide for severance or other payments or benefits in connection with an employment termination. We
may not terminate Mr. Black except for cause or by reason of disability (as such terms are defined in his employment agreement).
If Mr. Kellys employment is terminated by us without cause or he resigns for good reason, Mr. Kelly will be entitled to severance of six months
base pay and reimbursement of health insurance premiums paid in the six months following his employment termination. If Mr. Kellys employment
is terminated by us without cause or he resigns for good reason, he will vest in 50% of any unvested portion of his Plan Grant RSUs. If his
employment is terminated by reason of death or disability, he will vest in 50% of any unvested portion of his Plan Grant and Bonus Grant RSUs.
Upon his termination without cause and other than by reason of death or disability, Mr. Zelters employment agreement provides for continued
payments with respect to certain specified funds that remain in existence for one year after his employment termination. Upon his termination by
reason of death or disability, Mr. Zelter will vest in 50% of his then unvested RSUs.
If Mr. Suydams employment is terminated by reason of death or disability, he will vest in 50% of his then unvested RSUs.
If Mr. Spilkers employment is terminated by the Company without cause (including as a result of non- renewal of the employment term) or by him
for good reason, the employment agreement entitles him to a lump sum payment in an amount equal
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to six months base salary. Upon notice of his employment termination by the Company without cause, by him for good reason, or by reason of his
death or disability, Mr. Spilker will vest in 50% of his then unvested Plan Grant RSUs and options.
Our named executive officers postemployment obligations, and their entitlements upon employment termination, are described above in the
discussion of employment, noncompetition and nonsolicitation agreements and the discussion titled, Awards of Restricted Share Units Under the
Equity Plan, in each case in the section, Narrative Disclosure to the Summary Compensation Table and Grants of Plan- Based Awards Table.
The named executive officers obligations during and after employment were considered by the Managing Partners in determining appropriate postemployment payments and benefits for the named executive officers.
The following table lists the estimated amounts that would have been payable to each of our named executive officers in connection with a
termination that occurred on the last day of our last completed fiscal year and the value of any additional equity that would vest upon such
termination. When listing the potential payments to named executive officers under the plans and agreements described above, we have assumed that
the applicable triggering event occurred on December 31, 2013 and that the price per share of our Class A shares was $31.61, which is equal to the
closing price on such date. For purposes of this table, RSU and option acceleration values are based on the $31.61 closing price.
Estimated Value
Estimated Value
of Equity
of Cash
Acceleration
Payments
Reason for Employment
($)
($)
Name
Termination
Leon Black
Cause
--Death, disability
--Without cause; by executive for
Martin Kelly
good reason
500,000(1)
4,692,110 (3)
Death, disability
-5,263,239 (3)
Without cause; by executive for
James Zelter
good reason
5,100,000(2)
-Death; disability
-3,704,140 (3)
John Suydam
good reason
--Death; disability
-805,471 (3)
Marc Spilker
good reason
1,000,000(1)
49,268,750 (4)
Death, disability
-49,268,750 (4)
(1)
This amount would have been payable to the named executive officer had his employment been terminated by the Company without cause
(and other than by reason of death or disability) or for good reason on December 31, 2013.
(2) Pursuant to Mr. Zelters employment agreement, had his employment terminated on December 31, 2013, he would have been treated as if he had
remained employed, for purposes of receiving distributions in respect of certain specified funds that remained in existence, for 12 additional
months.
(3)
This amount represents the additional equity vesting that the named executive officer would have received had his employment
terminated in the circumstances described in the column, Reason for Employment Termination, on December 31, 2013, based on the
closing price of a Class A share on such date. Please see our Outstanding Equity Awards at Fiscal Year- End table above for
information regarding the named executive officers unvested equity as of December 31, 2013.
(4) This amount represents the additional equity vesting that Mr. Spilker would have received had notice of his employment termination in the
circumstances described in the column, Reason for Employment Termination, been provided on December 31, 2013, based on the closing price
of a Class A share on such date. The portion of this total that relates to options is calculated by multiplying the spread between the option exercise
price and the closing price of a Class A share on December 31, 2013 by the number of option shares that would have vested on such date. Please
see our Outstanding Equity Awards at Fiscal Year- End table above for information regarding his unvested equity as of December 31,
2013.
Director Compensation
We do not pay additional remuneration to our employees, including Messrs. Black, Harris and Rowan, for their service on our board of directors. The
2013 compensation of Mr. Black is set forth above on the Summary Compensation Table.
During 2013, each independent director received (1) a base annual director fee of $100,000, (2) an additional annual director fee of $25,000 if he or
she a member of the audit committee, (3) an additional annual director fee of $10,000 if he or she was a member of the conflicts committee, (4) an
additional annual director fee of $25,000 (incremental to the fee described in (2)) if he or she served as the chairperson of the audit committee, and
(5) an additional annual director fee of $15,000 (incremental to the fee described in (3)) if he or she served as the chairperson of the conflicts
committee. In addition, independent directors were reimbursed for reasonable expenses incurred in attending board meetings.
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The following table provides the compensation for our independent directors during the year ended December 31, 2013. The directors received no
equity awards in 2013.
Fees Earned or
Name
Paid in Cash Stock Awards
Total
Michael
Ducey
$150,000
-$150,000
Paul Fribourg
$110,000
-$110,000
A. B.
Krongard
$125,000
-$125,000
Pauline
Richards
$150,000
-$150,000
Effective January 1, 2014, we have modified the compensation of our independent directors, with each receiving a base annual director fee of
$125,000. Committee fees are unchanged. Each June 30th, independent directors will also receive an annual award of RSUs that have a value of
$100,000 at grant and vest on the first anniversary of the grant date.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of our Class A shares as of February 26, 2014 by (i) each person known
to us to beneficially own more than 5% of the voting Class A shares of Apollo Global Management, LLC, (ii) each of our directors, (iii) each person
who is a named executive officer for 2013 and (iv) all directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge, each person named in the table below has sole voting
and investment power with respect to all of the Class A shares and interests in our Class B share shown as beneficially owned by such person, except
as otherwise set forth in the notes to the table and pursuant to applicable community property laws. Unless otherwise indicated, the address of each
person named in the table is c/o Apollo Global Management, LLC, 9 West 57th Street, New York, NY 10019.
In respect of our Class A shares, the table set forth below assumes the exchange by Holdings of all AOG Units for our Class A shares with respect to
which the person listed below has the right to direct such exchange pursuant to the exchange agreement described under Item 13. Certain
Relationships and Related Party Transactions- Exchange Agreement, and the distribution of such shares to such person as a limited partner of
Holdings.
Number of
Shares
Class A Shares Beneficially Owned

Total Percentage
Percent(1)
of Voting Power(2)
Number of
Shares
Class B Share Beneficially Owned

Total Percentage
Percent
of Voting Power(2)
Directors and Executive Officers(3):

Leon Black(4)(5)
92,727,166
38.4%
68.8%
100%
68.8%
Joshua Harris(4)(5)
54,582,643
26.8%
68.8%
100%
68.8%
Marc Rowan(4)(5)
54,582,642
26.8%
68.8%
100%
68.8%
13,262
262,362
Michael Ducey
16,662
Paul Fribourg
31,362
1.2%
46,315
277,820
2,517,197
1.7%
206,820,085
58.5%
62.1%
100%
68.8%
Pauline Richards
Alvin Bernard Krongard(6)
Marc Spilker(7)
Martin Kelly
John Suydam(8)
James Zelter(9)
All directors and executive officers as a group (twelve persons)(10)
BRH(5)
AP Professional Holdings, L.P.(11)
1,762,654
228,954,958
100%
68.8%
60.6%
68.8%
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*Represents less than 1%.
(1) The percentage of beneficial ownership of our Class A shares is based on voting and nonvoting Class A shares outstanding.
(2) The total percentage of voting power is based on voting Class A shares and the Class B share.
(3) The shares beneficially owned by the directors and executive officers reflected above do not include 687,500 of Class A shares that will be
delivered to Mr. Spilker, and all directors and executive officers as a group, more than 60 days after February 26, 2014 in settlement of vested
restricted share units.
(4) The number of Class A shares presented are held by estate planning vehicles, for which this individual disclaims beneficial ownership except to
the extent of his pecuniary interest therein. The number of Class A shares presented do not include any Class A shares owned by Holdings with
respect to which this individual, as one of the three owners of all of the interests in BRH, the general partner of Holdings, or as a party to the
Agreement Among Managing Partners described under Item 13. Certain Relationships and Related Party TransactionsAgreement Among
Managing Partners or the Managing Partner Shareholders Agreement described under Item 13. Certain Relationships and Related Party
TransactionsManaging Partner Shareholders Agreement, may be deemed to have shared voting or dispositive power. Each of these individuals
disclaims any beneficial ownership of these shares, except to the extent of his pecuniary interest therein.
(5) BRH, the holder of the Class B share, is one third owned by Mr. Black, one third owned by Mr. Harris and one third owned by Mr. Rowan.
Pursuant to the Agreement Among Managing Partners, the Class B share is to be voted and disposed of by BRH based on the determination of at
least two of the three Managing Partners; as such, they share voting and dispositive power with respect to the Class B share.
(6) Includes 67,500 Class A shares held by a trust for the benefit of Mr. Krongards children, for which Mr. Krongards children are the trustees. Mr.
Krongard disclaims beneficial ownership with respect to such shares, except to the extent of his pecuniary interest therein.
(7)
Includes 26,350 Class A shares held by a trust for the benefit of Mr. Spilkers children, for which one of Mr. Spilkers immediate family
members is a trustee and has investment power. The amount also includes 26,350 Class A shares held by a not- for- profit tax exempt
foundation for which Mr. Spilker and his spouse are trustees with investment power. Mr. Spilker disclaims beneficial ownership with respect
to such shares, except to the extent of his pecuniary interest therein.
(8) Includes 24,098 Class A shares held by a trust for the benefit of Mr. Suydams spouse and children, for which Mr. Suydams spouse is the trustee.
Mr. Suydam disclaims beneficial ownership with respect to such shares, except to the extent of his pecuniary interest therein.
(9)
Includes 240,647 Class A shares held by a trust for the benefit of certain of Mr. Zelters family members, for which Mr. Zelter is a trustee.
Mr. Zelter disclaims beneficial ownership with respect to such shares, except to the extent of his pecuniary interest therein.
(10) Refers to shares beneficially owned by the individuals who were directors and executive officers as of February 26, 2014.
(11) Assumes that no Class A shares are distributed to the limited partners of Holdings. The general partner of Holdings, is BRH, which is one third
owned by Mr. Black, one third owned by Mr. Harris and one third owned by Mr. Rowan. BRH is also the general partner of BRH Holdings, L.P.,
the limited partnership through which Messrs. Black, Harris and Rowan indirectly beneficially own (through estate planning vehicles) their
limited partner interests in Holdings,. These individuals disclaim any beneficial ownership of these Class A shares, except to the extent of their
pecuniary interest therein.
Securities Authorized for Issuance under Equity Incentive Plans
The following table sets forth information concerning the awards that may be issued under the Companys Omnibus Equity Incentive Plan as of
December 31, 2013.
Number of Securities Remaining
Number of Securities to be
Available for Future Issuance
Issued Upon Exercise of
Weighted- Average Exercise
Under Equity Compensation Plans
Outstanding Options,
Price of Outstanding Options,
(excluding securities reflected in
Plan Category
Warrants and Rights(1)
Warrants and Rights
column (a)(2)
(a)
(b)
(c)
Equity Compensation Plans
Approved by Security Holders
34,524,596
$8.69
42,364,563
Equity Compensation Plans Not
Approved by Security Holders
Total
34,524,596
$8.69
42,364,563
(1) Reflects the aggregate number of outstanding options and RSUs granted under the Companys 2007 Omnibus Equity Incentive Plan (the Equity Plan) as of
December 31, 2013.
(2) The Class A shares reserved under the Equity Plan are increased on the first day of each fiscal year by (i) the amount (if any) by which (a) 15% of the number of
outstanding Class A shares and AOG Units exchangeable for Class A shares on a fully converted and diluted basis on the last day of the immediately preceding fiscal
year exceeds (b) the number of shares then reserved and available for issuance under the Equity Plan, or (ii) such lesser amount by which the administrator may
decide to increase the number of Class A shares. The number of shares reserved under the Equity Plan is also subject to adjustment
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in the event of a share split, share dividend, or other change in our capitalization. Generally, employee shares that are forfeited, canceled, surrendered or exchanged from
awards under the Equity Plan will be available for future awards. We have filed a registration statement and intend to file additional registration statements on Form S- 8
under the Securities Act to register Class A shares under the Equity Plan (including pursuant to automatic annual increases). Any such Form S- 8 registration statement
will automatically become effective upon filing. Accordingly, Class A shares registered under such registration statement will be available for sale in the open market.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Agreement Among Managing Partners
Our Managing Partners have entered into the Agreement Among Managing Partners, which provides that each Managing Partners Pecuniary Interest
(as defined below) in the AOG Units that he holds indirectly through Holdings would be subject to vesting. The Managing Partners own Holdings in
accordance with their respective sharing percentages, or Sharing Percentages, as set forth in the Agreement Among Managing Partners. For the
purposes of the Agreement Among Managing Partners, Pecuniary Interest means, with respect to each Managing Partner, the number of AOG
Units that would be distributable to such Managing Partner assuming that Holdings was liquidated and its assets distributed in accordance with its
governing agreements.
Pursuant to the Agreement Among Managing Partners, each of Messrs. Harris and Rowan vested in his interest in the AOG Units in 60 equal monthly
installments, and Mr. Black vested in his interest in the AOG Units in 72 equal monthly installments. For the purposes of the vesting provisions of the
Agreement Among Managing Partners, our Managing Partners were credited for their employment with us since January 1, 2007. Each is now vested
in full. We may not terminate a Managing Partner except for cause or by reason of disability.
The transfer by a Managing Partner of any portion of his Pecuniary Interest to a permitted transferee will in no way affect any of his obligations under
the Agreement Among Managing Partners; provided, that all permitted transferees are required to sign a joinder to the Agreement Among Managing
Partners.
The Managing Partners respective Pecuniary Interests in certain funds, or the Heritage Funds, within the Apollo Operating Group are not held in
accordance with the Managing Partners respective Sharing Percentages. Instead, each Managing Partners Pecuniary Interest in such Heritage Funds
is held in accordance with the historic ownership arrangements among the Managing Partners, and the Managing Partners continue to share the
operating income in such Heritage Funds in accordance with their historic ownership arrangement with respect to such Heritage Funds.
The Agreement Among Managing Partners may be amended and the terms and conditions of the Agreement Among Managing Partners may be
changed or modified upon the unanimous approval of the Managing Partners. We, our shareholders (other than the Strategic Investors, as set forth
under Lenders Rights AgreementAmendments to Managing Partner Transfer Restrictions) and the Apollo Operating Group have no ability to
enforce any provision thereof or to prevent the Managing Partners from amending the Agreement Among Managing Partners.
Managing Partner Shareholders Agreement
We have entered into the Managing Partner Shareholders Agreement with our Managing Partners. The Managing Partner Shareholders Agreement
provides the Managing Partners with certain rights with respect to the approval of certain matters and the designation of nominees to serve on our
board of directors, as well as registration rights for our securities that they own.
Board Representation
The Managing Partner Shareholders Agreement requires our board of directors, so long as the Apollo control condition is satisfied, to nominate
individuals designated by our manager such that our manager will have a majority of the designees on our board.
Transfer Restrictions
No Managing Partner may, nor shall any of such Managing Partners permitted transferees, directly or indirectly, voluntarily effect cumulative
transfers of Equity Interests (as defined in the Managing Partners Shareholders Agreement), representing more than: (i) 0.0% of his Equity Interests
at any time prior to the second anniversary of our IPO (the registration effectiveness date), (ii) 7.5% of his Equity Interests at any time on or after
the second anniversary and prior to the third anniversary of the registration effectiveness date; (iii) 15% of his Equity Interests at any time on or after
the third anniversary and prior to the fourth anniversary of the registration effectiveness date; (iv) 22.5% of his Equity Interests at any time on or after
the fourth anniversary and prior to the fifth anniversary of the registration effectiveness date; (v) 30% of his Equity Interests at any time on
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or after the fifth anniversary and prior to the sixth anniversary of the registration effectiveness date; and (vi) 100% of his Equity Interests at any time
on or after the sixth anniversary of the registration effectiveness date, other than, in each case, with respect to transfers (a) from one founder to
another founder, (b) to a permitted transferee of such Managing Partner, or (c) in connection with a sale by one or more of our Managing Partners in
one or a related series of transactions resulting in the Managing Partners owning or controlling, directly or indirectly, less than 50.1% of the economic
or voting interests in us or the Apollo Operating Group, or any other person exercising control over us or the Apollo Operating Group by contract,
which would include a transfer of control of our manager.
The percentages referenced in the preceding paragraph will apply to the aggregate amount of Equity Interests held by each Managing Partner (and his
permitted transferees) as of July 13, 2007 and adjusted for any additional Equity Interests received by such Managing Partner upon the forfeiture of
Equity Interests by another Managing Partner. Any Equity Interests received by a Managing Partner pursuant to the forfeiture provisions of the
Agreement Among Managing Partners (described above) will remain subject to the foregoing restrictions in the receiving Managing Partners hands;
provided, that each Managing Partner shall be permitted to sell without regard to the foregoing restrictions such number of forfeitable interests
received by him as are required to pay taxes payable as a result of the receipt of such interests, calculated based on the maximum combined U.S.
Federal, New York State and New York City tax rate applicable to individuals; and, provided further, that each Managing Partner who is not required
to pay taxes in the applicable fiscal quarter in which he receives Equity Interests as a result of being in the U.S. Federal income tax safe harbor will
not affect any such sales prior to the six- month anniversary of the applicable termination date which gave rise to the receipt of such Equity Interests.
After six years, each Managing Partner and his permitted transferees may transfer all of the Equity Interests of such Managing Partner to any person
or entity in accordance with Rule 144, in a registered public offering or in a transaction exempt from the registration requirements of the Securities
Act. The above transfer restrictions will lapse with respect to a Managing Partner if such Managing Partner dies or becomes disabled.
A permitted transferee means, with respect to each Managing Partner and his permitted transferees, (i) such Managing Partners spouse, (ii) a lineal
descendant of such Managing Partners parents (or any such descendants spouse), (iii) a charitable institution controlled by such Managing Partner,
(iv) a trustee of a trust (whether inter vivos or testamentary), the current beneficiaries and presumptive remaindermen of which are one or more of
such Managing Partner and persons described in clauses (i) through (iii) above, (v) a corporation, limited liability company or partnership, of which
all of the outstanding shares of capital stock or interests therein are owned by one or more of such Managing Partner and persons described in clauses
(i) through (iv) above, (vi) an individual mandated under a qualified domestic relations order, (vii) a legal or personal representative of such
Managing Partner in the event of his death or disability, (viii) any other Managing Partner with respect to transactions contemplated by the Managing
Partner Shareholders Agreement, and (ix) any other Managing Partner who is then employed by Apollo or any of its affiliates or any permitted
transferee of such Managing Partner in respect of any transaction not contemplated by the Managing Partner Shareholders Agreement, in each case
that agrees in writing to be bound by these transfer restrictions.
Any waiver of the above transfer restrictions may only occur with our consent. As our Managing Partners control the management of our company,
however, they have discretion to cause us to grant one or more such waivers. Accordingly, the above transfer restrictions might not be effective in
preventing our Managing Partners from selling or transferring their Equity Interests.
Indemnity
Carried interest income from our funds can be distributed to us on a current basis, but is subject to repayment by the subsidiaries of the Apollo
Operating Group that act as general partners of the funds in the event that certain specified return thresholds are not ultimately achieved. The
Managing Partners, Contributing Partners and certain other investment professionals have personally guaranteed, subject to certain limitations, the
obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited to a particular
Managing Partners or Contributing Partners distributions. Pursuant to the Managing Partner Shareholders Agreement, we agreed to indemnify each
of our Managing Partners and certain Contributing Partners against all amounts that they pay pursuant to any of these personal guarantees in favor of
Fund IV, Fund V and Fund VI (including costs and expenses related to investigating the basis for or objecting to any claims made in respect of the
guarantees) for all interests that our Managing Partners and Contributing Partners have contributed or sold to the Apollo Operating Group.
Accordingly, in the event that our Managing Partners, Contributing Partners and certain other investment professionals are required to pay amounts in
connection with a general partner obligation for the return of previously made distributions with respect to Fund IV, Fund V and Fund VI, we will be
obligated to reimburse our Managing Partners and certain Contributing Partners for the indemnifiable percentage of amounts that they are required to
pay even though we did not receive the distribution to which that general partner obligation related.
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Registration Rights
Pursuant to the Managing Partner Shareholders Agreement, we have granted Holdings, an entity through which our Managing Partners and
Contributing Partners own their AOG units, and its permitted transferees the right, under certain circumstances and subject to certain restrictions, to
require us to register under the Securities Act our Class A shares held or acquired by them. Under the Managing Partner Shareholders Agreement, the
registration rights holders (i) have demand registration rights that require us to register under the Securities Act the Class A shares that they hold or
acquire, (ii) may require us to make available registration statements permitting sales of Class A shares they hold or acquire in the market from time
to time over an extended period and (iii) have the ability to exercise certain piggyback registration rights in connection with registered offerings
requested by other registration rights holders or initiated by us. We have agreed to indemnify each registration rights holder and certain related parties
against any losses or damages resulting from any untrue statement or omission of material fact in any registration statement or prospectus pursuant to
which they sell our shares, unless such liability arose from such holders misstatement or omission, and each registration rights holder has agreed to
indemnify us against all losses caused by his misstatements or omissions.
Roll- Up Agreements
Pursuant to the Roll- Up Agreements, the Contributing Partners received interests in Holdings, which we refer to as AOG Units, in exchange for their
contribution of assets to the Apollo Operating Group. The AOG Units received by our Contributing Partners and any units into which they are
exchanged generally vested over six years in equal monthly installments and were fully vested on June 30, 2013. AOG Units were subject to a lockup until two years after the registration effectiveness date. Thereafter, 7.5% of the AOG Units became, or will become, tradable on each of the
second, third, fourth and fifth anniversaries of the registration effectiveness date, with the remaining AOG Units becoming tradable on the sixth
anniversary of the registration effectiveness date or upon subsequent vesting. An AOG Unit that is forfeited will revert to the Managing Partners. Our
Contributing Partners have the ability to direct Holdings to exercise Holdings registration rights described above under Managing Partner
Shareholders Agreement- Registration Rights.
Under their Roll- Up Agreements, each of our Contributing Partners is subject to a noncompetition provision until the first anniversary of the date of
termination of his service as a partner to us. During that period, our Contributing Partners are prohibited from (i) engaging in any business activity
that we operate in, (ii) rendering any services to any alternative asset management business (other than that of us or our affiliates) that involves
primarily (i.e., more than 50%) third- party capital or (iii) acquiring a financial interest in, or becoming actively involved with, any competitive
business (other than as a passive holding of a specified percentage of publicly traded companies). In addition, our Contributing Partners are subject to
nonsolicitation, nonhire and noninterference covenants during employment and for two years thereafter. Our Contributing Partners are also bound to
a nondisparagement covenant with respect to us and our Contributing Partners and to confidentiality restrictions. Resignation by any of our
Contributing Partners shall require ninety days notice. Any restricted period applicable to a Contributing Partner will commence after the ninety day
notice of termination period.
Amended and Restated Exchange Agreement
We have entered into an exchange agreement with Holdings under which, subject to certain procedures and restrictions (including the vesting
schedules applicable to our Managing Partners and any applicable transfer restrictions and lockup agreements described above) upon 60 days
written notice prior to a designated quarterly date, each Managing Partner and Contributing Partner (or certain transferees thereof) has the right to
cause Holdings to exchange the AOG Units that he owns through Holdings for our Class A shares and to sell such Class A shares at the prevailing
market price (or at a lower price that such Managing Partner or Contributing Partner is willing to accept). To effect the exchange, Holdings
distributes the AOG Units to be exchanged to the applicable Managing Partner or Contributing Partner. Under the exchange agreement, the Managing
Partner or Contributing Partner must then simultaneously exchange one AOG Unit (being an equal limited partner interest in each Apollo Operating
Group entity) for each Class A share received from our intermediate holding companies. As a Managing Partner or Contributing Partner exchanges
his AOG Units, our interest in the AOG Units will be correspondingly increased and the voting power of the Class B share will be correspondingly
decreased.
The exchange agreement was amended and restated on May 6, 2013. The amendments to the original exchange agreement (i) permit exchanging
holders certain rights to revoke exchanges of their AOG Units in whole, but not in part, in certain circumstances; (ii) permit transfers of a holders
exchanged shares to a qualifying entity that can sell them under a Rule 10b5- 1 trading plan; (iii) require the Company to use its commercially
reasonable efforts to file and keep effective a shelf registration statement relating to the exchange of Class A shares received upon an exchange of
AOG Units; (iv) modify the exchange mechanics to address certain tax considerations of an exchange for exchanging holders; and (v) require
exchanging holders to reimburse APO Corp. for any incremental U.S. federal income tax incurred by APO Corp. as a result of the modification of the
exchange mechanics.
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Amended and Restated Tax Receivable Agreement
With respect to any exchange by a Managing Partner or Contributing Partner of AOG Units (together with the corresponding interest in our Class B
share) that he owns through Holdings for our Class A shares in a taxable transaction, each of AMH Holdings (Cayman), L.P. and the Apollo
Operating Group entities controlled by it or Apollo Management Holdings, L.P. has made or will make an election under Section 754 of the Internal
Revenue Code, which may result in an adjustment to the tax basis of a portion of the assets owned by the Apollo Operating Group at the time of the
exchange. The taxable exchanges may result in increases in the tax depreciation and amortization deductions from depreciable and amortizable assets,
as well as an increase in the tax basis of other assets, of the Apollo Operating Group that otherwise would not have been available. A portion of these
increases in tax depreciation and amortization deductions, as well as the increase in the tax basis of such other assets, will reduce the amount of tax
that APO Corp. would otherwise be required to pay in the future. Additionally, our acquisition of AOG Units from the Managing Partners or
Contributing Partners, such as our acquisition of AOG Units from the Managing Partners in the Strategic Investors Transaction, may result in
increases in tax deductions and tax basis that reduces the amount of tax that APO Corp. would otherwise be required to pay in the future.
APO Corp. has entered into a tax receivable agreement with our Managing Partners and Contributing Partners that provides for the payment by APO
Corp. to an exchanging or selling Managing Partner or Contributing Partner of 85% of the amount of actual cash savings, if any, in U.S. Federal,
state, local and foreign income tax that APO Corp. realizes (or is deemed to realize in the case of an early termination payment by APO Corp. or a
change of control, as discussed below) as a result of these increases in tax deductions and tax basis, and certain other tax benefits, including imputed
interest expense, related to entering into the tax receivable agreement. APO Corp. expects to benefit from the remaining 15% of actual cash savings,
if any, in income tax that it realizes. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing our
actual income tax liability to the amount of such taxes that APO Corp. would have been required to pay had there been no increase to the tax basis of
the tangible and intangible assets of the applicable Apollo Operating Group entity as a result of the transaction and had APO Corp. not entered into
the tax receivable agreement. The tax savings achieved may not ensure that we have sufficient cash available to pay our tax liability or generate
additional distributions to our investors. Also, we may need to incur additional debt to repay the tax receivable agreement if our cash flows are not
met. The term of the tax receivable agreement will continue until all such tax benefits have been utilized or expired, unless APO Corp. exercises the
right to terminate the tax receivable agreement by paying an amount based on the present value of payments remaining to be made under the
agreement with respect to units that have been exchanged or sold and units which have not yet been exchanged or sold. Such present value will be
determined based on certain assumptions, including that APO Corp. would have sufficient taxable income to fully utilize the deductions that would
have arisen from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement. No payments will
be made if any Managing Partner or Contributing Partner elects to exchange his or her AOG Units in a tax- free transaction. In the event that other of
our current or future U.S. subsidiaries become taxable as corporations and acquire AOG Units in the future, or if we become taxable as a corporation
for U.S. Federal income tax purposes, each U.S. corporation will become subject to a tax receivable agreement with substantially similar terms. In
connection with an amendment of the AMH partnership agreement in April 2010, the tax receivable agreement was revised to reflect the Managing
Partners agreement to defer 25% of required payments pursuant to the tax receivable agreement that are attributable to the 2010 fiscal year for a
period of four years until 2015.
The IRS could challenge our claim to any increase in the tax basis of the assets owned by the Apollo Operating Group that results from the exchanges
entered into by the Managing Partners or Contributing Partners. The IRS could also challenge any additional tax depreciation and amortization
deductions or other tax benefits we claim as a result of such increase in the tax basis of such assets. If the IRS were to successfully challenge a tax
basis increase or tax benefits we previously claimed from a tax basis increase, our Managing Partners and Contributing Partners would not be
obligated under the tax receivable agreement to reimburse APO Corp. for any payments previously made to it (although future payments would be
adjusted to reflect the result of such challenge). As a result, in certain circumstances, payments could be made to our Managing Partners and
Contributing Partners under the tax receivable agreement in excess of 85% of APO Corp.s actual cash tax savings. In general, estimating the amount
of payments that may be made to our Managing Partners and Contributing Partners under the tax receivable agreement is by its nature, imprecise, in
the absence of an actual transaction, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis and
the amount and timing of any payments under the tax receivable agreement will vary depending upon a number of factors, including:
the timing of the transactions- for instance, the increase in any tax deductions will vary depending on the fair market value, which may fluctuate
over time, of the depreciable or amortizable assets of the Apollo Operating Group entities at the time of the transaction;
the price of our Class A shares at the time of the transaction- the increase in any tax deductions, as well as tax basis increase in other assets, of
the Apollo Operating Group entities, is directly proportional to the price of the Class A shares at the time of the transaction;
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the taxability of exchanges- if an exchange is not taxable for any reason, increased deductions will not be available; and
the amount and timing of our income- APO Corp. will be required to pay 85% of the tax savings as and when realized, if any. If APO Corp. does not
have taxable income, it is not required to make payments under the tax receivable agreement for that taxable year because no tax savings were
actually realized.
In addition, the tax receivable agreement provides that, upon a merger, asset sale or other form of business combination or certain other changes of
control, APO Corp.s (or its successors) obligations with respect to exchanged or acquired units (whether exchanged or acquired before or after such
change of control) would be based on certain assumptions, including that APO Corp. would have sufficient taxable income to fully utilize the
deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement. As noted
above, no payments will be made if a Managing Partner or Contributing Partner elects to exchange his or her AOG Units in a tax- free transaction.
In connection with the amended and restated exchange agreement, the tax receivable agreement was amended and restated on May 6, 2013 to
conform the agreement to the amended and restated exchange agreement, particularly to address the modified exchange mechanics, and to make nonsubstantive updates to recognize certain additional Apollo Operating Group entities that have been formed since the original tax receivable agreement
was entered into in 2007.
Strategic Investors Transaction
On July 13, 2007, we sold securities to the Strategic Investors in return for a total investment of $1.2 billion. Through our intermediate holding
companies, we used all of the proceeds from the issuance of such securities to the Strategic Investors to purchase from our Managing Partners 17.4%
of their AOG Units for an aggregate purchase price of $1,068 million, and to purchase from our Contributing Partners a portion of their points for an
aggregate purchase price of $156 million. The Strategic Investors hold nonvoting Class A shares, which represented 30.8% of our issued and
outstanding Class A shares and 12.0% of the economic interest in the Apollo Operating Group, in each case as of December 31, 2013.
As all of their holdings in us are nonvoting, neither of the Strategic Investors has any means for exerting control over our company.
Strategic Relationship Agreement
On April 20, 2010, we announced a new strategic relationship agreement with CalPERS, whereby we agreed to reduce management fees and other
fees charged to CalPERS on funds we manage, or in the future will manage, solely for CalPERS by $125 million over a five- year period or as close a
period as required to provide CalPERS with that benefit. The agreement further provides that we will not use a placement agent in connection with
securing any future capital commitments from CalPERS. Through December 31, 2013, the Company has reduced fees charged to CalPERS on the
funds it manages by approximately $87.3 million.
Lenders Rights Agreement
In connection with the Strategic Investors Transaction, we entered into a shareholders agreement, or the Lenders Rights Agreement, with the
Strategic Investors.
Transfer Restrictions
Following the registration effectiveness date, each Strategic Investor may transfer its nonvoting Class A shares up to the percentages set forth below
during the relevant periods identified:
Period
Registration Effectiveness Date- 2nd anniversary of the Registration Effectiveness Date
2nd- 3rd anniversary of Registration Effectiveness Date
3rd- 4th anniversary of Registration Effectiveness Date
4th- 5th anniversary of Registration Effectiveness Date
5th anniversary of Registration Effectiveness Date (and thereafter)
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Maximum
Cumulative
Amount
0%
25%
50%
75%
100%
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Notwithstanding the foregoing, at no time following the registration effectiveness date may a Strategic Investor make a transfer representing 2% or
more of our total Class A shares to any one person or group of related persons.
An Investor Permitted Transferee includes any entity controlled by, controlling or under common control with a Strategic Investor, or certain of its
affiliates so long as that entity continues to be an affiliate of the Strategic Investor at all times following the transfer.
Registration Rights
Pursuant to the Lenders Rights Agreement, each Strategic Investor is afforded four demand registrations with respect to nonvoting Class A shares,
covering offerings of at least 2.5% of our total equity ownership and customary piggyback registration rights. All cut- backs between the Strategic
Investors and Holdings (or its members) in any such demand registration shall be pro rata based upon the number of shares available for sale at such
time (regardless of which party exercises a demand).
Amendments to Managing Partner Transfer Restrictions
Each Strategic Investor has a consent right with respect to any amendment or waiver of any transfer restrictions that apply to our Managing Partners.
Apollo Operating Group Limited Partnership Agreements
Pursuant to the partnership agreements of the Apollo Operating Group partnerships, the wholly- owned subsidiaries of Apollo Global Management,
LLC that are the general partners of those partnerships have the right to determine when distributions will be made to the partners of the Apollo
Operating Group and the amount of any such distributions. If a distribution is authorized, such distribution will be made to the partners of Apollo
Operating Group pro rata in accordance with their respective partnership interests.
The partnership agreements of the Apollo Operating Group partnerships also provide that substantially all of our expenses, including substantially all
expenses solely incurred by or attributable to Apollo Global Management, LLC (such as expenses incurred in connection with the Private Offering
Transactions), will be borne by the Apollo Operating Group; provided that obligations incurred under the tax receivable agreement by Apollo Global
Management, LLC and its wholly- owned subsidiaries (which currently consist of our three intermediate holding companies, APO Corp., APO (FC),
LLC and APO Asset Co., LLC), income tax expenses of Apollo Global Management, LLC and its wholly- owned subsidiaries and indebtedness
incurred by Apollo Global Management, LLC and its wholly- owned subsidiaries shall be borne solely by Apollo Global Management, LLC and its
wholly- owned subsidiaries.
Employment Arrangements
Please see the section entitled Item 11. Executive CompensationNarrative Disclosure to the Summary Compensation Table and Grants of PlanBased Awards Table for a description of the employment agreements of our named executive officers who have employment agreements.
In addition, Joshua M. Black, a son of Leon Black, is employed by the Company as an Associate in the Companys private equity business. He is
entitled to receive a base salary, incentive compensation and other employee benefits that are offered to similarly situated employees of the Company.
He is also eligible to receive an annual performance- based bonus in an amount determined by the Company in its discretion.
Reimbursements
In the normal course of business, our personnel have made use of aircraft owned as personal assets by Messrs. Black and Rowan. Messrs. Black and
Rowan paid for their purchases of the aircraft and bear all operating, personnel and maintenance costs associated with their operation for personal
use. Payment by us for the business use of these aircraft by Messrs. Black and Rowan and other of our personnel totaled $763,120 and $1,811,464 for
2013 to Mr. Black and Mr. Rowan, respectively (which amounts are determined based on the lower of the actual costs of operating the aircraft or a
specified charter rate). In addition, Mr. Harris makes business and personal use of various aircraft in which we have fractional interests, and pays the
contractual cost of his personal usage. The amounts in respect of Mr. Harris' personal usage in 2013 totaled $977,007. Prior to December 11, 2013,
we also had fractional interests in an aircraft owned by Heliflite Shares, LLC (Heliflite). For 2013, Mr. Harris' personal usage of this aircraft totaled
$119,617, and we paid Heliflite $355,851 for use of this aircraft by individuals other than Mr. Harris. Mr.
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Spilker, our President, has an approximately 21% indirect ownership interest in Heliflite and serves as a member of its board of directors.
Investments In Apollo Funds
Our directors and executive officers are generally permitted to invest their own capital (or capital of estate planning vehicles that they control)
directly in our funds. In general, such investments are not subject to management fees, and in certain instances, may not be subject to carried interest.
The opportunity to invest in our funds is available to all of the senior Apollo professionals and to those of our employees whom we have determined
to have a status that reasonably permits us to offer them these types of investments in compliance with applicable laws. From our inception through
December 31, 2013, our professionals have committed or invested approximately $0.9 billion of their own capital to our funds.
The amount invested in our investment funds by our directors and executive officers (and their estate planning vehicles) during 2013 was $8,447,451,
$10,223,213, $7,331,024, $5,486,274 and $918,645 for Messrs Black, Harris, Rowan, Zelter, and Suydam, respectively. The amount of distributions,
including profits and return of capital to our directors and executive officers (and their estate planning vehicles) during 2013 was $177,015,558,
$53,225,718, $40,594,766, $14,746,832, and $6,699,584 for Messrs Black, Harris, Rowan, Zelter, and Suydam, respectively.
Mr. Barry Giarraputo, who was our Chief Accounting Officer and Controller until September 4, 2013, invested $431,022 in our investment funds
during 2013 and he received $2,795,930 of distributions, including profits and return of capital.
Sub- Advisory Arrangements and Strategic Investment Accounts
From time to time, we may enter into sub- advisory arrangements with, or establish strategic investment accounts for, our directors and executive
officers or vehicles they manage. Such arrangements would be approved in advance in accordance with our policy regarding transactions with related
persons. In addition, any such sub- advisory arrangement or strategic investment account would be entered into with, or advised by, an Apollo entity
serving as investment advisor registered under the Investment Advisers Act, and any fee arrangements, if applicable would be on an arms- length
basis.
Indemnification of Directors, Officers and Others
Under our operating agreement, in most circumstances we will indemnify the following persons, to the fullest extent permitted by law, from and
against all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest,
settlements or other amounts: our manager; any departing manager; any person who is or was an affiliate of our manager or any departing manager;
any person who is or was a member, partner, tax matters partner, officer, director, employee, agent, fiduciary or trustee of us or our subsidiaries, our
manager or any departing manager or any affiliate of us or our subsidiaries, our manager or any departing manager; any person who is or was serving
at the request of our manager or any departing manager or any affiliate of our manager or any departing manager as an officer, director, employee,
member, partner, agent, fiduciary or trustee of another person; or any person designated by our manager. We have agreed to provide this
indemnification unless there has been a final and nonappealable judgment by a court of competent jurisdiction determining that these persons acted
in bad faith or engaged in fraud or willful misconduct. We have also agreed to provide this indemnification for criminal proceedings. Any
indemnification under these provisions will only be out of our assets. We may purchase insurance against liabilities asserted against and expenses
incurred by persons for our activities, regardless of whether we would have the power to indemnify the person against liabilities under our operating
agreement.
We have entered into indemnification agreements with each of our directors, executive officers and certain of our employees which set forth the
obligations described above.
We have also agreed to indemnify each of our Managing Partners and certain Contributing Partners against certain amounts that they are required to
pay in connection with a general partner obligation for the return of previously made carried interest distributions in respect of Fund IV, Fund V and
Fund VI. See the above description of the indemnity provisions of the Managing Partners Shareholders Agreement.
Statement of Policy Regarding Transactions with Related Persons
Our board of directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our related person
policy. Our related person policy requires that a related person (as defined in paragraph (a) of Item 404 of Regulation S- K) must promptly
disclose to our Chief Legal Officer any related person transaction (defined as any transaction that is reportable by us under Item 404(a) of
Regulation S- K in which we were or are to be a participant and the amount
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involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect
thereto. Our Chief Legal Officer will then promptly communicate that information to our manager. No related person transaction will be
consummated without the approval or ratification of the executive committee of our manager or any committee of our board of directors consisting
exclusively of disinterested directors. It is our policy that persons interested in a related person transaction will recuse themselves from any vote of a
related person transaction in which they have an interest.
Director Independence
Because more than fifty percent of our voting power is controlled by BRH, we are considered a controlled company as defined in the listing
standards of the NYSE and we are exempt from the NYSE rules that require that:
our board of directors be comprised of a majority of independent

directors;
we establish a compensation committee composed solely of independent directors; and
we establish a nominating and corporate governance committee composed solely of independent

directors.
While our board of directors is currently comprised of a majority of independent directors, we plan on availing ourselves of the controlled company
exceptions. We have elected not to have a nominating and corporate governance committee comprised entirely of independent directors, nor a
compensation committee comprised entirely of independent directors. Our board of directors has determined that four of our seven directors meet the
independence standards under the NYSE and the SEC. These directors are Messrs. Ducey, Fribourg and Krongard and Ms. Richards.
At such time that we are no longer deemed a controlled company, our board of directors will take all action necessary to comply with all applicable
rules within the applicable time period under the NYSE listing standards.
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ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table summarizes the aggregate fees for professional services provided by Deloitte & Touche LLP, the member firms of Deloitte
Touche Tohmatsu, and their respective affiliates (collectively, the Deloitte Entities) for the years ended December 31, 2013 and 2012:
2013
Audit fees
$
Audit fees for Apollo
fund entities
Audit- related fees
Tax fees
Tax fees for Apollo
fund entities
All other fees
2012
(in thousands)
13,465 (1)
$
19,505
2,340
3,580
(2)
13,835
(2)
(1)
(3)(4)
(5)
(6)
12,100
(1)
18,470
875
1,550
(2)
12,125
775
(2)
(3)(4)
(5)
(6)
Audit fees consisted of fees for (a) the audits of our consolidated financial statements in our Annual Report on Form 10- K and services
attendant to, or required by, statute or regulation; (b) reviews of the interim consolidated financial statements included in our quarterly
reports on Form 10- Q.
(2) Audit and Tax fees for Apollo fund entities consisted of services to investment funds managed by Apollo in its capacity as the general partner
and/or manager of such entities.
(3) Audit- related fees consisted of comfort letters, consents and other services related to SEC and other regulatory filings.
(4)
Includes audit- related fees for Apollo fund entities of $0.5 million and $0.6 million for the year ended December 31, 2013 and 2012,
respectively.
(5) Tax fees consisted of fees for services rendered for tax compliance and tax planning and advisory services.
(6) Consisted of certain agreed upon procedures.
Our audit committee charter requires the audit committee to approve in advance all audit and non- audit related services to be provided by our
independent registered public accounting firm in accordance with the audit and non- audit related services pre- approval policy. All services reported
in the Audit, Audit- related, Tax and Other categories above were approved by the audit committee.
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PART IV
ITEM 15. EXHIBITS
Exhibit
Number
Exhibit Description
3.1
Certificate of Formation of Apollo Global Management, LLC (incorporated by reference to Exhibit 3.1 to the
Registrants Registration Statement on Form S- 1 (File No. 333- 150141)).
3.2
Amended and Restated Limited Liability Company Agreement of Apollo Global Management, LLC (incorporated
by reference to Exhibit 3.2 to the Registrants Registration Statement on Form S- 1 (File No. 333- 150141)).
4.1
Specimen Certificate evidencing the Registrants Class A shares (incorporated by reference to Exhibit 4.1 to the
10.1
Amended and Restated Limited Liability Company Operating Agreement of AGM Management, LLC dated as of
July 10, 2007 (incorporated by reference to Exhibit 10.1 to the Registrants Registration Statement on Form S- 1
(File No. 333- 150141)).
10.2
Third Amended and Restated Limited Partnership Agreement of Apollo Principal Holdings I, L.P. dated as of
April 14, 2010 (incorporated by reference to Exhibit 10.2 to the Registrants Registration Statement on Form S- 1
(File No. 333- 150141)).
10.3
Third Amended and Restated Limited Partnership Agreement of Apollo Principal Holdings II, L.P. dated as of
(File No. 333- 150141)).
10.4
Third Amended and Restated Exempted Limited Partnership Agreement of Apollo Principal Holdings III, L.P. dated
as of April 14, 2010 (incorporated by reference to Exhibit 10.4 to the Registrants Registration Statement on Form S1 (File No. 333- 150141)).
10.5
Third Amended and Restated Exempted Limited Partnership Agreement of Apollo Principal Holdings IV, L.P. dated
as of April 14, 2010 (incorporated by reference to Exhibit 10.5 to the Registrants Registration Statement on Form S1 (File No. 333- 150141)).
10.6
Registration Rights Agreement, dated as of August 8, 2007, by and among Apollo Global Management, LLC,
Goldman Sachs & Co., J.P. Morgan Securities Inc. and Credit Suisse Securities (USA) LLC (incorporated by
reference to Exhibit 10.6 to the Registrants Registration Statement on Form S- 1 (File No. 333- 150141)).
10.7
Investor Rights Agreement, dated as of August 8, 2007, by and among Apollo Global Management, LLC, AGM
Management, LLC and Credit Suisse Securities (USA) LLC (incorporated by reference to Exhibit 10.7 to the
+10.8
Apollo Global Management, LLC 2007 Omnibus Equity Incentive Plan, as amended and restated (incorporated by
10.9
Agreement Among Principals, dated as of July 13, 2007, by and among Leon D. Black, Marc J. Rowan, Joshua J.
Harris, Black Family Partners, L.P., MJR Foundation LLC, AP Professional Holdings, L.P. and BRH Holdings, L.P.
(incorporated by reference to Exhibit 10.9 to the Registrants Registration Statement on Form S- 1 (File No. 333150141)).
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10.10
Shareholders Agreement, dated as of July 13, 2007, by and among Apollo Global Management, LLC, AP
Professional Holdings, L.P., BRH Holdings, L.P., Black Family Partners, L.P., MJR Foundation LLC, Leon D.
Black, Marc J. Rowan and Joshua J. Harris (incorporated by reference to Exhibit 10.10 to the Registrants
Registration Statement on Form S- 1 (File No. 333- 150141)).
10.11
Amended and Restated Exchange Agreement, dated as of May 6, 2013, by and among Apollo Global Management,
LLC, Apollo Principal Holdings I, L.P., Apollo Principal Holdings II, L.P., Apollo Principal Holdings III, L.P.,
Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., Apollo Principal Holdings VI, L.P., Apollo
Principal Holdings VII, L.P., Apollo Principal Holdings VIII, L.P., Apollo Principal Holdings IX, L.P., AMH
Holdings (Cayman), L.P. and the Apollo Principal Holders (as defined therein) from time to time party thereto
(incorporated by reference to Exhibit 10.1 to the Registrant's Form 8- K filed with the Securities and Exchange
Commission on May 7, 2013. (File No. 001- 35107)).
10.12
Amended and Restated Tax Receivable Agreement, dated as of May 6, 2013, by and among APO Corp., Apollo
Principal Holdings II, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings VI, Apollo Principal
Holdings VIII, L.P., AMH Holdings (Cayman), L.P. and each Holder defined therein (incorporated by reference to
Exhibit 10.12 to the Registrant's Form 8- K filed with the Securities and Exchange Commission on May 7, 2013.
(File No. 001- 35107)).
10.13
Credit Agreement dated as of April 20, 2007 among Apollo Management Holdings, L.P., as borrower, Apollo
Management, L.P., Apollo Capital Management, L.P., Apollo International Management, L.P., Apollo Principal
Holdings II, L.P., Apollo Principal Holdings IV, L.P. and AAA Holdings, L.P., as guarantors, JPMorgan Chase
Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.13 to the
+10.14
Employment Agreement with Leon D. Black (incorporated by reference to Exhibit 10.43 to the Registrants Form
10- Q for the period ended June 30, 2012 (File No. 001- 35107)).
+10.15
Employment Agreement with Marc J. Rowan (incorporated by reference to Exhibit 10.44 to the Registrants Form
+10.16
Employment Agreement with Joshua J. Harris (incorporated by reference to Exhibit 10.45 to the Registrants Form
+10.17
Employment Agreement with Barry Giarraputo (incorporated by reference to Exhibit 10.17 to the Registrants
+10.18
Amended and Restated Employment Agreement with Joseph F. Azrack (incorporated by reference to Exhibit 10.40
to the Form 10- Q for the period ended June 30, 2012 (File No. 001- 35107)).
10.19
Second Amended and Restated Limited Partnership Agreement of Apollo Principal Holdings V, L.P. dated as of
(File No. 333- 150141)).
10.20
Second Amended and Restated Limited Partnership Agreement of Apollo Principal Holdings VI, L.P. dated as of
(File No. 333- 150141)).
10.21
Second Amended and Restated Exempted Limited Partnership Agreement of Apollo Principal Holdings VII, L.P.
dated as of April 14, 2010 (incorporated by reference to Exhibit 10.22 to the Registrants Registration Statement on
Form S- 1 (File No. 333- 150141)).
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Table of Contents
10.22
Second Amended and Restated Limited Partnership Agreement of Apollo Principal Holdings VIII, L.P. dated as of
(File No. 333- 150141)).
10.23
Second Amended and Restated Exempted Limited Partnership Agreement of Apollo Principal Holdings IX, L.P.
dated as of April 14, 2010 (incorporated by reference to Exhibit 10.24 to the Registrants Registration Statement on
Form S- 1 (File No. 333- 150141)).
10.23
Fourth Amended and Restated Limited Partnership Agreement of Apollo Management Holdings, L.P. dated as of
October 30, 2012. (incorporated by reference to Exhibit 10.25 to the Registrant Form 10- Q for the Registration
Statement on Form S- 1 (File No. 333- 150141)).
10.24
Settlement Agreement, dated December 14, 2008, by and among Huntsman Corporation, Jon M. Huntsman, Peter R.
Huntsman, Hexion Specialty Chemicals, Inc., Hexion LLC, Nimbus Merger Sub, Inc., Craig O. Morrison, Leon
Black, Joshua J. Harris and Apollo Global Management, LLC and certain of its affiliates (incorporated by reference
to Exhibit 10.26 to the Registrants Registration Statement on Form S- 1 (File No. 333- 150141)).
10.25
First Amendment and Joinder, dated as of August 18, 2009, to the Shareholders Agreement, dated as of July 13,
2007, by and among Apollo Global Management, LLC, AP Professional Holdings, L.P., BRH Holdings, L.P., Black
Family Partners, L.P., MJR Foundation LLC, Leon D. Black, Marc J. Rowan and Joshua J. Harris (incorporated by
10.26
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.28 to the Registrants Registration
+10.27
Employment Agreement with James Zelter (incorporated by reference to Exhibit 10.29 to the Registrants
+10.28
Roll- Up Agreement with James Zelter (incorporated by reference to Exhibit 10.30 to the Registrants Registration
+10.29
Form of Restricted Share Unit Award Agreement under the Apollo Global Management, LLC 2007 Omnibus Equity
Incentive Plan (for Plan Grants) (incorporated by reference to Exhibit 10.31 to the Registrants Registration
+10.30
Form of Restricted Share Unit Award Agreement under the Apollo Global Management, LLC 2007 Omnibus Equity
Incentive Plan (for Bonus Grants) (incorporated by reference to Exhibit 10.32 to the Registrants Registration
10.31
Form of Lock- up Agreement (incorporated by reference to Exhibit 10.33 to the Registrants Registration Statement
on Form S- 1 (File No. 333- 150141)).
+10.32
Apollo Management Companies AAA Unit Plan (incorporated by reference to Exhibit 10.34 to the Registrants
+10.33
Employment Agreement with Marc Spilker (incorporated by reference to Exhibit 10.35 to the Registrants
10.34
First Amendment and Joinder, dated as of April 14, 2010, to the Tax Receivable Agreement (incorporated by
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Table of Contents
10.35
First Amendment, dated as of May 16, 2007, to the Credit Agreement, dated as of April 20, 2007, among Apollo
Management Holdings, L.P., as borrower, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A.,
as administrative agent, and the other parties party thereto (incorporated by reference to Exhibit 10.38 to the
10.36
Second Amendment, dated as of December 20, 2010, to the Credit Agreement, dated as of April 20, 2007, as
amended by the First Amendment thereto dated as of May 16, 2007, among Apollo Management Holdings, L.P., as
borrower, the lenders party thereto from time to time JPMorgan Chase Bank as administrative agent and the other
parties party thereto (incorporated by reference to Exhibit 10.39 to the Registrants Registration Statement on Form
S- 1 (File No. 333- 150141)).
+10.37
Non- Qualified Share Option Agreement pursuant to the Apollo Global Management, LLC 2007 Omnibus Equity
Incentive Plan with Marc Spilker dated December 2, 2010 (incorporated by reference to Exhibit 10.40 to the
10.38
Form of Independent Director Engagement Letter (incorporated by reference to Exhibit 10.42 to the Registrants
Form 10- Q for the period ended March 31, 2011 (File No. 001- 35107)).
+10.39
Employment Agreement with Martin Kelly, dated July 2, 2012 (incorporated by reference to Exhibit 10.42 to the
Registrants Form 10- Q for the period ended June 30, 2012 (File No. 001- 35107)).
10.40
Amended and Restated Exempted Limited Partnership Agreement of AMH Holdings, L.P., dated October 30, 2012.
(incorporated by reference to Exhibit 10.46 to the Registrants Form 10- Q for the period ended September 30, 2012
(File No. 001- 35107)).
+*10.41
Amended and Restated Limited Partnership Agreement of Apollo Advisors VI, L.P., dated as of April 14, 2005 and
amended as of August 26, 2005.
+*10.42
Third Amended and Restated Limited Partnership Agreement of Apollo Advisors VII, L.P., dated as of July 1, 2008
and effective as of August 30, 2007.
+*10.43
Third Amended and Restated Limited Partnership Agreement of Apollo Credit Opportunity Advisors I, L.P., dated
January 12, 2011 and made effective as of July 14, 2009.
+*10.44
Third Amended and Restated Limited Partnership Agreement of Apollo Credit Opportunity Advisors II, L.P., dated
+*10.45
Third Amended and Restated Limited Partnership Agreement of Apollo Credit Liquidity Advisors, L.P., dated
+*10.46
Second Amended and Restated Limited Partnership Agreement of Apollo Credit Liquidity CM Executive Carry,
L.P., dated January 12, 2011 and made effective as of July 14, 2009.
+*10.47
Second Amended and Restated Limited Partnership Agreement Apollo Credit Opportunity CM Executive Carry I,
L.P. dated January 12, 2011 and made effective as of July 14, 2009.
+*10.48
Second Amended and Restated Limited Partnership Agreement of Apollo Credit Opportunity CM Executive Carry
II, L.P. dated January 12, 2011 and made effective as of July 14, 2009.
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Table of Contents
+*10.49
Second Amended and Restated Exempted Limited Partnership Agreement of AGM Incentive Pool, L.P., dated June
29, 2012.
*10.50
Credit Agreement, dated as of December 18, 2013, by and among Apollo Management Holdings, L.P. as the Term
Facility Borrower and a Revolving Facility Borrower, the other Revolving Facility Borrowers party thereto, the
other guarantors party thereto from time to time, the lenders party thereto from time to time, the issuing banks party
thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent.
*31.1
Certification of the Chief Executive Officer pursuant to Rule 13a- 14(a).
*31.2
Certification of the Chief Financial Officer pursuant to Rule 13a- 14(a).
*32.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes- Oxley Act of 2002 (furnished herewith).
*32.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes- Oxley Act of 2002 (furnished herewith).
*101.INS
XBRL Instance Document
*101.SCH
XBRL Taxonomy Extension Scheme Document
*101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB
XBRL Taxonomy Extension Label Linkbase Document
*101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
Filed herewith.
XBRL (Extensible Business Reporting Language) information is furnished and not filed for purposes of Sections 11 and 12 of the Securities
Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
+ Management contract or compensatory plan or arrangement.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with
respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any
representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant
agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

(Registrant)
Date: March 3, 2014
By: /s/ Martin Kelly

Name:
Martin Kelly
Title:
(principal financial officer and
authorized signatory)
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Name
Title
Date
/s/ Leon Black

Leon Black
Chairman and Chief Executive Officer and Director

(principal executive officer)
March 3, 2014
/s/ Martin Kelly

Martin Kelly

(principal financial officer)
March 3, 2014
/s/ Chris Weidler

Chris Weidler
Chief Accounting Officer

(principal accounting officer)
March 3, 2014
/s/ Joshua Harris

Joshua Harris
March 3, 2014
/s/ Marc Rowan

Marc Rowan
March 3, 2014
/s/ Michael Ducey

Michael Ducey
Director
March 3, 2014
/s/ Paul Fribourg

Paul Fribourg
Director
March 3, 2014
/s/ AB Krongard
AB Krongard
Director
March 3, 2014
/s/ Pauline Richards

Pauline Richards
Director
March 3, 2014
- 278-
Table of Contents
Exhibit 21.1
LIST OF SUBSIDIARIES
Jurisdiction of Organization
Entity Name
AGRE Europe Management, LLC
AGRE NA Management, LLC
Apollo Credit Liquidity CM Executive Carry, L.P.
Athene Asset Management, LP
2012 CMBS- I GP LLC (fka 2012 CMBS GP LLC)
2012 CMBS- I Management LLC (fka 2012 CMBS Management LLC)
2012 CMBS- II GP LLC
2012 CMBS- II Management LLC
2012 CMBS- III GP LLC
2012 CMBS- III Management LLC
A/A Capital Management, LLC
A/A Investor I, LLC
AAA Associates (Co- Invest VII GP), Ltd.
AAA Associates (Co- Invest VII), LP
AAA Associates, L.P.
AAA Guernsey Limited
AAA Holdings GP Limited
AAA Holdings, L.P.
AAA Life Re Carry, L.P.
AAA MIP Limited
AAM Management Ltd.
ACC Advisors A/B, LLC
ACC Advisors C, LLC
ACC Advisors D, LLC
ACC Management, LLC
ACREFI Management, LLC
AEM GP, LLC
AGM India Advisors Private Limited
AGRE - DCB, LLC
AGRE - E Legacy Management, LLC
AGRE - E2 Legacy Management, LLC
AGRE Asia Pacific Legacy Management, LLC
AGRE Asia Pacific Management, LLC
AGRE Asia Pacific Real Estate Advisors GP, Ltd.
AGRE Asia Pacific Real Estate Advisors, L.P.
AGRE CMBS GP II LLC
AGRE CMBS GP LLC
AGRE CMBS Management II LLC
AGRE CMBS Management LLC
AGRE CRE Debt Manager, LLC
AGRE Debt Fund I GP, Ltd.
AGRE Europe Co- Invest Advisors GP, LLC
AGRE Europe Co- Invest Advisors, LP
AGRE Europe Co- Invest Management GP, LLC
AGRE Europe Co- Invest Management, LP
AGRE Europe Legacy Management, LLC
AGRE GP Holdings, LLC
AGRE NA Legacy Management, LLC
AGRE U.S. Real Estate Advisors Cayman, Ltd.
AGRE U.S. Real Estate Advisors GP, LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Guernsey
Guernsey
Guernsey
Guernsey
Cayman Islands
Guernsey
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
India
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Marshall Islands
Marshall Islands
Marshall Islands
Marshall Islands
Delaware
Delaware
Delaware
Cayman Islands
Delaware
- 279-
Table of Contents
Entity Name
AGRE U.S. Real Estate Advisors, L.P.
AIF III Management, LLC
AIF V Management, LLC
AIF VI Management, LLC
AIF VII Management, LLC
AIF VIII Management, LLC
AION Co- Investors (D) Ltd
ALM IV, Ltd.
ALM Loan Funding 2010- 1, LLC
ALM Loan Funding 2010- 3, Ltd.
ALM V, Ltd.
ALM VI, Ltd
ALM VII ( R), LLC
ALM VII ( R), Ltd
ALM VII ( R)- 2, LLC
ALM VII ( R)- 2, Ltd
ALM VII, Ltd.
ALM VIII, Ltd.
AMH Holdings (Cayman), L.P.
AMH Holdings GP, Ltd.
AMI (Holdings), LLC
AMI (Luxembourg) S.a.r.l.
ANRP EPE GenPar, Ltd
ANRP PG GenPar, Ltd.
ANRP Talos GenPar, Ltd.
AP Alternative Assets, L.P.
AP AOP VII Transfer Holdco, LLC
AP Transport
AP TSL Funding, LLC
APH HFA Holdings GP, Ltd
APH HFA Holdings, L.P.
APH Holdings (DC), L.P.
APH Holdings (FC), L.P.
APH Holdings, L.P.
APH I (SUB I), Ltd
APH III (SUB I), Ltd
APO (FC), LLC
APO Asset Co., LLC
APO Corp.
Apollo Achilles Co- Invest GP, LLC
Apollo Administration GP Ltd.
Apollo Advisors (Mauritius) Ltd.
Apollo Advisors (MHE), LLC
Apollo Advisors IV, L.P.
Apollo Advisors V (EH Cayman), L.P.
Apollo Advisors V (EH), LLC
Apollo Advisors V, L.P.
Apollo Advisors VI (APO DC), L.P.
Apollo Advisors VI (APO DC- GP), LLC
Apollo Advisors VI (APO FC), L.P.
Apollo Advisors VI (APO FC- GP), LLC
Apollo Advisors VI (EH), L.P.
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Mauritius
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Delaware
Delaware
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Luxembourg
Cayman Islands
Cayman Islands
Cayman Islands
Guernsey
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Anguilla
Delaware
Delaware
Anguilla
Cayman Islands
Mauritius
Delaware
Delaware
Cayman Islands
Anguilla
Delaware
Delaware
Delaware
Cayman Islands
Anguilla
Cayman Islands
- 280-
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Entity Name
Apollo Advisors VI (EH- GP), Ltd.
Apollo Advisors VI, L.P.
Apollo Advisors VII (APO DC), L.P.
Apollo Advisors VII (APO DC- GP), LLC
Apollo Advisors VII (APO FC), L.P.
Apollo Advisors VII (APO FC- GP), LLC
Apollo Advisors VII (EH), L.P.
Apollo Advisors VII (EH- GP), Ltd.
Apollo Advisors VII, L.P.
Apollo Advisors VIII (EH), LP
Apollo Advisors VIII (EH- GP), Ltd.
Apollo Advisors VIII, L.P.
Apollo AGRE APREF Co- Investors (D), LP
Apollo AGRE Prime Co- Investors (D), LLC
Apollo AGRE USREF Co- Investors (B), LLC
Apollo AIE II Co- Investors (B), L.P.
Apollo AION Capital Partners
Apollo ALS Holdings II GP, LLC
Apollo ALST GenPar, Ltd.
Apollo ALST Voteco, LLC
Apollo Alternative Assets GP Limited
Apollo Alternative Assets, L.P.
Apollo Anguilla B LLC
Apollo ANRP Advisors (APO DC), L.P.
Apollo ANRP Advisors (APO DC- GP), LLC
Apollo ANRP Advisors (APO FC), L.P.
Apollo ANRP Advisors (APO FC- GP), LLC
Apollo ANRP Advisors (IH), L.P.
Apollo ANRP Advisors (IH- GP), LLC
Apollo ANRP Advisors, L.P.
Apollo ANRP Capital Management, LLC
Apollo ANRP Co- Investors (D), L.P.
Apollo ANRP Co- Investors (DC- D), L.P.
Apollo ANRP Co- Investors (FC- D), L.P.
Apollo ANRP Co- Investors (IH- D), LP
Apollo ANRP Fund Administration, LLC
Apollo APC Capital Management, LLC
Apollo APC Advisors, L.P.
Apollo APC Management GP, LLC
Apollo APC Management, L.P.
Apollo Asia Administration, LLC
Apollo Asia Advisors, L.P.
Apollo Asia Capital Management, LLC
Apollo Asia Management GP, LLC
Apollo Asia Management, L.P.
Apollo Asian Infrastructure Management, LLC
Apollo ASPL Management, LLC
Apollo Athlon GenPar, Ltd.
Apollo BSL Management, LLC
Apollo Capital Credit Management, LLC
Apollo Capital Management GP, LLC
Apollo Capital Management IV, Inc.
Cayman Islands
Delaware
Delaware
Delaware
Cayman Islands
Anguilla
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Anguilla
Delaware
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Anguilla
Delaware
Delaware
Cayman Islands
Anguilla
Cayman Islands
Anguilla
Delaware
Delaware
Delaware
Delaware
Anguilla
Anguilla
Delaware
Anguilla
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
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Table of Contents
Entity Name
Apollo Capital Management V, Inc.
Apollo Capital Management VI, LLC
Apollo Capital Management VII, LLC
Apollo Capital Management VIII, LLC
Apollo Capital Management, L.P.
Apollo Capital Spectrum Advisors, LLC
Apollo Capital Spectrum Management, LLC
Apollo Centre Street Advisors (APO DC), LLC
Apollo Centre Street Advisors (APO DC- GP), LLC
Apollo Centre Street Co- Investors (DC- D), L.P.
Apollo Centre Street Management, LLC
Apollo CKE GP, LLC
Apollo COF I Capital Management, LLC
Apollo COF II Capital Management, LLC
Apollo COF Investor, LLC
Apollo Co- Investors (NR EH- D), LP
Apollo Co- Investors Manager, LLC
Apollo Co- Investors VI (D), L.P.
Apollo Co- Investors VI (DC- D), L.P.
Apollo Co- Investors VI (EH- D), LP
Apollo Co- Investors VI (FC- D), LP
Apollo Co- Investors VII (D), L.P.
Apollo Co- Investors VII (DC- D), L.P.
Apollo Co- Investors VII (EH- D), LP
Apollo Co- Investors VII (FC- D), L.P.
Apollo Co- Investors VII (NR D), L.P.
Apollo Co- Investors VII (NR DC- D), L.P.
Apollo Co- Investors VII (NR FC- D), LP
Apollo Co- Investors VIII (D), L.P.
Apollo Co- Investors VIII (EH- D), LP
Apollo Commodities Management GP, LLC
Apollo Commodities Management, L.P.
Apollo Commodities Partners Fund Administration, LLC
Apollo Consumer Credit Advisors, LLC
Apollo Consumer Credit Fund, LP
Apollo Consumer Credit Master Fund, LP
Apollo Credit Advisors I, LLC
Apollo Credit Advisors II, LLC
Apollo Credit Advisors III, LLC
Apollo Credit Capital Management, LLC
Apollo Credit Fund LP (fka Stone Tower Credit Fund LP)
Apollo Credit Funding I Ltd. (fka Stone Tower Credit Funding I Ltd.)
Apollo Credit Income Advisors LLC
Apollo Credit Income Co- Investors (D) LLC
Apollo Credit Income Management LLC
Apollo Credit Liquidity Advisors, L.P.
Apollo Credit Liquidity Capital Management, LLC
Apollo Credit Liquidity Investor, LLC
Apollo Credit Liquidity Management GP, LLC
Apollo Credit Liquidity Management, L.P.
Apollo Credit Management (CLO), LLC
Apollo Credit Management (European Senior Debt), LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Anguilla
Delaware
Delaware
Delaware
Anguilla
Anguilla
Delaware
Delaware
Anguilla
Anguilla
Delaware
Delaware
Anguilla
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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Entity Name
Apollo Credit Management (Senior Loans) II, LLC
Apollo Credit Management (Senior Loans), LLC
Apollo Credit Management, LLC
Apollo Credit Opportunity Advisors I, L.P.
Apollo Credit Opportunity Advisors II, L.P.
Apollo Credit Opportunity Advisors III GP LLC
Apollo Credit Opportunity Advisors III, L.P.
Apollo Credit Opportunity CM Executive Carry I, L.P.
Apollo Credit Opportunity CM Executive Carry II, L.P.
Apollo Credit Opportunity Co- Investors III (D) LLC
Apollo Credit Opportunity Management III LLC
Apollo Credit Opportunity Management, LLC
Apollo Credit Senior Loan Fund, L.P.
Apollo Credit Short Opportunities Advisors LLC
Apollo Credit Short Opportunities Management, LLC
Apollo Emerging Markets, LLC
Apollo EPF Administration, Limited
Apollo EPF Advisors II, L.P.
Apollo EPF Advisors, L.P.
Apollo EPF Capital Management, Limited
Apollo EPF Co- Investors (B), L.P.
Apollo EPF Co- Investors II (D), L.P.
Apollo EPF Co- Investors II (EURO), LP
Apollo EPF II Capital Management, LLC
Apollo EPF Management GP, LLC
Apollo EPF Management II GP, LLC
Apollo EPF Management II, L.P.
Apollo EPF Management, L.P.
Apollo Europe Advisors, L.P.
Apollo Europe Capital Management, Ltd
Apollo Europe Management, L.P.
Apollo European Credit Advisors, L.P.
Apollo European Credit Advisors, LLC
Apollo European Credit Co- Investors, LLC
Apollo European Credit Management, L.P.
Apollo European Credit Management, LLC
Apollo European Senior Debt Advisors II, LLC
Apollo European Senior Debt Advisors, LLC
Apollo European Senior Debt Management, LLC
Apollo European Strategic Advisors, L.P.
Apollo European Strategic Advisors, LLC
Apollo European Strategic Co- Investors, LLC
Apollo European Strategic Management, L.P.
Apollo European Strategic Management, LLC
Apollo Executive Carry VII (NR APO DC), L.P.
Apollo Executive Carry VII (NR APO FC), L.P.
Apollo Executive Carry VII (NR EH), L.P.
Apollo Executive Carry VII (NR), L.P.
Apollo Franklin Advisors (APO DC), LP
Apollo Franklin Advisors (APO DC- GP), LLC
Apollo Franklin Co- Investors (DC- D), LP
Apollo Franklin Management, LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Marshall Islands
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
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Entity Name
Apollo Fund Administration IV, L.L.C.
Apollo Fund Administration V, L.L.C.
Apollo Fund Administration VI, LLC
Apollo Fund Administration VII, LLC
Apollo Fund Administration VIII, LLC
Apollo Gaucho GenPar, Ltd
Apollo Global Real Estate Management GP, LLC
Apollo Global Real Estate Management, L.P.
Apollo Global Securities, LLC
Apollo GSS GP Limited
Apollo India Credit Opportunity Management, LLC
Apollo International Management (Canada) ULC
Apollo International Management GP, LLC
Apollo International Management, L.P.
Apollo Investment Administration, LLC
Apollo Investment Consulting LLC
Apollo Investment Management, L.P.
Apollo Laminates Agent, LLC
Apollo Life Asset Ltd
Apollo Longevity, LLC
Apollo Management (AOP) VII, LLC
Apollo Management (AOP) VIII, LLC
Apollo Management (Germany) VI, LLC
Apollo Management (MHE), LLC
Apollo Management (UK) VI, LLC
Apollo Management (UK), L.L.C.
Apollo Management Advisors GmbH
Apollo Management Asia Pacific Limited
Apollo Management GP, LLC
Apollo Management Holdings GP, LLC
Apollo Management Holdings, L.P.
Apollo Management III, L.P.
Apollo Management International LLP
Apollo Management IV, L.P.
Apollo Management Singapore Pte Ltd
Apollo Management V, L.P.
Apollo Management VI, L.P.
Apollo Management VII, L.P.
Apollo Management VIII, L.P.
Apollo Management, L.P.
Apollo Maritime Management, LLC
Apollo Master Fund Administration, LLC
Apollo Master Fund Feeder Advisors, L.P.
Apollo Master Fund Feeder Management, LLC
Apollo Offshore Credit Fund Ltd. (fka Stone Tower Offshore Credit Fund Ltd)
Apollo Palmetto Advisors, L.P.
Apollo Palmetto Athene Advisors, L.P.
Apollo Palmetto Athene Management, LLC
Apollo Palmetto HFA Advisors, L.P.
Apollo Palmetto Management, LLC
Apollo Parallel Partners Administration, LLC
Apollo PE VIII Director, LLC
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Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Channel Islands
Delaware
British Columbia
Delaware
Delaware
Maryland
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Germany
Hong Kong
Delaware
Delaware
Delaware
Delaware
UK
Delaware
Singapore
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Anguilla
Table of Contents
Entity Name
Apollo PG GenPar, Ltd.
Apollo Principal Holdings I GP, LLC
Apollo Principal Holdings I, L.P.
Apollo Principal Holdings II GP, LLC
Apollo Principal Holdings II, L.P.
Apollo Principal Holdings III GP, Ltd.
Apollo Principal Holdings III, L.P.
Apollo Principal Holdings IV GP, Ltd.
Apollo Principal Holdings IV, L.P.
Apollo Principal Holdings IX GP, Ltd.
Apollo Principal Holdings IX, L.P.
Apollo Principal Holdings V GP, LLC
Apollo Principal Holdings V, L.P.
Apollo Principal Holdings VI GP, LLC
Apollo Principal Holdings VI, L.P.
Apollo Principal Holdings VII GP, Ltd.
Apollo Principal Holdings VII, L.P.
Apollo Principal Holdings VIII GP, Ltd.
Apollo Principal Holdings VIII, L.P.
Apollo Resolution Servicing GP, LLC
Apollo Resolution Servicing, L.P.
Apollo Rose GP, LP
Apollo Royalties Management, LLC
Apollo Senior Loan Fund Co- Investors (D), L.P.
Apollo SK Strategic Advisors, L.P.
Apollo SK Strategic Advisors, LLC
Apollo SK Strategic Co- Investors (FC- D), LLC
Apollo SK Strategic Management, LLC
Apollo SOMA Advisors, L.P.
Apollo SOMA Capital Management, LLC
Apollo SOMA II Advisors, L.P.
Apollo SPN Advisors (APO DC), L.P.
Apollo SPN Advisors (APO FC), L.P.
Apollo SPN Advisors, L.P.
Apollo SPN Capital Management (APO DC- GP), LLC
Apollo SPN Capital Management (APO FC- GP), LLC
Apollo SPN Capital Management, LLC
Apollo SPN Co- Investors (D), L.P.
Apollo SPN Co- Investors (DC- D), L.P.
Apollo SPN Co- Investors (FC- D), L.P.
Apollo SPN Management, LLC
Apollo ST CLO Holdings GP, LLC
Apollo ST Credit Partners GP LLC
Apollo ST Credit Strategies GP LLC
Apollo ST Debt Advisors LLC
Apollo ST Fund Management LLC
Apollo ST Operating LP
Apollo ST Structured Credit Recovery Partners II GP LLC
Apollo Strategic Advisors, L.P.
Apollo Strategic Capital Management, LLC
Apollo Strategic Management GP, LLC
Apollo Strategic Management, L.P.
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Cayman Islands
Anguilla
Marshall Islands
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Anguilla
Anguilla
Anguilla
Anguilla
Anguilla
Anguilla
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
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Entity Name
Apollo Structured Credit Recovery Advisors III LLC
Apollo Structured Credit Recovery Co- Investors III (D), LLC
Apollo Structured Credit Recovery Management III LLC
Apollo SVF Administration, LLC
Apollo SVF Advisors, L.P.
Apollo SVF Capital Management, LLC
Apollo SVF Management GP, LLC
Apollo SVF Management, L.P.
Apollo Talos GenPar, Ltd.
Apollo Total Return Advisors GP LLC
Apollo Total Return Advisors LP
Apollo Total Return Co- Investors (D) GP LLC
Apollo Total Return Co- Investors (D) LP
Apollo Total Return Management LLC
Apollo Value Administration, LLC
Apollo Value Advisors, L.P.
Apollo Value Capital Management, LLC
Apollo Value Management GP, LLC
Apollo Value Management, L.P.
Apollo Verwaltungs V GmbH
Apollo VII TXU Administration, LLC
Apollo Zeus Strategic Advisors, LLC
Apollo Zeus Strategic Advisors, LP
Apollo Zeus Strategic Co- Investors (DC- D), LLC
Apollo Zeus Strategic Management, LLC
Apollo Zohar Advisors LLC
Apollo/Artus Management, LLC
ARM Manager, LLC
Athene Investment Analytics LLC
Athene Mortgage Opportunities GP, LLC
August Global Management, LLC
Blue Bird GP, Ltd.
CAI Strategic European Real Estate Advisors GP, LLC
CAI Strategic European Real Estate Advisors, L.P.
Champ GP, LLC
CMP Apollo LLC
Cornerstone CLO Ltd.
CPI Asia G- Fdr General Partner GmbH
CPI Capital Partners Asia Pacific GP Ltd.
CPI Capital Partners Asia Pacific MLP II Ltd.
CPI Capital Partners Europe GP Ltd.
CPI CCP EU- T Scots GP Ltd.
CPI European Carried Interest, L.P.
CPI European Fund GP LLC
CPI NA Cayman Fund GP, L.P.
CPI NA Fund GP LP
CPI NA GP LLC
CPI NA WT Fund GP LP
Cyclone Royalties, LLC
Delaware Rose GP, LLC
EPE Acquisition Holdings, LLC
EPF II Team Carry Plan, L.P.
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Germany
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Florida
Cayman Islands
Marshall Islands
Marshall Islands
Delaware
Delaware
Cayman Islands
Germany
Cayman Islands
Cayman Islands
Cayman Islands
Scotland
Delaware
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Marshall Islands
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Table of Contents
Entity Name
Financial Credit I Capital Management, LLC
Financial Credit II Capital Management, LLC
Financial Credit Investment Advisors I, L.P.
Financial Credit Investment Advisors II, LP
Financial Credit Investment I Manager, LLC
Financial Credit Investment II Manager, LLC
Granite Ventures II Ltd.
Granite Ventures III Ltd.
Green Bird GP, Ltd.
Greenhouse Holdings, Ltd.
GSAM Apollo Holdings, LLC
Gulf Stream - Compass CLO 2005- II, Ltd.
Gulf Stream - Compass CLO 2007, Ltd.
Gulf Stream - Rashinban CLO 2006- I, Ltd.
Gulf Stream - Sextant CLO 2006- I, Ltd.
Gulf Stream - Sextant CLO 2007- I, Ltd.
Gulf Stream Asset Management, LLC
Harvest Holdings, LLC
Insight Solutions GP, LLC
Karpos Investments, LLC
Lapithus EPF II Team Carry Plan, LP
LeverageSource Management, LLC
London Prime Apartments Guernsey Holdings Limited
London Prime Apartments Guernsey Limited
Neptune Finance CCS, Ltd.
Ohio Haverly Finance Company GP, LLC
Ohio Haverly Finance Company, L.P.
Rampart CLO 2006- 1 Ltd.
Rampart CLO 2007 Ltd.
Red Bird GP, Ltd.
Smart & Final Holdco LLC
ST Holdings GP, LLC
ST Management Holdings, LLC
Stanhope Life Advisors, L.P.
Stone Tower Capital LLC
Stone Tower CLO II Ltd.
Stone Tower CLO III Ltd.
Stone Tower CLO IV Ltd.
Stone Tower CLO V Ltd.
Stone Tower CLO VI Ltd.
Stone Tower CLO VII Ltd.
Stone Tower Credit Solutions Fund LP
Stone Tower Credit Solutions GP LLC
Stone Tower Europe Limited
Stone Tower Europe LLC
Stone Tower Loan Value Recovery Fund GP LLC
Stone Tower Offshore Ltd.
Stone Tower Structured Credit Recovery Partners GP, LLC
VC GP C, LLC
VC GP, LLC
Verso Paper Investments Management LLC
Delaware
Delaware
Cayman Islands
Cayman Islands
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
North Carolina
Marshall Islands
Delaware
Marshall Islands
Marshall Islands
Delaware
Guernsey
Guernsey
Cayman Islands
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Delaware
Delaware
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Delaware
Ireland
Ireland
Delaware
Cayman Islands
Delaware
Delaware
Delaware
Delaware
Exhibit 31.1
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Table of Contents
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, Leon Black, certify that:
1.
I have reviewed this Annual Report on Form 10- K for the year ended December 31, 2013 of Apollo Global Management, LLC;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.
The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a- 15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and
15d- 15(f)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the Registrants most
recent fiscal quarter (the Registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrants internal control over financial reporting; and
5.
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal
control over financial reporting.
Date: March 3, 2014
/s/ Leon Black
Leon Black
Chief Executive Officer
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Exhibit 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Martin Kelly, certify that:
1.
2.
I have reviewed this Annual Report on Form 10- K for the year ended December 31, 2013 of Apollo Global Management, LLC
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.
The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a- 15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and
15d- 15(f)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b)
c)
Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the
d)
Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the Registrants most
recent fiscal quarter (the Registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrants internal control over financial reporting; and
5.
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal
control over financial reporting.
Date: March 3, 2014
/s/ Martin Kelly
Martin Kelly
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Table of Contents
Exhibit 32.1
Certification of the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
In connection with the Annual Report of Apollo Global Management, LLC (the Company) on Form 10- K for the year ended December 31, 2013
as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Leon Black, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
Date: March 3, 2014
/s/ Leon Black
Leon Black
* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.
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Table of Contents
Exhibit 32.2
Certification of the Chief Financial Officer
as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Martin Kelly, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that to my knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
Date: March 3, 2014
/s/ Martin Kelly
Martin Kelly
* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.
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CONFIDENTIAL AND PROPRIETARY This company is the general partner of Apollo Investment Fund VI, L.P. and earns the carried interest on Fund VI profits. Apollo Advisors VI, L.P. Amended and Restated Limited
Partnership Agreement Dated as of April 14, 2005 Amended as of August 26, 2005 THE TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN THIS AGREEMENT IS RESTRICTED AS DESCRIBED
HEREIN.
i TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS................................................................................................1 ARTICLE 2 FORMATION AND ORGANIZATION........................................................8 Section 2.1
Formation.................................................................................................8 Section 2.2 Name ........................................................................................................8 Section 2.3
Offices......................................................................................................9 Section 2.4 Term of Partnership .................................................................................9 Section 2.5 Purpose of the Partnership
.......................................................................9 Section 2.6 Actions by Partnership...........................................................................10 Section 2.7 Admission of Limited Partners ..............................................................10
ARTICLE 3 CAPITAL......................................................................................................10 Section 3.1 Contributions to Capital.........................................................................10 Section 3.2 Rights of Partners in Capital
..................................................................11 Section 3.3 Capital Accounts....................................................................................11 Section 3.4 Allocation of Profit and Loss.................................................................12 Section 3.5
Tax Allocations......................................................................................13 Section 3.6 Reserves; Adjustments for Certain Future Events .................................13 Section 3.7 Finality and Binding Effect of General Partner's
Determinations .........14 ARTICLE 4 DISTRIBUTIONS ........................................................................................14 Section 4.1 Distributions...........................................................................................14 Section 4.2 Withholding
of Certain Amounts...........................................................15 Section 4.3 Limitation on Distributions....................................................................16 ARTICLE 5
MANAGEMENT..........................................................................................16 Section 5.1 Rights and Powers of the General Partner .............................................16 Section 5.2 Delegation of Duties
..............................................................................17 Section 5.3 Transactions with Affiliates...................................................................18 Section 5.4 Expenses ................................................................................................19
Section 5.5 Rights of Limited Partners .....................................................................19 Section 5.6 Other Activities of Partners ...................................................................19 Section 5.7 Duty of Care; Indemnification
...............................................................20 ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS.............................21 Section 6.1 Admission of Additional Limited Partners; Effect on Points ................21
Section 6.2 Admission of Additional General Partner .............................................22 Section 6.3 Transfer of Interests of Limited Partners ...............................................22 Section 6.4 Withdrawal of Partners
..........................................................................23 Section 6.5 Pledges ...................................................................................................24
ii ARTICLE 7 ALLOCATION OF POINTS; ADJUSTMENTS OF POINTS AND RETIREMENT OF PARTNERS.......................................................................................25 Section 7.1 Allocation of Points
...............................................................................25 Section 7.2 Retirement of Partner.............................................................................25 Section 7.3 Effect of Retirement on Points...............................................................26
Section 7.4 Non- solicitation; Non- compete............................................................27 ARTICLE 8 DISSOLUTION AND LIQUIDATION .......................................................28 Section 8.1 Dissolution and Liquidation of
Partnership ...........................................28 ARTICLE 9 GENERAL PROVISIONS............................................................................29 Section 9.1 Amendment of Partnership Agreement .................................................29 Section
9.2 Special Power- of- Attorney ....................................................................30 Section 9.3 Notices ...................................................................................................32 Section 9.4 Agreement Binding Upon Successors and
Assigns ...............................32 Section 9.5 Merger, Consolidation, etc.....................................................................32 Section 9.6 Governing Law ......................................................................................33 Section 9.7 Termination
of Right of Action .............................................................33 Section 9.8 Confidentiality .......................................................................................33 Section 9.9 Not for Benefit of
Creditors...................................................................34 Section 9.10 Consents.............................................................................................34 Section 9.11 Reports ...............................................................................................34
Section 9.12 Filings ................................................................................................34 Section 9.13 Headings, Gender, Etc. ......................................................................34
1 APOLLO ADVISORS VI, L.P. A Delaware Limited Partnership AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of
APOLLO ADVISORS VI, L.P. made as of the 26th day of August, 2005 by and among Apollo Capital Management VI, LLC, a Delaware limited liability company, as the sole general partner, and the persons whose names
and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners. W I T N E S S E T H : WHEREAS, on April 14, 2005, Apollo Capital Management VI, LLC filed with the
Secretary of State of the State of Delaware a Certificate of Limited Partnership to form Apollo Advisors VI, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant to an
agreement among Apollo Capital Management VI, LLC, as sole general partner, and Messrs. Leon D. Black and John J. Hannan as initial limited partners (the Original Agreement); WHEREAS, the parties wish to amend
and restate the Original Agreement in its entirety in connection with the commencement of operations of the Funds (as defined herein); NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE 1
DEFINITIONS Act means the Delaware Revised Uniform Limited Partnership Act, as in effect on the date hereof and as amended from time to time, or any successor law. Advisory Board has the meaning ascribed to
that term in each of the Fund LP Agreements. Affiliate means with respect to any Person any other Person directly or indirectly controlling, controlled by or under common control with such Person. Agreement means
this Amended and Restated Limited Partnership Agreement, as amended or supplemented from time to time. AIF means Apollo Investment Fund VI, L.P., a limited partnership formed under the Act.
2 Capital Account means with respect to each Partner the capital account established and maintained on behalf of such Partner as described in Section 3.3. Cause means with respect to any Limited Partner, an election by
such Limited Partner in accordance with Section 7.2(a)(ii) or a determination by the General Partner that any of the following events has occurred with respect to such Limited Partner: (a) the Limited Partner's conviction of a
felony or plea of no contest to a felony charge; (b) the Limited Partner's intentional violation of law in connection with any transaction involving the purchase, sale, loan or other disposition of, or the rendering of investment
advice with respect to, any security, futures or forward contract, insurance contract, debt instrument or currency; (c) dishonesty, bad faith, gross negligence, willful misconduct, fraud or willful or reckless disregard of duties
by a Limited Partner in connection with the performance of any services on behalf of the Partnership or any Affiliate; (d) intentional failure by a Limited Partner to comply with any reasonable directive of the General Partner
in connection with the performance of any services on behalf of the Partnership or any Affiliate; (e) intentional breach by a Limited Partner of any material provision of this Agreement, any of the Fund LP Agreements, the
Co- Investors (A) LLC Agreement or any of the equivalent agreements of any other Affiliate; (f) intentional violation by a Limited Partner of any material written policies adopted by the General Partner governing the conduct
of Persons performing services on behalf of the Partnership or any Affiliate; (g) the taking of or omission to take any action that has caused or substantially contributed to a material deterioration in the business or reputation
of the Partnership or any of its Affiliates, or that was otherwise materially disruptive of their business or affairs; provided, however, that the term Cause shall not include for this purpose (i) any mistake of judgment made in
good faith with respect to any transaction respecting a Portfolio Investment for the account of any of the Funds or (ii) a communication to other Partners, in a professional and business- like manner, of any bona fide
disagreement or suggestion concerning a proposed action by the Partnership or an Affiliate; (h) the failure by a Limited Partner to devote a significant portion of time to performing services as an agent of the Partnership
without the prior consent of the General Partner, other than by reason of death or Disability; (i) the obtaining by a Limited Partner of any material improper personal benefit as a result of a breach by such Limited Partner of
any covenant or agreement (including, without limitation, a breach by a Limited Partner of the Partnerships code of ethics or a material breach
3 by a Limited Partner of other written policies furnished to the Limited Partner relating to personal investment transactions or of any covenant, agreement, representation or warranty contained in any of the Fund LP
Agreements); or (j) the declaration by a Voting Partner of Bankruptcy (as such term is defined in each of the Fund LP Agreements); provided, however, that if a failure, breach, violation or action or omission described in any
of clauses (d) through (g) is capable of being cured, the Limited Partner has failed to do so after being given notice and a reasonable opportunity to cure. Certificate means the Certificate of Limited Partnership of the
Partnership and any amendments thereto as filed with the office of the Secretary of State of the State of Delaware. Clawback Payment means any payment required to be made by the Partnership to any Fund pursuant to
Section 10.3 of the Fund LP Agreement of such Fund. Clawback Share means, with respect to any Limited Partner and any Clawback Payment, a portion of such Clawback Payment equal to (i) the cumulative amount
distributed to such Limited Partner prior to the time of determination of Operating Profit attributable to the Fund to which the Clawback Payment is required to be made, divided by (ii) the cumulative amount so distributed to
all Partners with respect to such Operating Profit attributable to such Fund. Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor law. Co- Investors (A)
LLC Agreement means the limited liability company agreement of Apollo Co- Investors VI (A), LLC, as amended from time to time. Code means the United States Internal Revenue Code of 1986, as amended and as
hereafter amended, or any successor law. Commitment Period has the meaning ascribed to that term in each of the Fund LP Agreements. Confidential Information means information that has not been made publicly
available by or with the permission of the General Partner and that is obtained or learned by a Limited Partner as a result of or in connection with his association with the Partnership or any of its Affiliates concerning the
business, affairs or activities of the Partnership, any of its Affiliates or any of the Portfolio Investments, including, without limitation, models, codes, client information (including client identity and contacts, client lists, client
financial or personal information), financial data, know- how, computer software and related documentation, trade secrets, and other forms of sensitive or valuable non- public information obtained or learned by the Limited
Partner as a result of such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information does not include information concerning non- proprietary business or
4 investment practices, methods or relationships customarily employed or entered into by comparable business enterprises Covered Person has the meaning ascribed to that term in Section 5.7. Disability means, with
respect to a Limited Partner, any physical or mental illness, disability or incapacity that prevents the Limited Partner from performing substantially all of the duties delegated to him as an agent of the Partnership pursuant to
Section 5.2. FC Loss means, for each Fund with respect to any Fiscal Year, the portion of any Net Loss and any Portfolio Investment Loss allocable to the Partnership, but only to the extent such allocation is made by such
Fund to the Partnership in proportion to the Partnership's capital contribution to such Fund, as determined pursuant to the Fund LP Agreement. FC Profit means, for each Fund with respect to any Fiscal Year, the portion of
any Net Income and any Portfolio Investment Gain allocable to the Partnership, but only to the extent such allocation is made by such Fund to the Partnership in proportion to the Partnership's capital contribution to such
Fund, as determined pursuant to the Fund LP Agreement. FC Share means a share of the FC Profit or FC Loss with respect to each of the Funds. The aggregate number of FC Shares with respect to each Fund shall be equal
to the dollar amount of the Partnership's capital commitment to such Fund. Final Adjudication has the meaning ascribed to that term in Section 5.7. Fiscal Year means, with respect to a year, the period commencing on
January 1 of such year and ending on December 31 of such year (or on the date of a final distribution pursuant to Section 8.1(a)(iii)), unless the General Partner shall elect another fiscal year for the Partnership which is a
permissible taxable year under the Code. Fund means each of AIF and each other entity that is a Co- Investing Entity within the meaning of the Fund LP Agreement of AIF. Such term also includes each alternative
investment vehicle created by any such Co- Investing Entity, to the extent the context so requires. Fund LP Agreement means the limited partnership agreement of any of the Funds, as amended from time to time. General
Partner means Apollo Capital Management VI, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in its capacity as general
partner of the Partnership. Giveback Amount has the meaning ascribed to that term in Section 7.4(d). Investment Committee means the committee constituted pursuant to the Management Company LP Agreement.
Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, including any Retired Partner and any Voting Partner, until
5 such Person withdraws entirely as a limited partner of the Partnership, in his capacity as a limited partner of the Partnership. All references herein to a Limited Partner shall be construed as referring collectively to such
Limited Partner and to each Related Party of such Limited Partner (and to each Person of which such Limited Partner is a Related Party) that also is or that previously was a Limited Partner, except to the extent that the
General Partner determines that the context does not require such interpretation as between such Limited Partner and his Related Parties. Management Company has the meaning ascribed to that term in each of the Fund LP
Agreements. Management Company LP Agreement means the limited partnership agreement of the Management Company, as amended from time to time. Managing Partner means the Partnership in its capacity as a
general partner of any of the Funds pursuant to the Fund LP Agreement. Maximum Dilution Percentage has the meaning ascribed to that term in Section 6.1(a). Net Income has the meaning ascribed to that term in each of
the Fund LP Agreements. Net Loss has the meaning ascribed to that term in each of the Fund LP Agreements. Operating Loss means, with respect to any Fiscal Year, any net loss of the Partnership, adjusted to exclude (i)
any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction Proceeds derived by the Partnership. To the extent derived from any Fund, any items of income, gain, loss, deduction
and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the relevant Fund, and any items not derived from a Fund shall be determined in
accordance with the accounting policies, principles and procedures used by the Partnership for federal income tax purposes. Operating Profit means, with respect to any Fiscal Year, any net income of the Partnership,
adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction Proceeds derived by the Partnership. To the extent derived from any Fund, any items of
income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the relevant Fund, and any items not derived from a
Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for federal income tax purposes. Partner means the General Partner or any of the Limited Partners, and
Partners means the General Partner and all of the Limited Partners. Partnership means the limited partnership continued pursuant to this Agreement.
6 Permanent Disability means a Disability that continues for (a) periods aggregating at least 24 months during any period of 48 consecutive months or (b) such shorter period as the General Partner may determine. Person
means any individual, partnership, corporation, limited liability company, joint venture, joint stock company, unincorporated organization or association, trust (including the trustees thereof, in their capacity as such),
government, governmental agency, political subdivision of any government, or other entity. Point means a 1/2,000 share of Operating Profit or Operating Loss. The aggregate number of Points assigned or available for
assignment to all Partners shall not at any time exceed 2,000. Portfolio Investment has the meaning ascribed to that term in each of the Fund LP Agreements. Portfolio Investment Gain has the meaning ascribed to that
term in each of the Fund LP Agreements. Portfolio Investment Loss has the meaning ascribed to that term in each of the Fund LP Agreements. Reference Rate means the interest rate described in Section 3.1(c) (or the
corresponding provision) of each of the Fund LP Agreements. Related Party means, with respect to any Limited Partner: (a) any spouse, child or other lineal descendant or collateral relative, or any natural Person who
occupies the same principal residence as the Limited Partner; (b) any trust or estate in which the Limited Partner and any Related Party or Related Parties (other than such trust or estate) collectively have more than 80 percent
of the beneficial interests (excluding contingent and charitable interests); and (c) any entity of which the Limited Partner and any Related Party or Related Parties (other than such entity) collectively are beneficial owners of
more than 80 percent of the equity interest; and (d) any Person with respect to whom such Limited Partner is a Related Party. Required Voting Partners means, at any time, at least two- thirds by number of Limited Partners
that are Voting Partners at such time. Retired Partner means any Limited Partner who has become a retired partner in accordance with or pursuant to Section 7.2.
7 Schedule of Partners means a schedule to be maintained by the General Partner showing the following information with respect to each Partner: name, address, date of admission and retirement, required capital
contribution, and FC Shares. Transfer means any direct or indirect sale, exchange, transfer, assignment or other disposition by a Partner of any or all of his interest in the Partnership (whether respecting, for example,
economic rights only or all the rights associated with the interest) to another Person, whether voluntary or involuntary. Triggering Event has the meaning ascribed to such term in each of the Fund LP Agreements. UCC
has the meaning ascribed to that term in Section 6.5(d). Unvested Points means, with respect to any Limited Partner as of the commencement of any Vesting Period, any amount by which (a) the total Points assigned to such
Limited Partner as of such date, excluding, unless otherwise determined by the General Partner, any Points assigned to such Limited Partner pursuant to Section 7.3(b), exceed (b) such Limited Partner's Vested Points, if any,
as of such time. Any reduction of such Limited Partner's Points in connection with the admission of a new Partner or the increase of the Points of any existing Limited Partner pursuant to Section 6.1 shall first reduce such
Limited Partner's Unvested Points to the extent thereof, and the balance of any such reduction shall be applied to such Limited Partner's Vested Points. Vested Points means, with respect to any Limited Partner at any time,
the sum of: (a) with respect to the first Vesting Period, the product of (i) such Limited Partner's Points as of the commencement of the first Vesting Period multiplied by (ii) such Limited Partner's Vesting Percentage with
respect to the first Vesting Period, plus (b) with respect to each Vesting Period after the first Vesting Period and without duplication (i) such Limited Partner's Vested Points, if any, as of the close of the immediately preceding
Vesting Period, plus (ii) the product of (A) such Limited Partner's Unvested Points as of the commencement of such Vesting Period multiplied by (B) such Limited Partner's Vesting Percentage with respect to such Vesting
Period. Vesting Date means, with respect to any Limited Partner,
8 Vesting Percentage means, with respect to any Vesting Period of any Limited Partner, Voting Partner means each of the members of the Investment Committee, so long as he has not become a Retired Partner. All
references herein to a Voting Partner (except in the definition of Required Voting Partners) shall be construed as referring collectively to such Voting Partner and to each Related Party of such Voting Partner that also is or that
previously was a Limited Partner (unless such Limited Partner is a Retired Partner), except to the extent that the General Partner determines that the context does not require such interpretation as between such Voting Partner
and his Related Parties. ARTICLE 2 FORMATION AND ORGANIZATION Section 2.1 Formation The Partnership was formed and is hereby continued as a limited partnership under and pursuant to the Act. The Certificate
was filed on April 14, 2005. The General Partner shall execute, acknowledge and file any amendments to the Certificate as may be required by the Act and any other instruments, documents and certificates which, in the
opinion of the Partnership's legal counsel, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Partnership shall determine to do business,
or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership. Section
2.2 Name The name of the Partnership shall be Apollo Advisors VI, L.P. or such other name as the General Partner hereafter may adopt upon causing an appropriate amendment to be made to this Agreement and to the
Certificate to be filed in accordance with the Act. Promptly thereafter, the General Partner shall send notice thereof to each Limited Partner. Vesting Period means, with respect to any Limited Partner, an initial period that
commences as of the later of January 1, 2006 or the effective date of such Limited Partner's admission to the Partnership and ends on the first Vesting Date thereafter, and each subsequent period that commences on the next
day following the immediately preceding Vesting Date and ends on the next succeeding Vesting Date.
9 Section 2.3 Offices (a) The Partnership shall maintain its principal office, and may maintain one or more additional offices, at such place or places as the General Partner may from time to time determine. (b) The General
Partner shall arrange for the Partnership to have and maintain in the State of Delaware, at the expense of the Partnership, a registered office and registered agent for service of process on the Partnership as required by the Act.
Section 2.4 Term of Partnership (a) The term of the Partnership shall continue until the dissolution (without continuation) of all of the Funds or the earlier of: (i) at any time there are no Limited Partners, unless the business of
the Partnership is continued in accordance with the Act; (ii) any event that results in the General Partner ceasing to be a general partner of the Partnership under the Act, provided that the Partnership shall not be dissolved and
required to be wound up in connection with any such event if (A) at the time of the occurrence of such event there is at least one remaining general partner of the Partnership who is hereby authorized to and does carry on the
business of the Partnership, or (B) within 90 days after the occurrence of such event, a majority of the Limited Partners agree in writing or vote to continue the business of the Partnership and to the appointment, effective as of
the date of such event, if required, of one or more additional general partners of the Partnership; and (iii) the entry of a decree of judicial dissolution under Section 17- 802 of the Act. (b) The parties agree that irreparable
damage would be done to the goodwill and reputation of the Partners if any Limited Partner should bring an action to dissolve the Partnership. Care has been taken in this Agreement to provide for fair and just payment in
liquidation of the interests of all Partners. Accordingly, to the fullest extent permitted by law, each Limited Partner hereby waives and renounces his right to such a decree of dissolution or to seek the appointment of a
liquidator for the Partnership, except as provided herein. Section 2.5 Purpose of the Partnership The principal purpose of the Partnership is to act as the sole general partner or as the managing general partner (as the case may
be) of each of the Funds pursuant to their respective Fund LP Agreements and to undertake such related and incidental activities and execute and deliver such related documents necessary or incidental thereto. The purpose of
the Partnership shall be limited to serving as a general partner of direct investment funds, including any of their Affiliates, and the provision of investment management and advisory services.
10 Section 2.6 Actions by Partnership The Partnership may execute, deliver and perform, and the General Partner may execute and deliver, all contracts, agreements and other undertakings, and engage in all activities and
transactions as may in the opinion of the General Partner be necessary or advisable to carry out the objects and purposes of the Partnership, without the approval or vote of any Limited Partner. Section 2.7 Admission of
Limited Partners On the date hereof, the Persons whose names are set forth in the Schedule of Partners under the caption Limited Partners shall be admitted to the Partnership as limited partners of the Partnership upon their
execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partner's intent to become a Limited Partner. ARTICLE 3 CAPITAL Section 3.1
Contributions to Capital (a) Any required contribution of a Limited Partner to the capital of the Partnership shall be as set forth in the Schedule of Partners. Contributions to the capital of the Partnership shall be made as of the
date of admission of such Limited Partner as a limited partner of the Partnership and as of each such other date as may be specified by the General Partner. Except as otherwise permitted by the General Partner, all
contributions to the capital of the Partnership by each Limited Partner shall be payable exclusively in cash. (b) The General Partner shall make capital contributions from time to time to the extent necessary to ensure that the
Partnership meets its obligations to make contributions of capital to each of the Funds. (c) No Partner shall be obligated, nor shall any Partner have any right, to make any contribution to the capital of the Partnership other
than as specified in this Section 3.1. No Limited Partner shall be obligated to restore any deficit balance in his Capital Account. (d) To the extent, if any, that at the time of the Final Distribution (as defined in each of the Fund
LP Agreements), it is determined that the Partnership, as a general partner of each of the Funds, is required to make any Clawback Payment with respect to any of the Funds, each Limited Partner shall be required to
participate in such payment and contribute to the Partnership for ultimate distribution to the limited partners of the relevant Fund an amount equal to such Limited Partner's Clawback Share of any Clawback Payment, but not
in any event in excess of the cumulative amount theretofore distributed to such Limited Partner with respect to the Operating Profit attributable to such Fund. For purposes of determining each Limited Partners required
contribution, each Limited Partners allocable share of any Escrow Account (as defined in the Fund LP Agreements), to the extent applied to satisfy any portion of a Clawback Payment,
11 shall be treated as if it had been distributed to such Limited Partner and re- contributed by such Limited Partner pursuant to this Section 3.1(d) at the time of such application. Section 3.2 Rights of Partners in Capital (a) No
Partner shall be entitled to interest on his capital contributions to the Partnership. (b) No Partner shall have the right to distributions or the return of any contribution to the capital of the Partnership except (i) for distributions
in accordance with Section 4.1 or (ii) upon dissolution of the Partnership. The entitlement to any such return at such time shall be limited to the value of the Capital Account of the Partner. The General Partner shall not be
liable for the return of any such amounts. Section 3.3 Capital Accounts (a) The Partnership shall maintain for each Partner a separate Capital Account. (b) Each Partner's Capital Account shall have an initial balance equal to
the amount of cash and the value of any securities or other property constituting such Partner's initial contribution to the capital of the Partnership. (c) Each Partner's Capital Account shall be increased by the sum of: (i) the
amount of cash and the net value of any securities or other property constituting additional contributions by such Partner to the capital of the Partnership permitted pursuant to Section 3.1, plus (ii) the portion of any FC Profit
allocated to such Partner's Capital Account pursuant to Section 3.4, plus (iii) the portion of any Operating Profit allocated to such Partner's Capital Account pursuant to Section 3.4, plus (iv) such Partners allocable share of
any decreases in any reserves recorded by the Partnership pursuant to Section 3.6 and any receipts determined to be applicable to a prior period pursuant to Section 3.6(b), to the extent the General Partner determines that,
pursuant to any provision of this Agreement, such item is to be credited to such Partner's Capital Account on a basis which is not in accordance with the current respective Points of all Partners. (d) Each Partner's Capital
Account shall be reduced by the sum of (without duplication): (i) the portion of any FC Loss allocated to such Partner's Capital Account pursuant to Section 3.4, plus (ii) the portion of any Operating Loss allocated to such
Partner's Capital Account pursuant to Section 3.4, plus
12 (iii) the amount of any cash and the net value of any property distributed to such Partner pursuant to Section 4.1 or 8.1 including any amount deducted pursuant to Section 4.2 or 5.4 from any such amount distributed, plus
(iv) any withholding taxes or other items payable by the Partnership, any increases in any reserves recorded by the Partnership pursuant to Section 3.6 and any payments determined to be applicable to a prior period pursuant
to Section 3.6, to the extent the General Partner determines that, pursuant to Sections 3.6, 4.2, 5.4 or pursuant to any other provision of this Agreement, such item is to be charged to such Partner's Capital Account on a basis
which is not in accordance with the current respective Points of all Partners. Section 3.4 Allocation of Profit and Loss (a) Allocations of Profit. FC Profit and Operating Profit for any Fiscal Year shall be allocated to the
Partners: (i) first, to Partners to which FC Loss and Operating Loss previously have been allocated pursuant to Section 3.4(b), to the extent of and in proportion to the amount of such Losses; (ii) next, to the extent that the
cumulative amount of distributions pursuant to Article 4 (other than distributions representing a return of such Partners' capital contributions) exceeds the cumulative amount of FC Profit and Operating Profit previously
allocated to such Partners pursuant to Section 3.4(a), in the order that such distributions occurred; and (iii) thereafter, any remaining such FC Profit and Operating Profit shall be allocated among the Partners so as to produce
Capital Accounts (computed after taking into account any other FC Profit and Operating Profit or FC Loss and Operating Loss for the Fiscal Year in which such event occurred and all distributions pursuant to Article 4 with
respect to such Fiscal Year and after adding back each Partner's share, if any, of Partner Nonrecourse Debt Minimum Gain or Partnership Minimum Gain) for the Partners such that a distribution of an amount of cash equal to
such Capital Account balances in accordance with such Capital Account balances would be in the amounts, sequence and priority set forth in Article 4. (b) Allocations of Losses. Subject to the limitation of Section 3.4(c), FC
Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective FC Shares as of the close of such Fiscal Year, and Operating Loss for any Fiscal Year shall be allocated among the Partners in
proportion to their respective Points as of the close of such Fiscal Year. (c) To the extent that the allocations of FC Loss or Operating Loss contemplated by Section 3.4(b) would cause the Capital Account of any Limited
Partner to be less than zero, such FC Loss or Operating Loss shall to that extent instead be allocated to and debited against the Capital Account of the General Partner (or, at the direction of the General Partner, to those
Limited Partners who are members of the General Partner in proportion to their limited liability company interests in the General Partner). Following any such adjustment pursuant to Section 3.4(c) with respect to any Limited
Partner, any FC Profit or Operating Profit for any subsequent Fiscal Year which would otherwise be credited to the Capital Account of such Limited Partner
13 pursuant to Section 3.4(a) shall instead be credited to the Capital Account of the General Partner (or relevant Limited Partners) until the cumulative amounts so credited to the Capital Account of the General Partner (or
relevant Limited Partners) with respect to such Limited Partner pursuant to Section 3.4(c) is equal to the cumulative amount debited against the Capital Account of the General Partner (or relevant Limited Partners) with
respect to such Limited Partner pursuant to Section 3.4(c). (d) Each Limited Partners rights and entitlements as a Limited Partner are limited to the rights to receive allocations and distributions of FC Profit and Operating
Profit expressly conferred by this Agreement and any side letter or similar agreement entered into pursuant to Section 9.1(b) and the other rights expressly conferred by this Agreement and any such side letter or similar
agreement or required by the Act, and a Limited Partner shall not be entitled to any other allocations, distributions or payments in respect of his interest, or to have or exercise any other rights, privileges or powers. Section 3.5
Tax Allocations (a) For United States federal, state and local income tax purposes, Partnership income, gain, loss, deduction or credit (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in
order to reflect the allocations of FC Profit, FC Loss, Operating Profit and Operating Loss pursuant to the provisions of Section 3.4 for such Fiscal Year, taking into account any variation between the adjusted tax basis and
book value of Partnership property in accordance with the principles of Section 704(c) of the Code. (b) If any Partner or Partners are treated for United States federal income tax purposes as realizing ordinary income because
of receiving interests in the Partnership (whether under Section 83 of the Code or under any similar provision of any law, rule or regulation) and the Partnership is entitled to any offsetting deduction (net of any income
realized by the Partnership as a result of such receipt), the Partnership's net deduction shall be allocated to and among the Partners in such manner as to offset, as nearly as possible, the ordinary income realized by such
Partner or Partners. Section 3.6 Reserves; Adjustments for Certain Future Events (a) Appropriate reserves may be created, accrued and charged against the Operating Profit or Operating Loss for contingent liabilities, if any,
as of the date any such contingent liability becomes known to the General Partner or as of each other date as the General Partner deems appropriate, such reserves to be in the amounts which the General Partner deems
necessary or appropriate. The General Partner may increase or reduce any such reserve from time to time by such amounts as the General Partner deems necessary or appropriate. The amount of any such reserve, or any
increase or decrease therein, shall be proportionately charged or credited, as appropriate, to the Capital Accounts of those parties who are Partners at the time when such reserve is created, increased or decreased, as the case
may be, in proportion to their respective Points at such time; provided that, if any individual reserve item, as adjusted by any increase therein, exceeds the lesser of $500,000 or one percent of the aggregate value of the Capital
Accounts of all such Partners, the amount of such reserve, increase or decrease shall instead be charged or credited to those parties who were Partners at the time, as determined by
14 the General Partner, of the act or omission giving rise to the contingent liability for which the reserve item was established in proportion to their respective Points at that time. (b) If at any time an amount is paid or received
by the Partnership and such amount exceeds the lesser of $500,000 or one percent of the aggregate value of the Capital Accounts of all Partners at the time of payment or receipt, and such amount was not accrued or reserved
for but would nevertheless, in accordance with the Partnership's accounting practices, be treated as applicable to one or more prior periods, then such amount may be proportionately charged or credited by the General Partner,
as appropriate, to those parties who were Partners during such prior period or periods. (c) If any amount is required by Section 3.6(a) or (b) to be credited to a Person who is no longer a Partner, such amount shall be paid to
such Person in cash, with interest from the date on which the General Partner determines that such credit is required at the Reference Rate in effect on that date. Any amount required to be charged pursuant to Section 3.6(a) or
(b) shall be debited against the current balance in the Capital Account of the affected Partners. To the extent that the aggregate current Capital Account balances of such affected Partners are insufficient to cover the full
amount of the required charge, the deficiency shall be debited against the Capital Accounts of the other Partners in proportion to their respective Capital Account balances at such time; provided, however, that each such other
Partner shall be entitled to a preferential allocation, in proportion to and to the extent of such other Partner's share of any such deficiency, together with a carrying charge at a rate equal to the Reference Rate, of any Operating
Profit that would otherwise have been allocable after the date of such charge to the Capital Accounts of the affected Partners whose Capital Accounts were insufficient to cover the full amount of the required charge. In no
event shall a current or former Partner be obligated to satisfy any amount required to be charged pursuant to Section 3.6(a) or (b) other than by means of a debit against such Partner's Capital Account. Section 3.7 Finality and
Binding Effect of General Partner's Determinations All matters concerning the determination, valuation and allocation among the Partners with respect to any profit or loss of the Partnership and any associated items of
income, gain, deduction, loss and credit, pursuant to any provision of this Article 3, including any accounting procedures applicable thereto, shall be determined by the General Partner unless specifically and expressly
otherwise provided for by the provisions of this Agreement, and such determinations and allocations shall be final and binding on all the Partners. ARTICLE 4 DISTRIBUTIONS Section 4.1 Distributions (a) Any amount of
cash or property received as a distribution from any of the Funds by the Partnership in its capacity as a partner, to the extent such amount is determined by reference to the capital commitment of the Partnership in, or the
capital contributions of the
15 Partnership to, any of the Funds, shall be promptly distributed by the Partnership to the Partners in proportion to their respective FC Shares determined: (i) in the case of any distributions received from any of the Funds
which are comprised of proceeds from the disposition of a Portfolio Investment by such Fund, as of the date of such disposition by such Fund; and (ii) in the case of any other distribution, as of the end of the relevant fiscal
year in respect of which such distribution is made by such Fund. (b) The General Partner shall use reasonable efforts to cause the Partnership to distribute, as promptly as practicable after receipt by the Partnership, any
available revenues attributable to items included in the determination of Operating Profit, subject to the provisions of Section 10.3 of the Fund LP Agreements and subject to the retention of such reserves as the General
Partner considers appropriate for purposes of the prudent and efficient financial operation of the Partnership's business including in accordance with Section 3.6 hereof. Any such distributions shall be made to Partners in
proportion to their respective Points, determined: (i) in the case of any amount of revenue received from any of the Funds that is attributable to the disposition of a Portfolio Investment by such Fund, as of the date of such
disposition by such Fund; and (ii) in any other case, as of the date of receipt of such revenue by the Partnership. (c) Any other distributions or payments in respect of the interests of Limited Partners shall be made at such time,
in such manner and to such Limited Partners as the General Partner shall determine. (d) The General Partner may cause the Partnership to pay distributions to the Partners at any time in addition to those contemplated by
Section 4.1(a), (b) or (c), in cash or in kind; provided that the General Partner shall only make a distribution in kind either to all Partners ratably or to those Partners who have agreed to accept such a distribution in kind.
Distributions of any such amounts shall be made to the Partners in proportion to their respective Points, determined immediately prior to giving effect to such distribution. Section 4.2 Withholding of Certain Amounts (a) If
the Partnership incurs a withholding tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the General Partner, without limitation of any other rights of the Partnership, may
cause the amount of such obligation to be debited against the Capital Account of such Partner when the Partnership pays such obligation, and any amounts then or thereafter distributable to such Partner shall be reduced by the
amount of such taxes. If the amount of such taxes is greater than any such then distributable amounts, then such Partner and any successor to such Partner's interest shall indemnify and hold harmless the Partnership and the
General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of such excess.
16 (b) The General Partner may withhold from any distribution to any Limited Partner pursuant to this Agreement any other amounts due from such Limited Partner to the Partnership or the General Partner pursuant to this
Agreement to the extent not otherwise paid. Any amounts so withheld shall be applied by the General Partner to discharge the obligation in respect of which such amounts were withheld. Section 4.3 Limitation on
Distributions Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to any Partner on account of his
interest in the Partnership if such distribution would violate the Act or other applicable law. ARTICLE 5 MANAGEMENT Section 5.1 Rights and Powers of the General Partner (a) Subject to the terms and conditions of this
Agreement, the General Partner shall have complete and exclusive responsibility (i) for all management decisions to be made on behalf of the Partnership and (ii) for the conduct of the business and affairs of the Partnership,
including all such decisions and all such business and affairs to be made or conducted by the Partnership in its capacity as Managing Partner of any of the Funds. (b) Without limiting the generality of the foregoing, the
General Partner shall have full power and authority to execute, deliver and perform such contracts, agreements and other undertakings, and to engage in all activities and transactions, as it may deem necessary or advisable for,
or as may be incidental to, the conduct of the business contemplated by this Section 5.1, including, without in any manner limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any
Partner or with any other Person having any business, financial or other relationship with any Partner or Partners; provided, however, that the General Partner shall not have authority to cause the Partnership to borrow any
funds for its own account on a secured basis without the consent of the Required Voting Partners. The Partnership, and the General Partner on behalf of the Partnership, may enter into and perform the Fund Agreements and
any documents contemplated thereby or related thereto and any amendments thereto, without any further act, vote or approval of any Person, including any Partner, notwithstanding any other provision of this Agreement. The
General Partner is hereby authorized to enter into the documents described in the preceding sentence on behalf of the Partnership, but such authorization shall not be deemed a restriction on the power of the General Partner to
enter into other documents on behalf of the Partnership. Except as otherwise expressly provided herein or as required by law, all powers and authority vested in the General Partner by or pursuant to this Agreement or the Act
shall be construed as being exercisable by the General Partner in its sole and absolute discretion.
17 (c) The General Partner, or a Limited Partner designated by the General Partner, shall be the tax matters partner for purposes of Section 6231(a)(7) of the Code. Each Partner agrees not to treat, on his United States federal
income tax return or in any claim for a refund, any item of income, gain, loss, deduction or credit in a manner inconsistent with the treatment of such item by the Partnership. The General Partner shall have the exclusive
authority to make any elections required or permitted to be made by the Partnership under any provisions of the Code or any other revenue laws. Section 5.2 Delegation of Duties (a) Subject to Section 5.1 and Section 5.2(d),
the General Partner may delegate to any Person or Persons any of the duties, powers and authority vested in it hereunder on such terms and conditions as it may consider appropriate. (b) Without limiting the generality of
Section 5.2(a), but subject to the limitations contained in Section 5.2(d), the General Partner shall have the power and authority to appoint any Person, including any Person who is a Limited Partner, to provide services to and
act as an employee or agent of the Partnership, with such titles and duties as may be specified by the General Partner, including the following: (i) a chief financial officer, to whom the General Partner may delegate its
authority to disburse funds for the account of the Partnership and the Funds for any proper purpose, to establish deposit accounts with banks or other financial institutions, to make permitted investments of Partnership assets,
and to take any other permitted actions pertaining to the finances of the Partnership and the Funds; (ii) a chief accounting officer, to whom the General Partner may delegate its authority to prepare and maintain financial and
accounting books, records and statements of the Partnership and the Funds; and (iii) one or more vice presidents, treasurers and controllers, to whom the General Partner may delegate its authority to execute any of its
decisions and to take any other permitted actions on behalf of the Partnership (including in its capacity as Managing Partner of any of the Funds) subject to the supervision of the chief executive officer, the chief financial
officer or the chief accounting officer. Any Person appointed by the General Partner to serve as an officer, employee or agent of the Partnership shall be subject to removal at any time by the General Partner; and shall report
to and consult with the General Partner at such times and in such manner as the General Partner may direct. (c) Any Person who is a Limited Partner and to whom the General Partner delegates any of its duties pursuant to this
Section 5.2 or any other provision of this Agreement shall be subject to the same standard of care, and shall be entitled to the same rights of indemnification and exoneration, applicable to the General Partner under and
pursuant to Section 5.7, unless such Person and the General Partner mutually agree to a different standard of care or right to indemnification and exoneration to which such Person shall be subject.
18 (d) Except as otherwise expressly provided herein, action by the General Partner with respect to any of the following matters shall be taken only in accordance with the directions of the Required Voting Partners: (i) the
waiver of any provision of Section 5.6 hereof concerning other activities of Limited Partners; (ii) the amount and timing of any discretionary distribution to Partners pursuant to Section 4.1(c), and any decision to pay any
distribution to Partners in kind; (iii) the exercise of the authority of the Partnership to (A) cause any of the Funds to pay a distribution in kind and (B) elect to receive any such distribution in kind; (iv) the exercise of the
Partnership's authority to borrow any funds on a secured basis for the account of the Partnership; (v) the determination of whether to conduct a business other than serving as a general partner of the Funds; (vi) the amendment
of this Agreement, and the exercise of the authority of the Partnership with respect to the approval of any amendment to the Fund LP Agreements; and (vii) to the fullest extent permitted by law, the voluntary dissolution of
the Partnership, and the exercise of the authority of the Partnership to cause a voluntary dissolution of any of the Funds. The foregoing shall not restrict the General Partner from delegating authority to execute or implement
any such determinations made by the General Partner. (e) The General Partner shall be permitted to designate one or more committees of the Partnership which committees may include Limited Partners as members. Any such
committees shall have such powers and authority granted by the General Partner. Any Limited Partner who has agreed to serve on a committee shall not be deemed to have the power to bind or act for or on behalf of the
Partnership in any manner and in no event shall a member of a committee be considered a general partner of the Partnership by agreement, estoppel or otherwise or be deemed to participate in the control of the business of the
Partnership as a result of the performance of his duties hereunder or otherwise. (f) The General Partner shall cause the Partnership to enter into an arrangement, as contemplated under the Fund LP Agreement, with the
Management Company which arrangement shall require the Management Company to pay all costs and expenses of the Partnership. Section 5.3 Transactions with Affiliates To the fullest extent permitted by applicable law,
the General Partner (or any Affiliate of the General Partner), when acting on behalf of the Partnership, is hereby authorized to (a) purchase property from, sell property to, lend money to or otherwise deal with any Affiliates,
19 any Limited Partner, the Partnership, any of the Funds or any Affiliate of any of the foregoing Persons, and (b) obtain services from any Affiliates, any Limited Partner, the Partnership, any of the Funds or any Affiliate of
the foregoing Persons. Section 5.4 Expenses (a) Subject to the arrangement contemplated by Section 5.2(f), the Partnership will pay, or will reimburse the General Partner for, all costs and expenses arising in connection with
the organization and operations of the Partnership. (b) Any withholding taxes payable by the Partnership, to the extent determined by the General Partner to have been paid or withheld on behalf of, or by reason of particular
circumstances applicable to, one or more but fewer than all of the Partners, shall be allocated among and debited against the Capital Accounts of only those Partners on whose behalf such payments are made or whose
particular circumstances gave rise to such payments in accordance with Section 4.2. Section 5.5 Rights of Limited Partners (a) Limited Partners shall have no right to take part in the management or control of the Partnership's
business, nor shall they have any right or authority to act for the Partnership or to vote on matters other than as set forth in this Agreement or as required by applicable law. (b) Without limiting the generality of the foregoing,
the General Partner shall have the full and exclusive authority, without the consent of any Limited Partner, to compromise the obligation of any Limited Partner to make a capital contribution or to return money or other
property paid or distributed to such Limited Partner in violation of the Act. (c) Nothing in this Agreement shall entitle any Partner to any compensation for services rendered to or on behalf of the Partnership as an agent or in
any other capacity, except for any amounts payable in accordance with this Agreement. Section 5.6 Other Activities of Partners (a) No Limited Partner other than a Retired Partner shall engage in any occupation, profession,
employment or other business, as an officer, director, partner, manager, member, employee, agent, consultant or otherwise, without the prior written consent of the General Partner, unless such activity is carried out on behalf
of the Partnership or an Affiliate. (b) Subject to the provisions contained in Section 6.7(c) of the Fund LP Agreements and to full compliance with the Partnerships code of ethics and other written policies relating to personal
investment transactions, membership in the Partnership shall not prohibit a Limited Partner from purchasing or selling as a passive investor any interest in any asset. (c) Nothing in this Agreement shall prohibit the General
Partner from engaging in any activity other than acting as General Partner hereunder.
20 Section 5.7 Duty of Care; Indemnification (a) The General Partner (including, without limitation, for this purpose each former and present director, officer, manager, member, employee and stockholder of the General
Partner) and each Limited Partner (including any former Limited Partner) in his capacity, as such, and to the extent such Limited Partner participates, directly or indirectly, in the Partnerships activities, whether or not a
Retired Partner (each, a Covered Person and collectively, the Covered Persons), shall not be liable to the Partnership or to any of the other Partners for any loss, claim, damage or liability occasioned by any acts or
omissions in the performance of his services hereunder, unless it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such loss, claim, damage or
liability is due to an act or omission of a Covered Person (i) made in bad faith or with criminal intent or (ii) that adversely affected any Fund and that failed to satisfy the duty of care owed pursuant to the applicable Fund LP
Agreement or as otherwise required by law. (b) A Covered Person shall be indemnified to the fullest extent permitted by law by the Partnership against any losses, claims, damages, liabilities and expenses (including
attorneys fees, judgments, fines, penalties and amounts paid in settlement) incurred by or imposed upon him by reason of or in connection with any action taken or omitted by such Covered Person arising out of the Covered
Persons status as a Partner or his activities on behalf of the Partnership, including in connection with any action, suit, investigation or proceeding before any judicial, administrative, regulatory or legislative body or agency to
which it may be made a party or otherwise involved or with which it shall be threatened by reason of being or having been the General Partner or by reason of serving or having served, at the request of the Partnership in its
capacity as Managing Partner of the Funds, as a director, officer, consultant, advisor, manager, member or partner of any enterprise in which any of the Funds has or had a financial interest, including issuers of Portfolio
Investments; provided, however, that the Partnership may but shall not be required to indemnify a Covered Person with respect to any matter as to which there has been a Final Adjudication that his acts or his failure to act (i)
were in bad faith or with criminal intent or (ii) were of a nature that makes indemnification by the Funds unavailable. The right to indemnification granted by this Section 5.7 shall be in addition to any rights to which a
Covered Person may otherwise be entitled and shall inure to the benefit of the successors by operation of law or valid assigns of such Covered Person. The Partnership shall pay the expenses incurred by a Covered Person in
defending a civil or criminal action, suit, investigation or proceeding in advance of the final disposition of such, action, suit, investigation or proceeding, upon receipt of an undertaking by the Covered Person to repay such
payment if there shall be a Final Adjudication that he is not entitled to indemnification as provided herein. In any suit brought by the Covered Person to enforce a right to indemnification hereunder it shall be a defense that the
Covered Person has not met the applicable standard of conduct set forth in this Section 5.7, and in any suit in the name of the Partnership to recover expenses advanced pursuant to the terms of an undertaking the Partnership
shall be entitled to recover such expenses upon Final Adjudication that the Covered Person has not met the applicable standard of conduct set forth in this Section 5.7. In any such suit brought to enforce a right to
indemnification or to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to an advancement of expenses, shall be
on the Partnership (or any Limited Partner acting derivatively or otherwise on
21 behalf of the Partnership or the Limited Partners). The General Partner may not satisfy any right of indemnity or reimbursement granted in this Section 5.7 or to which it may be otherwise entitled except out of the assets of
the Partnership (including, without limitation, insurance proceeds and rights pursuant to indemnification agreements), and no Partner shall be personally liable with respect to any such claim for indemnity or reimbursement.
The General Partner may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5 and obtain appropriate insurance coverage on behalf and at the expense of the
Partnership to secure the Partnerships indemnification obligations hereunder and may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5. Each Covered Person
shall be deemed a third party beneficiary (to the extent not a direct party hereto) to this Agreement and, in particular, the provisions of this Article 5, and shall be entitled to the benefit of the indemnity granted to the
Partnership by each of the Funds pursuant to the terms of the Fund LP Agreements. (c) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Partners, the Covered Person shall not be liable to the Partnership or to any Partner for his good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they
restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of each such Covered Person. (d) Notwithstanding
any of the foregoing provisions of this Section 5.7, the Partnership may but shall not be required to indemnify (i) a Retired Partner (or any other former Limited Partner) with respect to any claim for indemnification or
advancement of expenses arising from any conduct occurring more than six months after the date of such Persons retirement (or other withdrawal or departure), or (ii) a Limited partner with respect to any claim for
indemnification or advancement of expenses as a director, officer or agent of the issuer of any Portfolio Investment to the extent arising from conduct in such capacity occurring more than six months after the complete
disposition of such Portfolio Investment by the Fund. ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS Section 6.1 Admission of Additional Limited Partners; Effect on Points (a) The General Partner may
at any time admit as an additional Limited Partner any Person who has agreed to be bound by this Agreement, assign Points and issue FC Shares to such Person and/or increase the Points of any existing Limited Partner. Each
additional Limited Partner shall execute either a counterpart of this Agreement or a separate instrument evidencing, to the satisfaction of the General Partner, such Limited Partner's intent to become a Limited Partner and shall
be admitted as a Limited Partner upon such execution. In connection with such admission or increase in Points of any Partner, the Points of the other Voting Partners shall be reduced in an amount determined by the General
Partner which shall not to exceed such Voting Partners Maximum Dilution Percentage. For this purpose, a Voting Partners Maximum
22 Dilution Percentage means, in connection with any Point reduction, a percentage determined by dividing (i) the aggregate reduction to be made at that time in the Points of all Voting Partners who have more Points than
such Voting Partner immediately prior to such reduction by (ii) the aggregate number of Points held immediately prior to such reduction by all such Voting Partners who have more Points than such Voting Partner
immediately prior to such reduction. (b) FC Shares shall not be issued to any additional Limited Partner admitted after the date hereof without the consent of each Voting Partner whose FC Shares are proposed to be reduced
in connection therewith. Section 6.2 Admission of Additional General Partner The General Partner may admit one or more additional general partners at any time without the consent of any Limited Partner other than the
Required Voting Partners and any other Voting Partner whose FC Shares or Points, as applicable, are proposed to be reduced in connection with such admission. No reduction in the Points of any Limited Partner shall be
made as a result of the admission of an additional general partner or the increase in the Points of any general partner. Any additional general partner shall be admitted as a general partner upon its execution of a counterpart
signature page to this Agreement. Section 6.3 Transfer of Interests of Limited Partners (a) Subject to compliance with the other provisions of this Section 6.3, a Limited Partner may assign to any other Partner or to any
Related Party of such Partner all or any portion of such Limited Partner's rights to share in and receive allocations and distributions associated with such Limited Partner's FC Shares. No other Transfer of any Limited Partner's
interest in the Partnership, whether voluntary or involuntary, shall be valid or effective, and no transferee shall become a substituted Limited Partner, unless the prior written consent of the General Partner has been obtained,
which consent may be given or withheld by the General Partner. In the event of any Transfer, all of the conditions of the remainder of this Section 6.3 must also be satisfied. (b) A Limited Partner requesting approval of a
Transfer, or his legal representative, shall give the General Partner notice before the proposed effective date of any voluntary Transfer and within 30 days after any involuntary Transfer, and shall provide sufficient information
to allow legal counsel acting for the Partnership to make the determination that the proposed Transfer will not result in any of the consequences: (i) require registration of the Partnership or any interest therein under any
securities or commodities laws of any jurisdiction; (ii) result in a termination of the Partnership under Section 708(b)(1)(B) of the Code or jeopardize the status of the Partnership as a partnership for United States federal
income tax purposes; or (iii) violate, or cause the Partnership, the General Partner or any Limited Partner to violate, any applicable law, rule or regulation of any jurisdiction.
23 Such notice must be supported by proof of legal authority and a valid instrument of assignment acceptable to the General Partner. (c) In the event any Transfer permitted by this Section 6.3 shall result in multiple
ownership of any Limited Partner's interest in the Partnership, the General Partner may require one or more trustees or nominees to be designated to represent a portion of the interest transferred or the entire interest transferred
for the purpose of receiving all notices which may be given and all payments which may be made under this Agreement, and for the purpose of exercising the rights which the transferees have pursuant to the provisions of this
Agreement. (d) A permitted transferee shall be entitled to the allocations and distributions attributable to the interest in the Partnership transferred to such transferee and to Transfer such interest in accordance with the terms of
this Agreement; provided, however, that such transferee shall not be entitled to the other rights of a Limited Partner as a result of such transfer until he becomes a substituted Limited Partner. No transferee may become a
substituted Limited Partner except with the prior written consent of the General Partner (which consent may be given or withheld by the General Partner). Such transferee shall be admitted to the Partnership as a substituted
Limited Partner upon execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partner's intent to become a Limited Partner. Notwithstanding
the above, the Partnership and the General Partner shall incur no liability for allocations and distributions made in good faith to the transferring Limited Partner until a written instrument of Transfer has been received and
accepted by the Partnership and recorded on its books and the effective date of the Transfer has passed. (e) Any other provision of this Agreement to the contrary notwithstanding, to the fullest extent permitted by law, any
successor or transferee of any Limited Partner's interest in the Partnership shall be bound by the provisions hereof. Prior to recognizing any Transfer in accordance with this Section 6.3, the General Partner may require the
transferee to make certain representations and warranties to the Partnership and Partners and to accept, adopt and approve in writing all of the terms and provisions of this Agreement. (f) In the event of a Transfer or in the
event of a distribution of assets of the Partnership to any Partner, the Partnership, at the direction of the General Partner, may, but shall not be required to, file an election under Section 754 of the Code and in accordance with
the applicable Treasury Regulations, to cause the basis of the Partnership's assets to be adjusted as provided by Section 734 or 743 of the Code. (g) The Partnership shall maintain books for the purpose of registering the
transfer of partnership interests in the Partnership. No transfer of a partnership interest shall be effective until the transfer of the partnership interest is registered upon books maintained for that purpose by or on behalf of the
Partnership. Section 6.4 Withdrawal of Partners A Partner in the Partnership may not withdraw from the Partnership prior to its dissolution. For the avoidance of doubt, any Limited Partner who transfers to a Related Party
such Limited Partner's entire remaining entitlement to allocations and distributions shall remain
24 a Limited Partner, notwithstanding the admission of the transferee Related Party as a Limited Partner, for as long as the transferee Related Party remains a Limited Partner. Section 6.5 Pledges (a) A Limited Partner shall
not pledge or grant a security interest in such Limited Partner's interest in the Partnership unless the prior written consent of the General Partner has been obtained, which consent may be given or withheld by the General
Partner. (b) Notwithstanding the provisions of Section 6.5(a), any Limited Partner may grant to a bank or other financial institution a security interest in such part of such Limited Partner's interest in the Partnership as relates
solely to the FC Shares of such Limited Partner (including the right to receive distributions pursuant to Section 4.1(a) and allocations of FC Profit and FC Loss pursuant to Section 3.4) in the ordinary course of obtaining bona
fide loan financing to fund his contributions to the capital of the Partnership. If the interest of the Limited Partner in the Partnership or any portion thereof in respect of which a Limited Partner has granted a security interest
ceases to be owned by such Limited Partner in connection with the exercise by the secured party of remedies resulting from a default by such Limited Partner or upon the occurrence of such similar events with respect to such
Limited Partner's interest in the Management Company as set forth in Section 6.4 of the Management Company LP Agreement, such interest of the Limited Partner in the Partnership or portion thereof shall thereupon become
a nonvoting interest and the holder thereof shall not be entitled to vote on any matter pursuant to this Agreement and shall no longer be considered a Voting Partner for purposes of this Agreement. (c) Each partnership
interest in the Partnership shall constitute a "security" within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8- 102(a)(15) thereof) as in effect from time to time in the State
of Delaware (the "UCC"), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American
Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. (d) Every certificate representing an interest in the Partnership, if
any such certificates are issued, shall bear a legend substantially in the following form: Each partnership interest constitutes a "security" within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code
(including Section 8- 102(a)(15) thereof) as in effect from time to time in the State of Delaware (the "UCC"), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter
substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association
on February 14, 1995. THE TRANSFER OF THIS CERTIFICATE AND THE PARTNERSHIP INTERESTS REPRESENTED HEREBY IS RESTRICTED AS DESCRIBED IN THE AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP, DATED AS
25 OF AUGUST 26, 2005, AS THE SAME MAY BE AMENDED OR RESTATED FROM TIME TO TIME. (e) Each certificate representing a partnership interest in the Partnership shall be executed by manual or facsimile
signature of the General Partner on behalf of the Partnership. (f) Notwithstanding any provision of this Agreement to the contrary, to the extent that any provision of this Agreement is inconsistent with any non- waivable
provision of Article 8 of the UCC, such provision of Article 8 of the UCC shall control. ARTICLE 7 ALLOCATION OF POINTS; ADJUSTMENTS OF POINTS AND RETIREMENT OF PARTNERS Section 7.1
Allocation of Points (a) Except as otherwise provided herein, the General Partner shall be responsible for the allocation of Points from time to time to the Limited Partners. At each such time of allocation, all Points available
for allocation shall be so allocated to the Limited Partners by the General Partner; provided, however, that the allocation of Points to any Limited Partner who is invited to become a member of Apollo Co- Investors VI (A),
LLC, a Delaware limited liability company (Co- Investors (A)), shall not become effective until the effective date of the acceptance by Co- Investors (A) of a capital commitment from such Limited Partner (or his Related
Party, as applicable) in a mutually agreed amount. Points allocated to Limited Partners may not be reduced except as set forth in Section 6.1 and Section 7.3. (b) The General Partner shall maintain on the books and records of
the Partnership a record of the number of Points allocated to each Partner and shall give notice to each Limited Partner of the number of such Limited Partner's Points upon admission to the Partnership of such Limited Partner
and promptly upon any change in such Limited Partner's Points pursuant to this Article 7 or otherwise. Section 7.2 Retirement of Partner (a) A Limited Partner shall become a Retired Partner upon: (i) delivery to such Limited
Partner of a notice by the General Partner declaring such Limited Partner to be a Retired Partner; (ii) a date specified in a notice delivered by such Limited Partner to the General Partner stating that such Limited Partner elects
to become a Retired Partner, which date shall not be less than 60 days after the General Partner's receipt of such notice; or
26 (iii) the death of the Limited Partner, whereupon the estate of the deceased Limited Partner shall be treated as a Retired Partner in the place of the deceased Limited Partner, or the Permanent Disability of the Limited
Partner. (b) The notice declaring any Limited Partner to be a Retired Partner shall specify whether such Limited Partner is being declared a Retired Partner for Cause or a Retired Partner other than for Cause. Retirement by
reason of death or Permanent Disability shall constitute retirement other than for Cause. A written notice of retirement given by a Limited Partner shall be deemed to constitute a declaration that such Limited Partner is a
Retired Partner for Cause; provided, however, that such a retirement shall be deemed to constitute a mandatory retirement other than for Cause (and such Limited Partner shall be deemed a Retired Partner other than for
Cause) if the Limited Partner's resignation was tendered as a result of removal from the Investment Committee other than in a manner permitted by the Management Company LP Agreement and if the notice of retirement so
states. (c) No mandatory retirement of a Voting Partner for Cause shall become effective until the Voting Partner has been afforded an opportunity, if such Voting Partner so desires, to make a statement in person before the
General Partner regarding any considerations that, in the opinion of the Voting Partner, would warrant a reconsideration of the proposed mandatory retirement. (d) Nothing in this Agreement shall obligate the General Partner
or the Voting Partners to treat Retired Partners alike, and the exercise of any power or discretion by the General Partner or the Voting Partners in the case of any one such Retired Partner shall not create any obligation on the
part of the General Partner or the Voting Partners to take any similar action in the case of any other such Retired Partner, it being understood that any power or discretion conferred upon the General Partner or the Voting
Partners shall be treated as having been so conferred as to each such Retired Partner separately. Section 7.3 Effect of Retirement on Points (a) The Points of any Limited Partner who becomes a Retired Partner for Cause shall
be reduced automatically to an amount equal to such Limited Partner's Vested Points as of the date such Limited Partner became a Retired Partner. Any such reduction shall be effective as of the date such Limited Partner
became a Retired Partner or such subsequent date as may be determined by the General Partner; provided, however, that the General Partner may agree to a lesser reduction (or to no reduction) of the Points of any such
Limited Partner who becomes a Retired Partner. (b) The General Partner shall determine the manner of apportioning any Points that become available for reallocation pursuant to Section 7.3(a) as a result of any Partner
becoming a Retired Partner for Cause. (c) The Points of any Limited Partner who becomes a Retired Partner other than for Cause shall not be reduced without the consent of such Retired Partner, except as contemplated by
Section 7.4. For the avoidance of doubt, the General Partner shall have no authority under the provisions of this Agreement to reduce the Points of any Limited Partner solely by reason of (i)
27 such Limited Partner becoming a Retired Partner other than for Cause or (ii) such Limited Partner becoming a Retired Partner (whether for Cause or otherwise) after the 60th month anniversary of the commencement of the
initial Vesting Period with respect to such Limited Partner. Section 7.4 Non- solicitation; Non- compete (a) A Person who became a Retired Partner prior to the expiration of the Commitment Period shall not at any time
during the nine- month period commencing on the date as of which such Person became a Retired Partner (i) hire, employ, partner with or enter into any business arrangement with any Person who, at any time during the 270day period ending at the commencement of such nine- month period, was associated with the Partnership or any Affiliate as a partner, member, officer, exclusive consultant or employee, or (ii) enter into any agreement
relating to the foregoing, (ii) participate in any negotiations or substantive discussions with respect to the foregoing, or (iv) cause, influence, assist or cooperate with any other Person to do any of the foregoing. (b) A Person
who became a Retired Partner for Cause prior to the expiration of the Commitment Period shall not at any time (i) during the six- month period commencing on the date as of which such Person became a Retired Partner (A)
participate, on behalf or for the benefit of any business or enterprise that engages or is expected to engage in making private equity investments, in any activity that is in any way related to the private equity investment
activities of such business or enterprise or (B) enter into any agreement relating to the foregoing or (ii) during the 90- day period (or 60- day period in the case of a Partner who voluntarily resigns in accordance with Section
7.2(a)(ii)) commencing on the date as of which such Person became a Retired Partner participate in any negotiations or substantive discussions with respect to the foregoing. (c) Each Limited Partner acknowledges that (i) he
would not have been admitted to the Partnership in the absence of making the foregoing covenants, and (ii) the Partnership (and its associated investment management businesses) could suffer irreparable injury in the event of
a breach of such covenants or of the covenants contained in Section 9.8, for which monetary damages may not constitute an adequate remedy. Accordingly, each Limited Partner agrees that the Partnership shall be entitled to
seek any form of equitable relief that may be available to prevent or remedy any breach or anticipated breach of the covenants contained in this Section 7.4 and in Section 9.8 and further agrees that such Limited Partner will
not seek to oppose any such requested relief on any grounds other than the absence of a breach or anticipated breach of such covenants. (d) In addition to (and not in lieu of) any other available remedies that may be available,
any Limited Partner who breaches any of the covenants set forth in this Section 7.4 or in Section 9.8 shall have an obligation to make a cash payment to the Partnership in an amount equal to such Limited Partners Giveback
Amount for the period since the commencement of most recently ended fiscal year preceding the date of delivery of a written notice of breach, payable in cash within 10 business days after your receipt of such notice. For this
purpose, a Limited Partners Giveback Amount is equal to the aggregate amount of all cash payments and cash distributions received by such Limited Partner at any time during the applicable period from
28 the Partnership or any Affiliate in consideration for services performed on behalf of the Partnership or any Affiliate (including, without limitation, salary, bonus, Operating Profit distributions or similar distributions
attributable to carried interest amounts earned from Funds or other collective investment vehicles and including amounts that would have been paid in cash but for such Limited Partners participation in any management fee
waiver program administered by the Management Company or an Affiliate.) If a Limited Partner disputes an asserted breach or otherwise fails to pay such amount when due, the Partnership may elect to resolve such dispute
or remedy such failure either through an action in Delaware Chancery Court or through binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and such objecting
Limited Partner shall be bound by such election. In any such proceeding, the court or arbitrator shall not have the authority to grant any monetary award other than (i) the Giveback Amount plus (ii) reasonable attorneys fees
and expenses incurred by the Partnership in connection with such proceedings, but shall have the power to award, and shall be expected to award, specific performance or other appropriate equitable relief in addition to the
monetary award to remedy any breach. If there is a final and nonappealable finding by the court (in an action initiated by the Partnership) or the arbitrator that such Limited Partner did not breach any provision of Section 7.4
or Section 9.8 or if the Partnership abandons judicial or arbitration proceedings without a final determination or negotiated settlement, then the Partnership shall pay such Limited Partners reasonable attorneys fees and
expenses incurred in defending against the asserted breach in such proceedings. The conduct and outcome of any arbitration proceedings shall be subject to the confidentiality provisions of Section 9.8 hereof. (e)
Notwithstanding the foregoing, Section 7.4 will not be construed to prohibit a Partner from performing services for the benefit of any privately- owned family entity or office substantially all of the capital of which is derived
from members of the family of such Partner or the Partners spouse and that was actively engaged in making private equity investments prior to the date of your retirement. ARTICLE 8 DISSOLUTION AND LIQUIDATION
Section 8.1 Dissolution and Liquidation of Partnership (a) Upon dissolution of the Partnership in accordance with the Act, the General Partner shall liquidate the business and administrative affairs of the Partnership, except
that, if the General Partner is unable to perform this function, a liquidator may be elected by a majority in interest (determined by Points) of Limited Partners and upon such election such liquidator shall liquidate the
Partnership. FC Profit and FC Loss, Operating Profit and Operating Loss during the Fiscal Years that include the period of liquidation shall be allocated pursuant to Section 3.4. The proceeds from liquidation shall be
distributed in the following manner: (i) first, the debts, liabilities and obligations of the Partnership including the expenses of liquidation (including legal and accounting expenses incurred in connection therewith), up to and
including the date that distribution of the Partnership's assets to the Partners
29 has been completed, shall be satisfied (whether by payment or by making reasonable provision for payment thereof); (ii) thereafter, the Partners shall be paid amounts pro rata in accordance with and up to the positive
balances of their respective Capital Accounts, as adjusted to reflect allocations under this Section 8.1. (b) Anything in this Section 8.1 to the contrary notwithstanding, the General Partner or liquidator may distribute ratably in
kind rather than in cash, upon dissolution, any assets of the Partnership in accordance with the priorities set forth in Section 8.1(a), provided, however, that if any in kind distribution is to be made (i) the assets distributed in
kind shall be valued as of the actual date of their distribution and charged as so valued and distributed against amounts to be paid under Section 8.1(a), and (ii) any gain or loss (as computed for book purposes) attributable to
property distributed in kind shall be included in the FC Profit or FC Loss, or in Operating Profit or Operating Loss (as determined to be appropriate by the General Partner) for the Fiscal Year which includes the date of such
distribution. ARTICLE 9 GENERAL PROVISIONS Section 9.1 Amendment of Partnership Agreement (a) The General Partner, with the approval of the Required Voting Partners, may amend this Agreement at any time, in
whole or in part, without the consent of any Limited Partner by giving notice of such amendment to any Limited Partner whose rights or obligations as a Limited Partner pursuant to this Agreement are changed thereby;
provided, however, that any amendment that would adversely change the contractual rights of a Partner may only be made if the written consent of such Partner is obtained prior to the effectiveness thereof. Notwithstanding
the foregoing, the General Partner may amend this Agreement at any time, in whole or in part, without the consent of the Required Voting Partners or any Limited Partner (other than a Limited Partner whose rights to
allocations and distributions would suffer a material adverse change as a result of such amendment), to enable the Partnership to comply with the requirements of the Safe Harbor Election within the meaning of the
Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury Regulation Section 1.83- 3(e)(1) or Proposed Treasury Regulation Section 1.704- 1(b)(4)(xii) at such time as such proposed Procedure
and Regulations are effective and to make any such other related changes as may be required by pronouncements or Treasury Regulations issued by the Internal Revenue Service or Treasury Department after the date of this
Agreement. An adjustment of Points shall not be considered an amendment to the extent effected in compliance with the provisions of Section 6.1 or 7.3 as in effect on the date hereof or as hereafter amended in compliance
with the requirements of this Section 9.1(a). The General Partner's approval of or consent to any transaction resulting in the substitution of another Person in place of the Partnership as the managing or general partner of any
of the Funds or any change to the scheme of distribution under any of the Fund LP Agreements that would have the effect of reducing the Partnership's
30 allocable share of the Net Income of any Fund shall require the consent of any Limited Partner adversely affected thereby. (b) Notwithstanding the provisions of this Agreement, including Section 9.1(a), it is hereby
acknowledged and agreed that the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner or any other Person may enter into one or more side letters or similar
agreements with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of, this Agreement. The parties hereto agree that any terms contained in a side letter or
similar agreement with one or more Limited Partners shall govern with respect to such Limited Partner or Limited Partners and the Partnership notwithstanding the provisions of this Agreement. Any such side letters or
similar agreements shall be binding upon the Partnership and the signatories thereto as if the terms were contained in this Agreement, but no such side letter or similar agreement between the General Partner and any Limited
Partner or Limited Partners and the Partnership shall adversely amend the contractual rights of any other Limited Partner without such other Limited Partners prior consent. Section 9.2 Special Power- of- Attorney (a) Each
Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- in- fact, and in the name, place and stead of such Partner, with the
power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any amendment to this Agreement which complies with the provisions of this Agreement (including the
provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel to the Partnership, may from time to time be required by the laws of the United States of America,
the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting
existence and business of the Partnership as a limited partnership; and (iii) all such instruments, certificates, agreements and other documents relating to the conduct of the investment program of any of the Funds which, in the
opinion of such attorney- in- fact and the legal counsel to the Funds, are reasonably necessary to accomplish the legal, regulatory and fiscal objectives of the Funds in connection with its or their acquisition, ownership and
disposition of investments, including, without limitation: 1. the governing documents of any management entity formed as a part of the tax planning for any of the Funds and any amendments thereto; and 2. documents
relating to any restructuring transaction with respect to any of the Funds investments,
31 provided that such documents referred to in clauses 1. and 2. above, viewed individually or in the aggregate, provide substantially equivalent financial and economic rights with respect to such Limited Partner and
otherwise do not: i. increase the Limited Partners overall financial obligation to make capital contributions with respect to the relevant Fund (directly or through any associated vehicle in which the Limited Partner holds an
interest); ii. diminish the Limited Partners overall entitlement to share in profits and distributions with respect to the relevant Fund (directly or through any associated vehicle in which the Limited Partner holds an interest);
iii. cause the Limited Partner to become subject to increased personal liability for any debts or obligations of the Partnership; or iv. otherwise result in an adverse change in the overall rights or obligations of the Limited
Partner in relation to the conduct of the investment program of any of the Funds. (iv) any written notice or letter of resignation from any board seat or office of any Person (other than a company that has a class of equity
securities registered under the Securities Exchange Act of 1934, as amended, or that is registered under the Investment Company Act of 1940, as amended), which board seat or office was occupied or held at the request of the
Partnership or any of its Affiliates. (v) all such proxies, consents, assignments and other documents as the General Partner determines to be necessary or advisable in connection with any merger or other reorganization,
restructuring or other similar transaction entered into in accordance with this Agreement (including the provisions of Section 9.5(c)). (b) Each Limited Partner is aware that the terms of this Agreement permit certain
amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without his consent. If an amendment of the Certificate or this Agreement or any action by or
with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any objection which such Limited Partner may assert with
respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may be necessary or appropriate to permit such
amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a view to the orderly administration of the
affairs of the Partnership. This power- of- attorney is a special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any Person granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and
32 (ii) shall survive the delivery of an assignment by a Limited Partner of the whole or any portion of his interest in the Partnership, except that, where the assignee thereof has been approved by the General Partner for
admission to the Partnership as a substituted Limited Partner, this power- of- attorney given by the assignor shall survive the delivery of such assignment for the sole purpose of enabling the General Partner to execute,
acknowledge and file any instrument necessary to effect such substitution. Section 9.3 Notices Any notice required or permitted to be given under this Agreement shall be in writing. A notice to the General Partner shall be
directed to the attention of Leon D. Black with a copy to the general counsel of the Partnership. A notice shall be considered given when delivered to the addressee either by hand at his Partnership office or electronically to
the primary e- mail account supplied by the Partnership for Partnership business communications, except that a notice to a Retired Partner shall be considered given when delivered by hand to such Retired Partners residence.
Section 9.4 Agreement Binding Upon Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors by operation of law, but the rights and
obligations of the Partners hereunder shall not be assignable, transferable or delegable except as expressly provided herein, and any attempted assignment, transfer or delegation thereof that is not made in accordance with
such express provisions shall be void and unenforceable. Section 9.5 Merger, Consolidation, etc. (a) Subject to Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited
partnerships formed under the Act or other business entities (as defined in Section 17- 211 of the Act) pursuant to an agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to
Section 9.1(a) but notwithstanding any other provision to the contrary contained elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section 9.5(a) may, to the extent permitted
by Section 17- 211(g) of the Act and Section 9.5(a), (i) effect any amendment to this Agreement, (ii) effect the adoption of a new partnership agreement for the Partnership if it is the surviving or resulting limited partnership
in the merger or consolidation, or (iii) provide that the partnership agreement of any other constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of
consummating the merger or consolidation) shall be the partnership agreement of the surviving or resulting limited partnership. (c) The General Partner shall not authorize any merger, consolidation or other reorganization,
restructuring or similar transaction unless it has determined that such transaction should not result in any material adverse change in the financial and other material rights of Limited Partners conferred by this Agreement and
any side letter or similar agreement entered into pursuant to Section 9.1(b) or the imposition of any material new financial obligation.
33 Subject to the foregoing, the General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any such transaction, and
each Limited Partner shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement, and the rights of the Partners hereunder, shall be governed by
and construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws rules thereof. The parties hereby consent to the exclusive jurisdiction and venue for any action arising out of this
Agreement in the Chancery Court of the State of Delaware or the Federal District Court for the District of Delaware located in New Castle County. Section 9.7 Termination of Right of Action Every right of action arising out
of or in connection with this Agreement by or on behalf of any past, present or future Partner or the Partnership against any past, present or future Partner shall, to the fullest extent permitted by applicable law, irrespective of
the place where the action may be brought and irrespective of the residence of any such Partner, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action
arises. Section 9.8 Confidentiality (a) Each Limited Partner acknowledges and agrees that the information contained in the books and records of the Partnership concerning the Points assigned with respect to any other Limited
Partner (including any Retired Partner) is confidential, and, to the fullest extent permitted by applicable law, each Limited Partner waives, and covenants not to assert, any claim or entitlement whatsoever to gain access to any
such information. The Limited Partners agree that the restrictions set forth in this Section 9.8(a) shall constitute reasonable standards under the Act regarding access to information. (b) Each Limited Partner acknowledges and
agrees not to, at any time, either during the term of such Limited Partners participation in the Partnership or thereafter, disclose, use, publish or in any manner reveal, directly or indirectly, to any Person (other than on a
confidential basis to such Limited Partner's legal and tax advisors who have a need to know such information) the contents of this Agreement or any Confidential Information, except (i) as may be necessary to the performance
of the Limited Partners duties hereunder, (ii) with the prior written consent of the General Partner, (iii) to the extent that any such information is in the public domain other than as a result of the Limited Partners breach of
any of his obligations, or (iv) where required to be disclosed by court order, subpoena or other government process; provided, however, that the Limited Partner shall promptly notify the General Partner upon becoming aware
of any such disclosure requirement and shall cooperate with any effort by the General Partner to prevent or limit such disclosure. (c) Notwithstanding any of the provisions of this Section 9.8, each Limited Partner may
disclose to any and all Persons, without limitation of any kind, the tax treatment and tax
34 structure of an investment in the Partnership and all materials of any kind (including tax opinions or other tax analyses) that are provided to the Limited Partner relating to such tax treatment. For this purpose, tax
treatment is the purported or claimed federal income tax treatment of a transaction and tax structure is limited to any fact that may be relevant to understanding the purported or claimed federal income tax treatment of a
transaction. For this purpose, the names of the Partnership, the Partners, their affiliates, the names of their partners, members or equity holders and the representatives, agents and tax advisors of any of the foregoing are not
items of tax structure. Section 9.9 Not for Benefit of Creditors The provisions of this Agreement are intended only for the regulation of relations among Partners and between Partners and former or prospective Partners and
the Partnership. This Agreement is not intended for the benefit of any Person who is not a Partner, and no rights are intended to be granted to any other Person who is not a Partner under this Agreement. Section 9.10 Consents
Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept with the books of the Partnership. Section 9.11 Reports As soon
as practicable after the end of each taxable year, the General Partner shall furnish to each Limited Partner (i) such information as may be required to enable each Limited Partner to properly report for United States federal and
state income tax purposes his distributive share of each Partnership item of income, gain, loss, deduction or credit for such year, and (ii) a statement of the total amount of Operating Profit or Operating Loss for such year and
a reconciliation of any difference between (A) such Operating Profit or Operating Loss and (B) the aggregate net profits or net losses allocated by the Funds to the Partnership for such year (other than any difference
attributable to the aggregate FC Profit or FC Loss allocated by the Funds to the Partnership for such year). Section 9.12 Filings The Partners hereby agree to take any measures necessary (or, if applicable, refrain from any
action) to ensure that the Partnership is treated as a partnership for federal, state and local income tax purposes. Section 9.13 Headings, Gender, Etc. The section headings in this Agreement are for convenience of reference
only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof. As used herein, masculine pronouns shall include the feminine and neuter, and the singular shall be deemed to include the
plural.
35 Signature Page Follows
S- 1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. General Partner: Apollo Capital Management VI, LLC By: /s/ Leon D. Black Leon D. Black
President Initial Limited Partners: /s/ Leon D. Black Leon D. Black /s/ John J. Hannan John J. Hannan
CONFIDENTIAL AND PROPRIETARY This company is the general partner of Apollo Investment Fund VII, L.P. and its parallel funds and earns the carried interest on Fund VII profits. Apollo Advisors VII, L.P. Third
Amended and Restated Limited Partnership Agreement Dated as of July 1, 2008 and effective as of August 30, 2007 THE TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN THIS AGREEMENT IS
RESTRICTED AS DESCRIBED HEREIN.
i TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS............................................................................................................1 ARTICLE 2 FORMATION AND

ORGANIZATION....................................................................8 Section 2.1 Formation...........................................................................................................8 Section 2.2 Name
..................................................................................................................8 Section 2.3 Offices................................................................................................................9 Section 2.4 Term of Partnership
...........................................................................................9 Section 2.5 Purpose of the Partnership .................................................................................9 Section 2.6 Actions by
Partnership.....................................................................................10 Section 2.7 Admission of Limited Partners ........................................................................10 ARTICLE 3
CAPITAL..................................................................................................................10 Section 3.1 Contributions to Capital...................................................................................10 Section 3.2 Rights of Partners in Capital
............................................................................11 Section 3.3 Capital Accounts..............................................................................................11 Section 3.4 Allocation of Profit and
Loss...........................................................................12 Section 3.5 Tax Allocations................................................................................................13 Section 3.6 Reserves; Adjustments for Certain Future Events
...........................................13 Section 3.7 Finality and Binding Effect of General Partners Determinations ..................14 ARTICLE 4 DISTRIBUTIONS ....................................................................................................15
Section 4.1 Distributions.....................................................................................................15 Section 4.2 Withholding of Certain Amounts.....................................................................16 Section 4.3 Limitation on
Distributions..............................................................................16 ARTICLE 5 MANAGEMENT......................................................................................................16 Section 5.1 Rights and Powers of the General Partner
.......................................................16 Section 5.2 Delegation of Duties ........................................................................................17 Section 5.3 Transactions with Affiliates.............................................................................19
Section 5.4 Expenses ..........................................................................................................19 Section 5.5 Rights of Limited Partners ...............................................................................19 Section 5.6 Other Activities of Partners
.............................................................................20 Section 5.7 Duty of Care; Indemnification .........................................................................20 ARTICLE 6 ADMISSIONS, TRANSFERS AND
WITHDRAWALS.........................................22 Section 6.1 Admission of Additional Limited Partners; Effect on Points ..........................22 Section 6.2 Admission of Additional General Partner
.......................................................22 Section 6.3 Transfer of Interests of Limited Partners .........................................................22 Section 6.4 Withdrawal of Partners ....................................................................................24
Section 6.5 Pledges .............................................................................................................24
ii ARTICLE 7 ALLOCATION OF POINTS; ADJUSTMENTS OF POINTS AND RETIREMENT OF PARTNERS...................................................................................................25 Section 7.1 Allocation of Points
.........................................................................................25 Section 7.2 Retirement of Partner.......................................................................................26 Section 7.3 Effect of Retirement on
Points.........................................................................27 Section 7.4 Non- solicitation; Non- compete......................................................................27 ARTICLE 8 DISSOLUTION AND LIQUIDATION
...................................................................29 Section 8.1 Dissolution and Liquidation of Partnership .....................................................29 ARTICLE 9 GENERAL
PROVISIONS........................................................................................29 Section 9.1 Amendment of Partnership Agreement ...........................................................29 Section 9.2 Special Power- of- Attorney
..............................................................................30 Section 9.3 Notices .............................................................................................................32 Section 9.4 Agreement Binding Upon Successors and Assigns
.........................................32 Section 9.5 Merger, Consolidation, etc...............................................................................33 Section 9.6 Governing Law ................................................................................................33 Section 9.7
Termination of Right of Action .......................................................................33 Section 9.8 Confidentiality .................................................................................................34 Section 9.9 Not for Benefit of
Creditors.............................................................................34 Section 9.10 Consents...........................................................................................................35 Section 9.11 Reports
.............................................................................................................35 Section 9.12 Filings ..............................................................................................................35 Section 9.13 Headings, Gender, Etc.
....................................................................................35
1 APOLLO ADVISORS VII, L.P. A Delaware Limited Partnership THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT of APOLLO ADVISORS VII, L.P. made as of July 1, 2008 and effective as of August 30, 2007, by and among Apollo Capital Management VII, LLC, a Delaware limited liability company, as the sole general
partner, and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners. W I T N E S S E T H : WHEREAS, on May 30, 2007, Apollo Capital
Management VII, LLC filed with the Secretary of State of the State of Delaware a Certificate of Limited Partnership to form Apollo Advisors VII, L.P. as a limited partnership under the Delaware Revised Uniform Limited
Partnership Act, pursuant to an agreement among Apollo Capital Management VII, LLC, as sole general partner, and Black Family Partners, L.P., Joshua J. Harris and Marc J. Rowan as initial limited partners (the Original
Agreement); WHEREAS, the parties amended and restated the Original Agreement pursuant to that certain Amended and Restated Agreement of Limited Partnership dated as of August 20, 2007 (the First Amended and
Restated Agreement); WHEREAS, the parties amended and restated the First Amended and Restated Agreement pursuant to that certain Second Amended and Restated Agreement of Limited Partnership dated as of January
11, 2008 and effective as of August 30, 2007 (the Second Amended and Restated Agreement) in connection with the commencement of operations of the Funds (as defined herein); and WHEREAS, the parties wish to
amend and restate the Second Amended and Restated Agreement in its entirety; NOW, THEREFORE, the parties hereby agree as follows: ARTICLE 1 DEFINITIONS Act means the Delaware Revised Uniform Limited
Partnership Act, as in effect on the date hereof and as amended from time to time, or any successor law. Affiliate means with respect to any Person any other Person directly or indirectly controlling, controlled by or under
common control with such Person.
2 Agreement means this Third Amended and Restated Limited Partnership Agreement, as amended or supplemented from time to time. AIF means Apollo Investment Fund VII, L.P., a limited partnership formed under
the Act. Capital Account means with respect to each Partner the capital account established and maintained on behalf of such Partner as described in Section 3.3. Cause means with respect to any Limited Partner, an
election by such Limited Partner in accordance with Section 7.2(a)(ii) or a determination by the General Partner that any of the following events has occurred with respect to such Limited Partner: (a) the Limited Partners
conviction of a felony or plea of no contest to a felony charge; (b) the Limited Partners intentional violation of law in connection with any transaction involving the purchase, sale, loan or other disposition of, or the rendering
of investment advice with respect to, any security, futures or forward contract, insurance contract, debt instrument or currency; (c) dishonesty, bad faith, gross negligence, willful misconduct, fraud or willful or reckless
disregard of duties by a Limited Partner in connection with the performance of any services on behalf of the Partnership or any Affiliate; (d) intentional failure by a Limited Partner to comply with any reasonable directive of
the General Partner in connection with the performance of any services on behalf of the Partnership or any Affiliate; (e) intentional breach by a Limited Partner of any material provision of this Agreement, any of the Fund LP
Agreements, the Co- Investors (A) LP Agreement or any of the equivalent agreements of any other Affiliate; (f) intentional violation by a Limited Partner of any material written policies adopted by the General Partner
governing the conduct of Persons performing services on behalf of the Partnership or any Affiliate; (g) the taking of or omission to take any action that has caused or substantially contributed to a material deterioration in the
business or reputation of the Partnership or any of its Affiliates, or that was otherwise materially disruptive of their business or affairs; provided that the term Cause shall not include for this purpose (i) any mistake of
judgment made in good faith with respect to any transaction respecting a Portfolio Investment for the account of any of the Funds or (ii) a communication to other Partners or other Apollo professionals, in a professional and
business- like manner, of any bona fide disagreement or suggestion concerning a proposed action by the Partnership or an Affiliate;
3 (h) the failure by a Limited Partner to devote a significant portion of time to performing services as an agent of the Partnership without the prior consent of the General Partner, other than by reason of death or Disability; (i)
the obtaining by a Limited Partner of any material improper personal benefit as a result of a breach by such Limited Partner of any covenant or agreement (including, without limitation, a breach by a Limited Partner of the
Partnerships code of ethics or a material breach by a Limited Partner of other written policies furnished to the Limited Partner relating to personal investment transactions or of any covenant, agreement, representation or
warranty contained in any of the Fund LP Agreements); or (j) the declaration by a Voting Partner of Bankruptcy (as such term is defined in each of the Fund LP Agreements); provided that if a failure, breach, violation or
action or omission described in any of clauses (d) through (g) is capable of being cured, the Limited Partner has failed to do so after being given notice and a reasonable opportunity to cure. Certificate means the Certificate
of Limited Partnership of the Partnership and any amendments thereto as filed with the office of the Secretary of State of the State of Delaware. Clawback Payment means any payment required to be made by the
Partnership to any Fund pursuant to Section 10.3 of the Fund LP Agreement of such Fund. Clawback Share means, with respect to any Limited Partner and any Clawback Payment, a portion of such Clawback Payment
equal to (i) the cumulative amount distributed to such Limited Partner prior to the time of determination of Operating Profit attributable to the Fund to which the Clawback Payment is required to be made, divided by (ii) the
cumulative amount so distributed to all Partners with respect to such Operating Profit attributable to such Fund. Co- Investors (A) LP Agreement means the limited partnership agreement of Apollo Co- Investors VII (A),
L.P., as amended from time to time. Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor law. Commitment Period has the meaning ascribed to that term
in each of the Fund LP Agreements. Confidential Information means information that has not been made publicly available by or with the permission of the General Partner and that is obtained or learned by a Limited
Partner as a result of or in connection with his association with the Partnership or any of its Affiliates concerning the business, affairs or activities of the Partnership, any of its Affiliates or any of the Portfolio Investments,
including, without limitation, models, codes, client information (including client identity and contacts, client lists, client financial or personal information), financial data, know- how, computer software and related
documentation, trade secrets, and other
4 forms of sensitive or valuable non- public information obtained or learned by the Limited Partner as a result of such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information
does not include information concerning non- proprietary business or investment practices, methods or relationships customarily employed or entered into by comparable business enterprises Covered Person has the
meaning ascribed to that term in Section 5.7. DEUCC has the meaning ascribed to that term in Section 6.5(c). Disability means, with respect to a Limited Partner, any physical or mental illness, disability or incapacity that
prevents the Limited Partner from performing substantially all of the duties delegated to him as an agent of the Partnership pursuant to Section 5.2. FC Loss means, for each Fund with respect to any Fiscal Year, the portion
of any Net Loss and any Portfolio Investment Loss allocable to the Partnership, but only to the extent such allocation is made by such Fund to the Partnership in proportion to the Partnerships capital contribution to such
Fund, as determined pursuant to the Fund LP Agreement. FC Profit means, for each Fund with respect to any Fiscal Year, the portion of any Net Income and any Portfolio Investment Gain allocable to the Partnership, but
only to the extent such allocation is made by such Fund to the Partnership in proportion to the Partnerships capital contribution to such Fund, as determined pursuant to the Fund LP Agreement. FC Share means a share of
the FC Profit or FC Loss with respect to each of the Funds. The aggregate number of FC Shares with respect to each Fund shall be equal to the dollar amount of the Partnerships capital commitment to such Fund. Final
Adjudication has the meaning ascribed to that term in Section 5.7. Fiscal Year means, with respect to a year, the period commencing on January 1 of such year and ending on December 31 of such year (or on the date of a
final distribution pursuant to Section 8.1(a)), unless the General Partner shall elect another fiscal year for the Partnership which is a permissible taxable year under the Code. Fund means each of AIF and each Parallel
Fund within the meaning of the Fund LP Agreement of AIF. Such term also includes each alternative investment vehicle created by AIF and/or any such Parallel Fund, to the extent the context so requires. As of the date
hereof, the Funds are AIF, Apollo Investment Fund (PB) VII, L.P., Apollo Overseas Partners (Delaware 892) VII, L.P., Apollo Overseas Partners (Delaware) VII, L.P., and Apollo Overseas Partners VII, L.P. Fund General
Partner means the Partnership in its capacity as a general partner of any of the Funds pursuant to the Fund LP Agreements. Fund LP Agreement means the limited partnership agreement of any of the Funds and the Voting
Affiliated Feeder Funds, as amended from time to time.
5 General Partner means Apollo Capital Management VII, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in its
capacity as general partner of the Partnership. Giveback Amount has the meaning ascribed to that term in Section 7.4(d). Investment Committee means the committee constituted pursuant to the Management Company LP
Agreement. Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, including any Retired Partner and any Voting Partner, until such Person withdraws entirely
as a limited partner of the Partnership, in his capacity as a limited partner of the Partnership. All references herein to a Limited Partner shall be construed as referring collectively to such Limited Partner and to each Related
Party of such Limited Partner (and to each Person of which such Limited Partner is a Related Party) that also is or that previously was a Limited Partner, except to the extent that the General Partner determines that the context
does not require such interpretation as between such Limited Partner and his Related Parties. Management Company has the meaning ascribed to that term in each of the Fund LP Agreements. Management Company LP
Agreement means the limited partnership agreement of the Management Company, as amended from time to time. Maximum Dilution Percentage has the meaning ascribed to that term in Section 6.1(a). Net Income has
the meaning ascribed to that term in each of the Fund LP Agreements. Net Loss has the meaning ascribed to that term in each of the Fund LP Agreements. Operating Loss means, with respect to any Fiscal Year, any net
loss of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction proceeds derived by the Partnership. To the extent derived from any
Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the relevant Fund, and any items
not derived from a Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for federal income tax purposes. Operating Profit means, with respect to any Fiscal
Year, any net income of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction proceeds derived by the Partnership. To the extent
derived from any Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the relevant
Fund, and any items not derived from a Fund
6 shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for federal income tax purposes. Partner means the General Partner or any of the Limited Partners, and
Partners means the General Partner and all of the Limited Partners. Partnership means the limited partnership continued pursuant to this Agreement. Permanent Disability means a Disability that continues for (a) periods
aggregating at least 24 months during any period of 48 consecutive months or (b) such shorter period as the General Partner may determine. Person means any individual, partnership, corporation, limited liability company,
joint venture, joint stock company, unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or
other entity. Point means a 1/2,000 share of Operating Profit or Operating Loss. The aggregate number of Points assigned or available for assignment to all Partners shall not at any time exceed 2,000. Portfolio Investment
has the meaning ascribed to that term in each of the Fund LP Agreements. Portfolio Investment Gain has the meaning ascribed to that term in each of the Fund LP Agreements. Portfolio Investment Loss has the meaning
ascribed to that term in each of the Fund LP Agreements. Reference Rate means the interest rate described in Section 3.1(c) (or the corresponding provision) of each of the Fund LP Agreements. Related Party means, with
respect to any Limited Partner: (a) any spouse, child, parent or other lineal descendant of such Limited Partner or such Limited Partners parent, or any natural Person who occupies the same principal residence as the Limited
Partner; (b) any trust or estate in which the Limited Partner and any Related Party or Related Parties (other than such trust or estate) collectively have more than 80 percent of the beneficial interests (excluding contingent and
charitable interests); (c) any entity of which the Limited Partner and any Related Party or Related Parties (other than such entity) collectively are beneficial owners of more than 80 percent of the equity interest; and (d) any
Person with respect to whom such Limited Partner is a Related Party.
7 Required Voting Partners means, at any time, at least two- thirds by number of Limited Partners that are Voting Partners at such time. Retired Partner means any Limited Partner who has become a retired partner in
accordance with or pursuant to Section 7.2. Schedule of Partners means a schedule to be maintained by the General Partner showing the following information with respect to each Partner: name, address, date of admission
and retirement, required capital contribution, and FC Shares. Transfer means any direct or indirect sale, exchange, transfer, assignment or other disposition by a Partner of any or all of his interest in the Partnership (whether
respecting, for example, economic rights only or all the rights associated with the interest) to another Person, whether voluntary or involuntary. Unvested Points means, with respect to any Limited Partner as of the
commencement of any Vesting Period, any amount by which (a) the total Points assigned to such Limited Partner as of such date, excluding, unless otherwise determined by the General Partner, any Points assigned to such
Limited Partner pursuant to Section 7.3(b), exceed (b) such Limited Partners Vested Points, if any, as of such time. Any reduction of such Limited Partners Points in connection with the admission of a new Partner or the
increase of the Points of any existing Limited Partner pursuant to Section 6.1 shall first reduce such Limited Partners Unvested Points to the extent thereof, and the balance of any such reduction shall be applied to such
Limited Partners Vested Points. Vested Points means, with respect to any Limited Partner at any time, the sum of: (a) with respect to the first Vesting Period, the product of (i) such Limited Partners Points as of the
commencement of the first Vesting Period multiplied by (ii) such Limited Partners Vesting Percentage with respect to the first Vesting Period, plus (b) with respect to each Vesting Period after the first Vesting Period and
without duplication (i) such Limited Partners Vested Points, if any, as of the close of the immediately preceding Vesting Period, plus (ii) the product of (A) such Limited Partners Unvested Points as of the commencement of
such Vesting Period multiplied by (B) such Limited Partners Vesting Percentage with respect to such Vesting Period. Vesting Date means, with respect to any Limited Partner,
8 Vesting Percentage means, with respect to any Vesting Period of any Limited Partner, Vesting Period means, with respect to any Limited Partner, an initial period that commences as of the later of January 1, 2008 or the
effective date of such Limited Partners admission to the Partnership and ends on the first Vesting Date thereafter, and each subsequent period that commences on the next day following the immediately preceding Vesting
Date and ends on the next succeeding Vesting Date. Voting Affiliated Feeder Fund has the meaning ascribed to such term in each of the Fund LP Agreements. As of the date hereof, the Voting Affiliated Feeder Funds are
Apollo Overseas Partners (I) VII, L.P. and Apollo Investment Fund (I) VII, L.P. Voting Partner means each of the members of the Investment Committee, so long as he has not become a Retired Partner. All references
herein to a Voting Partner (except in the definition of Required Voting Partners) shall be construed as referring collectively to such Voting Partner and to each Related Party of such Voting Partner that also is or that
previously was a Limited Partner (unless such Limited Partner is a Retired Partner), except to the extent that the General Partner determines that the context does not require such interpretation as between such Voting Partner
and his Related Parties. ARTICLE 2 FORMATION AND ORGANIZATION Section 2.1 Formation The Partnership was formed and is hereby continued as a limited partnership under and pursuant to the Act. The Certificate
was filed on May 30, 2007. The General Partner shall execute, acknowledge and file any amendments to the Certificate as may be required by the Act and any other instruments, documents and certificates which, in the
opinion of the Partnerships legal counsel, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Partnership shall determine to do
business, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership.
Section 2.2 Name The name of the Partnership shall be Apollo Advisors VII, L.P. or such other name as the General Partner hereafter may adopt upon causing an appropriate amendment to be made to
9 this Agreement and to the Certificate to be filed in accordance with the Act. Promptly thereafter, the General Partner shall send notice thereof to each Limited Partner. Section 2.3 Offices (a) The Partnership shall maintain
its principal office, and may maintain one or more additional offices, at such place or places as the General Partner may from time to time determine. (b) The General Partner shall arrange for the Partnership to have and
maintain in the State of Delaware, at the expense of the Partnership, a registered office and registered agent for service of process on the Partnership as required by the Act. Section 2.4 Term of Partnership (a) The term of the
Partnership shall continue until the dissolution (without continuation) of all of the Funds or the earlier of: (i) at any time there are no Limited Partners, unless the business of the Partnership is continued in accordance with the
Act; (ii) any event that results in the General Partner ceasing to be a general partner of the Partnership under the Act, provided that the Partnership shall not be dissolved and required to be wound up in connection with any
such event if (A) at the time of the occurrence of such event there is at least one remaining general partner of the Partnership who is hereby authorized to and does carry on the business of the Partnership, or (B) within 90 days
after the occurrence of such event, a majority of the Limited Partners agree in writing or vote to continue the business of the Partnership and to the appointment, effective as of the date of such event, if required, of one or more
additional general partners of the Partnership; and (iii) the entry of a decree of judicial dissolution under Section 17- 802 of the Act. (b) The parties agree that irreparable damage would be done to the goodwill and reputation
of the Partners if any Limited Partner should bring an action to dissolve the Partnership. Care has been taken in this Agreement to provide for fair and just payment in liquidation of the interests of all Partners. Accordingly, to
the fullest extent permitted by law, each Limited Partner hereby waives and renounces his right to such a decree of dissolution or to seek the appointment of a liquidator for the Partnership, except as provided herein. Section
2.5 Purpose of the Partnership The principal purpose of the Partnership is to act as the sole general partner or as the managing general partner (as the case may be) of each of the Funds and certain Voting Affiliated Feeder
Funds pursuant to their respective Fund LP Agreements and to undertake such related and incidental activities and execute and deliver such related documents necessary or incidental thereto. The purpose of the Partnership
shall be limited to serving as a general partner of direct
10 investment funds, including any of their Affiliates, and the provision of investment management and advisory services. Section 2.6 Actions by Partnership The Partnership may execute, deliver and perform, and the
General Partner may execute and deliver, all contracts, agreements and other undertakings, and engage in all activities and transactions as may in the opinion of the General Partner be necessary or advisable to carry out the
objects and purposes of the Partnership, without the approval or vote of any Limited Partner. Section 2.7 Admission of Limited Partners On the date hereof, the Persons whose names are set forth in the Schedule of Partners
under the caption Limited Partners shall be admitted to the Partnership or shall continue, as the case may be, as limited partners of the Partnership upon their execution of a counterpart of this Agreement or such other
instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner. ARTICLE 3 CAPITAL Section 3.1 Contributions to Capital (a) Any required contribution of a
Limited Partner to the capital of the Partnership shall be as set forth in the Schedule of Partners. Contributions to the capital of the Partnership shall be made as of the date of admission of such Limited Partner as a limited
partner of the Partnership and as of each such other date as may be specified by the General Partner. Except as otherwise permitted by the General Partner, all contributions to the capital of the Partnership by each Limited
Partner shall be payable exclusively in cash. (b) The General Partner shall make capital contributions from time to time to the extent necessary to ensure that the Partnership meets its obligations to make contributions of
capital to each of the Funds. (c) No Partner shall be obligated, nor shall any Partner have any right, to make any contribution to the capital of the Partnership other than as specified in this Section 3.1. No Limited Partner shall
be obligated to restore any deficit balance in his Capital Account. (d) To the extent, if any, that at the time of the Final Distribution (as defined in each of the Fund LP Agreements), it is determined that the Partnership, as a
general partner of each of the Funds, is required to make any Clawback Payment with respect to any of the Funds, each Limited Partner shall be required to participate in such payment and contribute to the Partnership for
ultimate distribution to the limited partners of the relevant Fund an amount equal to such Limited Partners Clawback Share of any Clawback Payment, but not in any event in excess of the cumulative amount theretofore
distributed to such Limited Partner with respect to the Operating Profit attributable to such Fund. For purposes of determining each Limited Partners
11 required contribution, each Limited Partners allocable share of any Escrow Account (as defined in the Fund LP Agreements), to the extent applied to satisfy any portion of a Clawback Payment, shall be treated as if it had
been distributed to such Limited Partner and re- contributed by such Limited Partner pursuant to this Section 3.1(d) at the time of such application. Section 3.2 Rights of Partners in Capital (a) No Partner shall be entitled to
interest on his capital contributions to the Partnership. (b) No Partner shall have the right to distributions or the return of any contribution to the capital of the Partnership except (i) for distributions in accordance with Section
4.1 or (ii) upon dissolution of the Partnership. The entitlement to any such return at such time shall be limited to the value of the Capital Account of the Partner. The General Partner shall not be liable for the return of any such
amounts. Section 3.3 Capital Accounts (a) The Partnership shall maintain for each Partner a separate Capital Account. (b) Each Partners Capital Account shall have an initial balance equal to the amount of cash and the net
value of any securities or other property constituting such Partners initial contribution to the capital of the Partnership. (c) Each Partners Capital Account shall be increased by the sum of: (i) the amount of cash and the net
value of any securities or other property constituting additional contributions by such Partner to the capital of the Partnership permitted pursuant to Section 3.1, plus (ii) the portion of any FC Profit allocated to such Partners
Capital Account pursuant to Section 3.4, plus (iii) the portion of any Operating Profit allocated to such Partners Capital Account pursuant to Section 3.4, plus (iv) such Partners allocable share of any decreases in any
reserves recorded by the Partnership pursuant to Section 3.6 and any receipts determined to be applicable to a prior period pursuant to Section 3.6(b), to the extent the General Partner determines that, pursuant to any provision
of this Agreement, such item is to be credited to such Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners. (d) Each Partners Capital Account shall be reduced by
the sum of (without duplication): (i) the portion of any FC Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus
12 (ii) the portion of any Operating Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus (iii) the amount of any cash and the net value of any property distributed to such Partner pursuant to Section
4.1 or 8.1 including any amount deducted pursuant to Section 4.2 or 5.4 from any such amount distributed, plus (iv) any withholding taxes or other items payable by the Partnership and allocated to such Partner pursuant to
Section 5.4(b), any increases in any reserves recorded by the Partnership pursuant to Section 3.6 and any payments determined to be applicable to a prior period pursuant to Section 3.6(b), to the extent the General Partner
determines that, pursuant to any provision of this Agreement, such item is to be charged to such Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners. Section 3.4
Allocation of Profit and Loss (a) Allocations of Profit. FC Profit and Operating Profit for any Fiscal Year shall be allocated to the Partners: (i) first, to Partners to which FC Loss and Operating Loss previously have been
allocated pursuant to Section 3.4(b), to the extent of and in proportion to the amount of such losses; (ii) next, to the extent that the cumulative amount of distributions pursuant to Article 4 (other than distributions representing
a return of such Partners capital contributions) exceeds the cumulative amount of FC Profit and Operating Profit previously allocated to such Partners pursuant to Section 3.4(a), in the order that such distributions occurred;
and (iii) thereafter, any remaining such FC Profit and Operating Profit shall be allocated among the Partners so as to produce Capital Accounts (computed after taking into account any other FC Profit and Operating Profit or
FC Loss and Operating Loss for the Fiscal Year in which such event occurred and all distributions pursuant to Article 4 with respect to such Fiscal Year and after adding back each Partners share, if any, of Partner
Nonrecourse Debt Minimum Gain, as defined in Treasury Regulations Sections 1.704 - 2(b)(2) and 1.704 - 2(i), or Partnership Minimum Gain, as defined in Treasury Regulations Sections 1.704 - 2(b)(2) and 1.704 - 2(d)) for
the Partners such that a distribution of an amount of cash equal to such Capital Account balances in accordance with such Capital Account balances would be in the amounts, sequence and priority set forth in Article 4. (b)
Allocations of Losses. Subject to the limitation of Section 3.4(c), FC Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective FC Shares as of the close of such Fiscal Year, and Operating
Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective Points as of the close of such Fiscal Year. (c) To the extent that the allocations of FC Loss or Operating Loss contemplated by
Section 3.4(b) would cause the Capital Account of any Limited Partner to be less than zero, such FC Loss or Operating Loss shall to that extent instead be allocated to and debited against the
13 Capital Account of the General Partner (or, at the direction of the General Partner, to those Limited Partners who are members of the General Partner in proportion to their limited liability company interests in the General
Partner). Following any such adjustment pursuant to Section 3.4(c) with respect to any Limited Partner, any FC Profit or Operating Profit for any subsequent Fiscal Year which would otherwise be credited to the Capital
Account of such Limited Partner pursuant to Section 3.4(a) shall instead be credited to the Capital Account of the General Partner (or relevant Limited Partners) until the cumulative amounts so credited to the Capital Account
of the General Partner (or relevant Limited Partners) with respect to such Limited Partner pursuant to Section 3.4(c) is equal to the cumulative amount debited against the Capital Account of the General Partner (or relevant
Limited Partners) with respect to such Limited Partner pursuant to Section 3.4(c). (d) Each Limited Partners rights and entitlements as a Limited Partner are limited to the rights to receive allocations and distributions of FC
Profit and Operating Profit expressly conferred by this Agreement and any side letter or similar agreement entered into pursuant to Section 9.1(b) and the other rights expressly conferred by this Agreement and any such side
letter or similar agreement or required by the Act, and a Limited Partner shall not be entitled to any other allocations, distributions or payments in respect of his interest, or to have or exercise any other rights, privileges or
powers. Section 3.5 Tax Allocations (a) For United States federal, state and local income tax purposes, Partnership income, gain, loss, deduction or credit (or any item thereof) for each Fiscal Year shall be allocated to and
among the Partners in order to reflect the allocations of FC Profit, FC Loss, Operating Profit and Operating Loss pursuant to the provisions of Section 3.4 for such Fiscal Year, taking into account any variation between the
adjusted tax basis and book value of Partnership property in accordance with the principles of Section 704(c) of the Code. (b) If any Partner or Partners are treated for United States federal income tax purposes as realizing
ordinary income because of receiving interests in the Partnership (whether under Section 83 of the Code or under any similar provision of any law, rule or regulation) and the Partnership is entitled to any offsetting deduction
(net of any income realized by the Partnership as a result of such receipt), the Partnerships net deduction shall be allocated to and among the Partners in such manner as to offset, as nearly as possible, the ordinary income
realized by such Partner or Partners. Section 3.6 Reserves; Adjustments for Certain Future Events (a) Appropriate reserves may be created, accrued and charged against the Operating Profit or Operating Loss for contingent
liabilities, if any, as of the date any such contingent liability becomes known to the General Partner or as of each other date as the General Partner deems appropriate, such reserves to be in the amounts which the General
Partner deems necessary or appropriate. The General Partner may increase or reduce any such reserve from time to time by such amounts as the General Partner deems necessary or appropriate. The amount of any such
reserve, or any increase or decrease therein, shall be proportionately charged or credited, as appropriate, to the Capital Accounts of those parties who are Partners at the time
14 when such reserve is created, increased or decreased, as the case may be, in proportion to their respective Points at such time; provided that, if any individual reserve item, as adjusted by any increase therein, exceeds the
lesser of $500,000 or one percent of the aggregate value of the Capital Accounts of all such Partners, the amount of such reserve, increase or decrease shall instead be charged or credited to those parties who were Partners at
the time, as determined by the General Partner, of the act or omission giving rise to the contingent liability for which the reserve item was established in proportion to their respective Points at that time. (b) If at any time an
amount is paid or received by the Partnership and such amount exceeds the lesser of $500,000 or one percent of the aggregate value of the Capital Accounts of all Partners at the time of payment or receipt, and such amount
was not accrued or reserved for but would nevertheless, in accordance with the Partnerships accounting practices, be treated as applicable to one or more prior periods, then such amount may be proportionately charged or
credited by the General Partner, as appropriate, to those parties who were Partners during such prior period or periods. (c) If any amount is required by Section 3.6(a) or (b) to be credited to a Person who is no longer a Partner,
such amount shall be paid to such Person in cash, with interest from the date on which the General Partner determines that such credit is required at the Reference Rate in effect on that date. Any amount required to be charged
pursuant to Section 3.6(a) or (b) shall be debited against the current balance in the Capital Account of the affected Partners. To the extent that the aggregate current Capital Account balances of such affected Partners are
insufficient to cover the full amount of the required charge, the deficiency shall be debited against the Capital Accounts of the other Partners in proportion to their respective Capital Account balances at such time; provided
that each such other Partner shall be entitled to a preferential allocation, in proportion to and to the extent of such other Partners share of any such deficiency, together with a carrying charge at a rate equal to the Reference
Rate, of any Operating Profit that would otherwise have been allocable after the date of such charge to the Capital Accounts of the affected Partners whose Capital Accounts were insufficient to cover the full amount of the
required charge. In no event shall a current or former Partner be obligated to satisfy any amount required to be charged pursuant to Section 3.6(a) or (b) other than by means of a debit against such Partners Capital Account.
Section 3.7 Finality and Binding Effect of General Partners Determinations All matters concerning the determination, valuation and allocation among the Partners with respect to any profit or loss of the Partnership and any
associated items of income, gain, deduction, loss and credit, pursuant to any provision of this Article 3, including any accounting procedures applicable thereto, shall be determined by the General Partner unless specifically
and expressly otherwise provided for by the provisions of this Agreement, and such determinations and allocations shall be final and binding on all the Partners.
15 ARTICLE 4 DISTRIBUTIONS Section 4.1 Distributions (a) Any amount of cash or property received as a distribution from any of the Funds by the Partnership in its capacity as a partner, to the extent such amount is
determined by reference to the capital commitment of the Partnership in, or the capital contributions of the Partnership to, any of the Funds, shall be promptly distributed by the Partnership to the Partners in proportion to their
respective FC Shares determined: (i) in the case of any distributions received from any of the Funds which are comprised of proceeds from the disposition of a Portfolio Investment by such Fund, as of the date of such
disposition by such Fund; and (ii) in the case of any other distribution, as of the end of the relevant Fiscal Year in respect of which such distribution is made by such Fund. (b) The General Partner shall use reasonable efforts
to cause the Partnership to distribute, as promptly as practicable after receipt by the Partnership, any available revenues attributable to items included in the determination of Operating Profit, subject to the provisions of
Section 10.3 of the Fund LP Agreements and subject to the retention of such reserves as the General Partner considers appropriate for purposes of the prudent and efficient financial operation of the Partnerships business
including in accordance with Section 3.6 hereof. Any such distributions shall be made to Partners in proportion to their respective Points, determined: (i) in the case of any amount of revenue received from any of the Funds
that is attributable to the disposition of a Portfolio Investment by such Fund, as of the date of such disposition by such Fund; and (ii) in any other case, as of the date of receipt of such revenue by the Partnership. (c) Subject to
Section 5.2(d)(ii), any other distributions or payments in respect of the interests of Limited Partners shall be made at such time, in such manner and to such Limited Partners as the General Partner shall determine. (d) The
General Partner may cause the Partnership to pay distributions to the Partners at any time in addition to those contemplated by Section 4.1(a), (b) or (c), in cash or in kind; provided that the General Partner shall only make a
distribution in kind either to all Partners ratably or to those Partners who have agreed to accept such a distribution in kind. Distributions of any such amounts shall be made to the Partners in proportion to their respective
Points, determined immediately prior to giving effect to such distribution.
16 Section 4.2 Withholding of Certain Amounts (a) If the Partnership incurs a withholding tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the General Partner, without
limitation of any other rights of the Partnership, may cause the amount of such obligation to be debited against the Capital Account of such Partner when the Partnership pays such obligation, and any amounts then or
thereafter distributable to such Partner shall be reduced by the amount of such taxes. If the amount of such taxes is greater than any such then distributable amounts, then such Partner and any successor to such Partners
interest shall indemnify and hold harmless the Partnership and the General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of
such excess. (b) The General Partner may withhold from any distribution to any Limited Partner pursuant to this Agreement any other amounts due from such Limited Partner to the Partnership or the General Partner pursuant
to this Agreement to the extent not otherwise paid. Any amounts so withheld shall be applied by the General Partner to discharge the obligation in respect of which such amounts were withheld. Section 4.3 Limitation on
Distributions Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to any Partner on account of his
Agreement, the General Partner shall have complete and exclusive responsibility (i) for all management decisions to be made on behalf of the Partnership and (ii) for the conduct of the business and affairs of the Partnership,
including all such decisions and all such business and affairs to be made or conducted by the Partnership in its capacity as Fund General Partner of any of the Funds. (b) Without limiting the generality of the foregoing, the
General Partner shall have full power and authority to execute, deliver and perform such contracts, agreements and other undertakings, and to engage in all activities and transactions, as it may deem necessary or advisable for,
or as may be incidental to, the conduct of the business contemplated by this Section 5.1, including, without in any manner limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any
Partner or with any other Person having any business, financial or other relationship with any Partner or Partners; provided that the General Partner shall not have authority to cause the Partnership to borrow any funds for its
own account on a secured basis without the consent of the Required Voting Partners. The Partnership, and the
17 General Partner on behalf of the Partnership, may enter into and perform the Fund LP Agreements and any documents contemplated thereby or related thereto and (subject to any vote requirement in Section 5.2(d)(vi)) any
amendments thereto, without any further act, vote or approval of any Person, including any Partner, notwithstanding any other provision of this Agreement. The General Partner is hereby authorized to enter into the
documents described in the preceding sentence on behalf of the Partnership, but such authorization shall not be deemed a restriction on the power of the General Partner to enter into other documents on behalf of the
Partnership. Except as otherwise expressly provided herein or as required by law, all powers and authority vested in the General Partner by or pursuant to this Agreement or the Act shall be construed as being exercisable by
the General Partner in its sole and absolute discretion. (c) The General Partner, or a Limited Partner designated by the General Partner, shall be the tax matters partner for purposes of Section 6231(a)(7) of the Code. Each
Partner agrees not to treat, on his United States federal income tax return or in any claim for a refund, any item of income, gain, loss, deduction or credit in a manner inconsistent with the treatment of such item by the
Partnership. The General Partner shall have the exclusive authority to make any elections required or permitted to be made by the Partnership under any provisions of the Code or any other revenue laws. Section 5.2
Delegation of Duties (a) Subject to Section 5.1 and Section 5.2(d), the General Partner may delegate to any Person or Persons any of the duties, powers and authority vested in it hereunder on such terms and conditions as it
may consider appropriate. (b) Without limiting the generality of Section 5.2(a), but subject to the limitations contained in Section 5.2(d), the General Partner shall have the power and authority to appoint any Person, including
any Person who is a Limited Partner, to provide services to and act as an employee or agent of the Partnership, with such titles and duties as may be specified by the General Partner, including the following: (i) a chief
financial officer, to whom the General Partner may delegate its authority to disburse funds for the account of the Partnership and the Funds for any proper purpose, to establish deposit accounts with banks or other financial
institutions, to make permitted investments of Partnership assets, and to take any other permitted actions pertaining to the finances of the Partnership and the Funds; (ii) a chief accounting officer, to whom the General Partner
may delegate its authority to prepare and maintain financial and accounting books, records and statements of the Partnership and the Funds; and (iii) one or more vice presidents, treasurers and controllers, to whom the
General Partner may delegate its authority to execute any of its decisions and to take any other permitted actions on behalf of the Partnership (including in its capacity as a Fund General Partner of any of the Funds) subject to
the supervision of the chief executive officer, the chief financial officer or the chief accounting officer.
18 Any Person appointed by the General Partner to serve as an officer, employee or agent of the Partnership shall be subject to removal at any time by the General Partner; and shall report to and consult with the General
Partner at such times and in such manner as the General Partner may direct. (c) Any Person who is a Limited Partner and to whom the General Partner delegates any of its duties pursuant to this Section 5.2 or any other
provision of this Agreement shall be subject to the same standard of care, and shall be entitled to the same rights of indemnification and exoneration, applicable to the General Partner under and pursuant to Section 5.7, unless
such Person and the General Partner mutually agree to a different standard of care or right to indemnification and exoneration to which such Person shall be subject. (d) Except as otherwise expressly provided herein, action
by the General Partner with respect to any of the following matters shall be taken only in accordance with the directions of the Required Voting Partners: (i) the waiver of any provision of Section 5.6 hereof concerning other
activities of Limited Partners; (ii) the amount and timing of any discretionary distribution to Partners pursuant to Section 4.1(c), and any decision to pay any distribution to Partners in kind; (iii) the exercise of the authority of
the Partnership to (A) cause any of the Funds to pay a distribution in kind and (B) elect to receive any such distribution in kind; (iv) the exercise of the Partnerships authority to borrow any funds on a secured basis for the
account of the Partnership; (v) the determination of whether to conduct a business other than serving as a general partner of the Funds; (vi) the amendment of this Agreement, and the exercise of the authority of the Partnership
with respect to the approval of any amendment to the Fund LP Agreements; and (vii) to the fullest extent permitted by law, the voluntary dissolution of the Partnership, and the exercise of the authority of the Partnership to
cause a voluntary dissolution of any of the Funds. The foregoing shall not restrict the General Partner from delegating authority to execute or implement any such determinations made by the General Partner. (e) The General
Partner shall be permitted to designate one or more committees of the Partnership which committees may include Limited Partners as members. Any such committees shall have such powers and authority granted by the
General Partner. Any Limited Partner who has agreed to serve on a committee shall not be deemed to have the power to bind or act for or on behalf of the Partnership in any manner and in no event shall a member of a
committee be considered a general partner of the Partnership by agreement, estoppel or
19 otherwise or be deemed to participate in the control of the business of the Partnership as a result of the performance of his duties hereunder or otherwise. (f) The General Partner shall cause the Partnership to enter into an
arrangement, as contemplated under the Fund LP Agreement, with the Management Company which arrangement shall require the Management Company to pay all costs and expenses of the Partnership. Section 5.3
Transactions with Affiliates To the fullest extent permitted by applicable law, the General Partner (or any Affiliate of the General Partner), when acting on behalf of the Partnership, is hereby authorized to (a) purchase
property from, sell property to, lend money to or otherwise deal with any Affiliates, any Limited Partner, the Partnership, any of the Funds or any Affiliate of any of the foregoing Persons, and (b) obtain services from any
Affiliates, any Limited Partner, the Partnership, any of the Funds or any Affiliate of the foregoing Persons. Section 5.4 Expenses (a) Subject to the arrangement contemplated by Section 5.2(f), the Partnership will pay, or will
reimburse the General Partner for, all costs and expenses arising in connection with the organization and operations of the Partnership. (b) Any withholding taxes payable by the Partnership, to the extent determined by the
General Partner to have been paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the Partners, shall be allocated among and debited against the Capital
Accounts of only those Partners on whose behalf such payments are made or whose particular circumstances gave rise to such payments in accordance with Section 4.2. Section 5.5 Rights of Limited Partners (a) Limited
Partners shall have no right to take part in the management or control of the Partnerships business, nor shall they have any right or authority to act for the Partnership or to vote on matters other than as set forth in this
Agreement or as required by applicable law. (b) Without limiting the generality of the foregoing, the General Partner shall have the full and exclusive authority, without the consent of any Limited Partner, to compromise the
obligation of any Limited Partner to make a capital contribution or to return money or other property paid or distributed to such Limited Partner in violation of the Act. (c) Nothing in this Agreement shall entitle any Partner to
any compensation for services rendered to or on behalf of the Partnership as an agent or in any other capacity, except for any amounts payable in accordance with this Agreement.
20 Section 5.6 Other Activities of Partners (a) No Limited Partner other than a Retired Partner shall engage in any occupation, profession, employment or other business, as an officer, director, partner, manager, member,
employee, agent, consultant or otherwise, without the prior written consent of the General Partner, unless such activity is carried out on behalf of the Partnership or an Affiliate. (b) Subject to the Fund LP Agreements
(including, without limitation, Sections 5.1(d) and 6.8 thereof) and to full compliance with the Partnerships code of ethics and other written policies relating to personal investment transactions, membership in the Partnership
shall not prohibit a Limited Partner from purchasing or selling as a passive investor any interest in any asset. (c) Nothing in this Agreement shall prohibit the General Partner from engaging in any activity other than acting as
General Partner hereunder. Section 5.7 Duty of Care; Indemnification (a) The General Partner (including, without limitation, for this purpose each former and present director, officer, manager, member, employee and
stockholder of the General Partner) and each Limited Partner (including any former Limited Partner) in his capacity as such, and to the extent such Limited Partner participates, directly or indirectly, in the Partnerships
activities, whether or not a Retired Partner (each, a Covered Person and collectively, the Covered Persons), shall not be liable to the Partnership or to any of the other Partners for any loss, claim, damage or liability
occasioned by any acts or omissions in the performance of his services hereunder, unless it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that
such loss, claim, damage or liability is due to an act or omission of a Covered Person (i) made in bad faith or with criminal intent or (ii) that adversely affected any Fund and that failed to satisfy the duty of care owed pursuant
to the applicable Fund LP Agreement or as otherwise required by law. (b) A Covered Person shall be indemnified to the fullest extent permitted by law by the Partnership against any losses, claims, damages, liabilities and
expenses (including attorneys fees, judgments, fines, penalties and amounts paid in settlement) incurred by or imposed upon him by reason of or in connection with any action taken or omitted by such Covered Person arising
out of the Covered Persons status as a Partner or his activities on behalf of the Partnership, including in connection with any action, suit, investigation or proceeding before any judicial, administrative, regulatory or legislative
body or agency to which it may be made a party or otherwise involved or with which it shall be threatened by reason of being or having been the General Partner or a Limited Partner or by reason of serving or having served,
at the request of the Partnership in its capacity as Fund General Partner of the Funds, as a director, officer, consultant, advisor, manager, member or partner of any enterprise in which any of the Funds has or had a financial
interest, including issuers of Portfolio Investments; provided that the Partnership may, but shall not be required to, indemnify a Covered Person with respect to any matter as to which there has been a Final Adjudication that
his acts or his failure to act (i) were in bad faith or with criminal intent or (ii) were of a nature that makes indemnification by the Funds unavailable. The right to indemnification granted by this Section 5.7 shall be in
21 addition to any rights to which a Covered Person may otherwise be entitled and shall inure to the benefit of the successors by operation of law or valid assigns of such Covered Person. The Partnership shall pay the
expenses incurred by a Covered Person in defending a civil or criminal action, suit, investigation or proceeding in advance of the final disposition of such action, suit, investigation or proceeding, upon receipt of an
undertaking by the Covered Person to repay such payment if there shall be a Final Adjudication that he is not entitled to indemnification as provided herein. In any suit brought by the Covered Person to enforce a right to
indemnification hereunder it shall be a defense that the Covered Person has not met the applicable standard of conduct set forth in this Section 5.7, and in any suit in the name of the Partnership to recover expenses advanced
pursuant to the terms of an undertaking the Partnership shall be entitled to recover such expenses upon Final Adjudication that the Covered Person has not met the applicable standard of conduct set forth in this Section 5.7. In
any such suit brought to enforce a right to indemnification or to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or
to an advancement of expenses, shall be on the Partnership (or any Limited Partner acting derivatively or otherwise on behalf of the Partnership or the Limited Partners). The General Partner may not satisfy any right of
indemnity or reimbursement granted in this Section 5.7 or to which it may be otherwise entitled except out of the assets of the Partnership (including, without limitation, insurance proceeds and rights pursuant to
indemnification agreements), and no Partner shall be personally liable with respect to any such claim for indemnity or reimbursement. The General Partner may enter into appropriate indemnification agreements and/or
arrangements reflective of the provisions of this Article 5 and obtain appropriate insurance coverage on behalf and at the expense of the Partnership to secure the Partnerships indemnification obligations hereunder and may
enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5. Each Covered Person shall be deemed a third party beneficiary (to the extent not a direct party hereto) to this
Agreement and, in particular, the provisions of this Article 5, and shall be entitled to the benefit of the indemnity granted to the Partnership by each of the Funds pursuant to the terms of the Fund LP Agreements. (c) To the
extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or the Partners, the Covered Person shall not be liable to the Partnership or to any
Partner for his good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in
equity to the Partnership or the Partners, are agreed by the Partners to replace such other duties and liabilities of each such Covered Person. (d) Notwithstanding any of the foregoing provisions of this Section 5.7, the
Partnership may but shall not be required to indemnify (i) a Retired Partner (or any other former Limited Partner) with respect to any claim for indemnification or advancement of expenses arising from any conduct occurring
more than six months after the date of such Persons retirement (or other withdrawal or departure), or (ii) a Limited Partner with respect to any claim for indemnification or advancement of expenses as a director, officer or
agent of the issuer of any Portfolio Investment to the extent arising from conduct in such capacity occurring more than six months after the complete disposition of such Portfolio Investment by the Fund.
22 ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS Section 6.1 Admission of Additional Limited Partners; Effect on Points (a) The General Partner may at any time admit as an additional Limited Partner
any Person who has agreed to be bound by this Agreement, assign Points and issue FC Shares to such Person and/or increase the Points of any existing Limited Partner. Each additional Limited Partner shall execute either a
counterpart to this Agreement or a separate instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner and shall be admitted as a Limited Partner upon such
execution. In connection with such admission or increase in Points of any Partner, the Points of the other Voting Partners shall be reduced in an amount determined by the General Partner which shall not exceed such Voting
Partners Maximum Dilution Percentage. For this purpose, a Voting Partners Maximum Dilution Percentage means, in connection with any Point reduction, a percentage determined by dividing (i) the aggregate reduction
to be made at that time in the Points of all Voting Partners who have more Points than such Voting Partner immediately prior to such reduction by (ii) the aggregate number of Points held immediately prior to such reduction
by all such Voting Partners who have more Points than such Voting Partner immediately prior to such reduction. (b) FC Shares shall not be issued to any additional Limited Partner admitted after the date hereof without the
consent of each Voting Partner whose FC Shares are proposed to be reduced in connection therewith. Section 6.2 Admission of Additional General Partner The General Partner may admit one or more additional general
partners at any time without the consent of any Limited Partner other than the Required Voting Partners and any other Voting Partner whose FC Shares or Points, as applicable, are proposed to be reduced in connection with
such admission. No reduction in the Points of any Limited Partner shall be made as a result of the admission of an additional general partner or the increase in the Points of any general partner without the consent of such
Limited Partner. Any additional general partner shall be admitted as a general partner upon its execution of a counterpart signature page to this Agreement. Section 6.3 Transfer of Interests of Limited Partners (a) Subject to
compliance with the other provisions of this Section 6.3 and provided that such assignment does not cause a Change of Control to occur under the Fund LP Agreements or cause the Partnership to violate the Fund LP
Agreements, a Limited Partner may assign to any other Partner or to any Related Party of such Partner all or any portion of such Limited Partners rights to share in and receive allocations and distributions associated with
such Limited Partners FC Shares. No other Transfer of any Limited Partners interest in the Partnership, whether voluntary or involuntary, shall be valid or effective, and no transferee shall become a substituted Limited
Partner, unless the prior written consent of the General Partner has
23 been obtained, which consent may be given or withheld by the General Partner. In the event of any Transfer, all of the conditions of the remainder of this Section 6.3 must also be satisfied. (b) A Limited Partner or his legal
representative shall give the General Partner notice before the proposed effective date of any voluntary Transfer and within 30 days after any involuntary Transfer, and shall provide sufficient information to allow legal
counsel acting for the Partnership to make the determination that the proposed Transfer will not result in any of the following consequences: (i) require registration of the Partnership or any interest therein under any securities
or commodities laws of any jurisdiction; (ii) result in a termination of the Partnership under Section 708(b)(1)(B) of the Code or jeopardize the status of the Partnership as a partnership for United States federal income tax
purposes; or (iii) violate, or cause the Partnership, the General Partner or any Limited Partner to violate, any applicable law, rule or regulation of any jurisdiction. Such notice must be supported by proof of legal authority and
a valid instrument of assignment acceptable to the General Partner. (c) In the event any Transfer permitted by this Section 6.3 shall result in multiple ownership of any Limited Partners interest in the Partnership, the General
Partner may require one or more trustees or nominees to be designated to represent a portion of the interest transferred or the entire interest transferred for the purpose of receiving all notices which may be given and all
payments which may be made under this Agreement, and for the purpose of exercising the rights which the transferees have pursuant to the provisions of this Agreement. (d) A permitted transferee shall be entitled to the
allocations and distributions attributable to the interest in the Partnership transferred to such transferee and to Transfer such interest in accordance with the terms of this Agreement; provided that such transferee shall not be
entitled to the other rights of a Limited Partner as a result of such transfer until he becomes a substituted Limited Partner. No transferee may become a substituted Limited Partner except with the prior written consent of the
General Partner (which consent may be given or withheld by the General Partner). Such transferee shall be admitted to the Partnership as a substituted Limited Partner upon execution of a counterpart of this Agreement or
such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner. Notwithstanding the above, the Partnership and the General Partner shall incur no
liability for allocations and distributions made in good faith to the transferring Limited Partner until a written instrument of Transfer has been received and accepted by the Partnership and recorded on its books and the
effective date of the Transfer has passed. (e) Any other provision of this Agreement to the contrary notwithstanding, to the fullest extent permitted by law, any successor or transferee of any Limited Partners interest in the
Partnership shall be bound by the provisions hereof. Prior to recognizing any Transfer in accordance with this Section 6.3, the General Partner may require the transferee to make certain
24 representations and warranties to the Partnership and Partners and to accept, adopt and approve in writing all of the terms and provisions of this Agreement. (f) In the event of a Transfer or in the event of a distribution of
assets of the Partnership to any Partner, the Partnership, at the direction of the General Partner, may, but shall not be required to, file an election under Section 754 of the Code and in accordance with the applicable Treasury
Regulations, to cause the basis of the Partnerships assets to be adjusted as provided by Section 734 or 743 of the Code. (g) The Partnership shall maintain books for the purpose of registering the transfer of partnership
interests in the Partnership. No transfer of a partnership interest shall be effective until the transfer of the partnership interest is registered upon books maintained for that purpose by or on behalf of the Partnership. Section 6.4
Withdrawal of Partners A Partner in the Partnership may not withdraw from the Partnership prior to its dissolution. For the avoidance of doubt, any Limited Partner who transfers to a Related Party such Limited Partners
entire remaining entitlement to allocations and distributions shall remain a Limited Partner, notwithstanding the admission of the transferee Related Party as a Limited Partner, for as long as the transferee Related Party
remains a Limited Partner. Section 6.5 Pledges (a) A Limited Partner shall not pledge or grant a security interest in such Limited Partners interest in the Partnership unless the prior written consent of the General Partner has
been obtained (which consent may be given or withheld by the General Partner). (b) Notwithstanding the provisions of Section 6.5(a), any Limited Partner may grant to a bank or other financial institution a security interest in
such part of such Limited Partners interest in the Partnership as relates solely to the FC Shares of such Limited Partner (including the right to receive distributions pursuant to Section 4.1(a) and allocations of FC Profit and
FC Loss pursuant to Section 3.4) in the ordinary course of obtaining bona fide loan financing to fund his contributions to the capital of the Partnership. If the interest of the Limited Partner in the Partnership or any portion
thereof in respect of which a Limited Partner has granted a security interest ceases to be owned by such Limited Partner in connection with the exercise by the secured party of remedies resulting from a default by such
Limited Partner or upon the occurrence of such similar events with respect to such Limited Partners interest in the Management Company as set forth in Section 6.5 of the Management Company LP Agreement, such interest
of the Limited Partner in the Partnership or portion thereof shall thereupon become a nonvoting interest and the holder thereof shall not be entitled to vote on any matter pursuant to this Agreement and shall no longer be
considered a Voting Partner for purposes of this Agreement. (c) For purposes of the grant, pledge, attachment or perfection of a security interest in a partnership interest in the Partnership or otherwise, each such partnership
interest shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform
25 Commercial Code (including Section 8- 102(a)(15) thereof) as in effect from time to time in the State of Delaware (the DEUCC), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction
that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the
American Bar Association on February 14, 1995. (d) Any partnership interest in the Partnership may be evidenced by a certificate issued by the Partnership in such form as the General Partner may approve. Every certificate
representing an interest in the Partnership shall bear a legend substantially in the following form: Each partnership interest constitutes a security" within the meaning of, and governed by, (i) Article 8 of the Uniform
Commercial Code (including Section 8- 102(a)(15) thereof) as in effect from time to time in the State of Delaware (the UCC), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now
or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar
Association on February 14, 1995. THE TRANSFER OF THIS CERTIFICATE AND THE PARTNERSHIP INTERESTS REPRESENTED HEREBY IS RESTRICTED AS DESCRIBED IN THE THIRD AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP, DATED AS OF JULY 1, 2008 AND EFFECTIVE AS OF AUGUST 30, 2007, AS THE SAME MAY BE AMENDED OR RESTATED
FROM TIME TO TIME. (e) Each certificate representing a partnership interest in the Partnership shall be executed by manual or facsimile signature of the General Partner on behalf of the Partnership. (f) Notwithstanding any
provision of this Agreement to the contrary, to the extent that any provision of this Agreement is inconsistent with any non- waivable provision of Article 8 of the DEUCC, such provision of Article 8 of the DEUCC shall
control. ARTICLE 7 ALLOCATION OF POINTS; ADJUSTMENTS OF POINTS AND RETIREMENT OF PARTNERS Section 7.1 Allocation of Points (a) Except as otherwise provided herein, the General Partner shall be
responsible for the allocation of Points from time to time to the Limited Partners. At each such time of allocation, all Points available for allocation shall be so allocated to the Limited Partners by the General Partner; provided
that the allocation of Points to any Limited Partner who is invited to become a member of Apollo Co- Investors VII (A), L.P., a Delaware limited partnership (Co- Investors (A)), shall not become effective until the effective
date of the acceptance by Co-
26 Investors (A) of a capital commitment from such Limited Partner (or his Related Party, as applicable) in a mutually agreed amount. Points allocated to Limited Partners may not be reduced except as set forth in Section 6.1
and Section 7.3. (b) The General Partner shall maintain on the books and records of the Partnership a record of the number of Points allocated to each Partner and shall give notice to each Limited Partner of the number of
such Limited Partners Points upon admission to the Partnership of such Limited Partner and promptly upon any change in such Limited Partners Points pursuant to this Article 7 or otherwise. Section 7.2 Retirement of
Partner (a) A Limited Partner shall become a Retired Partner upon: (i) delivery to such Limited Partner of a notice by the General Partner declaring such Limited Partner to be a Retired Partner; (ii) a date specified in a notice
delivered by such Limited Partner to the General Partner stating that such Limited Partner elects to become a Retired Partner, which date shall not be less than 60 days after the General Partners receipt of such notice; or (iii)
the death of the Limited Partner, whereupon the estate of the deceased Limited Partner shall be treated as a Retired Partner in the place of the deceased Limited Partner, or the Permanent Disability of the Limited Partner. (b)
The notice declaring any Limited Partner to be a Retired Partner shall specify whether such Limited Partner is being declared a Retired Partner for Cause or a Retired Partner other than for Cause. Retirement by reason of
death or Permanent Disability shall constitute retirement other than for Cause. A written notice of retirement given by a Limited Partner shall be deemed to constitute a declaration that such Limited Partner is a Retired Partner
for Cause; provided that such a retirement shall be deemed to constitute a mandatory retirement other than for Cause (and such Limited Partner shall be deemed a Retired Partner other than for Cause) if the Limited Partners
resignation was tendered as a result of removal from the Investment Committee other than in a manner permitted by the Management Company LP Agreement and if the notice of retirement so states. (c) No mandatory
retirement of a Voting Partner for Cause shall become effective until the Voting Partner has been afforded an opportunity, if such Voting Partner so desires, to make a statement in person before the General Partner regarding
any considerations that, in the opinion of the Voting Partner, would warrant a reconsideration of the proposed mandatory retirement. (d) Nothing in this Agreement shall obligate the General Partner or the Voting Partners to
treat Retired Partners alike, and the exercise of any power or discretion by the General Partner or the Voting Partners in the case of any one such Retired Partner shall not create any obligation on the part of the General Partner
or the Voting Partners to take any similar action in the case of any other such Retired Partner, it being understood that any power or
27 discretion conferred upon the General Partner or the Voting Partners shall be treated as having been so conferred as to each such Retired Partner separately. Section 7.3 Effect of Retirement on Points (a) The Points of any
Limited Partner who becomes a Retired Partner for Cause shall be reduced automatically to an amount equal to such Limited Partners Vested Points as of the date such Limited Partner became a Retired Partner. Any such
reduction shall be effective as of the date such Limited Partner became a Retired Partner or such subsequent date as may be determined by the General Partner; provided that the General Partner may agree to a lesser reduction
(or to no reduction) of the Points of any such Limited Partner who becomes a Retired Partner. (b) The General Partner shall determine the manner of apportioning any Points that become available for reallocation pursuant to
Section 7.3(a) as a result of any Partner becoming a Retired Partner for Cause. (c) The Points of any Limited Partner who becomes a Retired Partner other than for Cause shall not be reduced without the consent of such
Retired Partner, except as contemplated by Section 7.4. For the avoidance of doubt, the General Partner shall have no authority under the provisions of this Agreement to reduce the Points of any Limited Partner solely by
reason of (i) such Limited Partner becoming a Retired Partner other than for Cause or (ii) such Limited Partner becoming a Retired Partner (whether for Cause or otherwise) after the 60th month anniversary of the
commencement of the initial Vesting Period with respect to such Limited Partner. Section 7.4 Non- solicitation; Non- compete (a) A Person who became a Retired Partner prior to the expiration of the Commitment Period
shall not at any time during the nine- month period commencing on the date as of which such Person became a Retired Partner (i) hire, employ, partner with or enter into any business arrangement with any Person who, at any
time during the 270- day period ending at the commencement of such nine- month period, was associated with the Partnership or any Affiliate as a partner, member, officer, exclusive consultant or employee, (ii) enter into any
agreement relating to the foregoing, (iii) participate in any negotiations or substantive discussions with respect to the foregoing, or (iv) cause, influence, assist or cooperate with any other Person to do any of the foregoing. (b)
A Person who became a Retired Partner for Cause prior to the expiration of the Commitment Period shall not at any time (i) during the six- month period commencing on the date as of which such Person became a Retired
Partner (A) participate, on behalf or for the benefit of any business or enterprise that engages or is expected to engage in making private equity investments, in any activity that is in any way related to the private equity
investment activities of such business or enterprise or (B) enter into any agreement relating to the foregoing or (ii) during the 90- day period (or 60- day period in the case of a Partner who voluntarily resigns in accordance
with Section 7.2(a)(ii)) commencing on the date as of which such Person became a
28 Retired Partner participate in any negotiations or substantive discussions with respect to the foregoing. (c) Each Limited Partner acknowledges that (i) he would not have been admitted to the Partnership in the absence of
making the foregoing covenants, and (ii) the Partnership (and its associated investment management businesses) could suffer irreparable injury in the event of a breach of such covenants or of the covenants contained in
Section 9.8, for which monetary damages may not constitute an adequate remedy. Accordingly, each Limited Partner agrees that the Partnership shall be entitled to seek any form of equitable relief that may be available to
prevent or remedy any breach or anticipated breach of the covenants contained in this Section 7.4 and in Section 9.8 and further agrees that such Limited Partner will not seek to oppose any such requested relief on any
grounds other than the absence of a breach or anticipated breach of such covenants. (d) In addition to (and not in lieu of) any other available remedies that may be available, any Limited Partner who breaches any of the
covenants set forth in this Section 7.4 or in Section 9.8 shall have an obligation to make a cash payment to the Partnership in an amount equal to such Limited Partners Giveback Amount for the period since the
commencement of most recently ended fiscal year preceding the date of delivery of a written notice of breach, payable in cash within 10 business days after your receipt of such notice. For this purpose, a Limited Partners
Giveback Amount is equal to the aggregate amount of all cash payments and cash distributions received by such Limited Partner at any time during the applicable period from the Partnership or any Affiliate thereof in
consideration for services performed on behalf of the Partnership or any Affiliate thereof (including, without limitation, salary, bonus, Operating Profit distributions or similar distributions attributable to carried interest
amounts earned from Funds or other collective investment vehicles and including amounts that would have been paid in cash but for such Limited Partners participation in any management fee waiver program administered
by the Management Company or an Affiliate.) If a Limited Partner disputes an asserted breach or otherwise fails to pay such amount when due, the Partnership may elect to resolve such dispute or remedy such failure either
through an action in Delaware Chancery Court or through binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and such objecting Limited Partner shall be bound
by such election. In any such proceeding, the court or arbitrator shall not have the authority to grant any monetary award other than (i) the Giveback Amount plus (ii) reasonable attorneys fees and expenses incurred by the
Partnership in connection with such proceedings, but shall have the power to award, and shall be expected to award, specific performance or other appropriate equitable relief in addition to the monetary award to remedy any
breach. If there is a final and nonappealable finding by the court (in an action initiated by the Partnership) or the arbitrator that such Limited Partner did not breach any provision of Section 7.4 or Section 9.8 or if the
Partnership abandons judicial or arbitration proceedings without a final determination or negotiated settlement, then the Partnership shall pay such Limited Partners reasonable attorneys fees and expenses incurred in
defending against the asserted breach in such proceedings. The conduct and outcome of any arbitration proceedings shall be subject to the confidentiality provisions of Section 9.8 hereof. (e) Notwithstanding the foregoing,
Section 7.4 will not be construed to prohibit a Partner from performing services for the benefit of any privately- owned family entity or office
29 substantially all of the capital of which is derived from members of the family of such Partner or the Partners spouse and that was actively engaged in making private equity investments prior to the date of your retirement.
ARTICLE 8 DISSOLUTION AND LIQUIDATION Section 8.1 Dissolution and Liquidation of Partnership (a) Upon dissolution of the Partnership in accordance with the Act, the General Partner shall liquidate the business
and administrative affairs of the Partnership, except that, if the General Partner is unable to perform this function, a liquidator may be elected by a majority in interest (determined by Points) of Limited Partners and upon such
election such liquidator shall liquidate the Partnership. FC Profit and FC Loss, Operating Profit and Operating Loss during the Fiscal Years that include the period of liquidation shall be allocated pursuant to Section 3.4. The
proceeds from liquidation shall be distributed in the following manner: (i) first, the debts, liabilities and obligations of the Partnership including the expenses of liquidation (including legal and accounting expenses incurred in
connection therewith), up to and including the date that distribution of the Partnerships assets to the Partners has been completed, shall be satisfied (whether by payment or by making reasonable provision for payment
thereof); and (ii) thereafter, the Partners shall be paid amounts pro rata in accordance with and up to the positive balances of their respective Capital Accounts, as adjusted pursuant to Article 3. (b) Anything in this Section 8.1
to the contrary notwithstanding, the General Partner or liquidator may distribute ratably in kind rather than in cash, upon dissolution, any assets of the Partnership in accordance with the priorities set forth in Section 8.1(a),
provided that if any in kind distribution is to be made the assets distributed in kind shall be valued as of the actual date of their distribution and charged as so valued and distributed against amounts to be paid under Section
8.1(a). ARTICLE 9 GENERAL PROVISIONS Section 9.1 Amendment of Partnership Agreement (a) The General Partner, with the approval of the Required Voting Partners, may amend this Agreement at any time, in whole
or in part, without the consent of any other Limited Partner by giving notice of such amendment to any Limited Partner whose rights or obligations as a Limited Partner pursuant to this Agreement are changed thereby;
provided that any amendment that would adversely change the contractual rights of a Partner may only be made if
30 the written consent of such Partner is obtained prior to the effectiveness thereof. Notwithstanding the foregoing, the General Partner may amend this Agreement at any time, in whole or in part, without the consent of the
Required Voting Partners or any other Limited Partner (other than a Limited Partner whose rights to allocations and distributions would suffer a material adverse change as a result of such amendment), to enable the
Partnership to comply with the requirements of the Safe Harbor Election within the meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury Regulation Section 1.83- 3(e)(1) or
Proposed Treasury Regulation Section 1.704- 1(b)(4)(xii) at such time as such proposed Procedure and Regulations are effective and to make any such other related changes as may be required by pronouncements or Treasury
Regulations issued by the Internal Revenue Service or Treasury Department after the date of this Agreement. An adjustment of Points shall not be considered an amendment to the extent effected in compliance with the
provisions of Section 6.1 or 7.3 as in effect on the date hereof or as hereafter amended in compliance with the requirements of this Section 9.1(a). The General Partners approval of or consent to any transaction resulting in the
substitution of another Person in place of the Partnership as the managing or general partner of any of the Funds or any change to the scheme of distribution under any of the Fund LP Agreements that would have the effect of
reducing the Partnerships allocable share of the Net Income of any Fund shall require the consent of any Limited Partner adversely affected thereby. (b) Notwithstanding the provisions of this Agreement, including Section
9.1(a), it is hereby acknowledged and agreed that the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner or any other Person may enter into one or more side letters or
similar agreements with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of this Agreement. The parties hereto agree that any terms contained in a side
letter or similar agreement with one or more Limited Partners shall govern with respect to such Limited Partner or Limited Partners notwithstanding the provisions of this Agreement. Any such side letters or similar
agreements shall be binding upon the Partnership or the General Partner, as applicable, and the signatories thereto as if the terms were contained in this Agreement, but no such side letter or similar agreement between the
General Partner and any Limited Partner or Limited Partners and the Partnership shall adversely amend the contractual rights of any other Limited Partner without such other Limited Partners prior consent. Section 9.2
Special Power- of- Attorney (a) Each Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- in- fact, and in the name,
place and stead of such Partner, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any amendment to this Agreement which complies with the
provisions of this Agreement (including the provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel to the Partnership, may from time to time be required by
the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political
31 subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership as a limited
partnership; (iii) all such instruments, certificates, agreements and other documents relating to the conduct of the investment program of any of the Funds which, in the opinion of such attorney- in- fact and the legal counsel to
the Funds, are reasonably necessary to accomplish the legal, regulatory and fiscal objectives of the Funds in connection with its or their acquisition, ownership and disposition of investments, including, without limitation: (A)
the governing documents of any management entity formed as a part of the tax planning for any of the Funds and any amendments thereto; and (B) documents relating to any restructuring transaction with respect to any of the
Funds investments, provided that such documents referred to in clauses (A) and (B) above, viewed individually or in the aggregate, provide substantially equivalent financial and economic rights with respect to such Limited
Partner and otherwise do not: (1) increase the Limited Partners overall financial obligation to make capital contributions with respect to the relevant Fund (directly or through any associated vehicle in which the Limited
Partner holds an interest); (2) diminish the Limited Partners overall entitlement to share in profits and distributions with respect to the relevant Fund (directly or through any associated vehicle in which the Limited Partner
holds an interest); (3) cause the Limited Partner to become subject to increased personal liability for any debts or obligations of the Partnership; or (4) otherwise result in an adverse change in the overall rights or obligations of
the Limited Partner in relation to the conduct of the investment program of any of the Funds; (iv) any written notice or letter of resignation from any board seat or office of any Person (other than a company that has a class of
equity securities registered under the Securities Exchange Act of 1934, as amended, or that is registered under the Investment Company Act of 1940, as amended), which board seat or office was occupied or held at the request
of the Partnership or any of its Affiliates; and (v) all such proxies, consents, assignments and other documents as the General Partner determines to be necessary or advisable in connection with any merger or other
32 reorganization, restructuring or other similar transaction entered into in accordance with this Agreement (including the provisions of Section 9.5(c)). (b) Each Limited Partner is aware that the terms of this Agreement
permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without his consent. If an amendment of the Certificate or this Agreement or
any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any objection which such Limited Partner may
assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may be necessary or appropriate to permit such
amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a view to the orderly administration of the
affairs of the Partnership. This power- of- attorney is a special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any party granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and (ii) shall survive any Transfer
by a Limited Partner of the whole or any portion of its interest in the Partnership, except that, where the transferee thereof has been approved by the General Partner for admission to the Partnership as a substituted Limited
Partner, this power of attorney given by the transferor shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect such substitution.
Section 9.3 Notices Any notice required or permitted to be given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the attention of Leon D. Black with a copy to the general counsel
of the Partnership. A notice to a Limited Partner shall be directed to such Limited Partners last known residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home Address).
A notice shall be considered given when delivered to the addressee either by hand at his Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership business communications,
except that a notice to a Retired Partner shall be considered given when delivered by hand by a recognized overnight courier together with mailing through the United States Postal System by regular mail to such Retired
Partners Home Address. Section 9.4 Agreement Binding Upon Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors by operation of law, but the
rights and obligations of the Partners hereunder shall not be assignable, transferable or delegable except as expressly provided herein, and any attempted assignment, transfer or delegation thereof that is not made in
accordance with such express provisions shall be void and unenforceable.
33 Section 9.5 Merger, Consolidation, etc. (a) Subject to Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited partnerships formed under the Act or other business entities (as
defined in Section 17- 211 of the Act) pursuant to an agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to Section 9.1(a) but notwithstanding any other provision to the
contrary contained elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section 9.5 (a) may, to the extent permitted by Section 17- 211(g) of the Act and Section 9.5 (a), (i)
effect any amendment to this Agreement, (ii) effect the adoption of a new partnership agreement for the Partnership if it is the surviving or resulting limited partnership in the merger or consolidation, or (iii) provide that the
partnership agreement of any other constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of consummating the merger or consolidation) shall be the partnership
agreement of the surviving or resulting limited partnership. (c) The General Partner shall not authorize any merger, consolidation or other reorganization, restructuring or similar transaction unless it has determined that such
transaction should not result in any material adverse change in the financial and other material rights of Limited Partners conferred by this Agreement and any side letter or similar agreement entered into pursuant to Section
9.1(b) or the imposition of any material new financial obligation. Subject to the foregoing, the General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests
in the Partnership in connection with any such transaction, and each Limited Partner shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement,
and the rights of each and all of the Partners hereunder, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws rules thereof. The parties hereby consent to
the non- exclusive jurisdiction and venue for any action arising out of or relating to this Agreement in the State Courts of the State of Delaware, New Castle County, the State Courts of the State of New York, New York
County, the United States District Court for the District of Delaware located in New Castle County or the United States District Court for the Southern District of New York located in New York County. In addition to any
other means available at law for service of process, each Limited Partner hereby agrees, to the fullest extent permitted by law, that service of process will be duly effectuated when delivered to a Limited Partners Home
Address by hand or by a recognized overnight carrier together with mailing through the United States Postal System by regular mail. Section 9.7 Termination of Right of Action Every right of action arising out of or in
connection with this Agreement by or on behalf of any past, present or future Partner or the Partnership against any past, present or future Partner shall, to the fullest extent permitted by applicable law, irrespective of the place
where the action may be brought and irrespective of the residence of any such Partner, cease and be barred by the
34 expiration of three years from the date of the act or omission in respect of which such right of action arises. Section 9.8 Confidentiality (a) Each Limited Partner acknowledges and agrees that the information contained in
the books and records of the Partnership concerning the Points assigned with respect to any other Limited Partner (including any Retired Partner) is confidential, and, to the fullest extent permitted by applicable law, each
Limited Partner waives, and covenants not to assert, any claim or entitlement whatsoever to gain access to any such information. The Limited Partners agree that the restrictions set forth in this Section 9.8 (a) shall constitute
reasonable standards under the Act regarding access to information. (b) Each Limited Partner acknowledges and agrees not to, at any time, either during the term of such Limited Partners participation in the Partnership or
thereafter, disclose, use, publish or in any manner reveal, directly or indirectly, to any Person (other than on a confidential basis to such Limited Partners legal and tax advisors who have a need to know such information) the
contents of this Agreement or any Confidential Information, except (i) as may be necessary to the performance of the Limited Partners duties hereunder, (ii) with the prior written consent of the General Partner, (iii) to the
extent that any such information is in the public domain other than as a result of the Limited Partners breach of any of his obligations, or (iv) where required to be disclosed by court order, subpoena or other government
process; provided that, to the fullest extent permitted by law, the Limited Partner shall promptly notify the General Partner upon becoming aware of any such disclosure requirement and shall cooperate with any effort by the
General Partner to prevent or limit such disclosure. (c) Notwithstanding any of the provisions of this Section 9.8, each Limited Partner may disclose to any and all Persons, without limitation of any kind, the tax treatment and
tax structure of an investment in the Partnership and all materials of any kind (including tax opinions or other tax analyses) that are provided to the Limited Partner relating to such tax treatment. For this purpose, tax
treatment is the purported or claimed federal income tax treatment of a transaction and tax structure is limited to any fact that may be relevant to understanding the purported or claimed federal income tax treatment of a
transaction. For this purpose, the names of the Partnership, the Partners, their affiliates, the names of their partners, members or equity holders and the representatives, agents and tax advisors of any of the foregoing are not
items of tax structure. Section 9.9 Not for Benefit of Creditors The provisions of this Agreement are intended only for the regulation of relations among Partners and between Partners and former or prospective Partners and
the Partnership. This Agreement is not intended for the benefit of any Person who is not a Partner, and no rights are intended to be granted to any other Person who is not a Partner under this Agreement.
35 Section 9.10 Consents Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept with the books of the Partnership.
Section 9.11 Reports As soon as practicable after the end of each taxable year, the General Partner shall furnish to each Limited Partner (i) such information as may be required to enable each Limited Partner to properly
report for United States federal and state income tax purposes his distributive share of each Partnership item of income, gain, loss, deduction or credit for such year, and (ii) a statement of the total amount of Operating Profit
or Operating Loss for such year and a reconciliation of any difference between (A) such Operating Profit or Operating Loss and (B) the aggregate net profits or net losses allocated by the Funds to the Partnership for such year
(other than any difference attributable to the aggregate FC Profit or FC Loss allocated by the Funds to the Partnership for such year). Section 9.12 Filings The Partners hereby agree to take any measures necessary (or, if
applicable, refrain from any action) to ensure that the Partnership is treated as a partnership for federal, state and local income tax purposes. Section 9.13 Headings, Gender, Etc. The section headings in this Agreement are for
convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof. As used herein, masculine pronouns shall include the feminine and neuter, and the singular shall
be deemed to include the plural. Signature Page Follows
Apollo Advisors VII, L.P. Third Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
General Partner: APOLLO CAPITAL MANAGEMENT VII, LLC By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President Limited Partner: APOLLO PRINCIPAL HOLDINGS I, L.P. By: Apollo Principal
Holdings I GP, LLC, its general partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL & PROPRIETARY EXECUTION VERSION This company is the general partner of Apollo Credit Opportunity Fund I, L.P. and earns the carried interest on COF I profits. Apollo Credit Opportunity
Advisors I, L.P. Third Amended and Restated Limited Partnership Agreement Dated January 12, 2011 and made effective as of July 14, 2009 THE TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN THIS
AGREEMENT IS RESTRICTED AS DESCRIBED HEREIN.
TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS ............................................................................................................2 ARTICLE 2 FORMATION AND ORGANIZATION
....................................................................5 Section 2.1 Formation ...........................................................................................................5 Section 2.2 Name
..................................................................................................................5 Section 2.3 Offices ................................................................................................................5 Section 2.4 Term of the Partnership
.....................................................................................6 Section 2.5 Purpose of the Partnership .................................................................................6 Section 2.6 Actions by the Partnership
.................................................................................6 Section 2.7 Admission of Limited Partners ..........................................................................6 ARTICLE 3 CAPITAL
....................................................................................................................7 Section 3.1 Contributions to Capital .....................................................................................7 Section 3.2 Rights of Partners in Capital
..............................................................................8 Section 3.3 Capital Accounts ................................................................................................8 Section 3.4 Allocation of Profit and Loss
.............................................................................9 Section 3.5 Tax Allocations ................................................................................................10 Section 3.6 Reserves; Adjustments for Certain Future Events
...........................................10 Section 3.7 Finality and Binding Effect of General Partners Determinations ...................11 ARTICLE 4 DISTRIBUTIONS ....................................................................................................11
Section 4.1 Distributions .....................................................................................................11 Section 4.2 Withholding of Certain Amounts .....................................................................12 Section 4.3 Limitation on Distributions
..............................................................................13 ARTICLE 5 MANAGEMENT ......................................................................................................13 Section 5.1 Rights and Powers of the General Partner
.......................................................13 Section 5.2 Delegation of Duties ........................................................................................14 Section 5.3 Transactions with Affiliates .............................................................................15
.............................................................................15 Section 5.7 Duty of Care; Indemnification .........................................................................16 ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS
.........................................17 Section 6.1 Admission of Additional Limited Partners; Effect on Points ..........................17 Section 6.2 Admission of Additional General Partner and Transfer ..................................18 Section 6.3
Transfer of Interests of Limited Partners .........................................................18 Section 6.4 Withdrawal of Partners ....................................................................................19 Section 6.5 Pledges
.............................................................................................................20
ARTICLE 7 POINTS .....................................................................................................................21 Section 7.1 Allocation of Points .........................................................................................21 Section 7.2 Effect of Withdrawal
on Points ........................................................................22 ARTICLE 8 DISSOLUTION AND LIQUIDATION ...................................................................22 Section 8.1 Dissolution and Liquidation of Partnership
.....................................................22 ARTICLE 9 GENERAL PROVISIONS .......................................................................................23 Section 9.1 Amendment of this Agreement
........................................................................23 Section 9.2 Special Power- of- Attorney ..............................................................................23 Section 9.3 Notices
.............................................................................................................25 Section 9.4 Agreement Binding Upon Successors and Assigns .........................................25 Section 9.5 Merger, Consolidation, etc.
..............................................................................25 Section 9.6 Governing Law ................................................................................................26 Section 9.7 Termination of Right of Action
.......................................................................26 Section 9.8 Confidentiality .................................................................................................26 Section 9.9 Not for Benefit of Creditors
.............................................................................27 Section 9.10 Consents ...........................................................................................................27 Section 9.11 Reports
.............................................................................................................27 Section 9.12 Filings ..............................................................................................................27 Section 9.13 Miscellaneous
..................................................................................................28
APOLLO CREDIT OPPORTUNITY ADVISORS I, L.P. A Delaware Limited Partnership THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT THIRD AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT of APOLLO CREDIT OPPORTUNITY ADVISORS I, L.P. (the Partnership) by and among Apollo COF I Capital Management, LLC, a Delaware limited liability company, as
the sole general partner (the General Partner), and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners is dated January 12, 2011 and
made effective as of July 14, 2009 (the Agreement). W I T N E S S E T H : WHEREAS, on June 25, 2009, Apollo COF I Capital Management, LLC filed with the Secretary of State of the State of Delaware a Certificate of
Limited Partnership to form Apollo Credit Opportunity Advisors I, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant to an agreement among Apollo COF I Capital
Management, LLC, as sole general partner, and Apollo Principal Holdings V, L.P. as initial limited partner (the Original Agreement); WHEREAS, the parties amended and restated the Original Agreement in its entirety as
of July 14, 2009 (the Amended Agreement); WHEREAS, the parties amended and restated the Amended Agreement in its entirety as of July 14, 2009 (the Second Amended Agreement); WHEREAS, pursuant to a
transfer agreement, dated December 31, 2009, between Apollo Principal Holdings V, L.P. (APH V) and Apollo Principal Holdings IX, L.P. (APH IX), APH V transferred, delivered and conveyed its entire limited partner
interest in the Partnership to APH IX and, contemporaneously therewith, APH IX was admitted to the Partnership as a substitute limited partner of the Partnership and APH V withdrew from the Partnership as a limited
partner; and WHEREAS, the parties wish to amend and restate the Second Amended Agreement in its entirety to reflect the admission of APH V as a substitute limited partner of the Partnership in place of APH IX and to
make certain additional modifications thereto. NOW, THEREFORE, the parties hereby agree as follows:
2 ARTICLE 1 DEFINITIONS Act means the Delaware Revised Uniform Limited Partnership Act, as in effect on the date hereof and as amended from time to time, or any successor law. Affiliate means with respect to
any Person any other Person directly or indirectly controlling, controlled by or under common control with such Person. Agreement means this Third Amended and Restated Limited Partnership Agreement, as amended or
supplemented from time to time. APH means Apollo Principal Holdings IX, L.P. (or its assignees or transferees). Capital Account means with respect to each Partner the capital account established and maintained on
behalf of such Partner as described in Section 3.3. Carried Interest Distributions has the meaning ascribed to that term in the Fund LP Agreement. Certificate means the Certificate of Limited Partnership of the Partnership
and any amendments thereto as filed with the office of the Secretary of State of the State of Delaware. Clawback Amount means any amount of Carried Interest Distributions received by the Partnership and required, under
the Fund LP Agreement, to be returned to the Fund, including any or all of (i) an Interim Clawback Amount, as defined in the Fund LP Agreement, (ii) a Clawback Amount, as defined in the Fund LP Agreement and, (iii) any
amount of Carried Interest Distributions required to be returned to the Fund pursuant to section 6.2 of the Fund LP Agreement. Clawback Share has the meaning ascribed to that term in Section 3.1(e). CM Executive
Carry means Apollo Credit Opportunity CM Executive Carry I, L.P. Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor law. COF Limited Partner
means a Limited Partner employed by Apollo Global Management, LLC or one of its Affiliates whom the General Partner has determined to be a member of the day- to- day investment management team for the Fund and
designated as such in the documentation admitting such Limited Partner to the Partnership. Confidential Information means information that has not been made publicly available by or with the permission of the General
Partner and that is obtained or learned by a Limited Partner as a result of or in connection with such Partners association with the Partnership or any of its Affiliates concerning the business, affairs or activities of the
Partnership, any of its Affiliates or any of the Portfolio Investments, including, without limitation, models, codes, client
3 information (including client identity and contacts, client lists, client financial or personal information), financial data, know- how, computer software and related documentation, trade secrets, and other forms of sensitive or
valuable non- public information obtained or learned by the Limited Partner as a result of such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information does not include
information concerning non- proprietary business or investment practices, methods or relationships customarily employed or entered into by comparable business enterprises. Covered Person has the meaning ascribed to
that term in Section 5.7. DEUCC has the meaning ascribed to that term in Section 6.5(b). Excess Points has the meaning ascribed to that term in Section 7.1(a). FC Loss means, with respect to any Fiscal Year, the
portion of any Losses and any Portfolio Investment Loss allocable to the Partnership, but only to the extent such allocation is made by the Fund to the Partnership in proportion to the Partnerships capital contribution to the
Fund, as determined pursuant to the Fund LP Agreement. FC Profit means, with respect to any Fiscal Year, the portion of any Profit and any Portfolio Investment Gain allocable to the Partnership, but only to the extent such
allocation is made by the Fund to the Partnership in proportion to the Partnerships capital contribution to the Fund, as determined pursuant to the Fund LP Agreement. FC Share means a share of the FC Profit or FC Loss
with respect to the Fund. The aggregate number of FC Shares shall be equal to the dollar amount of the Partnerships capital commitment to the Fund. Final Adjudication has the meaning ascribed to that term in Section 5.7.
Fiscal Year means, with respect to a year, the period commencing on January 1 of such year and ending on December 31 of such year (or on the date of a final distribution pursuant to Section 8.1(a)), unless the General
Partner shall elect another fiscal year for the Partnership which is a permissible taxable year under the Code. Fund means Apollo Credit Opportunity Fund I, L.P. Fund General Partner means the Partnership in its capacity
as a general partner of the Fund pursuant to the Fund LP Agreement. Fund LP Agreement means the second amended and restated agreement of limited partnership of the Fund, as amended from time to time. General
Partner means Apollo COF I Capital Management, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in its capacity as
general partner of the Partnership.
4 Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, until such Person withdraws entirely as a limited partner of the Partnership, in its capacity as a limited
partner of the Partnership. Losses has the meaning ascribed to that term in the Fund LP Agreement. Management Company has the meaning ascribed to that term in the Fund LP Agreement. Operating Loss means, with
respect to any Fiscal Year, any net loss of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction proceeds derived by the Partnership.
To the extent derived from the Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the
Fund, and any items not derived from the Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income tax purposes. Operating
Profit means, with respect to any Fiscal Year, any net income of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction proceeds
derived by the Partnership. To the extent derived from the Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable
to the determination by the Fund, and any items not derived from the Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income
tax purposes. Partner means the General Partner and any of the Limited Partners and Partners means the General Partner and all of the Limited Partners. Partnership means the limited partnership continued pursuant to
this Agreement. PE Limited Partner means a Limited Partner employed by Apollo Global Management, LLC or one of its Affiliates whom the General Partner has determined to be a private equity professional and
designated as such in the documentation admitting such Limited Partner to the Partnership. Person means any individual, partnership, corporation, limited liability company, joint venture, joint stock company,
unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or other entity. Point has the meaning
ascribed to that term in Section 7.1(a). Portfolio Investment has the meaning ascribed to that term in the Fund LP Agreement. Portfolio Investment Gain has the meaning ascribed to that term in the Fund LP Agreement.
5 Portfolio Investment Loss has the meaning ascribed to that term in the Fund LP Agreement. Profit has the meaning ascribed to that term in the Fund LP Agreement. Schedule of Partners means a schedule to be
maintained by the General Partner showing the following information with respect to each Partner: name, address, date of admission and withdrawal, required capital contribution (if any), and FC Share (if any). Transfer
means any direct or indirect sale, exchange, transfer, assignment or other disposition by a Partner of any or all of such Partners interest in the Partnership (whether respecting, for example, economic rights only or all the
rights associated with the interest) to another Person, whether voluntary or involuntary. Treasury Regulations means the regulations promulgated under the Code. ARTICLE 2 FORMATION AND ORGANIZATION
Section 2.1 Formation The Partnership was formed and is hereby continued as a limited partnership under and pursuant to the Act. The Certificate was filed on June 25, 2009. The General Partner shall execute, acknowledge
and file any amendments to the Certificate as may be required by the Act and any other instruments, documents and certificates which, in the opinion of the Partnerships legal counsel, may from time to time be required by
the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Partnership shall determine to do business, or any political subdivision or agency thereof, or which such legal counsel may
deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership. Section 2.2 Name The name of the Partnership shall be Apollo Credit Opportunity
Advisors I, L.P. or such other name as the General Partner may hereafter adopt upon causing an appropriate amendment to be made to this Agreement and to the Certificate to be filed in accordance with the Act. Promptly
thereafter, the General Partner shall send notice thereof to each Limited Partner. Section 2.3 Offices (a) The Partnership shall maintain its principal office, and may maintain one or more additional offices, at such place or
places as the General Partner may from time to time determine.
6 (b) The General Partner shall arrange for the Partnership to have and maintain in the State of Delaware, at the expense of the Partnership, a registered office and registered agent for service of process on the Partnership as
required by the Act. Section 2.4 Term of the Partnership (a) The term of the Partnership shall continue until the first to occur of the following: (i) any date on which the General Partner shall elect to dissolve the Partnership; or
(ii) the entry of a decree of judicial dissolution under section 17- 802 of the Act. (b) The parties agree that irreparable damage would be done to the goodwill and reputation of the Partners if any Limited Partner should bring
an action to dissolve the Partnership. Care has been taken in this Agreement to provide for fair and just payment in liquidation of the interests of all Partners. Accordingly, to the fullest extent permitted by law, each Limited
Partner hereby waives and renounces its right to such a decree of dissolution or to seek the appointment of a liquidator for the Partnership, except as provided herein. Section 2.5 Purpose of the Partnership The principal
purpose of the Partnership is to act as the general partner of the Fund pursuant to the Fund LP Agreement and to undertake such related and incidental activities and execute and deliver such related documents necessary or
incidental thereto. The purpose of the Partnership shall be limited to serving as a general partner of direct investment funds, including any of their Affiliates, and the provision of investment management and advisory services.
Section 2.6 Actions by the Partnership The Partnership may execute, deliver and perform, and the General Partner may execute and deliver, all contracts, agreements and other undertakings, and engage in all activities and
transactions as may in the opinion of the General Partner be necessary or advisable to carry out the objects and purposes of the Partnership, without the approval of any Limited Partner. Section 2.7 Admission of Limited
Partners On the date hereof, the Persons whose names are set forth in the Schedule of Partners under the caption Limited Partners shall be admitted to the Partnership or shall continue, as the case may be, as limited partners
of the Partnership upon their execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Partner.
7 ARTICLE 3 CAPITAL Section 3.1 Contributions to Capital (a) Any required contribution of a Limited Partner to the capital of the Partnership shall be as set forth in the Schedule of Partners. Contributions to the capital of
the Partnership shall be made as of the date of admission of such Limited Partner as a limited partner of the Partnership and as of each such other date as may be specified by the General Partner. Except as otherwise permitted
by the General Partner, all contributions to the capital of the Partnership by each Limited Partner shall be payable exclusively in cash. (b) The General Partner shall make capital contributions from time to time to the extent
necessary to ensure that the Partnership meets its obligations to make contributions of capital to the Fund. (c) No Partner shall be obligated, nor shall any Partner have any right, to make any contribution to the capital of the
Partnership other than as specified in this Section 3.1 or Section 4.2(a). No Limited Partner shall be obligated to restore any deficit balance in its Capital Account. (d) To the extent, if any, that it is determined that the
Partnership, as the Fund General Partner, is required to pay a Clawback Amount to the Fund, each Partner, and each former Partner, shall be required to participate in such payment and contribute to the Partnership an amount
equal to such Partners (or former Partners) Clawback Share of any Clawback Amount, but not in any event in excess of the cumulative amount theretofore distributed to such Partner, or former Partner, with respect to the
Operating Profit attributable to the Fund. To the extent, if any, that it is determined that the Partnership is required pursuant to section 6.2 of the Fund LP Agreement, or otherwise, to pay to the Fund any amount representing
distributions of the Fund other than Carried Interest Distributions, each Partner having an FC Share shall be required to participate in such payment and contribute to the Partnership an amount equal to such Partners pro rata
share of any such amount, but not in any event in excess of the cumulative amount theretofore distributed to such Partner with respect to the Profit attributable to the Fund. (e) A Partners (or former Partners) Clawback
Share of any Clawback Amount shall be calculated as follows: (i) to the extent that such Clawback Amount does not exceed the most recent cash distribution by the Partnership representing Operating Profit attributable to
the Fund (each such distribution, a Carry Distribution and the most recent Carry Distribution, the Latest Carry Distribution) as of the time of calculating such Clawback Amount, a portion of such Clawback Amount equal
to (A) the amount of the Latest Carry Distribution distributed to such Partner (or former Partner), divided by (B) the total amount of the Latest Carry Distribution; and (ii) to the extent that the Clawback Amount exceeds the
Latest Carry Distribution, the excess shall be applied successively to each immediately preceding Carry Distribution until the entire Clawback Amount has been satisfied and borne with respect to each
8 such Carry Distribution by those Partners (and former Partners) to whom such Carry Distribution was made in the same manner as provided in Section 3.1(e)(i). Section 3.2 Rights of Partners in Capital (a) No Partner shall
be entitled to interest on its capital contributions to the Partnership. (b) No Partner shall have the right to distributions or the return of any contribution to the capital of the Partnership except (i) for distributions in accordance
with Section 4.1 or Section 6.4, or (ii) upon dissolution of the Partnership. The entitlement to any such return at such time shall be limited to the value of the Capital Account of the Partner. The General Partner shall not be
liable for the return of any such amounts. Section 3.3 Capital Accounts (a) The Partnership shall maintain for each Partner a separate Capital Account. (b) Each Partners Capital Account shall have an initial balance equal to
the amount of any cash and the net value of any securities or other property constituting such Partners initial contribution to the capital of the Partnership. (c) Each Partners Capital Account shall be increased by the sum of:
(i) the amount of cash and the net value of any securities or other property constituting additional contributions by such Partner to the capital of the Partnership permitted pursuant to Section 3.1, plus (ii) the portion of any FC
Profit allocated to such Partners Capital Account pursuant to Section 3.4, plus (iii) the portion of any Operating Profit allocated to such Partners Capital Account pursuant to Section 3.4, plus (iv) such Partners allocable
share of any decreases in any reserves recorded by the Partnership pursuant to Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this Agreement, such item is to be credited to such
Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners. (d) Each Partners Capital Account shall be reduced by the sum of (without duplication): (i) the portion of any
FC Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus (ii) the portion of any Operating Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus
9 (iii) the amount of any cash and the net value of any property distributed to such Partner pursuant to Section 4.1, Section 6.4 or Section 8.1 including any amount deducted pursuant to Section 4.2 or Section 5.4 from any
such amount distributed, plus (iv) any withholding taxes or other items payable by the Partnership and allocated to such Partner pursuant to Section 5.4(b), any increases in any reserves recorded by the Partnership pursuant to
Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this Agreement, such item is to be charged to such Partners Capital Account on a basis which is not in accordance with the current
respective Points of all Partners. Section 3.4 Allocation of Profit and Loss (a) Allocations of Profit. FC Profit and Operating Profit for any Fiscal Year shall be allocated to the Partners: (i) first, to Partners to which FC Loss
and Operating Loss previously have been allocated pursuant to Section 3.4(b), to the extent of and in proportion to the amount of such losses; (ii) next, to the extent that the cumulative amount of distributions pursuant to
Article 4 (other than distributions representing a return of such Partners capital contributions) exceeds the cumulative amount of FC Profit and Operating Profit previously allocated to such Partners pursuant to Section 3.4(a),
in the order that such distributions occurred; and (iii) thereafter, any remaining such FC Profit and Operating Profit shall be allocated among the Partners so as to produce Capital Accounts (computed after taking into account
any other FC Profit and Operating Profit or FC Loss and Operating Loss for the Fiscal Year in which such event occurred and all distributions pursuant to Article 4 with respect to such Fiscal Year and after adding back each
Partners share, if any, of Partner Nonrecourse Debt Minimum Gain, as defined in Treasury Regulations sections 1.704 - 2(b)(2) and 1.704 - 2(i), or Partnership Minimum Gain, as defined in Treasury Regulations sections
1.704 - 2(b)(2) and 1.704 - 2(d)) for the Partners such that a distribution of an amount of cash equal to such Capital Account balances in accordance with such Capital Account balances would be in the amounts, sequence and
priority set forth in Article 4. (b) Allocations of Losses. Subject to the limitation of Section 3.4(c), FC Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective FC Shares as of the close
of such Fiscal Year, and Operating Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective Points as of the close of such Fiscal Year; provided that, if an Operating Loss is recognized by
the Partnership for a Fiscal Year that is attributable to a Portfolio Investment that gave rise to an Operating Profit in a prior Fiscal Year that previously was allocated to a Partner, including, for this purpose, a former Partner (a
Prior Profit Allocation), then such Operating Loss shall be allocated, in the reasonable discretion of the General Partner, among the Partners and such former Partners who received the Prior Profit Allocation in a proportion
that takes into account the Points that the former Partners had been assigned at the time such Prior Profit Allocation was made to the Partners, but only up to the amount of such Prior Profit Allocation.
10 (c) To the extent that the allocations of FC Loss or Operating Loss contemplated by Section 3.4(b) would cause the Capital Account of any Limited Partner to be less than zero, such FC Loss or Operating Loss shall to that
extent instead be allocated to and debited against the Capital Account of the General Partner. Following any such adjustment pursuant to Section 3.4(c) with respect to any Limited Partner, any FC Profit or Operating Profit for
any subsequent Fiscal Year which would otherwise be credited to the Capital Account of such Limited Partner pursuant to Section 3.4(a) shall instead be credited to the Capital Account of the General Partner until the
cumulative amounts so credited to the Capital Account of the General Partner with respect to such Limited Partner pursuant to Section 3.4(c) is equal to the cumulative amount debited against the Capital Account of the
General Partner with respect to such Limited Partner pursuant to Section 3.4(c). (d) Each Limited Partners rights and entitlements as a Limited Partner are limited to the rights to receive allocations and distributions of FC
letter or similar agreement or required by the Act, and a Limited Partner shall not be entitled to any other allocations, distributions or payments in respect of its interest, or to have or exercise any other rights, privileges or
among the Partners in order to reflect the allocations of FC Profit, FC Loss, Operating Profit and Operating Loss pursuant to Section 3.4 for such Fiscal Year, taking into account any variation between the adjusted tax basis
and book value of Partnership property in accordance with the principles of section 704(c) of the Code. (b) If any Partner or Partners are treated for United States federal income tax purposes as realizing ordinary income
because of receiving an interest in the Partnership (whether under section 83 of the Code or under any similar provision of any law, rule or regulation) and the Partnership is entitled to any offsetting deduction (net of any
income realized by the Partnership as a result of such receipt), the Partnerships net deduction shall be allocated to and among the Partners in such manner as to offset, as nearly as possible, the ordinary income realized by
such Partner or Partners. Section 3.6 Reserves; Adjustments for Certain Future Events (a) Appropriate reserves may be created, accrued and charged against the Operating Profit or Operating Loss for contingent liabilities, if
any, as of the date any such contingent liability becomes known to the General Partner or as of each other date as the General Partner deems appropriate, such reserves to be in the amounts which the General Partner deems
increase or decrease therein, shall be proportionately charged or credited, as appropriate, to the Capital Accounts of those parties who are Partners at the time
11 when such reserve is created, increased or decreased, as the case may be, in proportion to their respective Points at such time. (b) If any amount is required by Section 3.6(a) to be credited to a Person who is no longer a
Partner, such amount shall be paid to such Person in cash. Any amount required to be charged pursuant to Section 3.6(a) shall be debited against the current balance in the Capital Account of the affected Partners. To the
extent that the aggregate current Capital Account balances of such affected Partners are insufficient to cover the full amount of the required charge, the deficiency shall be debited against the Capital Accounts of the other
Partners in proportion to their respective Capital Account balances at such time; provided that each such other Partner shall be entitled to a preferential allocation, in proportion to and to the extent of such other Partners share
of any such deficiency of any Operating Profit that would otherwise have been allocable after the date of such charge to the Capital Accounts of the affected Partners whose Capital Accounts were insufficient to cover the full
amount of the required charge. Section 3.7 Finality and Binding Effect of General Partners Determinations All matters concerning the determination, valuation and allocation among the Partners with respect to any profit or
loss of the Partnership and any associated items of income, gain, deduction, loss and credit, pursuant to any provision of this Article 3, including any accounting procedures applicable thereto, shall be determined by the
General Partner, and such determinations and allocations shall be final and binding on all the Partners. ARTICLE 4 DISTRIBUTIONS Section 4.1 Distributions (a) Any amount of cash or property received as a distribution
from the Fund by the Partnership in its capacity as a partner, to the extent such amount is determined by reference to the capital commitment of the Partnership in, or the capital contributions of the Partnership to, the Fund,
shall be promptly distributed by the Partnership to the Partners in proportion to their respective FC Shares determined: (i) in the case of any distributions received from the Fund which are comprised of proceeds from the
disposition of a Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (ii) in the case of any other distribution, as of the end of the relevant Fiscal Year in respect of which such distribution is
made by the Fund. (b) The General Partner shall use reasonable efforts to cause the Partnership to distribute, as promptly as practicable after receipt by the Partnership, any available cash or property attributable to items
included in the determination of Operating Profit, subject to (i) the provisions of section 4.9, section 6.2 and section 10.3 of the Fund LP Agreement, and (ii) the retention of such reserves as the General Partner considers
appropriate or necessary for purposes
12 of the prudent and efficient financial operation of the Partnerships business including in accordance with Section 3.6 hereof and for purposes of satisfying the Partnerships anticipated obligations under section 4.9, section
6.2 and section 10.3 of the Fund LP Agreement. Subject to Section 4.1(e), any such distributions shall be made to Partners in proportion to their respective Points, determined: (A) in the case of any amount of cash or property
received from the Fund that is attributable to the disposition of a Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (B) in any other case, as of the date of receipt of such cash or property by
the Partnership from the Fund. (c) Any other distributions or payments in respect of the interests of Partners shall be made at such time, in such manner and to such Partners as the General Partner shall determine. (d) Subject
to Section 4.1(e), the General Partner may cause the Partnership to pay distributions to the Partners at any time in addition to those contemplated by Section 4.1(a), (b) or (c), in cash or in kind. Distributions of any such
amounts shall be made to the Partners in proportion to their respective Points, determined immediately prior to giving effect to such distribution. (e) If a portion of the withdrawal proceeds of a former Limited Partner is being
paid to such former Limited Partner in connection with a distribution to Limited Partners under this Section 4.1 of cash or property with respect to which such former Limited Partner received an allocation prior to its
withdrawal, such former Limited Partners share of such cash or property shall be calculated for purposes of this Section 4 as if such former Limited Partner were a Limited Partner with the number of Points such Limited
Partner had been assigned as of the date of such allocation; provided that a former Limited Partner shall not be entitled to receive an amount in excess of its withdrawal proceeds as determined under Section 6.4(c). Section 4.2
Withholding of Certain Amounts (a) If the Partnership incurs a withholding tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the General Partner, without limitation of
any other rights of the Partnership, may cause the amount of such obligation to be debited against the Capital Account of such Partner when the Partnership pays such obligation, and any amounts then or thereafter
distributable to such Partner shall be reduced by the amount of such taxes. If the amount of such taxes is greater than any such then distributable amounts, then such Partner and any successor to such Partners interest shall
indemnify and hold harmless the Partnership and the General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of such excess.
(b) The General Partner may withhold from any distribution or other payment to any Limited Partner pursuant to this Agreement or otherwise any other amounts due from such Limited Partner to the Partnership or the
General Partner pursuant to this Agreement to the
13 extent not otherwise paid. Any amounts so withheld shall be applied by the General Partner to discharge the obligation in respect of which such amounts were withheld. Section 4.3 Limitation on Distributions
Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to any Partner on account of such Partners
Agreement, the General Partner shall have complete and exclusive responsibility (i) for all management decisions to be made on behalf of the Partnership, and (ii) for the conduct of the business and affairs of the Partnership,
including all such decisions and all such business and affairs to be made or conducted by the Partnership in its capacity as Fund General Partner. (b) Without limiting the generality of the foregoing, the General Partner shall
have full power and authority to execute, deliver and perform such contracts, agreements and other undertakings, and to engage in all activities and transactions, as it may deem necessary or advisable for, or as may be
incidental to, the conduct of the business contemplated by this Section 5.1, including, without in any manner limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any Partner or
with any other Person having any business, financial or other relationship with any Partner or Partners. The Partnership, and the General Partner on behalf of the Partnership, may enter into and perform the Fund LP
Agreement and any documents contemplated thereby or related thereto and any amendments thereto, without any further act, vote or approval of any Person, including any Partner, notwithstanding any other provision of this
Agreement. The General Partner is hereby authorized to enter into the documents described in the preceding sentence on behalf of the Partnership, but such authorization shall not be deemed a restriction on the power of the
General Partner to enter into other documents on behalf of the Partnership. Except as otherwise expressly provided herein or as required by law, all powers and authority vested in the General Partner by or pursuant to this
Agreement or the Act shall be construed as being exercisable by the General Partner in its sole and absolute discretion. (c) The General Partner shall be the tax matters partner for purposes of section 6231(a)(7) of the Code.
Each Partner agrees not to treat, on such Partners United States federal income tax return or in any claim for a refund, any item of income, gain, loss, deduction or credit in a manner inconsistent with the treatment of such
item by the Partnership. The General Partner shall have the exclusive authority to make any elections required or permitted to be made by the Partnership under any provisions of the Code or any other revenue laws.
14 Section 5.2 Delegation of Duties (a) Subject to Section 5.1 and Section 5.2(d), the General Partner may delegate to any Person or Persons any of the duties, powers and authority vested in it hereunder on such terms and
conditions as it may consider appropriate. (b) Without limiting the generality of Section 5.2(a), but subject to the limitations contained in Section 5.2(d), the General Partner shall have the power and authority to appoint any
Person, including any Person who is a Limited Partner, to provide services to and act as an employee or agent of the Partnership, with such titles and duties as may be specified by the General Partner, including the following:
(i) a chief financial officer, to whom the General Partner may delegate its authority to disburse funds for the account of the Partnership and the Fund for any proper purpose, to establish deposit accounts with banks or other
financial institutions, to make permitted investments of Partnership assets, and to take any other permitted actions pertaining to the finances of the Partnership and the Fund; (ii) a chief accounting officer, to whom the General
Partner may delegate its authority to prepare and maintain financial and accounting books, records and statements of the Partnership and the Fund; and (iii) one or more vice presidents, treasurers and controllers, to whom the
General Partner may delegate its authority to execute any of its decisions and to take any other permitted actions on behalf of the Partnership (including in its capacity as Fund General Partner) subject to the supervision of the
chief executive officer, the chief financial officer or the chief accounting officer. Any Person appointed by the General Partner to serve as an officer, employee or agent of the Partnership shall be subject to removal at any time
by the General Partner; and shall report to and consult with the General Partner at such times and in such manner as the General Partner may direct. (c) Any Person who is a Limited Partner and to whom the General Partner
delegates any of its duties pursuant to this Section 5.2 or any other provision of this Agreement shall be subject to the same standard of care, and shall be entitled to the same rights of indemnification and exoneration,
applicable to the General Partner under and pursuant to Section 5.7, unless such Person and the General Partner mutually agree to a different standard of care or right to indemnification and exoneration to which such Person
shall be subject. (d) The General Partner shall be permitted to designate one or more committees of the Partnership which committees may include Limited Partners as members. Any such committees shall have such powers
and authority granted by the General Partner. Any Limited Partner who has agreed to serve on a committee shall not be deemed to have the power to bind or act for or on behalf of the Partnership in any manner and in no
event shall a member of a committee be considered a general partner of the Partnership by agreement, estoppel or otherwise or be deemed to participate in the control of the business of the Partnership as a result of the
performance of his duties hereunder or otherwise.
15 (e) The General Partner shall cause the Partnership to enter into an arrangement with the Management Company which arrangement shall require the Management Company to pay all costs and expenses of the Partnership.
Section 5.3 Transactions with Affiliates To the fullest extent permitted by applicable law, the General Partner (or any Affiliate of the General Partner), when acting on behalf of the Partnership, is hereby authorized to (a)
purchase property from, sell property to, lend money to or otherwise deal with any Affiliates, any Partner, the Partnership, the Fund or any Affiliate of any of the foregoing Persons, and (b) obtain services from any Affiliates,
any Partner, the Partnership, the Fund or any Affiliate of the foregoing Persons. Section 5.4 Expenses (a) Subject to the arrangement contemplated by Section 5.2(e), the Partnership will pay, or will reimburse the General
Partner for, all costs and expenses arising in connection with the organization and operations of the Partnership. (b) Any withholding taxes payable by the Partnership, to the extent determined by the General Partner to have
been paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the Partners, shall be allocated among and debited against the Capital Accounts of only those
Partners on whose behalf such payments are made or whose particular circumstances gave rise to such payments in accordance with Section 4.2. Section 5.5 Rights of Limited Partners (a) Limited Partners shall have no right
to take part in the management or control of the Partnerships business, nor shall they have any right or authority to act for the Partnership or to vote on matters other than as set forth in this Agreement or as required by
applicable law. (b) Without limiting the generality of the foregoing, the General Partner shall have the full and exclusive authority, without the consent of any Limited Partner, to compromise the obligation of any Limited
Partner to make a capital contribution or to return money or other property paid or distributed to such Limited Partner in violation of the Act. (c) Nothing in this Agreement shall entitle any Partner to any compensation for
services rendered to or on behalf of the Partnership as an agent or in any other capacity, except for any amounts payable in accordance with this Agreement. Section 5.6 Other Activities of Partners (a) Subject to the Fund LP
Agreement and to full compliance with the code(s) of ethics of Apollo Global Management, LLC and its Affiliates and other written policies relating to personal investment transactions, membership in the Partnership shall
not prohibit a Partner from purchasing or selling as a passive investor any interest in any asset.
16 (b) Nothing in this Agreement shall prohibit the General Partner from engaging in any activity other than acting as General Partner hereunder. Section 5.7 Duty of Care; Indemnification (a) To the fullest extent permitted
by law, the General Partner and its Affiliates and their respective partners, members, managers, shareholders, officers, directors, employees and associates and, with the approval of the General Partner, any agent of any of the
foregoing (including their respective executors, heirs, assigns, successors or other legal representatives) (each, a Covered Person and collectively, the Covered Persons), shall not be liable to the Partnership or to any of the
other Partners for any loss, claim, damage or liability occasioned by any acts or omissions in the performance of its services hereunder, except to the extent that it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (a Final Adjudication) that such loss, claim, damage or liability is due to an act or omission of a Covered Person is due to an act or omission of such a Covered Person that constituted
a bad faith violation of the implied contractual covenant of good faith and fair dealing. (b) A Covered Person shall be indemnified to the fullest extent permitted by law by the Partnership against any losses, claims, damages,
liabilities and expenses (including attorneys fees, judgments, fines, penalties and amounts paid in settlement) incurred by or imposed upon it by reason of or in connection with any action taken or omitted by such Covered
Person arising out of the Covered Persons status as a Partner or its activities on behalf of the Partnership, including in connection with any action, suit, investigation or proceeding before any judicial, administrative,
regulatory or legislative body or agency to which it may be made a party or otherwise involved or with which it shall be threatened by reason of being or having been a Partner or by reason of serving or having served, at the
request of the Partnership in its capacity as Fund General Partner, as a director, officer, consultant, advisor, manager, member or partner of any enterprise in which the Fund has or had a financial interest, including issuers of
Portfolio Investments; provided that the Partnership may, but shall not be required to, indemnify a Covered Person with respect to any matter as to which there has been a Final Adjudication that such Covered Persons acts or
its failure to act (i) constituted a bad faith violation of the implied contractual covenant of good faith and fair dealing, or (ii) were of a nature that makes indemnification by the Fund unavailable. The right to indemnification
granted by this Section 5.7 shall be in addition to any rights to which a Covered Person may otherwise be entitled and shall inure to the benefit of the successors by operation of law or valid assigns of such Covered Person.
The Partnership shall pay the expenses incurred by a Covered Person in defending a civil or criminal action, suit, investigation or proceeding in advance of the final disposition of such action, suit, investigation or proceeding,
upon receipt of an undertaking by the Covered Person to repay such payment if there shall be a Final Adjudication that it is not entitled to indemnification as provided herein. In any suit brought by the Covered Person to
enforce a right to indemnification hereunder it shall be a defense that the Covered Person has not met the applicable standard of conduct set forth in this Section 5.7, and in any suit in the name of the Partnership to recover
expenses advanced pursuant to the terms of an undertaking the Partnership shall be entitled to recover such expenses upon Final Adjudication that the Covered Person has not met the applicable standard of conduct set forth in
this Section 5.7. In any such suit brought to enforce a right to indemnification or to recover an advancement of expenses pursuant to the
17 terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to an advancement of expenses, shall be on the Partnership (or any Limited Partner acting derivatively or
otherwise on behalf of the Partnership or the Limited Partners). The General Partner may not satisfy any right of indemnity or reimbursement granted in this Section 5.7 or to which it may be otherwise entitled except out of
the assets of the Partnership (including, without limitation, insurance proceeds and rights pursuant to indemnification agreements), and no Partner shall be personally liable with respect to any such claim for indemnity or
reimbursement. The General Partner may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5 and obtain appropriate insurance coverage on behalf and at the
expense of the Partnership to secure the Partnerships indemnification obligations hereunder and may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5. Each
Covered Person shall be deemed a third party beneficiary (to the extent not a direct party hereto) to this Agreement and, in particular, the provisions of this Article 5, and shall be entitled to the benefit of the indemnity granted
to the Partnership by the Fund pursuant to the terms of the Fund LP Agreement. (c) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Partners, the Covered Person shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they
restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity to the Partnership or the Partners, are agreed by the parties hereto to replace such other duties and liabilities of such
Covered Person. Notwithstanding anything to the contrary contained in this Agreement or otherwise applicable provision of law or equity, to the maximum extent permitted by the Act, a Covered Person shall owe no duties
(including fiduciary duties) to the Partnership or the Partners other than those specifically set forth herein; provided that a Covered Person shall have the duty to act in accordance with the implied contractual covenant of good
faith and fair dealing. (d) Each of the Covered Persons may consult with legal counsel, accountants and other experts selected by it and any act or omission suffered or taken by it on behalf of the Partnership or in furtherance
of the interests of the Partnership or the Fund in good faith in reliance upon and in accordance with the advice of such counsel, accountants or other experts shall create a rebuttable presumption of the good faith and due care
of such Covered Person with respect to such act or omission. ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS Section 6.1 Admission of Additional Limited Partners; Effect on Points The General Partner
may at any time admit as an additional Limited Partner any Person who has agreed to be bound by this Agreement, assign Points and issue FC Shares to such Person and/or increase the Points of any existing Limited Partner.
Each additional Limited Partner shall execute either a counterpart to this Agreement or a separate instrument evidencing,
18 to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner and shall be admitted as a Limited Partner upon such execution. In connection with such admission or increase in Points
of any Partner (but not with respect to an assignment of Excess Points), the Points of APH shall be reduced in an amount determined by the General Partner. Section 6.2 Admission of Additional General Partner and Transfer
(a) The General Partner may admit one or more additional general partners at any time without the consent of any Limited Partner. Any additional general partner shall be admitted as a general partner upon its execution of a
counterpart signature page to this Agreement. (b) The General Partner may Transfer its general partner interest in the Partnership to any other Person, without the consent of any Limited Partner. Section 6.3 Transfer of
Interests of Limited Partners (a) No Transfer of any Limited Partners interest in the Partnership, whether voluntary or involuntary, shall be valid or effective, and no transferee shall become a substituted Limited Partner,
unless the prior written consent of the General Partner has been obtained, which consent may be given or withheld by the General Partner in its discretion. In the event of any Transfer, all of the conditions of the remainder of
this Section 6.3 must also be satisfied. (b) A Limited Partner requesting approval of a Transfer, or such Partners legal representative, shall give the General Partner reasonable notice before the proposed effective date of any
requested Transfer, and shall provide sufficient information to allow legal counsel acting for the Partnership to make the determination that the proposed Transfer will not: (i) require registration of the Partnership or any
interest therein under any securities or commodities laws of any jurisdiction; (ii) result in a termination of the Partnership under section 708(b)(1)(B) of the Code or jeopardize the status of the Partnership as a partnership for
United States federal income tax purposes; or (iii) violate, or cause the Partnership, the Fund, the General Partner or any Limited Partner to violate, any applicable law, rule or regulation of any jurisdiction. Such notice must
be supported by proof of legal authority and a valid instrument of assignment acceptable to the General Partner. (c) A permitted transferee shall be entitled to the allocations and distributions attributable to the interest in the
Partnership transferred to such transferee and to Transfer such interest in accordance with the terms of this Agreement; provided that such transferee shall not be entitled to the other rights of a Limited Partner as a result of
such transfer until it becomes a substituted Limited Partner. No transferee may become a substituted Limited Partner except with the prior written consent of the General Partner (which consent may be given or withheld by
the General Partner in its discretion). Such transferee shall be admitted to the Partnership as a
19 substituted Limited Partner upon execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner.
Notwithstanding the above, the Partnership and the General Partner shall incur no liability for allocations and distributions made in good faith to the transferring Limited Partner until a written instrument of Transfer has been
received and accepted by the General Partner and recorded on the books of the Partnership and the effective date of the Transfer has passed. (d) Any other provision of this Agreement to the contrary notwithstanding, to the
fullest extent permitted by law, any successor or transferee of any Limited Partners interest in the Partnership shall be bound by the provisions hereof. Prior to recognizing any Transfer in accordance with this Section 6.3, the
General Partner may require the transferee to make certain representations and warranties to the Partnership and the Partners and to accept, adopt and approve in writing all of the terms and provisions of this Agreement. (e) In
the event of a Transfer or in the event of a distribution of assets of the Partnership to any Partner, the Partnership, at the direction of the General Partner, may, but shall not be required to, file an election under section 754 of
the Code and in accordance with the applicable Treasury Regulations, to cause the basis of the Partnerships assets to be adjusted as provided by section 734 or section 743 of the Code. (f) The Partnership shall maintain books
for the purpose of registering the transfer of interests in the Partnership. No transfer of an interest in the Partnership shall be effective until the transfer of such interest is registered upon books maintained for that purpose by or
on behalf of the Partnership. Section 6.4 Withdrawal of Partners (a) A Partner with an FC Share may not withdraw from the Partnership prior to the Partnerships dissolution unless the prior written consent of the General
Partner has been obtained, which consent may be given or withheld by the General Partner. (b) A Limited Partner without an FC Share shall cease to be a Partner and be deemed to have withdrawn its interest in the
Partnership either: (i) automatically upon any date (and with immediate effect from such date) on which such Limited Partner (or, in the case of a Limited Partner that was admitted to the Partnership by virtue of its
relationship with an employee of Apollo Global Management, LLC or one of its Affiliates, such employee) ceases to be employed (for any reason, including, but not limited to, death, disability, resignation or a termination for
cause or other than for cause) by Apollo Global Management, LLC or one of its Affiliates (unless otherwise determined by the General Partner); or (ii) upon a date specified in a notice delivered by such Limited Partner to the
General Partner stating that such Limited Partner elects to withdraw from the Partnership. (c) Payment of a withdrawing Limited Partners withdrawal proceeds (being an amount equal to the balance of such Limited Partners
capital account as of the effective date of
20 withdrawal as adjusted for any Operating Loss allocable to such withdrawn Limited Partner pursuant to Section 3.4(b)) will generally be made at the same time as such amounts would have been distributed to such Limited
Partner under Section 4.1 had such Limited Partner not withdrawn from the Partnership; provided that the General Partner may (i) delay such payment if such delay is reasonably necessary to prevent such withdrawal from
having a material adverse impact on the Partnership, the Fund, or the remaining Partners, and (ii) hold back from any payments such reserves as the General Partner determines to be necessary or appropriate, including,
without limitation, as provided in Section 4.1(b) and Section 6.4(d). Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal
and will not earn interest for the period from the applicable withdrawal date through the settlement date. The General Partner may deduct from any withdrawal proceeds due to any Partner an amount representing the actual or
estimated expenses of the Partnership associated with processing the withdrawal and any other amounts owed by the withdrawing Partner to the General Partner or its Affiliates whether under this Agreement or otherwise. (d)
The right of any Partner to withdraw or receive distributions pursuant to this Section 6.4 is subject to the provision by the General Partner for all liabilities of the Partnership and for reserves for contingencies as provided in
Section 3.6 (including, in either case, for the Partnerships anticipated obligations under section 4.9, section 6.2 and section 10.3 of the Fund LP Agreement). (e) A former Partner shall remain liable to make capital
contributions to the Partnership pursuant to Section 3.1(d) and Section 4.2(a), notwithstanding that such Person may have withdrawn from the Partnership and ceased to be a Partner. Section 6.5 Pledges (a) A Limited Partner
shall not pledge or grant a security interest in such Limited Partners interest in the Partnership unless the prior written consent of the General Partner has been obtained (which consent may be given or withheld by the
General Partner). (b) Each limited partner interest in the Partnership shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15)
thereof) as in effect from time to time in the State of Delaware (the DEUCC), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994
revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.
Notwithstanding any provision of this Agreement to the contrary, to the extent that any provision of this Agreement is inconsistent with any non- waivable provision of Article 8 of the DEUCC, such provision of Article 8 of
the DEUCC shall be controlling. (c) Any limited partner interest in the Partnership may be evidenced by a certificate of limited partnership interest issued by the Partnership in such form as the General Partner may approve.
Every certificate representing a limited partner interest in the Partnership shall bear a legend substantially in the following form:
21 The limited partner interest represented by this certificate shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in
effect from time to time in the State of Delaware, and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as
adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. The transfer of this certificate and the
limited partner interest represented hereby is restricted as described in the amended and restated limited partnership agreement of the Partnership, dated as of July 14, 2009, as the same may be amended or restated from time
to time. (d) The Partnership shall maintain books for the purpose of registering the Transfer of limited partner interests in the Partnership. In connection with a Transfer in accordance with this Agreement of any limited
partner interests in the Partnership, the endorsed certificate(s) evidencing such interest shall be delivered to the Partnership for cancellation, and the Partnership shall thereupon issue a new certificate to the transferee
evidencing the interest that was transferred and, if applicable, the Partnership shall issue a new certificate to the transferor evidencing any interest registered in the name of the transferor that was not transferred. ARTICLE 7
POINTS Section 7.1 Allocation of Points (a) A Point means a 1/x share of Operating Profit or Operating Loss, where x equals the aggregate number of Points assigned or available for assignment at the relevant time. The
aggregate number of Points assigned or available for assignment to all Partners shall initially be 2,000. (b) Except as otherwise provided herein, the General Partner shall be responsible for the allocation of Points from time to
time to the Limited Partners. At each such time of
22 allocation, all Points available for allocation shall be so allocated to the Limited Partners (including APH) by the General Partner. Points allocated to Limited Partners (other than APH) may not be reduced except as set
forth in Section 6.1 and Section 7.2. Upon any allocation of Points (other than Excess Points) by the General Partner to an existing or new Limited Partner other than APH, there shall be a corresponding reduction in the Points
of APH, as provided in Section 6.1. (c) The General Partner shall maintain on the books and records of the Partnership a record of the number of Points allocated to each Limited Partner and shall give notice to each Limited
Partner of the number of such Limited Partners Points upon admission to the Partnership of such Limited Partner and as soon as reasonably practicable upon any change in such Limited Partners Points. Section 7.2 Effect of
Withdrawal on Points (a) The Points of any Limited Partner that withdraws or is deemed to have withdrawn from the Partnership shall be forfeited, as of the effective date of such Limited Partners withdrawal or deemed
withdrawal, unless otherwise determined by the General Partner. (b) Any Points that are forfeited pursuant to Section 7.2(a) shall, automatically and without any action on the part of any Person, be reallocated to APH, unless
otherwise determined by the General Partner; and no Limited Partner other than APH shall have any right or claim with respect to such forfeited Points. ARTICLE 8 DISSOLUTION AND LIQUIDATION Section 8.1
Dissolution and Liquidation of Partnership (a) Upon dissolution of the Partnership in accordance with the Act, the General Partner shall liquidate the business and administrative affairs of the Partnership, except that, if the
General Partner is unable to perform this function, a liquidator may be elected by a majority in interest (determined by Points) of Limited Partners and upon such election such liquidator shall liquidate the Partnership. FC
Profit and FC Loss, Operating Profit and Operating Loss during the Fiscal Years that include the period of liquidation shall be allocated pursuant to Section 3.4. The proceeds from liquidation shall be distributed in the
following manner: (i) first, the debts, liabilities and obligations of the Partnership including the expenses of liquidation (including legal and accounting expenses incurred in connection therewith), up to and including the date
that distribution of the Partnerships assets to the Partners has been completed, shall be satisfied (whether by payment or by making reasonable provision for payment thereof); and (ii) thereafter, the Partners shall be paid
amounts pro rata in accordance with and up to the positive balances of their respective Capital Accounts, as adjusted pursuant to Article 3.
23 (b) Anything in this Section 8.1 to the contrary notwithstanding, the General Partner or liquidator may distribute ratably in kind rather than in cash, upon dissolution, any assets of the Partnership in accordance with the
priorities set forth in Section 8.1(a); provided that if any in kind distribution is to be made, the assets distributed in kind shall be valued as of the actual date of their distribution and charged as so valued and distributed against
amounts to be paid under Section 8.1(a). ARTICLE 9 GENERAL PROVISIONS Section 9.1 Amendment of this Agreement (a) The General Partner may amend this Agreement at any time, in whole or in part, without the
consent of any other Partner; provided that any amendment which would increase the obligation of any Partner to make any contribution to the capital of the Partnership or adversely affect such Partners right to withdraw
voluntarily from the Partnership shall not be made unless such Partner has, at the General Partners election, (i) consented thereto, or (ii) been provided with an opportunity to withdraw from the Partnership as of a date
determined by the General Partner that is prior to the effective date of the amendment. Without limiting the foregoing, the General Partner may amend this Agreement at any time, in whole or in part, without the consent of
any other Partner, to enable the Partnership to comply with the requirements of the Safe Harbor Election within the meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury
Regulation section 1.83- 3(e)(1) or Proposed Treasury Regulation section 1.704- 1(b)(4)(xii) at such time as such proposed Procedure and Regulations are effective and to make any such other related changes as may be
required by pronouncements or Treasury Regulations issued by the Internal Revenue Service or Treasury Department after the date of this Agreement. An adjustment of Points shall not be considered an amendment to the
extent effected in compliance with the provisions of Section 6.1 or Article 7 as in effect on the date hereof or as hereafter amended in compliance with the requirements of this Section 9.1(a). (b) Notwithstanding the
provisions of this Agreement, including Section 9.1(a), it is hereby acknowledged and agreed that the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner or any other
Person may enter into one or more side letters or similar agreements with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of this Agreement. The parties
hereto agree that any terms contained in a side letter or similar agreement with one or more Partners shall govern with respect to such Partner or Partners notwithstanding the provisions of this Agreement. Any such side letters
or similar agreements shall be binding upon the Partnership or the General Partner, as applicable, and the signatories thereto as if the terms were contained in this Agreement. Section 9.2 Special Power- of- Attorney (a) Each
Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- in- fact,
24 and in the name, place and stead of such Partner, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any amendment to this Agreement which
complies with the provisions of this Agreement (including the provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel to the Partnership, may from time to
time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to
effectuate, implement and continue the valid and subsisting existence and business of the Partnership as a limited partnership; (iii) all such instruments, certificates, agreements and other documents relating to the conduct of
the investment program of the Fund which, in the opinion of such attorney- in- fact and the legal counsel to the Fund, are reasonably necessary to accomplish the legal, regulatory and fiscal objectives of the Fund in
connection with its or their acquisition, ownership and disposition of investments, including, without limitation: (A) the governing documents of any management entity formed as a part of the tax planning for the Fund and
any amendments thereto; and (B) documents relating to any restructuring transaction with respect to any of the Funds investments; (iv) any written notice or letter of resignation from any board seat or office of any Person
(other than a company that has a class of equity securities registered under the Securities Exchange Act of 1934, as amended, or that is registered under the Investment Company Act of 1940, as amended), which board seat or
office was occupied or held at the request of the Partnership or any of its Affiliates; and (v) all such proxies, consents, assignments and other documents as the General Partner determines to be necessary or advisable in
connection with any merger or other reorganization, restructuring or other similar transaction entered into in accordance with this Agreement (including the provisions of Section 9.5(c)). (b) Each Limited Partner is aware that
the terms of this Agreement permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without such Partners consent. If an amendment of
the Certificate or this Agreement or any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any
objection which such Limited Partner may assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may
be necessary or appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a
view to the orderly administration of the affairs of the Partnership. This power- of- attorney is a
25 special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue in full force and effect notwithstanding the subsequent death or incapacity of any
party granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and (ii) shall survive any Transfer by a Limited Partner of the whole or any portion of its
interest in the Partnership, except that, where the transferee thereof has been approved by the General Partner for admission to the Partnership as a substituted Limited Partner, this power of attorney given by the transferor
shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect such substitution. Section 9.3 Notices Any notice required or permitted to be
given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the attention of John J. Suydam. A notice to a Limited Partner shall be directed to such Limited Partners last known
residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home Address). A notice shall be considered given when delivered to the addressee either by hand at such Partners
Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership business communications, except that a notice to a former Partner shall be considered given when delivered by
hand by a recognized overnight courier together with mailing through the United States Postal System by regular mail to such former Partners Home Address. Section 9.4 Agreement Binding Upon Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors by operation of law, but the rights and obligations of the Limited Partners hereunder shall not be assignable,
transferable or delegable except as expressly provided herein, and any attempted assignment, transfer or delegation thereof that is not made in accordance with such express provisions shall be void and unenforceable. Section
9.5 Merger, Consolidation, etc. (a) Subject to Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited partnerships formed under the Act or other business entities (as defined in
section 17- 211 of the Act) pursuant to an agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to Section 9.1(a) but notwithstanding any other provision to the contrary contained
elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section 9.5(a) may, to the extent permitted by section 17- 211(g) of the Act and Section 9.5(a), (i) effect any amendment to
this Agreement, (ii) effect the adoption of a new limited partnership agreement for the Partnership if it is the surviving or resulting limited partnership in the merger or consolidation, or (iii) provide that the limited partnership
agreement
26 of any other constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of consummating the merger or consolidation) shall be the limited partnership agreement of
the surviving or resulting limited partnership. (c) The General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any
such transaction, and each Limited Partner shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement, and the rights of each and all of the
Partners hereunder, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws rules thereof. The parties hereby consent to the non- exclusive jurisdiction and
venue for any action arising out of or relating to this Agreement in the State Courts of the State of Delaware, New Castle County, the State Courts of the State of New York, New York County, the United States District Court
for the District of Delaware located in New Castle County or the United States District Court for the Southern District of New York located in New York County. In addition to any other means available at law for service of
process, each Limited Partner hereby agrees, to the fullest extent permitted by law, that service of process will be duly effectuated when delivered to a Limited Partners Home Address by hand or by a recognized overnight
carrier together with mailing through the United States Postal System by regular mail. Section 9.7 Termination of Right of Action Every right of action arising out of or in connection with this Agreement by or on behalf of
any past, present or future Partner or the Partnership against any past, present or future Partner shall, to the fullest extent permitted by applicable law, irrespective of the place where the action may be brought and irrespective
of the residence of any such Partner, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. Section 9.8 Confidentiality (a) Each Limited Partner
acknowledges and agrees that the information contained in the books and records of the Partnership concerning the Points assigned with respect to any other Limited Partner is confidential, and, to the fullest extent permitted
by applicable law, each Limited Partner waives, and covenants not to assert, any claim or entitlement whatsoever to gain access to any such information. The Limited Partners agree that the restrictions set forth in this Section
9.8(a) shall constitute reasonable standards under the Act regarding access to information. (b) Each Limited Partner acknowledges and agrees not to, at any time, either during the term of such Limited Partners participation in
the Partnership or thereafter, disclose, use, publish or in any manner reveal, directly or indirectly, to any Person (other than on a confidential basis to such Limited Partners legal and tax advisors who have a need to know
such information) the contents of this Agreement or any Confidential Information, except (i) with the prior written consent of the General Partner, (ii) to the extent that any such information is in the
27 public domain other than as a result of the Limited Partners breach of any of his obligations, or (iii) where required to be disclosed by court order, subpoena or other government process; provided that, to the fullest extent
permitted by law, the Limited Partner shall promptly notify the General Partner upon becoming aware of any such disclosure requirement and shall cooperate with any effort by the General Partner to prevent or limit such
disclosure. (c) Notwithstanding any of the provisions of this Section 9.8, each Limited Partner may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of an investment in the
Partnership and all materials of any kind (including tax opinions or other tax analyses) that are provided to the Limited Partner relating to such tax treatment. For this purpose, tax treatment is the purported or claimed
United States federal income tax treatment of a transaction and tax structure is limited to any fact that may be relevant to understanding the purported or claimed United States federal income tax treatment of a transaction.
For this purpose, the names of the Partnership, the Partners, their affiliates, the names of their partners, members or equity holders and the representatives, agents and tax advisors of any of the foregoing are not items of tax
structure. Section 9.9 Not for Benefit of Creditors The provisions of this Agreement are intended only for the regulation of relations among Partners and between Partners and former or prospective Partners and the
Partnership. Subject to the rights of Covered Persons provided by Section 5.7, this Agreement is not intended for the benefit of any Person who is not a Partner, and no rights are intended to be granted to any other Person who
is not a Partner under this Agreement. Section 9.10 Consents Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept
with the books of the Partnership. Section 9.11 Reports As soon as practicable after the end of each taxable year, the General Partner shall furnish to each Limited Partner (a) such information as may be required to enable
each Limited Partner to properly report for United States federal and state income tax purposes such Partners distributive share of each Partnership item of income, gain, loss, deduction or credit for such year, and (b) a
statement of the total amount of Operating Profit or Operating Loss for such year and a reconciliation of any difference between (i) such Operating Profit or Operating Loss and (ii) the aggregate net profits or net losses
allocated by the Fund to the Partnership for such year (other than any difference attributable to the aggregate FC Profit or FC Loss allocated by the Fund to the Partnership for such year). Section 9.12 Filings The Partners
hereby agree to take any measures necessary (or, if applicable, refrain from any action) to ensure that the Partnership is treated as a partnership for United States federal, state and local income tax purposes.
28 Section 9.13 Miscellaneous (a) The captions and titles preceding the text of each Section hereof shall be disregarded in the construction of this Agreement. (b) As used herein, masculine pronouns shall include the feminine
and neuter, and the singular shall be deemed to include the plural. (c) This Agreement may be executed in counterparts, each of which shall be deemed to be an original hereof. [Signature Page Follows]
Apollo Credit Opportunity Advisors I, L.P. Third Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January 12, 2011 and
made effective as of July 14, 2009. General Partner: APOLLO COF I CAPITAL MANAGEMENT, LLC By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President Limited Partners: APOLLO PRINCIPAL
HOLDINGS IX, L.P. By: Apollo Principal Holdings IX GP, Ltd., its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President APOLLO CREDIT OPPORTUNITY CM EXECUTIVE CARRY I,
L.P. By: Apollo COF I Capital Management, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL & PROPRIETARY EXECUTION VERSION This company is the general partner of Apollo Credit Opportunity Fund II, L.P. and earns the carried interest on COF II profits. Apollo Credit Opportunity
Advisors II, L.P. Third Amended and Restated Limited Partnership Agreement Dated January 12, 2011 and made effective as of July 14, 2009 THE TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN
THIS AGREEMENT IS RESTRICTED AS DESCRIBED HEREIN.
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APOLLO CREDIT OPPORTUNITY ADVISORS II, L.P. A Delaware Limited Partnership THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT THIRD AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT of APOLLO CREDIT OPPORTUNITY ADVISORS II, L.P. (the Partnership) by and among Apollo COF II Capital Management, LLC, a Delaware limited liability company, as
the sole general partner (the General Partner), and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners is dated January 12, 2011 and
made effective as of July 14, 2009 (the Agreement). W I T N E S S E T H : WHEREAS, on June 25, 2009, Apollo COF II Capital Management, LLC filed with the Secretary of State of the State of Delaware a Certificate of
Limited Partnership to form Apollo Credit Opportunity Advisors II, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant to an agreement among Apollo COF II Capital
Management, LLC, as sole general partner, and Apollo Principal Holdings V, L.P. as initial limited partner (the Original Agreement); WHEREAS, the parties amended and restated the Original Agreement in its entirety as
of July 14, 2009 (the Amended Agreement); WHEREAS, the parties amended and restated the Amended Agreement in its entirety as of July 14, 2009 (the Second Amended Agreement); WHEREAS, pursuant to a
transfer agreement, dated December 31, 2009, between Apollo Principal Holdings V, L.P. (APH V) and Apollo Principal Holdings IX, L.P. (APH IX), APH V transferred, delivered and conveyed its entire limited partner
interest in the Partnership to APH IX and, contemporaneously therewith, APH IX was admitted to the Partnership as a substitute limited partner of the Partnership and APH V withdrew from the Partnership as a limited
partner; and WHEREAS, the parties wish to amend and restate the Second Amended Agreement in its entirety to reflect the admission of APH V as a substitute limited partner of the Partnership in place of APH IX and to
make certain additional modifications thereto. NOW, THEREFORE, the parties hereby agree as follows:
2 ARTICLE 1 DEFINITIONS Act means the Delaware Revised Uniform Limited Partnership Act, as in effect on the date hereof and as amended from time to time, or any successor law. Affiliate means with respect to
any Person any other Person directly or indirectly controlling, controlled by or under common control with such Person. Agreement means this Third Amended and Restated Limited Partnership Agreement, as amended or
supplemented from time to time. APH means Apollo Principal Holdings IX, L.P. (or its assignees or transferees). Capital Account means with respect to each Partner the capital account established and maintained on
behalf of such Partner as described in Section 3.3. Carried Interest Distributions has the meaning ascribed to that term in the Fund LP Agreement. Certificate means the Certificate of Limited Partnership of the Partnership
and any amendments thereto as filed with the office of the Secretary of State of the State of Delaware. Clawback Amount means any amount of Carried Interest Distributions received by the Partnership and required, under
the Fund LP Agreement, to be returned to the Fund, including either or both of (i) a Clawback Amount, as defined in the Fund LP Agreement and, (ii) any amount of Carried Interest Distributions required to be returned to the
Fund pursuant to section 6.2 of the Fund LP Agreement. Clawback Share has the meaning ascribed to that term in Section 3.1(e). CM Executive Carry means Apollo Credit Opportunity CM Executive Carry II, L.P.
Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor law. COF Limited Partner means a Limited Partner employed by Apollo Global Management, LLC
or one of its Affiliates whom the General Partner has determined to be a member of the day- to- day investment management team for the Fund and designated as such in the documentation admitting such Limited Partner to
the Partnership. Confidential Information means information that has not been made publicly available by or with the permission of the General Partner and that is obtained or learned by a Limited Partner as a result of or in
connection with such Partners association with the Partnership or any of its Affiliates concerning the business, affairs or activities of the Partnership, any of its Affiliates or any of the Portfolio Investments, including, without
limitation, models, codes, client information (including client identity and contacts, client lists, client financial or personal
3 information), financial data, know- how, computer software and related documentation, trade secrets, and other forms of sensitive or valuable non- public information obtained or learned by the Limited Partner as a result of
such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information does not include information concerning non- proprietary business or investment practices, methods or
relationships customarily employed or entered into by comparable business enterprises. Covered Person has the meaning ascribed to that term in Section 5.7. DEUCC has the meaning ascribed to that term in Section
6.5(b). Excess Points has the meaning ascribed to that term in Section 7.1(a). FC Loss means, with respect to any Fiscal Year, the portion of any Losses and any Portfolio Investment Loss allocable to the Partnership, but
only to the extent such allocation is made by the Fund to the Partnership in proportion to the Partnerships capital contribution to the Fund, as determined pursuant to the Fund LP Agreement. FC Profit means, with respect
to any Fiscal Year, the portion of any Profit and any Portfolio Investment Gain allocable to the Partnership, but only to the extent such allocation is made by the Fund to the Partnership in proportion to the Partnerships capital
contribution to the Fund, as determined pursuant to the Fund LP Agreement. FC Share means a share of the FC Profit or FC Loss with respect to the Fund. The aggregate number of FC Shares shall be equal to the dollar
amount of the Partnerships capital commitment to the Fund. Final Adjudication has the meaning ascribed to that term in Section 5.7. Fiscal Year means, with respect to a year, the period commencing on January 1 of
such year and ending on December 31 of such year (or on the date of a final distribution pursuant to Section 8.1(a)), unless the General Partner shall elect another fiscal year for the Partnership which is a permissible taxable
year under the Code. Fund means Apollo Credit Opportunity Fund II, L.P. Fund General Partner means the Partnership in its capacity as a general partner of the Fund pursuant to the Fund LP Agreement. Fund LP
Agreement means the fourth amended and restated agreement of limited partnership of the Fund, as amended from time to time. General Partner means Apollo COF II Capital Management, LLC, a Delaware limited
liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in its capacity as general partner of the Partnership.
4 Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, until such Person withdraws entirely as a limited partner of the Partnership, in its capacity as a limited
partner of the Partnership. Losses has the meaning ascribed to that term in the Fund LP Agreement. Management Company has the meaning ascribed to that term in the Fund LP Agreement. Operating Loss means, with
respect to any Fiscal Year, any net loss of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction proceeds derived by the Partnership.
To the extent derived from the Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the
Fund, and any items not derived from the Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income tax purposes. Operating
Profit means, with respect to any Fiscal Year, any net income of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction proceeds
derived by the Partnership. To the extent derived from the Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable
to the determination by the Fund, and any items not derived from the Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income
tax purposes. Partner means the General Partner and any of the Limited Partners and Partners means the General Partner and all of the Limited Partners. Partnership means the limited partnership continued pursuant to
this Agreement. PE Limited Partner means a Limited Partner employed by Apollo Global Management, LLC or one of its Affiliates whom the General Partner has determined to be a private equity professional and
designated as such in the documentation admitting such Limited Partner to the Partnership. Person means any individual, partnership, corporation, limited liability company, joint venture, joint stock company,
unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or other entity. Point has the meaning
ascribed to that term in Section 7.1(a). Portfolio Investment has the meaning ascribed to that term in the Fund LP Agreement. Portfolio Investment Gain has the meaning ascribed to that term in the Fund LP Agreement.
5 Portfolio Investment Loss has the meaning ascribed to that term in the Fund LP Agreement. Profit has the meaning ascribed to that term in the Fund LP Agreement. Schedule of Partners means a schedule to be
maintained by the General Partner showing the following information with respect to each Partner: name, address, date of admission and withdrawal, required capital contribution (if any), and FC Share (if any). Transfer
means any direct or indirect sale, exchange, transfer, assignment or other disposition by a Partner of any or all of such Partners interest in the Partnership (whether respecting, for example, economic rights only or all the
rights associated with the interest) to another Person, whether voluntary or involuntary. Treasury Regulations means the regulations promulgated under the Code. ARTICLE 2 FORMATION AND ORGANIZATION
Section 2.1 Formation The Partnership was formed and is hereby continued as a limited partnership under and pursuant to the Act. The Certificate was filed on June 25, 2009. The General Partner shall execute, acknowledge
and file any amendments to the Certificate as may be required by the Act and any other instruments, documents and certificates which, in the opinion of the Partnerships legal counsel, may from time to time be required by
the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Partnership shall determine to do business, or any political subdivision or agency thereof, or which such legal counsel may
deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership. Section 2.2 Name The name of the Partnership shall be Apollo Credit Opportunity
Advisors II, L.P. or such other name as the General Partner may hereafter adopt upon causing an appropriate amendment to be made to this Agreement and to the Certificate to be filed in accordance with the Act. Promptly
thereafter, the General Partner shall send notice thereof to each Limited Partner. Section 2.3 Offices (a) The Partnership shall maintain its principal office, and may maintain one or more additional offices, at such place or
places as the General Partner may from time to time determine.
of the Partnership upon their execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Partner.
by the General Partner, all contributions to the capital of the Partnership by each Limited Partner shall be payable exclusively in cash. (b) The General Partner shall make capital contributions from time to time to the extent
necessary to ensure that the Partnership meets its obligations to make contributions of capital to the Fund. (c) No Partner shall be obligated, nor shall any Partner have any right, to make any contribution to the capital of the
Partnership other than as specified in this Section 3.1 or Section 4.2(a). No Limited Partner shall be obligated to restore any deficit balance in its Capital Account. (d) To the extent, if any, that it is determined that the
Partnership, as the Fund General Partner, is required to pay a Clawback Amount to the Fund, each Partner, and each former Partner, shall be required to participate in such payment and contribute to the Partnership an amount
equal to such Partners (or former Partners) Clawback Share of any Clawback Amount, but not in any event in excess of the cumulative amount theretofore distributed to such Partner, or former Partner, with respect to the
Operating Profit attributable to the Fund. To the extent, if any, that it is determined that the Partnership is required pursuant to section 6.2 of the Fund LP Agreement, or otherwise, to pay to the Fund any amount representing
distributions of the Fund other than Carried Interest Distributions, each Partner having an FC Share shall be required to participate in such payment and contribute to the Partnership an amount equal to such Partners pro rata
share of any such amount, but not in any event in excess of the cumulative amount theretofore distributed to such Partner with respect to the Profit attributable to the Fund. (e) A Partners (or former Partners) Clawback
Share of any Clawback Amount shall be calculated as follows: (i) to the extent that such Clawback Amount does not exceed the most recent cash distribution by the Partnership representing Operating Profit attributable to
the Fund (each such distribution, a Carry Distribution and the most recent Carry Distribution, the Latest Carry Distribution) as of the time of calculating such Clawback Amount, a portion of such Clawback Amount equal
to (A) the amount of the Latest Carry Distribution distributed to such Partner (or former Partner), divided by (B) the total amount of the Latest Carry Distribution; and (ii) to the extent that the Clawback Amount exceeds the
Latest Carry Distribution, the excess shall be applied successively to each immediately preceding Carry Distribution until the entire Clawback Amount has been satisfied and borne with respect to each
8 such Carry Distribution by those Partners (and former Partners) to whom such Carry Distribution was made in the same manner as provided in Section 3.1(e)(i). Section 3.2 Rights of Partners in Capital (a) No Partner shall
be entitled to interest on its capital contributions to the Partnership. (b) No Partner shall have the right to distributions or the return of any contribution to the capital of the Partnership except (i) for distributions in accordance
with Section 4.1 or Section 6.4, or (ii) upon dissolution of the Partnership. The entitlement to any such return at such time shall be limited to the value of the Capital Account of the Partner. The General Partner shall not be
liable for the return of any such amounts. Section 3.3 Capital Accounts (a) The Partnership shall maintain for each Partner a separate Capital Account. (b) Each Partners Capital Account shall have an initial balance equal to
the amount of any cash and the net value of any securities or other property constituting such Partners initial contribution to the capital of the Partnership. (c) Each Partners Capital Account shall be increased by the sum of:
(i) the amount of cash and the net value of any securities or other property constituting additional contributions by such Partner to the capital of the Partnership permitted pursuant to Section 3.1, plus (ii) the portion of any FC
Profit allocated to such Partners Capital Account pursuant to Section 3.4, plus (iii) the portion of any Operating Profit allocated to such Partners Capital Account pursuant to Section 3.4, plus (iv) such Partners allocable
share of any decreases in any reserves recorded by the Partnership pursuant to Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this Agreement, such item is to be credited to such
Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners. (d) Each Partners Capital Account shall be reduced by the sum of (without duplication): (i) the portion of any
FC Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus (ii) the portion of any Operating Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus
9 (iii) the amount of any cash and the net value of any property distributed to such Partner pursuant to Section 4.1, Section 6.4 or Section 8.1 including any amount deducted pursuant to Section 4.2 or Section 5.4 from any
such amount distributed, plus (iv) any withholding taxes or other items payable by the Partnership and allocated to such Partner pursuant to Section 5.4(b), any increases in any reserves recorded by the Partnership pursuant to
Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this Agreement, such item is to be charged to such Partners Capital Account on a basis which is not in accordance with the current
respective Points of all Partners. Section 3.4 Allocation of Profit and Loss (a) Allocations of Profit. FC Profit and Operating Profit for any Fiscal Year shall be allocated to the Partners: (i) first, to Partners to which FC Loss
and Operating Loss previously have been allocated pursuant to Section 3.4(b), to the extent of and in proportion to the amount of such losses; (ii) next, to the extent that the cumulative amount of distributions pursuant to
Article 4 (other than distributions representing a return of such Partners capital contributions) exceeds the cumulative amount of FC Profit and Operating Profit previously allocated to such Partners pursuant to Section 3.4(a),
in the order that such distributions occurred; and (iii) thereafter, any remaining such FC Profit and Operating Profit shall be allocated among the Partners so as to produce Capital Accounts (computed after taking into account
any other FC Profit and Operating Profit or FC Loss and Operating Loss for the Fiscal Year in which such event occurred and all distributions pursuant to Article 4 with respect to such Fiscal Year and after adding back each
Partners share, if any, of Partner Nonrecourse Debt Minimum Gain, as defined in Treasury Regulations sections 1.704 - 2(b)(2) and 1.704 - 2(i), or Partnership Minimum Gain, as defined in Treasury Regulations sections
1.704 - 2(b)(2) and 1.704 - 2(d)) for the Partners such that a distribution of an amount of cash equal to such Capital Account balances in accordance with such Capital Account balances would be in the amounts, sequence and
priority set forth in Article 4. (b) Allocations of Losses. Subject to the limitation of Section 3.4(c), FC Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective FC Shares as of the close
of such Fiscal Year, and Operating Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective Points as of the close of such Fiscal Year; provided that, if an Operating Loss is recognized by
the Partnership for a Fiscal Year that is attributable to a Portfolio Investment that gave rise to an Operating Profit in a prior Fiscal Year that previously was allocated to a Partner, including, for this purpose, a former Partner (a
Prior Profit Allocation), then such Operating Loss shall be allocated, in the reasonable discretion of the General Partner, among the Partners and such former Partners who received the Prior Profit Allocation in a proportion
that takes into account the Points that the former Partners had been assigned at the time such Prior Profit Allocation was made to the Partners, but only up to the amount of such Prior Profit Allocation.
10 (c) To the extent that the allocations of FC Loss or Operating Loss contemplated by Section 3.4(b) would cause the Capital Account of any Limited Partner to be less than zero, such FC Loss or Operating Loss shall to that
extent instead be allocated to and debited against the Capital Account of the General Partner. Following any such adjustment pursuant to Section 3.4(c) with respect to any Limited Partner, any FC Profit or Operating Profit for
any subsequent Fiscal Year which would otherwise be credited to the Capital Account of such Limited Partner pursuant to Section 3.4(a) shall instead be credited to the Capital Account of the General Partner until the
cumulative amounts so credited to the Capital Account of the General Partner with respect to such Limited Partner pursuant to Section 3.4(c) is equal to the cumulative amount debited against the Capital Account of the
General Partner with respect to such Limited Partner pursuant to Section 3.4(c). (d) Each Limited Partners rights and entitlements as a Limited Partner are limited to the rights to receive allocations and distributions of FC
letter or similar agreement or required by the Act, and a Limited Partner shall not be entitled to any other allocations, distributions or payments in respect of its interest, or to have or exercise any other rights, privileges or
among the Partners in order to reflect the allocations of FC Profit, FC Loss, Operating Profit and Operating Loss pursuant to Section 3.4 for such Fiscal Year, taking into account any variation between the adjusted tax basis
and book value of Partnership property in accordance with the principles of section 704(c) of the Code. (b) If any Partner or Partners are treated for United States federal income tax purposes as realizing ordinary income
because of receiving an interest in the Partnership (whether under section 83 of the Code or under any similar provision of any law, rule or regulation) and the Partnership is entitled to any offsetting deduction (net of any
income realized by the Partnership as a result of such receipt), the Partnerships net deduction shall be allocated to and among the Partners in such manner as to offset, as nearly as possible, the ordinary income realized by
such Partner or Partners. Section 3.6 Reserves; Adjustments for Certain Future Events (a) Appropriate reserves may be created, accrued and charged against the Operating Profit or Operating Loss for contingent liabilities, if
any, as of the date any such contingent liability becomes known to the General Partner or as of each other date as the General Partner deems appropriate, such reserves to be in the amounts which the General Partner deems
increase or decrease therein, shall be proportionately charged or credited, as appropriate, to the Capital Accounts of those parties who are Partners at the time
11 when such reserve is created, increased or decreased, as the case may be, in proportion to their respective Points at such time. (b) If any amount is required by Section 3.6(a) to be credited to a Person who is no longer a
Partner, such amount shall be paid to such Person in cash. Any amount required to be charged pursuant to Section 3.6(a) shall be debited against the current balance in the Capital Account of the affected Partners. To the
extent that the aggregate current Capital Account balances of such affected Partners are insufficient to cover the full amount of the required charge, the deficiency shall be debited against the Capital Accounts of the other
Partners in proportion to their respective Capital Account balances at such time; provided that each such other Partner shall be entitled to a preferential allocation, in proportion to and to the extent of such other Partners share
of any such deficiency of any Operating Profit that would otherwise have been allocable after the date of such charge to the Capital Accounts of the affected Partners whose Capital Accounts were insufficient to cover the full
amount of the required charge. Section 3.7 Finality and Binding Effect of General Partners Determinations All matters concerning the determination, valuation and allocation among the Partners with respect to any profit or
loss of the Partnership and any associated items of income, gain, deduction, loss and credit, pursuant to any provision of this Article 3, including any accounting procedures applicable thereto, shall be determined by the
General Partner, and such determinations and allocations shall be final and binding on all the Partners. ARTICLE 4 DISTRIBUTIONS Section 4.1 Distributions (a) Any amount of cash or property received as a distribution
from the Fund by the Partnership in its capacity as a partner, to the extent such amount is determined by reference to the capital commitment of the Partnership in, or the capital contributions of the Partnership to, the Fund,
shall be promptly distributed by the Partnership to the Partners in proportion to their respective FC Shares determined: (i) in the case of any distributions received from the Fund which are comprised of proceeds from the
disposition of a Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (ii) in the case of any other distribution, as of the end of the relevant Fiscal Year in respect of which such distribution is
made by the Fund. (b) The General Partner shall use reasonable efforts to cause the Partnership to distribute, as promptly as practicable after receipt by the Partnership, any available cash or property attributable to items
included in the determination of Operating Profit, subject to (i) the provisions of section 6.2 and section 10.3 of the Fund LP Agreement, and (ii) the retention of such reserves as the General Partner considers appropriate or
necessary for purposes of the
12 prudent and efficient financial operation of the Partnerships business including in accordance with Section 3.6 hereof and for purposes of satisfying the Partnerships anticipated obligations under section 6.2 and section
10.3 of the Fund LP Agreement. Subject to Section 4.1(e), any such distributions shall be made to Partners in proportion to their respective Points, determined: (A) in the case of any amount of cash or property received from
the Fund that is attributable to the disposition of a Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (B) in any other case, as of the date of receipt of such cash or property by the Partnership
from the Fund. (c) Any other distributions or payments in respect of the interests of Partners shall be made at such time, in such manner and to such Partners as the General Partner shall determine. (d) Subject to Section
4.1(e), the General Partner may cause the Partnership to pay distributions to the Partners at any time in addition to those contemplated by Section 4.1(a), (b) or (c), in cash or in kind. Distributions of any such amounts shall be
made to the Partners in proportion to their respective Points, determined immediately prior to giving effect to such distribution. (e) If a portion of the withdrawal proceeds of a former Limited Partner is being paid to such
former Limited Partner in connection with a distribution to Limited Partners under this Section 4.1 of cash or property with respect to which such former Limited Partner received an allocation prior to its withdrawal, such
former Limited Partners share of such cash or property shall be calculated for purposes of this Section 4 as if such former Limited Partner were a Limited Partner with the number of Points such Limited Partner had been
assigned as of the date of such allocation; provided that a former Limited Partner shall not be entitled to receive an amount in excess of its withdrawal proceeds as determined under Section 6.4(c). Section 4.2 Withholding of
Certain Amounts (a) If the Partnership incurs a withholding tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the General Partner, without limitation of any other rights of
the Partnership, may cause the amount of such obligation to be debited against the Capital Account of such Partner when the Partnership pays such obligation, and any amounts then or thereafter distributable to such Partner
shall be reduced by the amount of such taxes. If the amount of such taxes is greater than any such then distributable amounts, then such Partner and any successor to such Partners interest shall indemnify and hold harmless
the Partnership and the General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of such excess. (b) The General Partner may
withhold from any distribution or other payment to any Limited Partner pursuant to this Agreement or otherwise any other amounts due from such Limited Partner to the Partnership or the General Partner pursuant to this
Agreement to the extent not otherwise paid. Any amounts so withheld shall be applied by the General Partner to discharge the obligation in respect of which such amounts were withheld.
13 Section 4.3 Limitation on Distributions Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to any
Partner on account of such Partners interest in the Partnership if such distribution would violate the Act or other applicable law. ARTICLE 5 MANAGEMENT Section 5.1 Rights and Powers of the General Partner (a)
Subject to the terms and conditions of this Agreement, the General Partner shall have complete and exclusive responsibility (i) for all management decisions to be made on behalf of the Partnership, and (ii) for the conduct of
the business and affairs of the Partnership, including all such decisions and all such business and affairs to be made or conducted by the Partnership in its capacity as Fund General Partner. (b) Without limiting the generality
of the foregoing, the General Partner shall have full power and authority to execute, deliver and perform such contracts, agreements and other undertakings, and to engage in all activities and transactions, as it may deem
necessary or advisable for, or as may be incidental to, the conduct of the business contemplated by this Section 5.1, including, without in any manner limiting the generality of the foregoing, contracts, agreements,
undertakings and transactions with any Partner or with any other Person having any business, financial or other relationship with any Partner or Partners. The Partnership, and the General Partner on behalf of the Partnership,
may enter into and perform the Fund LP Agreement and any documents contemplated thereby or related thereto and any amendments thereto, without any further act, vote or approval of any Person, including any Partner,
notwithstanding any other provision of this Agreement. The General Partner is hereby authorized to enter into the documents described in the preceding sentence on behalf of the Partnership, but such authorization shall not be
deemed a restriction on the power of the General Partner to enter into other documents on behalf of the Partnership. Except as otherwise expressly provided herein or as required by law, all powers and authority vested in the
General Partner by or pursuant to this Agreement or the Act shall be construed as being exercisable by the General Partner in its sole and absolute discretion. (c) The General Partner shall be the tax matters partner for
purposes of section 6231(a)(7) of the Code. Each Partner agrees not to treat, on such Partners United States federal income tax return or in any claim for a refund, any item of income, gain, loss, deduction or credit in a
manner inconsistent with the treatment of such item by the Partnership. The General Partner shall have the exclusive authority to make any elections required or permitted to be made by the Partnership under any provisions of
the Code or any other revenue laws.
14 Section 5.2 Delegation of Duties (a) Subject to Section 5.1 and Section 5.2(d), the General Partner may delegate to any Person or Persons any of the duties, powers and authority vested in it hereunder on such terms and
conditions as it may consider appropriate. (b) Without limiting the generality of Section 5.2(a), but subject to the limitations contained in Section 5.2(d), the General Partner shall have the power and authority to appoint any
Person, including any Person who is a Limited Partner, to provide services to and act as an employee or agent of the Partnership, with such titles and duties as may be specified by the General Partner, including the following:
(i) a chief financial officer, to whom the General Partner may delegate its authority to disburse funds for the account of the Partnership and the Fund for any proper purpose, to establish deposit accounts with banks or other
financial institutions, to make permitted investments of Partnership assets, and to take any other permitted actions pertaining to the finances of the Partnership and the Fund; (ii) a chief accounting officer, to whom the General
Partner may delegate its authority to prepare and maintain financial and accounting books, records and statements of the Partnership and the Fund; and (iii) one or more vice presidents, treasurers and controllers, to whom the
General Partner may delegate its authority to execute any of its decisions and to take any other permitted actions on behalf of the Partnership (including in its capacity as Fund General Partner) subject to the supervision of the
chief executive officer, the chief financial officer or the chief accounting officer. Any Person appointed by the General Partner to serve as an officer, employee or agent of the Partnership shall be subject to removal at any time
by the General Partner; and shall report to and consult with the General Partner at such times and in such manner as the General Partner may direct. (c) Any Person who is a Limited Partner and to whom the General Partner
delegates any of its duties pursuant to this Section 5.2 or any other provision of this Agreement shall be subject to the same standard of care, and shall be entitled to the same rights of indemnification and exoneration,
applicable to the General Partner under and pursuant to Section 5.7, unless such Person and the General Partner mutually agree to a different standard of care or right to indemnification and exoneration to which such Person
shall be subject. (d) The General Partner shall be permitted to designate one or more committees of the Partnership which committees may include Limited Partners as members. Any such committees shall have such powers
and authority granted by the General Partner. Any Limited Partner who has agreed to serve on a committee shall not be deemed to have the power to bind or act for or on behalf of the Partnership in any manner and in no
event shall a member of a committee be considered a general partner of the Partnership by agreement, estoppel or otherwise or be deemed to participate in the control of the business of the Partnership as a result of the
performance of his duties hereunder or otherwise.
15 (e) The General Partner shall cause the Partnership to enter into an arrangement with the Management Company which arrangement shall require the Management Company to pay all costs and expenses of the Partnership.
purchase property from, sell property to, lend money to or otherwise deal with any Affiliates, any Partner, the Partnership, the Fund or any Affiliate of any of the foregoing Persons, and (b) obtain services from any Affiliates,
any Partner, the Partnership, the Fund or any Affiliate of the foregoing Persons. Section 5.4 Expenses (a) Subject to the arrangement contemplated by Section 5.2(e), the Partnership will pay, or will reimburse the General
Partner for, all costs and expenses arising in connection with the organization and operations of the Partnership. (b) Any withholding taxes payable by the Partnership, to the extent determined by the General Partner to have
been paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the Partners, shall be allocated among and debited against the Capital Accounts of only those
not prohibit a Partner from purchasing or selling as a passive investor any interest in any asset.
this Section 5.7. In any such suit brought to enforce a right to indemnification or to recover an advancement of expenses pursuant to the
17 terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to an advancement of expenses, shall be on the Partnership (or any Limited Partner acting derivatively or
otherwise on behalf of the Partnership or the Limited Partners). The General Partner may not satisfy any right of indemnity or reimbursement granted in this Section 5.7 or to which it may be otherwise entitled except out of
the assets of the Partnership (including, without limitation, insurance proceeds and rights pursuant to indemnification agreements), and no Partner shall be personally liable with respect to any such claim for indemnity or
reimbursement. The General Partner may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5 and obtain appropriate insurance coverage on behalf and at the
expense of the Partnership to secure the Partnerships indemnification obligations hereunder and may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5. Each
Covered Person shall be deemed a third party beneficiary (to the extent not a direct party hereto) to this Agreement and, in particular, the provisions of this Article 5, and shall be entitled to the benefit of the indemnity granted
to the Partnership by the Fund pursuant to the terms of the Fund LP Agreement. (c) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Partners, the Covered Person shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they
restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity to the Partnership or the Partners, are agreed by the parties hereto to replace such other duties and liabilities of such
Covered Person. Notwithstanding anything to the contrary contained in this Agreement or otherwise applicable provision of law or equity, to the maximum extent permitted by the Act, a Covered Person shall owe no duties
(including fiduciary duties) to the Partnership or the Partners other than those specifically set forth herein; provided that a Covered Person shall have the duty to act in accordance with the implied contractual covenant of good
faith and fair dealing. (d) Each of the Covered Persons may consult with legal counsel, accountants and other experts selected by it and any act or omission suffered or taken by it on behalf of the Partnership or in furtherance
of the interests of the Partnership or the Fund in good faith in reliance upon and in accordance with the advice of such counsel, accountants or other experts shall create a rebuttable presumption of the good faith and due care
of such Covered Person with respect to such act or omission. ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS Section 6.1 Admission of Additional Limited Partners; Effect on Points The General Partner
may at any time admit as an additional Limited Partner any Person who has agreed to be bound by this Agreement, assign Points and issue FC Shares to such Person and/or increase the Points of any existing Limited Partner.
Each additional Limited Partner shall execute either a counterpart to this Agreement or a separate instrument evidencing,
18 to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner and shall be admitted as a Limited Partner upon such execution. In connection with such admission or increase in Points
of any Partner (but not with respect to an assignment of Excess Points), the Points of APH shall be reduced in an amount determined by the General Partner. Section 6.2 Admission of Additional General Partner and Transfer
(a) The General Partner may admit one or more additional general partners at any time without the consent of any Limited Partner. Any additional general partner shall be admitted as a general partner upon its execution of a
counterpart signature page to this Agreement. (b) The General Partner may Transfer its general partner interest in the Partnership to any other Person, without the consent of any Limited Partner. Section 6.3 Transfer of
Interests of Limited Partners (a) No Transfer of any Limited Partners interest in the Partnership, whether voluntary or involuntary, shall be valid or effective, and no transferee shall become a substituted Limited Partner,
unless the prior written consent of the General Partner has been obtained, which consent may be given or withheld by the General Partner in its discretion. In the event of any Transfer, all of the conditions of the remainder of
this Section 6.3 must also be satisfied. (b) A Limited Partner requesting approval of a Transfer, or such Partners legal representative, shall give the General Partner reasonable notice before the proposed effective date of any
requested Transfer, and shall provide sufficient information to allow legal counsel acting for the Partnership to make the determination that the proposed Transfer will not: (i) require registration of the Partnership or any
interest therein under any securities or commodities laws of any jurisdiction; (ii) result in a termination of the Partnership under section 708(b)(1)(B) of the Code or jeopardize the status of the Partnership as a partnership for
United States federal income tax purposes; or (iii) violate, or cause the Partnership, the Fund, the General Partner or any Limited Partner to violate, any applicable law, rule or regulation of any jurisdiction. Such notice must
be supported by proof of legal authority and a valid instrument of assignment acceptable to the General Partner. (c) A permitted transferee shall be entitled to the allocations and distributions attributable to the interest in the
Partnership transferred to such transferee and to Transfer such interest in accordance with the terms of this Agreement; provided that such transferee shall not be entitled to the other rights of a Limited Partner as a result of
such transfer until it becomes a substituted Limited Partner. No transferee may become a substituted Limited Partner except with the prior written consent of the General Partner (which consent may be given or withheld by
the General Partner in its discretion). Such transferee shall be admitted to the Partnership as a
19 substituted Limited Partner upon execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner.
Notwithstanding the above, the Partnership and the General Partner shall incur no liability for allocations and distributions made in good faith to the transferring Limited Partner until a written instrument of Transfer has been
received and accepted by the General Partner and recorded on the books of the Partnership and the effective date of the Transfer has passed. (d) Any other provision of this Agreement to the contrary notwithstanding, to the
fullest extent permitted by law, any successor or transferee of any Limited Partners interest in the Partnership shall be bound by the provisions hereof. Prior to recognizing any Transfer in accordance with this Section 6.3, the
General Partner may require the transferee to make certain representations and warranties to the Partnership and the Partners and to accept, adopt and approve in writing all of the terms and provisions of this Agreement. (e) In
the event of a Transfer or in the event of a distribution of assets of the Partnership to any Partner, the Partnership, at the direction of the General Partner, may, but shall not be required to, file an election under section 754 of
the Code and in accordance with the applicable Treasury Regulations, to cause the basis of the Partnerships assets to be adjusted as provided by section 734 or section 743 of the Code. (f) The Partnership shall maintain books
for the purpose of registering the transfer of interests in the Partnership. No transfer of an interest in the Partnership shall be effective until the transfer of such interest is registered upon books maintained for that purpose by or
on behalf of the Partnership. Section 6.4 Withdrawal of Partners (a) A Partner with an FC Share may not withdraw from the Partnership prior to the Partnerships dissolution unless the prior written consent of the General
Partner has been obtained, which consent may be given or withheld by the General Partner. (b) A Limited Partner without an FC Share shall cease to be a Partner and be deemed to have withdrawn its interest in the
Partnership either: (i) automatically upon any date (and with immediate effect from such date) on which such Limited Partner (or, in the case of a Limited Partner that was admitted to the Partnership by virtue of its
relationship with an employee of Apollo Global Management, LLC or one of its Affiliates, such employee) ceases to be employed (for any reason, including, but not limited to, death, disability, resignation or a termination for
cause or other than for cause) by Apollo Global Management, LLC or one of its Affiliates (unless otherwise determined by the General Partner); or (ii) upon a date specified in a notice delivered by such Limited Partner to the
General Partner stating that such Limited Partner elects to withdraw from the Partnership. (c) Payment of a withdrawing Limited Partners withdrawal proceeds (being an amount equal to the balance of such Limited Partners
capital account as of the effective date of
20 withdrawal as adjusted for any Operating Loss allocable to such withdrawn Limited Partner pursuant to Section 3.4(b)) will generally be made at the same time as such amounts would have been distributed to such Limited
Partner under Section 4.1 had such Limited Partner not withdrawn from the Partnership; provided that the General Partner may (i) delay such payment if such delay is reasonably necessary to prevent such withdrawal from
having a material adverse impact on the Partnership, the Fund, or the remaining Partners, and (ii) hold back from any payments such reserves as the General Partner determines to be necessary or appropriate, including,
without limitation, as provided in Section 4.1(b) and Section 6.4(d). Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal
and will not earn interest for the period from the applicable withdrawal date through the settlement date. The General Partner may deduct from any withdrawal proceeds due to any Partner an amount representing the actual or
estimated expenses of the Partnership associated with processing the withdrawal and any other amounts owed by the withdrawing Partner to the General Partner or its Affiliates whether under this Agreement or otherwise. (d)
The right of any Partner to withdraw or receive distributions pursuant to this Section 6.4 is subject to the provision by the General Partner for all liabilities of the Partnership and for reserves for contingencies as provided in
Section 3.6 (including, in either case, for the Partnerships anticipated obligations under section 6.2 and section 10.3 of the Fund LP Agreement). (e) A former Partner shall remain liable to make capital contributions to the
Partnership pursuant to Section 3.1(d) and Section 4.2(a), notwithstanding that such Person may have withdrawn from the Partnership and ceased to be a Partner. Section 6.5 Pledges (a) A Limited Partner shall not pledge or
grant a security interest in such Limited Partners interest in the Partnership unless the prior written consent of the General Partner has been obtained (which consent may be given or withheld by the General Partner). (b) Each
limited partner interest in the Partnership shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in effect from time to
time in the State of Delaware (the DEUCC), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as
adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. Notwithstanding any provision of this
Agreement to the contrary, to the extent that any provision of this Agreement is inconsistent with any non- waivable provision of Article 8 of the DEUCC, such provision of Article 8 of the DEUCC shall be controlling. (c)
Any limited partner interest in the Partnership may be evidenced by a certificate of limited partnership interest issued by the Partnership in such form as the General Partner may approve. Every certificate representing a
limited partner interest in the Partnership shall bear a legend substantially in the following form:
21 The limited partner interest represented by this certificate shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in
effect from time to time in the State of Delaware, and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as
adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. The transfer of this certificate and the
limited partner interest represented hereby is restricted as described in the amended and restated limited partnership agreement of the Partnership, dated as of July 14, 2009, as the same may be amended or restated from time
to time. (d) The Partnership shall maintain books for the purpose of registering the Transfer of limited partner interests in the Partnership. In connection with a Transfer in accordance with this Agreement of any limited
partner interests in the Partnership, the endorsed certificate(s) evidencing such interest shall be delivered to the Partnership for cancellation, and the Partnership shall thereupon issue a new certificate to the transferee
evidencing the interest that was transferred and, if applicable, the Partnership shall issue a new certificate to the transferor evidencing any interest registered in the name of the transferor that was not transferred. ARTICLE 7
POINTS Section 7.1 Allocation of Points (a) A Point means a 1/x share of Operating Profit or Operating Loss, where x equals the aggregate number of Points assigned or available for assignment at the relevant time. The
aggregate number of Points assigned or available for assignment to all Partners shall initially be 2,000. (b) Except as otherwise provided herein, the General Partner shall be responsible for the allocation of Points from time to
time to the Limited Partners. At each such time of
22 allocation, all Points available for allocation shall be so allocated to the Limited Partners (including APH) by the General Partner. Points allocated to Limited Partners (other than APH) may not be reduced except as set
forth in Section 6.1 and Section 7.2. Upon any allocation of Points (other than Excess Points) by the General Partner to an existing or new Limited Partner other than APH, there shall be a corresponding reduction in the Points
of APH, as provided in Section 6.1. (c) The General Partner shall maintain on the books and records of the Partnership a record of the number of Points allocated to each Limited Partner and shall give notice to each Limited
withdrawal, unless otherwise determined by the General Partner. (b) Any Points that are forfeited pursuant to Section 7.2(a) shall, automatically and without any action on the part of any Person, be reallocated to APH, unless
otherwise determined by the General Partner; and no Limited Partner other than APH shall have any right or claim with respect to such forfeited Points. ARTICLE 8 DISSOLUTION AND LIQUIDATION Section 8.1
General Partner is unable to perform this function, a liquidator may be elected by a majority in interest (determined by Points) of Limited Partners and upon such election such liquidator shall liquidate the Partnership. FC
Profit and FC Loss, Operating Profit and Operating Loss during the Fiscal Years that include the period of liquidation shall be allocated pursuant to Section 3.4. The proceeds from liquidation shall be distributed in the
following manner: (i) first, the debts, liabilities and obligations of the Partnership including the expenses of liquidation (including legal and accounting expenses incurred in connection therewith), up to and including the date
that distribution of the Partnerships assets to the Partners has been completed, shall be satisfied (whether by payment or by making reasonable provision for payment thereof); and (ii) thereafter, the Partners shall be paid
amounts pro rata in accordance with and up to the positive balances of their respective Capital Accounts, as adjusted pursuant to Article 3.
23 (b) Anything in this Section 8.1 to the contrary notwithstanding, the General Partner or liquidator may distribute ratably in kind rather than in cash, upon dissolution, any assets of the Partnership in accordance with the
priorities set forth in Section 8.1(a); provided that if any in kind distribution is to be made, the assets distributed in kind shall be valued as of the actual date of their distribution and charged as so valued and distributed against
amounts to be paid under Section 8.1(a). ARTICLE 9 GENERAL PROVISIONS Section 9.1 Amendment of this Agreement (a) The General Partner may amend this Agreement at any time, in whole or in part, without the
consent of any other Partner; provided that any amendment which would increase the obligation of any Partner to make any contribution to the capital of the Partnership or adversely affect such Partners right to withdraw
voluntarily from the Partnership shall not be made unless such Partner has, at the General Partners election, (i) consented thereto, or (ii) been provided with an opportunity to withdraw from the Partnership as of a date
determined by the General Partner that is prior to the effective date of the amendment. Without limiting the foregoing, the General Partner may amend this Agreement at any time, in whole or in part, without the consent of
any other Partner, to enable the Partnership to comply with the requirements of the Safe Harbor Election within the meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury
Regulation section 1.83- 3(e)(1) or Proposed Treasury Regulation section 1.704- 1(b)(4)(xii) at such time as such proposed Procedure and Regulations are effective and to make any such other related changes as may be
required by pronouncements or Treasury Regulations issued by the Internal Revenue Service or Treasury Department after the date of this Agreement. An adjustment of Points shall not be considered an amendment to the
extent effected in compliance with the provisions of Section 6.1 or Article 7 as in effect on the date hereof or as hereafter amended in compliance with the requirements of this Section 9.1(a). (b) Notwithstanding the
provisions of this Agreement, including Section 9.1(a), it is hereby acknowledged and agreed that the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner or any other
Person may enter into one or more side letters or similar agreements with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of this Agreement. The parties
hereto agree that any terms contained in a side letter or similar agreement with one or more Partners shall govern with respect to such Partner or Partners notwithstanding the provisions of this Agreement. Any such side letters
or similar agreements shall be binding upon the Partnership or the General Partner, as applicable, and the signatories thereto as if the terms were contained in this Agreement. Section 9.2 Special Power- of- Attorney (a) Each
Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- in- fact,
24 and in the name, place and stead of such Partner, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any amendment to this Agreement which
complies with the provisions of this Agreement (including the provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel to the Partnership, may from time to
time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to
effectuate, implement and continue the valid and subsisting existence and business of the Partnership as a limited partnership; (iii) all such instruments, certificates, agreements and other documents relating to the conduct of
the investment program of the Fund which, in the opinion of such attorney- in- fact and the legal counsel to the Fund, are reasonably necessary to accomplish the legal, regulatory and fiscal objectives of the Fund in
connection with its or their acquisition, ownership and disposition of investments, including, without limitation: (A) the governing documents of any management entity formed as a part of the tax planning for the Fund and
any amendments thereto; and (B) documents relating to any restructuring transaction with respect to any of the Funds investments; (iv) any written notice or letter of resignation from any board seat or office of any Person
(other than a company that has a class of equity securities registered under the Securities Exchange Act of 1934, as amended, or that is registered under the Investment Company Act of 1940, as amended), which board seat or
office was occupied or held at the request of the Partnership or any of its Affiliates; and (v) all such proxies, consents, assignments and other documents as the General Partner determines to be necessary or advisable in
connection with any merger or other reorganization, restructuring or other similar transaction entered into in accordance with this Agreement (including the provisions of Section 9.5(c)). (b) Each Limited Partner is aware that
the terms of this Agreement permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without such Partners consent. If an amendment of
the Certificate or this Agreement or any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any
objection which such Limited Partner may assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may
be necessary or appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a
view to the orderly administration of the affairs of the Partnership. This power- of- attorney is a
25 special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue in full force and effect notwithstanding the subsequent death or incapacity of any
party granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and (ii) shall survive any Transfer by a Limited Partner of the whole or any portion of its
interest in the Partnership, except that, where the transferee thereof has been approved by the General Partner for admission to the Partnership as a substituted Limited Partner, this power of attorney given by the transferor
shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect such substitution. Section 9.3 Notices Any notice required or permitted to be
given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the attention of John J. Suydam. A notice to a Limited Partner shall be directed to such Limited Partners last known
residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home Address). A notice shall be considered given when delivered to the addressee either by hand at such Partners
Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership business communications, except that a notice to a former Partner shall be considered given when delivered by
hand by a recognized overnight courier together with mailing through the United States Postal System by regular mail to such former Partners Home Address. Section 9.4 Agreement Binding Upon Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors by operation of law, but the rights and obligations of the Limited Partners hereunder shall not be assignable,
transferable or delegable except as expressly provided herein, and any attempted assignment, transfer or delegation thereof that is not made in accordance with such express provisions shall be void and unenforceable. Section
9.5 Merger, Consolidation, etc. (a) Subject to Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited partnerships formed under the Act or other business entities (as defined in
section 17- 211 of the Act) pursuant to an agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to Section 9.1(a) but notwithstanding any other provision to the contrary contained
elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section 9.5(a) may, to the extent permitted by section 17- 211(g) of the Act and Section 9.5(a), (i) effect any amendment to
this Agreement, (ii) effect the adoption of a new limited partnership agreement for the Partnership if it is the surviving or resulting limited partnership in the merger or consolidation, or (iii) provide that the limited partnership
agreement
26 of any other constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of consummating the merger or consolidation) shall be the limited partnership agreement of
the surviving or resulting limited partnership. (c) The General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any
such transaction, and each Limited Partner shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement, and the rights of each and all of the
Partners hereunder, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws rules thereof. The parties hereby consent to the non- exclusive jurisdiction and
venue for any action arising out of or relating to this Agreement in the State Courts of the State of Delaware, New Castle County, the State Courts of the State of New York, New York County, the United States District Court
for the District of Delaware located in New Castle County or the United States District Court for the Southern District of New York located in New York County. In addition to any other means available at law for service of
process, each Limited Partner hereby agrees, to the fullest extent permitted by law, that service of process will be duly effectuated when delivered to a Limited Partners Home Address by hand or by a recognized overnight
carrier together with mailing through the United States Postal System by regular mail. Section 9.7 Termination of Right of Action Every right of action arising out of or in connection with this Agreement by or on behalf of
any past, present or future Partner or the Partnership against any past, present or future Partner shall, to the fullest extent permitted by applicable law, irrespective of the place where the action may be brought and irrespective
of the residence of any such Partner, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. Section 9.8 Confidentiality (a) Each Limited Partner
acknowledges and agrees that the information contained in the books and records of the Partnership concerning the Points assigned with respect to any other Limited Partner is confidential, and, to the fullest extent permitted
by applicable law, each Limited Partner waives, and covenants not to assert, any claim or entitlement whatsoever to gain access to any such information. The Limited Partners agree that the restrictions set forth in this Section
9.8(a) shall constitute reasonable standards under the Act regarding access to information. (b) Each Limited Partner acknowledges and agrees not to, at any time, either during the term of such Limited Partners participation in
the Partnership or thereafter, disclose, use, publish or in any manner reveal, directly or indirectly, to any Person (other than on a confidential basis to such Limited Partners legal and tax advisors who have a need to know
such information) the contents of this Agreement or any Confidential Information, except (i) with the prior written consent of the General Partner, (ii) to the extent that any such information is in the
27 public domain other than as a result of the Limited Partners breach of any of his obligations, or (iii) where required to be disclosed by court order, subpoena or other government process; provided that, to the fullest extent
permitted by law, the Limited Partner shall promptly notify the General Partner upon becoming aware of any such disclosure requirement and shall cooperate with any effort by the General Partner to prevent or limit such
disclosure. (c) Notwithstanding any of the provisions of this Section 9.8, each Limited Partner may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of an investment in the
Partnership and all materials of any kind (including tax opinions or other tax analyses) that are provided to the Limited Partner relating to such tax treatment. For this purpose, tax treatment is the purported or claimed
United States federal income tax treatment of a transaction and tax structure is limited to any fact that may be relevant to understanding the purported or claimed United States federal income tax treatment of a transaction.
For this purpose, the names of the Partnership, the Partners, their affiliates, the names of their partners, members or equity holders and the representatives, agents and tax advisors of any of the foregoing are not items of tax
structure. Section 9.9 Not for Benefit of Creditors The provisions of this Agreement are intended only for the regulation of relations among Partners and between Partners and former or prospective Partners and the
Partnership. Subject to the rights of Covered Persons provided by Section 5.7, this Agreement is not intended for the benefit of any Person who is not a Partner, and no rights are intended to be granted to any other Person who
is not a Partner under this Agreement. Section 9.10 Consents Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept
with the books of the Partnership. Section 9.11 Reports As soon as practicable after the end of each taxable year, the General Partner shall furnish to each Limited Partner (a) such information as may be required to enable
each Limited Partner to properly report for United States federal and state income tax purposes such Partners distributive share of each Partnership item of income, gain, loss, deduction or credit for such year, and (b) a
statement of the total amount of Operating Profit or Operating Loss for such year and a reconciliation of any difference between (i) such Operating Profit or Operating Loss and (ii) the aggregate net profits or net losses
allocated by the Fund to the Partnership for such year (other than any difference attributable to the aggregate FC Profit or FC Loss allocated by the Fund to the Partnership for such year). Section 9.12 Filings The Partners
hereby agree to take any measures necessary (or, if applicable, refrain from any action) to ensure that the Partnership is treated as a partnership for United States federal, state and local income tax purposes.
28 Section 9.13 MiscellaneousThe captions and titles preceding the text of each Section hereof shall be disregarded in the construction of this Agreement. (b) As used herein, masculine pronouns shall include the feminine and
neuter, and the singular shall be deemed to include the plural. (c) This Agreement may be executed in counterparts, each of which shall be deemed to be an original hereof. [Signature Page Follows]
Apollo Credit Opportunity Advisors II, L.P. Third Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January 12, 2011 and
made effective as of July 14, 2009. General Partner: APOLLO COF II CAPITAL MANAGEMENT, LLC By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President Limited Partners: APOLLO PRINCIPAL
HOLDINGS IX, L.P. By: Apollo Principal Holdings IX GP, Ltd., its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President APOLLO CREDIT OPPORTUNITY CM EXECUTIVE CARRY II,
L.P. By: Apollo COF II Capital Management, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL & PROPRIETARY EXECUTION VERSION This company is the general partner of Apollo Credit Liquidity Fund, L.P. and earns the carried interest on CLF profits. Apollo Credit Liquidity Advisors,
L.P. Third Amended and Restated Limited Partnership Agreement Dated January 12, 2011 and made effective as of July 14, 2009 THE TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN THIS
AGREEMENT IS RESTRICTED AS DESCRIBED HEREIN.
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APOLLO CREDIT LIQUIDITY ADVISORS, L.P. A Delaware Limited Partnership THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT THIRD AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT of APOLLO CREDIT LIQUIDITY ADVISORS, L.P. (the Partnership) by and among Apollo Credit Liquidity Capital Management, LLC, a Delaware limited liability company, as the sole
general partner (the General Partner), and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners is dated January 12, 2011 and made
effective as of July 14, 2009 (the Agreement). W I T N E S S E T H : WHEREAS, on September 18, 2007, Apollo Credit Liquidity Capital Management, LLC filed with the Secretary of State of the State of Delaware a
Certificate of Limited Partnership to form Apollo Credit Liquidity Advisors, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant to an agreement among Apollo Credit
Liquidity Capital Management, LLC, as sole general partner, and Apollo Principal Holdings II, L.P. as initial limited partner (the Original Agreement); WHEREAS, on June 4, 2008, Apollo Credit Liquidity Capital
Management, LLC filed with the Secretary of State of the State of Delaware a Certificate of Amendment to Certificate of Limited Partnership to reflect the change in the business address of Apollo Credit Liquidity Capital
Management, LLC; WHEREAS, the parties amended and restated the Original Agreement in its entirety as of July 14, 2009 (the Amended Agreement); WHEREAS, the parties amended and restated the Amended
Agreement in its entirety as of July 14, 2009 (the Second Amended Agreement); and WHEREAS, the parties wish to amend and restate the Second Amended Agreement in its entirety to make certain modifications thereto.
NOW, THEREFORE, the parties hereby agree as follows: ARTICLE 1 DEFINITIONS Act means the Delaware Revised Uniform Limited Partnership Act, as in effect on the date hereof and as amended from time to time,
or any successor law.
2 Affiliate means with respect to any Person any other Person directly or indirectly controlling, controlled by or under common control with such Person. Agreement means this Third Amended and Restated Limited
Partnership Agreement, as amended or supplemented from time to time. APH means Apollo Principal Holdings II, L.P. (or its assignees or transferees). Capital Account means with respect to each Partner the capital
account established and maintained on behalf of such Partner as described in Section 3.3. Carried Interest Distributions has the meaning ascribed to that term in the Fund LP Agreement. Certificate means the Certificate of
Limited Partnership of the Partnership as amended on June 4, 2008 and any further amendments thereto as filed with the office of the Secretary of State of the State of Delaware. Clawback Amount means any amount of
Carried Interest Distributions received by the Partnership and required, under the Fund LP Agreement, to be returned to the Fund, including either or both of (i) a Clawback Amount, as defined in the Fund LP Agreement and,
(ii) any amount of Carried Interest Distributions required to be returned to the Fund pursuant to section 6.3 of the Fund LP Agreement. Clawback Share has the meaning ascribed to that term in Section 3.1(e). CLF Limited
Partner means a Limited Partner employed by Apollo Global Management, LLC or one of its Affiliates whom the General Partner has determined to be a member of the day- to- day investment management team for the
Fund and designated as such in the documentation admitting such Limited Partner to the Partnership. CM Executive Carry means Apollo Credit Liquidity CM Executive Carry, L.P. Code means the United States Internal
Revenue Code of 1986, as amended and as hereafter amended, or any successor law. Confidential Information means information that has not been made publicly available by or with the permission of the General Partner
and that is obtained or learned by a Limited Partner as a result of or in connection with such Partners association with the Partnership or any of its Affiliates concerning the business, affairs or activities of the Partnership, any
of its Affiliates or any of the Portfolio Investments, including, without limitation, models, codes, client information (including client identity and contacts, client lists, client financial or personal information), financial data,
know- how, computer software and related documentation, trade secrets, and other forms of sensitive or valuable non- public information obtained or learned by the Limited Partner as a result of such Limited Partners
participation in the Partnership. For the avoidance of doubt, Confidential Information does not include information concerning non- proprietary business or investment practices, methods or relationships customarily employed
or entered into by comparable business enterprises.
3 Covered Person has the meaning ascribed to that term in Section 5.7. DEUCC has the meaning ascribed to that term in Section 6.5(b). Excess Points has the meaning ascribed to that term in Section 7.1(a). FC Loss
means, with respect to any Fiscal Year, the portion of any Losses and any Portfolio Investment Loss allocable to the Partnership, but only to the extent such allocation is made by the Fund to the Partnership in proportion to
the Partnerships capital contribution to the Fund, as determined pursuant to the Fund LP Agreement. FC Profit means, with respect to any Fiscal Year, the portion of any Profit and any Portfolio Investment Gain allocable
to the Partnership, but only to the extent such allocation is made by the Fund to the Partnership in proportion to the Partnerships capital contribution to the Fund, as determined pursuant to the Fund LP Agreement. FC
Share means a share of the FC Profit or FC Loss with respect to the Fund. The aggregate number of FC Shares shall be equal to the dollar amount of the Partnerships capital commitment to the Fund. Final Adjudication
has the meaning ascribed to that term in Section 5.7. Fiscal Year means, with respect to a year, the period commencing on January 1 of such year and ending on December 31 of such year (or on the date of a final
distribution pursuant to Section 8.1(a)), unless the General Partner shall elect another fiscal year for the Partnership which is a permissible taxable year under the Code. Fund means Apollo Credit Liquidity Fund, L.P. Fund
General Partner means the Partnership in its capacity as a general partner of the Fund pursuant to the Fund LP Agreement. Fund LP Agreement means the second amended and restated agreement of limited partnership of
the Fund, as amended from time to time. General Partner means Apollo Credit Liquidity Capital Management, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any
successor to the business of the General Partner in its capacity as general partner of the Partnership. Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement,
until such Person withdraws entirely as a limited partner of the Partnership, in its capacity as a limited partner of the Partnership. Losses has the meaning ascribed to that term in the Fund LP Agreement. Management
Company has the meaning ascribed to that term in the Fund LP Agreement.
4 Operating Loss means, with respect to any Fiscal Year, any net loss of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or other capital transaction
proceeds derived by the Partnership. To the extent derived from the Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures
applicable to the determination by the Fund, and any items not derived from the Fund shall be determined in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal
income tax purposes. Operating Profit means, with respect to any Fiscal Year, any net income of the Partnership, adjusted to exclude (i) any FC Profit or FC Loss and (ii) the effect of any reorganization, restructuring or
other capital transaction proceeds derived by the Partnership. To the extent derived from the Fund, any items of income, gain, loss, deduction and credit shall be determined in accordance with the same accounting policies,
principles and procedures applicable to the determination by the Fund, and any items not derived from the Fund shall be determined in accordance with the accounting policies, principles and procedures used by the
Partnership for United States federal income tax purposes. Partner means the General Partner and any of the Limited Partners and Partners means the General Partner and all of the Limited Partners. Partnership means
the limited partnership continued pursuant to this Agreement. PE Limited Partner means a Limited Partner employed by Apollo Global Management, LLC or one of its Affiliates whom the General Partner has determined to
be a private equity professional and designated as such in the documentation admitting such Limited Partner to the Partnership. Person means any individual, partnership, corporation, limited liability company, joint venture,
joint stock company, unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or other entity.
Point has the meaning ascribed to that term in Section 7.1(a). Portfolio Investment has the meaning ascribed to that term in the Fund LP Agreement. Portfolio Investment Gain has the meaning ascribed to that term in
the Fund LP Agreement. Portfolio Investment Loss has the meaning ascribed to that term in the Fund LP Agreement. Profit has the meaning ascribed to that term in the Fund LP Agreement. Schedule of Partners means
a schedule to be maintained by the General Partner showing the following information with respect to each Partner: name, address, date of admission and withdrawal, required capital contribution (if any), and FC Share (if
any).
5 Transfer means any direct or indirect sale, exchange, transfer, assignment or other disposition by a Partner of any or all of such Partners interest in the Partnership (whether respecting, for example, economic rights only
or all the rights associated with the interest) to another Person, whether voluntary or involuntary. Treasury Regulations means the regulations promulgated under the Code. ARTICLE 2 FORMATION AND
ORGANIZATION Section 2.1 Formation The Partnership was formed and is hereby continued as a limited partnership under and pursuant to the Act. The Certificate was filed on September 18, 2007 and amended on June 4,
2008. The General Partner shall execute, acknowledge and file any amendments to the Certificate as may be required by the Act and any other instruments, documents and certificates which, in the opinion of the Partnerships
legal counsel, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Partnership shall determine to do business, or any political subdivision
or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership. Section 2.2 Name The name of the
Partnership shall be Apollo Credit Liquidity Advisors, L.P. or such other name as the General Partner may hereafter adopt upon causing an appropriate amendment to be made to this Agreement and to the Certificate to be
filed in accordance with the Act. Promptly thereafter, the General Partner shall send notice thereof to each Limited Partner. Section 2.3 Offices (a) The Partnership shall maintain its principal office, and may maintain one or
more additional offices, at such place or places as the General Partner may from time to time determine. (b) The General Partner shall arrange for the Partnership to have and maintain in the State of Delaware, at the expense
of the Partnership, a registered office and registered agent for service of process on the Partnership as required by the Act. Section 2.4 Term of the Partnership (a) The term of the Partnership shall continue until the first to
occur of the following: (i) any date on which the General Partner shall elect to dissolve the Partnership; or
6 (ii) the entry of a decree of judicial dissolution under section 17- 802 of the Act. (b) The parties agree that irreparable damage would be done to the goodwill and reputation of the Partners if any Limited Partner should bring
of the Partnership upon their execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Partner. ARTICLE 3
CAPITAL Section 3.1 Contributions to Capital (a) Any required contribution of a Limited Partner to the capital of the Partnership shall be as set forth in the Schedule of Partners. Contributions to the capital of the Partnership
shall be made as of the date of admission of such Limited Partner as a limited partner of the Partnership and as of each such other date as may be specified by the General Partner. Except as otherwise permitted by the General
Partner, all contributions to the capital of the Partnership by each Limited Partner shall be payable exclusively in cash.
7 (b) The General Partner shall make capital contributions from time to time to the extent necessary to ensure that the Partnership meets its obligations to make contributions of capital to the Fund. (c) No Partner shall be
obligated, nor shall any Partner have any right, to make any contribution to the capital of the Partnership other than as specified in this Section 3.1 or Section 4.2(a). No Limited Partner shall be obligated to restore any deficit
balance in its Capital Account. (d) To the extent, if any, that it is determined that the Partnership, as the Fund General Partner, is required to pay a Clawback Amount to the Fund, each Partner, and each former Partner, shall be
required to participate in such payment and contribute to the Partnership an amount equal to such Partners (or former Partners) Clawback Share of any Clawback Amount, but not in any event in excess of the cumulative
amount theretofore distributed to such Partner, or former Partner, with respect to the Operating Profit attributable to the Fund. To the extent, if any, that it is determined that the Partnership is required pursuant to section 6.3 of
the Fund LP Agreement, or otherwise, to pay to the Fund any amount representing distributions of the Fund other than Carried Interest Distributions, each Partner having an FC Share shall be required to participate in such
payment and contribute to the Partnership an amount equal to such Partners pro rata share of any such amount, but not in any event in excess of the cumulative amount theretofore distributed to such Partner with respect to
the Profit attributable to the Fund. (e) A Partners (or former Partners) Clawback Share of any Clawback Amount shall be calculated as follows: (i) to the extent that such Clawback Amount does not exceed the most recent
cash distribution by the Partnership representing Operating Profit attributable to the Fund (each such distribution, a Carry Distribution and the most recent Carry Distribution, the Latest Carry Distribution) as of the time
of calculating such Clawback Amount, a portion of such Clawback Amount equal to (A) the amount of the Latest Carry Distribution distributed to such Partner (or former Partner), divided by (B) the total amount of the Latest
Carry Distribution; and (ii) to the extent that the Clawback Amount exceeds the Latest Carry Distribution, the excess shall be applied successively to each immediately preceding Carry Distribution until the entire Clawback
Amount has been satisfied and borne with respect to each such Carry Distribution by those Partners (and former Partners) to whom such Carry Distribution was made in the same manner as provided in Section 3.1(e)(i).
Section 3.2 Rights of Partners in Capital (a) No Partner shall be entitled to interest on its capital contributions to the Partnership. (b) No Partner shall have the right to distributions or the return of any contribution to the capital
of the Partnership except (i) for distributions in accordance with Section 4.1 or Section 6.4, or (ii) upon dissolution of the Partnership. The entitlement to any such return at such time shall be limited to the value of the Capital
Account of the Partner. The General Partner shall not be liable for the return of any such amounts.
8 Section 3.3 Capital Accounts (a) The Partnership shall maintain for each Partner a separate Capital Account. (b) Each Partners Capital Account shall have an initial balance equal to the amount of any cash and the net value
of any securities or other property constituting such Partners initial contribution to the capital of the Partnership. (c) Each Partners Capital Account shall be increased by the sum of: (i) the amount of cash and the net value of
any securities or other property constituting additional contributions by such Partner to the capital of the Partnership permitted pursuant to Section 3.1, plus (ii) the portion of any FC Profit allocated to such Partners Capital
Account pursuant to Section 3.4, plus (iii) the portion of any Operating Profit allocated to such Partners Capital Account pursuant to Section 3.4, plus (iv) such Partners allocable share of any decreases in any reserves
recorded by the Partnership pursuant to Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this Agreement, such item is to be credited to such Partners Capital Account on a basis which
is not in accordance with the current respective Points of all Partners. (d) Each Partners Capital Account shall be reduced by the sum of (without duplication): (i) the portion of any FC Loss allocated to such Partners Capital
Account pursuant to Section 3.4, plus (ii) the portion of any Operating Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus (iii) the amount of any cash and the net value of any property distributed to
such Partner pursuant to Section 4.1, Section 6.4 or Section 8.1 including any amount deducted pursuant to Section 4.2 or Section 5.4 from any such amount distributed, plus (iv) any withholding taxes or other items payable
by the Partnership and allocated to such Partner pursuant to Section 5.4(b), any increases in any reserves recorded by the Partnership pursuant to Section 3.6, to the extent the General Partner determines that, pursuant to any
provision of this Agreement, such item is to be charged to such Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners. Section 3.4 Allocation of Profit and Loss (a)
Allocations of Profit. FC Profit and Operating Profit for any Fiscal Year shall be allocated to the Partners:
9 (i) first, to Partners to which FC Loss and Operating Loss previously have been allocated pursuant to Section 3.4(b), to the extent of and in proportion to the amount of such losses; (ii) next, to the extent that the cumulative
amount of distributions pursuant to Article 4 (other than distributions representing a return of such Partners capital contributions) exceeds the cumulative amount of FC Profit and Operating Profit previously allocated to such
Partners pursuant to Section 3.4(a), in the order that such distributions occurred; and (iii) thereafter, any remaining such FC Profit and Operating Profit shall be allocated among the Partners so as to produce Capital Accounts
(computed after taking into account any other FC Profit and Operating Profit or FC Loss and Operating Loss for the Fiscal Year in which such event occurred and all distributions pursuant to Article 4 with respect to such
Fiscal Year and after adding back each Partners share, if any, of Partner Nonrecourse Debt Minimum Gain, as defined in Treasury Regulations sections 1.704 - 2(b)(2) and 1.704 - 2(i), or Partnership Minimum Gain, as
defined in Treasury Regulations sections 1.704 - 2(b)(2) and 1.704 - 2(d)) for the Partners such that a distribution of an amount of cash equal to such Capital Account balances in accordance with such Capital Account
balances would be in the amounts, sequence and priority set forth in Article 4. (b) Allocations of Losses. Subject to the limitation of Section 3.4(c), FC Loss for any Fiscal Year shall be allocated among the Partners in
proportion to their respective FC Shares as of the close of such Fiscal Year, and Operating Loss for any Fiscal Year shall be allocated among the Partners in proportion to their respective Points as of the close of such Fiscal
Year; provided that, if an Operating Loss is recognized by the Partnership for a Fiscal Year that is attributable to a Portfolio Investment that gave rise to an Operating Profit in a prior Fiscal Year that previously was allocated
to a Partner, including, for this purpose, a former Partner (a Prior Profit Allocation), then such Operating Loss shall be allocated, in the reasonable discretion of the General Partner, among the Partners and such former
Partners who received the Prior Profit Allocation in a proportion that takes into account the Points that the former Partners had been assigned at the time such Prior Profit Allocation was made to the Partners, but only up to the
amount of such Prior Profit Allocation. (c) To the extent that the allocations of FC Loss or Operating Loss contemplated by Section 3.4(b) would cause the Capital Account of any Limited Partner to be less than zero, such FC
Loss or Operating Loss shall to that extent instead be allocated to and debited against the Capital Account of the General Partner. Following any such adjustment pursuant to Section 3.4(c) with respect to any Limited Partner,
any FC Profit or Operating Profit for any subsequent Fiscal Year which would otherwise be credited to the Capital Account of such Limited Partner pursuant to Section 3.4(a) shall instead be credited to the Capital Account of
the General Partner until the cumulative amounts so credited to the Capital Account of the General Partner with respect to such Limited Partner pursuant to Section 3.4(c) is equal to the cumulative amount debited against the
Capital Account of the General Partner with respect to such Limited Partner pursuant to Section 3.4(c). (d) Each Limited Partners rights and entitlements as a Limited Partner are limited to the rights to receive allocations and
distributions of FC Profit and Operating Profit expressly
10 conferred by this Agreement and any side letter or similar agreement entered into pursuant to Section 9.1(b) and the other rights expressly conferred by this Agreement and any such side letter or similar agreement or
required by the Act, and a Limited Partner shall not be entitled to any other allocations, distributions or payments in respect of its interest, or to have or exercise any other rights, privileges or powers. Section 3.5 Tax
Allocations (a) For United States federal, state and local income tax purposes, Partnership income, gain, loss, deduction or credit (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in order
to reflect the allocations of FC Profit, FC Loss, Operating Profit and Operating Loss pursuant to Section 3.4 for such Fiscal Year, taking into account any variation between the adjusted tax basis and book value of Partnership
property in accordance with the principles of section 704(c) of the Code. (b) If any Partner or Partners are treated for United States federal income tax purposes as realizing ordinary income because of receiving an interest in
the Partnership (whether under section 83 of the Code or under any similar provision of any law, rule or regulation) and the Partnership is entitled to any offsetting deduction (net of any income realized by the Partnership as a
result of such receipt), the Partnerships net deduction shall be allocated to and among the Partners in such manner as to offset, as nearly as possible, the ordinary income realized by such Partner or Partners. Section 3.6
Reserves; Adjustments for Certain Future Events (a) Appropriate reserves may be created, accrued and charged against the Operating Profit or Operating Loss for contingent liabilities, if any, as of the date any such contingent
liability becomes known to the General Partner or as of each other date as the General Partner deems appropriate, such reserves to be in the amounts which the General Partner deems necessary or appropriate. The General
Partner may increase or reduce any such reserve from time to time by such amounts as the General Partner deems necessary or appropriate. The amount of any such reserve, or any increase or decrease therein, shall be
proportionately charged or credited, as appropriate, to the Capital Accounts of those parties who are Partners at the time when such reserve is created, increased or decreased, as the case may be, in proportion to their
respective Points at such time. (b) If any amount is required by Section 3.6(a) to be credited to a Person who is no longer a Partner, such amount shall be paid to such Person in cash. Any amount required to be charged
pursuant to Section 3.6(a) shall be debited against the current balance in the Capital Account of the affected Partners. To the extent that the aggregate current Capital Account balances of such affected Partners are insufficient
to cover the full amount of the required charge, the deficiency shall be debited against the Capital Accounts of the other Partners in proportion to their respective Capital Account balances at such time; provided that each such
other Partner shall be entitled to a preferential allocation, in proportion to and to the extent of such other Partners share of any such deficiency of any Operating Profit that would otherwise have been allocable after the date of
such charge to the Capital Accounts of the affected Partners whose Capital Accounts were insufficient to cover the full amount of the required charge.
11 Section 3.7 Finality and Binding Effect of General Partners Determinations All matters concerning the determination, valuation and allocation among the Partners with respect to any profit or loss of the Partnership and
any associated items of income, gain, deduction, loss and credit, pursuant to any provision of this Article 3, including any accounting procedures applicable thereto, shall be determined by the General Partner, and such
determinations and allocations shall be final and binding on all the Partners. ARTICLE 4 DISTRIBUTIONS Section 4.1 Distributions (a) Any amount of cash or property received as a distribution from the Fund by the
Partnership in its capacity as a partner, to the extent such amount is determined by reference to the capital commitment of the Partnership in, or the capital contributions of the Partnership to, the Fund, shall be promptly
distributed by the Partnership to the Partners in proportion to their respective FC Shares determined: (i) in the case of any distributions received from the Fund which are comprised of proceeds from the disposition of a
Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (ii) in the case of any other distribution, as of the end of the relevant Fiscal Year in respect of which such distribution is made by the Fund.
(b) The General Partner shall use reasonable efforts to cause the Partnership to distribute, as promptly as practicable after receipt by the Partnership, any available cash or property attributable to items included in the
determination of Operating Profit, subject to (i) the provisions of section 6.3 and section 10.3 of the Fund LP Agreement, and (ii) the retention of such reserves as the General Partner considers appropriate or necessary for
purposes of the prudent and efficient financial operation of the Partnerships business including in accordance with Section 3.6 hereof and for purposes of satisfying the Partnerships anticipated obligations under section 6.3
and section 10.3 of the Fund LP Agreement. Subject to Section 4.1(e), any such distributions shall be made to Partners in proportion to their respective Points, determined: (A) in the case of any amount of cash or property
received from the Fund that is attributable to the disposition of a Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (B) in any other case, as of the date of receipt of such cash or property by
the Partnership from the Fund. (c) Any other distributions or payments in respect of the interests of Partners shall be made at such time, in such manner and to such Partners as the General Partner shall determine.
12 (d) Subject to Section 4.1(e), the General Partner may cause the Partnership to pay distributions to the Partners at any time in addition to those contemplated by Section 4.1(a), (b) or (c), in cash or in kind. Distributions of
any such amounts shall be made to the Partners in proportion to their respective Points, determined immediately prior to giving effect to such distribution. (e) If a portion of the withdrawal proceeds of a former Limited Partner
is being paid to such former Limited Partner in connection with a distribution to Limited Partners under this Section 4.1 of cash or property with respect to which such former Limited Partner received an allocation prior to its
withdrawal, such former Limited Partners share of such cash or property shall be calculated for purposes of this Section 4 as if such former Limited Partner were a Limited Partner with the number of Points such Limited
Partner had been assigned as of the date of such allocation; provided that a former Limited Partner shall not be entitled to receive an amount in excess of its withdrawal proceeds as determined under Section 6.4(c). Section 4.2
Withholding of Certain Amounts (a) If the Partnership incurs a withholding tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the General Partner, without limitation of
any other rights of the Partnership, may cause the amount of such obligation to be debited against the Capital Account of such Partner when the Partnership pays such obligation, and any amounts then or thereafter
distributable to such Partner shall be reduced by the amount of such taxes. If the amount of such taxes is greater than any such then distributable amounts, then such Partner and any successor to such Partners interest shall
indemnify and hold harmless the Partnership and the General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of such excess.
(b) The General Partner may withhold from any distribution or other payment to any Limited Partner pursuant to this Agreement or otherwise any other amounts due from such Limited Partner to the Partnership or the
General Partner pursuant to this Agreement to the extent not otherwise paid. Any amounts so withheld shall be applied by the General Partner to discharge the obligation in respect of which such amounts were withheld.
Section 4.3 Limitation on Distributions Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to any
Partner on account of such Partners interest in the Partnership if such distribution would violate the Act or other applicable law.
13 ARTICLE 5 MANAGEMENT Section 5.1 Rights and Powers of the General Partner (a) Subject to the terms and conditions of this Agreement, the General Partner shall have complete and exclusive responsibility (i) for
all management decisions to be made on behalf of the Partnership, and (ii) for the conduct of the business and affairs of the Partnership, including all such decisions and all such business and affairs to be made or conducted
by the Partnership in its capacity as Fund General Partner. (b) Without limiting the generality of the foregoing, the General Partner shall have full power and authority to execute, deliver and perform such contracts,
agreements and other undertakings, and to engage in all activities and transactions, as it may deem necessary or advisable for, or as may be incidental to, the conduct of the business contemplated by this Section 5.1, including,
without in any manner limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any Partner or with any other Person having any business, financial or other relationship with any
Partner or Partners. The Partnership, and the General Partner on behalf of the Partnership, may enter into and perform the Fund LP Agreement and any documents contemplated thereby or related thereto and any amendments
thereto, without any further act, vote or approval of any Person, including any Partner, notwithstanding any other provision of this Agreement. The General Partner is hereby authorized to enter into the documents described in
the preceding sentence on behalf of the Partnership, but such authorization shall not be deemed a restriction on the power of the General Partner to enter into other documents on behalf of the Partnership. Except as otherwise
expressly provided herein or as required by law, all powers and authority vested in the General Partner by or pursuant to this Agreement or the Act shall be construed as being exercisable by the General Partner in its sole and
absolute discretion. (c) The General Partner shall be the tax matters partner for purposes of section 6231(a)(7) of the Code. Each Partner agrees not to treat, on such Partners United States federal income tax return or in any
claim for a refund, any item of income, gain, loss, deduction or credit in a manner inconsistent with the treatment of such item by the Partnership. The General Partner shall have the exclusive authority to make any elections
required or permitted to be made by the Partnership under any provisions of the Code or any other revenue laws. Section 5.2 Delegation of Duties (a) Subject to Section 5.1 and Section 5.2(d), the General Partner may
delegate to any Person or Persons any of the duties, powers and authority vested in it hereunder on such terms and conditions as it may consider appropriate. (b) Without limiting the generality of Section 5.2(a), but subject to
the limitations contained in Section 5.2(d), the General Partner shall have the power and authority to appoint any Person, including any Person who is a Limited Partner, to provide services to and act as an
14 employee or agent of the Partnership, with such titles and duties as may be specified by the General Partner, including the following: (i) a chief financial officer, to whom the General Partner may delegate its authority to
disburse funds for the account of the Partnership and the Fund for any proper purpose, to establish deposit accounts with banks or other financial institutions, to make permitted investments of Partnership assets, and to take
any other permitted actions pertaining to the finances of the Partnership and the Fund; (ii) a chief accounting officer, to whom the General Partner may delegate its authority to prepare and maintain financial and accounting
books, records and statements of the Partnership and the Fund; and (iii) one or more vice presidents, treasurers and controllers, to whom the General Partner may delegate its authority to execute any of its decisions and to take
any other permitted actions on behalf of the Partnership (including in its capacity as Fund General Partner) subject to the supervision of the chief executive officer, the chief financial officer or the chief accounting officer.
Any Person appointed by the General Partner to serve as an officer, employee or agent of the Partnership shall be subject to removal at any time by the General Partner; and shall report to and consult with the General Partner
at such times and in such manner as the General Partner may direct. (c) Any Person who is a Limited Partner and to whom the General Partner delegates any of its duties pursuant to this Section 5.2 or any other provision of
this Agreement shall be subject to the same standard of care, and shall be entitled to the same rights of indemnification and exoneration, applicable to the General Partner under and pursuant to Section 5.7, unless such Person
and the General Partner mutually agree to a different standard of care or right to indemnification and exoneration to which such Person shall be subject. (d) The General Partner shall be permitted to designate one or more
committees of the Partnership which committees may include Limited Partners as members. Any such committees shall have such powers and authority granted by the General Partner. Any Limited Partner who has agreed to
serve on a committee shall not be deemed to have the power to bind or act for or on behalf of the Partnership in any manner and in no event shall a member of a committee be considered a general partner of the Partnership by
agreement, estoppel or otherwise or be deemed to participate in the control of the business of the Partnership as a result of the performance of his duties hereunder or otherwise. (e) The General Partner shall cause the
Partnership to enter into an arrangement with the Management Company which arrangement shall require the Management Company to pay all costs and expenses of the Partnership. Section 5.3 Transactions with Affiliates
To the fullest extent permitted by applicable law, the General Partner (or any Affiliate of the General Partner), when acting on behalf of the Partnership, is hereby authorized to (a)
15 purchase property from, sell property to, lend money to or otherwise deal with any Affiliates, any Partner, the Partnership, the Fund or any Affiliate of any of the foregoing Persons, and (b) obtain services from any
Affiliates, any Partner, the Partnership, the Fund or any Affiliate of the foregoing Persons. Section 5.4 Expenses (a) Subject to the arrangement contemplated by Section 5.2(e), the Partnership will pay, or will reimburse the
General Partner for, all costs and expenses arising in connection with the organization and operations of the Partnership. (b) Any withholding taxes payable by the Partnership, to the extent determined by the General Partner
to have been paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the Partners, shall be allocated among and debited against the Capital Accounts of only those
not prohibit a Partner from purchasing or selling as a passive investor any interest in any asset. (b) Nothing in this Agreement shall prohibit the General Partner from engaging in any activity other than acting as General
Partner hereunder. Section 5.7 Duty of Care; Indemnification (a) To the fullest extent permitted by law, the General Partner and its Affiliates and their respective partners, members, managers, shareholders, officers, directors,
employees and associates and, with the approval of the General Partner, any agent of any of the foregoing
16 (including their respective executors, heirs, assigns, successors or other legal representatives) (each, a Covered Person and collectively, the Covered Persons), shall not be liable to the Partnership or to any of the other
Partners for any loss, claim, damage or liability occasioned by any acts or omissions in the performance of its services hereunder, except to the extent that it shall ultimately be determined by final judicial decision from which
there is no further right to appeal (a Final Adjudication) that such loss, claim, damage or liability is due to an act or omission of a Covered Person is due to an act or omission of such a Covered Person that constituted a bad
faith violation of the implied contractual covenant of good faith and fair dealing. (b) A Covered Person shall be indemnified to the fullest extent permitted by law by the Partnership against any losses, claims, damages,
this Section 5.7. In any such suit brought to enforce a right to indemnification or to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to
be indemnified, or to an advancement of expenses, shall be on the Partnership (or any Limited Partner acting derivatively or otherwise on behalf of the Partnership or the Limited Partners). The General Partner may not satisfy
any right of indemnity or reimbursement granted in this Section 5.7 or to which it may be otherwise entitled except out of the assets of the Partnership (including, without limitation, insurance proceeds and rights pursuant to
indemnification agreements), and no Partner shall be personally liable with respect to any such claim for indemnity or reimbursement. The General Partner may enter into appropriate indemnification
17 agreements and/or arrangements reflective of the provisions of this Article 5 and obtain appropriate insurance coverage on behalf and at the expense of the Partnership to secure the Partnerships indemnification obligations
hereunder and may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5. Each Covered Person shall be deemed a third party beneficiary (to the extent not a direct
party hereto) to this Agreement and, in particular, the provisions of this Article 5, and shall be entitled to the benefit of the indemnity granted to the Partnership by the Fund pursuant to the terms of the Fund LP Agreement. (c)
To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or the Partners, the Covered Person shall not be liable to the Partnership or to any
Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in
equity to the Partnership or the Partners, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person. Notwithstanding anything to the contrary contained in this Agreement or otherwise
applicable provision of law or equity, to the maximum extent permitted by the Act, a Covered Person shall owe no duties (including fiduciary duties) to the Partnership or the Partners other than those specifically set forth
herein; provided that a Covered Person shall have the duty to act in accordance with the implied contractual covenant of good faith and fair dealing. (d) Each of the Covered Persons may consult with legal counsel,
accountants and other experts selected by it and any act or omission suffered or taken by it on behalf of the Partnership or in furtherance of the interests of the Partnership or the Fund in good faith in reliance upon and in
accordance with the advice of such counsel, accountants or other experts shall create a rebuttable presumption of the good faith and due care of such Covered Person with respect to such act or omission. ARTICLE 6
ADMISSIONS, TRANSFERS AND WITHDRAWALS Section 6.1 Admission of Additional Limited Partners; Effect on Points The General Partner may at any time admit as an additional Limited Partner any Person who
has agreed to be bound by this Agreement, assign Points and issue FC Shares to such Person and/or increase the Points of any existing Limited Partner. Each additional Limited Partner shall execute either a counterpart to this
Agreement or a separate instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner and shall be admitted as a Limited Partner upon such execution. In
connection with such admission or increase in Points of any Partner (but not with respect to an assignment of Excess Points), the Points of APH shall be reduced in an amount determined by the General Partner.
18 Section 6.2 Admission of Additional General Partner and Transfer (a) The General Partner may admit one or more additional general partners at any time without the consent of any Limited Partner. Any additional general
partner shall be admitted as a general partner upon its execution of a counterpart signature page to this Agreement. (b) The General Partner may Transfer its general partner interest in the Partnership to any other Person,
without the consent of any Limited Partner. Section 6.3 Transfer of Interests of Limited Partners (a) No Transfer of any Limited Partners interest in the Partnership, whether voluntary or involuntary, shall be valid or
effective, and no transferee shall become a substituted Limited Partner, unless the prior written consent of the General Partner has been obtained, which consent may be given or withheld by the General Partner in its
discretion. In the event of any Transfer, all of the conditions of the remainder of this Section 6.3 must also be satisfied. (b) A Limited Partner requesting approval of a Transfer, or such Partners legal representative, shall give
the General Partner reasonable notice before the proposed effective date of any requested Transfer, and shall provide sufficient information to allow legal counsel acting for the Partnership to make the determination that the
proposed Transfer will not: (i) require registration of the Partnership or any interest therein under any securities or commodities laws of any jurisdiction; (ii) result in a termination of the Partnership under section 708(b)(1)(B)
of the Code or jeopardize the status of the Partnership as a partnership for United States federal income tax purposes; or (iii) violate, or cause the Partnership, the Fund, the General Partner or any Limited Partner to violate,
any applicable law, rule or regulation of any jurisdiction. Such notice must be supported by proof of legal authority and a valid instrument of assignment acceptable to the General Partner. (c) A permitted transferee shall be
entitled to the allocations and distributions attributable to the interest in the Partnership transferred to such transferee and to Transfer such interest in accordance with the terms of this Agreement; provided that such transferee
shall not be entitled to the other rights of a Limited Partner as a result of such transfer until it becomes a substituted Limited Partner. No transferee may become a substituted Limited Partner except with the prior written
consent of the General Partner (which consent may be given or withheld by the General Partner in its discretion). Such transferee shall be admitted to the Partnership as a substituted Limited Partner upon execution of a
counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner. Notwithstanding the above, the Partnership and the
General Partner shall incur no liability for allocations and distributions made in good faith to the transferring Limited Partner until a written instrument of Transfer has been received and accepted by the
19 General Partner and recorded on the books of the Partnership and the effective date of the Transfer has passed. (d) Any other provision of this Agreement to the contrary notwithstanding, to the fullest extent permitted by
law, any successor or transferee of any Limited Partners interest in the Partnership shall be bound by the provisions hereof. Prior to recognizing any Transfer in accordance with this Section 6.3, the General Partner may
require the transferee to make certain representations and warranties to the Partnership and the Partners and to accept, adopt and approve in writing all of the terms and provisions of this Agreement. (e) In the event of a
Transfer or in the event of a distribution of assets of the Partnership to any Partner, the Partnership, at the direction of the General Partner, may, but shall not be required to, file an election under section 754 of the Code and in
accordance with the applicable Treasury Regulations, to cause the basis of the Partnerships assets to be adjusted as provided by section 734 or section 743 of the Code. (f) The Partnership shall maintain books for the purpose
of registering the transfer of interests in the Partnership. No transfer of an interest in the Partnership shall be effective until the transfer of such interest is registered upon books maintained for that purpose by or on behalf of
the Partnership. Section 6.4 Withdrawal of Partners (a) A Partner with an FC Share may not withdraw from the Partnership prior to the Partnerships dissolution unless the prior written consent of the General Partner has been
obtained, which consent may be given or withheld by the General Partner. (b) A Limited Partner without an FC Share shall cease to be a Partner and be deemed to have withdrawn its interest in the Partnership either: (i)
automatically upon any date (and with immediate effect from such date) on which such Limited Partner (or, in the case of a Limited Partner that was admitted to the Partnership by virtue of its relationship with an employee of
Apollo Global Management, LLC or one of its Affiliates, such employee) ceases to be employed (for any reason, including, but not limited to, death, disability, resignation or a termination for cause or other than for cause) by
Apollo Global Management, LLC or one of its Affiliates (unless otherwise determined by the General Partner); or (ii) upon a date specified in a notice delivered by such Limited Partner to the General Partner stating that such
Limited Partner elects to withdraw from the Partnership. (c) Payment of a withdrawing Limited Partners withdrawal proceeds (being an amount equal to the balance of such Limited Partners capital account as of the
effective date of withdrawal as adjusted for any Operating Loss allocable to such withdrawn Limited Partner pursuant to Section 3.4(b)) will generally be made at the same time as such amounts would have been distributed to
such Limited Partner under Section 4.1 had such Limited Partner not withdrawn from the Partnership; provided that the General Partner may (i) delay such payment if such delay is reasonably necessary to prevent such
withdrawal from having a material adverse
20 impact on the Partnership, the Fund, or the remaining Partners, and (ii) hold back from any payments such reserves as the General Partner determines to be necessary or appropriate, including, without limitation, as
provided in Section 4.1(b) and Section 6.4(d). Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal and will not earn
interest for the period from the applicable withdrawal date through the settlement date. The General Partner may deduct from any withdrawal proceeds due to any Partner an amount representing the actual or estimated
expenses of the Partnership associated with processing the withdrawal and any other amounts owed by the withdrawing Partner to the General Partner or its Affiliates whether under this Agreement or otherwise. (d) The right
of any Partner to withdraw or receive distributions pursuant to this Section 6.4 is subject to the provision by the General Partner for all liabilities of the Partnership and for reserves for contingencies as provided in Section 3.6
(including, in either case, for the Partnerships anticipated obligations under section 6.3 and section 10.3 of the Fund LP Agreement). (e) A former Partner shall remain liable to make capital contributions to the Partnership
pursuant to Section 3.1(d) and Section 4.2(a), notwithstanding that such Person may have withdrawn from the Partnership and ceased to be a Partner. Section 6.5 Pledges (a) A Limited Partner shall not pledge or grant a
security interest in such Limited Partners interest in the Partnership unless the prior written consent of the General Partner has been obtained (which consent may be given or withheld by the General Partner). (b) Each limited
partner interest in the Partnership shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in effect from time to time in
the State of Delaware (the DEUCC), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by
the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. Notwithstanding any provision of this Agreement to
the contrary, to the extent that any provision of this Agreement is inconsistent with any non- waivable provision of Article 8 of the DEUCC, such provision of Article 8 of the DEUCC shall be controlling. (c) Any limited
partner interest in the Partnership may be evidenced by a certificate of limited partnership interest issued by the Partnership in such form as the General Partner may approve. Every certificate representing a limited partner
interest in the Partnership shall bear a legend substantially in the following form: The limited partner interest represented by this certificate shall constitute a security within the meaning of, and governed by, (i) Article 8 of
the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) Article 8 of the Uniform Commercial Code of any other applicable
21 jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and
approved by the American Bar Association on February 14, 1995. The transfer of this certificate and the limited partner interest represented hereby is restricted as described in the amended and restated limited partnership
agreement of the Partnership, dated as of July 14, 2009, as the same may be amended or restated from time to time. (d) The Partnership shall maintain books for the purpose of registering the Transfer of limited partner
interests in the Partnership. In connection with a Transfer in accordance with this Agreement of any limited partner interests in the Partnership, the endorsed certificate(s) evidencing such interest shall be delivered to the
Partnership for cancellation, and the Partnership shall thereupon issue a new certificate to the transferee evidencing the interest that was transferred and, if applicable, the Partnership shall issue a new certificate to the
transferor evidencing any interest registered in the name of the transferor that was not transferred. ARTICLE 7 POINTS Section 7.1 Allocation of Points (a) A Point means a 1/x share of Operating Profit or Operating Loss,
where x equals the aggregate number of Points assigned or available for assignment at the relevant time. The aggregate number of Points assigned or available for assignment to all Partners shall initially be 2,000. (b) Except
as otherwise provided herein, the General Partner shall be responsible for the allocation of Points from time to time to the Limited Partners. At each such time of allocation, all Points available for allocation shall be so
allocated to the Limited Partners (including APH) by the General Partner. Points allocated to Limited Partners (other than APH) may not be reduced except as set forth in Section 6.1 and Section 7.2. Upon any allocation of
Points (other than Excess Points) by the General Partner to an existing or new Limited Partner
22 other than APH, there shall be a corresponding reduction in the Points of APH, as provided in Section 6.1. (c) The General Partner shall maintain on the books and records of the Partnership a record of the number of
Points allocated to each Limited Partner and shall give notice to each Limited Partner of the number of such Limited Partners Points upon admission to the Partnership of such Limited Partner and as soon as reasonably
practicable upon any change in such Limited Partners Points. Section 7.2 Effect of Withdrawal on Points (a) The Points of any Limited Partner that withdraws or is deemed to have withdrawn from the Partnership shall be
forfeited, as of the effective date of such Limited Partners withdrawal or deemed withdrawal, unless otherwise determined by the General Partner. (b) Any Points that are forfeited pursuant to Section 7.2(a) shall,
automatically and without any action on the part of any Person, be reallocated to APH, unless otherwise determined by the General Partner; and no Limited Partner other than APH shall have any right or claim with respect to
such forfeited Points. ARTICLE 8 DISSOLUTION AND LIQUIDATION Section 8.1 Dissolution and Liquidation of Partnership (a) Upon dissolution of the Partnership in accordance with the Act, the General Partner shall
liquidate the business and administrative affairs of the Partnership, except that, if the General Partner is unable to perform this function, a liquidator may be elected by a majority in interest (determined by Points) of Limited
Partners and upon such election such liquidator shall liquidate the Partnership. FC Profit and FC Loss, Operating Profit and Operating Loss during the Fiscal Years that include the period of liquidation shall be allocated
pursuant to Section 3.4. The proceeds from liquidation shall be distributed in the following manner: (i) first, the debts, liabilities and obligations of the Partnership including the expenses of liquidation (including legal and
accounting expenses incurred in connection therewith), up to and including the date that distribution of the Partnerships assets to the Partners has been completed, shall be satisfied (whether by payment or by making
reasonable provision for payment thereof); and (ii) thereafter, the Partners shall be paid amounts pro rata in accordance with and up to the positive balances of their respective Capital Accounts, as adjusted pursuant to Article
3. (b) Anything in this Section 8.1 to the contrary notwithstanding, the General Partner or liquidator may distribute ratably in kind rather than in cash, upon dissolution, any assets of the Partnership in accordance with the
priorities set forth in Section 8.1(a); provided that if any in
23 kind distribution is to be made, the assets distributed in kind shall be valued as of the actual date of their distribution and charged as so valued and distributed against amounts to be paid under Section 8.1(a). ARTICLE 9
GENERAL PROVISIONS Section 9.1 Amendment of this Agreement (a) The General Partner may amend this Agreement at any time, in whole or in part, without the consent of any other Partner; provided that any
amendment which would increase the obligation of any Partner to make any contribution to the capital of the Partnership or adversely affect such Partners right to withdraw voluntarily from the Partnership shall not be made
unless such Partner has, at the General Partners election, (i) consented thereto, or (ii) been provided with an opportunity to withdraw from the Partnership as of a date determined by the General Partner that is prior to the
effective date of the amendment. Without limiting the foregoing, the General Partner may amend this Agreement at any time, in whole or in part, without the consent of any other Partner, to enable the Partnership to comply
with the requirements of the Safe Harbor Election within the meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury Regulation section 1.83- 3(e)(1) or Proposed Treasury
Regulation section 1.704- 1(b)(4)(xii) at such time as such proposed Procedure and Regulations are effective and to make any such other related changes as may be required by pronouncements or Treasury Regulations issued
by the Internal Revenue Service or Treasury Department after the date of this Agreement. An adjustment of Points shall not be considered an amendment to the extent effected in compliance with the provisions of Section 6.1
or Article 7 as in effect on the date hereof or as hereafter amended in compliance with the requirements of this Section 9.1(a). (b) Notwithstanding the provisions of this Agreement, including Section 9.1(a), it is hereby
acknowledged and agreed that the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner or any other Person may enter into one or more side letters or similar
agreements with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of this Agreement. The parties hereto agree that any terms contained in a side letter or
similar agreement with one or more Partners shall govern with respect to such Partner or Partners notwithstanding the provisions of this Agreement. Any such side letters or similar agreements shall be binding upon the
Partnership or the General Partner, as applicable, and the signatories thereto as if the terms were contained in this Agreement. Section 9.2 Special Power- of- Attorney (a) Each Partner hereby irrevocably makes, constitutes
and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- in- fact, and in the name, place and stead of such Partner, with the power from time to time to make, execute,
sign, acknowledge, swear to, verify, deliver, record, file and/or publish:
24 (i) any amendment to this Agreement which complies with the provisions of this Agreement (including the provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal
counsel to the Partnership, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, or which such legal
counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership as a limited partnership; (iii) all such instruments, certificates, agreements
and other documents relating to the conduct of the investment program of the Fund which, in the opinion of such attorney- in- fact and the legal counsel to the Fund, are reasonably necessary to accomplish the legal, regulatory
and fiscal objectives of the Fund in connection with its or their acquisition, ownership and disposition of investments, including, without limitation: (A) the governing documents of any management entity formed as a part of
the tax planning for the Fund and any amendments thereto; and (B) documents relating to any restructuring transaction with respect to any of the Funds investments; (iv) any written notice or letter of resignation from any
board seat or office of any Person (other than a company that has a class of equity securities registered under the Securities Exchange Act of 1934, as amended, or that is registered under the Investment Company Act of 1940,
as amended), which board seat or office was occupied or held at the request of the Partnership or any of its Affiliates; and (v) all such proxies, consents, assignments and other documents as the General Partner determines to
be necessary or advisable in connection with any merger or other reorganization, restructuring or other similar transaction entered into in accordance with this Agreement (including the provisions of Section 9.5(c)). (b) Each
Limited Partner is aware that the terms of this Agreement permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without such
Partners consent. If an amendment of the Certificate or this Agreement or any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner
agrees that, notwithstanding any objection which such Limited Partner may assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted
above in any manner which may be necessary or appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this
special power- of- attorney with a view to the orderly administration of the affairs of the Partnership. This power- of- attorney is a special power- of- attorney and is coupled with an interest in favor of the General Partner and
as such:
25 (i) shall be irrevocable and continue in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power- of- attorney, regardless of whether the Partnership or the General Partner
shall have had notice thereof; and (ii) shall survive any Transfer by a Limited Partner of the whole or any portion of its interest in the Partnership, except that, where the transferee thereof has been approved by the General
Partner for admission to the Partnership as a substituted Limited Partner, this power of attorney given by the transferor shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge
and file any instrument necessary to effect such substitution. Section 9.3 Notices Any notice required or permitted to be given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the
attention of John J. Suydam. A notice to a Limited Partner shall be directed to such Limited Partners last known residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home
Address). A notice shall be considered given when delivered to the addressee either by hand at such Partners Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership
business communications, except that a notice to a former Partner shall be considered given when delivered by hand by a recognized overnight courier together with mailing through the United States Postal System by regular
mail to such former Partners Home Address. Section 9.4 Agreement Binding Upon Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
by operation of law, but the rights and obligations of the Limited Partners hereunder shall not be assignable, transferable or delegable except as expressly provided herein, and any attempted assignment, transfer or delegation
thereof that is not made in accordance with such express provisions shall be void and unenforceable. Section 9.5 Merger, Consolidation, etc. (a) Subject to Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate
with or into one or more limited partnerships formed under the Act or other business entities (as defined in section 17- 211 of the Act) pursuant to an agreement of merger or consolidation which has been approved by the
General Partner. (b) Subject to Section 9.1(a) but notwithstanding any other provision to the contrary contained elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section
9.5(a) may, to the extent permitted by section 17- 211(g) of the Act and Section 9.5(a), (i) effect any amendment to this Agreement, (ii) effect the adoption of a new limited partnership agreement for the Partnership if it is the
surviving or resulting limited partnership in the merger or consolidation, or (iii) provide that the limited partnership agreement of any other constituent limited partnership to the merger or consolidation (including a limited
partnership formed for the purpose of consummating the merger or consolidation) shall be the limited partnership agreement of the surviving or resulting limited partnership.
26 (c) The General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any such transaction, and each Limited Partner
shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement, and the rights of each and all of the Partners hereunder, shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard to conflict of laws rules thereof. The parties hereby consent to the non- exclusive jurisdiction and venue for any action arising out of or relating to
this Agreement in the State Courts of the State of Delaware, New Castle County, the State Courts of the State of New York, New York County, the United States District Court for the District of Delaware located in New
Castle County or the United States District Court for the Southern District of New York located in New York County. In addition to any other means available at law for service of process, each Limited Partner hereby agrees,
to the fullest extent permitted by law, that service of process will be duly effectuated when delivered to a Limited Partners Home Address by hand or by a recognized overnight carrier together with mailing through the
United States Postal System by regular mail. Section 9.7 Termination of Right of Action Every right of action arising out of or in connection with this Agreement by or on behalf of any past, present or future Partner or the
Partnership against any past, present or future Partner shall, to the fullest extent permitted by applicable law, irrespective of the place where the action may be brought and irrespective of the residence of any such Partner,
cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. Section 9.8 Confidentiality (a) Each Limited Partner acknowledges and agrees that the
information contained in the books and records of the Partnership concerning the Points assigned with respect to any other Limited Partner is confidential, and, to the fullest extent permitted by applicable law, each Limited
Partner waives, and covenants not to assert, any claim or entitlement whatsoever to gain access to any such information. The Limited Partners agree that the restrictions set forth in this Section 9.8(a) shall constitute reasonable
standards under the Act regarding access to information. (b) Each Limited Partner acknowledges and agrees not to, at any time, either during the term of such Limited Partners participation in the Partnership or thereafter,
disclose, use, publish or in any manner reveal, directly or indirectly, to any Person (other than on a confidential basis to such Limited Partners legal and tax advisors who have a need to know such information) the contents of
this Agreement or any Confidential Information, except (i) with the prior written consent of the General Partner, (ii) to the extent that any such information is in the public domain other than as a result of the Limited Partners
breach of any of his obligations, or (iii) where required to be disclosed by court order, subpoena or other government process; provided that, to the fullest extent permitted by law, the Limited Partner shall promptly notify the
27 General Partner upon becoming aware of any such disclosure requirement and shall cooperate with any effort by the General Partner to prevent or limit such disclosure. (c) Notwithstanding any of the provisions of this
Section 9.8, each Limited Partner may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of an investment in the Partnership and all materials of any kind (including tax opinions
or other tax analyses) that are provided to the Limited Partner relating to such tax treatment. For this purpose, tax treatment is the purported or claimed United States federal income tax treatment of a transaction and tax
structure is limited to any fact that may be relevant to understanding the purported or claimed United States federal income tax treatment of a transaction. For this purpose, the names of the Partnership, the Partners, their
affiliates, the names of their partners, members or equity holders and the representatives, agents and tax advisors of any of the foregoing are not items of tax structure. Section 9.9 Not for Benefit of Creditors The provisions of
this Agreement are intended only for the regulation of relations among Partners and between Partners and former or prospective Partners and the Partnership. Subject to the rights of Covered Persons provided by Section 5.7,
this Agreement is not intended for the benefit of any Person who is not a Partner, and no rights are intended to be granted to any other Person who is not a Partner under this Agreement. Section 9.10 Consents Any and all
consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept with the books of the Partnership. Section 9.11 Reports As soon as
practicable after the end of each taxable year, the General Partner shall furnish to each Limited Partner (a) such information as may be required to enable each Limited Partner to properly report for United States federal and
state income tax purposes such Partners distributive share of each Partnership item of income, gain, loss, deduction or credit for such year, and (b) a statement of the total amount of Operating Profit or Operating Loss for
such year and a reconciliation of any difference between (i) such Operating Profit or Operating Loss and (ii) the aggregate net profits or net losses allocated by the Fund to the Partnership for such year (other than any
difference attributable to the aggregate FC Profit or FC Loss allocated by the Fund to the Partnership for such year). Section 9.12 Filings The Partners hereby agree to take any measures necessary (or, if applicable, refrain
from any action) to ensure that the Partnership is treated as a partnership for United States federal, state and local income tax purposes. Section 9.13 MiscellaneousThe captions and titles preceding the text of each Section
hereof shall be disregarded in the construction of this Agreement.
28 (b) As used herein, masculine pronouns shall include the feminine and neuter, and the singular shall be deemed to include the plural. (c) This Agreement may be executed in counterparts, each of which shall be deemed to
be an original hereof. [Signature Page Follows]
Apollo Credit Liquidity Advisors, L.P. Third Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January 12, 2011 and made
effective as of July 14, 2009. General Partner: APOLLO CREDIT LIQUIDITY CAPITAL MANAGEMENT, LLC By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President Limited Partners: APOLLO
PRINCIPAL HOLDINGS II, L.P. By: Apollo Principal Holdings II GP, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President APOLLO CREDIT LIQUIDITY CM EXECUTIVE
CARRY, L.P. By: Apollo Credit Liquidity Capital Management, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL AND PROPRIETARY This company is a limited partner of Apollo Credit Liquidity Advisors, L.P. which is the general partner of Apollo Credit Liquidity Fund, L.P. and earns the carried interest on CLF
profits. Apollo Credit Liquidity CM Executive Carry, L.P. Second Amended and Restated Limited Partnership Agreement Dated January 12, 2011 and made effective as of July 14, 2009 THE TRANSFER OF THE
PARTNERSHIP INTERESTS DESCRIBED IN THIS AGREEMENT IS RESTRICTED AS DESCRIBED HEREIN.
.............................................................................8 Section 3.5 Tax Allocations ..................................................................................................9 Section 3.6 Reserves; Adjustments for Certain Future Events
.............................................9 Section 3.7 Finality and Binding Effect of General Partners Determinations ...................10 ARTICLE 4 DISTRIBUTIONS ....................................................................................................10
.............................................................................................................18
on Points ........................................................................20 Section 7.3 Points as Profits Interests .................................................................................20 ARTICLE 8 DISSOLUTION AND LIQUIDATION
...................................................................21 Section 8.1 Dissolution and Liquidation of Partnership .....................................................21 ARTICLE 9 GENERAL PROVISIONS
.......................................................................................21 Section 9.1 Amendment of this Agreement ........................................................................21 Section 9.2 Special Power- of- Attorney
.........................................23 Section 9.5 Merger, Consolidation, etc. ..............................................................................24 Section 9.6 Governing Law ................................................................................................24 Section 9.7
Termination of Right of Action .......................................................................25 Section 9.8 Confidentiality .................................................................................................25 Section 9.9 Not for Benefit of Creditors
..................................................................................................26
APOLLO CREDIT LIQUIDITY CM EXECUTIVE CARRY, L.P. A Delaware Limited Partnership SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SECOND AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT of APOLLO CREDIT LIQUIDITY CM EXECUTIVE CARRY, L.P. (the Partnership) by and among Apollo Credit Liquidity Capital Management, LLC, a
Delaware limited liability company, as the sole general partner (the General Partner), and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited
partners is dated January 12, 2011 and made effective as of July 14, 2009 (the Agreement). W I T N E S S E T H : WHEREAS, on July 14, 2009, Apollo Credit Liquidity Capital Management, LLC filed with the Secretary
of State of the State of Delaware a Certificate of Limited Partnership to form Apollo Credit Liquidity CM Executive Carry, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant
to an agreement among Apollo Credit Liquidity Capital Management, LLC, as sole general partner, and the limited partners of the Partnership (the Original Agreement); WHEREAS, the parties amended and restated the
Original Agreement in its entirety as of July 14, 2009 (the Amended Agreement); and WHEREAS, the parties wish to amend and restate the Amended Agreement in its entirety to make certain modifications thereto. NOW,
THEREFORE, the parties hereby agree as follows: ARTICLE 1 DEFINITIONS Act means the Delaware Revised Uniform Limited Partnership Act, as in effect on the date hereof and as amended from time to time, or any
successor law. Affiliate means with respect to any Person any other Person directly or indirectly controlling, controlled by or under common control with such Person. Agreement means this Amended and Restated
Limited Partnership Agreement, as amended or supplemented from time to time. APH means Apollo Principal Holdings II, L.P. (or its assignees or transferees).
2 Capital Account means with respect to each Partner the capital account established and maintained on behalf of such Partner as described in Section 3.3. Carried Interest Distributions has the meaning ascribed to that
term in the Fund LP Agreement. Certificate means the Certificate of Limited Partnership of the Partnership and any amendments thereto as filed with the office of the Secretary of State of the State of Delaware. Clawback
Amount means any amount of Carried Interest Distributions received by the Fund General Partner and required, under the Fund LP Agreement, to be returned to the Fund, including either or both of (i) a Clawback Amount,
as defined in the Fund LP Agreement and, (ii) any amount of Carried Interest Distributions required to be returned to the Fund pursuant to section 6.2 of the Fund LP Agreement. Clawback Share has the meaning ascribed to
that term in Section 3.1(d). Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor law. Confidential Information means information that has not been made
publicly available by or with the permission of the General Partner and that is obtained or learned by a Limited Partner as a result of or in connection with such Partners association with the Partnership or any of its Affiliates
concerning the business, affairs or activities of the Partnership, any of its Affiliates or any of the Portfolio Investments, including, without limitation, models, codes, client information (including client identity and contacts,
client lists, client financial or personal information), financial data, know- how, computer software and related documentation, trade secrets, and other forms of sensitive or valuable non- public information obtained or learned
by the Limited Partner as a result of such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information does not include information concerning non- proprietary business or
investment practices, methods or relationships customarily employed or entered into by comparable business enterprises. Covered Person has the meaning ascribed to that term in Section 5.7. DEUCC has the meaning
ascribed to that term in Section 6.5(b). Excess Points has the meaning ascribed to that term in the Fund GP Agreement. Final Adjudication has the meaning ascribed to that term in Section 5.7. Fiscal Year means, with
respect to a year, the period commencing on January 1 of such year and ending on December 31 of such year (or on the date of a final distribution pursuant to Section 8.1(a)), unless the General Partner shall elect another
fiscal year for the Partnership which is a permissible taxable year under the Code. Fund means Apollo Credit Liquidity Fund, L.P.
3 Fund General Partner means Apollo Credit Liquidity Advisors, L.P. in its capacity as general partner of the Fund pursuant to the Fund LP Agreement. Fund GP Agreement means the amended and restated limited
partnership agreement of the Fund General Partner, as amended from time to time. Fund LP Agreement means the second amended and restated agreement of limited partnership of the Fund, as amended from time to time.
General Partner means Apollo Credit Liquidity Capital Management, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in
its capacity as general partner of the Partnership. Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, until such Person withdraws entirely as a limited
partner of the Partnership, in its capacity as a limited partner of the Partnership. Loss means, with respect to any Fiscal Year, any net loss of the Partnership. To the extent derived from the Fund, any items of income, gain,
loss, deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the Fund, and any items not derived from the Fund shall be
determined in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income tax purposes. Management Company has the meaning ascribed to that term in the
Fund LP Agreement. Operating Profit has the meaning ascribed to that term in the Fund GP Agreement. Partner means the General Partner and any of the Limited Partners and Partners means the General Partner and
all of the Limited Partners. Partnership means the limited partnership formed pursuant to this Agreement and the Certificate. Person means any individual, partnership, corporation, limited liability company, joint venture,
joint stock company, unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or other entity.
Point means a share of Profit or Loss representing a Point (as defined in the Fund GP Agreement) held by the Partnership as a limited partner of the Fund General Partner. Portfolio Investment has the meaning ascribed
to that term in the Fund LP Agreement. Profit means, with respect to any Fiscal Year, any net income of the Partnership. To the extent derived from the Fund General Partner, any items of income, gain, loss, deduction and
credit shall be determined in accordance with the same accounting policies, principles and
4 procedures applicable to the determination by the Fund General Partner, and any items not derived from the Fund General Partner shall be determined in accordance with the accounting policies, principles and procedures
used by the Partnership for United States federal income tax purposes. Schedule of Partners means a schedule to be maintained by the General Partner showing the following information with respect to each Partner: name,
address, date of admission and withdrawal, and required capital contribution (if any). Transfer means any direct or indirect sale, exchange, transfer, assignment or other disposition by a Partner of any or all of such Partners
interest in the Partnership (whether respecting, for example, economic rights only or all the rights associated with the interest) to another Person, whether voluntary or involuntary. Treasury Regulations means the
regulations promulgated under the Code. ARTICLE 2 FORMATION AND ORGANIZATION Section 2.1 Formation The Partnership is formed as a limited partnership under and pursuant to the Act. The Certificate was filed
on July 14, 2009. The General Partner shall execute, acknowledge and file any amendments to the Certificate as may be required by the Act and any other instruments, documents and certificates which, in the opinion of the
Partnerships legal counsel, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Partnership shall determine to do business, or any
political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership. Section 2.2
Name The name of the Partnership shall be Apollo Credit Liquidity CM Executive Carry, L.P. or such other name as the General Partner may hereafter adopt upon causing an appropriate amendment to be made to this
Agreement and to the Certificate to be filed in accordance with the Act. Promptly thereafter, the General Partner shall send notice thereof to each Limited Partner. Section 2.3 Offices (a) The Partnership shall maintain its
principal office, and may maintain one or more additional offices, at such place or places as the General Partner may from time to time determine.
purpose of the Partnership is to act as a limited partner of the Fund General Partner and to undertake such related and incidental activities and execute and deliver such related documents necessary or incidental thereto.
Partners On the date hereof, the Persons whose names are set forth in the Schedule of Partners under the caption Limited Partners shall be admitted to the Partnership as limited partners of the Partnership upon their
execution of a counterpart of this Agreement or such other instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Partner.
by the General Partner, all contributions to the capital of the Partnership by each Limited Partner shall be payable exclusively in cash. (b) No Partner shall be obligated, nor shall any Partner have any right, to make any
contribution to the capital of the Partnership other than as specified in this Section 3.1 or Section 4.2(a). No Limited Partner shall be obligated to restore any deficit balance in its Capital Account. (c) To the extent, if any, that
it is determined that the Partnership, as a limited partner of the Fund General Partner, is required to pay any amounts to the Fund General Partner pursuant to section 3.1(d) of the Fund GP Agreement, each Partner, and each
former Partner, shall be required to participate in such payment and contribute to the Partnership an amount equal to such Partners (or former Partners) Clawback Share of any Clawback Amount, but not in any event in
excess of the cumulative amount theretofore distributed to such Partner, or former Partner, with respect to Profit. (d) A Partners (or former Partners) Clawback Share of any Clawback Amount shall be calculated as
follows: (i) if such Clawback Amount does not exceed the most recent cash distribution by the Partnership representing Operating Profit attributable to the Fund (each such distribution, a Carry Distribution and the most
recent Carry Distribution, the Latest Carry Distribution) as of the time of calculating such Clawback Amount, a portion of such Clawback Amount equal to (A) the amount of the Latest Carry Distribution distributed to such
Partner (or former Partner), divided by (B) the total amount of the Latest Carry Distribution; (ii) to the extent that the Clawback Amount exceeds the Latest Carry Distribution, the excess shall be applied successively to each
immediately preceding Carry Distribution until the entire Clawback Amount has been satisfied and borne with respect to each such Carry Distribution by those Partners (and former Partners) to whom such Carry Distribution
was made in the same manner as provided in Section 3.1(d)(i). Section 3.2 Rights of Partners in Capital (a) No Partner shall be entitled to interest on its capital contributions to the Partnership.
7 (b) No Partner shall have the right to distributions or the return of any contribution to the capital of the Partnership except (i) for distributions in accordance with Section 4.1 or Section 6.4, or (ii) upon dissolution of the
Partnership. The entitlement to any such return at such time shall be limited to the value of the Capital Account of the Partner. The General Partner shall not be liable for the return of any such amounts. Section 3.3 Capital
Accounts (a) The Partnership shall maintain for each Partner a separate Capital Account. (b) Each Partners Capital Account shall have an initial balance equal to the amount of any cash and the net value of any securities or
other property constituting such Partners initial contribution to the capital of the Partnership. (c) Each Partners Capital Account shall be increased by the sum of: (i) the amount of cash and the net value of any securities or
other property constituting additional contributions by such Partner to the capital of the Partnership permitted pursuant to Section 3.1, plus (ii) the portion of any Profit allocated to such Partners Capital Account pursuant to
Section 3.4, plus (iii) such Partners allocable share of any decreases in any reserves recorded by the Partnership pursuant to Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this
Agreement, such item is to be credited to such Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners. (d) Each Partners Capital Account shall be reduced by the sum
of (without duplication): (i) the portion of any Loss allocated to such Partners Capital Account pursuant to Section 3.4, plus (ii) the amount of any cash and the net value of any property distributed to such Partner pursuant to
Section 4.1, Section 6.4 or Section 8.1 including any amount deducted pursuant to Section 4.2 or Section 5.4 from any such amount distributed, plus (iii) any withholding taxes or other items payable by the Partnership and
allocated to such Partner pursuant to Section 5.4(b), any increases in any reserves recorded by the Partnership pursuant to Section 3.6, to the extent the General Partner determines that, pursuant to any provision of this
Agreement, such item is to be charged to such Partners Capital Account on a basis which is not in accordance with the current respective Points of all Partners.
8 Section 3.4 Allocation of Profit and Loss (a) Allocations of Profit. Profit for any Fiscal Year shall be allocated among the Partners in proportion to their respective Points as of the close of such Fiscal Year (determined
immediately prior to any forfeiture pursuant to Section 7.1(c)). (b) Allocations of Losses. Subject to the limitation of Section 3.4(c), Loss for any Fiscal Year shall be allocated among the Partners in proportion to their
respective Points as of the close of such Fiscal Year (determined immediately prior to any forfeiture pursuant to Section 7.1(c)); provided that, if a Loss is recognized by the Partnership for a Fiscal Year that is attributable to a
Portfolio Investment that gave rise to a Profit in a prior Fiscal Year that was allocated to a Partner, including for this purpose, a former Partner (a Prior Profit Allocation), then such Loss shall be allocated, in the reasonable
discretion of the General Partner, among the Partners and such former Partners who received the Prior Profit Allocation in a proportion that takes any into account the Points that the former Partners had been assigned at the
time such Prior Profit Allocation was made to the Partners, but only up to the amount of such Prior Profit Allocation. (c) To the extent that the allocations of Loss contemplated by Section 3.4(b) would cause the Capital
Account of any Limited Partner to be less than zero, such Loss shall to that extent instead be allocated to and debited against the Capital Account of the General Partner. Following any such adjustment pursuant to Section
3.4(c) with respect to any Limited Partner, any Profit for any subsequent Fiscal Year which would otherwise be credited to the Capital Account of such Limited Partner pursuant to Section 3.4(a) shall instead be credited to the
Capital Account of the General Partner until the cumulative amounts so credited to the Capital Account of the General Partner with respect to such Limited Partner pursuant to Section 3.4(c) is equal to the cumulative amount
debited against the Capital Account of the General Partner with respect to such Limited Partner pursuant to Section 3.4(c). (d) Special Allocations (i) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Treasury Regulations section 1.704- 1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership income and gain shall be specially allocated to each such Limited Partner in an
amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the deficit balance in the Capital Account of such Partner as quickly as possible; provided that an allocation pursuant to this
Section 3.4(d)(i) may be made only if and to the extent that such Partner would have a deficit balance in its Capital Account after all other allocations provided for in this Article 3 have been tentatively made as if this Section
3.4(d)(i) were not in this Agreement. This Section 3.4(d)(i) is intended to constitute a qualified income offset within the meaning of Treasury Regulations section 1.704- 1(b)(2)(ii), and shall be interpreted consistently
therewith. (ii) Gross Income Allocation. In the event any Partner has a deficit Capital Account at the end of any Fiscal Year that is in excess of the sum of (i) the amount such Partner is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount such Partner is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury
9 Regulations sections 1.704- 2(g)(1) and 1.704- 2(i)(5), each such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible; provided that an allocation
pursuant to this Section 3.4(d)(ii) may be made only if and to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article 3 have been made as
if Section 3.4(d)(i) and this Section 3.4(d)(ii) were not in this Agreement. (iii) Other Special Allocations. Special allocations shall be made in accordance with the requirements set forth in the Treasury Regulations sections
1.704- 2(f), (g) and (j) (minimum gain chargeback), 1.704- 2(i)(4) (partner minimum gain chargeback), 1.704- 2(i)(2) (nonrecourse deductions), and, to the extent that an election under section 754 of the Code is in effect,
1.704- 1(b)(2)(iv)(m) (section 754 adjustments). (e) Each Limited Partners rights and entitlements as a Limited Partner are limited to the rights to receive allocations and distributions of Profit expressly conferred by this
Agreement and any side letter or similar agreement entered into pursuant to Section 9.1(b) and the other rights expressly conferred by this Agreement and any such side letter or similar agreement or required by the Act, and a
Limited Partner shall not be entitled to any other allocations, distributions or payments in respect of its interest, or to have or exercise any other rights, privileges or powers. Section 3.5 Tax Allocations (a) For United States
federal, state and local income tax purposes, Partnership income, gain, loss, deduction or credit (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in order to reflect the allocations of Profit
and Loss pursuant to Section 3.4 for such Fiscal Year, taking into account any variation between the adjusted tax basis and book value of Partnership property in accordance with the principles of section 704(c) of the Code.
(b) If any Partner or Partners are treated for United States federal income tax purposes as realizing ordinary income because of receiving an interest in the Partnership (whether under section 83 of the Code or under any
similar provision of any law, rule or regulation) and the Partnership is entitled to any offsetting deduction (net of any income realized by the Partnership as a result of such receipt), the Partnerships net deduction shall be
allocated to and among the Partners in such manner as to offset, as nearly as possible, the ordinary income realized by such Partner or Partners. Section 3.6 Reserves; Adjustments for Certain Future Events (a) Appropriate
reserves may be created, accrued and charged against Profit or Loss for contingent liabilities, if any, as of the date any such contingent liability becomes known to the General Partner or as of each other date as the General
Partner deems appropriate, such reserves to be in the amounts which the General Partner deems necessary or appropriate. The General Partner may increase or reduce any such reserve from time to time by such amounts as the
General Partner deems necessary or appropriate. The amount of any such reserve, or any increase or decrease therein, shall be proportionately charged or credited, as appropriate, to the
10 Capital Accounts of those parties who are Partners at the time when such reserve is created, increased or decreased, as the case may be, in proportion to their respective Points at such time. (b) If any amount is required by
Section 3.6(a) to be credited to a Person who is no longer a Partner, such amount shall be paid to such Person in cash. Any amount required to be charged pursuant to Section 3.6(a) shall be debited against the current balance
in the Capital Account of the affected Partners. To the extent that the aggregate current Capital Account balances of such affected Partners are insufficient to cover the full amount of the required charge, the deficiency shall be
debited against the Capital Accounts of the other Partners in proportion to their respective Capital Account balances at such time; provided that each such other Partner shall be entitled to a preferential allocation, in proportion
to and to the extent of such other Partners share of any such deficiency of any Profit that would otherwise have been allocable after the date of such charge to the Capital Accounts of the affected Partners whose Capital
Accounts were insufficient to cover the full amount of the required charge. Section 3.7 Finality and Binding Effect of General Partners Determinations All matters concerning the determination, valuation and allocation
among the Partners with respect to any profit or loss of the Partnership and any associated items of income, gain, deduction, loss and credit, pursuant to any provision of this Article 3, including any accounting procedures
applicable thereto, shall be determined by the General Partner, and such determinations and allocations shall be final and binding on all the Partners. ARTICLE 4 DISTRIBUTIONS Section 4.1 Distributions (a) The General
Partner shall use reasonable efforts to cause the Partnership to distribute, as promptly as practicable after receipt by the Partnership, any available cash or property, subject to (i) the provisions of section 3.1(d) of the Fund GP
Agreement, and (ii) the retention of such reserves as the General Partner considers appropriate or necessary for purposes of the prudent and efficient financial operation of the Partnerships business including in accordance
with Section 3.6 hereof and for purposes of satisfying the Partnerships anticipated obligations under section 3.1(d) of the Fund GP Agreement. Any such distributions shall be made to Partners in proportion to their respective
Capital Account balances until such time as the Capital Account balance of every Partner is zero and thereafter in proportion to their respective Points, in either case determined: (A) in the case of any amount of cash or
property received from the Fund that is attributable to the disposition of a Portfolio Investment by the Fund, as of the date of such disposition by the Fund; and (B) in any other case, as of the date of receipt of such cash or
property by the Partnership.
11 (b) Any other distributions or payments in respect of the interests of Partners shall be made at such time, in such manner and to such Partners as the General Partner shall determine. (c) Subject to Section 4.1(d), the
General Partner may cause the Partnership to pay distributions to the Partners at any time in addition to those contemplated by Section 4.1(a) or (b), in cash or in kind. Distributions of any such amounts shall be made to the
Partners in proportion to their respective Points, determined immediately prior to giving effect to such distribution. (d) If a portion of the withdrawal proceeds of a former Limited Partner is being paid to such Limited Partner
in connection with a distribution to Limited Partners under this Section 4.1 of cash or property with respect to which such former Limited Partner received an allocation prior to its withdrawal, such former Limited Partners
share of such cash or property shall be calculated for purposes of this Section 4 as if such former Limited Partner were a Limited Partner with the number of Points such Limited Partner had been assigned as of the date of
such allocation; provided that a former Limited Partner shall not be entitled to receive an amount in excess of its withdrawal proceeds as determined under Section 6.4(b). Section 4.2 Withholding of Certain Amounts (a) If the
Partnership or the Fund General Partner incurs a withholding tax or other tax obligation with respect to the share of Partnership income allocable to any Partner, then the General Partner, without limitation of any other rights
of the Partnership, may cause the amount of such obligation to be debited against the Capital Account of such Partner when the Partnership pays such obligation, and any amounts then or thereafter distributable to such Partner
the Partnership, the Fund General Partner and the General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of such excess. (b)
The General Partner may withhold from any distribution or other payment to any Limited Partner pursuant to this Agreement or otherwise any other amounts due from such Limited Partner to the Partnership or the General
Partner pursuant to this Agreement to the extent not otherwise paid. Any amounts so withheld shall be applied by the General Partner to discharge the obligation in respect of which such amounts were withheld. Section 4.3
Limitation on Distributions Notwithstanding any provision to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not make a distribution to any Partner on
account of such Partners interest in the Partnership if such distribution would violate the Act or other applicable law.
all management decisions to be made on behalf of the Partnership, and (ii) for the conduct of the business and affairs of the Partnership. (b) Without limiting the generality of the foregoing, the General Partner shall have full
power and authority to execute, deliver and perform such contracts, agreements and other undertakings, and to engage in all activities and transactions, as it may deem necessary or advisable for, or as may be incidental to, the
conduct of the business contemplated by this Section 5.1, including, without in any manner limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any Partner or with any other
Person having any business, financial or other relationship with any Partner or Partners. The Partnership, and the General Partner on behalf of the Partnership, may enter into and perform the Fund GP Agreement and any
documents contemplated thereby or related thereto and any amendments thereto, without any further act, vote or approval of any Person, including any Partner, notwithstanding any other provision of this Agreement. The
shall be construed as being exercisable by the General Partner in its sole and absolute discretion. (c) The General Partner shall be the tax matters partner for purposes of section 6231(a)(7) of the Code. Each Partner agrees
not to treat, on such Partners United States federal income tax return or in any claim for a refund, any item of income, gain, loss, deduction or credit in a manner inconsistent with the treatment of such item by the Partnership.
The General Partner shall have the exclusive authority to make any elections required or permitted to be made by the Partnership under any provisions of the Code or any other revenue laws. Section 5.2 Delegation of Duties
(a) Subject to Section 5.1, the General Partner may delegate to any Person or Persons any of the duties, powers and authority vested in it hereunder on such terms and conditions as it may consider appropriate. (b) Any Person
who is a Limited Partner and to whom the General Partner delegates any of its duties pursuant to this Section 5.2 or any other provision of this Agreement shall be subject to the same standard of care, and shall be entitled to
the same rights of indemnification and exoneration, applicable to the General Partner under and pursuant to Section 5.7, unless such Person and the General Partner mutually agree to a different standard of care or right to
indemnification and exoneration to which such Person shall be subject.
13 (c) The General Partner shall cause the Partnership to enter into an arrangement with the Management Company which arrangement shall require the Management Company to pay all costs and expenses of the Partnership.
purchase property from, sell property to, lend money to or otherwise deal with any Affiliates, any Partner, the Partnership, the Fund General Partner, the Fund or any Affiliate of any of the foregoing Persons, and (b) obtain
services from any Affiliates, any Partner, the Partnership, the Fund General Partner, the Fund or any Affiliate of the foregoing Persons. Section 5.4 Expenses (a) Subject to the arrangement contemplated by Section 5.2(c), the
Partnership will pay, or will reimburse the General Partner for, all costs and expenses arising in connection with the organization and operations of the Partnership. (b) Any withholding taxes payable by the Partnership or the
Fund General Partner, to the extent determined by the General Partner to have been paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the Partners, shall be
allocated among and debited against the Capital Accounts of only those Partners on whose behalf such payments are made or whose particular circumstances gave rise to such payments in accordance with Section 4.2. Section
5.5 Rights of Limited Partners (a) Limited Partners shall have no right to take part in the management or control of the Partnerships business, nor shall they have any right or authority to act for the Partnership or to vote on
matters other than as set forth in this Agreement or as required by applicable law. (b) Without limiting the generality of the foregoing, the General Partner shall have the full and exclusive authority, without the consent of any
Limited Partner, to compromise the obligation of any Limited Partner to make a capital contribution or to return money or other property paid or distributed to such Limited Partner in violation of the Act. (c) Nothing in this
Agreement shall entitle any Partner to any compensation for services rendered to or on behalf of the Partnership as an agent or in any other capacity, except for any amounts payable in accordance with this Agreement. Section
5.6 Other Activities of Partners (a) Subject to the Fund LP Agreement and to full compliance with the code(s) of ethics of Apollo Global Management, LLC and its Affiliates and other written policies relating to personal
investment transactions, membership in the Partnership shall not prohibit a Partner from purchasing or selling as a passive investor any interest in any asset.
request of the Fund General Partner, as a director, officer, consultant, advisor, manager, member or partner of any enterprise in which the Fund has or had a financial interest, including issuers of Portfolio Investments;
provided that the Partnership may, but shall not be required to, indemnify a Covered Person with respect to any matter as to which there has been a Final Adjudication that such Covered Persons acts or its failure to act (i)
constituted a bad faith violation of the implied contractual covenant of good faith and fair dealing, or (ii) were of a nature that makes indemnification by the Fund unavailable. The right to indemnification granted by this
Section 5.7 shall be in addition to any rights to which a Covered Person may otherwise be entitled and shall inure to the benefit of the successors by operation of law or valid assigns of such Covered Person. The Partnership
shall pay the expenses incurred by a Covered Person in defending a civil or criminal action, suit, investigation or proceeding in advance of the final disposition of such action, suit, investigation or proceeding, upon receipt of
an undertaking by the Covered Person to repay such payment if there shall be a Final Adjudication that it is not entitled to indemnification as provided herein. In any suit brought by the Covered Person to enforce a right to
any such suit brought to enforce a right to indemnification or to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of
15 proving that the Covered Person is not entitled to be indemnified, or to an advancement of expenses, shall be on the Partnership (or any Limited Partner acting derivatively or otherwise on behalf of the Partnership or the
Limited Partners). The General Partner may not satisfy any right of indemnity or reimbursement granted in this Section 5.7 or to which it may be otherwise entitled except out of the assets of the Partnership (including,
without limitation, insurance proceeds and rights pursuant to indemnification agreements), and no Partner shall be personally liable with respect to any such claim for indemnity or reimbursement. The General Partner may
enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5 and obtain appropriate insurance coverage on behalf and at the expense of the Partnership to secure the
Partnerships indemnification obligations hereunder and may enter into appropriate indemnification agreements and/or arrangements reflective of the provisions of this Article 5. Each Covered Person shall be deemed a third
party beneficiary (to the extent not a direct party hereto) to this Agreement and, in particular, the provisions of this Article 5. (c) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties)
and liabilities relating thereto to the Partnership or the Partners, the Covered Person shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity to the Partnership or the Partners, are agreed by the parties hereto to replace such other
duties and liabilities of such Covered Person. Notwithstanding anything to the contrary contained in this Agreement or otherwise applicable provision of law or equity, to the maximum extent permitted by the Act, a Covered
Person shall owe no duties (including fiduciary duties) to the Partnership or the Partners other than those specifically set forth herein; provided that a Covered Person shall have the duty to act in accordance with the implied
contractual covenant of good faith and fair dealing. (d) Each of the Covered Persons may consult with legal counsel, accountants and other experts selected by it and any act or omission suffered or taken by it on behalf of the
Partnership or in furtherance of the interests of the Partnership or the Fund in good faith in reliance upon and in accordance with the advice of such counsel, accountants or other experts shall create a rebuttable presumption of
the good faith and due care of such Covered Person with respect to such act or omission. ARTICLE 6 ADMISSIONS, TRANSFERS AND WITHDRAWALS Section 6.1 Admission of Additional Limited Partners; Effect on
Points The General Partner may at any time admit as an additional Limited Partner any Person who has agreed to be bound by this Agreement, assign Points to such Person and/or increase the Points of any existing Limited
Partner. Each additional Limited Partner shall execute either a counterpart to this Agreement or a separate instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited
Partner and shall be admitted as a Limited Partner upon such execution. In connection with such
16 admission or increase in Points of any Partner (but not with respect to an assignment of Excess Points), the Points of APH shall be reduced in an amount determined by the General Partner. Section 6.2 Admission of
Additional General Partner and Transfer (a) The General Partner may admit one or more additional general partners at any time without the consent of any Limited Partner. Any additional general partner shall be admitted as a
general partner upon its execution of a counterpart signature page to this Agreement. (b) The General Partner may Transfer its general partner interest in the Partnership to any other Person, without the consent of any Limited
Partner. Section 6.3 Transfer of Interests of Limited Partners (a) No Transfer of any Limited Partners interest in the Partnership, whether voluntary or involuntary, shall be valid or effective, and no transferee shall become a
substituted Limited Partner, unless the prior written consent of the General Partner has been obtained, which consent may be given or withheld by the General Partner in its discretion. In the event of any Transfer, all of the
conditions of the remainder of this Section 6.3 must also be satisfied. (b) A Limited Partner requesting approval of a Transfer, or such Partners legal representative, shall give the General Partner reasonable notice before the
proposed effective date of any requested Transfer, and shall provide sufficient information to allow legal counsel acting for the Partnership to make the determination that the proposed Transfer will not: (i) require registration
of the Partnership or any interest therein under any securities or commodities laws of any jurisdiction; (ii) result in a termination of the Partnership under section 708(b)(1)(B) of the Code or jeopardize the status of the
Partnership as a partnership for United States federal income tax purposes; or (iii) violate, or cause the Partnership, the Fund, the Fund General Partner, the General Partner or any Limited Partner to violate, any applicable
law, rule or regulation of any jurisdiction. Such notice must be supported by proof of legal authority and a valid instrument of assignment acceptable to the General Partner. (c) A permitted transferee shall be entitled to the
entitled to the other rights of a Limited Partner as a result of such transfer until it becomes a substituted Limited Partner. No transferee may become a substituted Limited Partner except with the prior written consent of the
General Partner (which consent may be given or withheld by the General Partner in its discretion). Such transferee shall be admitted to the Partnership as a substituted Limited Partner upon execution of a counterpart of this
Agreement or such other
17 instrument evidencing, to the satisfaction of the General Partner, such Limited Partners intent to become a Limited Partner. Notwithstanding the above, the Partnership and the General Partner shall incur no liability for
allocations and distributions made in good faith to the transferring Limited Partner until a written instrument of Transfer has been received and accepted by the General Partner and recorded on the books of the Partnership and
the effective date of the Transfer has passed. (d) Any other provision of this Agreement to the contrary notwithstanding, to the fullest extent permitted by law, any successor or transferee of any Limited Partners interest in the
Partnership shall be bound by the provisions hereof. Prior to recognizing any Transfer in accordance with this Section 6.3, the General Partner may require the transferee to make certain representations and warranties to the
Partnership and the Partners and to accept, adopt and approve in writing all of the terms and provisions of this Agreement. (e) In the event of a Transfer or in the event of a distribution of assets of the Partnership to any
Partner, the Partnership, at the direction of the General Partner, may, but shall not be required to, file an election under section 754 of the Code and in accordance with the applicable Treasury Regulations, to cause the basis of
the Partnerships assets to be adjusted as provided by section 734 or section 743 of the Code. (f) The Partnership shall maintain books for the purpose of registering the transfer of interests in the Partnership. No transfer of an
interest in the Partnership shall be effective until the transfer of such interest is registered upon books maintained for that purpose by or on behalf of the Partnership. Section 6.4 Withdrawal of Partners (a) A Limited Partner
shall cease to be a Partner and be deemed to have withdrawn its interest in the Partnership: (i) automatically upon any date (and with immediate effect from such date) on which such Limited Partner (or, in the case of a
Limited Partner that was admitted to the Partnership by virtue of its relationship with an employee of Apollo Global Management, LLC or one of its Affiliates, such employee) ceases to be employed (for any reason,
including, but not limited to, death, disability, resignation or a termination for cause or other than for cause) by Apollo Global Management, LLC or one of its Affiliates (unless otherwise determined by the General Partner);
(ii) automatically upon any date (and with immediate effect from such date) on which such Limited Partner ceases to hold any Points; provided that no such automatic withdrawal shall occur with respect to a forfeiture of
Points pursuant to Section 7.1(c) where such Limited Partner receives an allocation of Points for the immediately following Fiscal Year; or (iii) upon a date specified in a notice delivered by such Limited Partner to the
General Partner stating that such Limited Partner elects to withdraw from the Partnership.
18 (b) Payment of a withdrawing Limited Partners withdrawal proceeds (being an amount equal to the balance of such Limited Partners capital account as of the effective date of withdrawal as adjusted for any Loss
allocable to such withdrawn Limited Partner pursuant to Section 3.4(b)) will generally be made at the same time as such amounts would have been distributed to such Limited Partner under Section 4.1 had such Limited
Partner not withdrawn from the Partnership; provided that the General Partner may (i) delay such payment if such delay is reasonably necessary to prevent such withdrawal from having a material adverse impact on the
Partnership, the Fund, the Fund General Partner or the remaining Partners, and (ii) hold back from any payments such reserves as the General Partner determines to be necessary or appropriate, including, without limitation, as
provided in Section 4.1(a) and Section 6.4(c). Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal and will not earn
expenses of the Partnership associated with processing the withdrawal and any other amounts owed by the withdrawing Partner to the General Partner or its Affiliates whether under this Agreement or otherwise. (c) The right
(including, in either case, for the Partnerships anticipated obligations under section 3.1(d) of the Fund GP Agreement). (d) A former Partner shall remain liable to make capital contributions to the Partnership pursuant to
Section 3.1(c) and Section 4.2(a), notwithstanding that such Person may have withdrawn from the Partnership and ceased to be a Partner. Section 6.5 Pledges (a) A Limited Partner shall not pledge or grant a security interest
in such Limited Partners interest in the Partnership unless the prior written consent of the General Partner has been obtained (which consent may be given or withheld by the General Partner). (b) Each limited partner interest
in the Partnership shall constitute a security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in effect from time to time in the State of
Delaware (the DEUCC), and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American
Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. Notwithstanding any provision of this Agreement to the contrary, to
the extent that any provision of this Agreement is inconsistent with any non- waivable provision of Article 8 of the DEUCC, such provision of Article 8 of the DEUCC shall be controlling. (c) Any limited partner interest in
the Partnership may be evidenced by a certificate of limited partnership interest issued by the Partnership in such form as the General Partner may
19 approve. Every certificate representing a limited partner interest in the Partnership shall bear a legend substantially in the following form: The limited partner interest represented by this certificate shall constitute a
security within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including section 8- 102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) Article 8 of the
Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. The transfer of this certificate and the limited partner interest represented hereby is restricted as described in the
limited partnership agreement of the Partnership, dated as of July 14, 2009, as the same may be amended or restated from time to time. (d) The Partnership shall maintain books for the purpose of registering the Transfer of
limited partner interests in the Partnership. In connection with a Transfer in accordance with this Agreement of any limited partner interests in the Partnership, the endorsed certificate(s) evidencing such interest shall be
delivered to the Partnership for cancellation, and the Partnership shall thereupon issue a new certificate to the transferee evidencing the interest that was transferred and, if applicable, the Partnership shall issue a new
certificate to the transferor evidencing any interest registered in the name of the transferor that was not transferred. ARTICLE 7 POINTS Section 7.1 Allocation of Points (b) Except as otherwise provided herein, the General
Partner shall be responsible for the allocation of Points from time to time to the Limited Partners. At each such time of allocation, all Points available for allocation shall be so allocated to the Limited Partners (including APH)
by the General Partner. Points allocated to Limited Partners (other than APH) may not be reduced except as set forth in Section 6.1 and this Article 7. Upon any allocation of Points (other than Excess Points) by the General
Partner to an existing or new Limited Partner other than APH, there shall be a corresponding reduction in the Points of APH, as provided in Section 6.1. (a) The aggregate number of Points assigned or available for assignment
to all Partners shall initially be 300. The General Partner intends generally to allocate all 300 Points to Limited Partners other than APH. ...
20 (c) Points allocated to a Limited Partner other than APH shall be allocated for a specific Fiscal Year only. Such Limited Partners Points shall automatically be forfeited as of the close of such Fiscal Year, unless otherwise
determined by the General Partner. (d) The General Partner shall maintain on the books and records of the Partnership a record of the number of Points allocated to each Limited Partner and shall give notice to each Limited
withdrawal, unless otherwise determined by the General Partner. (b) Any Points that are forfeited pursuant to Section 7.1(c) or Section 7.2(a) shall, automatically and without any action on the part of any Person, be
reallocated to APH, unless otherwise determined by the General Partner; and no Limited Partner other than APH shall have any right or claim with respect to such forfeited Points. Section 7.3 Points as Profits Interests (a)
Except to the extent not permitted by law, the Partnership and each Limited Partner agree to treat Points as profits interests within the meaning of U.S. Internal Revenue Service Revenue Procedure (Rev. Proc). 93- 27,
1993- 2 C.B. 343. Except to the extent not permitted by law, in accordance with Rev. Proc. 2001- 43, 2001- 2 C.B. 191, the Partnership shall treat each Limited Partner as the holder of Points from the issue date of such
Points, and shall file its Partnership tax return, and issue appropriate Schedules K- 1 to such Limited Partner, allocating to such Limited Partner its distributive share of all items of income, gain, loss, deduction and credit
associated with such Points and each such Limited Partner agrees to take into account such distributive share in computing such Limited Partners U.S. federal income tax liability for the entire period during which such
Limited Partner holds such Points. Except as required pursuant to a Determination as defined in section 1313(a) of the Code, the Partnership and each Limited Partner agree not to claim a deduction (as wages, compensation
or otherwise) for the fair market value of any Points issued to a Limited Partner at the time of issuance of the Points. The undertakings contained in this Section 7.3(a) shall be construed in accordance with section 4 of Rev.
Proc. 2001- 43. Except to the extent not permitted by law, the provisions of this Section 7.3(a) shall apply regardless of whether the Limited Partner files an election pursuant to section 83(b) of the Code. (b) Notwithstanding
the provisions of this Agreement, the General Partner shall have the discretion to vary the allocations of Profit and Loss and the distributions pursuant to this Agreement to the extent necessary to ensure that the issuance of
Points to a Limited Partner does not result, in the General Partners discretion, in a taxable capital shift (unless the General Partner otherwise intends) to such Limited Partner, including by treating as additional Profit or Loss
for the taxable period and by allocating such Profit and Loss to the Limited Partners other
21 than the Limited Partner receiving the Points, any unrealized appreciation or deprecation in the Partnerships assets as of the time the Points are issued. ARTICLE 8 DISSOLUTION AND LIQUIDATION Section 8.1
General Partner is unable to perform this function, a liquidator may be elected by a majority in interest (determined by Points) of Limited Partners and upon such election such liquidator shall liquidate the Partnership. Profit
and Loss during the Fiscal Years that include the period of liquidation shall be allocated pursuant to Section 3.4. The proceeds from liquidation shall be distributed in the following manner: (i) first, the debts, liabilities and
obligations of the Partnership including the expenses of liquidation (including legal and accounting expenses incurred in connection therewith), up to and including the date that distribution of the Partnerships assets to the
Partners has been completed, shall be satisfied (whether by payment or by making reasonable provision for payment thereof); and (ii) thereafter, the Partners shall be paid amounts pro rata in accordance with and up to the
positive balances of their respective Capital Accounts, as adjusted pursuant to Article 3. (b) Anything in this Section 8.1 to the contrary notwithstanding, the General Partner or liquidator may distribute ratably in kind rather
than in cash, upon dissolution, any assets of the Partnership in accordance with the priorities set forth in Section 8.1(a); provided that if any in kind distribution is to be made, the assets distributed in kind shall be valued as of
the actual date of their distribution and charged as so valued and distributed against amounts to be paid under Section 8.1(a). ARTICLE 9 GENERAL PROVISIONS Section 9.1 Amendment of this Agreement (a) The General
Partner may amend this Agreement at any time, in whole or in part, without the consent of any other Partner; provided that any amendment which would increase the obligation of any Partner to make any contribution to the
capital of the Partnership or adversely affect such Partners right to withdraw voluntarily from the Partnership shall not be made unless such Partner has, at the General Partners election, (i) consented thereto, or (ii) been
provided with an opportunity to withdraw from the Partnership as of a date determined by the General Partner that is prior to the effective date of the amendment. Without limiting the foregoing, the
22 General Partner may amend this Agreement at any time, in whole or in part, without the consent of any other Partner, to enable the Partnership to comply with the requirements of the Safe Harbor Election within the
meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury Regulation section 1.83- 3(e)(1) or Proposed Treasury Regulation section 1.704- 1(b)(4)(xii) at such time as such proposed
Procedure and Regulations are effective and to make any such other related changes as may be required by pronouncements or Treasury Regulations issued by the Internal Revenue Service or Treasury Department after the
date of this Agreement. An adjustment of Points shall not be considered an amendment to the extent effected in compliance with the provisions of Section 6.1 or Article 7 as in effect on the date hereof or as hereafter amended
in compliance with the requirements of this Section 9.1(a). (b) Notwithstanding the provisions of this Agreement, including Section 9.1(a), it is hereby acknowledged and agreed that the General Partner on its own behalf or
on behalf of the Partnership without the approval of any Limited Partner or any other Person may enter into one or more side letters or similar agreements with one or more Limited Partners which have the effect of
establishing rights under, or altering or supplementing the terms of this Agreement. The parties hereto agree that any terms contained in a side letter or similar agreement with one or more Partners shall govern with respect to
such Partner or Partners notwithstanding the provisions of this Agreement. Any such side letters or similar agreements shall be binding upon the Partnership or the General Partner, as applicable, and the signatories thereto as
if the terms were contained in this Agreement. Section 9.2 Special Power- of- Attorney (a) Each Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and
lawful representative and attorney- in- fact, and in the name, place and stead of such Partner, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any
amendment to this Agreement which complies with the provisions of this Agreement (including the provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel
to the Partnership, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, or which such legal counsel
may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership as a limited partnership; (iii) any written notice or letter of resignation from any
as amended), which board seat or office was occupied or held at the request of the Partnership or any of its Affiliates; and (iv) all such proxies, consents, assignments and other documents as the General Partner determines to
be necessary or advisable in connection with any merger or other
permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without such Partners consent. If an amendment of the Certificate or this
Agreement or any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any objection which such
Limited Partner may assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a view to the
orderly administration of the affairs of the Partnership. This power- of- attorney is a special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue
in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and (ii) shall
survive any Transfer by a Limited Partner of the whole or any portion of its interest in the Partnership, except that, where the transferee thereof has been approved by the General Partner for admission to the Partnership as a
substituted Limited Partner, this power of attorney given by the transferor shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect
such substitution. Section 9.3 Notices Any notice required or permitted to be given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the attention of John J. Suydam. A notice to a
Limited Partner shall be directed to such Limited Partners last known residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home Address). A notice shall be considered
given when delivered to the addressee either by hand at such Partners Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership business communications, except that a
notice to a former Partner shall be considered given when delivered by hand by a recognized overnight courier together with mailing through the United States Postal System by regular mail to such former Partners Home
Address. Section 9.4 Agreement Binding Upon Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors by operation of law, but the rights and
obligations of the Limited Partners hereunder shall not be assignable, transferable or delegable except as expressly provided
24 herein, and any attempted assignment, transfer or delegation thereof that is not made in accordance with such express provisions shall be void and unenforceable. Section 9.5 Merger, Consolidation, etc. (a) Subject to
Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited partnerships formed under the Act or other business entities (as defined in section 17- 211 of the Act) pursuant to an
agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to Section 9.1(a) but notwithstanding any other provision to the contrary contained elsewhere in this Agreement, an
agreement of merger or consolidation approved in accordance with Section 9.5(a) may, to the extent permitted by section 17- 211(g) of the Act and Section 9.5(a), (i) effect any amendment to this Agreement, (ii) effect the
adoption of a new limited partnership agreement for the Partnership if it is the surviving or resulting limited partnership in the merger or consolidation, or (iii) provide that the limited partnership agreement of any other
constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of consummating the merger or consolidation) shall be the limited partnership agreement of the surviving
or resulting limited partnership. (c) The General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any such
transaction, and each Limited Partner shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement, and the rights of each and all of the Partners
hereunder, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws rules thereof. The parties hereby consent to the non- exclusive jurisdiction and venue for
any action arising out of or relating to this Agreement in the State Courts of the State of Delaware, New Castle County, the State Courts of the State of New York, New York County, the United States District Court for the
District of Delaware located in New Castle County or the United States District Court for the Southern District of New York located in New York County. In addition to any other means available at law for service of process,
each Limited Partner hereby agrees, to the fullest extent permitted by law, that service of process will be duly effectuated when delivered to a Limited Partners Home Address by hand or by a recognized overnight carrier
together with mailing through the United States Postal System by regular mail.
25 Section 9.7 Termination of Right of Action Every right of action arising out of or in connection with this Agreement by or on behalf of any past, present or future Partner or the Partnership against any past, present or
future Partner shall, to the fullest extent permitted by applicable law, irrespective of the place where the action may be brought and irrespective of the residence of any such Partner, cease and be barred by the expiration of
three years from the date of the act or omission in respect of which such right of action arises. Section 9.8 Confidentiality (a) Each Limited Partner acknowledges and agrees that the information contained in the books and
records of the Partnership concerning the Points assigned with respect to any other Limited Partner is confidential, and, to the fullest extent permitted by applicable law, each Limited Partner waives, and covenants not to
assert, any claim or entitlement whatsoever to gain access to any such information. The Limited Partners agree that the restrictions set forth in this Section 9.8(a) shall constitute reasonable standards under the Act regarding
access to information. (b) Each Limited Partner acknowledges and agrees not to, at any time, either during the term of such Limited Partners participation in the Partnership or thereafter, disclose, use, publish or in any
manner reveal, directly or indirectly, to any Person (other than on a confidential basis to such Limited Partners legal and tax advisors who have a need to know such information) the contents of this Agreement or any
Confidential Information, except (i) with the prior written consent of the General Partner, (ii) to the extent that any such information is in the public domain other than as a result of the Limited Partners breach of any of his
obligations, or (iii) where required to be disclosed by court order, subpoena or other government process; provided that, to the fullest extent permitted by law, the Limited Partner shall promptly notify the General Partner upon
becoming aware of any such disclosure requirement and shall cooperate with any effort by the General Partner to prevent or limit such disclosure. (c) Notwithstanding any of the provisions of this Section 9.8, each Limited
Partner may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of an investment in the Partnership and all materials of any kind (including tax opinions or other tax analyses) that
are provided to the Limited Partner relating to such tax treatment. For this purpose, tax treatment is the purported or claimed United States federal income tax treatment of a transaction and tax structure is limited to any
fact that may be relevant to understanding the purported or claimed United States federal income tax treatment of a transaction. For this purpose, the names of the Partnership, the Partners, their affiliates, the names of their
partners, members or equity holders and the representatives, agents and tax advisors of any of the foregoing are not items of tax structure. Section 9.9 Not for Benefit of Creditors The provisions of this Agreement are intended
only for the regulation of relations among Partners and between Partners and former or prospective Partners and the Partnership. Subject to the rights of Covered Persons provided by Section 5.7, this Agreement is not
intended for the
26 benefit of any Person who is not a Partner, and no rights are intended to be granted to any other Person who is not a Partner under this Agreement. Section 9.10 Consents Any and all consents, agreements or approvals
provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept with the books of the Partnership. Section 9.11 Reports As soon as practicable after the end of each taxable
year, the General Partner shall furnish to each Limited Partner (a) such information as may be required to enable each Limited Partner to properly report for United States federal and state income tax purposes such Partners
distributive share of each Partnership item of income, gain, loss, deduction or credit for such year, and (b) a statement of the total amount of Profit or Loss for such year and a reconciliation of any difference between (i) such
Profit or Loss and (ii) the aggregate net profits or net losses allocated by the Fund General Partner to the Partnership for such year. Section 9.12 Filings The Partners hereby agree to take any measures necessary (or, if
applicable, refrain from any action) to ensure that the Partnership is treated as a partnership for United States federal, state and local income tax purposes. Section 9.13 MiscellaneousThe captions and titles preceding the text
of each Section hereof shall be disregarded in the construction of this Agreement. (b) As used herein, masculine pronouns shall include the feminine and neuter, and the singular shall be deemed to include the plural. (c) This
Agreement may be executed in counterparts, each of which shall be deemed to be an original hereof. Signature Page Follows
Apollo Credit Liquidity CM Executive Carry, L.P. Second Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January 12,
2011 and made effective as of July 14, 2009. General Partner: APOLLO CREDIT LIQUIDITY CAPITAL MANAGEMENT, LLC By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President Limited Partner:
APOLLO PRINCIPAL HOLDINGS II, L.P. By: Apollo Principal Holdings II GP, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL AND PROPRIETARY This company is a limited partner of Apollo Credit Opportunity Advisors I, L.P. which is the general partner of Apollo Credit Opportunity Fund I, L.P. and earns the carried
interest on COF I profits. Apollo Credit Opportunity CM Executive Carry I, L.P. Second Amended and Restated Limited Partnership Agreement Dated January 12, 2011 and made effective as of July 14, 2009 THE
TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN THIS AGREEMENT IS RESTRICTED AS DESCRIBED HEREIN.
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APOLLO CREDIT OPPORTUNITY CM EXECUTIVE CARRY I, L.P. A Delaware Limited Partnership SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SECOND AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT of APOLLO CREDIT OPPORTUNITY CM EXECUTIVE CARRY I, L.P. (the Partnership) by and among Apollo COF I Capital Management, LLC, a Delaware
limited liability company, as the sole general partner (the General Partner), and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners is
dated January 12, 2011 and made effective as of July 14, 2009 (the Agreement). W I T N E S S E T H : WHEREAS, on July 14, 2009, Apollo COF I Capital Management, LLC filed with the Secretary of State of the State
of Delaware a Certificate of Limited Partnership to form Apollo Credit Opportunity CM Executive Carry I, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant to an
agreement among Apollo COF I Capital Management, LLC, as sole general partner, and the limited partners of the Partnership (the Original Agreement); WHEREAS, the parties amended and restated the Original
Agreement in its entirety as of July 14, 2009 (the Amended Agreement); and WHEREAS, the parties wish to amend and restate the Amended Agreement in its entirety to make certain modifications thereto. NOW,
Limited Partnership Agreement, as amended or supplemented from time to time. APH means Apollo Principal Holdings V, L.P. (or its assignees or transferees).
Amount means any amount of Carried Interest Distributions received by the Fund General Partner and required, under the Fund LP Agreement, to be returned to the Fund, including any or all of (i) an Interim Clawback
Amount, as defined in the Fund LP Agreement, (ii) a Clawback Amount, as defined in the Fund LP Agreement and, (iii) any amount of Carried Interest Distributions required to be returned to the Fund pursuant to section 6.2
of the Fund LP Agreement. Clawback Share has the meaning ascribed to that term in Section 3.1(d). Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor
law. Confidential Information means information that has not been made publicly available by or with the permission of the General Partner and that is obtained or learned by a Limited Partner as a result of or in connection
with such Partners association with the Partnership or any of its Affiliates concerning the business, affairs or activities of the Partnership, any of its Affiliates or any of the Portfolio Investments, including, without limitation,
models, codes, client information (including client identity and contacts, client lists, client financial or personal information), financial data, know- how, computer software and related documentation, trade secrets, and other
forms of sensitive or valuable non- public information obtained or learned by the Limited Partner as a result of such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information does
not include information concerning non- proprietary business or investment practices, methods or relationships customarily employed or entered into by comparable business enterprises. Covered Person has the meaning
ascribed to that term in Section 5.7. DEUCC has the meaning ascribed to that term in Section 6.5(b). Excess Points has the meaning ascribed to that term in the Fund GP Agreement. Final Adjudication has the meaning
ascribed to that term in Section 5.7. Fiscal Year means, with respect to a year, the period commencing on January 1 of such year and ending on December 31 of such year (or on the date of a final distribution pursuant to
Section 8.1(a)), unless the General Partner shall elect another fiscal year for the Partnership which is a permissible taxable year under the Code. Fund means Apollo Credit Opportunity Fund I, L.P.
3 Fund General Partner means Apollo Credit Opportunity Advisors I, L.P. in its capacity as general partner of the Fund pursuant to the Fund LP Agreement. Fund GP Agreement means the amended and restated limited
partnership agreement of the Fund General Partner, as amended from time to time. Fund LP Agreement means the second amended and restated agreement of limited partnership of the Fund, as amended from time to time.
General Partner means Apollo COF I Capital Management, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in its
capacity as general partner of the Partnership. Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, until such Person withdraws entirely as a limited partner
of the Partnership, in its capacity as a limited partner of the Partnership. Loss means, with respect to any Fiscal Year, any net loss of the Partnership. To the extent derived from the Fund, any items of income, gain, loss,
deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the Fund, and any items not derived from the Fund shall be determined
in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income tax purposes. Management Company has the meaning ascribed to that term in the Fund LP
Agreement. Operating Profit has the meaning ascribed to that term in the Fund GP Agreement. Partner means the General Partner and any of the Limited Partners and Partners means the General Partner and all of the
Limited Partners. Partnership means the limited partnership formed pursuant to this Agreement and the Certificate. Person means any individual, partnership, corporation, limited liability company, joint venture, joint
stock company, unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or other entity. Point
means a share of Profit or Loss representing a Point (as defined in the Fund GP Agreement) held by the Partnership as a limited partner of the Fund General Partner. Portfolio Investment has the meaning ascribed to that
term in the Fund LP Agreement. Profit means, with respect to any Fiscal Year, any net income of the Partnership. To the extent derived from the Fund General Partner, any items of income, gain, loss, deduction and credit
shall be determined in accordance with the same accounting policies, principles and
Name The name of the Partnership shall be Apollo Credit Opportunity CM Executive Carry I, L.P. or such other name as the General Partner may hereafter adopt upon causing an appropriate amendment to be made to this
provided in Section 4.1(b) and Section 6.4(c). Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal and will not earn
certificate to the transferor evidencing any interest registered in the name of the transferor that was not transferred. ARTICLE 7 POINTS Section 7.1 Allocation of Points (a) The aggregate number of Points assigned or
available for assignment to all Partners shall initially be 100. The General Partner intends generally to allocate all 100 Points to Limited Partners other than APH. (b) Except as otherwise provided herein, the General Partner
shall be responsible for the allocation of Points from time to time to the Limited Partners. At each such time of allocation, all Points available for allocation shall be so allocated to the Limited Partners (including APH) by the
General Partner. Points allocated to Limited Partners (other than APH) may not be reduced except as set forth in Section 6.1 and this Article 7. Upon any allocation of Points (other than Excess Points) by the General Partner
to an existing or new Limited Partner other than APH, there shall be a corresponding reduction in the Points of APH, as provided in Section 6.1.
provided with an opportunity to withdraw from the Partnership as of a date determined by the General Partner that is prior to the effective date of the amendment. Without limiting the foregoing, the
22 General Partner may amend this Agreement at any time, in whole or in part, without the consent of any other Partner, to enable the Partnership to comply with the requirements of the Safe Harbor Election within the
meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury Regulation section 1.83- 3(e)(1) or Proposed Treasury Regulation section 1.704- 1(b)(4)(xii) at such time as such proposed
Procedure and Regulations are effective and to make any such other related changes as may be required by pronouncements or Treasury Regulations issued by the Internal Revenue Service or Treasury Department after the
date of this Agreement. An adjustment of Points shall not be considered an amendment to the extent effected in compliance with the provisions of Section 6.1 or Article 7 as in effect on the date hereof or as hereafter amended
in compliance with the requirements of this Section 9.1(a). (b) Notwithstanding the provisions of this Agreement, including Section 9.1(a), it is hereby acknowledged and agreed that the General Partner on its own behalf or
on behalf of the Partnership without the approval of any Limited Partner or any other Person may enter into one or more side letters or similar agreements with one or more Limited Partners which have the effect of
establishing rights under, or altering or supplementing the terms of this Agreement. The parties hereto agree that any terms contained in a side letter or similar agreement with one or more Partners shall govern with respect to
such Partner or Partners notwithstanding the provisions of this Agreement. Any such side letters or similar agreements shall be binding upon the Partnership or the General Partner, as applicable, and the signatories thereto as
if the terms were contained in this Agreement. Section 9.2 Special Power- of- Attorney (a) Each Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and
lawful representative and attorney- in- fact, and in the name, place and stead of such Partner, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any
amendment to this Agreement which complies with the provisions of this Agreement (including the provisions of Section 9.1); (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel
to the Partnership, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision or agency thereof, or which such legal counsel
may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the Partnership as a limited partnership; (iii) any written notice or letter of resignation from any
as amended), which board seat or office was occupied or held at the request of the Partnership or any of its Affiliates; and (iv) all such proxies, consents, assignments and other documents as the General Partner determines to
be necessary or advisable in connection with any merger or other
permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without such Partners consent. If an amendment of the Certificate or this
Agreement or any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any objection which such
Limited Partner may assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a view to the
orderly administration of the affairs of the Partnership. This power- of- attorney is a special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue
in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and (ii) shall
survive any Transfer by a Limited Partner of the whole or any portion of its interest in the Partnership, except that, where the transferee thereof has been approved by the General Partner for admission to the Partnership as a
substituted Limited Partner, this power of attorney given by the transferor shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect
such substitution. Section 9.3 Notices Any notice required or permitted to be given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the attention of John J. Suydam. A notice to a
Limited Partner shall be directed to such Limited Partners last known residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home Address). A notice shall be considered
given when delivered to the addressee either by hand at such Partners Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership business communications, except that a
notice to a former Partner shall be considered given when delivered by hand by a recognized overnight courier together with mailing through the United States Postal System by regular mail to such former Partners Home
Address. Section 9.4 Agreement Binding Upon Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors by operation of law, but the rights and
obligations of the Limited Partners hereunder shall not be assignable, transferable or delegable except as expressly provided
24 herein, and any attempted assignment, transfer or delegation thereof that is not made in accordance with such express provisions shall be void and unenforceable. Section 9.5 Merger, Consolidation, etc. (a) Subject to
Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited partnerships formed under the Act or other business entities (as defined in section 17- 211 of the Act) pursuant to an
agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to Section 9.1(a) but notwithstanding any other provision to the contrary contained elsewhere in this Agreement, an
agreement of merger or consolidation approved in accordance with Section 9.5(a) may, to the extent permitted by section 17- 211(g) of the Act and Section 9.5(a), (i) effect any amendment to this Agreement, (ii) effect the
adoption of a new limited partnership agreement for the Partnership if it is the surviving or resulting limited partnership in the merger or consolidation, or (iii) provide that the limited partnership agreement of any other
constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of consummating the merger or consolidation) shall be the limited partnership agreement of the surviving
or resulting limited partnership. (c) The General Partner may require one or more of the Limited Partners to sell, exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any such
transaction, and each Limited Partner shall take such action as may be directed by the General Partner to effect any such transaction. Section 9.6 Governing Law This Agreement, and the rights of each and all of the Partners
hereunder, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws rules thereof. The parties hereby consent to the non- exclusive jurisdiction and venue for
any action arising out of or relating to this Agreement in the State Courts of the State of Delaware, New Castle County, the State Courts of the State of New York, New York County, the United States District Court for the
District of Delaware located in New Castle County or the United States District Court for the Southern District of New York located in New York County. In addition to any other means available at law for service of process,
each Limited Partner hereby agrees, to the fullest extent permitted by law, that service of process will be duly effectuated when delivered to a Limited Partners Home Address by hand or by a recognized overnight carrier
together with mailing through the United States Postal System by regular mail.
intended for the
Apollo Credit Opportunity CM Executive Carry I, L.P. Second Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January
12, 2011 and made effective as of July 14, 2009. General Partner: APOLLO COF I CAPITAL MANAGEMENT, LLC By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President Limited Partner: APOLLO
PRINCIPAL HOLDINGS V, L.P. By: Apollo Principal Holdings V GP, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL AND PROPRIETARY This company is a limited partner of Apollo Credit Opportunity Advisors II, L.P. which is the general partner of Apollo Credit Opportunity Fund II, L.P. and earns the carried
interest on COF II profits. Apollo Credit Opportunity CM Executive Carry II, L.P. Second Amended and Restated Limited Partnership Agreement Dated January 12, 2011 and made effective as of July 14, 2009 THE
TRANSFER OF THE PARTNERSHIP INTERESTS DESCRIBED IN THIS AGREEMENT IS RESTRICTED AS DESCRIBED HEREIN.
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APOLLO CREDIT OPPORTUNITY CM EXECUTIVE CARRY II, L.P. A Delaware Limited Partnership SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SECOND AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT of APOLLO CREDIT OPPORTUNITY CM EXECUTIVE CARRY II, L.P. (the Partnership) by and among Apollo COF II Capital Management, LLC, a Delaware
limited liability company, as the sole general partner (the General Partner), and the persons whose names and addresses are set forth in the Schedule of Partners under the caption Limited Partners as the limited partners is
dated January 12, 2011 and made effective as of July 14, 2009 (the Agreement). W I T N E S S E T H : WHEREAS, on July 14, 2009, Apollo COF II Capital Management, LLC filed with the Secretary of State of the State
of Delaware a Certificate of Limited Partnership to form Apollo Credit Opportunity CM Executive Carry II, L.P. as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, pursuant to an
agreement among Apollo COF II Capital Management, LLC, as sole general partner, and the limited partners of the Partnership (the Original Agreement); WHEREAS, the parties amended and restated the Original
Agreement in its entirety as of July 14, 2009 (the Amended Agreement); and WHEREAS, the parties wish to amend and restate the Amended Agreement in its entirety to make certain modifications thereto. NOW,
Limited Partnership Agreement, as amended or supplemented from time to time. APH means Apollo Principal Holdings V, L.P. (or its assignees or transferees).
Amount means any amount of Carried Interest Distributions received by the Fund General Partner and required, under the Fund LP Agreement, to be returned to the Fund, including either or both of (i) a Clawback Amount,
as defined in the Fund LP Agreement and, (ii) any amount of Carried Interest Distributions required to be returned to the Fund pursuant to section 6.2 of the Fund LP Agreement. Clawback Share has the meaning ascribed to
that term in Section 3.1(d). Code means the United States Internal Revenue Code of 1986, as amended and as hereafter amended, or any successor law. Confidential Information means information that has not been made
publicly available by or with the permission of the General Partner and that is obtained or learned by a Limited Partner as a result of or in connection with such Partners association with the Partnership or any of its Affiliates
concerning the business, affairs or activities of the Partnership, any of its Affiliates or any of the Portfolio Investments, including, without limitation, models, codes, client information (including client identity and contacts,
client lists, client financial or personal information), financial data, know- how, computer software and related documentation, trade secrets, and other forms of sensitive or valuable non- public information obtained or learned
by the Limited Partner as a result of such Limited Partners participation in the Partnership. For the avoidance of doubt, Confidential Information does not include information concerning non- proprietary business or
investment practices, methods or relationships customarily employed or entered into by comparable business enterprises. Covered Person has the meaning ascribed to that term in Section 5.7. DEUCC has the meaning
ascribed to that term in Section 6.5(b). Excess Points has the meaning ascribed to that term in the Fund GP Agreement. Final Adjudication has the meaning ascribed to that term in Section 5.7. Fiscal Year means, with
respect to a year, the period commencing on January 1 of such year and ending on December 31 of such year (or on the date of a final distribution pursuant to Section 8.1(a)), unless the General Partner shall elect another
fiscal year for the Partnership which is a permissible taxable year under the Code. Fund means Apollo Credit Opportunity Fund II, L.P.
3 Fund General Partner means Apollo Credit Opportunity Advisors II, L.P. in its capacity as general partner of the Fund pursuant to the Fund LP Agreement. Fund GP Agreement means the amended and restated limited
partnership agreement of the Fund General Partner, as amended from time to time. Fund LP Agreement means the fourth amended and restated agreement of limited partnership of the Fund, as amended from time to time.
General Partner means Apollo COF II Capital Management, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership or any successor to the business of the General Partner in its
capacity as general partner of the Partnership. Limited Partner means any Person admitted as a limited partner to the Partnership in accordance with this Agreement, until such Person withdraws entirely as a limited partner
of the Partnership, in its capacity as a limited partner of the Partnership. Loss means, with respect to any Fiscal Year, any net loss of the Partnership. To the extent derived from the Fund, any items of income, gain, loss,
deduction and credit shall be determined in accordance with the same accounting policies, principles and procedures applicable to the determination by the Fund, and any items not derived from the Fund shall be determined
in accordance with the accounting policies, principles and procedures used by the Partnership for United States federal income tax purposes. Management Company has the meaning ascribed to that term in the Fund LP
Agreement. Operating Profit has the meaning ascribed to that term in the Fund GP Agreement. Partner means the General Partner and any of the Limited Partners and Partners means the General Partner and all of the
Limited Partners. Partnership means the limited partnership formed pursuant to this Agreement and the Certificate. Person means any individual, partnership, corporation, limited liability company, joint venture, joint
stock company, unincorporated organization or association, trust (including the trustees thereof, in their capacity as such), government, governmental agency, political subdivision of any government, or other entity. Point
means a share of Profit or Loss representing a Point (as defined in the Fund GP Agreement) held by the Partnership as a limited partner of the Fund General Partner. Portfolio Investment has the meaning ascribed to that
term in the Fund LP Agreement. Profit means, with respect to any Fiscal Year, any net income of the Partnership. To the extent derived from the Fund General Partner, any items of income, gain, loss, deduction and credit
shall be determined in accordance with the same accounting policies, principles and
Name The name of the Partnership shall be Apollo Credit Opportunity CM Executive Carry II, L.P. or such other name as the General Partner may hereafter adopt upon causing an appropriate amendment to be made to this
provided in Section 4.1(a) and Section 6.4(c). Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal and will not earn
certificate to the transferor evidencing any interest registered in the name of the transferor that was not transferred. ARTICLE 7 POINTS Section 7.1 Allocation of Points (a) The aggregate number of Points assigned or
available for assignment to all Partners shall initially be 200. The General Partner intends generally to allocate all 200 Points to Limited Partners other than APH. (b) Except as otherwise provided herein, the General Partner
shall be responsible for the allocation of Points from time to time to the Limited Partners. At each such time of allocation, all Points available for allocation shall be so allocated to the Limited Partners (including APH) by the
General Partner. Points allocated to Limited Partners (other than APH) may not be reduced except as set forth in Section 6.1 and this Article 7. Upon any allocation of Points (other than Excess Points) by the General Partner
to an existing or new Limited Partner other than APH, there shall be a corresponding reduction in the Points of APH, as provided in Section 6.1.
provided with an opportunity to withdraw from the Partnership as of a date determined by the General
22 Partner that is prior to the effective date of the amendment. Without limiting the foregoing, the General Partner may amend this Agreement at any time, in whole or in part, without the consent of any other Partner, to
enable the Partnership to comply with the requirements of the Safe Harbor Election within the meaning of the Proposed Revenue Procedure of Notice 2005- 43, 2005- 24 IRB 1, Proposed Treasury Regulation section 1.833(e)(1) or Proposed Treasury Regulation section 1.704- 1(b)(4)(xii) at such time as such proposed Procedure and Regulations are effective and to make any such other related changes as may be required by pronouncements or
Treasury Regulations issued by the Internal Revenue Service or Treasury Department after the date of this Agreement. An adjustment of Points shall not be considered an amendment to the extent effected in compliance with
the provisions of Section 6.1 or Article 7 as in effect on the date hereof or as hereafter amended in compliance with the requirements of this Section 9.1(a). (b) Notwithstanding the provisions of this Agreement, including
Section 9.1(a), it is hereby acknowledged and agreed that the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner or any other Person may enter into one or more side
letters or similar agreements with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of this Agreement. The parties hereto agree that any terms contained in
a side letter or similar agreement with one or more Partners shall govern with respect to such Partner or Partners notwithstanding the provisions of this Agreement. Any such side letters or similar agreements shall be binding
upon the Partnership or the General Partner, as applicable, and the signatories thereto as if the terms were contained in this Agreement. Section 9.2 Special Power- of- Attorney (a) Each Partner hereby irrevocably makes,
constitutes and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- in- fact, and in the name, place and stead of such Partner, with the power from time to time to make,
execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any amendment to this Agreement which complies with the provisions of this Agreement (including the provisions of Section 9.1); (ii) all
such other instruments, documents and certificates which, in the opinion of legal counsel to the Partnership, may from time to time be required by the laws of the United States of America, the State of Delaware or any other
jurisdiction, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid and subsisting existence and business of the
Partnership as a limited partnership; (iii) any written notice or letter of resignation from any board seat or office of any Person (other than a company that has a class of equity securities registered under the Securities
Exchange Act of 1934, as amended, or that is registered under the Investment Company Act of 1940, as amended), which board seat or office was occupied or held at the request of the Partnership or any of its Affiliates; and
23 (iv) all such proxies, consents, assignments and other documents as the General Partner determines to be necessary or advisable in connection with any merger or other reorganization, restructuring or other similar
transaction entered into in accordance with this Agreement (including the provisions of Section 9.5(c)). (b) Each Limited Partner is aware that the terms of this Agreement permit certain amendments to this Agreement to be
effected and certain other actions to be taken or omitted by or with respect to the Partnership without such Partners consent. If an amendment of the Certificate or this Agreement or any action by or with respect to the
Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any objection which such Limited Partner may assert with respect to such action,
the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may be necessary or appropriate to permit such amendment to be made or action
lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with a view to the orderly administration of the affairs of the Partnership. This
power- of- attorney is a special power- of- attorney and is coupled with an interest in favor of the General Partner and as such: (i) shall be irrevocable and continue in full force and effect notwithstanding the subsequent death
or incapacity of any party granting this power- of- attorney, regardless of whether the Partnership or the General Partner shall have had notice thereof; and (ii) shall survive any Transfer by a Limited Partner of the whole or
any portion of its interest in the Partnership, except that, where the transferee thereof has been approved by the General Partner for admission to the Partnership as a substituted Limited Partner, this power of attorney given by
the transferor shall survive such Transfer for the sole purpose of enabling the General Partner to execute, acknowledge and file any instrument necessary to effect such substitution. Section 9.3 Notices Any notice required or
permitted to be given under this Agreement shall be in writing. A notice to the General Partner shall be directed to the attention of John J. Suydam. A notice to a Limited Partner shall be directed to such Limited Partners last
known residence as set forth in the books and records of the Partnership or its Affiliates (a Limited Partners Home Address). A notice shall be considered given when delivered to the addressee either by hand at such
Partners Partnership office or electronically to the primary e- mail account supplied by the Partnership for Partnership business communications, except that a notice to a former Partner shall be considered given when
delivered by hand by a recognized overnight courier together with mailing through the United States Postal System by regular mail to such former Partners Home Address. Section 9.4 Agreement Binding Upon Successors
and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors by operation of law, but the rights and obligations of the Limited
24 Partners hereunder shall not be assignable, transferable or delegable except as expressly provided herein, and any attempted assignment, transfer or delegation thereof that is not made in accordance with such express
provisions shall be void and unenforceable. Section 9.5 Merger, Consolidation, etc. (a) Subject to Sections 9.5(b) and 9.5(c), the Partnership may merge or consolidate with or into one or more limited partnerships formed
under the Act or other business entities (as defined in section 17- 211 of the Act) pursuant to an agreement of merger or consolidation which has been approved by the General Partner. (b) Subject to Section 9.1(a) but
notwithstanding any other provision to the contrary contained elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section 9.5(a) may, to the extent permitted by section 17211(g) of the Act and Section 9.5(a), (i) effect any amendment to this Agreement, (ii) effect the adoption of a new limited partnership agreement for the Partnership if it is the surviving or resulting limited partnership in the
merger or consolidation, or (iii) provide that the limited partnership agreement of any other constituent limited partnership to the merger or consolidation (including a limited partnership formed for the purpose of
consummating the merger or consolidation) shall be the limited partnership agreement of the surviving or resulting limited partnership. (c) The General Partner may require one or more of the Limited Partners to sell,
exchange, transfer or otherwise dispose of their interests in the Partnership in connection with any such transaction, and each Limited Partner shall take such action as may be directed by the General Partner to effect any such
transaction. Section 9.6 Governing Law This Agreement, and the rights of each and all of the Partners hereunder, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to
conflict of laws rules thereof. The parties hereby consent to the non- exclusive jurisdiction and venue for any action arising out of or relating to this Agreement in the State Courts of the State of Delaware, New Castle County,
the State Courts of the State of New York, New York County, the United States District Court for the District of Delaware located in New Castle County or the United States District Court for the Southern District of New
York located in New York County. In addition to any other means available at law for service of process, each Limited Partner hereby agrees, to the fullest extent permitted by law, that service of process will be duly
effectuated when delivered to a Limited Partners Home Address by hand or by a recognized overnight carrier together with mailing through the United States Postal System by regular mail.
intended for the
Apollo Credit Opportunity CM Executive Carry II, L.P. Second Amended and Restated Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January
12, 2011 and made effective as of July 14, 2009. General Partner: APOLLO COF II CAPITAL MANAGEMENT, LLC By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President Limited Partner: APOLLO
PRINCIPAL HOLDINGS V, L.P. By: Apollo Principal Holdings V GP, LLC, its General Partner By: /s/ John J. Suydam Name: John J. Suydam Title: Vice President
CONFIDENTIAL & PROPRIETARY EXECUTION VERSION 032751.0031 EAST 103465630 v3 SECOND AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT OF AGM
INCENTIVE POOL, L.P. This SECOND AMENDED AND RESTATED EXEMPTED LIMITED PARTNERSHIP AGREEMENT (this Agreement) of AGM Incentive Pool, L.P., a Cayman Islands exempted limited
partnership (the Partnership), is entered into by the parties whose names are recorded from time to time as limited partners of the Partnership in the Register of Partners (as defined herein) (the Limited Partners), Apollo
Principal Holdings IV GP, Ltd., a Cayman Islands exempted company (the General Partner and together with the Limited Partners, the Partners), on June 29, 2012. WHEREAS, the Partnership was formed upon (a) the
entry into of the initial exempted limited partnership agreement of the Partnership on June 16, 2011 (the Original Agreement) by and among the General Partner and Walkers Nominees Limited, a Cayman Islands exempted
company, (the Initial Limited Partner), and (b) registered as an exempted limited partnership pursuant to the Exempted Limited Partnership Law (as amended) of the Cayman Islands (the Act) by the filing of a statement
in accordance with section 9 of the Act by the General Partner as evidenced by the certificate of registration dated June 16, 2011; and WHEREAS, on August 2, 2012, the Original Agreement was amended and restated in its
entirety by and among the General Partner, the Limited Partners and the Initial Limited Partner to (a) effect the withdrawal of the Initial Limited Partner, (b) reflect the admission of the Limited Partners to the Partnership as
limited partners, and (c) make the additional changes set forth therein (the Amended and Restated Agreement). WHEREAS, the parties hereto desire to amend and restate the Amended and Restated Agreement to make the
additional changes set forth in this Agreement. NOW, THEREFORE, the parties hereby agree as follows: 1. Name. (a) The name of the exempted limited partnership continued hereby is AGM Incentive Pool, L.P. The
General Partner is authorized to make any variations in the Partnerships name and may otherwise conduct the business of the Partnership under any other name, subject to compliance with the Act and all other applicable
laws, as the General Partner may deem it necessary or advisable; provided that such name shall contain the words Limited Partnership, the letters L.P. or the designation LP or the equivalent translation thereof. (b) The
Partners acknowledge that the rights and duties of the General Partner shall be as provided by the Act and, save as permitted by applicable law, as provided in this Agreement.
032751.0031 EAST 103465630 v3 2 2. Purpose. The object and purpose of, and the nature of the business to be conducted and promoted by the Partnership is, engaging in any lawful act or activity for which exempted limited
partnerships may be formed under the Act and engaging in any and all activities necessary or incidental to the foregoing. The Partnership is intended to act as a limited partner of APH Holdings, L.P., APH Holdings (FC), L.P.
and APH Holdings (DC), L.P. (together with any additional limited partnerships in which the Partnership may hold a limited partner interest, the Holdings Partnerships) and receive distributions from the Holdings
Partnerships representing the Minimum Profit Share, the Discretionary Profit Share and the Fixed Profits Share (each, as defined herein). 3. Registered Office. The address of the registered office of the Partnership in the
Cayman Islands is c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1- 9005, Cayman Islands. 4. Principal Office. The principal office of the Partnership shall be One
Manhattanville Road, Suite 201, Purchase, New York 10577, United States of America, or at such other place as the General Partner may determine from time to time. The General Partner may establish additional offices as it
deems necessary. 5. Partners. (a) The names of the Partners are as set forth in the register of partnership interests maintained by the General Partner (the Register of Partners). Each person listed under the title Limited
Partner in the Register of Partners hereby continues as a limited partner of the Partnership upon its execution of a counterpart signature page to this Agreement on the date hereof or subsequently pursuant to a form of deed of
adherence to this Agreement pursuant to which such person agrees to be admitted as a Limited Partner of the Partnership and to adhere to and be bound by the terms of this Agreement as a limited partner of the Partnership.
(b) Each Limited Partner shall have a limited partner interest in the Partnership as set forth on the Register of Partners (the Limited Partner Interests) in accordance with the Act. The General Partner shall adjust the Register
of Partners from time to time as necessary to reflect the admission of any limited partner or any transfers of a Limited Partner Interest, any contributions made by or distributions paid to any Limited Partner or any other event
which may result in a change in the Limited Partner Interest of a Limited Partner. To the maximum extent permitted by the Act and other applicable law, the rights of a Limited Partner with respect to the Partnership and
under this Agreement shall be limited to an entitlement to allocations and distributions as provided in Sections 9 and 10 only and, without limiting the foregoing, no Limited Partner shall have any right or authority to (i) take
part in the management or control of the Partnerships business, (ii) act for the Partnership, or (iii) vote on any matter with respect to the Partnership. (c) The General Partner hereby designates two classes of Limited Partner
Interests in the Partnership. Class 1 Interests represent an entitlement to allocations and distributions by the Partnership with respect to the Minimum Profits Share and the Discretionary Profits Share only, and Class 2 Interests
represent an entitlement to allocations and distributions
032751.0031 EAST 103465630 v3 3 by the Partnership with respect to the Fixed Profits Share only. A Limited Partner may hold both a Class 1 Interest and a Class 2 Interest. (d) The General Partner hereby continues as the
general partner of the Partnership upon its execution of a counterpart signature page to this Agreement and confirms its agreement to be bound by the terms of this Agreement. 6. Management of the Partnership. (a) Subject to
the delegation of rights and powers provided for herein, the management of the Partnership shall be vested exclusively in the General Partner. To the extent permitted by law, the General Partner shall have the sole right to
manage and conduct the affairs of the business of the Partnership and shall have all powers and rights necessary, appropriate or advisable to carry out the purposes and business of the Partnership. The General Partner, on
behalf of the Partnership, is authorized to execute and deliver, and perform the Partnerships obligations under, any and all agreements, deeds, instruments, receipts, certificates and other documents, and to take all such other
action as it may consider necessary or advisable in connection with the purposes of the Partnership without any further act, vote or approval of any person, including any Limited Partner, notwithstanding any other provision
of this Agreement. (b) The General Partner shall have sole discretion regarding the appointment, quantity, titles, duties, power and removal of all officers of the Partnership, if any. (c) All contracts, agreements, endorsements,
assignments, transfers, or other instruments shall be signed by the General Partner or an authorized agent on behalf of the Partnership. (d) All matters concerning the determination, valuation, distribution to and allocation
among the Partners with respect to any profit or loss of the Partnership and any associated items of income, gain, deduction, loss and credit, pursuant to any provision of this Agreement, including any accounting procedures
applicable thereto, shall be determined by the General Partner in its discretion, and such determinations and allocations shall be final and binding on all the Partners. (e) The General Partner shall execute and file any
amendments to all certificates and other instruments, including any amendments to this Agreement in accordance with the terms of this Agreement and a filing of a statement of changes in registered particulars of the
Partnership pursuant to section 10 of the Act, which the General Partner deems appropriate to form, qualify or continue the Partnership as an exempted limited partnership (or a partnership in which the Limited Partners have
limited liability) in the Cayman Islands and all other jurisdictions in which the Partnership conducts or plans to conduct its affairs. 7. Capital Contributions. No Partner shall be required to make capital contributions to the
Partnership, save as agreed from time to time between such Partner and the General Partner. 8. Capital Accounts. The General Partner shall maintain for each Limited Partner a capital account in accordance with this Section 8
and in accordance with the rules of United
032751.0031 EAST 103465630 v3 4 States Treasury Regulation Section 1.704- 1(b)(2)(iv) promulgated under the United States Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations
promulgated thereunder. Each Limited Partners capital account shall have an initial balance equal to the amount of cash and the Carrying Value (as defined herein) of property constituting the Limited Partners initial
contribution to the capital of the Partnership, if any. Each Limited Partners capital account shall be increased by the sum of (a) the amount of cash and the Carrying Value of property constituting additional contributions by
the Limited Partner to the capital of the Partnership, if any, and (b) any Profits (as defined herein) allocated to the Limited Partners capital account pursuant to Section 9(b). Each Limited Partners capital account shall be
reduced by the sum of (i) the amount of cash and the Carrying Value of any property distributed by the Partnership to such Limited Partner, and (ii) any Losses (as defined herein) allocated to such Limited Partners capital
account pursuant to Section 9(b). 9. Allocation of Profits and Losses. (a) Distribution Sources. Each of the Holdings Partnerships is expected to derive cash or other revenues from its equity interests in entities that received
such revenues as a distribution of carried interest or incentive allocations from a private investment fund or similar account (as adjusted for certain tax- related items, Carried Interest Revenue). The Holdings Partnerships
may also derive other revenues. Each year, each of the Holdings Partnerships is generally required to distribute to the Partnership an amount equal to one percent of its Carried Interest Revenue for the year (the Minimum
Profit Share). In addition, the general partner of each Holdings Partnership has the authority (but not the obligation) to (i) designate an additional fixed amount that it will be required to distribute to the Partnership (a Fixed
Profit Share) and (ii) make additional discretionary distributions to the Partnership (a Discretionary Profit Share). (b) Book Allocations of Profits and Losses. The Partnerships Profits and Losses (and, to the extent
necessary, individual items of income, gain, loss, deduction or credit) for any Fiscal Year (as defined herein) shall be allocated among the Limited Partners: (i) in respect of the Minimum Profit Share, as determined by the
General Partner such that (A) each Limited Partner receives at least the lesser of (1) its Minimum Per Capita Share or (2) its Minimum Percentage Share and (B) 100% of the Minimum Profit Share has been allocated among
the Limited Partners; (ii) in respect of the Fixed Profit Share, in accordance with their respective interests therein as set forth in the Limited Partners Side Letter (as defined herein) relating to the Fixed Profit Share; and (iii)
in respect of any Discretionary Profit Share, in accordance with the determination of the General Partner; (c) provided, that any Profits or Losses attributable to a Book- Tax Difference in the Partnerships assets shall be
specially allocated to the Limited Partners that have been allocated a share of such Book- Tax Difference pursuant to the definition of Book- Tax Difference, any such special allocation to be in the proportion that such
Limited Partners
032751.0031 EAST 103465630 v3 5 allocated share of the Book- Tax Difference bears to the total Book- Tax Difference of the asset giving rise to the Profits or Losses; and provided further, that to the extent any Losses are
attributable to assets in respect of which prior allocations of Profits were made, such Losses shall be specially allocated in the same manner as the prior allocations of Profits. (d) Tax Allocations. Except as otherwise required
under Section 704(c) of the Code, the Partnerships income, gains, losses, credits and deductions shall be allocated among the Limited Partners, for United States federal, state and local income tax purposes, to the extent
permitted under the Code and the Treasury Regulations, in the same manner that each such item is allocated to the Limited Partners capital accounts for book purposes. (e) Definitions. The following terms, when used in this
Agreement, have the respective meanings set forth below. (i) Book- Tax Difference shall mean the difference between the Carrying Value of a Partnership asset and its adjusted tax basis for United States federal income tax
purposes, as determined at the time of any of the events described in the definition of Carrying Value, which for purposes of this Agreement shall include any accrued income in respect of securities contributed to or held
(directly or indirectly) by the Partnership as of the date of any such event. The General Partner shall maintain an account in the name of each Limited Partner that reflects such Limited Partners share of any Book- Tax
Difference. (ii) Carrying Value shall mean, with respect to any Partnership asset, the assets adjusted basis for United States federal income tax purposes, except that the Carrying Values of all Partnership assets shall be
adjusted to equal their respective fair market values (as determined by the General Partner), in accordance with the rules set forth in Treasury Regulations Section 1.704- 1(b)(2)(iv)(f), except as otherwise provided herein,
immediately prior to (a) the date of the acquisition of any additional interests in the Partnership by any new or existing Partner in exchange for more than a de minimis capital contribution; (b) the date of the distribution of
more than a de minimis amount of any Partnership asset to a Partner including cash as consideration for an interest in the Partnership, (c) the date of the grant of more than a de minimis profits interest in the Partnership to as
consideration for the provision of services to or for the benefit of the Partnership by an existing Partner, or by a new Partner acting in his capacity as a Partner or in anticipation of becoming a Partner, or (d) the liquidation of
the Partnership within the meaning of Treasury Regulations Section 1.704- 1(b)(2)(ii)(g); provided, that adjustment pursuant to clauses (a), (b) and (c) above shall be made only if the General Partner reasonably determines
that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners. The Carrying Value of any Partnership asset distributed to any Partner shall be adjusted immediately prior to such
distribution to equal its fair market value (as determined by the General Partner). The Carrying Value of any asset contributed by a Partner to the Partnership shall be the fair market value (as determined by the General
Partner) of the asset at the date of its contribution. (iii) Minimum Per Capita Share means x/y, where x = in the case of AGM Marketing Pool, L.P., the number of limited partners thereof at that time and, in the case of each
other Limited
032751.0031 EAST 103465630 v3 6 Partner, 1, and y = the number of limited partners of AGM Marketing Pool, L.P. at that time plus the number of Limited Partners other than AGM Marketing Pool, L.P. (iv) Minimum
Percentage Share means, in the case of AGM Marketing Pool, L.P., 1.0% multiplied by the number of limited partners of AGM Marketing Pool, L.P. at such time and, in the case of each other Limited Partner means 1.0%.
(v) Profits and Losses shall mean, for each Fiscal Year or other period, the taxable income or loss of the Partnership, or particular items thereof, determined in accordance with the accounting method used by the
Partnership for United States federal income tax purposes with the following adjustments: (A) any income of the Partnership that is exempt from United States federal income taxation and not otherwise taken into account in
computing Profits and Losses shall be added to such taxable income or loss; (B) if the Carrying Value of any Partnership asset differs from its adjusted tax basis for United States federal income tax purposes, any gain or loss
resulting from a disposition of such Partnership asset shall be calculated with reference to such Carrying Value; (C) if the Carrying Value of any Partnership asset differs from its adjusted tax basis for United States federal
income tax purposes the amount of depreciation, amortization or cost recovery deductions with respect to such Partnership asset shall for purposes of determining Profits and Losses be an amount which bears the same ratio to
such Carrying Value as the United States federal income tax depreciation, amortization or other cost recovery deductions bears to such adjusted tax basis (provided that if the United States federal income tax depreciation,
amortization or other cost recovery deduction is zero, the General Partner may use any reasonable method for purposes of determining depreciation, amortization or other cost recovery deductions in calculating Profits and
Losses); (D) upon an adjustment to the Carrying Value of any Partnership asset (other than an adjustment in respect of depreciation, amortization or other cost recovery deductions) pursuant to the definition of Carrying
Value, the amount of the adjustment shall be included as gain (if the adjustment increases the Carrying Value of the asset) or loss (if the adjustment decreases the Carrying Value of the asset) in computing such taxable income
or loss; and (E) any expenditures of the Partnership that are described in Section 705(a)(2)(B) of the Code or are treated as described in Section 705(a)(2)(B) of the Code pursuant to Treasury Regulations Section 1.7041(b)(2)(iv)(i) and not otherwise taken into account in computing Profits and Losses shall be treated as deductible items. 10. Distributions.
032751.0031 EAST 103465630 v3 7 (a) The Limited Partners shall not have the right to distributions except for distributions in accordance with this Section 10 or, upon dissolution of the Partnership, in accordance with
Section 16. The entitlement to any such return at such time shall be pro rata in accordance with their respective applicable capital account balances. Except as required by the Act or other applicable law, no Partner shall be
liable for the return of any such amounts. Notwithstanding any provision in this Agreement to the contrary, the Partnership shall not make a distribution to a Partner if such distribution would violate the Act or other applicable
law. (b) The General Partner shall cause the Partnership to distribute any cash or property received by the Partnership. All cash or property attributable to: (i) the Minimum Profit Share shall be distributed to the holders of
Class 1 Interests in accordance with the determination by the General Partner made pursuant to the requirements of Section 9(b)(i) hereof; (ii) the Fixed Profit Shares shall be distributed to the holders of Class 2 Interests, in
such proportions as are consistent with the applicable Side Letters delivered by the General Partner to the Limited Partners; and (iii) the Discretionary Profit Share shall be distributed to the holders of the Class 1 Interests in
accordance with the determination by the General Partner; provided, that any amount determined by the General Partner to be attributable to a Book- Tax Difference in the Partnerships assets shall be distributed to the
Limited Partners in a manner determined by the General Partner to be consistent with the allocation of the related Book- Tax Difference in accordance with Section 9(c). (c) If the Partnership incurs a withholding tax or other
tax obligation with respect to a share of Partnership income allocable to any Limited Partner, then the General Partner, without limitation of any other rights of the Partnership, may cause the amount of such obligation to be
debited against the capital account of such Limited Partner when the Partnership pays such obligation, and any amounts then or thereafter distributable to such Limited Partner shall be reduced by the amount of such taxes. If
the amount of such taxes is greater than any such then distributable amounts, then such Limited Partner and any successor to such Limited Partners Limited Partner Interest shall indemnify and hold harmless the Partnership
and the General Partner against, and shall pay to the Partnership as a contribution to the capital of the Partnership, upon demand of the General Partner, the amount of such excess. (d) The General Partner may deduct from any
distribution due to any Partner any amounts owed by such Limited Partner to the General Partner or its Affiliates, whether under this Agreement or otherwise. For purposes of this Agreement, Affiliate means with respect to
any person any other person directly or indirectly controlling, controlled by or under common control with such person. 11. Fiscal Year; Tax Matters. (a) The fiscal year of the Partnership shall begin on January 1 and end on
December 31 of each year, except for the short taxable years, if any, in the years of the
032751.0031 EAST 103465630 v3 8 Partnerships formation and termination, and as otherwise required by the Code (the Fiscal Year). (b) Proper and complete records and books of account of the business of the
Partnership shall be maintained at the Partnerships principal place of business. Each of the Partners acknowledges and agrees that the Partnership is a foreign entity with multiple Partners and is intended to be classified and
treated as a partnership for United States federal, state and local income tax purposes. The Partnerships books of account shall be maintained on a basis consistent with such treatment and on the same basis utilized in
preparing the Partnerships United States federal income tax return. Each Limited Partner and its duly authorized representatives may, for any reason reasonably related to its interest as a limited partner of the Partnership,
examine the Partnerships books of account and make copies and extracts therefrom at its own expense. The General Partner or, if there is no general partner, the liquidating trustee of the Partnership, shall maintain the records
of the Partnership for three years following termination of the Partnership. (c) The Partners hereby agree to take any measures necessary (or, if applicable, refrain from any action) to ensure that the Partnership is treated as a
partnership for United States federal, state and local income tax purposes. (d) As soon as reasonably practicable after the end of each Fiscal Year, the Partnership shall prepare and send to each Partner a statement of the
amount of such Partners share in the Partnerships taxable income or loss for each year and information relating to the nature thereof, in sufficient detail to enable it to prepare its United States federal, state and other tax
returns including, but not limited to, Internal Revenue Service Schedule K- 1, or any successor thereto. (e) The General Partner shall make such elections under the Code and other relevant tax laws as to the treatment of
items of the Partnerships income, gain, loss, deduction and credit, as well as to all other relevant matters, as it deems necessary or appropriate. (f) The General Partner is designated, and is specifically authorized to act as a
tax matters partner under the Code and in any similar capacity under any law. 12. Assignments and Transfers of Interests. (a) The General Partner may transfer all or any portion of its general partner interest in the
Partnership and any and all rights and/or obligations associated therewith to any person at any time. The transferee of a general partner interest in the Partnership shall be admitted to the Partnership as a general partner of the
Partnership upon its execution of a form of deed of adherence to this Agreement, pursuant to which it agrees to adhere to and be bound by the terms of this Agreement as a general partner of the Partnership and upon the filing
of a statement by the General Partner in accordance with the terms of Section 10 of the Act. If the General Partner transfers all of its general partner interest, such admission shall be effective for the purposes of this
Agreement immediately prior to such transfer and immediately following such transfer, the transferor general partner shall file a statement in accordance with the terms of Section 10 of the Act whereupon it shall cease to be a
general partner of the Partnership.
032751.0031 EAST 103465630 v3 9 (b) A Limited Partner may not Transfer all or any portion of its Limited Partner Interest or any and all rights and/or obligations associated therewith to any person without the consent of
the General Partner, which consent may be withheld in the General Partners discretion. The transferee of a Limited Partner Interest shall be admitted to the Partnership as a substitute limited partner of the Partnership only (i)
with the consent of the General Partner, which consent may be withheld in the General Partners discretion, and (ii) upon its execution of a form of deed of adherence to this Agreement pursuant to which it agrees to adhere to
and be bound by the terms of this Agreement as a limited partner of the Partnership. If the transferring Limited Partner is the sole limited partner and transfers all of its Limited Partner Interest, such admission shall for the
purposes of this Agreement be effective immediately prior to such transfer, and immediately following such admission, the transferor Limited Partner shall cease to be a limited partner of the Partnership. For purposes of this
Agreement, Transfer means any direct or indirect sale, exchange, transfer, assignment, pledge or other disposition by a Limited Partner of any or all of such Limited Partners Limited Partner Interest (whether respecting, for
example, economic rights only or all the rights associated with the Limited Partner Interest) to another person, whether voluntary or involuntary. 13. Admission and Withdrawal of Limited Partners. (a) One or more additional
limited partner(s) may be admitted to the Partnership with the written consent of the General Partner and upon execution of a form of deed of adherence to this Agreement pursuant to which it agrees to adhere to and be bound
by the terms of this Agreement as a limited partner of the Partnership. (b) Subject to any vesting terms in a Side Letter (as defined herein) in favor of such Limited Partner, a Limited Partner shall cease to be a Partner and be
deemed to have withdrawn its Limited Partner Interest either: (i) automatically upon any date (and with immediate effect from such date) on which such Limited Partner (or, in the case of a Limited Partner that was admitted
to the Partnership by virtue of its relationship with an employee of Apollo Global Management, LLC or one of its Affiliates, such employee) ceases to be employed (for any reason, including, but not limited to, death,
disability, resignation or a termination for cause or other than for cause) by Apollo Global Management, LLC or one of its Affiliates (unless otherwise determined by the General Partner); or (ii) upon a date specified in a
notice delivered by the General Partner to such Limited Partner requiring that such Limited Partner withdraw from the Partnership. (c) Payment of a withdrawing Limited Partners withdrawal proceeds (being an amount equal
to the balance of such Limited Partners capital account as of the effective date of withdrawal) will generally be made at the same time as such amounts would have been distributed to such Limited Partner under Section 10(b)
had such Limited Partner not been withdrawn from the Partnership. Amounts withdrawn by a Partner will not be adjusted as a result of audit adjustments made after the final payment date relating to the applicable withdrawal
and will not earn interest for the period from the applicable withdrawal date through the settlement date. The General Partner may deduct from any withdrawal proceeds due to any
032751.0031 EAST 103465630 v3 10 Partner an amount representing the actual or estimated expenses of the Partnership associated with processing the withdrawal and any other amounts owed by the withdrawing Partner to
the General Partner or its Affiliates whether under this Agreement or otherwise. 14. Admission and Withdrawal of General Partners. One or more additional general partner(s) may be admitted to the Partnership with the
written consent of the General Partner and upon execution of a form of deed of adherence to this Agreement pursuant to which such person agrees to adhere to and be bound by the terms of this Agreement as a general partner
of the Partnership and upon the filing of a statement by the General Partner in accordance with the terms of section 10 of the Act. A General Partner may withdraw from the Partnership with the written consent of all other
general partners, if any, and provided that, upon withdrawal, there remains at least one general partner of the Partnership and such general partner continues the Partnership. 15. Liability of Limited Partners. The Limited
Partners, in their capacity as limited partners of the Partnership, shall have no liability for the obligations or liabilities of the Partnership except as provided herein and to the extent provided in the Act and applicable law.
Nothing expressed in or implied by this Agreement shall be construed to confer upon or to give any person, except the Partners, any rights or remedies under or by reason of this Agreement. 16. Termination. (a) The
Partnership shall be required to wind up upon the occurrence of any of the following events (each a Dissolution Trigger Event) only and sections 15(2), 15(5), 15(6) and 15(7) of the Act shall not apply to the Partnership
save as otherwise expressly provided for herein: (i) at the discretion of the General Partner, upon the service of a notice of winding up by the General Partner on the Limited Partners; or (ii) upon the withdrawal by or
resignation of the General Partner as the last remaining general partner of the Partnership; or (iii) following the occurrence of any event as described in paragraphs (a), (b) or (c) of section 15(5) of the Act in relation to the
General Partner, unless all remaining partners agree in writing to continue the business of the Partnership and to appoint a replacement qualifying general partner within 90 days of notice of such event having been given by
the General Partner (or its legal representative) to all other partners; or (iv) upon the occurrence of any event leaving the General Partner as the sole partner of the Partnership, whereupon the Partnerships affairs shall be
wound up by the General Partner, or such other person as the General Partner shall appoint, all in accordance with section 15(1) of the Act. (b) Upon the completion of the winding up of the Partnership, the General Partner
shall file with the Registrar any notice of dissolution required to be filed pursuant to the
032751.0031 EAST 103465630 v3 11 Act. This Agreement shall terminate upon the filing of the notice of dissolution in accordance with this Section 16. (c) Upon the dissolution of the Partnership, the assets of the
Partnership shall be liquidated or distributed under the direction of and to the extent determined by the General Partner and the business of the Partnership shall be wound up. Within a reasonable time after the effective date of
dissolution of the Partnership, the Partnerships assets shall be distributed in the following manner and order: (i) first, to the satisfaction of debts and liabilities (including expenses of liquidation) of the Partnership (whether by
payment or the reasonable provision thereof), if any, in the order of priority provided by law, (ii) second, after giving effect to the allocations in Section 9(b), to the Limited Partners (pro rata in proportion to their then
respective positive capital account balances). 17. Duties of Covered Persons. (a) To the fullest extent permitted by law, the General Partner and its Affiliates and their respective partners, members, managers, shareholders,
officers, directors, employees and associates and, with the approval of the General Partner, any agent of any of the foregoing (including their respective executors, heirs, assigns, successors or other legal representatives) (each,
a Covered Person and collectively, the Covered Persons), shall not be liable to the Partnership or to any of the other Partners for any loss, claim, damage or liability occasioned by any acts or omissions in the performance
of its services hereunder, except to the extent that it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such loss, claim, damage or liability has
occurred solely by reason of the willful misconduct or gross negligence (as that term is construed in accordance with the laws of the State of New York) of such a Covered Person or as otherwise required by law; provided that
nothing in this Agreement shall be construed as waiving any legal rights or remedies which the Partnership may have under United States state or federal securities laws. (b) To the extent that, at law or in equity, a Covered
Person has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or the Partners, the Covered Person acting under this Agreement shall not be liable to the Partnership or to any Partner for its good
faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity to the
Partnership or its partners, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person, save that the General Partner shall act at all times in good faith in the interests of the Partnership in
accordance with section 4(3) of the Act. 18. Amendments. (a) Except as otherwise provided in this Agreement or in the Act, this Agreement may be amended by the General Partner in its sole and absolute discretion and
without the consent of the Limited Partners. Notwithstanding the foregoing, no amendment shall be binding upon any Limited Partner without its written consent to the extent such amendment would (i) require such Limited
Partner to make any capital contribution to the Partnership, (ii)
032751.0031 EAST 103465630 v3 12 impose any other financial commitment, restrictive covenant or other personal obligation on such Limited Partner, or (iii) adversely change any vested right of such Limited Partner. (b)
Notwithstanding any other provision of this Agreement or the Act, the General Partner on its own behalf or on behalf of the Partnership without the approval of any Limited Partner may enter into one or more side letters or
similar agreements, including profit sharing award letters (each a Side Letter) with one or more Limited Partners which have the effect of establishing rights under, or altering or supplementing the terms of this Agreement
(including provision for vesting of a Limited Partners interest in the Partnership) as between such Partner and the Partnership. Any terms contained in a Side Letter with one or more Partners shall govern with respect to such
Partner or Partners notwithstanding the provisions of this Agreement. Any such Side Letters shall be binding upon the Partnership or the General Partner, as applicable, and the signatories thereto as if the terms were contained
in this Agreement. 19. Power of Attorney. (a) Each Limited Partner hereby irrevocably makes, constitutes and appoints the General Partner with full power of substitution, the true and lawful representative and attorney- infact, and in the name, place and stead of such Partner, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish: (i) any amendment to this Agreement which
complies with the provisions of this Agreement; (ii) all such other instruments, documents and certificates which, in the opinion of legal counsel to the Partnership, may from time to time be required by the laws of the
Cayman Islands, the United States of America, any state thereof or any other jurisdiction, or any political subdivision or agency thereof, or which such legal counsel may deem necessary or appropriate to effectuate,
implement and continue the valid and subsisting existence and business of the Partnership as a limited partnership; and (iii) all such proxies, consents, assignments and other documents as the General Partner determines to be
necessary or advisable in connection with any merger or other reorganization, restructuring or other similar transaction entered into in accordance with this Agreement. (b) Each Limited Partner is aware that the terms of this
Agreement permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Partnership without such Partners consent. If an amendment of this Agreement
or any action by or with respect to the Partnership is taken by the General Partner in the manner contemplated by this Agreement, each Limited Partner agrees that, notwithstanding any objection which such Limited Partner
may assert with respect to such action, the General Partner is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner which may be necessary or appropriate to permit
such amendment to be made or action lawfully taken or omitted. Each Partner is fully aware that each other Partner will rely on the effectiveness of this special power- of- attorney with
032751.0031 EAST 103465630 v3 13 a view to the orderly administration of the affairs of the Partnership. The power- of- attorney granted herein is intended to secure an interest in property and, in addition, the obligations of
each relevant Partner under this Agreement and as such shall (i) be irrevocable and continue in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power- of- attorney, regardless
of whether the Partnership or the General Partner shall have had notice thereof, and (ii) survive any Transfer by a Limited Partner of the whole or any portion of its interest in the Partnership, except that, where the transferee
thereof has been approved by the General Partner for admission to the Partnership as a substituted Limited Partner, this power of attorney given by the transferor shall survive such transfer for the sole purpose of enabling the
General Partner to execute, acknowledge and file any instrument necessary to effect such substitution. 20. Notices. Any notice required or permitted to be given under this Agreement shall be in writing. A notice to the
General Partner shall be directed to the attention of John J. Suydam. A notice to a Limited Partner shall be directed to such Limited Partners last known residence as set forth in the books and records of the Partnership or its
Affiliates (a Limited Partners Home Address). A notice shall be considered given when delivered to the addressee either by hand at such Partners Partnership office or electronically to the primary e- mail account supplied
by the Partnership for Partnership business communications, except that a notice to a former Partner shall be considered given when delivered by hand by a recognized overnight courier together with mailing through the
United States Postal System by regular mail to such former Partners Home Address. 21. Successors and Assigns. This Agreement shall be binding upon the parties and their respective successors, executors, administrators,
legal representatives, heirs and legal assigns and shall inure to the benefit of the parties and, except as otherwise provided herein, their respective successors, executors, administrators, legal representatives, heirs and legal
assigns. 22. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands and each party hereto submits to the non- exclusive jurisdiction of the courts of the Cayman
Islands. To the fullest extent permitted by applicable law, the General Partner and each Limited Partner hereby agree that any claim, action or proceeding by any Limited Partner seeking any relief whatsoever against any
Covered Person based on, arising out of or in connection with, this Agreement or the Partnerships business or affairs shall be brought only in the courts of the Cayman Islands, and not in any court in any other country.
EACH PARTNER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. The Partners intend the provisions of the Act to be controlling as to any matters not set forth in this Agreement. 23. Entire Agreement. This Agreement and any Side Letters
constitute the entire agreement among the Partners and between the Partners and the Initial Limited Partner with respect to the subject matter hereof and thereof and supersede any prior agreement or understanding among or
between them with respect to such subject matter, notwithstanding the fact that such agreement or understanding is referred to in this Agreement.
032751.0031 EAST 103465630 v3 14 24. Separability of Provisions. Each provision of this Agreement shall be considered separable, and if for any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement that are valid, enforceable and legal. 25.
Counterparts. This Agreement may be executed in any number of counterparts, including by facsimile or other electronic signature. All counterparts shall be construed together and shall constitute one instrument. [Signature
Page Follows]
AGM Incentive Pool, L.P. Second Amended and Restated Exempted Limited Partnership Agreement Signature Page IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this
Agreement as a deed on the day first above written. General Partner: APOLLO PRINCIPAL HOLDINGS IV GP, LTD. By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President In the presence of Witness: /s/
Patricia A. McCabe Name: Patricia A. McCabe Limited Partners: AGM MARKETING POOL, L.P. By: Apollo Principal Holdings IV GP, Ltd., its general partner By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title:
Vice President In the presence of Witness: /s/ Patricia A. McCabe Name: Patricia A. McCabe
AGM Incentive Pool, L.P. Second Amended and Restated Exempted Limited Partnership Agreement Signature Page For and on behalf of all other Limited Partners listed on the Register of Partners pursuant to powers of
attorney granted to the General Partner: By: Apollo Principal Holdings IV GP, Ltd., as attorney- in- fact By: /s/ Wendy F. Dulman Name: Wendy F. Dulman Title: Vice President In the presence of Witness: /s/ Patricia A.
McCabe Name: Patricia A. McCabe
EXECUTION VERSION
CONFIDENTIAL
CREDIT AGREEMENT
Dated as of December 18, 2013,
Among
APOLLO MANAGEMENT HOLDINGS, L.P.,
as the Term Facility Borrower and a Revolving Facility Borrower,
THE AFFILIATES OF APOLLO MANAGEMENT HOLDINGS, L.P. PARTY HERETO,
as other Revolving Facility Borrowers,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
THE ISSUING BANKS PARTY HERETO, and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
_________________
J.P. MORGAN SECURITIES, LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
BARCLAYS CAPITAL, CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC,
DEUTSCHE BANK SECURITIES INC., GOLDMAN SACHS BANK USA, MORGAN STANLEY SENIOR
FUNDING, INC., RBC CAPITAL MARKETS, UBS SECURITIES LLC, and WELLS FARGO SECURITIES, LLC,
as Joint Lead Arrangers and Joint Bookrunners,
and
JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., BARCLAYS BANK PLC, CITIBANK, N.A.,
CREDIT SUISSE AG, GOLDMAN SACHS BANK USA, MORGAN STANLEY SENIOR FUNDING, INC., ROYAL
BANK OF CANADA, UBS SECURITIES LLC, and WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Syndication Agents
TABLE OF CONTENTS
Page
ARTICLE I Definitions
Section 1.01
Section 1.02
Section 1.03
Section 1.04
Section 1.05
1
Defined Terms
Terms Generally
Exchange Rates; Currency Equivalents
Timing of Payment or Performance
Times of Day
Article II The Credits

Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Section 2.07
Section 2.08
Section 2.09
Section 2.10
Section 2.11
Section 2.12
Section 2.13
Section 2.14
Section 2.15
Section 2.16
Section 2.17
Section 2.18
Section 2.19
Section 2.20
Section 2.21
Section 2.22
Section 2.23
43
Commitments
Loans and Borrowings
Requests for Borrowings
Swingline Loans
Letters of Credit
Funding of Borrowings
Interest Elections
Termination and Reduction of Commitments
Evidence of Debt
Repayment of Loans
Optional Prepayment of Loans; Cash Collateralization; Letter of
Credit Support
Fees
Interest
Alternate Rate of Interest
Increased Costs
Break Funding Payments
Taxes
Payments Generally; Pro Rata Treatment; Sharing of Set- offs;
Subordination Terms
Mitigation Obligations; Replacement of Lenders
Illegality
Incremental Commitments; Other Term Loans; Other Revolving
Loans
Defaulting Lender
Grant of Security
Article III Representations and Warranties

Section 3.01
Section 3.02
Section 3.03
Section 3.04
Section 3.05
1
42
43
43
43
43
44
45
46
48
54
55
56
57
58
59
59
60
61
62
63
63
67
72
74
74
84
87
87
Financial Condition
No Change
Existence; Compliance with Law
Power; Authorization; Enforceable Obligations
No Legal Bar
i
87
87
87
88
88
Section 3.06
Section 3.07
Section 3.08
Section 3.09
Section 3.10
Section 3.11
Section 3.12
Section 3.13
Section 3.14
Section 3.15
Litigation
No Default
Taxes
Federal Reserve Regulations
ERISA
Investment Company Act
Information
Use of Proceeds
USA PATRIOT Act; OFAC
Foreign Corrupt Practices Act
Article IV Conditions of Lending

Section 4.01
Section 4.02
90
All Credit Events
First Credit Event
Article V Affirmative Covenants

Section 5.01
Section 5.02
Section 5.03
Section 5.04
Section 5.05
Section 5.06
Section 5.07
Section 5.08
Section 5.09
Section 5.10
Financial Statements
Certificates; Other Information
Maintenance of Existence; Compliance
Maintenance of Insurance
Books and Records; Discussions
Notices
Additional Guarantors
Use of Proceeds
Change in Private Corporate Rating
Anti- Corruption Laws and Sanctions
Indebtedness
Liens
Fundamental Changes; Sales of Material Assets
Transactions with Affiliates
Business of Group Members
Amendment to Management Agreements
Financial Covenants
96
101
105
106
106
106
106
106
Events of Default
Treatment of Certain Payments
Right to Cure
Article VIII The Administrative Agent

Section 8.01
Section 8.02
Section 8.03
Section 8.04
93
94
94
94
94
95
95
95
95
95
96
Article VII Events of Default

Section 7.01
Section 7.02
Section 7.03
90
91
93
Article VI Negative Covenants

Section 6.01
Section 6.02
Section 6.03
Section 6.04
Section 6.05
Section 6.06
Section 6.07
88
88
88
89
89
89
89
89
89
90
106
108
109
110
Appointment
Delegation of Duties
Exculpatory Provisions
Reliance by Administrative Agent
110
110
111
112
Section 8.05
Section 8.06
Section 8.07
Section 8.08
Section 8.09
Section 8.10
Section 8.11
Section 8.12
Section 8.13
Notice of Default
Non- Reliance on the Administrative Agent and Other Lenders
Indemnification
Agent in Its Individual Capacity
Successor Administrative Agent
Joint Bookrunners, Joint Lead Arrangers and Syndication Agents
Loan Documents
Right to Realize on Collateral and Enforce Guaranties
Withholding Tax
Article IX Miscellaneous
Section 9.01
Section 9.02
Section 9.03
Section 9.04
Section 9.05
Section 9.06
Section 9.07
Section 9.08
Section 9.09
Section 9.10
Section 9.11
Section 9.12
Section 9.13
Section 9.14
Section 9.15
Section 9.16
Section 9.17
Section 9.18
Section 9.19
Section 9.20
Section 9.21
Section 9.22
Section 9.23
116
Notices; Communications
Survival of Agreement
Binding Effect
Successors and Assigns
Expenses; Indemnity
Right of Set- off
Applicable Law
Waivers; Amendment
Interest Rate Limitation
Entire Agreement
WAIVER OF JURY TRIAL
Severability
Counterparts
Headings
Jurisdiction; Consent to Service of Process
Confidentiality
Platform; Borrower Materials
Release of Liens and Guaranties
Judgment Currency
USA PATRIOT Act Notice
Affiliate Lenders
Agency of the Term Facility Borrower for the Loan Parties
No Liability of the Issuing Banks
Article X Guaranty
Section 10.01
Section 10.02
Section 10.03
Section 10.04
Section 10.05
Section 10.06
Section 10.07
112
113
113
114
114
114
115
115
116
116
117
118
118
125
127
127
127
131
131
131
132
132
132
132
133
134
135
136
136
136
137
137
138
Guaranty of Payment
Obligations Unconditional
Modifications
Waiver of Rights
Reinstatement
Remedies
Limitation of Guaranty
138
138
139
139
140
140
140
Exhibits and Schedules:

Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Form of Assignment and Acceptance

Form of Administrative Questionnaire
Form of Borrowing Request
Form of Swingline Borrowing Request
Form of Interest Election Request
Form of Permitted Loan Purchase Assignment and Acceptance
Form of Guarantor Joinder Agreement
Non- Bank Tax Certificate
Schedule 1.01 Designated Lenders on Closing Date

Schedule 2.01 Commitments and Loans
Schedule 6.01 Indebtedness
Schedule 6.02(a) Liens
Schedule 9.01 Notice Information
This CREDIT AGREEMENT, dated as of December 18, 2013 (this Agreement), is among (i) APOLLO
MANAGEMENT HOLDINGS, L.P., a Delaware limited partnership, as the borrower of the Term Loans (as defined
below) hereunder (the Term Facility Borrower) and a Revolving Facility Borrower (as defined below); (ii) APOLLO
MANAGEMENT, L.P., a Delaware limited partnership, APOLLO CAPITAL MANAGEMENT, L.P., a Delaware limited
partnership, APOLLO INTERNATIONAL MANAGEMENT, L.P., a Delaware limited partnership, AAA HOLDINGS,
L.P., a Guernsey limited partnership, APOLLO PRINCIPAL HOLDINGS I, L.P., a Delaware limited partnership,
APOLLO PRINCIPAL HOLDINGS II, L.P., a Delaware limited partnership, APOLLO PRINCIPAL HOLDINGS III,
L.P., a Cayman Islands exempted limited partnership, APOLLO PRINCIPAL HOLDINGS IV, L.P., a Cayman Islands
exempted limited partnership, APOLLO PRINCIPAL HOLDINGS V, L.P., a Delaware limited partnership, APOLLO
PRINCIPAL HOLDINGS VI, L.P., a Delaware limited partnership, APOLLO PRINCIPAL HOLDINGS VII, L.P., a
Cayman Islands exempted limited partnership, APOLLO PRINCIPAL HOLDINGS VIII, L.P., a Cayman Islands
exempted limited partnership, APOLLO PRINCIPAL HOLDINGS IX L.P., a Cayman Islands exempted limited
partnership, ST HOLDINGS GP, LLC, a Delaware limited liability company, and ST MANAGEMENT HOLDINGS,
LLC, a Delaware limited liability company (such entities, together with APOLLO MANAGEMENT HOLDINGS, L.P.,
collectively, the Revolving Facility Borrowers, and the Revolving Facility Borrowers, together with the Term Facility
Borrower, collectively, the Borrowers); (iii) the GUARANTORS (as defined below) party hereto from time to time; (iv)
the LENDERS (as defined below) party hereto from time to time; (v) the ISSUING BANKS (as defined below) party
hereto from time to time; and (vi) JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such
capacity, the Administrative Agent).
WHEREAS, the Borrowers have requested that the Lenders extend credit hereunder and the Issuing Banks issue Letters of
Credit, and the Lenders and the Issuing Banks are willing to do so on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
Article I
Definitions
Section 1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:
ABR shall mean, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Effective Rate
in effect for such day plus 0.50%, (b) the Prime Rate in effect on such day and (c) the Adjusted LIBO Rate for a onemonth Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus
1.00%; provided that, for the avoidance of doubt, the LIBO Rate for any day shall be based on the rate determined on such
day at approximately 11:00 a.m. (London time) by reference to the British Bankers Association Interest Settlement Rates
(or the successor thereto if the British Bankers Association is no longer making a LIBO Rate available) for deposits in
Dollars (as displayed on pages LIBOR01 or LIBOR02 of the Reuters Screen that displays such rate or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such
rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by
the Administrative Agent in its reasonable discretion). Any change in such rate due to a change in the Prime Rate, the
Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be.
ABR Borrowing shall mean a Borrowing comprised of ABR Loans.
ABR Loan shall mean any ABR Term Loan, ABR Revolving Loan or Swingline Loan.
ABR Revolving Facility Borrowing shall mean a Borrowing comprised of ABR Revolving Loans.
ABR Revolving Loan shall mean any Revolving Facility Loan bearing interest at a rate determined by reference to the
ABR in accordance with the provisions of Article II.
ABR Term Loan shall mean any Term Loan bearing interest at a rate determined by reference to the ABR in accordance
with the provisions of Article II.
Adjusted LIBO Rate shall mean, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate
per annum equal to (a) the LIBO Rate in effect for such Interest Period divided by (b) one minus the Statutory Reserves
applicable to such Eurocurrency Borrowing, if any.
Administrative Agent shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
Administrative Agent Fees shall have the meaning assigned to such term in Section 2.12(c).
Administrative Questionnaire shall mean an Administrative Questionnaire in the form of Exhibit B or such other form
supplied by the Administrative Agent.
Affiliate shall mean, when used with respect to a specified person, another person that directly, or indirectly through one
or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.
Affiliate Lender shall have the meaning assigned to such term in Section 9.04(i).
AGM Closing Date Term B Loans shall mean the $271,727,272.73 of Closing Date Term B Loans extended by Apollo
Principal Holdings V, L.P. to the Term Facility Borrower on the Closing Date pursuant to Section 2.01(a).
AGM Fund shall mean any existing or future pooled investment vehicle sponsored or managed by affiliates of any
Group Member and any separate or managed account managed by affiliates of any Group Member that primarily makes
investments similar to those made by investment funds. For purposes hereof, AGM Fund shall also include related
master- feeder funds, parallel funds, coinvestment partnerships and alternative investment vehicles established with
respect to the foregoing.
AGM Group shall mean the Public Company and the Group Members.
Agreement shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
Agreement Currency shall have the meaning assigned to such term in Section 9.19.
Alternate Currency shall mean, with respect to any Letter of Credit, Canadian Dollars, Euros, Pound Sterling, and any
other currency other than Dollars as may be acceptable to the Administrative Agent and the applicable Issuing Banks with
respect thereto in their sole discretion.
Alternate Currency Equivalent shall mean, at any time, with respect to any amount denominated in Dollars, the
equivalent amount thereof in the applicable Alternate Currency as determined by the Administrative Agent at such time on
the basis of the Spot Rate (determined in respect of the applicable date of determination) for the purchase of Alternate
Currency with such Dollars.
Alternate Currency Letter of Credit shall mean any Letter of Credit denominated in an Alternate Currency.
Applicable Commitment Fee shall mean for any day (i) with respect to any undrawn Initial Revolving Facility
Commitments, the applicable rate per annum set forth below, based upon the (public or private) corporate rating assigned
to the Public Company by S&P, as in effect on such date:
Rating
Applicable Commitment Fee
A
0.125%
A0.15%
BBB+
0.20%
BBB or lower (or unrated)
0.25%
and (ii) with respect to any Commitment to make Other Revolving Loans, the Applicable Commitment Fee set forth in
the Incremental Assumption Agreement relating thereto.
If the corporate rating established by S&P for the Public Company shall be changed (other than as a result of a change in
S&Ps rating system), such change shall be effective as of the date on which it is first announced by S&P, irrespective of
when notice of such change shall have been furnished to the Administrative Agent and the Lenders. Each change in the
Applicable Commitment Fee shall apply during the period commencing on the effective date of such change and ending
on the date immediately preceding the effective date of the next such change. If S&Ps rating system shall change, or if
S&P shall cease to be in the business of rating corporate obligors, the Revolving Facility Borrowers and the Revolving
Facility Lenders (acting via a majority) shall negotiate in good faith to amend this definition to reflect such changed rating
system or the unavailability of ratings from S&P.
Applicable Date shall have the meaning assigned to such term in Section 9.08(f).
Applicable Margin shall mean for any day (i) with respect to any Term B Loan and any Initial Revolving Loan, the
applicable rate per annum set forth below under the caption Eurocurrency Loans or ABR Loans, as the case may be,
based upon the (public or private) corporate rating assigned to the Public Company by S&P, as in effect on such date:
Rating
Eurocurrency Loans
ABR Loans
A
1.125%
0.125%
A1.25%
0.25%
BBB+
1.50%
0.50%
BBB or lower (or unrated)
1.75%
0.75%
and (ii) with respect to any Other Term Loan or Other Revolving Loan, the Applicable Margin set forth in the
Incremental Assumption Agreement relating thereto.
If the corporate rating established by S&P for the Public Company shall be changed (other than as a result of a change in
S&Ps rating system), such change shall be effective as of the date on which it is first announced by S&P, irrespective of
when notice of such change shall have been furnished to the Administrative Agent and the Lenders. Each change in the
Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If S&Ps rating system shall change, or if S&P shall
cease to be in the business of rating corporate obligors, the Borrowers and the Required Lenders shall negotiate in good
faith to amend this definition to reflect such changed rating system or the unavailability of ratings from S&P.
Approved Fund shall have the meaning assigned to such term in Section 9.04(b)(ii).
Assets Under Management shall mean any and all fee- paying (via management, monitoring or advisory fees)
investment funds, products, managed accounts or other investments managed or advised (including with respect to capital
permitted to be called from investors pursuant to the terms of relevant capital commitments) by the Group Members, and
shall include, without limitation, the sum of: (i) the fair value of private equity investments, plus the capital permitted to
be called from investors pursuant to the terms of relevant capital commitments, plus non- recallable capital to the extent a
fund is within the commitment period in which management fees are calculated based on total commitments to the fund;
(ii) the net asset value of credit funds (other than certain collateralized loan obligations) measured by using the mark- tomarket value of the aggregate principal amount of the underlying collateralized loan obligation and collateralized debt
obligation credit funds with a feegenerating basis (other than mark- to- market asset), plus used or available leverage
and/or capital commitments; (iii) the gross asset value or net asset value of real estate entities and structured portfolio
company investments included within the managed funds, which shall include the leverage used by such structured
portfolio companies; (iv) the incremental value associated with the reinsurance investments of the managed portfolio
company assets; and (v) the fair value of any other managed investments plus unused credit facilities, including capital
commitments for investments that may require pre- qualification before investment, plus any other capital commitments
available for investment that are not otherwise included in the clauses above.
Assignee shall have the meaning assigned to such term in Section 9.04(b)(i).
Assignment and Acceptance shall mean an assignment and acceptance entered into by a Lender and an Assignee, and
accepted by the Administrative Agent and the applicable Borrower(s) (if required by Section 9.04), in the form of
Exhibit A or such other form as shall be approved by the Administrative Agent and reasonably satisfactory to the
applicable Borrower(s).
Availability Period shall mean, with respect to any Class of Revolving Facility Commitments, the period from and
including the Closing Date (or, if later, the effective date for such Class of Revolving Facility Commitments) to but
excluding the earlier of the Maturity Date for such Class and, in the case of each of the Revolving Facility Loans,
Revolving Facility Borrowings, Swingline Loans, Swingline Borrowings and Letters of Credit, the date of termination of
the Revolving Facility Commitments of such Class.
Available Unused Commitment shall mean, with respect to a Revolving Facility Lender under any Class of Revolving
Facility Commitments at any time, an amount equal to the amount by which (a) the applicable Revolving Facility
Commitment of such Revolving Facility Lender at such time exceeds (b) the applicable Revolving Facility Credit
Exposure of such Revolving Facility Lender at such time.
Back- to- Back Lending Facilities shall mean credit facilities made available to the Group Members or their Affiliates
for the purpose of funding loans or advances to employees or Affiliates of the Group Members or their Affiliates the
proceeds of which are invested in funds managed by the Group Members.
Bankruptcy Code shall mean Title 11 of the United States Code, as amended, or any similar federal law for the relief of
debtors.
Board shall mean the Board of Governors of the Federal Reserve System of the United States of America.
Board of Directors shall mean, as to any person, the board of directors or other governing body of such person, or if
such person is not a corporation and is owned or managed by a single entity, the board of directors or other governing
body of such entity.
Borrowers shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
Borrower Materials shall have the meaning assigned to such term in Section 9.17.
Borrowing shall mean a group of Loans of a single Type under a single Facility, and made on a single date and, in the
case of Eurocurrency Loans, as to which a single Interest Period is in effect.
Borrowing Minimum shall mean (a) in the case of Eurocurrency Loans, $1,000,000, (b) in the case of ABR Loans,
$1,000,000 and (c) in the case of Swingline Loans, $500,000.
Borrowing Multiple shall mean (a) in the case of Eurocurrency Loans, $500,000, (b) in the case of ABR Loans,
$250,000 and (c) in the case of Swingline Loans, $100,000.
Borrowing Request shall mean a request by the applicable Borrower in accordance with the terms of Section 2.03 and
substantially in the form of Exhibit C or another form approved by the Administrative Agent.
Business Day shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required by law to remain closed; provided that, when used in connection with a Eurocurrency
Loan, the term Business Day shall also exclude any day on which banks are not open for dealings in deposits in Dollars
in the London interbank market.
Capital Lease shall mean, as applied to any person, any lease of any property (whether real, personal or mixed) by that
person as lessee that, in conformity with GAAP, is, or is required to be, accounted for as a capital lease on the balance
sheet of that person.
Capitalized Lease Obligations shall mean, as applied to any person, all obligations under Capital Leases of such person
or any of its subsidiaries, in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP.
Cash Collateral shall mean the collective reference to (a) all cash, instruments, securities, other financial assets and
funds deposited from time to time in the Cash Collateral Account; (b) all investments of funds in the Cash Collateral
Account and all instruments, securities and other financial assets evidencing such investments; (c) all interest, dividends,
cash, instruments, securities and other financial assets and other property received in respect of, or as proceeds of, or in
substitution or exchange for, any of the foregoing; and (d) any security entitlement to any of the foregoing.
Cash Collateral Account shall mean, collectively, any accounts as may be agreed by the Administrative Agent and the
Term Facility Borrower established at the office of JPMorgan Chase Bank, N.A., for the Administrative Agent as
entitlement holder thereto, and designated JP Morgan Chase Bank N.A., Apollo Management Holdings, L.P., Cash
Collateral Account and JP Morgan Chase Bank N.A., Apollo Management Holdings, L.P., Permanent Cash Collateral
Account respectively (or such other designation as may be agreed between the Administrative Agent and the Term
Facility Borrower), with such abbreviations as may be required to comply with JPMorgan Chase Bank N.A.s operating
systems.
Cash Collateralize shall mean to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one
or more of the Lenders, as collateral for Revolving Facility Credit Exposure (other than Revolving L/C Exposure), Cash
Collateral, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative
Agent, and Cash Collateralization shall have a meaning correlative thereto.
Cash Management Agreement shall mean any agreement to provide to any Group Member cash management services
for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house
fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or
operating account relationships, commercial credit cards, merchant card, purchase or debit cards, non- card e- payables
services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment
services and wire transfer services, in each case as such agreement may be amended, renewed, extended, supplemented,
restated or otherwise modified from time to time.
Cash Management Bank shall mean any person that, at the time it enters into a Cash Management Agreement (or on the
Closing Date), is the Administrative Agent, a Joint Lead Arranger, a Lender or an Affiliate of any such person, in each
case, in its capacity as a party to such Cash Management Agreement.
CFC shall mean a controlled foreign corporation within the meaning of section 957(a) of the Code.
Change in Control shall be deemed to occur if any person or group (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act or any successor provision), other than a Continuing AGM Person, becomes the beneficial
owner (within the meaning of Rule 13d- 3 and 13d- 5 under the Exchange Act or any successor provision) of (i) a
majority of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Public
Company and (ii) a majority of the economic interests in the Public Company.
Change in Law shall mean (a) the adoption of any law, rule or regulation after the Closing Date, (b) any change in law,
rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or
(c) compliance by any Lender or Issuing Bank (or, for purposes of Section 2.15(b), by any Lending Office of such Lender
or Issuing Bank or by such Lenders or such Issuing Banks holding company, if any) with any written request, guideline
or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing
Date; provided, however, that notwithstanding anything herein to the contrary, (x) all requests, rules, guidelines or
directives under or issued in connection with the DoddFrank Wall Street Reform and Consumer Protection Act, all
interpretations and applications thereof and any compliance by a Lender with any request, rule, guideline or directive
relating thereto and (y) all requests, rules, guidelines or directives promulgated under or in connection with, all
interpretations and applications of, or any compliance by a Lender or Issuing Bank with any request or directive relating to
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S.
or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case under these clauses (x) and (y) be
deemed to be a Change in Law, regardless of the date enacted, adopted or issued, but, in each case, only to the extent a
Lender is imposing applicable increased costs or costs in connection with capital adequacy or liquidity requirements
similar to those described in clauses (a) and (b) of Section 2.15 generally on other borrowers of loans under U.S. cash flow
term loan credit facilities.
Charges shall have the meaning assigned to such term in Section 9.09.
Class shall mean, (a) when used in respect of any Loan or Borrowing, whether such Loan or the Loans comprising such
Borrowing are Term B Loans, Other Term Loans (and whether such Other Term Loans are Other Incremental Term
Loans, Extended Term Loans or Refinancing Term Loans), Initial Revolving Loans or Other Revolving Loans (and
whether such Other Revolving Loans are Other Incremental Revolving Loans, Extended Revolving Loans or Replacement
Revolving Loans); and (b) when used in respect of any Commitment, whether such Commitment is in respect of a
commitment to make Term B Loans, Other Term Loans (and whether such Other Term Loans are Other Incremental Term
Loans, Extended Term Loans or Refinancing Term Loans) or Other Revolving Loans (and whether such Other Revolving
Loans are Other Incremental Revolving Loans, Extended Revolving Loans or Replacement Revolving Loans). Other Term
Loans or Other Revolving Loans that have different terms and conditions (together with the Commitments in respect
thereof) from the Term B Loans or the Initial Revolving Loans, respectively, or from other Other Term Loans or other
Other Revolving Loans, as applicable, shall be construed to be in separate and distinct Classes.
Class Loans shall have the meaning assigned to such term in Section 9.08(f).
Closing Date shall mean December 18, 2013.
Closing Date Term B Loans shall mean the term loans (including the AGM Closing Date Term B Loans) incurred by
the Term Facility Borrower on the Closing Date pursuant to Section 2.01(a). The amount of each Lenders Closing Date
Term B Loans (including AGM Closing Date Term B Loans) is set forth on Schedule 2.01. The aggregate amount of the
Closing Date Term B Loans is $1,021,727,272.73.
Code shall mean the Internal Revenue Code of 1986, as amended.
Collateral shall mean the collective reference to the Cash Collateral and the Cash Collateral Account (and shall include,
for the avoidance of doubt, any Letter of Credit Support).
Combined Debt at any date shall mean the sum of (without duplication) all Indebtedness of the Group Members of the
type described in clauses (a), (b) and (e) of the definition of Indebtedness (for clarification purposes, which shall exclude
letters of credit or bank guaranties, to the extent undrawn) on such date determined on a combined basis as provided in
Section 1.02 in accordance with GAAP; provided, however, that in any event Combined Debt shall exclude any
Indebtedness in respect of any AGM Fund and/or consolidated variable interest entity that is consolidated into a Group
Member.
Combined Net Income shall mean, with respect to the Management Group Members for any period, the aggregate of the
Net Income of the Management Group Members for such period, on a combined basis as provided in Section 1.02;
provided, however, that, without duplication,
(i) any extraordinary, nonrecurring or unusual gains or losses or income or expense or charge (less all fees and expenses
relating thereto), including any expenses or charges in connection with the establishment of, or fundraising for, any new
fund (whether or not successful), severance, relocation or other restructuring expenses, any expenses related to any New
Project or any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses,
fees, expenses or charges relating to facilities closing costs, curtailments or modifications to pension and post- retirement
employee benefit plans, excess pension charges, acquisition integration costs, facilities opening costs, signing, retention or
completion bonuses, and expenses or charges related to any offering of Equity Interests or debt securities of any
Management Group Member, Parent Entity or the Public Company, any investment, acquisition, disposition,
recapitalization or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or
not successful), and any fees, expenses, charges or change in control payments related to the Transactions (including any
costs relating to auditing prior periods, any transition- related expenses, and Transaction expenses incurred before, on or
after the Closing Date), in each case, shall be excluded,
(ii) any income or loss from disposed of, abandoned, closed or discontinued operations or fixed assets and any gain or
loss on the dispositions of disposed of, abandoned, closed or discontinued operations or fixed assets shall be excluded,
(iii) any gain or loss (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset
dispositions other than in the ordinary course of business (as determined in good faith by the management of the Term
Facility Borrower) shall be excluded,
(iv) any income or loss (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of
indebtedness, Hedging Agreements or other derivative instruments shall be excluded,
(v) (A) the Net Income for such period of any person that is not a subsidiary of such person or that is accounted for by
the equity method of accounting shall be included only to the extent of the amount of dividends or distributions or other
payments paid in cash (or to the extent converted into cash) to the referent person or a subsidiary thereof in respect of such
period and (B) the Net Income for such period shall include any dividend, distribution or other payment in cash (or to the
extent converted into cash) received by the referent person or a subsidiary thereof from any person in excess of, but
without duplication of, the amounts included in subclause (A),
(vi) the cumulative effect of a change in accounting principles during such period shall be excluded,
(vii) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such person
and its subsidiaries) in component amounts required or permitted by GAAP, resulting from the application of purchase
accounting or the amortization or write- off of any amounts thereof, net of taxes, shall be excluded,
(viii) any impairment charges or asset write- offs, in each case pursuant to GAAP, and the amortization of intangibles
and other fair value adjustments relating to impairments and amortization arising pursuant to GAAP, shall be excluded,
(ix) any noncash compensation charge or expenses realized or resulting from stock option plans, employee benefit
plans or postemployment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options,
restricted stock, preferred stock or other rights shall be excluded,
(x) accruals and reserves that are established or adjusted within twelve months after the Closing Date and that are so
required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting
policies shall be excluded,
(xi) noncash gains, losses, income and expenses resulting from fair value accounting required by the applicable
standard under GAAP and related interpretation shall be excluded,
(xii) any noncash charges for deferred tax asset valuation allowances shall be excluded,
(xiii) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or
gain resulting from Hedging Agreements for currency exchange risk, shall be excluded,
(xiv) any deductions attributable to minority interests shall be excluded,
(xv) (A) the noncash portion of straightline rent expense shall be excluded and (B) the cash portion of straightline rent expense which exceeds the amount expensed in respect of such rent expense shall be included,
(xvi) (A) to the extent covered by insurance and actually reimbursed, or, so long as such person has made a
determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to
the extent that such amount is (x) not denied by the applicable carrier in writing within 180 days and (y) in fact reimbursed
within 365 days following the date of such evidence (with a deduction for any amount so added back to the extent not so
reimbursed within such 365 days), expenses with respect to liability or casualty events or business interruption shall be
excluded; and (B) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in
respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually
received up to such estimated amount to the extent included in Net Income in a future period),
(xvii) without duplication, an amount equal to the amount of distributions actually made to any parent or equity holder
of such person that is not a Management Group Member during such period to the extent that the proceeds thereof are
used to pay the tax liability of such parent or equity holder to any relevant jurisdiction attributable to the income of the
Management Group Members shall be included as though such amounts had been paid as income taxes directly by such
person for such period,
(xviii) the operating results in respect of any AGM Fund and/or consolidated variable interest entity that is consolidated
into a Group Member shall be excluded, and
(xix) any carry- related clawbacks (cash or noncash) shall be excluded.
Commitment Fee shall have the meaning assigned to such term in Section 2.12(a).
Commitments shall mean (a) with respect to any Lender, such Lenders Revolving Facility Commitment and Term
Facility Commitment and (b) with respect to any Swingline Lender, its Swingline Commitment (it being understood that a
Swingline Commitment does not increase the applicable Swingline Lenders Revolving Facility Commitment).
Conduit Lender shall mean any special purpose corporation organized and administered by any Lender for the purpose
of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument;
provided that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and
waivers required or requested under this Agreement with respect to its Conduit Lender; provided further that no Conduit
Lender shall (a) be entitled to receive any greater amount pursuant to Sections 2.15, 2.16, 2.17 or 9.05 than the designating
Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender unless the
designation of such Conduit Lender is made with the prior written consent of the Borrowers (not to be unreasonably
withheld or delayed), which consent shall specify that it is being made pursuant to the proviso in the definition of Conduit
Lender and provided that the designating Lender provides such information as the Borrowers reasonably request in order
for the Borrowers to determine whether to provide its consent or (b) be deemed to have any Commitment.
Confidential Information Memorandum shall mean the Confidential Information Memorandum with respect to the
Facilities dated December 3, 2013.
Continuing AGM Person shall mean, immediately prior to and immediately following any relevant date of
determination, (a) an individual who (i) is an executive of any entity in the AGM Group, (ii) devotes substantially all of
his or her business and professional time to the activities of any entity in the AGM Group and (iii) did not become an
executive of any entity in the AGM Group or begin devoting substantially all of his or her business and professional time
to the activities of any entity in the AGM Group in contemplation of a Change of Control, (b) any person in which any one
or more of such individuals directly or indirectly, singly or as a group, holds a majority of the controlling interests, (c) any
person that is a family member of such individual or individuals or (d) any trust for which such individual acts as a trustee
or beneficiary.
Continuing Letter of Credit shall have the meaning assigned to such term in Section 2.05(k).
Control shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and Controlling
and Controlled shall have meanings correlative thereto.
Credit Event shall have the meaning assigned to such term in Article IV.
Cure Amount shall have the meaning assigned to such term in Section 7.03.
Cure Right shall have the meaning assigned to such term in Section 7.03.
Debtor Relief Laws shall mean the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief
laws of the United States of America or other applicable jurisdictions from time to time in effect.
Default shall mean any event or condition that upon notice, lapse of time or both would constitute an Event of Default.
Defaulting Lender shall mean, subject to Section 2.22, any Lender that (a) has failed to (i) fund all or any portion of its
Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies
the Administrative Agent and the applicable Borrower in writing that such failure is the result of such Lenders
determination that one or more conditions precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative
Agent, any Issuing Bank, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder
(including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date
when due, (b) has notified the applicable Borrower, the Swingline Lender, the Administrative Agent or any Issuing Bank
in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that
effect (unless such writing or public statement relates to such Lenders obligation to fund a Loan hereunder and states that
such position is based on such Lenders determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or any Borrower, to
confirm in writing to the Administrative Agent and such Borrower that it will comply with its prospective funding
obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and such Borrower) or (d) has, or has a direct or indirect
parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or (ii) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar person charged with
reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other
state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender
solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent
company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such
Lender with immunity from the jurisdiction of courts within the United States of America or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the
Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to
Section 2.22) upon delivery by the Administrative Agent of written notice of such determination to the Borrowers, each
Issuing Bank, the Swingline Lender and each other Lender.
Designated Lenders shall mean the Lenders listed in Schedule 1.01, which such Schedule may be amended,
supplemented and/or otherwise modified from time to time after the Closing Date as agreed between the Term Facility
Borrower and the Administrative Agent (and without consent of any other person, notwithstanding the provisions of
Section 9.08(b)) and as shall be delivered to the Term B Lenders.
Disqualified Stock shall mean, with respect to any person, any Equity Interests of such person that, by its terms (or by
the terms of any security or other Equity Interests into which it is convertible or for which it is redeemable or
exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than
solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of
control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all other Loan Obligations that are accrued and
payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely
for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is
or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute
Disqualified Stock, in each case, prior to the date that is ninety- one (91) days after the latest Maturity Date in effect at the
time of issuance thereof (provided that only the portion of the Equity Interests that so mature or are mandatorily
redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date
shall be deemed to be Disqualified Stock). Notwithstanding the foregoing: (i) any Equity Interests issued to any employee
or to any plan for the benefit of employees of the Group Members or by any such plan to such employees shall not
constitute Disqualified Stock solely because they may be required to be repurchased by the Group Members in order to
satisfy applicable statutory or regulatory obligations or as a result of such employees termination, death or disability and
(ii) any class of Equity Interests of such person that by its terms authorizes such person to satisfy its obligations thereunder
by delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be Disqualified Stock.
Dollar Equivalent shall mean, at any time, (a) with respect to any amount denominated in Dollars, such amount, and
(b) with respect to any amount denominated in any currency other than Dollars, the equivalent amount thereof in Dollars
as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the
applicable date of determination) for the purchase of Dollars with such currency.
Dollars or $ shall mean lawful money of the United States of America.
EBITDA of the Group Members for any trailing period of twelve months shall mean the sum of (a) Management
EBITDA and (b) Realized Incentive Carry.
Equity Interests of any person shall mean any and all shares, interests, rights to purchase or otherwise acquire, warrants,
options, participations or other equivalents of or interests in (however designated) equity or ownership of such person,
including any preferred stock, any limited or general partnership interest and any limited liability company interest, and
any securities or other rights or interests convertible into or exchangeable for any of the foregoing.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to
time and any final regulations promulgated and the rulings issued thereunder.
Eurocurrency Borrowing shall mean a Borrowing comprised of Eurocurrency Loans.
Eurocurrency Loan shall mean any Eurocurrency Term Loan or Eurocurrency Revolving Loan.
Eurocurrency Revolving Facility Borrowing shall mean a Borrowing comprised of Eurocurrency Revolving Loans.
Eurocurrency Revolving Loan shall mean any Revolving Facility Loan bearing interest at a rate determined by reference
to the Adjusted LIBO Rate in accordance with the provisions of Article II.
Eurocurrency Term Loan shall mean any Term Loan bearing interest at a rate determined by reference to the Adjusted
LIBO Rate in accordance with the provisions of Article II.
Event of Default shall have the meaning assigned to such term in Section 7.01.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
Excluded Taxes shall mean, with respect to the Administrative Agent, any Lender or any other recipient of any payment
to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document, (i) Taxes
imposed on or measured by its overall net income or branch profits (however denominated, and including (for the
avoidance of doubt) any backup withholding in respect thereof under Section 3406 of the Code or any similar provision of
state, local or foreign law), and franchise Taxes imposed on it (in lieu of net income Taxes), in each case by a jurisdiction
(including any political subdivision thereof) (A) as a result of such recipient being organized in, having its principal office
in, or in the case of any Lender, having its applicable lending office in, such jurisdiction, or (B) as a result of any other
present or former connection with such jurisdiction (other than any such connection arising solely from this Agreement or
any other Loan Documents or any transactions contemplated thereunder, including any such connection arising from such
recipient having executed, delivered, become a party to, performed its obligations under, received payments under,
received or perfected a security interest under, engaged in any other transaction pursuant to or enforced this Agreement or
any other Loan document, sold or assigned an interest in any Loan or Loan Document), (ii) U.S. federal withholding Tax
imposed on any payment by or on account of any obligation of any Loan Party hereunder or under any other Loan
Document that is required to be imposed on amounts payable to a Lender (other than to the extent such Lender is an
assignee pursuant to a request by the Borrowers under Section 2.19(b) or 2.19(c)) pursuant to laws in force at the time
such Lender becomes a party hereto (or designates a new lending office), except to the extent that such Lender (or its
assignor, if any) was entitled, immediately prior to the designation of a new lending office (or assignment), to receive
additional amounts or indemnification payments from any Loan Party with respect to such withholding Tax pursuant to
Section 2.17, (iii) any withholding Tax imposed on any payment by or on account of any obligation of any Loan Party
hereunder or under any other Loan Document that is attributable to the Administrative Agents, any Lenders or any other
recipients failure to comply with Section 2.17(d), (e) or (h), or (iv) any Tax imposed under FATCA.
Existing Class Loans shall have the meaning assigned to such term in Section 9.08(f).
Existing Credit Agreement shall mean the Amended and Restated Credit Agreement, dated as of December 20, 2010,
among Apollo Management Holdings , L.P., as borrower, the guarantors referred to therein, the lenders party thereto and
JPMorgan Chase Bank, N.A., as administrative agent, as such Amended and Restated Credit Agreement was in effect
immediately prior to the Closing Date.
Extended Revolving Facility Commitment shall have the meaning assigned to such term in Section 2.21(e).
Extended Revolving Loan shall have the meaning assigned to such term in Section 2.21(e).
Extended Term Loan shall have the meaning assigned to such term in Section 2.21(e).
Extending Lender shall have the meaning assigned to such term in Section 2.21(e).
Extension shall have the meaning assigned to such term in Section 2.21(e).
Facility shall mean the respective facility and commitments utilized in making Loans and credit extensions hereunder; it
being understood that, as of the Closing Date, there are two Facilities (i.e., the Term B Facility and the Initial Revolving
Facility) and, thereafter, the term Facility may include any other Class of Commitments and the extensions of credit
thereunder.
FATCA shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or
successor version that is substantively comparable and not materially more onerous to comply with), or any Treasury
regulations promulgated thereunder or official administrative interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code or any fiscal or regulatory legislation, rules or practices adopted pursuant to
any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.
Federal Funds Effective Rate shall mean, for any day, the rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the
average (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
Fee Letter shall mean that certain Fee Letter, dated as of December 5, 2013, by and between the Term Facility Borrower
and the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.
Fees shall mean the Commitment Fees, the L/C Participation Fees, the Issuing Bank Fees and the Administrative Agent
Fees.
Financial Officer of any person shall mean the Chief Financial Officer, principal accounting officer, Treasurer, Assistant
Treasurer or Controller of such person.
Financial Performance Covenant shall have the meaning assigned to such term in Section 6.07(b).
Foreign Lender shall mean any Lender (a) that is not disregarded as separate from its owner for U.S. federal income tax
purposes and that is not a United States person as defined by Section 7701(a)(30) of the Code or (b) that is disregarded
as separate from its owner for U.S. federal income tax purposes and whose regarded owner is not a United States person
as defined in Section 7701(a)(30) of the Code.
Fronting Exposure shall mean, at any time there is a Defaulting Lender, (a) with respect to any Issuing Bank, such
Defaulting Lenders Revolving Facility Percentage of the Revolving L/C Exposure with respect to Letters of Credit issued
by such Issuing Bank (other than such Revolving L/C Exposure as to which such Defaulting Lenders participation
obligation has been reallocated to other Revolving Facility Lenders or Letter of Credit Support has been provided in
accordance with the terms hereof) and (b) with respect to the Swingline Lender, such Defaulting Lenders Swingline
Exposure other than Swingline Loans as to which such Defaulting Lenders participation obligation has been reallocated
to other Revolving Facility Lenders in accordance with the terms hereof.
Fund Investment shall have the meaning assigned to such term in the definition of the term Non- Recourse Seasoning
Debt.
GAAP shall mean generally accepted accounting principles in effect from time to time in the United States of America,
applied on a consistent basis, subject to (i) the provisions of Section 1.02 and (ii) the Specified Exception.
Notwithstanding anything to the contrary, all financial terms in the Loan Documents that are determined in accordance
with GAAP shall exclude the effects of any consolidation or inclusion of any AGM Fund or variable interest entity.
Governmental Authority shall mean any federal, state, provincial, territorial, municipal, local or foreign court or
governmental agency, authority, instrumentality, regulatory, taxing or legislative body.
Group Members shall mean the collective reference to the Loan Parties and their Subsidiaries (and, for the avoidance of
doubt, shall include the Management Group Members).
guarantor shall have the meaning assigned to such term in the definition of the term Guaranty.
Guarantor Joinder Agreement shall mean a Guarantor Joinder Agreement executed by a new Guarantor and the
Administrative Agent in substantially the form of Exhibit G or such other form agreed to by the Term Facility Borrower
and the Administrative Agent.
Guarantors shall mean (a) the Term Facility Borrower (other than with respect to its own Loan Obligations), (b) each
Revolving Facility Borrower (other than with respect to its own Loan Obligations) and (c) each other person that becomes
a Guarantor hereunder pursuant to Section 5.07.
Guaranty of or by any person (the guarantor) shall mean (a) any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or
performable by another person (the primary obligor) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner
the holders of such Indebtedness or other obligation of the payment thereof or to protect such holders against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of the guarantor securing any Indebtedness or other
obligation (or any existing right, contingent or otherwise, of the holder of Indebtedness or other obligation to be secured
by such a Lien) of any other person, whether or not such Indebtedness or other obligation is assumed by the guarantor;
provided, however, that the term Guaranty shall not include endorsements of instruments for deposit or collection in the
ordinary course of business or customary and reasonable indemnity obligations in effect on the Closing Date or entered
into in connection with any acquisition or disposition of assets not prohibited by this Agreement (other than such
obligations with respect to Indebtedness). The amount of any Guaranty shall be deemed to be an amount equal to the
stated or determinable amount of the Indebtedness in respect of which such Guaranty is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by such person in good faith.
Hedge Bank shall mean any person that, at the time it enters into a Hedging Agreement (or on the Closing Date), is the
Administrative Agent, a Joint Lead Arranger, a Lender or an Affiliate of any such person, in each case of the foregoing, in
its capacity as a party to such Hedging Agreement.
Hedging Agreement shall mean any agreement with respect to any swap, forward, future or derivative transaction, or
option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk
or value, or credit spread transaction, repurchase transaction, reserve repurchase transaction, securities lending transaction,
weather index transaction, spot contracts, fixed price physical delivery contracts, or any similar transaction or any
combination of these transactions, in each case of the foregoing, whether or not exchange traded; provided that no
phantom stock or similar plan providing for payments only on account of services provided by current or former directors,
officers, employees or consultants of the Group Members shall be a Hedging Agreement.
Impacted Interest Period shall have the meaning assigned to such term in the definition of the term LIBO Rate.
Increased Amount of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with
any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest
in the form of additional Indebtedness or in the form of common stock of the Borrowers, the accretion of original issue
discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of
fluctuations in the exchange rate of currencies.
Incremental Amount shall mean, at any time, the sum of:
(i) the excess (if any) of (a) $500,000,000 over (b) the sum of (x) the aggregate amount of all Incremental Term Loan
Commitments and Incremental Revolving Facility Commitments, in each case established after the Closing Date and prior
to such time pursuant to Section 2.21 by utilizing this clause (i) (other than in respect of Extended Term Loans,
Refinancing Term Loans, Extended Revolving Facility Commitments or Replacement Revolving Facility Commitments)
and (y) the aggregate principal amount of Indebtedness outstanding pursuant to Section 6.01(y) at such time; plus
(ii) any additional amounts so long as after giving effect to the establishment of the commitments in respect thereof (and
assuming such commitments are fully drawn) and the use of proceeds of the loans thereunder, the Net Leverage Ratio as
of the date of the most recent financial statements required to be delivered pursuant to Section 5.01(a) or (b), calculated on
a Pro Forma Basis, is not greater than 3.75 to 1.00; provided that, for purposes of this clause (ii), net cash proceeds of
Incremental Loans incurred at such time shall not be netted against the applicable amount of Combined Debt for purposes
of such calculation of the Net Leverage Ratio.
Incremental Assumption Agreement shall mean an Incremental Assumption Agreement in form and substance
reasonably satisfactory to the Administrative Agent, among the applicable Borrower(s), the Administrative Agent and the
applicable Lenders.
Incremental Commitment shall mean an Incremental Term Loan Commitment or an Incremental Revolving Facility
Commitment.
Incremental Loan shall mean an Incremental Term Loan or an Incremental Revolving Loan.
Incremental Revolving Facility Commitment shall mean the commitment of any Lender established pursuant to
Section 2.21 to make Incremental Revolving Loans to any Revolving Facility Borrower.
Incremental Revolving Facility Lender shall mean a Lender with an Incremental Revolving Facility Commitment or an
outstanding Incremental Revolving Loan.
Incremental Revolving Loan shall mean (i) to the extent permitted by Section 2.21 and provided for in the relevant
Incremental Assumption Agreement, Revolving Facility Loans made by one or more Revolving Facility Lenders to any
Revolving Facility Borrower pursuant to an Incremental Revolving Facility Commitment to make additional Initial
Revolving Loans, (ii) to the extent permitted by Section 2.21 and provided for in the relevant Incremental Assumption
Agreement, Other Incremental Revolving Loans, or (iii) any of the foregoing.
Incremental Term B Loans shall have the meaning assigned to such term in Section 2.21(a).
Incremental Term Lender shall mean a Lender with an Incremental Term Loan Commitment or an outstanding
Incremental Term Loan.
Incremental Term Loan Commitment shall mean the commitment of any Lender established pursuant to Section 2.21 to
make Incremental Term Loans to the Term Facility Borrower.
Incremental Term Loans shall mean (i) Incremental Term B Loans, (ii) to the extent permitted by Section 2.21 and
provided for in the relevant Incremental Assumption Agreement, Other Incremental Term Loans, or (iii) any of the
foregoing.
Indebtedness of any person shall mean, if and to the extent (other than with respect to clause (i)) the same would
constitute indebtedness or a liability on a balance sheet prepared in accordance with GAAP, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such person under conditional sale or other title retention agreements relating
to property or assets purchased by such person, (d) all obligations of such person issued or assumed as the deferred
purchase price of property or services (other than such obligations accrued in the ordinary course), to the extent that the
same would be required to be shown as a long term liability on a balance sheet prepared in accordance with GAAP, (e) all
Capitalized Lease Obligations of such person, (f) all net payments that such person would have to make in the event of an
early termination, on the date Indebtedness of such person is being determined, in respect of outstanding Hedging
Agreements, (g) the principal component of all obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit and bank guarantees, (h) the principal component of all obligations of such person in respect of
bankers acceptances, (i) all Guaranties by such person of Indebtedness described in clauses (a) to (h) above and (j) the
amount of all obligations of such person with respect to the redemption, repayment or other repurchase of any
Disqualified Stock (excluding accrued dividends that have not increased the liquidation preference of such Disqualified
Stock); provided that Indebtedness shall not include (A) trade and other ordinary- course payables, accrued expenses, and
intercompany liabilities among Group Members arising in the ordinary course of business, (B) prepaid or deferred
revenue, (C) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase
price of an asset to satisfy unperformed obligations of the seller of such asset, (D) earn- out obligations until such
obligations become a liability on the balance sheet of such person in accordance with GAAP, or (E) in the case of the
Group Members, (I) all intercompany Indebtedness having a term not exceeding 364 days (inclusive of any roll- over or
extensions of terms) and made in the ordinary course of business and (II) intercompany liabilities in connection with the
cash management, tax and accounting operations of the Group Members. The Indebtedness of any person shall include the
Indebtedness of any partnership in which such person is a general partner, other than to the extent that the instrument or
agreement evidencing such Indebtedness limits the liability of such person in respect thereof.
Indemnified Taxes shall mean all Taxes imposed on or with respect to or measured by any payment by or on account of
any obligation of any Loan Party hereunder or under any other Loan Document other than (a) Excluded Taxes and (b)
Other Taxes.
Indemnitee shall have the meaning assigned to such term in Section 9.05(b).
Ineligible Institution shall mean the persons identified in writing to the Administrative Agent by the Term Facility
Borrower on or prior to the Closing Date, and as may be identified in writing to the Administrative Agent by the Term
Facility Borrower from time to time thereafter, with the consent of the Administrative Agent (not to be unreasonably
withheld or delayed), by delivery of a notice thereof to the Administrative Agent setting forth such person or persons (or
the person or persons previously identified to the Administrative Agent that are to be no longer considered Ineligible
Institutions).
Initial Revolving Facility shall mean the Initial Revolving Facility Commitments and the Initial Revolving Loans.
Initial Revolving Facility Commitments shall mean the Revolving Facility Commitments (i) in effect on the Closing
Date (as the same may be amended from time to time in accordance with this Agreement) or (ii) to the extent permitted by
Section 2.21 and provided for in the relevant Incremental Assumption Agreement, established pursuant to any Incremental
Assumption Agreement on the same terms as the Revolving Facility Commitments referred to in clause (i) of this
definition. The aggregate amount of the Revolving Facility Lenders Initial Revolving Facility Commitments in effect on
the Closing Date is $500,000,000.
Initial Revolving Loan shall mean a Revolving Facility Loan made pursuant to the Initial Revolving Facility
Commitments.
Interest Election Request shall mean a request by the applicable Borrower to convert or continue a Borrowing in
accordance with Section 2.07 and substantially in the form of Exhibit E or another form approved by the Administrative
Agent and the Term Facility Borrower.
Interest Payment Date shall mean, (a) with respect to any Eurocurrency Loan, (i) the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part, (ii) in the case of a Eurocurrency Borrowing with an Interest
Period of more than three months duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months duration been applicable to such Borrowing and (iii) in addition, the date of any
refinancing or conversion of such Borrowing with or to a Borrowing of a different Type, and (b) with respect to any ABR
Loan, the last Business Day of each calendar quarter, and (c) with respect to any Swingline Loan, the day that such
Swingline Loan is required to be repaid pursuant to Section 2.09(a).
Interest Period shall mean, as to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing or
on the last day of the immediately preceding Interest Period applicable to such Borrowing, as applicable, and ending on
the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month
that is 1, 2, 3 or 6 months thereafter (or 12 months or any such shorter period, if at the time of the relevant Borrowing, all
Lenders make interest periods of such length available (in the case of any such shorter period, if agreed to by the
Administrative Agent)) as the applicable Borrower may elect; provided, however, that if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such
next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first day of an Interest Period to but excluding
the last day of such Interest Period.
Interpolated Rate shall have the meaning assigned to such term in the definition of LIBO Rate.
Issuing Bank shall mean (a) with respect to the Initial Revolving Facility, (i) on the Closing Date, JPMorgan Chase
Bank, N.A. and (ii) each other Issuing Bank designated pursuant to Section 2.05(i) or 2.05(l), in each case in its capacity
as an issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.05(i) and (b) with
respect to any other Revolving Facility, as set forth in the Incremental Assumption Agreement with respect thereto with
such Issuing Banks consent. An Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of such Issuing Bank, in which case the term Issuing Bank shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
Issuing Bank Fees shall have the meaning assigned to such term in Section 2.12(b).
Joint Bookrunners shall mean the persons identified as such on the title page of this Agreement.
Joint Lead Arrangers shall mean shall mean the persons identified as such on the title page of this Agreement.
Judgment Currency shall have the meaning assigned to such term in Section 9.19.
L/C Disbursement shall mean a payment or disbursement made by an Issuing Bank pursuant to a Letter of Credit.
L/C Participation Fee shall have the meaning assigned to such term in Section 2.12(b).
Lender shall mean each financial institution listed on Schedule 2.01 (other than any such person that has ceased to be a
party hereto pursuant to an Assignment and Acceptance in accordance with Section 9.04), as well as any person that
becomes a Lender hereunder pursuant to Section 9.04 or Section 2.21. Unless the context clearly indicates otherwise,
the term Lenders shall include any Swingline Lender.
Lender Parties shall mean, collectively, the Administrative Agent, each Lender, each Issuing Bank and each subagent
appointed pursuant to Section 8.02 by the Administrative Agent.
Lending Office shall mean, as to any Lender, the applicable branch, office or Affiliate of such Lender designated by
such Lender to make Loans.
Letter of Credit shall mean any letter of credit or bank guaranty issued pursuant to Section 2.05, including any Alternate
Currency Letter of Credit.
Letter of Credit Commitment shall mean, with respect to each Issuing Bank, the commitment of such Issuing Bank to
issue Letters of Credit pursuant to Section 2.05.
Letter of Credit Sublimit shall mean the aggregate Letter of Credit Commitments of the Issuing Banks, in an amount not
to exceed $100,000,000 (or the equivalent thereof in an Alternate Currency).
Letter of Credit Support shall mean a pledge or delivery to the Administrative Agent, for deposit in the Cash Collateral
Account, for the benefit of one or more of the Issuing Banks or Revolving Facility Lenders, as collateral for Revolving
L/C Exposure or obligations of the Revolving Facility Lenders to fund participations in respect of Revolving L/C
Exposure, of cash or deposit account balances or, if the Administrative Agent and each Issuing Bank shall agree in their
sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory
to the Administrative Agent and each applicable Issuing Bank (provided, however, that any Letter of Credit Support
relating to any Continuing Letter of Credit shall be delivered to, and deposited with, the applicable Issuing Bank).
LIBO Rate shall mean, with respect to any Eurocurrency Borrowing for any Interest Period, the rate per annum
determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British Bankers Association Interest Settlement
Rates (or the successor thereof if the British Bankers Association is no longer making such rates available) for Dollar
deposits (as displayed on pages LIBOR01 or LIBOR02 of the Reuters Screen that displays such rate or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such
rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by
the Administrative Agent in its reasonable discretion (in each case, the Screen Rate)) for a period equal to such Interest
Period; provided, that, if the Screen Rate shall not be available at such time for such Interest Period (an Impacted Interest
Period) with respect to such currency, then the LIBO Rate shall be the Interpolated Rate at such time. Interpolated Rate
means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the
Screen Rate for the longest period (for which that Screen Rate is available in Dollars) that is shorter than the Impacted
Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available for Dollars) that
exceeds the Impacted Interest Period, in each case, at such time.
Lien shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, hypothecation, pledge, charge, security
interest or similar encumbrance in or on such asset and (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset; provided that in no event shall an operating lease or an agreement to sell by
itself be deemed to constitute a Lien.
Loan Documents shall mean (i) this Agreement, (ii) the Letters of Credit, (iii) each Incremental Assumption Agreement,
(iv) any Note issued under Section 2.09(d), (v) each Guarantor Joinder Agreement, and (vi) solely for the purposes of
Sections 4.02 and 7.01 hereof, the Fee Letter.
Loan Obligations shall mean (a) the due and punctual payment by the Borrowers of (i) the unpaid principal of and
interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans made to the Borrowers under
this Agreement, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrowers under this Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon (including
interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) and obligations to provide Letter of Credit Support and (iii) all other
monetary obligations of the Borrowers owed under or pursuant to this Agreement and each other Loan Document,
including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such
proceeding), and (b) the due and punctual payment of all obligations of each other Loan Party under or pursuant to each of
the Loan Documents. For the avoidance of doubt, the Loan Obligations include all Term Facility Obligations and all
Revolving Facility Obligations.
Loan Parties shall mean the Borrowers and the Guarantors.
Loans shall mean the Term Loans, the Revolving Facility Loans and the Swingline Loans.
Local Time shall mean New York City time (daylight or standard, as applicable).
Majority Lenders of any Facility shall mean, at any time, Lenders under such Facility having Loans, Revolving L/C
Exposure, Swingline Exposure and unused Commitments representing more than 50% of the sum of all Loans, Revolving
L/C Exposure and Swingline Exposure outstanding under such Facility and unused Commitments under such Facility at
such time; provided that the Loans, Revolving L/C Exposures, Swingline Exposures and Available Unused Commitment
of any Defaulting Lender shall be disregarded in determining Majority Lenders at any time.
Management EBITDA of the Management Group Members for any trailing period of twelve months shall mean the
Combined Net Income for such period plus, in each case without duplication and to the extent the respective amounts
described in clauses (a) through (m) below reduced such Combined Net Income (and were not excluded therefrom) for the
respective period for which Management EBITDA is being determined, the sum of
(a) income tax expense (including any provision for taxes based on income, profits or capital, including state, franchise
and similar taxes and foreign withholding taxes (including penalties and interest related to taxes or arising from tax
examinations) and including any tax distributions, including any tax distributions made to fund payments under the TRA),
(b) interest expense (and, to the extent not included in interest expense, (x) all cash dividend payments (excluding items
eliminated in consolidation) on any series of preferred stock or Disqualified Stock and (y) costs of surety bonds in
connection with financing activities) of the Management Group Members for such period, amortization or write- off of
debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans),
(c) depreciation and amortization expense (including deferred financing fees and amortization of unrecognized prior
service costs and actuarial gains and losses related to pensions and other postemployment benefits),
(d) amortization of intangibles (including, but not limited to, goodwill) and organization costs,
(e) business optimization expenses and other restructuring charges or reserves (which, for the avoidance of doubt, shall
include the effect of facility closures, facility consolidations, retention, severance, systems establishment costs, contract
termination costs, future lease commitments and excess pension charges),
(f) other noncash charges (but excluding (x) any such charges in respect of which cash was paid in a prior period and
not then deducted in determining Management EBITDA for such prior period or will be paid in a future period and not
then deducted in determining Management EBITDA for such future period and (y) any charges in the nature of
compensation paid in the form of notional investments in an AGM Fund or in the form of any participation therein),
including any negative incentive carry,
(g) non- operating expenses,
(h) the amount of management, consulting, monitoring, transaction and advisory fees and related expenses paid (or any
accruals related to such fees and related expenses) during such period not in contravention of this Agreement,
(i) any expenses, charges, commissions, discounts, yield and other fees (other than depreciation or amortization expense
as described above) related to any issuance of any Equity Interests, investment, acquisition, New Project, disposition,
recapitalization or the incurrence, modification or repayment of Indebtedness permitted to be incurred by this Agreement
(including a refinancing thereof) (whether or not successful),
(j) any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management
or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or
expenses are funded with cash proceeds contributed to the capital of any Management Group Member (other than
contributions received from any Management Group Member) or net cash proceeds of an issuance of Equity Interests of
any Management Group Member (other than to another Management Group Member),
(k) the amount of any loss attributable to a New Project, until the date that is twelve months after the creation of such
New Project, as the case may be (provided that (A) such losses are reasonably identifiable and factually supportable and
certified by a Responsible Officer of the Term Facility Borrower or its general partner and (B) losses attributable to such
New Project after twelve months from the date of completing such construction, acquisition, assembling or creation, as the
case may be, shall not be included in this clause (k)),
(l) with respect to any joint venture that is not a Subsidiary and solely to the extent relating to any net income referred to
in clause (v) of the definition of Combined Net Income, an amount equal to the proportion of those items described in
clauses (a) and (b) above relating to such joint venture corresponding to the Management Group Members proportionate
share of such joint ventures Combined Net Income (determined as if such joint venture were a Subsidiary), and
(m) costs associated with compliance by the Public Company with the requirements of the Sarbanes- Oxley Act of 2002
and the rules and regulations promulgated in connection therewith, the provisions of the Securities Act and the Exchange
Act, and the rules of national securities exchange listed companies (in each case, as applicable to companies with equity or
debt securities held by the public), including procuring directors and officers insurance, legal and other professional fees,
and listing fees,
minus, in each case without duplication and to the extent the respective amounts described in clauses (i) and (ii) below
increased such Combined Net Income for the respective period for which Management EBITDA is being determined, the
sum of,
(i) interest income, and
(ii) income tax credits (to the extent not netted from income tax expense),
minus, any payments made to fund expenses of a Parent Entity to the extent such expenses would have reduced
Management EBITDA if they were incurred by the Management Group Members,
minus, for any period with respect to which any Cure Right has been exercised hereunder, an amount equal to the lesser of
(x) the aggregate amount of Restricted Payments (other than tax distributions of the type referred to in clause (xvii) of the
definition of Combined Net Income) made by any Group Member to any person that is not a Group Member during the
period with respect to which any Cure Amounts are included in the calculation of Management EBITDA and (y) the sum
of the Cure Amounts in respect of all Cure Rights exercised with respect to such period. For the purposes of this clause,
Restricted Payments means any payment, dividend or any other distribution (by reduction of capital or otherwise),
whether in cash, property, obligations, securities or a combination thereof, with respect to any of Equity Interests (other
than dividends and distributions on Equity Interests payable solely by the issuance of additional Equity Interests (other
than Disqualified Stock) of the person paying such dividends or distributions) or direct or indirect redemption, purchase,
retirement, defeasement or other acquisition for value of any Equity Interests or setting aside any amount for any such
purpose (other than through the issuance of additional Equity Interests (other than Disqualified Stock) of the person
redeeming, purchasing, retiring or acquiring such shares).
Management Group Members shall mean (a) the Term Facility Borrower, (b) each Loan Party that earns its revenues
(directly, or indirectly via its Subsidiaries) predominately from the receipt of management fees and (c) each Group
Member that is a Subsidiary of a person described in clause (a) or (b) above.
Material Adverse Effect shall mean a material adverse effect on the business, property, operations or financial condition
of the Group Members, taken as a whole, or on the validity or enforceability of any of the Loan Documents or the rights
and remedies of the Administrative Agent and the Lenders thereunder.
Material AGM Operating Group Entity shall mean, any Operating Group Entity existing on the Closing Date or formed
or acquired thereafter that owns or controls (a) any investment or asset management services, financial advisory services,
money management services, merchant banking activities or similar or related business, including but not limited to a
business providing services to mutual funds, private equity or debt funds, hedge funds, funds of funds, corporate or other
business entities or individuals or (b) any person that makes investments, including investments in funds of the type
specified in clause (a); provided, however, that, for the avoidance of doubt, none of the Public Company, AP Professional
Holdings, L.P., APO Asset Co., APO (FC), LLC and APO Corp. shall be a Material AGM Operating Group Entity
hereunder.
Material Indebtedness shall mean Indebtedness (other than Loans and Letters of Credit) of any one or more of the Loan
Parties or Subsidiaries in an aggregate principal amount exceeding $100,000,000.
Maturity Date shall mean, as the context may require, (a) with respect to the Term B Facility and the Initial Revolving
Facility, January 18, 2019, and (b) with respect to any other Class of Loans or Commitments, the maturity dates specified
therefor in the applicable Incremental Assumption Agreement.
Maximum Rate shall have the meaning assigned to such term in Section 9.09.
Minimum Letter of Credit Support Amount shall mean, at any time, in connection with any Letter of Credit, (i) with
respect to Letter of Credit Support consisting of cash or deposit account balances (denominated in the same currency as
the applicable Letter of Credit), an amount equal to 103% of the Revolving L/C Exposure with respect to such Letter of
Credit at such time and (ii) otherwise, an amount sufficient to provide credit support with respect to such Revolving L/C
Exposure as determined by the Administrative Agent and the Issuing Banks in their sole discretion.
Moodys shall mean Moodys Investors Service, Inc.
Net Income of the Management Group Members for any period shall mean the net income (or loss) of the Management
Group Members before distributions to partners, determined on a combined basis as provided in Section 1.02 in
accordance with GAAP, provided that Net Income shall include any amount received by the Management Group
Members as a notional investment in an AGM Fund in lieu of payment of cash management fees (with the amount of
such notional investment being deemed equal to the amount of foregone cash management fees).
Net Leverage Ratio shall mean, on any date, the ratio of (a) (i) the aggregate principal amount of Combined Debt of the
Group Members outstanding as of the last day of the Test Period most recently ended as of such date, less (ii) without
duplication, the Letter of Credit Support, any Cash Collateral (including, without limitation, any cash collateral provided
pursuant to Section 2.11(b)), cash and Permitted Investments of the Group Members as of the last day of such Test Period,
to (b) EBITDA for such Test Period; provided that the Net Leverage Ratio and each component thereof shall be
determined for the relevant Test Period on a Pro Forma Basis.
New Class Loans shall have the meaning assigned to such term in Section 9.08(f).
New Project shall mean (a) each creation (in one or a series of related transactions) of a business unit to the extent such
business unit commences operations or (b) each expansion (in one or a series of related transactions) of business into a
new market.
Non- Bank Tax Certificate shall have the meaning assigned to such term in Section 2.17(e)(i).
Non- Consenting Lender shall have the meaning assigned to such term in Section 2.19(c).
Non- Defaulting Lender shall mean, at any time, each Lender that is not a Defaulting Lender at such time.
Non- Recourse Seasoning Debt shall mean Indebtedness incurred by a Seasoning Subsidiary to finance investments
made by such Seasoning Subsidiary that may be transferred to a fund managed by a Group Member (Fund Investments),
which Indebtedness (a) has a maturity of not more than six months from the date of the incurrence of such Indebtedness,
(b) does not constitute a general obligation of any Group Member and (c) does not have, directly or indirectly, recourse
(including by way of any Guaranty or other undertaking, agreement or instrument that would constitute Indebtedness)
against any assets of any Group Member (other than, in each case, recourse to (i) such Seasoning Subsidiary or (ii) any
other Group Member (including letters of credit issued for the account of a Loan Party or such other Subsidiary), the
principal component of which constitutes Indebtedness permitted under Section 6.01.
Note shall have the meaning assigned to such term in Section 2.09(d).
Obligations shall mean the Loan Obligations.
OFAC shall have the meaning assigned to such term in Section 3.14(b).
Operating Group Entity shall mean a person that is jointly and directly owned by (a) AP Professional Holdings, L.P. and
(b) any combination of APO Asset Co., APO (FC), LLC and APO Corp. (or any other person analogous to APO Asset
Co., APO (FC), LLC or APO Corp.).
Organizational Document shall mean, with respect to any person, the Certificate of Incorporation and By- Laws,
memorandum and articles of association, certificate of registration, exempted limited partnership agreement, or other
organizational or governing documents of such person.
Other Incremental Revolving Loans shall have the meaning assigned to such term in Section 2.21(a).
Other Incremental Term Loans shall have the meaning assigned to such term in Section 2.21(a).
Other Revolving Loans shall mean the Other Incremental Revolving Loans, the Extended Revolving Loans and the
Replacement Revolving Loans, or any of the foregoing.
Other Taxes shall mean any and all present or future stamp or documentary Taxes or any other excise, transfer, sales,
property, intangible, mortgage recording, filing or similar Taxes arising from any payment made hereunder or under any
other Loan Document or from the execution, registration, delivery or enforcement of, consummation or administration of,
from the receipt or perfection of security interest under, or otherwise with respect to, the Loan Documents (but excluding
any Excluded Taxes).
Other Term Loan Installment Date shall have, with respect to any tranche of Other Term Loans established pursuant to
an Incremental Assumption Agreement, the meaning assigned to such term in Section 2.10(a)(iii).
Other Term Loans shall mean the Other Incremental Term Loans, the Extended Term Loans and the Refinancing Term
Loans, or any of the foregoing.
Parent Entity shall mean any entity owning, directly or indirectly, Equity Interests of any Loan Party after giving effect
to any conversion or exchange rights.
Participant shall have the meaning assigned to such term in Section 9.04(d)(i).
Participant Register shall have the meaning assigned to such term in Section 9.04(d)(ii).
Permitted Investments shall mean:
(a) direct obligations of the United States of America or any member of the European Union or any agency thereof or
obligations guaranteed by the United States of America or any member of the European Union or any agency thereof, in
each case with maturities not exceeding two years;
(b) time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company that is organized under the laws of the United States of America,
any state thereof or any foreign country recognized by the United States of America having capital, surplus and undivided
profits in excess of $250,000,000 and whose longterm debt, or whose parent holding companys longterm debt, is rated
A (or such similar equivalent rating or higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act));
(c) repurchase obligations with a term of not more than 180 days for underlying securities of the types described in
clause (a) above entered into with a bank meeting the qualifications described in clause (b) above;
(d) commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than
an Affiliate of any Borrower) organized and in existence under the laws of the United States of America or any foreign
country recognized by the United States of America with a rating at the time as of which any investment therein is made
of P 1 (or higher) according to Moodys, or A 1 (or higher) according to S&P (or such similar equivalent rating or higher
by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act));
(e) securities with maturities of two years or less from the date of acquisition, issued or fully guaranteed by any State,
commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and
rated at least A by S&P or A by Moodys (or such similar equivalent rating or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities Act));
(f) shares of mutual funds whose investment guidelines restrict 95% of such funds investments to those satisfying the
provisions of clauses (a) through (e) above;
(g) money market funds that (i) comply with the criteria set forth in Rule 2a 7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moodys and (iii) have portfolio assets of at least $5,000,000,000;
(h) time deposit accounts, certificates of deposit and money market deposits in an aggregate face amount not in excess
of 0.5% of the total assets of the Group Members, on a combined basis, as of the end of the Borrowers most recently
completed fiscal year; and
(i) instruments equivalent to those referred to in clauses (a) through (h) above (in the case of clause (h), subject to the
limits set forth therein) denominated in any foreign currency comparable in credit quality and tenor to those referred to
above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States of
America to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such
jurisdiction.
Permitted Liens shall have the meaning assigned to such term in Section 6.02.
Permitted Loan Purchase shall have the meaning assigned to such term in Section 9.04(i).
Permitted Loan Purchase Assignment and Acceptance shall mean an assignment and acceptance entered into by a
Lender, as an assignor, and any Affiliate of any of the Group Members, Public Company or their respective Affiliates, as
an Assignee, in the form of Exhibit F or such other form as shall be approved by the Administrative Agent and the Term
Facility Borrower (such approval not to be unreasonably withheld or delayed).
Permitted Refinancing Indebtedness shall mean any Indebtedness issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund (collectively, to Refinance), the Indebtedness being
Refinanced (or previous refinancings thereof constituting Permitted Refinancing Indebtedness); provided that (a) the
principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so Refinanced (plus unpaid accrued interest and
premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions, expenses,
plus an amount equal to any existing commitment unutilized thereunder and letters of credit undrawn thereunder),
(b) except with respect to Section 6.01(i), (i) the final maturity date of such Permitted Refinancing Indebtedness is on or
after the earlier of (x) the final maturity date of the Indebtedness being Refinanced and (y) the latest Maturity Date in
effect at the time of incurrence and (ii) the Weighted Average Life to Maturity of such Permitted Refinancing
Indebtedness is greater than or equal to the lesser of (x) the Weighted Average Life to Maturity of the Indebtedness being
Refinanced and (y) the Weighted Average Life to Maturity of the Class of Term Loans then outstanding with the greatest
remaining Weighted Average Life to Maturity, (c) if the Indebtedness being Refinanced is subordinated in right of
payment to the Loan Obligations, such Permitted Refinancing Indebtedness shall be subordinated in right of payment to
such Loan Obligations on terms in the aggregate not materially less favorable to the Lenders as those contained in the
documentation governing the Indebtedness being Refinanced, and (d) no Permitted Refinancing Indebtedness shall have
obligors that are not (or would not have been) obligated with respect to the Indebtedness so Refinanced (except that a
Loan Party may be added as an additional obligor).
person shall mean any natural person, corporation, business trust, joint venture, association, company, partnership,
limited liability company or government, individual or family trusts, or any agency or political subdivision thereof.
Platform shall have the meaning assigned to such term in Section 9.17.
primary obligor shall have the meaning assigned to such term in the definition of the term Guaranty.
Prime Rate shall mean the rate of interest per annum as announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City.
Pro Forma Basis shall mean, as to any person, for any events as described below that occur subsequent to the
commencement of a period for which the financial effect of such events is being calculated, and giving effect to the events
for which such calculation is being made, such calculation as will give pro forma effect to such events as if such events
occurred on the first day of the four consecutive fiscal quarter period ended on or before the occurrence of such event (the
Reference Period): (i) pro forma effect shall be given to any disposition, acquisition, investment, capital expenditure,
construction, repair, replacement, improvement, development, disposition, merger, amalgamation, consolidation,
dividend, distribution or other similar payment, any New Project and any restructurings of the business of any Group
Member that such Group Member has determined to make and/or made and are expected to have a continuing impact and
are factually supportable, which would include cost savings resulting from head count reduction, closure of facilities and
similar operational and other cost savings, which adjustments the Term Facility Borrower determines are reasonable as set
forth in a certificate of a Financial Officer of the Term Facility Borrower or its general partner (the foregoing, together
with any transactions related thereto or in connection therewith, the relevant transactions), in each case that occurred
during the Reference Period (or, in the case of determinations made pursuant to Article II or Article VI, occurring during
the Reference Period or thereafter and through and including the date upon which the relevant transaction is
consummated), (ii) in making any determination on a Pro Forma Basis, (x) all Indebtedness (including Indebtedness
issued, incurred or assumed as a result of, or to finance, any relevant transactions and for which the financial effect is
being calculated, whether incurred under this Agreement or otherwise, but excluding normal fluctuations in revolving
Indebtedness incurred for working capital purposes, in each case not to finance any acquisition) issued, incurred, assumed
or permanently repaid during the Reference Period (or, in the case of determinations made pursuant to Article II or
Article VI, occurring during the Reference Period or thereafter and through and including the date upon which the relevant
transaction is consummated) shall be deemed to have been issued, incurred, assumed or permanently repaid at the
beginning of such period, (y) interest expense of such person attributable to interest on any Indebtedness, for which pro
forma effect is being given as provided in the preceding clause (x), bearing floating interest rates shall be computed on a
pro forma basis as if the rates that would have been in effect during the period for which pro forma effect is being given
had been actually in effect during such periods, and (z) in giving effect to clause (i) above with respect to each New
Project which commences operations and records not less than one full fiscal quarters operations during the Reference
Period, the operating results of such New Project shall be annualized on a straight line basis during such period, taking
into account any seasonality adjustments determined by the Term Facility Borrower in good faith, and (iii) pro forma
effect shall be given to (x) the payment of management fees to the Group Members in respect of any AGM Fund with an
investor lockup period of two years or more established during such measurement period, as though such management
fees and related anticipated expenses commenced immediately prior to such measurement period (and any reductions in
other management fees as a result of the establishment of such AGM Fund), (y) the effect on management fees payable to
the Group Members in respect of any AGM Fund terminated during such measurement period by an action on the part of
the limited partners in such AGM Fund, as though such effect commenced immediately prior to such measurement period,
and (z) at the Term Facility Borrowers option (and without duplication in any subsequent fiscal period), any transaction
fee (net of related anticipated expenses) to be paid to the Group Members in respect of any transaction under contract
during such measurement period, so long as such transaction fee is actually paid within 60 days after the end of such
measurement period.
Pro forma calculations made pursuant to the definition of the term Pro Forma Basis shall be determined in good faith by
a Financial Officer of the Term Facility Borrower or its general partner and may include adjustments to reflect operating
expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from such
relevant pro forma event (including, to the extent applicable, the Transactions). Upon the request of the Administrative
Agent, the Term Facility Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer of the
Term Facility Borrower or its general partner setting forth such demonstrable or additional operating expense reductions
and other operating improvements, synergies or cost savings and information and calculations supporting them in
reasonable detail.
For purposes of this definition, any amount in a currency other than Dollars will be converted to Dollars based on the
average exchange rate for such currency for the most recent twelve month period immediately prior to the date of
determination in a manner consistent with that used in calculating EBITDA for the applicable period.
Pro Rata Extension Offers shall have the meaning assigned to such term in Section 2.21(e).
Pro Rata Share shall have the meaning assigned to such term in Section 9.08(f).
Public Company or AGM shall mean Apollo Global Management, LLC, a Delaware limited liability company, or any
successor thereof.
Public Lender shall have the meaning assigned to such term in Section 9.17.
Qualified Equity Interests shall mean any Equity Interest other than Disqualified Stock.
Rate shall have the meaning assigned to such term in the definition of the term Type.
Realized Incentive Carry of the Group Members for any period shall mean the realized incentive carry of such Group
Members for such period minus the realized incentive profit- sharing expense of such Group Members for such period
(without duplication for any amounts included in the calculation of Management EBITDA); provided that Realized
Incentive Carry shall never be less than $0.
Real Property shall mean, collectively, all right, title and interest (including any leasehold estate) in and to any and all
parcels of or interests in real property owned in fee or leased by any Loan Party, whether by lease, license, or other means,
together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, incidental to the ownership, lease or operation thereof.
Reference Period shall have the meaning assigned to such term in the definition of the term Pro Forma Basis.
Refinance shall have the meaning assigned to such term in the definition of the term Permitted Refinancing
Indebtedness, and Refinanced shall have a meaning correlative thereto.
Refinancing Effective Date shall have the meaning assigned to such term in Section 2.21(j).
Refinancing Notes shall mean any unsecured notes or loans issued by any Group Member (whether under an indenture,
a credit agreement or otherwise) and the Indebtedness represented thereby; provided that (a) 90% of the net proceeds of
any other Refinancing Notes are used to permanently reduce the Loan Obligations substantially simultaneously with the
issuance thereof; (b) the principal amount (or accreted value, if applicable) of such Refinancing Notes does not exceed the
principal amount (or accreted value, if applicable) of the portion of the Loan Obligations so reduced (plus unpaid accrued
interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees,
commissions and expenses); (c) the final maturity date of such Refinancing Notes is on or after the Maturity Date of the
Loan Obligations so reduced; (d) the Weighted Average Life to Maturity of such Refinancing Notes is greater than or
equal to the Weighted Average Life to Maturity of the Loan Obligations so reduced; (e) in the case of Refinancing Notes
in the form of notes issued under an indenture, the terms thereof do not provide for any scheduled repayment, mandatory
redemption or sinking fund obligations prior to the Maturity Date of the Loan Obligations so reduced (other than
customary offers to repurchase or mandatory prepayment provisions upon a change of control, asset sale or event of loss
and customary acceleration rights after an event of default); (f) the other terms of such Refinancing Notes (other than
interest rates, fees, floors, funding discounts and redemption or prepayment premiums), taken as a whole, are substantially
similar to, or not materially less favorable to the Group Members than the terms, taken as a whole, applicable to the Loan
Obligations (except for covenants or other provisions applicable only to periods after the Maturity Date in effect at the
time such Refinancing Notes are issued), as determined by the Term Facility Borrower in good faith (or, if more
restrictive, the Loan Documents are amended to contain such more restrictive terms to the extent required to satisfy the
foregoing standard); and (g) there shall be no obligor in respect of such Refinancing Notes that is not a Loan Party.
Refinancing Term Loans shall have the meaning assigned to such term in Section 2.21(j).
Register shall have the meaning assigned to such term in Section 9.04(b)(iv).
Regulation T shall mean Regulation T of the Board as from time to time in effect and all official rulings and
interpretations thereunder or thereof.
Regulation U shall mean Regulation U of the Board as from time to time in effect and all official rulings and
Regulation X shall mean Regulation X of the Board as from time to time in effect and all official rulings and
Related Fund shall mean, with respect to any Lender that is a fund that invests in bank or commercial loans and similar
extensions of credit, any other fund that invests in bank or commercial loans and similar extensions of credit and is
advised or managed by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity (or an Affiliate of such entity) that
administers, advises or manages such Lender.
Related Parties shall mean, with respect to any specified person, such persons Affiliates and the respective directors,
trustees, officers, employees, agents and advisors of such person and such persons Affiliates.
relevant transactions shall have the meaning assigned to such term in the definition of the term Pro Forma Basis.
Replacement Revolving Facility Commitments shall have the meaning assigned to such term in Section 2.21(l).
Replacement Revolving Facility Effective Date shall have the meaning assigned to such term in Section 2.21(l).
Replacement Revolving Loans shall have the meaning assigned to such term in Section 2.21(l).
Required Lenders shall mean, at any time, Lenders having (a) Loans (other than Swingline Loans) outstanding,
(b) Revolving L/C Exposures, (c) Swingline Exposures and (d) Available Unused Commitments that, taken together,
represent more than 50% of the sum of (w) all Loans (other than Swingline Loans) outstanding, (x) all Revolving L/C
Exposures, (y) all Swingline Exposures and (z) the total Available Unused Commitments at such time; provided that the
Loans, Revolving L/C Exposures, Swingline Exposures and Available Unused Commitment of any Defaulting Lender
shall be disregarded in determining Required Lenders at any time.
Requirement of Law shall mean, as to any person, any law, treaty, rule, regulation, statute, order, ordinance, decree,
judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or
imposed or entered into or agreed by any Governmental Authority, in each case applicable to or binding upon such person
or any of its property or assets or to which such person or any of its property or assets is subject.
Responsible Officer of any person shall mean any executive officer or Financial Officer of such person and any other
officer or similar official thereof responsible for the administration of the obligations of such person in respect of this
Agreement.
Restricted Payments shall have the meaning assigned to such term in the definition of the term Management
EBITDA.
Revaluation Date shall mean, with respect to any Alternate Currency Letter of Credit, each of the following: (i) each
date of issuance, extension or renewal of an Alternate Currency Letter of Credit, (ii) each date of an amendment of any
Alternate Currency Letter of Credit having the effect of increasing the amount thereof, (iii) each date of any payment by
the Issuing Bank under any Alternate Currency Letter of Credit, and (iv) such additional dates as the Administrative Agent
or the Issuing Bank shall determine or the Required Lenders shall require.
Revolving Facility shall mean the Revolving Facility Commitments of any Class and the extensions of credit made
hereunder by the Revolving Facility Lenders of such Class and, for purposes of Section 9.08(b), shall refer to all such
Revolving Facility Commitments as a single Class.
Revolving Facility Borrowers shall have the meaning assigned to such term in the introductory paragraph of this
Agreement; provided that notwithstanding the foregoing, AAA Holdings, L.P. shall not be a Revolving Facility Borrower
hereunder until the Administrative Agent shall have received, on behalf of itself, the Lenders and each Issuing Bank, a
favorable written opinion of Guernsey counsel in form and substance reasonably satisfactory to the Administrative Agent,
covering such matters relating to the Loan Documents as the Administrative Agent shall reasonably request.
Revolving Facility Commitment shall mean, with respect to each Revolving Facility Lender, the commitment of such
Revolving Facility Lender to make Revolving Facility Loans pursuant to Section 2.01(b), expressed as an amount
representing the maximum aggregate permitted amount of such Revolving Facility Lenders Revolving Facility Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, (b) reduced or
increased from time to time pursuant to assignments by or to such Lender under Section 9.04, and (c) increased (or
replaced) as provided under Section 2.21. The initial amount of each Revolving Facility Lenders Initial Revolving
Facility Commitment as of the Closing Date is set forth on Schedule 2.01. On the Closing Date hereof, there is only one
Class of Revolving Facility Commitments (i.e., the Initial Revolving Facility Commitments). After the date hereof,
additional Classes of Revolving Facility Commitments may be added or created pursuant to Incremental Assumption
Agreements pursuant to the terms hereof.
Revolving Facility Credit Exposure shall mean, at any time with respect to any Class of Revolving Facility
Commitments, the sum of (a) the aggregate principal amount of the Revolving Facility Loans of such Class outstanding at
such time, (b) the Swingline Exposure applicable to such Class at such time and (c) the Revolving L/C Exposure
applicable to such Class at such time. The Revolving Facility Credit Exposure of any Revolving Facility Lender with
respect to any Class at any time shall be the product of (x) such Revolving Facility Lenders Revolving Facility
Percentage of the applicable Class and (y) the aggregate Revolving Facility Credit Exposure of such Class of all
Revolving Facility Lenders, collectively, at such time.
Revolving Facility Lender shall mean a Lender (including an Incremental Revolving Facility Lender) with a Revolving
Facility Commitment or with outstanding Revolving Facility Loans.
Revolving Facility Loan shall mean a Loan made by a Revolving Facility Lender pursuant to Section 2.01(b). Unless
the context otherwise requires, the term Revolving Facility Loans shall include the Incremental Revolving Loans and
Other Revolving Loans.
Revolving Facility Obligations shall mean any and all obligations of the Revolving Facility Borrowers with respect to
the Revolving Facility.
Revolving Facility Percentage shall mean, with respect to any Revolving Facility Lender of any Class, the percentage of
the total Revolving Facility Commitments of such Class represented by such Lenders Revolving Facility Commitment of
such Class. If the Revolving Facility Commitments of such Class have terminated or expired, the Revolving Facility
Percentages of such Class shall be determined based upon the Revolving Facility Commitments of such Class most
recently in effect, giving effect to any assignments pursuant to Section 9.04.
Revolving L/C Exposure of any Class shall mean at any time the sum of (a) the aggregate undrawn amount of all Letters
of Credit applicable to such Class outstanding at such time (calculated, in the case of Alternate Currency Letters of Credit,
based on the Dollar Equivalent thereof) and (b) the aggregate principal amount of all L/C Disbursements applicable to
such Class that have not yet been reimbursed at such time (calculated, in the case of Alternate Currency Letters of Credit,
based on the Dollar Equivalent thereof). The Revolving L/C Exposure of any Class of any Revolving Facility Lender at
any time shall mean its applicable Revolving Facility Percentage of the aggregate Revolving L/C Exposure applicable to
such Class at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired
by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the International
Standard Practices, International Chamber of Commerce No. 590, such Letter of Credit shall be deemed to be
outstanding in the amount so remaining available to be drawn. Unless otherwise specified herein, the amount of a Letter
of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided that,
with respect to any Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or
more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum
stated amount is in effect at such time.
S&P shall mean Standard & Poors Ratings Group, Inc.
Screen Rate shall have the meaning assigned to such term in the definition of LIBO Rate.
Seasoning Subsidiary shall mean any single purpose Subsidiary the sole business of which is to purchase and hold Fund
Investments and finance the purchase thereof and substantially all of the assets of which consist of the Fund Investments
so purchased.
SEC shall mean the Securities and Exchange Commission or any successor thereto.
Securities Act shall mean the Securities Act of 1933, as amended.
Senior Creditors shall mean the Administrative Agent, the Issuing Banks and the Lenders other than Affiliate Lenders.
Senior Obligations shall mean all Obligations other than Subordinated Obligations.
Similar Business shall mean any business, the majority of whose revenues are derived from (i) business or activities
conducted by the Group Members on the Closing Date, (ii) any business that is a natural outgrowth or reasonable
extension, development or expansion of any such business or any business similar, reasonably related, incidental,
complementary or ancillary to any of the foregoing or (iii) any business that in the Term Facility Borrowers good faith
business judgment constitutes a reasonable diversification of businesses conducted by the Group Members.
Specified Cash Management Agreement shall mean any Cash Management Agreement that is entered into by and
between any Loan Party and any Cash Management Bank to the extent that such Cash Management Agreement is
designated in writing by the Term Facility Borrower and such Cash Management Bank to the Administrative Agent as a
Specified Cash Management Agreement.
Specified Exception shall mean that the investment funds/vehicles that are managed by the Group Members and the
general partner entities of such funds and vehicles have not been, and will not be, consolidated or otherwise included in
the financial statements of the Group Members, as may otherwise be required in accordance with generally accepted
accounting principles in effect from time to time in the United States of America.
Specified Hedge Agreement shall mean any Hedging Agreement that is entered into by and between any Loan Party and
any Hedge Bank to the extent that such Hedging Agreement is designated in writing by the Term Facility Borrower and
such Hedge Bank to the Administrative Agent as a Specified Hedge Agreement.
Spot Rate shall mean, with respect to any currency, the rate determined by the Administrative Agent or the applicable
Issuing Bank, as applicable, to be the rate quoted by the person acting in such capacity as the spot rate for the purchase by
such person of such currency with another currency through its principal foreign exchange trading office at approximately
11:00 a.m., Local Time on the date two Business Days prior to the date as of which the foreign exchange computation is
made or if such rate cannot be computed as of such date such other date as the Administrative Agent or such Issuing Bank
shall reasonably determine is appropriate under the circumstances; provided that the Administrative Agent or such Issuing
Bank may obtain such spot rate from another financial institution designated by the Administrative Agent or such Issuing
Bank if the person acting in such capacity does not have as of the date of determination a spot buying rate for any such
currency.
Standby Letters of Credit shall have the meaning assigned to such term in Section 2.05(a).
Statutory Reserves shall mean the aggregate of the maximum reserve percentages (including any basic, marginal,
special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking
authority, domestic or foreign, to which the Administrative Agent or any Lender (including any branch, Affiliate or other
fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the
Board). Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the Board)
and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on
and as of the effective date of any change in any reserve percentage.
Subagent shall have the meaning assigned to such term in Section 8.02.
Subordinated Obligations shall mean all Obligations held by Affiliate Lenders.
Subordination Terms shall have the meaning assigned to such term in Section 2.18(f).
subsidiary shall mean, with respect to any person (herein referred to as the parent), any corporation, partnership,
association or other business entity (a) of which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power (other than securities or ownership interests having such power
only by reason of the happening of a contingency) or more than 50% of the general partnership interests are, at the time
any determination is being made, directly or indirectly, owned, Controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent.
Subsidiary shall mean, unless the context otherwise requires, a subsidiary of a Loan Party. Notwithstanding anything to
the contrary, Subsidiaries shall not include any AGM Funds or any other variable interests entity or fund or investment
vehicle.
Swingline Borrowing shall mean a Borrowing comprised of Swingline Loans.
Swingline Borrowing Request shall mean a request by the applicable Revolving Facility Borrower substantially in the
form of Exhibit D or another form approved by the Swingline Lender.
Swingline Commitment shall mean, with respect to each Swingline Lender, the commitment of such Swingline Lender
to make Swingline Loans pursuant to Section 2.04. The aggregate amount of the Swingline Commitments on the Closing
Date is $50,000,000. The Swingline Commitment is part of, and not in addition to, the Revolving Facility Commitments.
Swingline Exposure shall mean at any time the aggregate principal amount of all outstanding Swingline Borrowings at
such time. The Swingline Exposure of any Revolving Facility Lender at any time shall mean its applicable Revolving
Facility Percentage of the aggregate Swingline Exposure at such time.
Swingline Lender shall mean (a) with respect to the Initial Revolving Facility, (i) on the Closing Date, JPMorgan Chase
Bank, N.A., in its capacity as a lender of Swingline Loans, and (ii) thereafter, each Revolving Facility Lender that shall
have become a Swingline Lender hereunder as provided in Section 2.04(d), each in its capacity as a lender of Swingline
Loans hereunder and (b) with respect to any another Revolving Facility, as set forth in the Incremental Assumption
Agreement with respect thereto with such Swingline Lenders consent.
Swingline Loans shall mean the swingline loans made to the applicable Revolving Facility Borrower pursuant to
Section 2.04.
Syndication Agents shall mean the person identified as such on the title page of this Agreement.
Taxes shall mean any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings, fees
or other similar charges imposed by any Governmental Authority, whether computed on a separate, consolidated, unitary,
combined or other basis and any interest, fines, penalties or additions to tax with respect to the foregoing.
Term B Facility shall mean the Term B Loan Commitments and the Term B Loans made hereunder.
Term B Lender shall mean a Lender with either a Term B Loan Commitment or an outstanding Term B Loan.
Term B Loan Commitment shall mean, with respect to each Lender, the commitment of such Lender to make Term B
Loans hereunder.
Term B Loans shall mean (a) the Closing Date Term B Loans and (b) any Incremental Term B Loans.
Term B Obligations shall mean any Term Facility Obligations with respect to the Term B Facility.
Term Facility Borrower shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
Term Facility Commitment shall mean the commitment of any Lender to make Term Loans, including Term B Loans
and/or Other Term Loans.
Term Facility Obligations shall mean any and all obligations of the Term Facility Borrower with respect to the Term
Loans.
Term Loans shall mean the Term B Loans and/or the Other Term Loans.
Termination Date shall mean the date on which (a) all Commitments shall have been terminated, (b) the principal of and
interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document shall have been paid
in full (other than in respect of contingent indemnification and expense reimbursement claims not then due) and (c) all
Letters of Credit (other than those with respect to which the Revolving Facility Borrowers have provided Letter of Credit
Support) have been cancelled or have expired and all amounts drawn or paid thereunder have been reimbursed in full.
Test Period shall mean, on any date of determination, the period of four consecutive fiscal quarters of the Term Facility
Borrower then most recently ended (taken as one accounting period) for which financial statements have been (or were
required to be) delivered pursuant to Section 5.01(a) or 5.01(b) and, initially, the four fiscal quarter period ending
September 30, 2013.
TRA shall mean the Amended and Restated Tax Receivable Agreement, dated as of May 6, 2013, by and among APO
Corp., Apollo Principal Holdings II, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings VI, Apollo
Principal Holdings VIII, L.P., AMH Holdings (Cayman), L.P., Leon D. Black, Marc J. Rowan and Joshua J. Harris, as the
same may be further amended, restated, replaced, supplemented or otherwise modified from time to time.
Trade Letters of Credit shall have the meaning assigned to such term in Section 2.05(a).
Transactions shall mean, collectively, (a) the transactions to occur pursuant to the Loan Documents and the initial
borrowings hereunder, and (b) the payment of all fees and expenses to be paid in connection with the foregoing.
Type shall mean, when used in respect of any Loan or Borrowing, the Rate by reference to which interest on such Loan
or on the Loans comprising such Borrowing is determined. For purposes hereof, the term Rate shall include the
Adjusted LIBO Rate and the ABR.
Uniform Commercial Code shall mean the Uniform Commercial Code as the same may from time to time be in effect in
the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction.
Unreimbursed Amount shall have the meaning assigned to such term in Section 2.05(e).
U.S. Lender shall mean any Lender other than a Foreign Lender.
USA PATRIOT Act shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107 56 (signed into law October 26, 2001)).
Weighted Average Life to Maturity shall mean, when applied to any Indebtedness at any date, the number of years
obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest one- twelfth) that will elapse between such date and
the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.
Section 1.02 Terms Generally. The definitions set forth or referred to in Section 1.01 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to
be followed by the phrase without limitation. All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided herein, any reference in this Agreement to any Loan Document
shall mean such document as amended, restated, supplemented or otherwise modified from time to time. Except as
otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; provided that, if the Term Facility Borrower notifies the Administrative Agent that
the Term Facility Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring
after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative
Agent notifies the Term Facility Borrower that the Required Lenders request an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such
change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance
herewith. Notwithstanding any changes in GAAP after the Closing Date, any lease of a Group Member that would be
characterized as an operating lease under GAAP in effect on the Closing Date (whether such lease is entered into before or
after the Closing Date) shall not constitute Indebtedness or a Capitalized Lease Obligation under this Agreement or any
other Loan Document as a result of such changes in GAAP. Unless otherwise expressly provided herein, any references
herein to any person shall be construed to include such persons successors and permitted assigns. Any financial terms
used herein shall be determined on a combined basis for the Loan Parties and their consolidated Subsidiaries and shall net
out (i) intercompany items among or between any Group Members and, without duplication (ii) any Indebtedness owing
by a Group Member to another Group Member. Notwithstanding the foregoing, for purposes of calculating the Net
Leverage Ratio contained herein, computations shall be made without giving effect to any election under Financial
Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825- 10, Financial
Instruments, or FASB ASC Topic 4701- 20, Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement), or any successor thereto, to value any Indebtedness of the
Borrowers or the other Group Members at fair value, as defined therein.
Section 1.03 Exchange Rates; Currency Equivalents. (%3) The Administrative Agent shall determine the Spot Rate as of
each Revaluation Date to be used for calculating Dollar Equivalent amounts of Alternate Currency Letters of Credit. Such
Spot Rate shall become effective as of such Revaluation Date and shall be the Spot Rate employed in converting any
amounts between the Dollars and each Alternate Currency until the next Revaluation Date to occur. Except for purposes
of financial statements delivered by Loan Parties hereunder or calculating financial ratios hereunder or except as otherwise
provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be
such Dollar Equivalent amount as determined by the Administrative Agent in accordance with this Agreement. No Default
or Event of Default shall arise as a result of any limitation or threshold set forth in Dollars in Article VI (other than
Section 6.07) or Section 7.01 being exceeded solely as a result of changes in currency exchange rates from those rates
applicable on the first day of the fiscal quarter in which such determination occurs or in respect of which such
determination is being made.
(a) Wherever in this Agreement in connection with an Alternate Currency Letter of Credit, an amount, such as a required
minimum or multiple amount, is expressed in Dollars, such amount shall be the relevant Alternate Currency Equivalent of
such Dollar amount (rounded to the nearest unit of such Alternate Currency, with 0.5 of a unit being rounded upward), as
determined by the Administrative Agent or the Issuing Bank, as applicable.
Section 1.04 Timing of Payment or Performance. Except as otherwise expressly provided herein, when the payment of
any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day
which is not a Business Day, the date of such payment or performance (other than as described in the definition of
Interest Period) shall extend to the immediately succeeding Business Day.
Section 1.05 Times of Day. Unless otherwise specified herein, all references herein to times of day shall be references to
New York City time (daylight or standard, as applicable).
ARTICLE II
The Credits
Section 2.01 Commitments. Subject to the terms and conditions set forth herein:
(a) each Term B Lender with a Term B Loan Commitment severally agrees to make in Dollars Closing Date Term B
Loans to the Term Facility Borrower on the Closing Date in an aggregate principal amount not to exceed its Term B Loan
Commitment in respect of such Closing Date Term B Loans;
(b) each Revolving Facility Lender with a Revolving Facility Commitment in respect of the applicable Class severally
agrees to make in Dollars Revolving Facility Loans (including Incremental Revolving Loans) of such Class in Dollars to
any Revolving Facility Borrower from time to time during the Availability Period in an aggregate principal amount that
will not result in (i) such Lenders Revolving Facility Credit Exposure of such Class exceeding such Lenders Revolving
Facility Commitment of such Class or (ii) the Revolving Facility Credit Exposure of such Class exceeding the total
Revolving Facility Commitments of such Class. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Revolving Facility Borrowers may borrow, prepay and reborrow Revolving Facility Loans;
(c) each Lender having an Incremental Term Loan Commitment with respect to any Class severally agrees, subject to the
terms and conditions set forth in the applicable Incremental Assumption Agreement, to make Incremental Term Loans of
such Class to the Term Facility Borrower, in an aggregate principal amount not to exceed its Incremental Term Loan
Commitment with respect to such Class;
(d) each Lender having a commitment to make Extended Term Loans, Refinancing Term Loans, Extended Revolving
Loans or Replacement Revolving Loans, in each case, of any Class, severally agrees, subject to the terms and conditions
set forth in the applicable Incremental Assumption Agreement, to make such Extended Term Loans, Refinancing Term
Loans, Extended Revolving Loans or Replacement Revolving Loans; and
(e) amounts of Term Loans borrowed under this Section 2.01 that are repaid or prepaid may not be reborrowed.
Section 2.02 Loans and Borrowings. (%3) Each Loan shall be made as part of a Borrowing consisting of Loans under the
same Facility and of the same Type made by the Lenders ratably in accordance with their respective Commitments under
the applicable Facility (or, in the case of Swingline Loans, in accordance with their respective Swingline Commitments);
provided, however, that Revolving Facility Loans of any Class shall be made by the Revolving Facility Lenders of such
Class ratably in accordance with their respective Revolving Facility Percentages on the date such Loans are made
hereunder. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided further that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lenders failure to make Loans as required. The Term Facility Obligations and the Revolving
Facility Obligations shall be several but not joint obligations of the Term Facility Borrower and the Revolving Facility
Borrowers, respectively. The Revolving Facility Obligations shall be joint and several obligations of the Revolving
Facility Borrowers.
(b) Subject to Section 2.14, each Borrowing (other than a Swingline Borrowing) shall be composed entirely of ABR
Loans or Eurocurrency Loans as a Borrower may request in accordance herewith. Each Swingline Borrowing shall be an
ABR Borrowing. Each Lender at its option may make any ABR Loan or Eurocurrency Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect
the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement and such Lender shall
not be entitled to any amounts payable under Section 2.15 or 2.17 solely in respect of increased costs resulting from such
exercise and existing at the time of such exercise.
(c) At the commencement of each Interest Period for any Eurocurrency Revolving Facility Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing
Minimum. At the time that each ABR Revolving Facility Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum; provided that an
ABR Revolving Facility Borrowing may be in an aggregate amount that is equal to the entire unused available balance of
the Revolving Facility Commitments or that is required to finance the reimbursement of an L/C Disbursement as
contemplated by Section 2.05(e). Each Swingline Borrowing shall be in an amount that is an integral multiple of the
Borrowing Multiple and not less than the Borrowing Minimum. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrowers shall not be entitled to request any Borrowing that, if made, would
result in more than (i) 8 Eurocurrency Borrowings relating to the Term Loans at any time and (ii) 8 Eurocurrency
Borrowings outstanding under the Revolving Facility at any time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same date, shall be considered separate
Borrowings.
(d) Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request, or to elect to
convert or continue, any Borrowing of any Class if the Interest Period requested with respect thereto would end after the
Maturity Date for such Class, as applicable.
Section 2.03 Requests for Borrowings. To request a Revolving Facility Borrowing and/or a Term Borrowing, the
applicable Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurocurrency
Borrowing, not later than 12:00 noon, Local Time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 10:00 a.m. Local Time, on the Business Day of the proposed
Borrowing; provided that, (i) to request a Eurodollar or ABR Borrowing on the Closing Date, the applicable Borrower
shall notify the Administrative Agent of such request by telephone not later than 5:00 p.m., Local Time, one Business Day
prior to the Closing Date (or such later time as the Administrative Agent may agree) and (ii) any such notice of an ABR
Revolving Facility Borrowing to finance the reimbursement of an L/C Disbursement as contemplated by Section 2.05(e)
may be given not later than 12:00 noon, Local Time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or electronic means to the
Administrative Agent of a written Borrowing Request signed by such Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with Section 2.02:
(i) whether such Borrowing is to be a Borrowing of Term B Loans, Other Term Loans (and specifying a particular Class
of such Other Term Loans), Initial Revolving Loans or Other Revolving Loans (and specifying a particular Class of such
Other Revolving Loans), as applicable;
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
(v) in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term Interest Period; and
(vi) the location and number of such Borrowers account to which funds are to be disbursed.
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the applicable Borrower shall be
deemed to have selected an Interest Period of one months duration. Promptly following receipt of a Borrowing Request in
accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lenders Loan to be made as part of the requested Borrowing.
Section 2.04 Swingline Loans. (%3) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to
make Swingline Loans to any Revolving Facility Borrower from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding
Swingline Loans exceeding the Swingline Commitment or (ii) the Revolving Facility Credit Exposure of the applicable
Class exceeding the total Revolving Facility Commitments of such Class; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Borrowing. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Revolving Facility Borrowers may borrow, prepay and reborrow
Swingline Loans.
(a) To request a Swingline Borrowing, a Revolving Facility Borrower shall notify the Administrative Agent and the
Swingline Lender of such request by telephone (confirmed by a Swingline Borrowing Request by electronic means), not
later than 2:00 p.m., Local Time, on the day of a proposed Swingline Borrowing. Each such notice and Swingline
Borrowing Request shall be irrevocable and shall specify (i) the requested date of such Swingline Borrowing (which shall
be a Business Day) and (ii) the amount of the requested Swingline Borrowing. The Swingline Lender shall consult with
the Administrative Agent as to whether the making of the Swingline Loan is in accordance with the terms of this
Agreement prior to the Swingline Lender funding such Swingline Loan. The Swingline Lender shall make each Swingline
Loan on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., Local Time, to the
account of such Revolving Facility Borrower (or, in the case of a Swingline Borrowing made to finance the
reimbursement of an L/C Disbursement as provided in Section 2.05(e), by remittance to the applicable Issuing Bank).
(b) The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., Local
Time, on any Business Day require the Revolving Facility Lenders of the applicable Class to acquire participations on
such Business Day in all or a portion of the outstanding Swingline Loans made by it. Such notice shall specify the
aggregate amount of such Swingline Loans in which the Revolving Facility Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to each such Lender, specifying in such notice
such Revolving Facility Lenders applicable Revolving Facility Percentage of such Swingline Loan or Loans. Each
Revolving Facility Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay
to the Administrative Agent for the account of the Swingline Lender, such Revolving Facility Lenders applicable
Revolving Facility Percentage of such Swingline Loan or Loans. Each Revolving Facility Lender acknowledges and
agrees that its respective obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a
Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each Revolving Facility Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Loans made by such Revolving Facility Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline
Lender the amounts so received by it from the Revolving Facility Lenders. The Administrative Agent shall notify the
Revolving Facility Borrowers of any participations in any Swingline Loan acquired pursuant to this paragraph (c), and
thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline
Lender. Any amounts received by the Swingline Lender from the Revolving Facility Borrowers (or other party on behalf
of the Revolving Facility Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds
of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Facility Lenders that
shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear;
provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as
applicable, if and to the extent such payment is required to be refunded to the applicable Revolving Facility Borrower for
any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Revolving
Facility Borrowers of any default in the payment thereof.
(c) The Revolving Facility Borrowers may, at any time and from time to time, designate as additional Swingline Lenders
one or more Revolving Facility Lenders that agree to serve in such capacity as provided below. The acceptance by a
Revolving Facility Lender of an appointment as a Swingline Lender hereunder shall be evidenced by an agreement, which
shall be in form and substance reasonably satisfactory to the Administrative Agent and the Revolving Facility Borrowers,
executed by the Revolving Facility Borrowers, the Administrative Agent and such designated Swingline Lender, and,
from and after the effective date of such agreement, (i) such Revolving Facility Lender shall have all the rights and
obligations of a Swingline Lender under this Agreement and (ii) references herein to the term Swingline Lender shall be
deemed to include such Revolving Facility Lender in its capacity as a lender of Swingline Loans hereunder.
Section 2.05 Letters of Credit. (%3) General. Subject to the terms and conditions set forth herein, any Revolving Facility
Borrower may request the issuance of one or more letters of credit or bank guarantees in Dollars or any Alternate
Currency in the form of (x) trade letters of credit in support of trade obligations of such Revolving Facility Borrower and
its Affiliates incurred in the ordinary course of business (such letters of credit issued for such purposes, Trade Letters of
Credit) and (y) standby letters of credit or bank guarantees issued for any other lawful purposes of such Revolving
Facility Borrower and its Affiliates (such letters of credit or bank guarantees issued for such purposes, Standby Letters of
Credit; each such letter of credit or bank guarantee, issued hereunder, a Letter of Credit and collectively, the Letters of
Credit) for its own account or for the account of any Group Member in a form reasonably acceptable to the applicable
Issuing Bank, at any time and from time to time during the applicable Availability Period and prior to the date that is five
Business Days prior to the applicable Maturity Date. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by
such Revolving Facility Borrower to, or entered into by such Revolving Facility Borrower with, an Issuing Bank relating
to any Letter of Credit, the terms and conditions of this Agreement shall control.
(a) Notice of Issuance, Amendment, Renewal, Extension: Certain Conditions. To request the issuance of a Letter of
Credit (or the amendment, renewal (other than an automatic extension in accordance with paragraph (c) of this Section) or
extension of an outstanding Letter of Credit), a Revolving Facility Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the
applicable Issuing Bank and the Administrative Agent (three Business Days in advance of the requested date of issuance,
amendment or extension or such shorter period as the Administrative Agent and the Issuing Bank in their sole discretion
may agree) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended or
extended, and specifying the date of issuance, amendment or extension (which shall be a Business Day), the date on which
such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount and currency (which
may be Dollars or any Alternate Currency) of such Letter of Credit, the name and address of the beneficiary thereof,
whether such Letter of Credit constitutes a Standby Letter of Credit or a Trade Letter of Credit and such other information
as shall be necessary to issue, amend or extend such Letter of Credit. If requested by the applicable Issuing Bank, such
Revolving Facility Borrower also shall submit a letter of credit application on such Issuing Banks standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended or extended only if (and
upon issuance, amendment or extension of each Letter of Credit, the applicable Revolving Facility Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance, amendment or extension (i) the Revolving L/C
Exposure shall not exceed the Letter of Credit Sublimit and (ii) the Revolving Facility Credit Exposure shall not exceed
the applicable Revolving Facility Commitments. For the avoidance of doubt, no Issuing Bank shall be obligated to issue
an Alternate Currency Letter of Credit if such Issuing Bank does not otherwise issue letters of credit in such Alternate
Currency.
(b) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one
year (unless otherwise agreed upon by the Administrative Agent and the Issuing Bank in their sole discretion) after the
date of the issuance of such Letter of Credit (or, in the case of any extension thereof, one year (unless otherwise agreed
upon by the Administrative Agent and the Issuing Bank in their sole discretion) after such renewal or extension) and
(ii) the date that is five Business Days prior to the applicable Maturity Date; provided that any Letter of Credit with a one
year tenor may provide for automatic renewal or extension thereof for additional one year periods (which, in no event,
shall extend beyond the date referred to in clause (ii) of this paragraph (c)) so long as such Letter of Credit permits the
Issuing Bank to prevent any such extension at least once in each twelvemonth period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof within a time period during such twelvemonth period to be agreed upon at the time such Letter of Credit is issued; provided further that, if the Issuing Bank and
the Administrative Agent consent in their sole discretion, the expiration date on any Letter of Credit may extend beyond
the date referred to in clause (ii) above, provided that, if any such Letter of Credit is outstanding or is issued under the
Revolving Facility Commitments of any Class after the date that is five Business Days prior to the Maturity Date for such
Class such Revolving Facility Borrower shall provide Letter of Credit Support pursuant to documentation reasonably
satisfactory to the Administrative Agent and the relevant Issuing Bank in an amount equal to 103% of the face amount of
each such Letter of Credit on or prior to the date that is five Business Days prior to such Maturity Date or, if later, such
date of issuance.
(c) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount
thereof) under the Revolving Facility Commitments of any Class and without any further action on the part of the
applicable Issuing Bank or the Revolving Facility Lenders, such Issuing Bank hereby grants to each Revolving Facility
Lender under such Class, and each such Revolving Facility Lender hereby acquires from such Issuing Bank, a
participation in such Letter of Credit equal to such Revolving Facility Lenders applicable Revolving Facility Percentage
of the aggregate amount available to be drawn under such Letter of Credit (calculated, in the case of Alternate Currency
Letters of Credit, based on the Dollar Equivalent thereof). In consideration and in furtherance of the foregoing, each
Revolving Facility Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the
account of the applicable Issuing Bank, in Dollars, such Revolving Facility Lenders applicable Revolving Facility
Percentage of each L/C Disbursement made by such Issuing Bank and not reimbursed by the applicable Revolving
Facility Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required
to be refunded to such Borrower for any reason (calculated, in the case of any Alternate Currency Letter of Credit, based
on the Dollar Equivalent thereof). Each Revolving Facility Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or Event of Default or reduction or termination of the Commitments or the fact
that, as a result of changes in currency exchange rates, such Revolving Facility Lenders Revolving Facility Credit
Exposure at any time might exceed its Revolving Facility Commitment at such time (in which case Section 2.11(c) would
apply), and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(d) Reimbursement. If the applicable Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, the
applicable Revolving Facility Borrower shall reimburse such L/C Disbursement by paying to the Administrative Agent an
amount in Dollars equal to such L/C Disbursement (or, in the case of an Alternate Currency Letter of Credit, the Dollar
Equivalent thereof) not later than 2:00 p.m., Local Time, on the first Business Day after the Revolving Facility Borrower
receives notice under paragraph (g) of this Section of such L/C Disbursement (or the second Business Day, if such notice
is received after 12:00 noon, Local Time), together with accrued interest thereon from the date of such L/C Disbursement
at the rate applicable to ABR Revolving Facility Loans of the applicable Class; provided that such Revolving Facility
Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that
such payment be financed with an ABR Revolving Facility Borrowing or a Swingline Borrowing of the applicable Class,
as applicable, in an equivalent amount and, to the extent so financed, such Revolving Facility Borrowers obligation to
make such payment shall be discharged and replaced by the resulting ABR Revolving Facility Borrowing or Swingline
Borrowing. If such Revolving Facility Borrower fails to reimburse any L/C Disbursement when due, then the
Administrative Agent shall promptly notify the applicable Issuing Bank and each other applicable Revolving Facility
Lender of the applicable L/C Disbursement, the payment then due from such Revolving Facility Borrower in respect
thereof (the Unreimbursed Amount) and, in the case of a Revolving Facility Lender, such Lenders Revolving Facility
Percentage thereof. Promptly following receipt of such notice, each Revolving Facility Lender with a Revolving Facility
Commitment of the applicable Class shall pay to the Administrative Agent in Dollars its Revolving Facility Percentage of
the Unreimbursed Amount in the same manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving Facility Lenders), and the
Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Revolving
Facility Lenders. Promptly following receipt by the Administrative Agent of any payment from such Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that
Revolving Facility Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such
Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving Facility Lender pursuant
to this paragraph to reimburse an Issuing Bank for any L/C Disbursement (other than the funding of an ABR Revolving
Loan or a Swingline Borrowing as contemplated above) shall not constitute a Loan and shall not relieve such Borrower of
its obligation to reimburse such L/C Disbursement.
(e) Obligations Absolute. The obligation of each applicable Revolving Facility Borrower to reimburse L/C
Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision
therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the applicable Issuing
Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of
such Letter of Credit or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff
against, such Revolving Facility Borrowers obligations hereunder. Neither the Administrative Agent, the Lenders nor any
Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of
any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including
any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of such Issuing Bank, or any of the circumstances referred to in clauses (i), (ii) or
(iii) of the first sentence; provided that the foregoing shall not be construed to excuse the applicable Issuing Bank from
liability to such Revolving Facility Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by such Revolving Facility Borrower to the extent permitted by applicable
law) suffered by the Revolving Facility Borrower that are determined by final and binding decision of a court of
competent jurisdiction to have been caused by such Issuing Banks failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part of the applicable Issuing Bank, such
Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face
to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
(f) Disbursement Procedures. The applicable Issuing Bank shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under a Letter of Credit. Such Issuing Bank shall promptly
notify the Administrative Agent and the applicable Revolving Facility Borrower by telephone (confirmed by electronic
means) of any such demand for payment under a Letter of Credit and whether such Issuing Bank has made or will make
an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve such
Revolving Facility Borrower of its obligation to reimburse such Issuing Bank and the Revolving Facility Lenders with
respect to any such L/C Disbursement.
(g) Interim Interest. If an Issuing Bank shall make any L/C Disbursement, then, unless the applicable Revolving Facility
Borrower shall reimburse such L/C Disbursement in full on the date such L/C Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such L/C Disbursement is made to but excluding the
date that the applicable Revolving Facility Borrower reimburses such L/C Disbursement, at the rate per annum then
applicable to ABR Revolving Loans of the applicable Class; provided that, if such L/C Disbursement is not reimbursed by
such Borrower when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that interest accrued on and after
the date of payment by any Revolving Facility Lender pursuant to paragraph (e) of this Section to reimburse such Issuing
Bank shall be for the account of such Revolving Facility Lender to the extent of such payment.
(h) Replacement of an Issuing Bank. An Issuing Bank may be replaced at any time by written agreement among the
Revolving Facility Borrowers, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such
replacement shall become effective, the Revolving Facility Borrowers shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 2.12. From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the replaced Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein to the term Issuing Bank shall be deemed to
refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context
shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of such Issuing Bank under this Agreement with respect to Letters
of Credit issued by it prior to such replacement but shall not be required to issue additional Letters of Credit.
(i) Letter of Credit Support Following Certain Events. If and when the applicable Revolving Facility Borrower is
required to provide Letter of Credit Support with respect to any Revolving L/C Exposure relating to any outstanding
Letters of Credit pursuant to any of Section 2.05(c), 2.08(b), 2.11(b), 2.11(c), 2.11(d), 2.22(a)(v) or 7.01, such Revolving
Facility Borrower shall deposit in an account with or at the direction of the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash in Dollars equal to the Minimum Letter of
Credit Support Amount with respect to such Revolving L/C Exposure as of such date (or, in the case of Sections 2.05(c),
2.08(b), 2.11(b), 2.11(c) and 2.22(a)(v), the portion thereof required by such sections). Each deposit of Letter of Credit
Support (x) made pursuant to this paragraph or (y) delivered by the Administrative Agent pursuant to Section 2.22(a)(ii),
in each case, shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of
such Revolving Facility Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole discretion of (i) for so long as an Event of
Default shall be continuing, the Administrative Agent and (ii) at any other time, such Revolving Facility Borrower, in
each case, in Permitted Investments and at the risk and expense of such Revolving Facility Borrower, such deposits shall
not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse each Issuing Bank for L/C Disbursements for which such
Issuing Bank has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of such Revolving Facility Borrower for the Revolving L/C Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of Lenders with Revolving L/C Exposure
representing greater than 50% of the total Revolving L/C Exposure), be applied to satisfy other obligations of such
Revolving Facility Borrower under this Agreement. If a Revolving Facility Borrower is required to provide Letter of
Credit Support hereunder as a result of the occurrence of an Event of Default or the existence of a Defaulting Lender or
the occurrence of a limit under Section 2.11(b) or (c) being exceeded, such amount (to the extent not applied as aforesaid)
shall be returned to such Revolving Facility Borrower within three Business Days after all Events of Default have been
cured or waived or the termination of the Defaulting Lender status or the limits under Sections 2.11(b) and (c) no longer
being exceeded, as applicable.
(j) Letter of Credit Support Following Termination of the Revolving Facility. Notwithstanding anything to the contrary
herein, in the event of the prepayment in full of all outstanding Revolving Facility Loans and the termination of all
Revolving Facility Commitments in connection with which the applicable Revolving Facility Borrower notifies any one or
more Issuing Banks that it intends to maintain one or more Letters of Credit initially issued under this Agreement in effect
after the date of such termination event (each, a Continuing Letter of Credit), such Revolving Facility Borrower shall
provide Letter of Credit Support with respect to such Continuing Letter of Credit, in an amount equal to the Minimum
Letter of Credit Support Amount, which shall be deposited with or at the direction of each such Issuing Bank.
(k) Additional Issuing Banks. From time to time, the Revolving Facility Borrowers may by notice to the Administrative
Agent designate any Lender (in addition to the initial Issuing Bank) that agrees (in its sole discretion) to act as an Issuing
Bank and is reasonably satisfactory to the Administrative Agent as an Issuing Bank. Each such additional Issuing Bank
shall execute a counterpart of this Agreement upon the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) and shall thereafter be an Issuing Bank hereunder for all purposes.
(l) Reporting. Unless otherwise requested by the Administrative Agent, each Issuing Bank shall (i) provide to the
Administrative Agent copies of any notice received from any Revolving Facility Borrower pursuant to Section 2.05(b) no
later than the next Business Day after receipt thereof and (ii) report in writing to the Administrative Agent (A) on or prior
to each Business Day on which such Issuing Bank expects to issue, amend, renew or extend any Letter of Credit, the date
of such issuance, amendment, renewal or extension, and the aggregate face amount of the Letters of Credit to be issued,
amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment or extension
occurred (and whether the amount thereof changed), and such Issuing Bank shall be permitted to issue, amend, renew or
extend such Letter of Credit if the Administrative Agent shall not have advised such Issuing Bank that such issuance,
amendment, renewal or extension would not be in conformity with the requirements of this Agreement, (B) on each
Business Day on which such Issuing Bank makes any L/C Disbursement, the date of such L/C Disbursement and the
amount of such L/C Disbursement and (C) on any other Business Day, such other information with respect to the
outstanding Letters of Credit issued by such Issuing Bank as the Administrative Agent shall reasonably request.
Section 2.06 Funding of Borrowings. (%3) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00 noon, Local Time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline
Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to the
applicable Borrower by promptly crediting the amounts so received, in like funds, to an account of such Borrower as
specified in the applicable Borrowing Request; provided that ABR Revolving Loans and Swingline Borrowings made to
finance the reimbursement of a L/C Disbursement and reimbursements as provided in Section 2.05(e) shall be remitted by
the Administrative Agent to the applicable Issuing Bank.
(a) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent such Lenders share of such Borrowing,
the Administrative Agent may assume that such Lender has made such share available on such date in accordance with
clause (a) of this Section and may, in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share of the Borrowing available to the
Administrative Agent, then the applicable Lender and such Borrower severally agree to pay to the Administrative Agent
forthwith on demand (without duplication) such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to such Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of (A) the Federal Funds
Effective Rate and (B) a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of a payment to be made by such Borrower, the interest rate applicable to ABR
Loans at such time. If such Borrower and such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid
by such Borrower for such period. If such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lenders Loan included in such Borrowing. Any payment by such Borrower shall be without prejudice to
any claim such Borrower may have against a Lender that shall have failed to make such payment to the Administrative
Agent.
(b) The foregoing notwithstanding, the Administrative Agent, in its sole discretion, may from its own funds make a
Revolving Facility Loan on behalf of the Lenders (including by means of Swingline Loans to the applicable Revolving
Facility Borrower). In such event, the applicable Lenders on behalf of whom the Administrative Agent made the
Revolving Facility Loan shall reimburse the Administrative Agent for all or any portion of such Revolving Facility Loan
made on its behalf upon written notice given to each applicable Lender not later than 2:00 p.m., Local Time, on the
Business Day such reimbursement is requested. The entire amount of interest attributable to such Revolving Facility Loan
for the period from and including the date on which such Revolving Facility Loan was made on such Lenders behalf to
but excluding the date the Administrative Agent is reimbursed in respect of such Revolving Facility Loan by such Lender
shall be paid to the Administrative Agent for its own account.
Section 2.07 Interest Elections. (%3) Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the applicable Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as
provided in this Section. Such Borrower may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising
such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall
not apply to Swingline Borrowings, which may not be converted into or continued as Eurocurrency Borrowings.
(a) To make an election pursuant to this Section, the applicable Borrower shall notify the Administrative Agent of such
election by telephone, by the time that a Borrowing Request would be required under Section 2.03 if such Borrower were
requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each
such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or
electronic means to the Administrative Agent of a written Interest Election Request and signed by such Borrower.
(b) Each telephonic and written Interest Election Request shall specify the following information in compliance with
Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect
to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving
effect to such election, which shall be a period contemplated by the definition of the term Interest Period.
If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the
applicable Borrower shall be deemed to have selected an Interest Period of one months duration. If less than all the
outstanding principal amount of any Borrowing shall be converted or continued, then each resulting Borrowing shall be in
an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum and satisfy the limitations
specified in Section 2.02(c) regarding the maximum number of Borrowings of the relevant Type.
(c) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender to
which such Interest Election Request relates of the details thereof and of such Lenders portion of each resulting
Borrowing.
(d) If the applicable Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency
Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the
written request (including a request through electronic means) of the Required Lenders, so notifies the applicable
Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an
ABR Borrowing at the end of the Interest Period applicable thereto.
Section 2.08 Termination and Reduction of Commitments. (%3) Unless previously terminated, the Revolving Facility
Commitments of each Class shall terminate on the applicable Maturity Date for such Class. On the Closing Date (after the
funding of the Closing Date Term B Loans in accordance with Section 2.01(a)), the Term B Loan Commitments of each
Lender in effect on the Closing Date will terminate.
(a) The Revolving Facility Borrowers may at any time terminate, or from time to time reduce, the Revolving Facility
Commitments of any Class; provided that (i) each reduction of the Revolving Facility Commitments of any Class shall be
in an amount that is an integral multiple of $500,000 and not less than $1,000,000 (or, if less, the remaining amount of the
Revolving Facility Commitments of such Class) and (ii) the Revolving Facility Borrowers shall not terminate or reduce
the Revolving Facility Commitments of any Class if, after giving effect to any concurrent prepayment of the Revolving
Facility Loans in accordance with Section 2.11 and provision of any Letter of Credit Support in accordance with
Section 2.05(j) or (k), the Revolving Facility Credit Exposure of such Class (excluding any Letter of Credit for which
Letter of Credit Support has been provided) would exceed the total Revolving Facility Commitments of such Class.
(b) The Revolving Facility Borrowers shall notify the Administrative Agent of any election to terminate or reduce the
Revolving Facility Commitments of any Class under paragraph (b) of this Section 2.08 at least three Business Days prior
to the effective date of such termination or reduction (or such shorter period acceptable to the Administrative Agent),
specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the applicable Lenders of the contents thereof. Each notice delivered by the Revolving Facility Borrowers
pursuant to this Section 2.08 shall be irrevocable; provided that a notice of termination or reduction of the Revolving
Facility Commitments of any Class delivered by the Revolving Facility Borrowers may state that such notice is
conditioned upon the effectiveness of other credit facilities, indentures or similar agreements or other transactions, in
which case such notice may be revoked by the Revolving Facility Borrowers (by notice to the Administrative Agent on or
prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments of any Class shall be made ratably among the Revolving Facility
Lenders in accordance with their respective Commitments of such Class.
Section 2.09 Evidence of Debt. (%3) Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(a) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, the Facility and Type thereof and the Interest Period (if any) applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and (iii) any
amount received by the Administrative Agent hereunder for the account of the Lenders and each Lenders share thereof.
(b) The entries made in the accounts maintained pursuant to clause (a) or (b) of this Section shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of any
Borrower to repay the Loans in accordance with the terms of this Agreement.
(c) Any Lender may request that Loans made by it be evidenced by a promissory note (a Note). In such event, each
applicable Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent
and reasonably acceptable to such Borrower. Thereafter, unless otherwise agreed to by the applicable Lender, the Loans
evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form payable to the payee named therein (or, if
requested by such payee, to such payee and its registered assigns).
Section 2.10 Repayment of Loans. (%3) Subject to the other clauses of this Section,
(i) each Revolving Facility Borrower hereby unconditionally promises to pay (A) to the Administrative Agent for the
account of each applicable Revolving Facility Lender the then unpaid principal amount of its Revolving Facility Loan on
the Maturity Date applicable to such Revolving Facility Loan and (B) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan applicable to any Class of Revolving Facility Commitments on the earlier of the Maturity
Date for such Class and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month
and is at least five Business Days after such Swingline Loan is made; provided that, on each date that a Revolving Facility
Borrowing is made by a Revolving Facility Borrower, such Borrower shall repay all Swingline Loans then outstanding;
(ii) the Term Facility Borrower shall repay the Term B Loans on the applicable Maturity Date, in an amount equal to the
then unpaid principal amount of the Term B Loans outstanding;
(iii) in the event that any Other Term Loans are made, the Term Facility Borrower shall repay such Other Term Loans on
the dates and in the amounts set forth in the related Incremental Assumption Agreement (each such date being referred to
as an Other Term Loan Installment Date); and
(iv) to the extent not previously paid, outstanding Loans shall be due and payable on the applicable Maturity Date.
(b) Any optional prepayments of the Term Loans pursuant to Section 2.11(a) shall be applied to the remaining
installments (if any) of the Term Loans under the applicable Class or Classes as the Term Facility Borrower may in each
case direct.
(c) Prior to any prepayment of any Loan under any Facility hereunder, the applicable Borrower shall select the
Borrowing or Borrowings under the applicable Facility to be prepaid and shall notify the Administrative Agent by
telephone (confirmed by electronic means) of such selection not later than 2:00 p.m., Local Time, (i) in the case of an
ABR Borrowing, at least one Business Day before the scheduled date of such prepayment (or in the case of a Swingline
Loan, on the scheduled date of such prepayment) and (ii) in the case of a Eurocurrency Borrowing, at least three Business
Days before the scheduled date of such prepayment (or, in each case such shorter period acceptable to the Administrative
Agent); provided that a notice of prepayment may state that such notice is conditioned upon the effectiveness of other
credit facilities, indentures or similar agreements or other transactions, in which case such notice may be revoked by the
applicable Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is
not satisfied. Each repayment and prepayment of a Borrowing (x) in the case of the Revolving Facility of any Class, shall
be applied to the Revolving Facility Loans included in the repaid Borrowing such that each Revolving Facility Lender
receives its ratable share of such repayment (based upon the respective Revolving Facility Credit Exposures of the
Revolving Facility Lenders of such Class at the time of such repayment) and (y) in all other cases, shall be applied ratably
to the Loans included in the repaid Borrowing. All repayments of Loans shall be accompanied by accrued interest on the
amount repaid to the extent required by Section 2.13(d).
Section 2.11 Optional Prepayment of Loans; Cash Collateralization; Letter of Credit Support. (%3) Any applicable
Borrower shall have the right at any time and from time to time to prepay any Loan in whole or in part, without premium
or penalty (but subject to Section 2.16), in an aggregate principal amount that is an integral multiple of the Borrowing
Multiple and not less than the Borrowing Minimum or, if less, the amount outstanding, subject to prior notice in
accordance with Section 2.10(c).
(a) In the event that the aggregate amount of Revolving Facility Credit Exposure of any Class exceeds the total
Revolving Facility Commitments of such Class, the applicable Revolving Facility Borrower shall Cash Collateralize or
prepay Revolving Facility Borrowings or Swingline Borrowings of such Class (or, if no such Borrowings are outstanding,
provide Letter of Credit Support in respect of outstanding Letters of Credit pursuant to Section 2.05(j)) in an aggregate
amount equal to such excess.
(b) In the event that the Revolving L/C Exposure exceeds the Letter of Credit Sublimit, at the request of the
Administrative Agent, the applicable Revolving Facility Borrower shall provide Letter of Credit Support pursuant to
Section 2.05(j) in an amount equal to such excess.
(c) If as a result of changes in currency exchange rates, on any Revaluation Date, (i) the total Revolving Facility Credit
Exposure of any Class exceeds the total Revolving Facility Commitments of such Class or (ii) the Revolving L/C
Exposure exceeds the Letter of Credit Sublimit, the applicable Revolving Facility Borrower shall, at the request of the
Administrative Agent, within ten (10) days of such Revaluation Date (A) prepay Revolving Facility Borrowings or
Swingline Borrowings or (B) provide Letter of Credit Support pursuant to Section 2.05(j), in an aggregate amount such
that the applicable exposure does not exceed the applicable commitment, sublimit or amount set forth above.
Section 2.12 Fees. (%3) Each applicable Revolving Facility Borrower agrees to pay to each applicable Revolving
Facility Lender (other than any Defaulting Lender), through the Administrative Agent, on the date that is three Business
Days after the last day of March, June, September and December in each year (beginning in March 2014) and on the date
on which the Revolving Facility Commitments of such Revolving Facility Lender shall be terminated as provided herein,
a commitment fee (a Commitment Fee) on the daily amount of the applicable Available Unused Commitment of such
Revolving Facility Lender during the preceding quarter (or other period commencing with the Closing Date or ending
with the date on which the last of the Commitments of such Revolving Facility Lender shall be terminated) at a rate equal
to the Applicable Commitment Fee. All Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. For the purpose of calculating any Revolving Facility Lenders Commitment Fee, the
outstanding Swingline Loans during the period for which such Revolving Facility Lenders Commitment Fee is calculated
shall be deemed to be zero. The Commitment Fee due to each Lender shall commence to accrue on the Closing Date and
shall cease to accrue on the date on which the last of the Commitments of such Revolving Facility Lender shall be
terminated as provided herein.
(a) Each applicable Revolving Facility Borrower from time to time agrees to pay (i) to each applicable Revolving
Facility Lender of each Class (other than any Defaulting Lender), through the Administrative Agent, on the date that is
three Business Days after the last day of March, June, September and December of each year and on the date on which the
Revolving Facility Commitments of such Revolving Facility Lender shall be terminated as provided herein, a fee in
Dollars (an L/C Participation Fee) on such Revolving Facility Lenders Revolving Facility Percentage of the daily
aggregate Revolving L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C Disbursements) of
such Class, during the preceding quarter (or shorter period commencing with the Closing Date or ending with the
applicable Maturity Date or the date on which the Revolving Facility Commitments of such Class shall be terminated) at
the rate per annum equal to the Applicable Margin for Eurocurrency Revolving Facility Borrowings of such Class
effective for each day in such period, and (ii) to each Issuing Bank, for its own account (x) on the date that is three
Business Days after the last day of March, June, September and December of each year and on the date on which the
Revolving Facility Commitments of all the Revolving Facility Lenders shall be terminated, a fronting fee in respect of
each Letter of Credit issued by such Issuing Bank for the period from and including the date of issuance of such Letter of
Credit to and including the termination of such Letter of Credit, computed at a rate equal to 1/8 of 1% per annum of the
daily stated amount of such Letter of Credit), plus (y) in connection with the issuance, amendment or transfer of any such
Letter of Credit or any L/C Disbursement thereunder, such Issuing Banks customary documentary and processing fees
and charges (collectively, Issuing Bank Fees). All L/C Participation Fees and Issuing Bank Fees that are payable on a
per annum basis shall be computed on the basis of the actual number of days elapsed in a year of 360 days.
(b) The Term Facility Borrower agrees to pay to the Administrative Agent, for the account of the Administrative Agent,
the agency fees as set forth in the Fee Letter, at the times specified therein (the Administrative Agent Fees).
(c) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution,
if and as appropriate, among the Lenders, except that Issuing Bank Fees shall be paid directly to the applicable Issuing
Banks. Once paid, none of the Fees shall be refundable under any circumstances.
Section 2.13 Interest. (%3) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the ABR plus the Applicable Margin.
(a) The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin.
(b) Notwithstanding the foregoing, if any principal of or interest on any Loan or any Fees or other amount payable by
any Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall, bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2.00% plus the rate otherwise applicable to such Loan as provided in the preceding clauses of this
Section 2.13 or (ii) in the case of any other overdue amount, 2.00% plus the rate applicable to ABR Loans as provided in
clause (a) of this Section; provided that this clause (c) shall not apply to any Event of Default that has been waived by the
Lenders pursuant to Section 9.08.
(c) Accrued interest on each Loan shall be payable in arrears (i) on each Interest Payment Date for such Loan, (ii) in the
case of Revolving Facility Loans, upon termination of the applicable Revolving Facility Commitments and (iii) in the case
of the Term Loans, on the applicable Maturity Date; provided that (A) interest accrued pursuant to clause (c) of this
Section 2.13 shall be payable on demand, (B) in the event of any repayment or prepayment of any Loan (other than a
prepayment of a Revolving Facility Loan that is an ABR Loan that is not made in conjunction with a permanent
commitment reduction), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (C) in the event of any conversion of any Eurocurrency Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(d) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by
reference to the ABR shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable
ABR, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall
be conclusive absent manifest error.
Section 2.14 Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurocurrency
Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the applicable Borrower and the Lenders by telephone or
electronic means as promptly as practicable thereafter and, until the Administrative Agent notifies such Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective and
such Borrowing shall be converted to or continued as on the last day of the Interest Period applicable thereto an ABR
Borrowing, and (ii) if any Borrowing Request requests a Eurocurrency Borrowing, such Borrowing shall be made as an
ABR Borrowing.
Section 2.15 Increased Costs. (%3) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or Issuing Bank;
(ii) subject any Lender, the Issuing Bank or the Administrative Agent to any Tax with respect to any Loan Document or
any Loan made by it (other than (i) Indemnified Taxes or Other Taxes indemnifiable under Section 2.17 or (ii) Excluded
Taxes); or
(iii) impose on any Lender or Issuing Bank or the London interbank market any other condition, cost or expense
affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender or the Administrative Agent of making,
continuing, converting to or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan)
or to increase the cost to such Lender, the Administrative Agent or Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Administrative Agent
or Issuing Bank hereunder (whether of principal, interest or otherwise), then the applicable Borrower will pay to such
Lender, the Administrative Agent or Issuing Bank, as applicable, such additional amount or amounts as will compensate
such Lender, the Administrative Agent or Issuing Bank, as applicable, for such additional costs incurred or reduction
suffered.
(b) If any Lender or Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or
would have the effect of reducing the rate of return on such Lenders or Issuing Banks capital or on the capital of such
Lenders or Issuing Banks holding company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such Issuing
Bank, to a level below that which such Lender or such Issuing Bank or such Lenders or such Issuing Banks holding
company could have achieved but for such Change in Law (taking into consideration such Lenders or such Issuing
Banks policies and the policies of such Lenders or such Issuing Banks holding company with respect to capital
adequacy and liquidity), then from time to time each applicable Borrower shall pay to such Lender or such Issuing Bank,
as applicable, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lenders
or such Issuing Banks holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or Issuing Bank or its holding company, as applicable, as specified in clause (a) or (b) of this Section shall be
delivered to the applicable Borrower and shall be conclusive absent manifest error; provided that any such certificate
claiming amounts described in clause (x) or (y) of the definition of Change in Law shall, in addition, state the basis
upon which such amount has been calculated and certify that such Lenders or Issuing Banks demand for payment of
such costs hereunder, and such method of allocation is not inconsistent with its treatment of other borrowers which, as a
credit matter, are similarly situated to such Borrower and which are subject to similar provisions. Such Borrower shall pay
such Lender or Issuing Bank, as applicable, the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Promptly after any Lender or any Issuing Bank has determined that it will make a request for increased compensation
pursuant to this Section 2.15, such Lender or Issuing Bank shall notify the applicable Borrower thereof. Failure or delay
on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section 2.15 shall not constitute a
waiver of such Lenders or Issuing Banks right to demand such compensation; provided that such Borrower shall not be
required to compensate a Lender or an Issuing Bank pursuant to this Section 2.15 for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or Issuing Bank, as applicable, notifies such Borrower of
the Change in Law giving rise to such increased costs or reductions and of such Lenders or Issuing Banks intention to
claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions
is retroactive, then the 180 day period referred to above shall be extended to include the period of retroactive effect
thereof.
Section 2.16 Break Funding Payments. In the event of (a) the payment of any principal of any Eurocurrency Loan other
than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the
conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto
or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the applicable Borrower pursuant to Section 2.19, then, in any such event, such Borrower shall
compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurocurrency Loan, such
loss, cost or expense to any Lender shall be deemed to be the amount determined by such Lender (it being understood that
the deemed amount shall not exceed the actual amount) to be the excess, if any, of (i) the amount of interest that would
have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue a Eurocurrency Loan, for the period that would
have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount
for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for
deposits in Dollars of a comparable amount and period from other banks in the Eurocurrency market. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.16 shall be
delivered to such Borrower and shall be conclusive absent manifest error. Such Borrower shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt thereof.
Section 2.17 Taxes. (%3) Any and all payments made by or on account of any obligation of any Loan Party under this
Agreement or any other Loan Document shall be made free and clear of, and without deduction or withholding for or on
account of, any Taxes, except as required by applicable Requirements of Law. If a Loan Party, the Administrative Agent
or any other applicable withholding agent shall be required by applicable Requirement of Law to deduct or withhold any
Taxes from such payments, then (i) the applicable withholding agent shall make such deductions or withholdings as
determined in the good faith discretion of the applicable withholding agent to be required by any applicable Requirement
of Law, (ii) the applicable withholding agent shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority within the time allowed and in accordance with applicable Requirement of Law, and (iii) to the
extent withholding or deduction is required to be made on account of Indemnified Taxes or Other Taxes, the sum payable
by the applicable Loan Party shall be increased as necessary so that after all required deductions and withholdings have
been made (including deductions or withholdings applicable to additional sums payable under this Section 2.17) the
Administrative Agent or any Lender, as applicable, receives an amount equal to the sum it would have received had no
such deductions or withholdings been made. As soon as practicable after any payment of Taxes by any Loan Party to a
Governmental Authority as provided in this Section 2.17, the applicable Loan Party shall deliver to the Administrative
Agent a copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required
by applicable Requirements of Law to report such payment or other evidence of such payment reasonably satisfactory to
the Administrative Agent.
(a) The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable
Requirements of Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.
(b) The Loan Parties shall jointly and severally indemnify and hold harmless the Administrative Agent and each Lender
within 15 Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
imposed on the Administrative Agent or such Lender, as the case may be (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section 2.17), and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate setting forth the basis and calculation of the
amount of such payment or liability delivered to such Loan Party by a Lender or the Administrative Agent (as applicable)
on its own behalf or on behalf of a Lender shall be conclusive absent manifest error.
(c) Each Lender shall deliver to the applicable Borrower and the Administrative Agent, at such time or times reasonably
requested by such Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law and such other reasonably requested information as will permit such Borrower or the
Administrative Agent, as the case may be, to determine (A) whether or not any payments made hereunder or under any
other Loan Document are subject to withholding of Taxes, (B) if applicable, the required rate of withholding or deduction,
and (C) such Lenders entitlement to any available exemption from, or reduction of, any such withholding of Taxes in
respect of any payments to be made to such Lender by any Loan Party pursuant to any Loan Document or otherwise to
establish such Lenders status for withholding tax purposes in the applicable jurisdiction. In addition, any Lender, if
requested by such Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable
law or reasonably requested by such Borrower or the Administrative Agent as will enable such Borrower or the
Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding any other provision of this Section 2.17(d), a Lender shall not be required to deliver any
documentation or other information requested by the Borrower if such Lender is not legally eligible to do so.
(d) Without limiting the generality of Section 2.17(d), each Foreign Lender with respect to any Loan made to the
applicable Borrower shall, to the extent it is legally eligible to do so:
(i) deliver to such Borrower and the Administrative Agent, prior to the date on which the first payment to the Foreign
Lender is due under any Loan Document (and from time to time thereafter upon the reasonable request of such Borrower
or the Administrative Agent), two copies of (A) in the case of a Foreign Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of portfolio interest, United States
Internal Revenue Service Form W- 8BEN (or any applicable successor form) together with a certificate substantially in
the form of Exhibit H hereto, such certificate, the Non- Bank Tax Certificate) certifying that such Foreign Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10- percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of such Borrower and is not a CFC related to such Borrower (within the meaning of Section
864(d)(4) of the Code), and that the interest payments in question are not effectively connected with the conduct by such
Lender of a trade or business within the United States of America, (B) Internal Revenue Service Form W- 8BEN or Form
W- 8ECI (or any applicable successor form), in each case properly completed and duly executed by such Foreign Lender
claiming complete exemption from, or reduced rate of, U.S. federal withholding tax on payments by such Borrower under
any Loan Document, (C) Internal Revenue Service Form W- 8IMY (or any applicable successor form) and all necessary
attachments (including the forms described in clauses (A) and (B) above, provided that, if the Foreign Lender is a
partnership and one or more of the partners is claiming the portfolio interest exemption, the Non- Bank Tax Certificate
may be provided by such Foreign Lender on behalf of such partners) or (D) any other form prescribed by applicable law
as a basis for claiming exemption from or a reduction in U.S. federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable law to permit such Borrower or the Administrative
Agent to determine the withholding or deduction required to be made; and
(ii) deliver to the applicable Borrower and the Administrative Agent two further copies of any such form or certification
(or any applicable successor form) promptly after any such form or certification previously delivered by it expires or
becomes obsolete, inaccurate or invalid, and from time to time thereafter if reasonably requested by such Borrower or the
Administrative Agent.
Any Foreign Lender that becomes legally ineligible to update any form or certification previously delivered shall promptly
notify the applicable Borrower and the Administrative Agent in writing of such Foreign Lenders inability to do so.
In addition, the Administrative Agent that is a United States person as defined in Section 7701(a)(3) of the Code shall
deliver to the applicable Borrower that is a United States person as defined in Section 7701(a)(3) of the Code (x) prior to
the date on which the first payment by such Borrower is due hereunder, two copies of a properly completed and executed
IRS Form W- 9 certifying its exemption from U.S. federal backup withholding, and (y) promptly after any such previously
delivered form expires or becomes obsolete, inaccurate or invalid two further copies of such documentation.
(e) If any Lender or the Administrative Agent, as applicable, determines, in its sole discretion, that it has received a
refund of an Indemnified Tax or Other Tax for which a payment has been made by a Loan Party pursuant to this
Agreement or any other Loan Document, which refund in the good faith judgment of such Lender or the Administrative
Agent, as the case may be, is attributable to such payment made by such Loan Party, then the Lender or the Administrative
Agent, as the case may be, shall reimburse the Loan Party for such amount (net of all reasonable outof- pocket expenses
of such Lender or the Administrative Agent, as the case may be, and without interest other than any interest received
thereon from the relevant Governmental Authority with respect to such refund) as the Lender or Administrative Agent, as
the case may be, determines in its sole discretion to be the proportion of the refund as will leave it, after such
reimbursement, in no better or worse position (taking into account expenses or any Taxes imposed on the refund) than it
would have been in if the Indemnified Tax or Other Tax giving rise to such refund had not been imposed in the first
instance; provided that the Loan Party, upon the request of the Lender or the Administrative Agent agrees to repay the
amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Lender or the Administrative Agent in the event the Lender or the Administrative Agent is required to
repay such refund to such Governmental Authority. In such event, such Lender or the Administrative Agent, as the case
may be, shall, at the applicable Borrowers request, provide such Borrower with a copy of any notice of assessment or
other evidence of the requirement to repay such refund to the extent such notice or evidence has been received from the
relevant Governmental Authority (provided that such Lender or the Administrative Agent may delete any information
therein that it deems confidential). A Lender or the Administrative Agent shall claim any refund that it determines is
available to it, unless it concludes in its sole discretion that it would be adversely affected by making such a claim. No
Lender nor the Administrative Agent shall be obliged to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to any Loan Party in connection with this clause (f) or any other provision of this
Section 2.17.
(f) If any Borrower determines that a reasonable basis exists for contesting an Indemnified Tax or Other Tax for which a
Loan Party has paid additional amounts or indemnification payments, each affected Lender or the Administrative Agent,
as the case may be, shall use commercially reasonable efforts to cooperate with such Borrower as such Borrower may
reasonably request in challenging such Tax. Such Borrower shall indemnify and hold each Lender and the Administrative
Agent harmless against any outof- pocket expenses incurred by such person in connection with any request made by
such Borrower pursuant to this Section 2.17(g). Nothing in this Section 2.14(g) shall obligate any Lender or the
Administrative Agent to take any action that such person, in its sole judgment, determines may result in a material
detriment to such person.
(g) Each U.S. Lender shall deliver to each applicable Borrower and the Administrative Agent two Internal Revenue
Service Forms W- 9 (or substitute or successor form), properly completed and duly executed, certifying that such U.S.
Lender is exempt from United States federal backup withholding (i) prior to the date on which the first payment to the
such U.S. Lender is due under any Loan Document, (ii) as soon as practicable after such form expires or becomes
obsolete, inaccurate or invalid, and (iii) from time to time thereafter if reasonably requested by such Borrower or the
Administrative Agent.
(h) If a payment made to any Lender or the Administrative Agent under this Agreement or any other Loan Document
would be subject to U.S. federal withholding tax imposed by FATCA if such Lender or the Administrative Agent were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender or the Administrative Agent shall deliver to the applicable Borrower and
the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by such
Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by such Borrower or the
Administrative Agent as may be necessary for such Borrower and the Administrative Agent to comply with their
obligations under FATCA, to determine whether such Lender has or has not complied with such Lenders obligations
under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this
Section 2.17(h), FATCA shall include any amendments made to FATCA after the date of this Agreement.
(i) The agreements in this Section 2.17 shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable under any Loan Document.
For purposes of this Section 2.17, the term Lender includes any Issuing Bank and the term applicable Requirement of
Law includes FATCA.
Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set- offs; Subordination Terms. (%3) Unless
otherwise specified, each Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of L/C Disbursements, or of amounts payable under Sections 2.15, 2.16 or 2.17, or
otherwise) prior to 2:00 p.m., Local Time, on the date when due, in immediately available funds, without condition or
deduction for any defense, recoupment, setoff or counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent to the applicable
account designated to such Borrower by the Administrative Agent, except payments to be made directly to the applicable
Issuing Bank or the Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.05 shall be made directly to the persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other person to the appropriate recipient promptly following receipt
thereof. Except as otherwise expressly provided herein, if any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of such extension. Except with respect to
Alternate Currency Letters of Credit (to the extent payments thereunder are required to be provided in any Alternate
Currency), all payments made under the Loan Documents shall be made in Dollars. Any payment required to be made by
the Administrative Agent hereunder shall be deemed to have been made by the time required if the Administrative Agent
shall, at or before such time, have taken the necessary steps to make such payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by the Administrative Agent to make such payment.
(a) Subject to Section 7.02, if at any time insufficient funds are received by and available to the Administrative Agent
from any applicable Borrower to pay fully all amounts of principal, unreimbursed L/C Disbursements, interest and fees
then due from such Borrower hereunder, such funds shall be applied (i) first, towards payment of interest and fees then
due from such Borrower hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, (ii) second, towards payment of principal of Swingline Loans and unreimbursed L/C
Disbursements then due from such Borrower hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed L/C Disbursements then due to such parties, and (iii) third, towards payment of
principal then due from such Borrower hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(b) Subject to the Subordination Terms, if any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of, or interest on, any of its Term Loans, Revolving Facility Loans
or participations in L/C Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Term Loans, Revolving Facility Loans and participations in L/C Disbursements
and Swingline Loans and accrued interest thereon than the proportion received by any other Lender entitled to receive the
same proportion of such payment, then the Lender receiving such greater proportion shall purchase participations in the
Term Loans, Revolving Facility Loans and participations in L/C Disbursements and Swingline Loans of such other
Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in
accordance with the principal amount of each such Lenders respective Term Loans, Revolving Facility Loans and
participations in L/C Disbursements and Swingline Loans and accrued interest thereon; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall
be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this
clause (c) shall not be construed to apply to any payment made by any Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in L/C Disbursements to any assignee or participant. Each Loan Party
consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
(c) Unless the Administrative Agent shall have received notice from any Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the applicable Issuing Bank hereunder that
such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the
applicable Issuing Bank, as applicable, the amount due. In such event, if such Borrower has not in fact made such
payment, then each of the Lenders or the applicable Issuing Bank, as applicable, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to
the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
(d) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (e),
2.06, or 2.18(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such
Lenders obligations under such Sections until all such unsatisfied obligations are fully paid.
(e) The provisions of this Section 2.18(f) (these Subordination Terms) shall apply to any Subordinated Obligations.
(i) Notwithstanding anything to the contrary contained in this Agreement or in any of the other Loan Documents, the
Subordinated Obligations are subordinated and subject in right of payment to the Senior Obligations such that, upon the
occurrence and during the continuance of an Event of Default, the Senior Creditors shall be entitled to receive indefeasible
payment in full in cash of the amounts constituting the Senior Obligations and, in that connection, upon the occurrence of
an Event of Default, until the date that is the earlier to occur of (x) such time as there are no Events of Default continuing
and (y) the indefeasible payment in full in cash of the principal of and interest on, and all other amounts in respect of, all
Senior Obligations:
(1) subject to paragraphs (f)(ii) and (f)(iii) below, all payments on account of the principal of or interest on, or any other
amount in respect of, the Subordinated Obligations shall not be made to the Affiliate Lenders and shall instead be held by
the Administrative Agent in trust for the benefit of, the Senior Creditors, ratably according to the respective aggregate
amounts remaining unpaid thereon, to the extent necessary to pay all Senior Obligations in full in cash; and
(2) no Affiliate Lender shall (A) ask, demand, sue for, accelerate or take or receive from any Loan Party, by setoff or in
any other manner, any payment on account of Subordinated Obligations or (B) seek any other remedy allowed at law or in
equity against any Loan Party for breach of such Loan Partys obligations thereunder.
(ii) In the event of any dissolution or winding up or total or partial liquidation or reorganization of any Loan Party (other
than any such transaction not then constituting a continuing Default), whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, then upon any payment or distribution of assets (including, without
limitation, debt or equity interests issued by such Loan Party or any successor thereto) of such Loan Party of any kind or
character, whether in cash, property or securities, to any of its creditors (including any Affiliate Lender) of any amounts
(including interest, indemnities and fees) due or to become due, all Senior Obligations shall first be paid in full in cash
before any Affiliate Lender shall be entitled to retain any assets so paid or distributed in respect of the Subordinated
Obligations (for principal, premium, interest or otherwise) and, to that end, the Senior Creditors shall be entitled to receive
for application in payment thereof any payment or distribution of any kind or character, whether in cash or property or
securities that would, but for these Subordination Terms, be paid or delivered to an Affiliate Lender. If an Affiliate Lender
shall have failed to file claims or proofs of claim with respect to the Subordinated Obligations at least 30 days prior to the
deadline for any such filing, the Administrative Agent, on behalf of the Senior Creditors, is hereby irrevocably authorized
to vote to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or
extension and file proofs of claim and otherwise to act with respect to the Subordinated Obligations as the Administrative
Agent may deem appropriate using its reasonable discretion under the circumstances. Each Affiliate Lender shall provide
to the Administrative Agent, on behalf of the Senior Creditors, all information and documents necessary to present claims
or seek enforcement as aforesaid and will duly and promptly take such action as the Administrative Agent may request to
collect the Subordinated Obligations for the account of the Administrative Agent and the Senior Creditors and to file
appropriate claims or proofs of claim with respect thereto. No Affiliate Lender shall take any action or vote in any way so
as to contest (A) the validity or enforceability of any of the Loan Documents, (B) the rights and duties of the
Administrative Agent and the Senior Creditors established in any of the Loan Documents or (C) the validity or
enforceability of the subordination provisions set forth in this Section 2.18(f).
(iii) If any payment or distribution of any character, whether in cash, securities or other property, in respect of the
Subordinated Obligations shall be received by an Affiliate Lender in contravention of these Subordination Terms, such
payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the Administrative
Agent for the benefit of the Senior Creditors, ratably according to the respective aggregate amounts remaining unpaid
thereon, to the extent necessary to pay all Senior Obligations in full in cash.
(iv) So long as any Senior Obligation is outstanding, no Affiliate Lender shall commence in its capacity as a creditor, or
join with any creditor (other than any Senior Creditor) in commencing, or directly or indirectly cause any Loan Party to
commence, or assist any Loan Party in commencing, any proceeding referred to clause (ii) above.
(v) The provisions of these Subordination Terms constitute a continuing agreement and shall (A) remain in full force and
effect until all Senior Obligations (other than contingent indemnity obligations not then payable) have been indefeasibly
paid in full in cash, (B) be binding upon each Affiliate Lender and the Loan Parties and their respective successors,
transferees and assignees, and (C) inure to the benefit of, and be enforceable by, the Senior Creditors.
(vi) These Subordination Terms shall be automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Loan Party in respect of the Senior Obligations is rescinded or must be otherwise restored by any
holder of any of the Senior Obligations, whether as a result of any proceedings in bankruptcy or reorganization or
otherwise.
(vii) Each of the Affiliate Lenders hereby waives any and all rights to be subrogated to the rights of any Senior Creditor
under or with respect to the Senior Obligations.
(viii) No right of the Senior Creditors to enforce the subordination provisions herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Loan Parties or by any act or failure to act, in good
faith, by the Senior Creditors, or by any noncompliance by the Loan Parties with the terms of the Senior Obligations or the
Subordinated Obligations, regardless of any knowledge thereof which any such Senior Creditor may have or be otherwise
charged with. The Senior Creditors may extend, renew, modify or amend the terms of the Senior Obligations or any
security thereof and release, sell or exchange such security and otherwise deal freely with the Loan Parties, all without
affecting the rights of the Senior Creditors hereunder.
(ix) All rights and interests hereunder or under the other Loan Documents of the Senior Creditors, and all agreements and
obligations of any Affiliate Lender hereunder or under the other Loan Documents, shall remain in full force and effect
irrespective of (A) any lack of validity or enforceability of this Agreement or any other Loan Document, or of any
provision of any thereof, or (B) any other circumstance that might otherwise constitute a defense available to, or a
discharge of the Loan Parties in respect of, any of the Obligations.
The parties hereto agree that the provisions of this Section 2.18(f) set forth a contractual agreement of the type
contemplated by Section 510(a) of Title 11 of the United States Code entitled Bankruptcy. The provisions of this
Section 2.18(f) are solely for the purpose of defining the relative rights of the Senior Creditors on the one hand, and the
Affiliate Lenders on the other hand, and nothing in this Section 2.18(f) shall impair, as between the Loan Parties and the
Affiliate Lenders, the obligation of the Loan Parties to pay to the Affiliate Lenders the principal of and interest on the
Subordinated Obligations as and when the same shall become due and payable in accordance with the terms of the Loan
Documents, nor shall anything in this Section 2.18(f) prevent the Affiliate Lenders from exercising all remedies otherwise
permitted by applicable law in respect hereof, subject to the rights under this Section 2.18(f) of the Senior Creditors.
(f) Each prepayment by a Borrower on account of principal of the Term Loans pursuant to Section 2.11 shall be made
pro rata, first, to the Term Loans that are Senior Obligations according to the respective outstanding principal amounts of
the Term Loans that are Senior Obligations then held by the Senior Creditors, and upon indefeasible payment in full in
cash of the principal of and interest on, and all other amounts in respect of, all Term Loans that are Senior Obligations,
each prepayment by a Borrower on account of principal of the Term Loans pursuant to Section 2.11 shall be made pro rata
to the Term Loans that are Subordinated Obligations according to the respective outstanding principal amounts of the
Term Loans then held by the Affiliate Lenders. Amounts prepaid on account of the Term Loans may not be reborrowed.
Section 2.19 Mitigation Obligations; Replacement of Lenders. (%3) If any Lender requests compensation under
Section 2.15, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if, in the reasonable judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as applicable, in the future and (ii) would
not subject such Lender to any material unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender in any material respect. Such Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment. Nothing in this Section shall affect or postpone any of
the Obligations or the rights of any Lender pursuant to Section 2.17(a).
(a) If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender is a
Defaulting Lender, then such Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require any such Lender to assign and delegate, without recourse (in accordance with and subject to
the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that
(i) such Borrower shall have received the prior written consent of the Administrative Agent (and, if in respect of any
Revolving Facility Commitment or Revolving Facility Loan, the Swingline Lender and each Issuing Bank), which
consent, in each case, shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in L/C Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or such Borrower (in the case of all other amounts) and (iii) in the
case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. Nothing in this
Section 2.19 shall be deemed to prejudice any rights that such Borrower may have against any Lender that is a Defaulting
Lender. No action by or consent of the removed Lender shall be necessary in connection with such assignment, which
shall be immediately and automatically effective upon payment of such purchase price. In connection with any such
assignment, such Borrower, Administrative Agent, such removed Lender and the replacement Lender shall otherwise
comply with Section 9.04, provided that if such removed Lender does not comply with Section 9.04 within one Business
Day after such Borrowers request, compliance with Section 9.04 shall not be required to effect such assignment.
(b) If any Lender (such Lender, a Non- Consenting Lender) has failed to consent to a proposed amendment, waiver,
discharge or termination which pursuant to the terms of Section 9.08 requires the consent of all of the Lenders affected
and with respect to which the Required Lenders shall have granted their consent, then the applicable Borrower shall have
the right (unless such Non- Consenting Lender grants such consent) at its sole expense (including with respect to the
processing and recordation fee referred to in Section 9.04(b)(ii)(B)) to replace such Non- Consenting Lender by requiring
such Non- Consenting Lender to (and any such Non- Consenting Lender agrees that it shall, upon such Borrowers
request) assign its Loans and its Commitments (or, at such Borrowers option, the Loans and Commitments under the
Facility that is the subject of the proposed amendment, waiver, discharge or termination) hereunder to one or more
assignees reasonably acceptable to (i) the Administrative Agent (unless, in the case of an assignment of Term Loans, such
assignee is a Lender, an Affiliate of a Lender or an Approved Fund) and (ii) if in respect of any Revolving Facility
Commitment or Revolving Facility Loan, the Swingline Lender and the Issuing Bank; provided that: (a) all Loan
Obligations of such Borrower owing to such Non- Consenting Lender being replaced shall be paid in full to such NonConsenting Lender concurrently with such assignment, (b) the replacement Lender shall purchase the foregoing by paying
to such Non- Consenting Lender a price equal to the principal amount thereof plus accrued and unpaid interest thereon and
the replacement Lender or such Borrower shall pay any amount required by Section 2.11 as if such assignment constituted
a prepayment of the assigning Lenders Loans and (c) the replacement Lender shall grant its consent with respect to the
applicable proposed amendment, waiver, discharge or termination. No action by or consent of the Non- Consenting
Lender shall be necessary in connection with such assignment, which shall be immediately and automatically effective
upon payment of such purchase price. In connection with any such assignment, such Borrower, Administrative Agent,
such Non- Consenting Lender and the replacement Lender shall otherwise comply with Section 9.04; provided that, if
such Non- Consenting Lender does not comply with Section 9.04 within one Business Day after such Borrowers request,
compliance with Section 9.04 shall not be required to effect such assignment.
Section 2.20 Illegality. If any Lender reasonably determines that any Change in Law has made it unlawful, or that any
Governmental Authority has asserted after the Closing Date that it is unlawful, for any Lender or its applicable lending
office to make or maintain any Eurocurrency Loans, then, on notice thereof by such Lender to the applicable Borrower
through the Administrative Agent, any obligations of such Lender to make or continue Eurocurrency Loans or to convert
ABR Borrowings to Eurocurrency Borrowings shall be suspended until such Lender notifies the Administrative Agent and
such Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, such
Borrower shall upon demand from such Lender (with a copy to the Administrative Agent), either convert all Eurocurrency
Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurocurrency Borrowings to such day, or immediately, if such Lender may not
lawfully continue to maintain such Loans. Upon any such prepayment or conversion, the applicable Borrower shall also
pay accrued interest on the amount so prepaid or converted.
(a) The applicable Borrower and each Incremental Term Lender and/or Incremental Revolving Facility Lender shall
execute and deliver to the Administrative Agent an Incremental Assumption Agreement and such other documentation as
the Administrative Agent shall reasonably specify to evidence the Incremental Term Loan Commitment of such
Incremental Term Lender and/or Incremental Revolving Facility Commitment of such Incremental Revolving Facility
Lender. Each Incremental Assumption Agreement shall specify the terms of the applicable Incremental Term Loans
and/or Incremental Revolving Facility Commitments; provided that:
(iii) any commitments to make the Incremental Term B Loans and/or additional Initial Revolving Loans shall have the
same terms as the Closing Date Term B Loans or Initial Revolving Loans made pursuant to the Revolving Facility
Commitments in effect on the Closing Date, respectively,
(iv) the Other Incremental Term Loans shall be unsecured (or secured by cash collateral on substantially the same terms
as those set forth herein) and (unless such Other Incremental Term Loans constitute Subordinated Obligations (in which
case such Loans shall be subject to the Subordination Terms)) shall rank pari passu with or, at the option of the Term
Facility Borrower, junior in right of payment to the Term B Loans that are Senior Obligations,
(v) the final maturity date of any Other Incremental Term Loans shall be no earlier than the Maturity Date of the Term B
Loans and, except as to pricing, amortization, final maturity date and participation in prepayments, shall have
(x) substantially identical terms as the Term B Loans or (y) such other terms (including as to guarantees) as shall be
reasonably satisfactory to the Administrative Agent,
(vi) the Weighted Average Life to Maturity of any Other Incremental Term Loans shall be no shorter than the remaining
Weighted Average Life to Maturity of the Term B Loans,
(vii) the Other Incremental Revolving Loans shall be unsecured (or secured by cash collateral on substantially the same
terms as those set forth herein) and shall rank pari passu in right of payment with the Initial Revolving Loans,
(viii) the final maturity date of any Other Incremental Revolving Loans shall be no earlier than the Maturity Date with
respect to the Initial Revolving Loans and, except as to pricing, final maturity date, participation in prepayments and
commitment reductions, shall have (x) substantially identical terms as the Initial Revolving Loans or (y) such other terms
(including as to guarantees) as shall be reasonably satisfactory to the Administrative Agent,
(ix) (A) the Other Incremental Revolving Loans may participate on a pro rata basis or a less than pro rata basis (but not a
greater than pro rata basis) than the Initial Revolving Loans in (x) any prepayment or commitment reduction hereunder
and (y) any Borrowing at the time such Borrowing is made and (B) the Other Incremental Term Loans may participate on
a pro rata basis or a less than pro rata basis (but not a greater than pro rata basis) than the Term B Loans in any
prepayment hereunder,
(x) there shall be no obligor in respect of any Incremental Term Loan Commitments or Incremental Revolving Facility
Commitments that is not a Loan Party, and
(xi) no Lender shall be obligated to provide an Incremental Commitment as a result of any such request by any
Borrower, and, until such time, if any, as such Lender has agreed in its sole discretion to provide an Incremental
Commitment and executed and delivered to the Administrative Agent an Incremental Assumption Agreement as provided
in clause (b) of this Section 2.21, such Lender shall not be obligated to fund any Incremental Loans.
Each party hereto hereby agrees that, upon the effectiveness of any Incremental Assumption Agreement, this Agreement
shall be amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Incremental Term
Loan Commitments and/or Incremental Revolving Facility Commitments evidenced thereby as provided for in
Section 9.08(e). Any amendment to this Agreement or any other Loan Document that is necessary to effect the provisions
of this Section 2.21 and any such collateral and other documentation shall be deemed Loan Documents hereunder and
may be memorialized in writing by the Administrative Agent with the applicable Borrowers consent (not to be
unreasonably withheld) and furnished to the other parties hereto.
(b) Notwithstanding the foregoing, no Incremental Term Loan Commitment or Incremental Revolving Facility
Commitment shall become effective under this Section 2.21 unless (i) on the date of such effectiveness, to the extent
required by the relevant Incremental Assumption Agreement, the conditions set forth in clauses (b) and (c) of Section 4.01
shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed
by a Responsible Officer of the applicable Borrower or (in the case of any Borrower that is a limited partnership) of its
general partner, as applicable, and (ii) the Administrative Agent shall have received customary legal opinions, board
resolutions and other customary closing certificates and documentation as required by the relevant Incremental
Assumption Agreement and, to the extent required by the Administrative Agent, consistent with those delivered on the
Closing Date under Section 4.02 and such additional customary documents and filings as the Administrative Agent may
reasonably request to assure that the Incremental Term Loans and/or Revolving Facility Loans in respect of Incremental
Revolving Facility Commitments are secured by the Collateral, to the extent applicable, ratably with one or more Classes
of then- existing Term Loans and Revolving Facility Loans.
(c) Each of the parties hereto hereby agrees that the Administrative Agent may take any and all action as may be
reasonably necessary to ensure that (i) all Incremental Term Loans (other than Other Incremental Term Loans), when
originally made, are included in each Borrowing of the outstanding applicable Class of Term Loans on a pro rata basis,
and (ii) all Revolving Facility Loans in respect of Incremental Revolving Facility Commitments (other than Other
Incremental Revolving Loans), when originally made, are included in each Borrowing of the applicable Class of
outstanding Revolving Facility Loans on a pro rata basis. Each Borrower agrees that Section 2.16 shall apply to any
conversion of Eurocurrency Loans to ABR Loans reasonably required by the Administrative Agent to effect the foregoing.
(d) Notwithstanding anything to the contrary in this Agreement, including Section 2.18(c) (which provisions shall not be
applicable to clauses (e) through (i) of this Section 2.21), pursuant to one or more offers made from time to time by the
Term Facility Borrower and/or a Revolving Facility Borrower to all Lenders of any Class of Term Loans and/or
Revolving Facility Commitments, respectively, on a pro rata basis (based, in the case of an offer to the Lenders under any
Class of Term Loans, on the aggregate outstanding Term Loans of such Class and, in the case of an offer to the Lenders
under any Revolving Facility, on the aggregate outstanding Revolving Facility Commitments under such Revolving
Facility, as applicable) and on the same terms (Pro Rata Extension Offers), the Term Facility Borrower and/or such
Revolving Facility Borrower, respectively, is hereby permitted to consummate transactions with individual Lenders from
time to time to extend the maturity date of such Lenders Loans and/or Commitments of such Class and to otherwise
modify the terms of such Lenders Loans and/or Commitments of such Class pursuant to the terms of the relevant Pro
Rata Extension Offer (including, without limitation, increasing the interest rate or fees payable in respect of such Lenders
Loans and/or Commitments and/or modifying the amortization schedule in respect of such Lenders Loans). For the
avoidance of doubt, the reference to on the same terms in the preceding sentence shall mean, (i) in the case of an offer to
the Lenders under any Class of Term Loans, that all of the Term Loans of such Class are offered to be extended for the
same amount of time and that the interest rate changes and fees payable with respect to such extension are the same and
(ii) in the case of an offer to the Lenders under any Revolving Facility, that all of the Revolving Facility Commitments of
such Facility are offered to be extended for the same amount of time and that the interest rate changes and fees payable
with respect to such extension are the same. Any such extension (an Extension) agreed to between the applicable
Borrower and any such Lender (an Extending Lender) will be established under this Agreement by implementing a
Term Loan for such Lender if such Lender is extending an existing Term Loan (such extended Term Loan, an Extended
Term Loan) or a Revolving Facility Commitment for such Lender if such Lender is extending an existing Revolving
Facility Commitment (such extended Revolving Facility Commitment, an Extended Revolving Facility Commitment,
and the Loans thereunder, the Extended Revolving Loans). Each Pro Rata Extension Offer shall specify the date on
which the applicable Borrower proposes that the Extended Term Loan shall be made, which shall be a date not earlier than
five Business Days after the date on which notice is delivered to the Administrative Agent (or such shorter period agreed
to by the Administrative Agent in its reasonable discretion).
(e) The applicable Borrower and each Extending Lender shall execute and deliver to the Administrative Agent an
Incremental Assumption Agreement and such other documentation as the Administrative Agent shall reasonably specify
to evidence the Extended Term Loans and/or Extended Revolving Facility Commitments of such Extending Lender. Each
Incremental Assumption Agreement shall specify the terms of the applicable Extended Term Loans and/or Extended
Revolving Facility Commitments; provided that (i) except as to interest rates, fees, any other pricing terms, amortization,
final maturity date and participation in prepayments and commitment reductions (which shall, subject to
clauses (ii), (iii) and (vi) of this proviso, be determined by the Term Facility Borrower and set forth in the Pro Rata
Extension Offer), the Extended Term Loans shall have (x) the same terms as an existing Class of Term Loans or (y) such
other terms as shall be reasonably satisfactory to the Administrative Agent, (ii) the final maturity date of any Extended
Term Loans shall be no earlier than the latest Maturity Date in effect for the Term Loans on the date of incurrence, (iii) the
Weighted Average Life to Maturity of any Extended Term Loans shall be no shorter than the remaining Weighted
Average Life to Maturity of the Class of Term Loans to which such offer relates, (iv) except as to interest rates, fees, any
other pricing terms (which interest rates, fees and other pricing terms shall not be subject to the provisions set forth in
Section 2.21(b)(iii)), participation in prepayments and commitment reductions and final maturity (which shall, subject to
clause (v) of this proviso, be determined by the applicable Revolving Facility Borrower and set forth in the Pro Rata
Extension Offer), any Extended Revolving Facility Commitment shall have (x) the same terms as an existing Class of
Revolving Facility Commitments or (y) have such other terms as shall be reasonably satisfactory to the Administrative
Agent, (v) any Extended Revolving Facility Commitments may participate on a pro rata basis or a less than pro rata basis
(but not greater than a pro rata basis) than the Initial Revolving Loans in any prepayment or commitment reduction
hereunder, (vi) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater
than a pro rata basis) than the Term B Loans in any repayment or prepayment hereunder and (vii) no Lender shall be
obligated to provide Extended Term Loans and/or Extended Revolving Facility Commitments as a result of any such
request by any Borrower, and, until such time, if any, as such Lender has agreed in its sole discretion to provide Extended
Term Loans and/or Extended Revolving Facility Commitments and executed and delivered to the Administrative Agent an
Incremental Assumption Agreement as provided in clause (f) of this Section 2.21, such Lender shall not be obligated to
fund any Extended Term Loans and/or provide or fund any Extended Revolving Facility Commitments. Upon the
effectiveness of any Incremental Assumption Agreement, this Agreement shall be amended to the extent (but only to the
extent) necessary to reflect the existence and terms of the Extended Term Loans and/or Extended Revolving Facility
Commitments evidenced thereby as provided for in Section 9.08(e). Any such deemed amendment may be memorialized
in writing by the Administrative Agent with the applicable Borrowers consent (not to be unreasonably withheld) and
furnished to the other parties hereto. If provided in any Incremental Assumption Agreement with respect to any Extended
Revolving Facility Commitments, and with the consent of each Swingline Lender and Issuing Bank, participations in
Swingline Loans and Letters of Credit shall be reallocated to lenders holding such Extended Revolving Facility
Commitments in the manner specified in such Incremental Assumption Agreement, including upon effectiveness of such
Extended Revolving Facility Commitment or upon or prior to the maturity date for any Class of Revolving Facility
Commitments.
(f) Upon the effectiveness of any such Extension, the applicable Extending Lenders Term Loan (or applicable portion
thereof) will be automatically designated an Extended Term Loan and/or such Extending Lenders Revolving Facility
Commitment (or applicable portion thereof) will be automatically designated an Extended Revolving Facility
Commitment. For purposes of this Agreement and the other Loan Documents, (i) if such Extending Lender is extending a
Term Loan, such Extending Lender will be deemed to have a Term Loan having the terms of such Extended Term Loan
and (ii) if such Extending Lender is extending a Revolving Facility Commitment, such Extending Lender will be deemed
to have a Revolving Facility Commitment having the terms of such Extended Revolving Facility Commitment.
(g) Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document (including, without
limitation, this Section 2.21), (i) the aggregate amount of Extended Term Loans and Extended Revolving Facility
Commitments will not be included in the calculation of the Incremental Amount, (ii) no Extended Term Loan or Extended
Revolving Facility Commitment is required to be in any minimum amount or any minimum increment, (iii) any Extending
Lender may extend all or any portion of its Term Loans and/or Revolving Facility Commitment pursuant to one or more
Pro Rata Extension Offers (subject to applicable proration in the case of over participation) (including the extension of any
Extended Term Loan and/or Extended Revolving Facility Commitment), (iv) there shall be no condition to any Extension
of any Loan or Commitment at any time or from time to time other than notice to the Administrative Agent of such
Extension and the terms of the Extended Term Loan or Extended Revolving Facility Commitment implemented thereby,
(v) no consent of any Lender shall be required to effectuate an Extension, other than the consent of each Lender agreeing
to such Extension with respect to one or more of its Loans and/or Commitments (or a portion thereof), which consent will
be in each Lenders sole discretion, (vi) all Extended Term Loans, Extended Revolving Facility Commitments and all
obligations in respect thereof shall be Loan Obligations of the relevant Loan Parties under this Agreement and the other
Loan Documents, shall be unsecured (or secured by cash collateral on substantially the same terms as those set forth
herein) and (unless constituting Subordinated Obligations (in which case such Loans or commitments shall be subject to
the Subordination Terms)) shall rank pari passu in right of payment with the other Loan Obligations of the Senior
Creditors, (vii) no Issuing Bank or Swingline Lender shall be obligated to provide Swingline Loans or issue Letters of
Credit under such Extended Revolving Facility Commitments unless it shall have consented thereto, and (viii) there shall
be no obligor in respect of any such Extended Term Loans or Extended Revolving Facility Commitments that is not a
Loan Party.
(h) Each Extension shall be consummated pursuant to procedures set forth in the associated Pro Rata Extension Offer;
provided that the applicable Borrower shall cooperate with the Administrative Agent prior to making any Pro Rata
Extension Offer to establish reasonable procedures with respect to mechanical provisions relating to such Extension,
including, without limitation, timing, rounding and other adjustments.
(i) Notwithstanding anything to the contrary in this Agreement, including Section 2.18(c) (which provisions shall not be
applicable to clauses (j) through (o) of this Section 2.21), the Term Facility Borrower may by written notice to the
Administrative Agent establish one or more additional tranches of term loans under this Agreement (such loans,
Refinancing Term Loans), the net proceeds of which are used to Refinance in whole or in part any Class of Term Loans.
Each such notice shall specify the date (each, a Refinancing Effective Date) on which the Term Facility Borrower
proposes that the Refinancing Term Loans shall be made, which shall be a date not earlier than five Business Days after
the date on which such notice is delivered to the Administrative Agent (or such shorter period agreed to by the
Administrative Agent in its reasonable discretion); provided that:
(i) before and after giving effect to the borrowing of such Refinancing Term Loans on the Refinancing Effective Date,
each of the conditions set forth in Section 4.01 shall be satisfied to the extent required by the relevant Incremental
Assumption Agreement governing such Refinancing Term Loans;
(ii) the final maturity date of the Refinancing Term Loans shall be no earlier than the Maturity Date of the refinanced
Term Loans;
(iii) the Weighted Average Life to Maturity of such Refinancing Term Loans shall be no shorter than the then- remaining
Weighted Average Life to Maturity of the refinanced Term Loans;
(iv) the aggregate principal amount of the Refinancing Term Loans shall not exceed the outstanding principal amount of
the refinanced Term Loans plus amounts used to pay fees, premiums and expenses (including original issue discount) and
accrued interest associated therewith;
(v) all other terms applicable to such Refinancing Term Loans (other than provisions relating to original issue discount,
upfront fees, interest rates or any other pricing terms and prepayment terms, which, subject to clause (iii) above and clause
(viii) below, shall be as agreed between the Term Facility Borrower and the Lenders providing such Refinancing Term
Loans) taken as a whole shall be substantially similar to, or not materially less favorable to the Group Members than the
terms, taken as a whole, applicable to the Term B Loans (except to the extent such covenants and other terms apply solely
to any period after the latest Maturity Date then in effect with respect to the Term Loans or as otherwise reasonably
acceptable to the Administrative Agent), as determined by the Term Facility Borrower in good faith. In addition,
notwithstanding the foregoing, the Term Facility Borrower may establish Refinancing Term Loans to refinance and/or
replace all or any portion of a Revolving Facility Commitment (regardless of whether Revolving Facility Loans are
outstanding under such Revolving Facility Commitments at the time of incurrence of such Refinancing Term Loans), so
long as (i) the aggregate amount of such Refinancing Term Loans does not exceed the aggregate amount of Revolving
Facility Commitments terminated at the time of incurrence thereof, (ii) if the Revolving Facility Credit Exposure
outstanding on the Refinancing Effective Date would exceed the aggregate amount of Revolving Facility Commitments
outstanding in each case after giving effect to the termination of such Revolving Facility Commitments, the Term Facility
Borrower shall take one or more actions such that such Revolving Facility Credit Exposure does not exceed such
aggregate amount of Revolving Facility Commitments in effect on the Refinancing Effective Date after giving effect to
the termination of such Revolving Facility Commitments (it being understood that such Refinancing Term Loans may be
provided by the Lenders holding the Revolving Facility Commitments being terminated and/or by any other person that
would be a permitted Assignee hereunder, (iii) the Weighted Average Life to Maturity of the Refinancing Term Loans
shall be no shorter than the remaining life to termination of the terminated Revolving Facility Commitments, (iv) the final
maturity date of the Refinancing Term Loans shall be no earlier than the termination date of the terminated Revolving
Facility Commitments, (v) all other terms applicable to such Refinancing Term Loans (other than provisions relating to
original issue discount, upfront fees, interest rates or any other pricing terms and prepayment terms, which, subject to
subclause (iii) above and clause (viii) below, shall be as agreed between the Term Facility Borrower and the Lenders
providing such Refinancing Term Loans) taken as a whole shall be substantially similar to, or not materially less favorable
to the Group Members than the terms, taken as a whole, applicable to the Term B Loans (except to the extent such
covenants and other terms apply solely to any period after the Maturity Date in effect with respect to the Term B Loans or
are otherwise reasonably acceptable to the Administrative Agent), as determined by the Term Facility Borrower in good
faith and (vi) before and after giving effect to the borrowing of such Refinancing Term Loans on the Refinancing
Effective Date, each of the conditions set forth in Section 4.01 shall be satisfied to the extent required by the relevant
Incremental Assumption Agreement governing such Refinancing Term Loans;
(vi) Refinancing Term Loans shall be unsecured (or secured by cash collateral on substantially the same terms as those
set forth herein) and (unless constituting Subordinated Obligations (in which case such Refinancing Term Loans shall be
subject to the Subordination Terms)) shall rank pari passu in right of payment with the other Loan Obligations of the
Senior Creditors;
(vii) there shall be no obligor in respect of such Refinancing Term Loans that is not a Loan Party;
(viii) the Refinancing Term Loans may participate on a pro rata basis or a less than pro rata basis (but not a greater than
pro rata basis) than the Term B Loans in any mandatory prepayment hereunder; and
(ix) no Lender shall be obligated to provide Refinancing Term Loans as a result of any such request by any Borrower,
and, until such time, if any, as such Lender has agreed in its sole discretion to provide Refinancing Term Loans and
executed and delivered to the Administrative Agent an Incremental Assumption Agreement as provided in clause (j) of
this Section 2.21, such Lender shall not be obligated to fund any Refinancing Term Loans.
(j) The Term Facility Borrower may approach any Lender or any other person that would be a permitted Assignee
pursuant to Section 9.04 to provide all or a portion of the Refinancing Term Loans; provided that any Lender offered or
approached to provide all or a portion of the Refinancing Term Loans may elect or decline, in its sole discretion, to
provide a Refinancing Term Loan. Any Refinancing Term Loans made on any Refinancing Effective Date shall be
designated an additional Class of Term Loans for all purposes of this Agreement; provided further that any Refinancing
Term Loans may, to the extent provided in the applicable Incremental Assumption Agreement governing such
Refinancing Term Loans, be designated as an increase in any previously established Class of Term Loans made to the
Term Facility Borrower.
(k) Notwithstanding anything to the contrary in this Agreement, including Section 2.18(c) (which provisions shall not be
applicable to clause (l) through (o) of this Section 2.21), any Revolving Facility Borrower may by written notice to the
Administrative Agent establish one or more additional Facilities providing for revolving commitments (Replacement
Revolving Facility Commitments and the revolving loans thereunder, Replacement Revolving Loans), which replace in
whole or in part any Class of Revolving Facility Commitments under this Agreement. Each such notice shall specify the
date (each, a Replacement Revolving Facility Effective Date) on which such Revolving Facility Borrower proposes that
the Replacement Revolving Facility Commitments shall become effective, which shall be a date not less than five
Business Days after the date on which such notice is delivered to the Administrative Agent (or such shorter period agreed
to by the Administrative Agent in its reasonable discretion); provided that: (i) before and after giving effect to the
establishment of such Replacement Revolving Facility Commitments on the Replacement Revolving Facility Effective
Date, each of the conditions set forth in Section 4.01 shall be satisfied to the extent required by the relevant Incremental
Assumption Agreement governing such Replacement Revolving Facility Commitments; (ii) after giving effect to the
establishment of any Replacement Revolving Facility Commitments and any concurrent reduction in the aggregate
amount of any other Revolving Facility Commitments, the aggregate amount of Revolving Facility Commitments shall
not exceed the aggregate amount of the Revolving Facility Commitments outstanding immediately prior to the applicable
Replacement Revolving Facility Effective Date; (iii) no Replacement Revolving Facility Commitments shall have a final
maturity date (or require commitment reductions or amortizations) prior to the Maturity Date in effect at the time of
incurrence for the Revolving Facility Commitments being replaced; (iv) all other terms applicable to such Replacement
Revolving Facility (other than provisions relating to (x) fees, interest rates and other pricing terms and prepayment and
commitment reduction and optional redemption terms which, subject to clause (iii) above and clause (vi) below, shall be
as agreed between such Revolving Facility Borrower and the Lenders providing such Replacement Revolving Facility
Commitments and (y) the amount of any letter of credit sublimit and swingline commitment under such Replacement
Revolving Facility, which shall be as agreed between such Revolving Facility Borrower, the Lenders providing such
Replacement Revolving Facility Commitments, the Administrative Agent and the replacement issuing bank and
replacement swingline lender, if any, under such Replacement Revolving Facility Commitments) taken as a whole shall be
substantially similar to, or not materially more favorable to the Lenders providing such Replacement Revolving Facility
Commitments than those, taken as a whole, applicable to the Initial Revolving Loans (except to the extent such covenants
and other terms apply solely to any period after the latest Maturity Date in effect at the time of incurrence or are otherwise
reasonably acceptable to the Administrative Agent); (v) there shall be no obligor in respect of such Replacement
Revolving Facility that is not a Loan Party; (vi) the Replacement Revolving Commitments may participate on a pro rata
basis or a less than pro rata basis (but not greater than a pro rata basis) than the Initial Revolving Loans in (x) any
prepayment or commitment reduction hereunder and (y) any Borrowing at the time such Borrowing is made and (vii) no
Lender shall be obligated to provide a Replacement Revolving Facility Commitment as a result of any such request by any
Borrower, and, until such time, if any, as such Lender has agreed in its sole discretion to provide a Replacement
Revolving Facility Commitment and executed and delivered to the Administrative Agent an Incremental Assumption
Agreement as provided in clause (l) of this Section 2.21, such Lender shall not be obligated to provide or fund any
Replacement Revolving Facility Commitments. In addition, any Revolving Facility Borrower may establish Replacement
Revolving Facility Commitments to refinance and/or replace all or any portion of a Term Loan hereunder (regardless of
whether such Term Loan is repaid with the proceeds of Replacement Revolving Loans or with other amounts), so long as
the aggregate amount of such Replacement Revolving Facility Commitments does not exceed the aggregate amount of
Term Loans repaid at the time of establishment thereof (it being understood that such Replacement Revolving Facility
Commitment may be provided by the Lenders holding the Term Loans being repaid and/or by any other person that would
be a permitted Assignee hereunder) so long as (i) before and after giving effect to the establishment of such Replacement
Revolving Facility Commitments on the Replacement Revolving Facility Effective Date each of the conditions set forth in
Section 4.01 shall be satisfied to the extent required by the relevant agreement governing such Replacement Revolving
Facility Commitments, (ii) the weighted average life to termination of such Replacement Revolving Facility
Commitments shall be not shorter than the Weighted Average Life to Maturity then applicable to the refinanced Term
Loans, (iii) the final termination date of the Replacement Revolving Facility Commitments shall be no earlier than the
Maturity Date of the refinanced Term Loans, (iv) Replacement Revolving Loans shall be unsecured (or secured by cash
collateral on substantially the same terms as those set forth herein) and (unless constituting Subordinated Obligations (in
which case such Replacement Revolving Loans shall be subject to the Subordination Terms)) shall rank pari passu in right
of payment with the other Loan Obligations of the Senior Creditors and (v) the requirement of clause (v) in the preceding
sentence shall be satisfied mutatis mutandis.
(l) Any Revolving Facility Borrower may approach any Lender or any other person that would be a permitted Assignee
of a Revolving Facility Commitment pursuant to Section 9.04 to provide all or a portion of the Replacement Revolving
Facility Commitments; provided that any Lender offered or approached to provide all or a portion of the Replacement
Revolving Facility Commitments may elect or decline, in its sole discretion, to provide a Replacement Revolving Facility
Commitment. Any Replacement Revolving Facility Commitment made on any Replacement Revolving Facility Effective
Date shall be designated an additional Class of Revolving Facility Commitments for all purposes of this Agreement;
provided that any Replacement Revolving Facility Commitments may, to the extent provided in the applicable
Incremental Assumption Agreement, be designated as an increase in any previously established Class of Revolving
Facility Commitments.
(m) On any Replacement Revolving Facility Effective Date, subject to the satisfaction of the foregoing terms and
conditions, each of the Lenders with Replacement Revolving Facility Commitments of such Class shall purchase from
each of the other Lenders with Replacement Revolving Facility Commitments of such Class, at the principal amount
thereof and in the applicable currencies, such interests in the Replacement Revolving Loans and participations in Letters
of Credit and Swingline Loans under such Replacement Revolving Facility Commitments of such Class then outstanding
on such Replacement Revolving Facility Effective Date as shall be necessary in order that, after giving effect to all such
assignments and purchases, the Replacement Revolving Loans and participations of such Replacement Revolving Facility
Commitments of such Class will be held by the Lenders thereunder ratably in accordance with their Replacement
Revolving Facility Commitments.
(n) For purposes of this Agreement and the other Loan Documents, (i) if a Lender is providing a Refinancing Term Loan,
such Lender will be deemed to have a Term Loan having the terms of such Refinancing Term Loan and (ii) if a Lender is
providing a Replacement Revolving Facility Commitment, such Lender will be deemed to have an Revolving Facility
Commitment having the terms of such Replacement Revolving Facility Commitment. Notwithstanding anything to the
contrary set forth in this Agreement or any other Loan Document (including without limitation this Section 2.21), (i) the
aggregate amount of Refinancing Term Loans and Replacement Revolving Facility Commitments will not be included in
the calculation of the Incremental Amount, (ii) no Refinancing Term Loan or Replacement Revolving Facility
Commitment is required to be in any minimum amount or any minimum increment, (iii) there shall be no condition to any
incurrence of any Refinancing Term Loan or Replacement Revolving Facility Commitment at any time or from time to
time other than those set forth in clauses (j) or (l) above, as applicable, and (iv) all Refinancing Term Loans, Replacement
Revolving Facility Commitments and all obligations in respect thereof shall be Loan Obligations under this Agreement
and the other Loan Documents, shall be unsecured (or secured by cash collateral on substantially the same terms as those
set forth herein) and (except to the extent constituting Subordinated Obligations, in which case they shall be subject to the
Subordination Terms) shall rank pari passu in right of payment with the other Loan Obligations.
(o) Notwithstanding anything in the foregoing to the contrary, (i) for the purpose of determining the number of
outstanding Eurocurrency Borrowings upon the incurrence of any Incremental Loans, (x) to the extent the last date of
Interest Periods for multiple Eurocurrency Borrowings under the Term Facilities fall on the same day, such Eurocurrency
Borrowings shall be considered a single Eurocurrency Borrowing and (y) to the extent the last date of Interest Periods for
multiple Eurocurrency Borrowings under the Revolving Facilities fall on the same day, such Eurocurrency Borrowings
shall be considered a single Eurocurrency Borrowing and (ii) the initial Interest Period with respect to any Eurocurrency
Borrowing of Incremental Loans may, at the applicable Borrowers option, be of a duration of a number of Business Days
that is less than one month, and the Adjusted LIBO Rate with respect to such initial Interest Period shall be the same as the
Adjusted LIBO Rate applicable to any then- outstanding Eurocurrency Borrowing as such Borrower may direct, so long as
the last day of such initial Interest Period is the same as the last day of the Interest Period with respect to such outstanding
Eurocurrency Borrowing.
Section 2.21 Defaulting Lender. (%3) Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer
a Defaulting Lender, to the extent permitted by applicable law:
(i) Waivers and Amendments. Such Defaulting Lenders right to approve or disapprove any amendment, waiver or
consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.
(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, following
an Event of Default or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to
Section 9.06 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to
the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or the Swingline
Lender hereunder, third, to provide Letter of Credit Support for the Issuing Banks Fronting Exposure with respect to such
Defaulting Lender in accordance with Section 2.05(j), fourth, as the applicable Borrower may request (so long as no
Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, fifth, if so determined
by the Administrative Agent and the applicable Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lenders potential future funding obligations with respect to Loans under this Agreement and
(y) provide Letter of Credit Support for the Issuing Banks future Fronting Exposure with respect to such Defaulting
Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.05(j), sixth, to
the payment of any amounts owing to the Lenders, the Issuing Banks or the Swingline Lender as a result of any judgment
of a court of competent jurisdiction obtained by any Lender, Issuing Bank or Swingline Lender against such Defaulting
Lender as a result of such Defaulting Lenders breach of its obligations under this Agreement, seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to such Borrower as a result of any judgment of a
court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such Defaulting
Lenders breach of its obligations under this Agreement, and eighth, to such Defaulting Lender or as otherwise directed by
a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to provide Letter of Credit Support pursuant to
this Section 2.22 shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.
(iii) Certain Fees.
(A) No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a
Defaulting Lender
(B) Each Defaulting Lender shall be entitled to receive L/C Participation Fees for any period during which that Lender is
a Defaulting Lender only to the extent allocable to its pro rata share of the stated amount of Letters of Credit for which it
has provided Letter of Credit Support.
(C) With respect to any Commitment Fee or L/C Participation Fee not required to be paid to any Defaulting Lender
pursuant to clause (A) or (B) above, the applicable Revolving Facility Borrower shall (x) pay to each Non- Defaulting
Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lenders
participation in Letters of Credit or Swingline Loans that has been reallocated to such Non- Defaulting Lender pursuant to
clause (iv) below, (y) pay to each Issuing Bank and the Swingline Lender, as applicable, the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Banks or the Swingline Lenders
Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lenders
participation in Letters of Credit and Swingline Loans shall be reallocated among the Non- Defaulting Lenders in
accordance with their respective pro rata Commitments (calculated without regard to such Defaulting Lenders
Commitment) but only to the extent that (x) the conditions set forth in Section 4.01 are satisfied at the time of such
reallocation and (y) such reallocation does not cause the aggregate Revolving Facility Credit Exposure of any NonDefaulting Lender to exceed such Non- Defaulting Lenders Revolving Facility Commitment. No reallocation hereunder
shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a Non- Defaulting Lender as a result of such NonDefaulting Lenders increased exposure following such reallocation.
(v) Letter of Credit Support; Repayment of Swingline Loans. If the reallocation described in clause (iv) above cannot, or
can only partially, be effected, the applicable Revolving Facility Borrower shall, without prejudice to any right or remedy
available to it hereunder or under law, within three (3) Business Days following the written request of the
(i) Administrative Agent or (ii) the Swingline Lender or any Issuing Bank, as applicable (with a copy to the
Administrative Agent), (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders Fronting Exposure
and (y) second, provide Letter of Credit Support for the Issuing Banks Fronting Exposure in accordance with the
procedures set forth in Section 2.05(j).
(b) Defaulting Lender Cure. If the applicable Borrower, the Administrative Agent and the Swingline Lender and each
Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the
parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein
(which may include arrangements with respect to provision of any Letter of Credit Support), that Lender will, to the extent
applicable, purchase at par that portion of outstanding Revolving Facility Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with their
Revolving Facility Commitments (without giving effect to Section 2.22(a)(iv)), whereupon such Lender shall be deemed
to no longer be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued
or payments made by or on behalf of any Borrower while that Lender was a Defaulting Lender; provided further that,
except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to
Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lenders having been a
Defaulting Lender.
(c) New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall
not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect
to such Swingline Loan and (ii) the Issuing Banks shall not be required to issue, extend, renew or increase any Letter of
Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.
Section 2.22 Grant of Security. Each Loan Party hereby grants a security interest in the Collateral to the Administrative
Agent, for the benefit of the applicable Lender Parties (or, in the case of that portion of the Collateral constituting Letter of
Credit Support for Continuing Letters of Credit, to the applicable Issuing Bank, for the benefit of such Issuing Bank).
ARTICLE III
Representations and Warranties
On the date of each Credit Event, each Borrower represents and warrants to each of the Lenders that:
Section 3.01 Financial Condition. The audited statement of financial condition and statement of operations of the Public
Company and its consolidated subsidiaries as at December 31, 2012 reported by Deloitte & Touche LLP have been
prepared in accordance with GAAP.
Section 3.02 No Change. Since December 31, 2012, there has been no development or event that has had or would
reasonably be expected to have a Material Adverse Effect.
Section 3.03 Existence; Compliance with Law. Each Loan Party (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, incorporation or registration (to the extent good standing
has substantive legal meaning in such jurisdiction), (b) has the power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its business requires such qualification (to the extent
good standing has substantive legal meaning in such jurisdiction), except to the extent not reasonably expected to have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law (including ERISA) except to the extent
that the failure to comply therewith would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.04 Power; Authorization; Enforceable Obligations. Each Loan Party has the power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of each Borrower, to obtain
extensions of credit hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in the case of each Borrower, to authorize the
extensions of credit on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other person is required in connection with the
extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or
any of the Loan Documents, except consents, authorizations, filings and notices which (i) have been obtained or made and
are in full force and effect or (ii) the failure to obtain or to be in full force and effect would not result in a Material
Adverse Effect. Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto.
This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors rights generally and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
Section 3.05 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents,
the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any contractual
obligation or Organizational Document of any Loan Party and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such contractual
obligation or Organizational Document (other than Permitted Liens) except to the extent not reasonably expected to have a
Material Adverse Effect. As of the Closing Date, no Requirement of Law, Organizational Document or contractual
obligation applicable to any Loan Party would reasonably be expected to have a Material Adverse Effect.
Section 3.06 Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority
is pending or, to the knowledge of any Loan Party, threatened by or against or affecting any Group Member or against any
of their respective properties or revenues (including the income from fees) (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that would reasonably be expected to have a Material
Adverse Effect.
Section 3.07 No Default. No Group Member is in default under or with respect to any of its contractual obligations in
any respect that would reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
Section 3.08 Taxes. Each Group Member has filed or caused to be filed all federal, state and other material tax returns
that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any amount the validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been provided on the books of the relevant
Group Member in accordance with GAAP), except in each case as would not reasonably be expected to have a Material
Adverse Effect.
Section 3.09 Federal Reserve Regulations. No part of the proceeds of any Loans will be used (a) for buying or
carrying any margin stock within the respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect for any purpose that violates the provisions of the Regulations of the Board or (b) for
any purpose that violates the provisions of Regulation T, Regulation U or Regulation X of the Board.
Section 3.10 ERISA. No Group Member has any direct or contingent obligation or liability under any employee benefit
plan or program or otherwise in respect of ERISA or the rules and regulations thereunder that would reasonably be
expected to have a Material Adverse Effect.
Section 3.11 Investment Company Act. No Loan Party is or is required to be registered as an investment company
within the meaning of the Investment Company Act of 1940, as amended.
Section 3.12 Information. No statement or information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other certificate furnished by or on behalf of any Loan Party to the
Administrative Agent, any Issuing Bank or the Lenders, or any of them, for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, when taken as a whole, contained as of the date such
statement, information, document or certificate was so furnished (or, in the case of the Confidential Information
Memorandum, as of the date of this Agreement), any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not misleading. Any projections and pro forma financial
information contained in the materials referenced above are based upon good faith estimates and assumptions believed by
management of the Term Facility Borrower to be reasonable at the time made, it being recognized by the Lenders that
such financial information as it relates to future events is not to be viewed as fact and that actual results during the period
or periods covered by such financial information may differ from the projected results set forth therein by a material
amount.
Section 3.13 Use of Proceeds. The Borrowers will use the proceeds of the Loans, and may request the issuance of Letters
of Credit, (a) to refinance all obligations under the Existing Credit Agreement, (b) to pay fees and expenses associated
with the Transactions and (c) for working capital and general corporate purposes (including, without limitation, for any
acquisitions of Equity Interests or other assets not prohibited by this Agreement).
Section 3.14 USA PATRIOT Act; OFAC.
(e) Each Loan Party is in compliance in all material respects with the material provisions of the USA PATRIOT Act,
and, on or prior to the Closing Date, the Term Facility Borrower has provided to the Administrative Agent all information
related to the Loan Parties (including names, addresses and tax identification numbers (if applicable)) reasonably
requested in writing by the Administrative Agent not less than three (3) Business Days prior to the Closing Date and
required under know your customer and anti- money laundering rules and regulations, including the USA PATRIOT
Act, to be obtained by the Administrative Agent or any Lender.
(f) None of the Group Members nor, to the knowledge of the Borrowers making this representation, any director, officer,
agent, employee or Affiliate of any Group Member is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (OFAC) or equivalent European Union measure; and no
Borrower will directly or indirectly use the proceeds of the Loans or the Letters of Credit or otherwise make available
such proceeds to any person, for the purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC or equivalent European Union measure.
Section 3.15 Foreign Corrupt Practices Act. None of the Group Members, nor, to the knowledge of the Borrowers
making this representation, any of their directors, officers, agents or employees, has (i) violated in the past five (5) years
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977 or the Bribery Act 2010 of the United
Kingdom or similar law of the European Union or any European Union Member State or similar law of a jurisdiction in
which the Group Members conduct their business and to which they are lawfully subject or (ii) in the past five (5) years
made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
ARTICLE IV
Conditions of Lending
The obligations of (a) the Lenders (including the Swingline Lender) to make Loans and (b) any Issuing Bank to issue,
amend, extend or renew Letters of Credit or increase the stated amounts of Letters of Credit hereunder (each, a Credit
Event) are subject to the satisfaction (or waiver in accordance with Section 9.08) of the following conditions:
Section 4.01 All Credit Events. On the date of each Borrowing and each issuance, amendment, extension or renewal of a
Letter of Credit:
(b) In the case of each Credit Event (but, with respect to a Borrowing of any Incremental Loan, Extended Term Loan,
Refinancing Term Loan, Extended Revolving Loan or Replacement Revolving Loan, only to the extent required by the
applicable Incremental Assumption Agreement), the representations and warranties set forth in the Loan Documents shall
be true and correct in all material respects as of such date (it being understood that any representation or warranty that is
qualified as to materiality, Material Adverse Effect or similar language shall be true and correct in all respects on such
date) (other than an amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of
such Letter of Credit), with the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date).
(c) In the case of each Credit Event (but, with respect to a Borrowing of any Incremental Loan, Extended Term Loan,
Refinancing Term Loan, Extended Revolving Loan or Replacement Revolving Loan, only to the extent required by the
applicable Incremental Assumption Agreement), at the time of and immediately after such Credit Event (other than an
amendment, extension or renewal of a Letter of Credit without any increase in the stated amount of such Letter of Credit),
as applicable, no Event of Default or Default shall have occurred and be continuing.
(d) Each Credit Event (but, with respect to a Borrowing of any Incremental Loan, Extended Term Loan, Refinancing
Term Loan, Extended Revolving Loan or Replacement Revolving Loan, only to the extent required by the applicable
Incremental Assumption Agreement) shall be deemed to constitute a representation and warranty by the applicable
Borrower on the date of such Credit Event as to the matters specified in paragraphs (b) and (c) of this Section 4.01.
Section 4.02 First Credit Event. On or prior to the Closing Date:
(d) The Administrative Agent (or its counsel) shall have received from each of the Loan Parties, initial Issuing Bank and
the Lenders (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence reasonably
satisfactory to the Administrative Agent (which may include delivery of a signed signature page of this Agreement by
facsimile or other means of electronic transmission (e.g., pdf)) that such party has signed a counterpart of this
Agreement.
(e) The Administrative Agent shall have received, on behalf of itself, the Lenders and each Issuing Bank, a favorable
written opinion of (x) Paul, Weiss, Rifkind, Wharton & Garrison LLP, special counsel for the Loan Parties and
(y) Walkers, special Cayman Islands counsel for the Loan Parties, each (A) dated the Closing Date, (B) addressed to the
Administrative Agent, the Lenders and each Issuing Bank on the Closing Date and (C) in form and substance reasonably
satisfactory to the Administrative Agent, covering such matters relating to the Loan Documents as the Administrative
Agent shall reasonably request.
(f) The Administrative Agent shall have received, in the case of each Loan Party:
(i) (i) a copy of the certificate or articles of incorporation, memorandum of association, certificate of limited
partnership, certificate of registration of exempted limited partnership, certificate of formation, exempted limited
partnership agreement, or other equivalent constituent and governing documents, including all amendments thereto, of
such Loan Party, (1) certified as of a recent date by the Secretary of State (or other similar official) of the jurisdiction of its
organization, or (2) if such certification is not available in the applicable jurisdiction, otherwise certified by the Secretary
or Assistant Secretary or similar officer of such Loan Party or (in the case of any Loan Party that is a limited partnership)
its general partner, as applicable,
(ii) a certificate as to the good standing (to the extent such concept or a similar concept exists under the laws of such
jurisdiction) of such Loan Party as of a recent date from such Secretary of State (or other similar official),
(iii) a certificate of the Secretary or Assistant Secretary or similar officer of such Loan Party or (in the case of any Loan
Party that is a limited partnership) of its general partner, as applicable, dated the Closing Date and certifying:
(1) that attached thereto is a true and complete copy of the by- laws (or memorandum and articles of association,
partnership agreement, exempted limited partnership agreement, limited liability company agreement or other equivalent
constituent and governing documents) of such Loan Party as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (2) below,
(2) that attached thereto is a true and complete copy of resolutions (or equivalent documentation) duly adopted by the
Board of Directors (or equivalent governing body) of such Loan Party (or its managing general partner or managing
member) authorizing the execution, delivery and performance of the Loan Documents dated as of the Closing Date to
which such person is a party and, in the case of each Borrower, the borrowings hereunder, and that such resolutions (or
equivalent documentation) have not been modified, rescinded or amended and are in full force and effect on the Closing
Date,
(3) that the certificate or articles of incorporation, memorandum of association, certificate of limited partnership,
certificate of registration of exempted limited partnership, articles of incorporation, certificate of formation, exempted
limited partnership agreement or other equivalent organizational documents of such Loan Party has not been amended
since the date of the last amendment thereto as disclosed pursuant to clause (i) above
(4) as to the incumbency and specimen signature of each officer of the Loan Party or (in the case of any Loan Party that
is a limited partnership) of its general partner, as applicable, executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party, and
(5) as to the absence of any pending proceeding for the dissolution or liquidation of such Loan Party or, to the knowledge
of such person, threatening the existence of such Loan Party.
(g) The Administrative Agent shall have received all fees payable thereto or to any Lender or Joint Lead Arranger on or
prior to the Closing Date and, to the extent invoiced, all other amounts due and payable pursuant to the Loan Documents
on or prior to the Closing Date, including, to the extent invoiced at least three Business Days prior to the Closing Date,
reimbursement or payment of all reasonable and documented outof- pocket expenses (including reasonable fees, charges
and disbursements of Simpson Thacher & Bartlett LLP) required to be reimbursed or paid by the Loan Parties hereunder
or under any Loan Document;
(h) The Administrative Agent shall have received a certificate of a Financial Officer of the Term Facility Borrower or its
general partner setting forth reasonably detailed calculations showing the EBITDA of the Group Members for the four
fiscal quarters ending September 30, 2013.
For purposes of determining compliance with the conditions specified in this Section 4.02, each Lender shall be deemed to
have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender prior to
the Closing Date specifying its objection thereto and, in the case of a Borrowing, such Lender shall not have made
available to the Administrative Agent such Lenders ratable portion of the initial Borrowing.
ARTICLE V
Affirmative Covenants
Each Loan Party covenants and agrees with each Lender that, until the Termination Date, unless the Required Lenders
shall otherwise consent in writing, such Loan Party will, and will (in the case of Sections 5.02(b), 5.03, 5.04, 5.05 and
5.07) cause each of the Subsidiaries to:
Section 5.01 Financial Statements. Furnish to the Administrative Agent (for distribution to each Lender):
(a) as soon as available, but in any event within 120 days after the end of each fiscal year of the Term Facility Borrower,
(i) a copy of the audited statement of financial condition and statement of operations of the Public Company and its
consolidated subsidiaries as at the end of such year, reported on without a going concern or like qualification or
exception, or qualification arising out of the scope of the audit, by Deloitte & Touche LLP or other independent certified
public accountants of nationally recognized standing, and (ii) a reconciliation prepared by a Financial Officer of the Term
Facility Borrower or its general partner and indicating the differences between (x) the statement of financial condition and
statement of operations referred to in clause (i) above and (y) the unaudited statement of financial condition and statement
of operations of the Loan Parties and their consolidated Subsidiaries in respect of such year; and
(a) as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of
each fiscal year of the Term Facility Borrower, (i) a copy of the quarterly unaudited statement of financial condition and
statement of operations of the Public Company and its consolidated subsidiaries as at the end of such quarterly period,
certified by a Financial Officer of the Public Company as prepared in accordance with GAAP (subject to normal yearend
audit adjustments and the absence of footnotes), and (ii) a reconciliation prepared by a Financial Officer of the Term
Facility Borrower or its general partner and indicating the differences between (x) the financial statements referred to in
clause (i) above and (y) the unaudited statement of financial condition and statement of operations of the Loan Parties and
their consolidated Subsidiaries as at the end of such quarterly period.
Section 5.01 Certificates; Other Information. Furnish to the Administrative Agent (for distribution to each Lender), or (in
the case of clause (b)) to the relevant Lender:
(a) concurrently with the delivery of any financial statements pursuant to Section 5.01, a certificate of a Financial Officer
of the Term Facility Borrower or its general partner (i) stating that such Financial Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.07; and
(b) promptly, such additional financial and other information as any Lender may from time to time reasonably request
through the Administrative Agent.
Section 5.02 Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in full force and effect its
organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 6.03 and except, in
the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (b) comply with all contractual obligations and Requirements of Law except to the extent that failure
to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.03 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies insurance on
its property in at least such amounts and against at least such risks as are usually insured against in the same general area
by companies engaged in the same or a similar business.
Section 5.04 Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities and (b) permit representatives of the Administrative Agent and the Lenders to discuss
the business, operations, properties and financial and other condition of any Group Member with its officers and
employees (upon prior notice and without undue disruption to the business of the Loan Parties).
Section 5.05 Notices. Promptly (after any Responsible Officer of any Borrower or (in the case of any Borrower that is a
limited partnership) of its general partner, as applicable, obtains actual knowledge) give notice to the Administrative
Agent (which will promptly thereafter notify each Lender) of:
(a) the occurrence of any Default or Event of Default (and each such notice shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein and stating what action the relevant Group
Member proposes to take with respect thereto);
(b) any (i) default or event of default under any contractual obligation of any Group Member or (ii) litigation,
investigation or proceeding that may exist at any time between any Loan Party and any Governmental Authority, that in
either case, would reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member (other than a litigation or proceeding described in clause (b)
above) (i) as to which an adverse determination is reasonably probable and which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect or (ii) which directly relates to any Loan Document; and
(d) any other development or event that has had or could reasonably be expected to have a Material Adverse Effect.
Section 5.06 Additional Guarantors. Within 20 days after a Material AGM Operating Group Entity is formed or acquired
or such person becomes a Material AGM Operating Group Entity, as applicable, notify the Administrative Agent of such
occurrence, and, within 30 days following such notification, cause such Material AGM Operating Group Entity to (i)
become a party to this Agreement and a Guarantor by delivering to the Administrative Agent a Guarantor Joinder
Agreement executed by such new Guarantor, (ii) deliver to the Administrative Agent a certificate of such Material AGM
Operating Group Entity, substantially in the form of the certificates delivered pursuant to Section 4.02(c)(iii) on the
Closing Date, with appropriate insertions and attachments, and (iii) if reasonably requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form
and substance, and from counsel, reasonably satisfactory to the Administrative Agent.
Section 5.07 Use of Proceeds. Use the proceeds of the Loans made and Letters of Credit issued in the manner
contemplated by Section 3.13.
Section 5.08 Change in Private Corporate Rating. Upon obtaining knowledge of any change in the private corporate
rating established by S&P for the Public Company, use commercially reasonable efforts to direct the Administrative
Agent to access S&Ps website or platform on which S&P makes such rating available.
Section 5.09 Anti- Corruption Laws and Sanctions. Maintain in effect and enforce policies and procedures designed to
ensure compliance in all material respects by the Group Members and their respective directors, officers, employees and
agents with (a) all laws, rules and regulations of any jurisdiction applicable to any Group Member from time to time
concerning or relating to bribery or corruption and (b) economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (i) the U.S. government, including those administered by the OFAC or the
U.S. Department of State or (ii) the United Nations Security Council, the European Union or Her Majestys Treasury of
the United Kingdom.
ARTICLE VI
Negative Covenants
Each Loan Party covenants and agrees with each Lender that, until the Termination Date, unless the Required Lenders
shall otherwise consent in writing, such Loan Party will not, and will not permit any of its Subsidiaries to (it being
understood and agreed that the following covenants shall not restrict any of the Group Members from entering into,
consummating and performing under strategic relationships with financial institutions and other parties and, as necessary,
shall be deemed to include exceptions permitting each such Loan Party and Subsidiary to enter into, consummate and
perform under such relationships):
Section 6.01 Indebtedness. Incur, create, assume or permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Closing Date (provided that any such Indebtedness that is (x) not intercompany
Indebtedness and (y) in excess of $1,000,000 shall be set forth on Schedule 6.01) and any Permitted Refinancing
Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with
Indebtedness owed to a person other than a Group Member);
(b) Indebtedness created hereunder (including pursuant to Section 2.21) and under the other Loan Documents and any
Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) Indebtedness of any Group Member pursuant to Hedging Agreements entered into for nonspeculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guaranties or similar instruments
for the benefit of) any person providing workers compensation, health, disability or other employee benefits or property,
casualty or liability insurance to any Group Member, pursuant to reimbursement or indemnification obligations to such
person, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of any Loan Party to any other Group Member, and of any Subsidiary to any other Group Member (in
each case other than any Guaranty by a Loan Party or any other Subsidiary of Non- Recourse Seasoning Debt); provided
that any Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this clause
(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms reasonably satisfactory to
the Administrative Agent;
(f) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guaranties and
similar obligations, in each case provided in the ordinary course of business or consistent with past practice or industry
practices, including those incurred to secure health, safety and environmental obligations in the ordinary course of
business;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business or other cash management services, in each case
incurred in the ordinary course of business;
(h) (i) Indebtedness of a Subsidiary or Loan Party acquired after the Closing Date or a person merged or combined with
any Group Member after the Closing Date and Indebtedness otherwise incurred or assumed by any Group Member in
connection with the acquisition of all or substantially all of the assets of, or all or substantially all of the Equity Interests
(other than directors qualifying shares) not previously held by the Group Members in, or merger, consolidation or
amalgamation with, a person or a division or line of business of a person or a controlling interest in a person (or any
subsequent investment made in a person, division or line of business previously acquired in any such acquisition), where
such acquisition, merger or consolidation is not prohibited by this Agreement; and (ii) any Permitted Refinancing
Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by any Group Member prior
to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective
property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning
such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair,
replacement or improvement; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(j) (i) Indebtedness of any Group Member (including Guaranties by the Group Members (other than the Seasoning
Subsidiaries) of Non- Recourse Seasoning Debt) and Permitted Refinancing Indebtedness in respect thereof in an
aggregate principal amount for all Indebtedness incurred pursuant to this clause (j)(i) not to exceed $200,000,000 at any
time outstanding and (ii) Indebtedness of the Seasoning Subsidiaries consisting of Non- Recourse Seasoning Debt and any
Permitted Refinancing Indebtedness (without giving effect to the final parenthetical in clause (d) of the definition thereof)
in respect thereof;
(k) other Indebtedness of any Group Member, in an aggregate principal amount that at the time of, and after giving effect
to, the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to
this Section 6.01(k), would not exceed $200,000,000;
(l) [reserved];
(m) Guaranties (i) by any Group Member of any Indebtedness of Loan Party permitted to be incurred under this
Agreement, (ii) by any Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Loan
Party, (iii) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party, and
(iv) by any Loan Party of Indebtedness of Subsidiaries that are not Loan Parties incurred for working capital purposes in
the ordinary course of business on ordinary business terms; provided that Guaranties by any Loan Party under this
Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be
expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is
subordinated;
(n) Indebtedness arising from agreements of any Group Member providing for indemnification, adjustment of purchase
or acquisition price or similar obligations (including earn- outs), in each case, incurred or assumed in connection with
investments or the disposition of any business, assets, a Loan Party or a Subsidiary not prohibited by this Agreement,
other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a
Subsidiary for the purpose of financing such acquisition;
(o) Indebtedness in respect of letters of credit, bank guaranties, warehouse receipts or similar instruments issued to
support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the
ordinary course of business or consistent with past practice or industry practices;
(p) [reserved];
(q) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take- or- pay obligations contained in
supply arrangements, in each case, in the ordinary course of business;
(r) [reserved];
(s) (i) other Indebtedness so long as the Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to the
incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof) is not
greater than 4.00 to 1.00; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Loan Parties in an aggregate principal amount that at the time of, and after
giving effect to, the incurrence thereof, together with the aggregate principal amount of any other Indebtedness
outstanding pursuant to this clause (t), would not exceed $50,000,000;
(u) Indebtedness incurred in the ordinary course of business in respect of obligations of any Group Member to pay the
deferred purchase price of goods or services or progress payments in connection with such goods and services; provided
that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the
ordinary course of business and not in connection with the borrowing of money or any Hedging Agreements;
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of any Group
Member (or any direct or indirect parent thereof) incurred in the ordinary course of business;
(w) obligations in respect of Cash Management Agreements in the ordinary course of business;
(x) Refinancing Notes and any Permitted Refinancing Indebtedness incurred in respect thereof;
(y) (i) Indebtedness in an aggregate principal amount not to exceed at the time of incurrence an amount equal to the
amount determined pursuant to clause (i) of the definition of Incremental Amount at such time; provided that (x) the
incurrence of any Indebtedness for borrowed money pursuant to this clause (y)(i) shall be subject to the last paragraph of
this Section 6.01, and (y) there shall be no obligor in respect of such Indebtedness that is not a Loan Party; and (ii) any
Permitted Refinancing Indebtedness in respect thereof;
(z) (i) Indebtedness of any Loan Party under Back- to- Back Lending Facilities that at the time of, and after giving effect
to, the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to
this clause (z)(i), would not exceed $150,000,000; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) Indebtedness incurred on behalf of, or representing Guaranties of Indebtedness of, joint ventures in an aggregate
principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal
amount of any other Indebtedness outstanding pursuant to this clause (aa), would not exceed $50,000,000;
(bb) Indebtedness issued by any Group Member to, or Guaranties of any Indebtedness of, current or former officers,
directors and employees (and their respective estates, spouses or former spouses) of any Group Member, Public Company
or any of their respective Affiliates, in each case in the ordinary course of business;
(cc) Indebtedness consisting of obligations of any Group Member under deferred compensation or other similar
arrangements incurred by such Group Member;
(dd) Indebtedness of any Group Member to or on behalf of any joint venture (regardless of the form of legal entity) that
is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations
(including with respect to intercompany self- insurance arrangements) of the Group Members;
(ee) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter
of Credit; and
(ff) (i) all premiums (if any, including tender premiums), expenses, defeasance costs, interest (including post- petition
interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (ee)
above; and (ii) any Permitted Refinancing Indebtedness in respect thereof.
For purposes of determining compliance with this Section 6.01, the amount of any Indebtedness denominated in any
currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of such
Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) on or prior to
the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or
committed (in respect of revolving Indebtedness) after the Closing Date, on the date on which such Indebtedness was
incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided that, if such
Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (or in a different
currency from the Indebtedness being refinanced), and such refinancing would cause the applicable Dollar- denominated
restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing,
such Dollar- denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed (i) the outstanding or committed principal amount, as applicable, of such
Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums (including tender
premiums), defeasance costs and other costs and expenses incurred in connection with such refinancing.
Further, for purposes of determining compliance with this Section 6.01, (A) Indebtedness need not be permitted solely by
reference to one category of permitted Indebtedness described in Sections 6.01(a) through (ff) but may be permitted in
part under any combination thereof and (B) in the event that an item of Indebtedness (or any portion thereof) meets the
criteria of one or more of the categories of permitted Indebtedness described in Sections 6.01(a) through (ff), the Term
Facility Borrower shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of
Indebtedness (or any portion thereof) in any manner that complies with this Section 6.01 and will only be required to
include the amount and type of such item of Indebtedness (or any portion thereof) in one of the above clauses and such
item of Indebtedness shall be treated as having been incurred or existing pursuant to only one of such clauses; provided
that all Indebtedness under this Agreement outstanding on the Closing Date shall at all times be deemed to have been
incurred pursuant to clause (b) of this Section 6.01. In addition, with respect to any Indebtedness that was permitted to be
incurred hereunder on the date of such incurrence, any Increased Amount of such Indebtedness shall also be permitted
hereunder after the date of such incurrence.
With respect to any Indebtedness for borrowed money described in Section 6.01(y)(i), (A) the stated maturity date of such
Indebtedness shall be no earlier than the latest Maturity Date as in effect at the time such Indebtedness is incurred and (B)
except in respect of any such Indebtedness incurred under any revolving credit facility, the Weighted Average Life to
Maturity of such Indebtedness shall be no shorter than the remaining Weighted Average Life to Maturity of the Term B
Loans.
Section 6.02 Liens. Create, incur, assume or permit to exist any Lien on any property or assets (including stock or other
securities of any person) of any Group Member at the time owned by it or on any income or revenues or rights in respect
of any thereof, except the following (collectively, Permitted Liens):
(a) Liens on property or assets of any Group Member existing on the Closing Date (or created following the Closing
Date pursuant to agreements in existence on the Closing Date requiring the creation of such Liens) and set forth on
Schedule 6.02(a), and any modifications, replacements, renewals or extensions thereof; provided that such Liens shall
secure only those obligations that they secure on the Closing Date (and any Permitted Refinancing Indebtedness in respect
of such obligations permitted by Section 6.01(a)) and shall not subsequently apply to any other property or assets of any
Group Member other than (A) after- acquired property that is affixed or incorporated into the property covered by such
Liens and (B) proceeds and products thereof;
(b) any Lien created under the Loan Documents;
(c) any Lien on any property or asset of any Group Member securing Indebtedness or Permitted Refinancing
Indebtedness permitted by Section 6.01(h); provided that such Lien (i) does not apply to any other property or assets of the
Group Members not securing such Indebtedness at the date of the acquisition of such property or asset and accessions and
additions thereto and proceeds and products thereof (other than after- acquired property subjected to a Lien securing
Indebtedness and other obligations incurred prior to such date and which Indebtedness and other obligations are permitted
hereunder that require a pledge of after acquired property, it being understood that such requirement shall not be permitted
to apply to any property to which such requirement would not have applied but for such acquisition); and (ii) such Lien is
not created in contemplation of or in connection with such acquisition;
(d) Liens for Taxes, assessments or other governmental charges or levies not yet delinquent by more than 30 days or that
are being contested in good faith;
(e) Liens imposed by law, such as landlords, carriers, warehousemens, mechanics, materialmens, repairmens,
suppliers, construction or other like Liens, securing obligations that are not overdue by more than 30 days or that are
being contested in good faith by appropriate proceedings and in respect of which, if applicable, an applicable Group
Member shall have set aside on its books reserves in accordance with GAAP;
(f) (i) pledges and deposits and other Liens made in the ordinary course of business in compliance with the Federal
Employers Liability Act or any other workers compensation, unemployment insurance and other social security laws or
regulations and deposits securing liability to insurance carriers under insurance or self- insurance arrangements in respect
of such obligations and (ii) pledges and deposits and other Liens securing liability for reimbursement or indemnification
obligations of (including obligations in respect of letters of credit or bank guaranties for the benefit of) insurance carriers
providing property, casualty or liability insurance to any Group Member;
(g) deposits and other Liens to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other
than Capitalized Lease Obligations), statutory obligations, surety and appeal bonds, performance and return of money
bonds, bids, leases, government contracts, trade contracts, agreements with utilities, and other obligations of a like nature
(including letters of credit in lieu of any such bonds or to support the issuance thereof) incurred in the ordinary course of
business, including those incurred to secure health, safety and environmental obligations in the ordinary course of
business;
(h) zoning restrictions, easements, survey exceptions, trackage rights, leases (other than Capitalized Lease Obligations),
licenses, special assessments, rights- of- way, covenants, conditions, restrictions and declarations on or with respect to the
use of Real Property, servicing agreements, development agreements, site plan agreements and other similar
encumbrances incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and
that, in the aggregate, do not interfere in any material respect with the ordinary conduct of the business of any Group
Member;
(i) Liens securing Indebtedness permitted by Section 6.01(i); provided that such Liens do not apply to any property or
assets of any Group Member other than the property or assets acquired, leased, constructed, replaced, repaired or
improved with such Indebtedness (or the Indebtedness Refinanced thereby), and accessions and additions thereto,
proceeds and products thereof and customary security deposits; provided that individual financings provided by one lender
may be cross- collateralized to other financings provided by such lender (and its Affiliates) and incurred pursuant to
Section 6.01(i);
(j) Liens arising out of capitalized lease transactions, so long as such Liens attach only to the property sold and being
leased in such transaction and any accessions and additions thereto or proceeds and products thereof and related property;
(k) Liens securing judgments that do not constitute an Event of Default;
(l) Liens securing obligations in respect of Specified Hedge Agreements and Specified Cash Management Agreements
entered into in the ordinary course of business and (in the case of any such Specified Hedge Agreements) for nonspeculative purposes;
(m) any interest or title of a lessor or sublessor under any leases or subleases entered into by any Group Member in the
ordinary course of business;
(n) Liens that are contractual rights of setoff (i) relating to the establishment of depository relations with banks and
other financial institutions not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposits,
sweep accounts, reserve accounts or similar accounts of any Group Member to permit satisfaction of overdraft or similar
obligations incurred in the ordinary course of business of such Group Member, including with respect to credit card
charge- backs and similar obligations, or (iii) relating to purchase orders and other agreements entered into with
customers, suppliers or service providers of any Group Member in the ordinary course of business;
(o) Liens (i) arising solely by virtue of any statutory or common law provision relating to bankers liens, rights of setoff
or similar rights or (ii) encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching
to brokerage accounts incurred in the ordinary course of business and not for speculative purposes;
(p) Liens securing obligations in respect of trade- related letters of credit, bank guaranties or similar obligations
permitted under Section 6.01(f) or (o) and covering the property (or the documents of title in respect of such property)
financed by such letters of credit, bank guaranties or similar obligations and the proceeds and products thereof;
(q) leases or subleases, licenses or sublicenses (including with respect to intellectual property) granted to others in the
ordinary course of business not interfering in any material respect with the business of the Group Members, taken as a
whole;
(r) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(s) Liens solely on any cash earnest money deposits made any Group Member in connection with any letter of intent or
purchase agreement in respect of any investment permitted hereunder;
(t) (i) Liens with respect to property or assets of any Subsidiary that is not a Loan Party securing obligations of a
Subsidiary that is not a Loan Party permitted under Section 6.01 and (ii) Liens with respect to property or assets of any
person securing Indebtedness permitted under Section 6.01(aa);
(u) Liens on any amounts held by a trustee under any indenture or other debt agreement issued in escrow pursuant to
customary escrow arrangements pending the release thereof, or under any indenture or other debt agreement pursuant to
customary discharge, redemption or defeasance provisions;
(v) the prior rights of consignees and their lenders under consignment arrangements entered into in the ordinary course of
business;
(w) agreements to subordinate any interest of any Group Member in any accounts receivable or other proceeds arising
from inventory consigned by such Group Member pursuant to an agreement entered into in the ordinary course of
business;
(x) Liens arising from precautionary Uniform Commercial Code financing statements regarding operating leases or other
obligations not constituting Indebtedness;
(y) Liens on Equity Interests in joint ventures (i) securing obligations of such joint venture or (ii) pursuant to the relevant
joint venture agreement or arrangement;
(z) Liens on securities that are the subject of repurchase agreements constituting Permitted Investments under clause (c)
of the definition thereof;
(aa) Liens in respect of nonrecourse receivables sales or factoring transactions that extend only to the receivables and
associated ancillary rights subject thereto;
(bb) Liens securing insurance premiums financing arrangements; provided that such Liens are limited to the applicable
unearned insurance premiums;
(cc) in the case of Real Property that constitutes a leasehold interest, any Lien to which the fee simple interest (or any
superior leasehold interest) is subject;
(dd) Liens securing Indebtedness or other obligation (i) of any Group Member in favor of any Loan Party and (ii) of any
Subsidiary that is not Loan Party in favor of any Subsidiary that is not a Loan Party;
(ee) Liens on not more than $50,000,000 of deposits securing Hedging Agreements entered into for nonspeculative
purposes;
(ff) Liens on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of
credit, bank guaranty or bankers acceptance issued or created for the account of any Group Member in the ordinary
course of business; provided that such Lien secures only the obligations of such Group Member in respect of such letter of
credit, bank guaranty or bankers acceptance to the extent permitted under Section 6.01;
(gg) Liens to secure any Indebtedness issued or incurred to Refinance (or successive Indebtedness issued or incurred for
subsequent Refinancings) as a whole, or in part, any Indebtedness secured by any Lien permitted by this Section 6.02;
provided, however, that (x) such new Lien shall be limited to all or part of the same type of property that secured the
original Lien (plus improvements on and accessions to such property, proceeds and products thereof, customary security
deposits and any other assets pursuant to after- acquired property clauses to the extent such assets secured (or would have
secured) the Indebtedness being Refinanced), (y) the Indebtedness secured by such Lien at such time is not increased to
any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater,
committed amount of the applicable Indebtedness at the time the original Lien became a Lien permitted hereunder, (B)
unpaid accrued interest and premium (including tender premiums) and (C) an amount necessary to pay any associated
underwriting discounts, defeasance costs, fees, commissions and expenses, and (z) on the date of the incurrence of the
Indebtedness secured by such Liens, the grantors of any such Liens shall be no different from the grantors of the Liens
securing the Indebtedness being Refinanced or grantors that would have been obligated to secure such Indebtedness or a
Loan Party;
(hh) [reserved]; and
(ii) other Liens with respect to property or assets of any Group Member securing obligations in an aggregate principal
amount that at the time of, and after giving effect to, the incurrence of such Liens, would not exceed $200,000,000.
For purposes of determining compliance with this Section 6.02(a), a Lien securing an item of Indebtedness need not be
permitted solely by reference to one category of permitted Liens described in Sections 6.02(a) through (ii) but may be
permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness (or any
portion thereof) meets the criteria of one or more of the categories of permitted Liens described in Sections 6.02(a)
through (ii), the Term Facility Borrower shall, in its sole discretion, classify or reclassify, or later divide, classify or
reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this
covenant and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by
such Lien in one of the above clauses and such Lien securing such item of Indebtedness will be treated as being incurred
or existing pursuant to only one of such clauses. In addition, with respect to any Lien securing Indebtedness that was
permitted to secure such Indebtedness at the time of the incurrence of such Indebtedness, such Lien shall also be permitted
to secure any Increased Amount of such Indebtedness.
Section 6.03 Fundamental Changes; Sales of Material Assets. Enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or dispose of all or any substantial part of its
property or business or any material assets (determined by reference to the combined financial condition of the Group
Members), except that:
(a) any Group Member may dispose of any property (including any investment) in the ordinary course of business and
consistent with past practices or so long as such disposition would not reasonably be expected to have a Material Adverse
Effect;
(b) any Group Member (other than the Term Facility Borrower or any Revolving Facility Borrower with any Obligations
outstanding) may liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) if the effect thereof is a
disposition of its assets to another Group Member, or dispose of all or any part of its property or business so long as such
disposition does not have a Material Adverse Effect, provided that, in the case of any liquidation, winding up or
dissolution of any Loan Party, the resulting disposition of its assets is to another Loan Party;
(c) any Group Member may dispose of any restricted depository units representing ownership interests in common units
of AP Alternative Assets, L.P.; and
(d) any Group Member may Dispose of the G- 4 aircraft or its owner.
Section 6.04 Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of
property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate
(other than any Group Member or any AGM Fund) unless such transaction (a) is otherwise expressly permitted by this
Agreement or in the ordinary course of business and consistent with past practices generally, (b) is upon fair and
reasonable terms no less favorable to the relevant Group Member than it would obtain in a comparable arms length
transaction with a person that is not an Affiliate or (c) would not reasonably be expected to have a Material Adverse
Effect.
Business of Group Members
Section 6.05 Amendment to Management Agreements. Amend, supplement, waive, terminate or otherwise modify any
material management agreement with any AGM Fund if such amendment, supplement, waiver, termination or
modification would reasonably be expected to have a Material Adverse Effect (it being agreed and understood that any
amendment or other modification of such an agreement to (x) achieve non- consolidation for financial reporting purposes
of the AGM Funds with the Group Members or (y) provide investors in any AGM Fund, and/or independent board
members of any AGM Fund, with the power to cause a liquidation of such AGM Fund and/or the power to remove a
Group Member as general partner of manager of such AGM Fund, shall be permitted).
Section 6.06 Financial Covenants. Permit, as of the last day of any fiscal quarter (beginning with the fiscal quarter
ending March 31, 2014), (a) the aggregate Assets Under Management to be less than $40,000,000,000 or (b) the Net
Leverage Ratio to exceed 4.00 to 1.00 (the financial covenant set forth in this clause (b) of this Section 6.07, the
Financial Performance Covenant).
ARTICLE VII
Events of Default
Section 7.01 Events of Default. In case of the happening of any of the following events (each, an Event of Default):
(jj) any Borrower shall fail to pay (i) any principal of any of its Loans when due in accordance with the terms hereof or
(ii) any interest on any of its Loans, any reimbursement with respect to any applicable L/C Disbursement or any other
amount payable hereunder or under any other Loan Document, within five days after any such interest, reimbursement or
other amount becomes due in accordance with the terms hereof; or
(kk) any representation or warranty made or deemed made by any Loan Party (which shall be deemed to include, in the
case of any limited partnership, any representation or warranty made by its general partner) herein or in any other Loan
Document or that is contained in any certificate, document or financial or other statement furnished by it (or by its general
partner) at any time under or in connection with this Agreement or any such other Loan Document shall prove to have
been inaccurate in any material respect on or as of the date made or deemed made; or
(ll) any Loan Party shall default in the observance or performance of (A) clause (i) or (ii) of Section 5.03(a), Section 5.07
or Section 5.08, or (B) Article VI; or
(mm) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement
or any other Loan Document (other than as provided in clauses (a) through (c) of this Section 7.01), and such default shall
continue unremedied for a period of 30 days (or 60 days if such default results solely from the failure of a Subsidiary that
is not a Loan Party to duly observe or perform any such covenant, condition or agreement) after notice to the Term
Facility Borrower from the Administrative Agent or the Required Lenders; or
(nn) any Group Member shall (i) default in making any payment of any principal of any Material Indebtedness on the
scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guaranty) to become payable; provided that this clause (e) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness if such sale or
transfer is permitted hereunder and under the documents providing for such Indebtedness; or
(oo) (i) any Borrower or material Group Member shall commence any case, proceeding or other action under any
existing or future Debtor Relief Laws seeking (A) to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, windingup, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B) appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part of its assets, or any Borrower or material Group
Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any
Borrower or material Group Member any case, proceeding or other action of a nature referred to in clause (i) above that
(A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed or
undischarged for a period of 60 days; or (iii) there shall be commenced against any Borrower or material Group Member
any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Borrower
or material Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Borrower or material Group Member
shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or
(pp) any material provision of the guaranty contained in Article X of this Agreement shall cease, for any reason, to be in
full force and effect with respect to any Guarantor, or any Loan Party or any affiliate of any Loan Party shall so assert; or
(qq) there shall have occurred a Change in Control,
then, and in any such event, (A) if such event is an Event of Default specified in subclause (i) or (ii) of clause (f) above
with respect to any Borrower or any material Group Member, automatically the Commitments shall immediately
terminate, the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan
Documents shall immediately become due and payable, and the Administrative Agent shall be deemed to have made a
demand for Letter of Credit Support pursuant to Section 2.05(j), and (B) if such event is any other Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Term Facility Borrower and any other applicable Borrower, terminate the
Commitments, declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents to be due and payable, whereupon the same shall immediately become due and payable, and
make a demand for Letter of Credit Support pursuant to Section 2.05(j). Except as expressly provided above in this
Section 7.01, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the
Borrowers.
Section 7.02 Treatment of Certain Payments. (a) Any amount received by the Administrative Agent from any Group
Member following any acceleration of the Loan Obligations under this Agreement or any Event of Default specified in
subclause (i) or (ii) of clause (f) of Section 7.01, in each case that is continuing, shall be applied: (i) first, to the payment
of all reasonable and documented outof- pocket costs and expenses and indemnification amounts then due to the
Administrative Agent from the Borrowers and all fees owed to them in connection with the collection or sale or otherwise
in connection with this Agreement or any other Loan Document, including all court costs and reasonable and documented
fees and expenses of its agents and legal counsel, the repayment of all advances made by the Administrative Agent under
this Agreement or any other Loan Document on behalf of any Loan Party and any other reasonable and documented costs
or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document
in its capacity as such, (ii) second, towards payment in full of interest and fees then due from the Borrowers hereunder in
respect of the Senior Obligations, ratably among the parties entitled thereto in accordance with the amounts of interest and
fees then due to such parties, (iii) third, towards payment of principal of Swingline Loans and unreimbursed L/C
Disbursements then due from the Borrowers hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed L/C Disbursements then due to such parties, (iv) fourth, towards payment in full of
other Senior Obligations then due from the Loan Parties hereunder, ratably among the parties entitled thereto in
accordance with the amounts of such Senior Obligations then due to such parties, (v) fifth, towards payment in full of the
Subordinated Obligations then due from the Loan Parties hereunder, ratably among the parties entitled thereto in
accordance with the amounts of such Subordinated Obligations then due to such parties and (vi) sixth, the balance, if any,
after all of the Obligations have been paid in full, to the Borrowers or as otherwise required by Requirements of Law.
(b) Any amounts of Collateral received by the Administrative Agent following any acceleration of the Loan Obligations
under this Agreement or any Event of Default specified in subclause (i) or (ii) of clause (f) of Section 7.01, in each case
that is continuing, shall be applied: (i) first, towards payment in full of interest and fees then due from the Borrowers
hereunder in respect of the Senior Obligations secured by such Collateral, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, (ii) second, towards payment of principal of
Swingline Loans and unreimbursed L/C Disbursements then due from the Borrowers hereunder and in respect of which
such Collateral was delivered hereunder, ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed L/C Disbursements then due to such parties, (iii) third, towards payment in full of other Senior
Obligations then due from the Loan Parties hereunder in respect of which such Collateral has been delivered hereunder,
ratably among the parties entitled thereto in accordance with the amounts of such Senior Obligations then due to such
parties, (iv) fourth, towards payment in full of the Subordinated Obligations then due from the Loan Parties hereunder in
respect of which such Collateral has been delivered hereunder, ratably among the parties entitled thereto in accordance
with the amounts of such Senior Obligations then due to such parties, (v) fifth, towards payment in full of other
Obligations then due from the Loan Parties hereunder, ratably among the parties entitled thereto in accordance with the
amounts of such Obligations then due to such parties, and (v) fifth, the balance, if any, after all of the Obligations have
been paid in full, to the Borrowers or as otherwise required by Requirements of Law.
Section 7.03 Right to Cure. Notwithstanding anything to the contrary contained in Section 7.01, in the event that the
Loan Parties fail (or, but for the operation of this Section 7.03, would fail) to comply with the requirements of the
Financial Performance Covenant, until the expiration of the tenth Business Day subsequent to the date the certificate
calculating such Financial Performance Covenant is required to be delivered pursuant to Section 5.02(a)(ii), any of the
Public Company, Parent Entities or Group Members shall have the right to issue equity securities (other than Disqualified
Stock) for cash to persons who are not Group Members or otherwise receive cash contributions to the capital of such
entities from persons who are not Group Members, and, in each case, to contribute any such cash to the capital of any
Borrower (collectively, the Cure Right), and upon the receipt by such Borrower of such cash (the Cure Amount),
pursuant to the exercise of the Cure Right, the Financial Performance Covenant shall be recalculated giving effect to a pro
forma adjustment by which EBITDA shall be increased with respect to the applicable fiscal quarter and any four- quarter
period that contains such quarter, solely for the purpose of measuring the Financial Performance Covenant and not for any
other purpose under this Agreement, by an amount equal to the Cure Amount; provided that (i) in each four consecutive
fiscal quarter period there shall be at least two fiscal quarters in which a Cure Right is not exercised, (ii) a Cure Right shall
not be exercised more than five times during the term of this Agreement and (iii) for purposes of this Section 7.03, the
Cure Amount shall be no greater than the amount required for purposes of complying with the Financial Performance
Covenant. If, after giving effect to the adjustments referred to in this Section 7.03, the Loan Parties shall then be in
compliance with the requirements of the Financial Performance Covenant, the Loan Parties shall be deemed to have
satisfied the requirements of the Financial Performance Covenant as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the
Financial Performance Covenant that had occurred shall be deemed cured for the purposes of this Agreement. It is
understood and agreed that none of the Administrative Agent, the Lenders and the Issuing Banks shall have the right to
exercise any remedy in connection with the Loan Parties failure to comply with the Financial Performance Covenant until
the expiration of the ten- Business Day period referred to above.
ARTICLE VIII
The Administrative Agent

Section 8.01 Appointment. Each Lender (in its capacities as a Lender and the Swingline Lender (if applicable)) and each
Issuing Bank (in such capacity) hereby irrevocably designate and appoint the Administrative Agent as the agent of such
Lender and such Issuing Bank under this Agreement and the other Loan Documents and each such Lender and such
Issuing Bank irrevocably authorize the Administrative Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any
jurisdiction other than the United States of America, each of the Lenders and the Issuing Banks hereby grants to the
Administrative Agent any required powers of attorney to execute any Loan Document governed by the laws of such
jurisdiction on such Lenders or Issuing Banks behalf. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative
Agent.
Section 8.02 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the
other Loan Documents (including for purposes of holding or enforcing any Lien on any Collateral by or through agents,
employees or attorneys- in- fact and shall be entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys- in- fact selected by it with reasonable care. The Administrative Agent may also from time to time,
when it deems it to be necessary or desirable, appoint one or more trustees, co- trustees, collateral co- agents, collateral
subagents or attorneys- in- fact (each, a Subagent) with respect to any Collateral; provided that no such Subagent shall
be authorized to take any action with respect to any Cash Collateral (including, without limitation, any cash collateral
provided pursuant to Section 2.11(b)) or any Letter of Credit Support unless and except to the extent expressly authorized
in writing (a) with respect to any Letter of Credit Support relating to any Continuing Letter of Credit, by the applicable
Issuing Bank and (b) in all other cases, by the Administrative Agent. Should any instrument in writing from any Borrower
or any other Loan Party be required by any Subagent so appointed by the Administrative Agent to more fully or certainly
vest in and confirm to such Subagent such rights, powers, privileges and duties, such Borrower and such other Loan Party
shall execute, acknowledge and deliver any and all such instruments promptly upon request by the Administrative Agent.
If any Subagent, or successor thereto, shall become incapable of acting, resign or be removed, all rights, powers,
privileges and duties of such Subagent, to the extent permitted by law, shall automatically vest in and be exercised by the
Administrative Agent until the appointment of a new Subagent. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent, attorney- in- fact or Subagent that it selects in accordance with the foregoing
provisions of this Section 8.02 in the absence of the Administrative Agents gross negligence or willful misconduct.
Section 8.03 Exculpatory Provisions. None of the Administrative Agent, its Affiliates or any of their respective officers,
directors, employees, agents, attorneys- in- fact or affiliates, shall be (a) liable for any action lawfully taken or omitted to
be taken by it or such person under or in connection with this Agreement or any other Loan Document (except to the
extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such persons own gross negligence or willful misconduct) or (b) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer
thereof or (in the case of any limited partnership) of its general partner, as applicable, contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for
any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books
or records of any Loan Party. The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative
Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has
occurred and is continuing, and (b) the Administrative Agent shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall be liable for the failure to disclose, any information relating to the
Borrowers or any of its Affiliates that is communicated to or obtained by the Administrative Agent or any of its Affiliates
in any capacity. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default
unless and until written notice describing such Default or Event of Default is given to the Administrative Agent by any
Borrower, a Lender or Issuing Bank. The Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms
or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Loan Documents,
(v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
Section 8.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting or other distribution) or conversation
believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper person, and shall not incur any liability for relying thereon. In determining compliance with any
condition hereunder to any Credit Event, that by its terms must be fulfilled to the satisfaction of a Lender or any Issuing
Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or Issuing Bank unless the
Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank prior to such Credit
Event. The Administrative Agent may consult with legal counsel (including counsel to the Borrowers), independent
accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence
of the Required Lenders (or, if so specified by this Agreement, all or other Lenders) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of
the Required Lenders (or, if so specified by this Agreement, all or other Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.
Section 8.05 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent has received written notice from a Lender
or any Borrower, describing such Default or Event of Default and stating that such notice is a notice of default. In the
event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this Agreement, all or other Lenders); provided that,
unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.
Section 8.06 Non- Reliance on the Administrative Agent and Other Lenders. Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys- in- fact or affiliates have
made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of, and investigation into the business, operations,
property, financial and other condition and creditworthiness of, the Loan Parties and their affiliates and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan
Party that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents,
attorneys- in- fact or affiliates.
Section 8.07 Indemnification. The Lenders agree to indemnify the Administrative Agent and the Revolving Facility
Lenders agree to indemnify each Issuing Bank, in each case in its capacity as such (to the extent not reimbursed by the
Borrowers and without limiting the obligation of the Borrowers to do so), in the amount of its pro rata share (based on its
aggregate Revolving Facility Credit Exposure and, in the case of the indemnification of the Administrative Agent,
outstanding Term Loans and unused Commitments hereunder; provided that the aggregate principal amount of Swingline
Loans owing to the Swingline Lender and of L/C Disbursements owing to any Issuing Bank shall be considered to be
owed to the Revolving Facility Lenders ratably in accordance with their respective Revolving Facility Credit Exposure)
(determined at the time such indemnity is sought), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or asserted against the Administrative
Agent or such Issuing Bank in any way relating to or arising out of the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Administrative Agent or such Issuing Bank under or in connection
with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have resulted from the Administrative Agents or
such Issuing Banks, as applicable, gross negligence or willful misconduct. The failure of any Lender to reimburse the
Administrative Agent or any Issuing Bank, as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lenders to the Administrative Agent or such Issuing Bank, as the case may be, as provided
herein shall not relieve any other Lender of its obligation hereunder to reimburse the Administrative Agent or such Issuing
Bank, as the case may be, for its ratable share of such amount, but no Lender shall be responsible for the failure of any
other Lender to reimburse the Administrative Agent or such Issuing Bank, as the case may be, for such other Lenders
ratable share of such amount. The agreements in this Section 8.07 shall survive the payment of the Loans and all other
amounts payable hereunder.
Section 8.08 Agent in Its Individual Capacity. The Administrative Agent and its affiliates may make loans to, accept
deposits from, and generally engage in any kind of business with any Loan Party as though the Administrative Agent were
not the Administrative Agent. With respect to its Loans made or renewed by it and with respect to any Letter of Credit
issued, or Letter of Credit or Swingline Loan participated in, by it, the Administrative Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms Lender and Lenders shall include the Administrative Agent in its
individual capacity.
Section 8.09 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 10
days notice to the Lenders and the Term Facility Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 7.01(a)
or (f) shall have occurred and be continuing) be subject to approval by the Term Facility Borrower (which approval shall
not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties
of the Administrative Agent, and the term Administrative Agent shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agents rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement or any holders of the Loans. If no successor agent has accepted appointment as Administrative
Agent by the date that is 10 days following a retiring Administrative Agents notice of resignation, the retiring
Administrative Agents resignation shall nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agents resignation as Administrative Agent, the
provisions of this Section 8.09 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
Section 8.10 Joint Bookrunners, Joint Lead Arrangers and Syndication Agents. Notwithstanding any other provision of
this Agreement or any provision of any other Loan Document, each of the persons named on the cover page hereof as
Joint Bookrunners, Joint Lead Arrangers or Syndication Agent is named as such for recognition purposes only, and in its
capacity as such shall have no rights, duties, responsibilities or liabilities with respect to this Agreement or any other Loan
Document, except that each such person and its Affiliates shall be entitled to the rights expressly stated to be applicable to
them in Section 9.05 and 9.17 (subject to the applicable obligations and limitations as set forth therein).
Section 8.11 Loan Documents. The Lenders authorize the Administrative Agent to release any collateral (including any
Letter of Credit Support) or/and Guarantors in accordance with Section 9.18.
Section 8.12 Right to Realize on Collateral and Enforce Guaranties. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding
relative to any Loan Party, (i) the Administrative Agent (irrespective of whether the principal of any Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise (A) to file and prove a claim for the whole amount of the principal and interest owing and unpaid
in respect of any or all of the Obligations that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent and any
Subagents allowed in such judicial proceeding, and (B) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and (ii) any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank
to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Banks, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel,
and any other amounts due the Administrative Agent under the Loan Documents. Nothing contained herein shall be
deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or
Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of
any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or
Issuing Bank in any such proceeding.
Anything contained in any of the Loan Documents to the contrary notwithstanding, the Loan Parties, the Administrative
Agent and each Lender Party hereby agree that no Lender Party individually shall have any right individually to realize
upon any Collateral (including any Letter of Credit Support) or to enforce any Guaranty, it being understood and agreed
that all powers, rights and remedies hereunder may be exercised solely by the Administrative Agent, on behalf of all
Lender Parties and in accordance with the terms hereof, and all powers, rights and remedies under the Loan Documents
may be exercised solely by the Administrative Agent, on behalf of all Lender Parties and in accordance with the terms
hereof and thereof (provided, however, that, with respect to any Letter of Credit Support relating to any Continuing Letter
of Credit, the applicable Issuing Bank shall have the right to enforce or realize upon such Letter of Credit Support).
Section 8.13 Withholding Tax. To the extent required by any applicable Requirement of Law, the Administrative Agent
may withhold from any payment to any Lender or Issuing Bank an amount equivalent to any applicable withholding Tax.
If the Internal Revenue Service or any authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold Tax from amounts paid to or for the account of any Lender or Issuing
Bank for any reason (including because the appropriate form was not delivered, was not properly executed, or because
such Lender failed to notify the Administrative Agent of a change in circumstances that rendered the exemption from, or
reduction of, withholding Tax ineffective), whether or not such Taxes were correctly or legally imposed or asserted by
such authority, such Lender or Issuing Bank shall indemnify the Administrative Agent (to the extent that the
Administrative Agent has not already been reimbursed by any applicable Loan Party and without limiting the obligation of
any applicable Loan Party to do so) fully for all amounts paid, directly or indirectly, by the Administrative Agent as Tax
or otherwise, including penalties, fines, additions to Tax and interest, together with all expenses incurred, including legal
expenses, allocated staff costs and any out of pocket expenses. Each Lender and Issuing Bank hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or Issuing Bank under
this Agreement or any other Loan Document against any amount due to the Administrative Agent under this Section 8.13.
A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. The agreements set forth in this Section 8.13 shall survive the resignation and/or
replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or Issuing Bank,
the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.
ARTICLE IX
Miscellaneous
Section 9.01 Notices; Communications. (%3) Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in Section 9.01(b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by facsimile or other electronic means as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:
(i) if to any Loan Party, the Administrative Agent, the Issuing Bank as of the Closing Date or the Swingline Lender, to
the address, facsimile number, electronic mail address or telephone number specified for such person on Schedule 9.01;
and
(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire.
(e) Notices and other communications to the Lenders and the Issuing Banks hereunder may be delivered or furnished by
electronic communication (including electronic mail and Internet or intranet websites) pursuant to procedures approved by
the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to
Article II if such Lender or Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication. The Administrative Agent or the Borrowers may, in
their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant
to procedures approved by them, provided that approval of such procedures may be limited to particular notices or
communications.
(f) Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have
been given when received. Notices sent by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in
Section 9.01(b) above shall be effective as provided in such Section 9.01(b).
(g) Any party hereto may change its address or facsimile number for notices and other communications hereunder by
notice to the other parties hereto.
(h) Documents required to be delivered pursuant to Section 5.01 and 5.02 (to the extent any such documents are included
in materials otherwise filed with the SEC) may be delivered electronically (including as set forth in Section 9.17) and if so
delivered, shall be deemed to have been delivered on the date (i) on which any Borrower posts such documents, or
provides a link thereto, on such Borrowers website on the Internet at the website address listed on Schedule 9.01, or
(ii) on which such documents are posted on such Borrowers behalf on an Internet or intranet website, if any, to which
each Lender and the Administrative Agent have access (whether a commercial, third- party website or whether sponsored
by the Administrative Agent); provided that (A) the Term Facility Borrower shall deliver paper copies of such documents
to the Administrative Agent or any Lender that requests any Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such Lender, and (B) the Term Facility Borrower
or any other Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such
documents and provide to the Administrative Agent, by electronic mail, electronic versions (i.e., soft copies) of such
documents. Except for such certificates required by Section 5.02, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility
to monitor compliance by any Borrower with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.
Section 9.02 Survival of Agreement. All covenants, agreements, representations and warranties made by the Loan Parties
herein, in the other Loan Documents and in the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders
and each Issuing Bank and shall survive the making by the Lenders of the Loans and the execution and delivery of the
Loan Documents and the issuance of the Letters of Credit, regardless of any investigation made by such persons or on
their behalf, and shall continue in full force and effect until the Termination Date. Without prejudice to the survival of any
other agreements contained herein, indemnification and reimbursement obligations contained herein (including pursuant
to Sections 2.15, 2.16, 2.17 and 9.05) shall survive the Termination Date.
Section 9.03 Binding Effect. This Agreement shall become effective when it shall have been executed by each Loan
Party and the Administrative Agent and when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of each Loan Party, the Administrative Agent, each Issuing Bank and each Lender, and their respective permitted
successors and assigns.
Section 9.04 Successors and Assigns. (%3) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of any
Issuing Bank that issues any Letter of Credit), except that (i) no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer
by such Loan Party without such consent shall be null and void) (it being understood that any Borrower may discontinue
its existence to the extent not prohibited by Section 6.03) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 9.04. Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any person (other than the parties hereto, their respective successors and assigns permitted
hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in
clause (c) of this Section 9.04), and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, each Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement or the other Loan Documents.
(a) (%4) Subject to the conditions set forth in subclause (ii) below, any Lender may assign to one or more assignees
(each, an Assignee) all or a portion of its rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it) with the prior written consent of (A) with respect to any assignment
of any Term Facility Commitment or any Term Loan (other than an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund), the Term Facility Borrower and the Administrative Agent (in each case, such consent not to be
unreasonably withheld or delayed) (provided that (x) such consent of the Term Facility Borrower shall not be required if
an Event of Default under Section 7.01(a) or (f) has occurred and is continuing and (y) such consent of the Administrative
Agent shall not be required in connection with any assignment to an Affiliate Lender in compliance with the provisions of
Section 9.04(i)) and (B) with respect to any assignment of any Revolving Facility Commitment or any Revolving Facility
Loan, (x) (other than an assignment to a Lender, an Affiliate of a Lender or an Approved Fund), the applicable Revolving
Facility Borrower (provided that such consent of the applicable Revolving Facility Borrower shall not be required if an
Event of Default under Section 7.01(a) or (f) has occurred and is continuing) and (y) the Administrative Agent, the
Swingline Lender and each Issuing Bank (in the case of each of clauses (x) and (y) above, such consent not to be
unreasonably withheld or delayed); provided that notwithstanding anything herein to the contrary, no assignment of any
Commitment or any Loan shall be permitted hereunder without the prior written consent of all Borrowers (in their sole
and absolute discretion) if, after giving effect to such assignment, (x) any Lender and its Affiliates and related Approved
Funds (collectively) would hold directly greater than 15% of the sum of all Loans (other than Swingline Loans)
outstanding, all Revolving L/C Exposures, all Swingline Exposures and all Available Unused Commitments or (y) the
Designated Lenders (collectively) would hold less than 51% of the sum of all Loans (other than Swingline Loans and any
Loans that constitute Subordinated Obligations) outstanding, all Revolving L/C Exposures, all Swingline Exposures and
all Available Unused Commitments; provided further that each Borrower shall be deemed to have consented to any
assignment of the Term Loans unless it shall have objected thereto by written notice to the Administrative Agent within
10 Business Days after having received notice thereof.
(iii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or an Affiliate Lender or
an assignment of the entire remaining amount of the assigning Lenders Commitments or Loans under any Facility, the
amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date
on which the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $1,000,000 (or $5,000,000 in the case of Revolving Facility Loans or Revolving Facility Commitments),
unless each of the applicable Borrower and the Administrative Agent otherwise consent; provided that such amount shall
be aggregated in respect of each Lender and its Affiliates or Approved Funds (with simultaneous assignments to or by two
or more Related Funds shall be treated as one assignment), if any; provided further that no such consent of any Borrower
shall be required if an Event of Default under Section 7.01(a) or (f) shall have occurred and be continuing;
(B) the parties to each assignment shall (1) execute and deliver to the Administrative Agent an Assignment and
Acceptance via an electronic settlement system acceptable to the Administrative Agent or (2) if previously agreed with the
Administrative Agent, manually execute and deliver to the Administrative Agent an Assignment and Acceptance, in each
case together with a processing and recordation fee of $3,500 (which fee may be waived or reduced in the discretion of the
Administrative Agent);
(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire
and any tax forms required to be delivered pursuant to Section 2.17; and
(D) the Assignee shall not be a Borrower or any of its Affiliates or Subsidiaries except in accordance with Section 9.04(i)
and Section 9.21.
For the purposes of this Section 9.04, Approved Fund, with respect to a Lender or a Participant, means any person
(other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course and that is administered or managed by (a) such Lender or such Participant,
respectively, (b) an Affiliate of such Lender or such Participant, respectively, or (c) an entity or an Affiliate of an entity
that administers or manages such Lender or such Participant, respectively. Notwithstanding the foregoing or anything to
the contrary herein, no Lender shall be permitted to assign or transfer any portion of its rights and obligations under this
Agreement to (A) any Ineligible Institution, (B) any Defaulting Lender or any of the Subsidiaries, or any person who,
upon becoming a Lender hereunder, would constitute any of the foregoing persons described in this clause (B), or (C) a
natural person. Any assigning Lender shall, in connection with any potential assignment, provide to the applicable
Borrower a copy of its request (including the name of the prospective assignee) concurrently with its delivery of the same
request to the Administrative Agent irrespective of whether or not an Event of Default under Section 7.01(a) or (f) has
occurred and is continuing.
(iv) Subject to acceptance and recording thereof pursuant to subclause (v) below, from and after the effective date
specified in each Assignment and Acceptance, the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.05 (subject to the limitations and requirements of
those Sections)); provided that an Assignee shall not be entitled to receive any greater payment pursuant to Section 2.17
than the applicable Assignor would have been entitled to receive had no such assignment occurred unless the assignment
is made with the applicable Borrowers prior written consent in accordance with Section 9.04(b)(i) (not to be unreasonably
withheld or delayed); provided that each potential Assignee shall provide such information as is reasonably requested by
the applicable Borrower in order for such Borrower to determine whether to provide its consent. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in
accordance with clause (d) of this Section 9.04.
(v) The Administrative Agent, acting solely for this purpose as a non- fiduciary agent of the Borrowers, shall maintain at
one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and
Revolving L/C Exposure owing to, each Lender pursuant to the terms hereof from time to time (the Register). The
entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Issuing
Banks, the Swingline Lender and the Lenders shall treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrowers, the Issuing Banks, the Swingline Lender and any Lender (with
respect to such Lenders own interests only), at any reasonable time and from time to time upon reasonable prior notice.
(vi) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an Assignee,
the Assignees completed Administrative Questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in clause (b) of this Section 9.04, if applicable, and any written consent to such
assignment required by clause (b) of this Section 9.04 and any applicable tax forms, the Administrative Agent shall accept
such Assignment and Acceptance and promptly record the information contained therein in the Register. No assignment,
whether or not evidenced by a promissory note, shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this subclause (v).
(b) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee
thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of
any adverse claim and that its applicable Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance,
(ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement,
or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto, or the financial condition of any Loan Party or
any Subsidiary or the performance or observance by any Loan Party or any Subsidiary of any of its obligations under this
Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (iii) the Assignee
represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (iv) the Assignee
confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements
referred to in Section 3.01(or delivered pursuant to Section 5.01), and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) the
Assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) the Assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms of this Agreement, together with such powers as are reasonably
incidental thereto; and (vii) the Assignee agrees that it will perform in accordance with their terms all the obligations
which by the terms of this Agreement are required to be performed by it as a Lender.
(c) (%4) Any Lender may, with the consent of the applicable Borrower (not to be unreasonably withheld or delayed) but
not the Administrative Agent, sell participations to one or more banks or other entities other than any Ineligible Institution
or any Defaulting Lender (a Participant) in all or a portion of such Lenders rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lenders obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Banks and the
Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and
obligations under this Agreement; provided further that the applicable Borrower shall be deemed to have consented to any
sale of participations described above in respect of Term Loans unless it shall have objected thereto by written notice to
the Administrative Agent within 10 Business Days after having received notice thereof. Any agreement pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and
the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement and
the other Loan Documents; provided that (x) such agreement may provide that such Lender will not, without the consent
of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly
affected thereby pursuant to clauses (i), (ii), (iii) or (vi) of the first proviso to Section 9.08(b) and (2) directly affects such
Participant (but, for the avoidance of doubt, not any waiver of any Default or Event of Default or any modification of
Section 6.07) and (y) no other agreement with respect to amendment, modification or waiver may exist between such
Lender and such Participant. Subject to clause (d)(iii) of this Section 9.04, each Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the limitations and requirements of those
Sections and Section 2.19 (it being understood that the documentation required under Section 2.17 shall be delivered to
the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to
clause (b) of this Section 9.04. To the extent permitted by law, each Participant also shall be entitled to the benefits of
Section 9.06 as though it were a Lender; provided that such Participant shall be subject to Section 2.18(c) as though it
were a Lender.
(i) Each Lender that sells a participation shall, acting solely for this purpose as a non- fiduciary agent of the Borrowers,
maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated
interest) of each Participants interest in the Loans or other obligations under the Loan Documents (the Participant
Register). The entries in the Participant Register shall be conclusive absent manifest error, and each party hereto shall
treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of
this Agreement notwithstanding any notice to the contrary. Without limitation of the requirements of Section 9.04(d), no
Lender shall have any obligation to disclose all or any portion of a Participant Register to any person (including the
identity of any Participant or any information relating to a Participants interest in any Commitments, Loans or other Loan
Obligations under any Loan Document), except to the extent that such disclosure is necessary to establish that such
Commitment, Loan or other Loan Obligation is in registered form for U.S. federal income tax purposes or is otherwise
required by applicable law. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.
(ii) A Participant shall not be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17 than the applicable
Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the applicable Borrowers prior written consent in accordance with Section
9.04(d)(i) (not to be unreasonably withheld or delayed); provided that each potential Participant shall provide such
information as is reasonably requested by the applicable Borrower in order for such Borrower to determine whether to
provide its consent.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or any Central Bank having jurisdiction over such Lender and in the case of any Lender that is an Approved
Fund, any pledge or assignment to any holders of obligations owed, or securities issued, by such Lender, including to any
trustee for, or any other representative of, such holders, and this Section 9.04 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) Each Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender
requiring Notes to facilitate transactions of the type described in clause (e) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it may have funded hereunder
to its designating Lender without the consent of any Borrower or the Administrative Agent. Each of the Loan Parties,
Lenders, Issuing Banks and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or
join any other person in instituting against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the
latest maturing commercial paper note issued by such Conduit Lender; provided, however, that each Lender designating
any Conduit Lender hereby agrees to indemnify, save and hold harmless each other party hereto and each Loan Party for
any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
(g) If any Borrower wishes to replace the Loans or Commitments under any Facility applicable to it with ones having
different terms, it shall have the option, with the consent of the Administrative Agent and subject to at least three Business
Days advance notice to the Lenders under such Facility, instead of prepaying the Loans or reducing or terminating the
Commitments to be replaced, to (i) require the Lenders under such Facility to assign such Loans or Commitments to the
Administrative Agent or its designees and (ii) amend the terms thereof in accordance with Section 9.08 (with such
replacement, if applicable, being deemed to have been made pursuant to Section 9.08(d)). Pursuant to any such
assignment, all Loans and Commitments to be replaced shall be purchased at par (allocated among the Lenders under such
Facility in the same manner as would be required if such Loans were being optionally prepaid or such Commitments were
being optionally reduced or terminated by such Borrower), accompanied by payment of any accrued interest and fees
thereon and any amounts owing pursuant to Section 9.05(b). By receiving such purchase price, the Lenders under such
Facility shall automatically be deemed to have assigned the Loans or Commitments under such Facility pursuant to the
terms of the form of Assignment and Acceptance attached hereto as Exhibit A, and accordingly no other action by such
Lenders shall be required in connection therewith.
(h) Notwithstanding anything to the contrary in this Agreement, including Section 2.18(c) (which provisions shall not be
applicable to clause (i) of this Section 9.04), the Public Company, any Group Member or any of their respective Affiliates
may purchase from time to time, at individually negotiated prices or otherwise, any Term Loan or Term Facility
Commitment from any of the Lenders, in a pro rata or non pro rata manner, and without the consent of the Administrative
Agent, any Issuing Bank, any Lender or any other person (each such purchase by the Public Company, any Group
Member or any of their respective Affiliates, a Permitted Loan Purchase, and each Lender holding a Term Loan or Term
Facility Commitment acquired through a Permitted Loan Purchase, an Affiliate Lender); provided that (A) any Term
Loan acquired through a Permitted Loan Purchase shall be subject to provisions of Section 2.18(f) and Section 9.21, (B) in
connection with any Permitted Loan Purchase, the Public Company, any Group Member or any of their respective
Affiliates effecting a purchase pursuant to this Section 9.04(i) and the applicable assigning Lender shall execute and
deliver to the Administrative Agent a Permitted Loan Purchase Assignment and Acceptance (and for the avoidance of
doubt, (x) shall make the representations and warranties set forth in the Permitted Loan Purchase Assignment and
Acceptance and (y) shall not be required to execute and deliver an Assignment and Acceptance pursuant to
Section 9.04(b)(ii)(B)) and shall otherwise comply with the conditions to Assignments under this Section 9.04, (C) no
Default or Event of Default would exist immediately before or after giving effect to such Permitted Loan Purchase and
(D) for the avoidance of doubt, no Revolving Facility Commitments, Revolving Facility Loans or L/C Exposure shall be
assigned to any Affiliate Lender.
(i) In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment
shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or
other compensating actions, including funding, with the consent of the applicable Borrower and the Administrative Agent,
the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the
applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then
owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and
(y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and
Swingline Loans in accordance with its Revolving Facility Percentage; provided that, notwithstanding the foregoing, in
the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under
applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Section 9.05 Expenses; Indemnity. (%3) The Borrowers agree to pay
(i) all reasonable and documented outof- pocket expenses (including Other Taxes) incurred by the Administrative Agent
in connection with the preparation of this Agreement and the other Loan Documents, or by the Administrative Agent in
connection with the administration of this Agreement and any amendments, modifications or waivers of the provisions
hereof or thereof, including the reasonable fees, charges and disbursements of one primary counsel to the Administrative
Agent and the Joint Lead Arrangers, and, if necessary, the reasonable fees, charges and disbursements of one local counsel
per jurisdiction, and (ii) all outof- pocket expenses (including Other Taxes) incurred by the Administrative Agent or any
Lender in connection with the enforcement of their rights in connection with this Agreement and the other Loan
Documents, in connection with the Loans made or the Letters of Credit issued hereunder, including the fees, charges and
disbursements of a single counsel for the Senior Creditors, taken as a whole and a single counsel for the Affiliate Lenders,
taken as a whole,, and, if necessary, a single local counsel in each appropriate jurisdiction for the Senior Creditors, taken
as a whole and a single local counsel in each appropriate jurisdiction for the Affiliate Lenders, taken as a whole (and, in
the case of an actual or perceived conflict of interest where such person affected by such conflict informs the Borrowers of
such conflict and thereafter retains its own counsel, of another firm for such affected person (and, if necessary, a single
local counsel in each appropriate jurisdiction for such affected person)).
(a) The Borrowers agree to indemnify the Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners, each
Issuing Bank, each Lender, each of their Related Parties (each such person being called an Indemnitee) against, and to
hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements (excluding the allocated costs of in house counsel and limited to not
more than one counsel for all such Indemnitees that are Senior Creditors, taken as a whole, and one counsel for all such
Indemnitees that are Affiliate Lenders, taken as a whole, and, if necessary, a single local counsel in each appropriate
jurisdiction for all such Indemnitees that are Senior Creditors, taken as a whole and a single local counsel in each
appropriate jurisdiction for all such Indemnitees that are Affiliate Lenders, taken as a whole (and, in the case of an actual
or perceived conflict of interest where the Indemnitee affected by such conflict informs the Borrowers of such conflict and
thereafter retains its own counsel, of another firm for such affected Indemnitee (and, if necessary, a single local counsel in
each appropriate jurisdiction for such affected Indemnitee)), incurred by or asserted against any Indemnitee arising out of,
in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto and thereto of their
respective obligations thereunder or the consummation of the Transactions and the other transactions contemplated
hereby, (ii) the use of the proceeds of the Loans or the use of any Letter of Credit or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto and
regardless of whether such matter is initiated by a third party or by the Borrowers or any of their subsidiaries or Affiliates
whether based on contract, tort or any other theory; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a final, nonappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee or any of its Related Parties, (y) arose from a material breach of such Indemnitees or any
of its Related Parties obligations under any Loan Document (as determined by a court of competent jurisdiction in a final,
nonappealable judgment) or (z) arose from any claim, actions, suits, inquiries, litigation, investigation or proceeding that
does not involve an act or omission of the Borrowers or any of their Affiliates and is brought by an Indemnitee against
another Indemnitee (other than any claim, actions, suits, inquiries, litigation, investigation or proceeding against the
Administrative Agent or a Joint Lead Arranger in its capacity as such). None of the Indemnitees (or any of their respective
affiliates) shall be responsible or liable to the Borrowers or any Subsidiaries, Affiliates or stockholders or any other person
or entity for any special, indirect, consequential or punitive damages, which may be alleged as a result of the Facilities or
the Transactions. The provisions of this Section 9.05 shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of
any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent, any Issuing Bank or any Lender. All
amounts due under this Section 9.05 shall be payable within 15 days after written demand therefor accompanied by
reasonable documentation with respect to any reimbursement, indemnification or other amount requested.
(b) Except as expressly provided in Section 9.05(a) with respect to Other Taxes, which shall not be duplicative with any
amounts paid pursuant to Section 2.17, this Section 9.05 shall not apply to any Taxes (other than Taxes that represent
losses, claims, damages, liabilities and related expenses resulting from a non- Tax claim), which shall be governed
exclusively by Section 2.17 and, to the extent set forth therein, Section 2.15.
(c) To the fullest extent permitted by applicable law, no Loan Party shall assert, and hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.
(d) The agreements in this Section 9.05 shall survive the resignation of the Administrative Agent or any Issuing Bank,
the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the
other Obligations and the termination of this Agreement.
Section 9.06 Right of Set- off. Subject to the Subordination Terms, if an Event of Default shall have occurred and be
continuing, each of the Lenders and Issuing Banks is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender or such Issuing Bank to or for the credit or the
account of any Loan Party or any Subsidiary against any of and all the obligations of the any Loan Party or any Subsidiary
now or hereafter existing under this Agreement or any other Loan Document held by such Lender or such Issuing Bank,
irrespective of whether or not such Lender or such Issuing Bank shall have made any demand under this Agreement or
such other Loan Document and although the obligations may be unmatured; provided that in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the
Administrative Agent for further application in accordance with the provisions of Section 2.22 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of
the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative
Agent a statement describing in reasonable detail the Loan Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender and each Issuing Bank under this Section 9.06 are in addition to
other rights and remedies (including other rights of setoff) that such Lender or such Issuing Bank may have.
Section 9.07 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE)
BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
(OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER
LAW.
Section 9.08 Waivers; Amendment. (%3) No failure or delay of the Administrative Agent, any Issuing Bank or any
Lender in exercising any right or power hereunder or under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, each Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any departure by any Borrower or any other
Loan Party therefrom shall in any event be effective unless the same shall be permitted by clause (b) below, and then such
waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand
on any Borrower or any other Loan Party in any case shall entitle such person to any other or further notice or demand in
similar or other circumstances.
(a) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended
or modified except (x) as provided in Section 2.21, (y) in the case of this Agreement, pursuant to an agreement or
agreements in writing entered into by the Loan Parties and the Required Lenders, and (z) in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by each Loan Party party thereto and the
Administrative Agent and consented to by the Required Lenders; provided, however, that no such agreement shall:
(iv) decrease or forgive the principal amount of, or extend the final maturity of, or decrease the rate of interest (except as
provided in the definition of Applicable Margin) on, any Loan or any L/C Disbursement, or extend the stated expiration
of any Letter of Credit beyond the latest Maturity Date in effect for the Revolving Facility Commitments of the applicable
Class (except as provided in Section 2.05(c)), without the prior written consent of each Lender directly adversely affected
thereby (which, notwithstanding the foregoing, such consent of such Lender directly adversely affected thereby shall be
the only consent required hereunder to make such modification),
(v) increase or extend the Commitment of any Lender, or decrease the Commitment Fees (except as provided in the
definition of Applicable Commitment Fee), L/C Participation Fees or any other Fees of any Lender, without the prior
written consent of such Lender (which, notwithstanding the foregoing, such consent of such Lender shall be the only
consent required hereunder to make such modification); provided that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the aggregate Commitments shall not constitute
an increase of the Commitments of any Lender,
(vi) extend or waive any Other Term Loan Installment Date or reduce the amount due on any Other Term Loan
Installment Date or extend any date on which payment of interest on any Loan or any L/C Disbursement or any Fees is
due, without the prior written consent of each Lender directly adversely affected thereby (which, notwithstanding the
foregoing, such consent of such Lender directly adversely affected thereby shall be the only consent required hereunder to
make such modification),
(vii) amend the provisions of Section 7.02 in a manner that would by its terms alter the pro rata sharing of payments
required thereby, without the prior written consent of each Lender adversely affected thereby (which, notwithstanding the
foregoing, such consent of such Lender directly adversely affected thereby shall be the only consent required hereunder to
make such modification), except as provided in Sections 9.08(d) and (e),
(viii) amend or modify the provisions of this Section 9.08 or the definition of the terms Required Lenders, Majority
Lenders or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent hereunder, without the prior written consent
of each Lender adversely affected thereby (it being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the Loans and Commitments are included on the Closing Date), except as provided in
Sections 9.08(d) and (e),
(ix) release any Borrower or all or substantially all of the Loan Parties from their respective Guaranties under this
Agreement unless, in the case of any Loan Party (other than the Term Facility Borrower or any Revolving Facility
Borrower with any Obligations outstanding), such entity ceases to constitute a Loan Party as a result of a transaction not
prohibited hereunder on the date hereof, without the prior written consent of each Lender;
(x) effect any waiver, amendment or modification that by its terms adversely affects the rights in respect of payments or
collateral of Lenders participating in any Facility differently from those of Lenders participating in another Facility,
without the consent of the Majority Lenders participating in the adversely affected Facility (it being agreed that the
Required Lenders may waive, in whole or in part, any prepayment or Commitment reduction required by Section 2.11 so
long as the application of any prepayment or Commitment reduction still required to be made is not changed), except as
provided in Section 9.08(e);
(xi) waive, amend, supplement or modify any of the provisions of Section 2.18(f), Section 9.21 or any of the definitions
of Senior Creditors, Senior Obligations, Affiliate Lenders or Subordinated Obligations without , in each case, the
written consent of all Senior Creditors;
(xii) amend or modify the definition of Revolving Facility Percentage without the written consent of all Revolving
Facility Lenders; or
(xiii) amend or modify any condition in Section 4.01 without the written consent of the Majority Lenders participating in
the adversely affected Facility;
provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative
Agent, Swingline Lender or an Issuing Bank hereunder without the prior written consent of the Administrative Agent,
Swingline Lender or such Issuing Bank acting as such at the effective date of such agreement, as applicable. Each Lender
shall be bound by any waiver, amendment or modification authorized by this Section 9.08 and any consent by any Lender
pursuant to this Section 9.08 shall bind any Assignee of such Lender.
(b) Without the consent of any Lender or Issuing Bank, the Loan Parties and the Administrative Agent may (in their
respective sole discretion, or shall, to the extent required by any Loan Document) enter into any amendment, modification
or waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting, perfection,
protection, expansion or enhancement of any security interest in any Collateral (including any Letter of Credit Support
(provided, however, that, with respect to any Letter of Credit Support relating to any Continuing Letter of Credit, consent
of the applicable Issuing Bank shall be required)) or additional property to become Collateral for the benefit of the Lender
Parties, or as required by local law to give effect to, or protect any security interest for the benefit of the Lender Parties, in
any property or so that the security interests therein comply with applicable law or this Agreement or in each case to
otherwise enhance the rights or benefits of any Lender under any Loan Document.
(c) Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent
of the Required Lenders, the Administrative Agent and the Borrowers (i) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit to be outstanding hereunder from time to time and the accrued
interest and fees and other obligations in respect thereof to share ratably in the benefits of this Agreement and the other
Loan Documents with the Loans and the accrued interest and fees and other obligations in respect thereof and (ii) to
include appropriately the holders of such extensions of credit facilities in any determination of the requisite lenders
required hereunder, including the Required Lenders; provided that, notwithstanding anything to the contrary set forth in
this Agreement or in any other Loan Document, any Collateral (including any Letter of Credit Support) that is delivered to
the Administrative Agent (or to the applicable Issuing Bank, in the case of Letter of Credit Support relating to any
Continuing Letter of Credit) to support certain Obligations in accordance of the terms hereof shall be held solely for the
benefit of the Lender Parties to whom such Obligations are owed and shall not be shared with any other Lender Parties at
any time that such Obligations remain outstanding.
(d) Notwithstanding the foregoing, technical and conforming modifications to the Loan Documents may be made with
the consent of the Term Facility Borrower and the Administrative Agent (but without the consent of any Lender) to the
extent necessary (A) to cure any ambiguity, omission, defect or inconsistency or (B) to integrate any Incremental
Commitments in a manner consistent with Section 2.21, including, with respect to Other Revolving Loans or Other Term
Loans (and Commitments with respect thereto), as may be necessary to establish such Other Revolving Loans or Other
Term Loans (and Commitments with respect thereto) as a separate Class or tranche from the existing Loans or
Commitments.
(e) Each of the parties hereto hereby agrees that the Administrative Agent may take any and all action as may be
necessary to ensure that all Term Loans established pursuant to Section 2.21 after the Closing Date that will be included in
an existing Class of Term Loans outstanding on such date (an Applicable Date), when originally made, are included in
each Borrowing of outstanding Term Loans of such Class (the Existing Class Loans), on a pro rata basis, and/or to
ensure that, immediately after giving effect to such new Term Loans (the New Class Loans and, together with the
Existing Class Loans, the Class Loans), each Lender holding Class Loans will be deemed to hold its Pro Rata Share of
each Class Loan on the Applicable Date (but without changing the amount of any such Lenders Term Loans), and each
such Lender shall be deemed to have effectuated such assignments as shall be required to ensure the foregoing. The Pro
Rata Share of any Lender on the Applicable Date is the ratio of (1) the sum of such Lenders Existing Class Loans
immediately prior to the Applicable Date plus the amount of New Class Loans made by such Lender on the Applicable
Date over (2) the aggregate principal amount of all Class Loans on the Applicable Date.
(g) With respect to the incurrence of any secured or unsecured Indebtedness, any Borrower may elect (in its discretion,
but shall not be obligated) to deliver to the Administrative Agent a certificate of a Responsible Officer of such Borrower
or (in the case of any Borrower that is a limited partnership) of its general partner, as applicable, at least three Business
Days prior to the incurrence thereof (or such shorter time as the Administrative Agent may agree in its reasonable
discretion), together with either drafts of the material documentation relating to such Indebtedness or a description of such
Indebtedness (including a description of the Liens intended to secure the same or the subordination provisions thereof, as
applicable) in reasonably sufficient detail to be able to make the determinations referred to in this paragraph, which
certificate shall state that such Borrower or (in the case of any Borrower that is a limited partnership) its general partner,
as applicable, has determined in good faith that such Indebtedness satisfies the requirements of the applicable provisions
of Sections 6.01 and 6.02 (taking into account any other applicable provisions of this Section 9.08), in which case such
certificate shall be conclusive evidence thereof.
Section 9.09 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the applicable
interest rate, together with all fees and charges that are treated as interest under applicable law (collectively, the
Charges), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender or any Issuing Bank, shall exceed the maximum lawful rate (the
Maximum Rate) that may be contracted for, charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable hereunder, together with all Charges payable to such Lender or such Issuing
Bank, shall be limited to the Maximum Rate; provided that such excess amount shall be paid to such Lender or such
Issuing Bank on subsequent payment dates to the extent not exceeding the legal limitation.
Section 9.10 Entire Agreement. This Agreement, the other Loan Documents and the agreements regarding certain Fees
referred to herein constitute the entire contract between the parties relative to the subject matter hereof. Any previous
agreement among or representations from the parties or their Affiliates with respect to the subject matter hereof is
superseded by this Agreement and the other Loan Documents. Notwithstanding the foregoing, the Fee Letter shall survive
the execution and delivery of this Agreement and remain in full force and effect. Nothing in this Agreement or in the other
Loan Documents, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto any
rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.
Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
Section 9.12 Severability. In the event any one or more of the provisions contained in this Agreement or in any other
Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties
shall endeavor in good- faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 9.13 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute
an original but all of which, when taken together, shall constitute but one contract, and shall become effective as provided
in Section 9.03. Delivery of an executed counterpart to this Agreement by facsimile transmission (or other electronic
transmission) shall be as effective as delivery of a manually signed original.
Section 9.14 Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
Section 9.15 Jurisdiction; Consent to Service of Process. (%3) Each of the Loan Parties irrevocably and unconditionally
agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity,
whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, or any Affiliate of the foregoing
in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any
forum other than the courts of the State of New York sitting in New York County, and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably
and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action,
litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by
applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.
(a) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.
(b) Other than as provided in this Section 9.15(c), each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Each Loan Party that is incorporated or organized under the
laws of any jurisdiction other than the United States of America, any state or territory thereof or the District of Columbia
hereby irrevocably appoints the Term Facility Borrower, as its agent to receive on its behalf, service of process that may
be served in any action, litigation or proceeding referred to in clause (a) of this Section 9.15. Nothing in this Agreement
will affect the right of any party to this Agreement or any other Loan Document to serve process in any other manner
permitted by law.
Section 9.16 Confidentiality. Each of the Lenders, Issuing Banks and the Administrative Agent agrees that it shall
maintain in confidence any information relating to the Public Company, any Parent Entity, any Loan Party and any
Subsidiary furnished to it by or on behalf of such person (other than information that (a) has become generally available to
the public other than as a result of a disclosure by such party, (b) has been independently developed by such Lender,
Issuing Bank or Agent without violating this Section 9.16 or (c) was available to such Lender, Issuing Bank or
Administrative Agent from a third party having, to such persons knowledge, no obligations of confidentiality to the
Public Company, any Parent Entity, any Loan Party or any Subsidiary) and shall not reveal the same other than to its
directors, trustees, officers, employees and advisors with a need to know and any numbering, administration or settlement
service providers or to any person that approves or administers the Loans on behalf of such Lender or Letters of Credit on
behalf of such Issuing Bank (so long as each such person shall have been instructed to keep the same confidential in
accordance with this Section 9.16), except: (A) to the extent necessary to comply with law or any legal process or the
requirements of any Governmental Authority, the National Association of Insurance Commissioners or of any securities
exchange on which securities of the disclosing party or any Affiliate of the disclosing party are listed or traded, (B) as part
of normal reporting or review procedures to, or examinations by, Governmental Authorities or selfregulatory authorities,
including the National Association of Insurance Commissioners or the National Association of Securities Dealers, Inc.,
(C) to its parent companies, Affiliates or auditors (so long as each such person shall have been instructed to keep the same
confidential in accordance with this Section 9.16), (D) in order to enforce its rights under any Loan Document in a legal
proceeding, (E) to any pledgee under Section 9.04(e) or any other prospective assignee of, or prospective Participant in,
any of its rights under this Agreement (so long as such person shall have been instructed to keep the same confidential in
accordance with this Section 9.16) and (F) to any direct or indirect contractual counterparty in Hedging Agreements or
such contractual counterpartys professional advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this Section 9.16).
Each Lender acknowledges that information furnished to it pursuant to this Agreement may include material non- public
information concerning the Borrowers and their affiliates and their related parties or their respective securities, and
confirms that it has developed compliance procedures regarding the use of material non- public information and that it will
handle such material non- public information in accordance with those procedures and applicable law, including Federal
and state securities laws.
All information, including requests for waivers and amendments, furnished by any Loan Party, the Administrative Agent
or the Joint Lead Arrangers pursuant to, or in the course of administering, this Agreement will be syndicate- level
information, which may contain material non- public information about the Loan Parties and its affiliates and their related
parties or their respective securities. Accordingly, each Lender represents to each Loan Party, the Administrative Agent
and Arrangers that it has identified in its Administrative Questionnaire a credit contact who may receive information that
may contain material non- public information in accordance with its compliance procedures and applicable law, including
Federal and state securities laws.
Section 9.17 Platform; Borrower Materials. Each of the Loan Parties hereby acknowledges that (a) the Administrative
Agent and/or the Joint Lead Arrangers will make available to the Lenders and the Issuing Banks materials and/or
information provided by or on behalf of the Borrowers hereunder (collectively, Borrower Materials) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the Platform), and (b) certain of the Lenders
may be public- side Lenders (i.e., Lenders that do not wish to receive material non- public information (or, in the case of
a company that is not a public- reporting company, material information of a type that would not be reasonably expected
to be publicly available if such company were a public- reporting company) with respect to the Public Company, the Loan
Parties or the Subsidiaries or any of their respective securities) (each, a Public Lender). Each Borrower hereby agrees
that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed
to the Public Lenders and that (i) all such Borrower Materials shall be clearly and conspicuously marked PUBLIC
which, at a minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof, (ii) by
marking Borrower Materials PUBLIC, each Borrower shall be deemed to have authorized the Administrative Agent, the
Joint Lead Arrangers, the Issuing Banks and the Lenders to treat such Borrower Materials as solely containing information
that is either (A) of a type that would reasonably be expected to be publicly available if the Public Company or the Loan
Parties were a public- reporting company or (B) not material (although it may be sensitive and proprietary) with respect to
the Public Company, the Loan Parties, the Subsidiaries or any of their respective securities for purposes of United States
federal and state securities laws (provided, however, that such Borrower Materials shall be treated as set forth in Section
9.16, to the extent such Borrower Materials constitute information subject to the terms thereof), (iii) all Borrower
Materials marked PUBLIC are permitted to be made available through a portion of the Platform designated Public
Investor; and (iv) the Administrative Agent and the Joint Lead Arrangers shall be entitled to treat any Borrower Materials
that are not marked PUBLIC as being suitable only for posting on a portion of the Platform not designated Public
Investor.
Section 9.18 Release of Liens and Guaranties.
(a) The Administrative Agent, the Lenders and the Issuing Banks hereby irrevocably agree that the Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (including any cash collateral providing Cash
Collateralization hereunder and any Letter of Credit Support (excluding any Letter of Credit Support relating to any
Continuing Letter of Credit)) shall be automatically released in full upon the occurrence of the Termination Date (but
subject to the provisions of Section 9.18(d) below).
(b) The Lenders and the Issuing Banks hereby irrevocably agree that any Guarantor shall be automatically released from
the Guaranties upon consummation of any transaction not prohibited hereunder resulting in such Subsidiary ceasing to
constitute a Loan Party (and the Administrative Agent may rely conclusively on a certificate to that effect provided to it by
any Loan Party upon its reasonable request without further inquiry).
(c) The Lenders and the Issuing Banks hereby authorize the Administrative Agent to execute and deliver any
instruments, documents, and agreements necessary or desirable to evidence and confirm the release of any Guarantor
pursuant to the foregoing provisions of this Section 9.18, all without the further consent or joinder of any Lender or
Issuing Bank. Following any such release, any representation, warranty or covenant contained in any Loan Document
relating to any such Guarantor shall no longer be deemed to be made. In connection with any release hereunder, the
Administrative Agent shall promptly (and the Lenders and the Issuing Banks hereby authorize the Administrative Agent
to) take such action and execute any such documents as may be reasonably requested by the Term Facility Borrower and
at such Borrowers expense in connection with such release; provided that the Administrative Agent shall have received a
certificate of a Responsible Officer of the Term Facility Borrower or its general partner containing such certifications as
the Administrative Agent shall reasonably request.
(d) Notwithstanding anything to the contrary contained herein or any other Loan Document, on the Termination Date,
upon request of the Term Facility Borrower, the Administrative Agent shall (without notice to, or vote or consent of, any
Lender Party) take such actions as shall be required to release all obligations and Liens on any Collateral (including any
cash collateral providing Cash Collateralization hereunder and any Letter of Credit Support under any Loan Document),
whether or not on the date of such release there may be any contingent indemnification obligations or expense reimburse
claims not then due (provided that, for the avoidance of doubt, in the event any Letters of Credit (including any
Continuing Letter of Credit) remain outstanding, any Letter of Credit Support being held by the Administrative Agent or
the applicable Issuing Bank, as the case may be, to support any Obligations relating thereto shall be retained by the
Administrative Agent or such Issuing Bank); provided that the Administrative Agent shall have received a certificate of a
Responsible Officer of the Term Facility Borrower or its general partner containing such certifications as the
Administrative Agent shall reasonably request. Any such release of obligations shall be deemed subject to the provision
that such obligations shall be reinstated if after such release any portion of any payment in respect of the obligations
guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Loan Party, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, any Loan Party or any substantial part of its property, or
otherwise, all as though such payment had not been made. The Term Facility Borrower agrees to pay all reasonable and
documented outof- pocket expenses incurred by the Administrative Agent (and its representatives) in connection with
taking such actions as contemplated by this Section 9.18(d).
Section 9.19 Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum
due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with
such other currency on the Business Day preceding that on which final judgment is given. The obligation of any Loan
Party in respect of any such sum due from it to the Administrative Agent or the Lenders hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the Judgment Currency) other than that in which such
sum is denominated in accordance with the applicable provisions of this Agreement (the Agreement Currency), be
discharged only to the extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from a Loan Party in the Agreement Currency, such Loan
Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or
the person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased
is greater than the sum originally due to the Administrative Agent in such currency, the Administrative Agent agrees to
return the amount of any excess to the applicable Loan Party (or to any other person who may be entitled thereto under
applicable law).
Section 9.20 USA PATRIOT Act Notice. Each Lender that is subject to the USA PATRIOT Act and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notify each Borrower that, pursuant to the requirements of the
USA PATRIOT Act, they are required to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each Loan Party in accordance with the USA PATRIOT Act.
Section 9.21 Affiliate Lenders.
(a) Notwithstanding anything to the contrary in this Agreement, with respect to (i) any waiver, amendment, supplement
or modification of this Agreement or any other Loan Document, (ii) any consent or request by any Lenders as
contemplated by Article VII or any directions by any Lenders as contemplated by Section 8.05 or (iii) any instruction or
authorization given to the Administrative Agent under this Agreement or any other Loan Document (in each case, to the
extent that an Affiliate Lender, or the Affiliate Lenders as a group, are (subject to Section 2.18(f)) treated therein in the
same, or a better, manner than the other Lenders), any Affiliate Lender shall be deemed to agree, consent, approve or join
such waiver, amendment, supplement or modification, such consent, request or directions or such instruction or
authorization if it has otherwise been agreed or consented to, or joined in, by the Required Lenders, calculated for this
purpose on a basis that disregards (for certainty of clarity, in both the numerator and the denominator) the Loans held by
any Affiliate Lender from time to time and, if requested by the Administrative Agent, each Affiliate Lender shall take
such actions at its sole cost and expense as are reasonable in the circumstances to confirm, evidence or implement its
agreements in this clause (a).
(b) The Lenders (other than Affiliate Lenders) may hold discussions, which may include the Administrative Agent and
advisers to the foregoing, with respect to matters of concern to them relating to any of the Group Members or their
Affiliates or this Agreement or any other Loan Document without inviting or permitting participation therein by Affiliate
Lenders or sharing with Affiliate Lenders any notice or report thereof or any materials prepared to facilitate or further such
discussions or otherwise requested in connection therewith.
(c) No Affiliate Lender shall have any right to make or bring (or participate in, other than as a passive participant in or
recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against the Administrative Agent, any Joint Lead
Arranger or any other Lender or any of their respective Affiliates with respect to any duties or obligations or alleged duties
or obligations of the Administrative Agent, such Joint Lead Arranger or such other Lender or affiliate thereof under the
Loan Documents.
(d) Any agreement, consent or waiver of any Affiliate Lender deemed received pursuant to Section 9.21(a) shall be
deemed to have been received by the Administrative Agent simultaneously with its receipt of the agreement, consent or
waiver of the Required Lenders (in each case as calculated as provided in Section 9.21(a)), for purposes of determining
the entitlement of any Affiliate Lender to any consent or similar fee or any other consideration to Lenders (or any
appropriate grouping thereof) agreeing or consenting to such waiver, amendment or modification.
Section 9.22 Agency of the Term Facility Borrower for the Loan Parties. Each of the other Loan Parties hereby appoints
the Term Facility Borrower as its agent for all purposes relevant to this Agreement and the other Loan Documents,
including the giving and receipt of notices and the execution and delivery of all documents, instruments and certificates
contemplated herein and therein and all modifications hereto and thereto.
Section 9.23 No Liability of the Issuing Banks. Each Revolving Facility Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither
any Issuing Bank nor any of its officers or directors shall be liable or responsible for: (a) the use that may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit, except that each Revolving Facility Borrower shall have a claim against such
Issuing Bank, and such Issuing Bank shall be liable to such Revolving Facility Borrower, to the extent of any direct, but
not consequential, damages suffered by such Revolving Facility Borrower that such Revolving Facility Borrower proves
were caused by (i) such Issuing Banks willful misconduct or gross negligence as determined in a final, nonappealable
judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of Credit
comply with the terms of the Letter of Credit or (ii) such Issuing Banks willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of
the Letter of Credit. In furtherance and not in limitation of the foregoing, such Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information
to the contrary.
ARTICLE X
Guaranty
Section 10.01 Guaranty of Payment. Subject to Section 10.07, each Guarantor hereby unconditionally and irrevocably
and jointly and severally guarantees (other than with respect to its own Loan Obligations) to the Administrative Agent, for
the benefit of the Issuing Banks and the Lenders, the prompt payment of the Loan Obligations in full when due (whether
at stated maturity, as a mandatory prepayment, by acceleration or otherwise). Any payment hereunder shall be made at
such place and in the same currency as such relevant Loan Obligation is payable. This guaranty is a guaranty of payment
and not solely of collection and is a continuing guaranty and shall apply to all Loan Obligations whenever arising.
Obligations Unconditional
Section 10.02 Modifications. Each Guarantor agrees to the fullest extent permitted by applicable law that (a) all or any
part of any security which hereafter may be held for the Loan Obligations, if any, may be exchanged, compromised or
surrendered from time to time; (b) the Administrative Agent, the Lenders and the Issuing Banks shall not have any
obligation to protect, perfect, secure or insure any such security interests or Liens which hereafter may be held, if any, for
the Loan Obligations or the properties subject thereto; (c) the time or place of payment of the Loan Obligations may be
changed or extended, in whole or in part, to a time certain or otherwise, and may be renewed or accelerated, in whole or in
part; (d) any Borrower and any other party liable for payment under this Agreement may be granted indulgences
generally; (e) any of the provisions of this Agreement or any other Loan Document may be modified, amended or waived;
(f) any party liable for the payment thereof may be granted indulgences or be released; and (g) any deposit balance for the
credit of any Borrower or any other party liable for the payment of the Loan Obligations or liable upon any security
therefor may be released, in whole or in part, at, before or after the stated, extended or accelerated maturity of the Loan
Obligations, all without notice to or further assent by such Guarantor, which shall remain bound thereon, notwithstanding
any such exchange, compromise, surrender, extension, renewal, acceleration, modification, indulgence or release.
Section 10.03 Waiver of Rights. Each Guarantor expressly waives to the fullest extent permitted by applicable law: (a)
notice of acceptance of this guaranty by the Administrative Agent, the Lenders and the Issuing Banks, and of all Loans
made to the Borrowers by the Lenders and Letters of Credit issued by the Issuing Banks; (b) presentment and demand for
payment or performance of any of the Loan Obligations; (c) protest and notice of dishonor or of default (except as
specifically required in this Agreement) with respect to the Loan Obligations or with respect to any security therefor; (d)
notice of the Lenders obtaining, amending, substituting for, releasing, waiving or modifying any Lien, if any, hereafter
securing the Loan Obligations, or the Administrative Agents, Lenders or Issuing Banks subordinating, compromising,
discharging or releasing such Liens, if any; (e) all other notices to which any Borrower might otherwise be entitled in
connection with the guaranty evidenced by this Section 10.04; and (f) demand for payment under this guaranty.
Section 10.04 Reinstatement. The obligations of each Guarantor under this Section 10.05 shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf of any person in respect of the Loan
Obligations is rescinded or must be otherwise restored by any holder of any of the Loan Obligations, whether as a result of
any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the
Lenders on demand for all reasonable costs and expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Administrative Agent, Lenders and Issuing Banks in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.
Section 10.05 Remedies. Each Guarantor agrees to the fullest extent permitted by applicable law that, as between such
Guarantor, on the one hand, and the Administrative Agent, Lenders and Issuing Banks, on the other hand, the Loan
Obligations may be declared to be forthwith due and payable as provided in Article VII (and shall be deemed to have
become automatically due and payable in the circumstances provided in Article VII) notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing such Loan Obligations from becoming automatically due
and payable) as against any other person and that, in the event of such declaration (or such Loan Obligations being
deemed to have become automatically due and payable), such Loan Obligations (whether or not due and payable by any
other person) shall forthwith become due and payable by such Guarantor.
Section 10.06 Limitation of Guaranty. Notwithstanding any provision to the contrary contained herein, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the
obligations of such Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the Bankruptcy Code). Notwithstanding anything herein or in
any other Loan Document, the partners of the Loan Parties shall not be personally liable under this Agreement or any
other Loan Document.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first
written above.
APOLLO MANAGEMENT HOLDINGS, L.P., as the Term Facility Borrower, a Revolving Facility Borrower and a
Guarantor
By: Apollo Management Holdings GP, LLC, its general partner
By: /s/ Jessica L. Lomm
Name: Jessica L. Lomm
Title: Vice President
APOLLO MANAGEMENT, L.P., as a Revolving Facility Borrower and a Guarantor

By: Apollo Management GP, LLC, its general partner
APOLLO CAPITAL MANAGEMENT, L.P., as a Revolving Facility Borrower and a Guarantor

By: Apollo Capital Management GP, LLC, its general partner
APOLLO INTERNATIONAL MANAGEMENT, L.P., as a Revolving Facility Borrower and a Guarantor

By: Apollo International Management GP, LLC, its general partner
AAA HOLDINGS, L.P., as a Revolving Facility Borrower and a Guarantor

By: AAA Holdings GP Limited, its general partner
By: /s/ John J. Suydam
Name: John J. Suydam
Title: Director
APOLLO PRINCIPAL HOLDINGS I, L.P., as a Revolving Facility Borrower and a Guarantor

By: Apollo Principal Holdings I GP, LLC, its general partner
APOLLO PRINCIPAL HOLDINGS II, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings II GP, LLC, its general partner
APOLLO PRINCIPAL HOLDINGS III, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings III GP, Ltd., its general partner
APOLLO PRINCIPAL HOLDINGS IV, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings IV GP, Ltd., its general partner
APOLLO PRINCIPAL HOLDINGS V, L.P., as a Revolving Facility Borrower and a Guarantor

By: Apollo Principal Holdings V GP, LLC, its general partner
APOLLO PRINCIPAL HOLDINGS VI, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings VI GP, LLC, its general partner
APOLLO PRINCIPAL HOLDINGS VII, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings VII GP, Ltd., its general partner
APOLLO PRINCIPAL HOLDINGS VIII, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings VIII GP, Ltd., its general partner
APOLLO PRINCIPAL HOLDINGS IX, L.P., as a Revolving Facility Borrower and a Guarantor
By: Apollo Principal Holdings IX GP, Ltd., its general partner
ST HOLDINGS GP, LLC, as a Revolving Facility Borrower and a Guarantor

ST MANAGEMENT HOLDINGS, LLC, as a Revolving Facility Borrower and a Guarantor

By:/s/ Jessica L. Lomm
JPMORGAN CHASE BANK, N.A., as Administrative Agent, initial Issuing Bank and a Lender
By: /s/ Lauren Gubkin
Name: Lauren Gubkin
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of December 18, 2013 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the Credit Agreement), among (i) Apollo Management
Holdings, L.P., a Delaware limited partnership, as the borrower of the Term Loans (the Term Facility Borrower) and a
Revolving Facility Borrower (as defined below); (ii) Apollo Management, L.P., a Delaware limited partnership, Apollo
Capital Management, L.P., a Delaware limited partnership, Apollo International Management, L.P., a Delaware limited
partnership, AAA Holdings, L.P., a Guernsey limited partnership, Apollo Principal Holdings I, L.P., a Delaware limited
partnership, Apollo Principal Holdings II, L.P., a Delaware limited partnership, Apollo Principal Holdings III, L.P., a
Cayman Islands exempted limited partnership, Apollo Principal Holdings IV, L.P., a Cayman Islands exempted limited
partnership, Apollo Principal Holdings V, L.P., a Delaware limited partnership, Apollo Principal Holdings VI, L.P., a
Delaware limited partnership, Apollo Principal Holdings VII, L.P., a Cayman Islands exempted limited partnership,
Apollo Principal Holdings VIII, L.P., a Cayman Islands exempted limited partnership, Apollo Principal Holdings IX L.P.,
a Cayman Islands exempted limited partnership, ST Holdings GP, LLC, a Delaware limited liability company, and ST
Management Holdings, LLC, a Delaware limited liability company (such entities, together with Apollo Management
Holdings, L.P., collectively, the Revolving Facility Borrowers, and the Revolving Facility Borrowers, together with the
Term Facility Borrower, collectively, the Borrowers and each a Borrower); (iii) the Guarantors party thereto from
time to time; (iv) the lenders party thereto from time to time (the Lenders); (v) the Issuing Banks party thereto from time
to time; and (vi) JPMorgan Chase Bank, N.A., as administrative agent for the Lenders (in such capacity, the
Administrative Agent). Terms defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby irrevocably sells and assigns, without recourse, to the Assignee, and the Assignee hereby
irrevocably purchases and assumes, without recourse, from the Assignor, effective as of the Effective Date set forth below
(the Effective Date) (but not prior to the registration of the information contained herein in the Register pursuant to
Section 9.04(b)(v) of the Credit Agreement), the interests set forth below (the Assigned Interest) in the Assignors rights
and obligations under the Credit Agreement and the other Loan Documents, including, without limitation, the amounts
and percentages set forth below of (i) the Commitments of the Assignor on the Effective Date set forth below and (ii) the
Loans owing to the Assignor which are
outstanding on the Effective Date. Each of the Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 9.04(c) of the Credit Agreement, a copy of which has been
received by each such party. From and after the Effective Date, (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests assigned by this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to the extent
of the interests assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
2. Pursuant to Section 9.04(b)(ii) of the Credit Agreement, this Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if required by Section 9.04(b)(ii)(B) of the Credit Agreement, a processing and
recordation fee of $3,500 and (ii) if the Assignee is not already a Lender under the Credit Agreement, a completed
Administrative Questionnaire and any tax forms required to be delivered pursuant to Section 2.17 of the Credit
Agreement.
3. This Assignment and Acceptance shall be construed in accordance with and governed by the laws of the State of New
York, without regard to any principle of conflicts of law that could require the application of any other law.
Date of Assignment:
Legal Name of Assignor (Assignor):
Legal Name of Assignee (Assignee):
Assignees Address for Notices:
Effective Date of Assignment:
Facility/Commitment
Term Loans/Commitments
$
Revolving Facility Loans/Commitments $
Principal Amount
Assigned
Percentage Assigned of Commitment

(set forth, to at least 8 decimals, as a
percentage of the Facility and the
aggregate Commitments of all
Lenders thereunder)
%
%
The Assignee shall deliver to the Administrative Agent an Administrative Questionnaire in a form approved by the
Administrative Agent in which the Assignee designates one or more credit contacts to whom all syndicate- level
information (which may contain material non- public information about the Loan Parties and their Related Parties or their
respective securities) will be made available and who may receive such information in accordance with the Assignees
compliance procedures and applicable laws, including Federal and state securities laws.
[Signature pages follow.]
The terms set forth above are hereby agreed to:

_______________, as Assignor
Accepted:
as Administrative Agent
by: _________________________
Name:
Title:
by: _________________________
Name:
Title:
_______________, as Assignee
[[INSERT NAME],
as Swingline Lender
by: _________________________
Name:
Title:
by: _________________________
Name:
Title:
as Issuing Bank
by: _________________________
Name:
Title:
[INSERT NAME],
as Issuing Bank
by: _________________________
Name:
Title:]
[Signature page to Assignment and Acceptance]
[[APOLLO MANAGEMENT HOLDINGS, L.P.

By: _________________________
Name:
Title:]
[APOLLO MANAGEMENT, L.P.
By: _________________________
Name:
Title:]
[APOLLO CAPITAL MANAGEMENT, L.P.
By: _________________________
Name:
Title:]
[APOLLO INTERNATIONAL MANAGEMENT, L.P.

by: _________________________
Name:
Title:]
[AAA HOLDINGS, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS I, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS II, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS III, L.P.

By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS IV, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS V, L.P.

By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS VI, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS VII, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS VIII, L.P.
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS IX, L.P.
By: _________________________
Name:
Title:]
[ST HOLDINGS GP, LLC
by: _________________________
Name:
Title:]
[ST MANAGEMENT HOLDINGS, LLC.
by: _________________________
Name:
Title:]]
EXHIBIT B
FORM OF ADMINISTRATIVE QUESTIONNAIRE
ARTICLE XI Administrative Questionnaire

DEAL NAME: APOLLO MANAGEMENT HOLDINGS, L.P
Agent Address:
JPMorgan Chase Bank, N.A

500 Stanton Christiana Road
Ops Building 2, 3rd Floor
Newark, DE 19713- 2107
Return form to:

Telephone:
Facsimile:
E- mail:
Josh Pauley
302- 634- 4067
302- 634- 4712
Deal.Management.Team@jpmchase.com
It is very important that all of the requested information be completed accurately and that this questionnaire be returned promptly. If your institution
is sub- allocating its allocation, please fill out an administrative questionnaire for each legal entity.
Lender Markit Entity Identifier (MEI): ________________________________
Legal Name of Lender to appear in Documentation:
Signature Block Information:
n Signing Credit Agreement

n Coming in via Assignment
Type of Lender:
(Bank, Asset Manager, Broker/Dealer, CLO/CDO; Finance Company, Hedge Fund, Insurance, Mutual Fund, Pension Fund, Other Regulated
Investment Fund, Special Purpose Vehicle, Other- please specify)
Fund Manager:
N/A
Lender Parent:
N/A
Domestic Address
Eurodollar Address
Contacts/Notification Methods: Borrowings, Paydowns, Interest, Fees, etc.

Syndicate- level information (which may contain material non- public information about the Borrower and its related parties or their respective
securities) will be made available to the Credit Contact(s). The Credit Contacts identified must be able to receive such information in accordance with
his/her institutions compliance procedures and applicable laws, including Federal and state securities laws.
Primary Credit Contact
Secondary Credit Contact
Additional IntraLinks Credit Contact
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
The above listed individuals will be given access to any related IntraLinks site for information distribution.
Should your institution require more than the contacts listed above, please add additional names on the Annex A
provided with the above information for ALL individuals who require IntraLinks access.
Primary Operations Contact
Secondary Operations Contact
Operations Contact
Operations Contact
Bid Contact
L/C Contact
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
Domestic Wire Instructions

Bank Name:
ABA/Routing No.:
Account Name:
Account No.:
FFC Account Name:
FFC Account No.:
Attention:
Reference:
Lenders Foreign Wire Instructions

Currency:
Bank Name:
Swift/Routing No.:
Account Name:
Account No.:
FFC Account Name:
FFC Account No.:
Attention:
Reference:
Agents Wire Instructions

Bank Name:
ABA/Routing No.:
Account Name:
Account No.:
FFC Account Name:
FFC Account No.:
Attention:
Reference:
JPMorgan Chase Bank N.A.

21000021
LS2 Incoming Account
9008113381H0328
NA
NA
Loan & Agency
APOLLO MANAGEMENT HOLDINGS, L.P
Agents DTCC Account Number:

DTCC00006161
Tax Documents
NON- U.S. LENDER INSTITUTIONS:
I. Corporations:
If your institution is incorporated outside of the United States for U.S. federal income tax purposes, and is the beneficial owner of the interest and
other income it receives, you must complete one of the following three tax forms, as applicable to your institution: a.) Form W- 8BEN (Certificate of
Foreign Status of Beneficial Owner), b.) Form W- 8ECI (Income Effectively Connected to a U.S. Trade or Business), or c.) Form W- 8EXP
(Certificate of Foreign Government or Governmental Agency).
A U.S. taxpayer identification number is required for any institution submitting Form W- 8ECI. It is also required on Form W- 8BEN for certain
institutions claiming the benefits of a tax treaty with the U.S. Please refer to the instructions when completing the form applicable to your institution.
In addition, please be advised that U.S. tax regulations do not permit the acceptance of faxed forms. An original tax form must be submitted.
II. Flow- Through Entities:
If your institution is organized outside the U.S., and is classified for U.S. federal income tax purposes as either a Partnership, Trust, Qualified or NonQualified Intermediary, or other non- U.S. flowthrough entity, an original Form W- 8IMY (Certificate of Foreign Intermediary, Foreign FlowThrough Entity, or Certain U.S. Branches for United States Tax Withholding) must be completed by the intermediary together with a withholding
statement. Flow- through entities other than Qualified Intermediaries are required to include tax forms for each of the underlying beneficial owners.
Please refer to the instructions when completing this form. In addition, please be advised that U.S. tax regulations do not permit the acceptance of
faxed forms. Original tax form(s) must be submitted.
U.S. LENDER INSTITUTIONS:

If your institution is incorporated or organized within the United States, you must complete and return Form W- 9 (Request for Taxpayer
Identification Number and Certification). Please be advised that we request that you submit an original Form W- 9.
Pursuant to the language contained in the tax section of the Credit Agreement, the applicable tax form for your institution must be
completed and returned prior to the first payment of income. Failure to provide the proper tax form when requested may subject your
institution to U.S. tax withholding.
ANNEX A
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
Name:
Company:
Title
Address:
Telephone:
Facsimile:
E- mail address:
FORM OF BORROWING REQUEST

Date: ________________, 20____
To:
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the Administrative Agent) under that
certain Credit Agreement, dated as of December 18, 2013 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the Credit Agreement), among (i) Apollo
Management Holdings, L.P., a Delaware limited partnership, as the borrower of the Term Loans (the Term
Facility Borrower) and a Revolving Facility Borrower (as defined below); (ii) Apollo Management, L.P., a
Delaware limited partnership, Apollo Capital Management, L.P., a Delaware limited partnership, Apollo
International Management, L.P., a Delaware limited partnership, AAA Holdings, L.P., a Guernsey limited
partnership, Apollo Principal Holdings I, L.P., a Delaware limited partnership, Apollo Principal Holdings II,
L.P., a Delaware limited partnership, Apollo Principal Holdings III, L.P., a Cayman Islands exempted limited
partnership, Apollo Principal Holdings IV, L.P., a Cayman Islands exempted limited partnership, Apollo
Principal Holdings V, L.P., a Delaware limited partnership, Apollo Principal Holdings VI, L.P., a Delaware
limited partnership, Apollo Principal Holdings VII, L.P., a Cayman Islands exempted limited partnership,
Apollo Principal Holdings VIII, L.P., a Cayman Islands exempted limited partnership, Apollo Principal
Holdings IX L.P., a Cayman Islands exempted limited partnership, ST Holdings GP, LLC, a Delaware limited
liability company, and ST Management Holdings, LLC, a Delaware limited liability company (such entities,
together with Apollo Management Holdings, L.P., collectively, the Revolving Facility Borrowers, and the
Revolving Facility Borrowers, together with the Term Facility Borrower, collectively, the Borrowers and
each a Borrower); (iii) the Guarantors party thereto from time to time; (iv) the Lenders party thereto from
time to time; (v) the Issuing Banks party thereto from time to time; and (vi) the Administrative Agent.
Ladies and Gentlemen:
Reference is made to the above- described Credit Agreement. Terms defined in the Credit Agreement, wherever used
herein, unless otherwise defined herein, shall have the same meanings herein as are prescribed by the Credit Agreement.
The undersigned hereby irrevocably notifies you of the Borrowing specified below:
1.The Borrowing will be a Borrowing of _________ Loans.
2.The aggregate amount of the proposed Borrowing is: $_________.
3.The Business Day of the proposed Borrowing is: _____________, 20___.
4.The Borrowing is comprised of $___________ of ABR Loans and $____________ of Eurocurrency Loans.
5.The duration of the Interest Period for the Eurocurrency Loans, if any, included in the Borrowing shall be
____________ month(s).
6.The location and number of the account to which the proceeds of such Borrowing are to be deposited is
_________________.
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of
the proposed Borrowing:
(A) The representations and warranties set forth in the Loan Documents are true and correct in all material respects as of
the date hereof (it being understood that any representation or warranty that is qualified as to materiality, Material
Adverse Effect or similar language is true and correct in all respects as of the date hereof), with the same effect as though
made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties were true and correct in all material respects as of such earlier
date); and
(B) No Event of Default or Default has occurred and is continuing.
[Signature page follows.]
This Borrowing Request, issued pursuant to and subject to the Credit Agreement, is executed as of the date first written
above.
[APOLLO MANAGEMENT HOLDINGS, L.P.

By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
by: _________________________
Name:
Title:]
[AAA HOLDINGS, L.P.
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]

By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
by: _________________________
Name:
Title:]
by: _________________________
Name:
Title:]
FORM OF SWINGLINE BORROWING REQUEST

Date: ________________, 20____
To:
partnership, Apollo Principal Holdings IV, L.P., a Cayman exempted Islands limited partnership, Apollo
Apollo Principal Holdings VIII, L.P., a Cayman Islands exempted limited partnership, Apollo Principal
The undersigned hereby irrevocably notifies you, pursuant to Section 2.04(b) of the Credit Agreement, of the Swingline
Borrowing specified below:
1.The Business Day of the proposed Swingline Borrowing is: _____________, 20___.
2.The aggregate amount of the proposed Swingline Borrowing is:
$____________.
3.The location and number of the account to which the proceeds of such Swingline Borrowing are to be deposited is
_____________.
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of
the proposed Swingline Borrowing:
(A) The representations and warranties set forth in the Loan Documents are true and correct in all material respects as of
the date hereof, with the same effect as though made on and as of the date hereof, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such representations and warranties were true and correct
in all material respects as of such earlier date); and
(B) No Event of Default or Default has occurred and is continuing.
This Swingline Borrowing Request, issued pursuant to and subject to the Credit Agreement, is executed as of the date first
written above.
[APOLLO MANAGEMENT HOLDINGS, L.P.
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: Apollo International Management GP, LLC, its general
partner
by: _________________________
Name:
Title:]
[AAA HOLDINGS, L.P.
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings VIII GP, Ltd., its general
partner
By: _________________________
Name:
Title:]
By: _________________________
Name:
Title:]
by: _________________________
Name:
Title:]

by: _________________________
Name:
Title:]
FORM OF INTEREST ELECTION REQUEST

Date: ________________, __________
To:
partnership, Apollo Principal Holdings IV, L.P., a Cayman Islands exempted limited partnership, Apollo
Apollo Principal Holdings VIII, L.P., a Cayman exempted Islands limited partnership, Apollo Principal
This notice constitutes an Interest Election Request and the undersigned Borrower hereby makes an election with respect
to the Loans under the Credit Agreement specified below, and in connection therewith such Borrower specifies the
following information with respect to such election:
1.Borrowing to which this request applies (including Facility, principal amount and Type of Loans subject to election):
_________________.
2.Effective date of election: _____________, 20___.
3.The Loans are to be [converted into] [continued as] [ABR] [Eurocurrency] Loans.
4.The duration of the Interest Period for the Eurocurrency Loans, if any, included in the election shall be ______________
months.

This Interest Election Request, issued pursuant to and subject to the Credit Agreement, is executed as of the date first
written above.
[APOLLO MANAGEMENT HOLDINGS,
L.P.
By: Apollo Management Holdings GP, LLC, its
general partner
By: _________________________
Name:
Title:]

By: Apollo Management GP, LLC, its general
partner
By: _________________________
Name:
Title:]
By: Apollo Capital Management GP, LLC, its
general partner
By: _________________________
Name:
Title:]
[APOLLO INTERNATIONAL
MANAGEMENT, L.P.
By: Apollo International Management GP, LLC,
its general partner
by: _________________________
Name:
Title:]
[AAA HOLDINGS, L.P.
By: AAA Holdings GP Limited, its general
partner
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings I GP, LLC, its
general partner
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings II GP, LLC, its
general partner
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings III GP, Ltd., its
general partner
By: _________________________
Name:
Title:]

By: Apollo Principal Holdings IV GP, Ltd., its
general partner
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings V GP, LLC, its
general partner
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings VI GP, LLC, its
general partner
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS VII,
L.P.
By: Apollo Principal Holdings VII GP, Ltd., its
general partner
By: _________________________
Name:
Title:]
[APOLLO PRINCIPAL HOLDINGS VIII,

L.P.
By: Apollo Principal Holdings VIII GP, Ltd., its
general partner
By: _________________________
Name:
Title:]
By: Apollo Principal Holdings IX GP, Ltd., its
general partner
By: _________________________
Name:
Title:]
by: _________________________
Name:
Title:]
by: _________________________
Name:
Title:]
FORM OF PERMITTED LOAN PURCHASE ASSIGNMENT AND ACCEPTANCE
Holdings, L.P., collectively, the Revolving Facility Borrowers, and the Revolving Facility Borrowers together with the
Administrative Agent). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the Assignor) and the Assignee identified on Schedule l hereto (the
Assignee) agree as follows:
1.The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee
hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date
(as defined below) and pursuant to the terms and conditions set forth in the Credit Agreement for Permitted Loan
Purchases (including, without limitation, Section 9.04(i) thereof), the interest described in Schedule 1 hereto (the
Assigned Interest) in and to the Assignors rights and obligations under the Credit Agreement with respect to those
credit facilities contained in the Credit Agreement as are set forth on Schedule 1 hereto (individually, an Assigned
Facility; collectively, the Assigned Facilities), in a principal amount for each Assigned Facility as set forth on
Schedule 1 hereto.
2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority,
and has taken all action necessary, to execute and deliver this Permitted Loan Purchase Assignment and Acceptance and
to consummate the transactions contemplated hereby; (b) other than as set forth in clause (a) hereof, assumes no
responsibility with respect to any statements, warranties or representations made in or in connection with the Credit
Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto; (c) makes
no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or
any Subsidiary or the performance or observance by any Loan Party of any of its respective obligations under the Credit
Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto; and (d) attaches
any Notes held by it evidencing the Assigned Facilities. To the extent the Assignor has retained any interest in the
Assigned Facility and holds a Note evidencing such interest, the Assignor hereby requests that the Administrative Agent
exchange the attached Notes for a new Note or Notes payable to the Assignor, in each case in amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments which have become effective on the
Effective Date).
3. The Assignee (a) represents and warrants that it has full power and authority and is legally authorized to enter into this
Permitted Loan Purchase Assignment and Acceptance and has taken all action necessary to execute and deliver this
Permitted Loan Purchase Assignment and Acceptance and to consummate the transactions contemplated hereby; and
(b) represents and warrants that it is not in possession of material non- public information (within the meaning of United
States federal and state securities laws (or, in the case of any such person that is not a public reporting company, material
information of a type that would not be reasonably expected to be publicly available if such person were a public reporting
company) with respect to the Borrowers, the Subsidiaries or their respective securities that (A) has not been disclosed to
the Assignor (other than because any such Assignor does not wish to receive material non- public information (or, in the
case of any such person that is not a public reporting company, material information of a type that would not be
reasonably expected to be publicly available if such person were a public reporting company) with respect to the
Borrowers, the Subsidiaries or their respective securities) and (B) could reasonably be expected to have a material effect
upon, or otherwise be material to, Assignors decision to assign the Assigned Facilities to the Assignee.
4. The effective date of this Permitted Loan Purchase Assignment and Acceptance shall be the Effective Date of
Assignment described in Schedule 1 hereto (the Effective Date). The Administrative Agent shall update the Register,
effective as of the Effective Date, to record such event.
5. Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) (i) to the
Assignor for amounts which have accrued prior to the Effective Date and (ii) subject to terms and conditions set forth in
the Credit Agreement (including, without limitation, Section 2.18(f) thereof), to the Assignee for amounts which have
accrued from and after the Effective Date.
6. As of the Effective Date, the Assignor shall, to the extent provided in this Permitted Loan Purchase Assignment and
Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.
7. This Permitted Loan Purchase Assignment and Acceptance shall be binding upon, and inure to the benefit of the
parties hereto and their respective successors and assigns. This Permitted Loan Purchase Assignment and Acceptance may
be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Permitted Loan Purchase Assignment and Acceptance by electronic means shall be
effective as delivery of a manually executed counterpart of this Permitted Loan Purchase Assignment and Acceptance.
8. This Permitted Loan Purchase Assignment and Acceptance shall be governed by and construed in accordance with the
laws of the State of New York, without regard to any principle of conflicts of law that could require the application of any
other law.
IN WITNESS WHEREOF, the parties hereto have caused this Permitted Loan Purchase Assignment and Acceptance to be
executed as of the date first above written.
[INSERT NAME],
as Assignor
By: ___________________
Name:
Title:
EXHIBIT F
[INSERT NAME],
as Assignee
By: ___________________
Name:
Title:
SCHEDULE 1
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignees Address for Notices:
Effective Date of Assignment:
Assigned Interests:
Facility Assigned
(1) Amount of Loans / (2) Aggregate Amount (3) Aggregate Amount of

Commitments
of Loans or
Outstanding Term Loans and
Assigned
Commitments of the Aggregate Commitments in
Assigned Facility
respect of other Facilities
(1) / (2) x 100%
(1) / (3) x 100%
Term Loans/ Commitments

Revolving Facility
Loans/Commitments
FORM OF GUARANTOR JOINDER AGREEMENT

SUPPLEMENT NO. ___, dated as of ___________ ____, 20__ (as amended, restated, supplemented or otherwise
modified from time to time, this Supplement), to the Credit Agreement, dated as of December 18, 2013 (as the same
may be amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), among (i)
Apollo Management Holdings, L.P., a Delaware limited partnership, as the borrower of the Term Loans (the Term
Facility Borrower) and a Revolving Facility Borrower (as defined below); (ii) Apollo Management, L.P., a Delaware
limited partnership, Apollo Capital Management, L.P., a Delaware limited partnership, Apollo International Management,
L.P., a Delaware limited partnership, AAA Holdings, L.P., a Guernsey limited partnership, Apollo Principal Holdings I,
L.P., a Delaware limited partnership, Apollo Principal Holdings II, L.P., a Delaware limited partnership, Apollo Principal
Holdings III, L.P., a Cayman Islands exempted limited partnership, Apollo Principal Holdings IV, L.P., a Cayman Islands
exempted limited partnership, Apollo Principal Holdings V, L.P., a Delaware limited partnership, Apollo Principal
Holdings VI, L.P., a Delaware limited partnership, Apollo Principal Holdings VII, L.P., a Cayman Islands exempted
limited partnership, Apollo Principal Holdings VIII, L.P., a Cayman Islands exempted limited partnership, Apollo
Principal Holdings IX L.P., a Cayman Islands exempted limited partnership, ST Holdings GP, LLC, a Delaware limited
liability company, and ST Management Holdings, LLC, a Delaware limited liability company (such entities, together with
Apollo Management Holdings, L.P., collectively, the Revolving Facility Borrowers, and the Revolving Facility
Borrowers, together with the Term Facility Borrower, collectively, the Borrowers and each a Borrower); (iii) the
Guarantors listed on the signature pages thereto (collectively, the Existing Guarantors); (iv) the lenders party thereto
from time to time (the Lenders); (v) the issuing banks party thereto from time to time; and (vi) JPMorgan Chase Bank,
N.A., as administrative agent for the Lenders (in such capacity, the Administrative Agent).
A.Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
B.
Each Existing Guarantor has entered into the Credit Agreement in order to induce the Lenders to make Loans and
each Issuing Bank to issue Letters of Credit.
C.
Section 5.07 of the Credit Agreement provides that additional Material AGM Operating Group Entities must
become Guarantors under the Credit Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Material AGM Operating Group Entity (the New Guarantor) is executing this
Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the
Credit Agreement in order to induce the Lenders to maintain and/or make additional Loans and each Issuing
Bank to maintain and/or issue additional Letters of Credit, and as consideration for Loans previously made and
Letters of Credit previously issued.
Accordingly, the New Guarantor agrees as follows:
SECTION 1. In accordance with Section 5.07 of the Credit Agreement, the New Guarantor by its signature below
becomes a Guarantor under the Credit Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby agrees to all terms and provisions of the Credit Agreement applicable to it as a
Guarantor thereunder. In furtherance of the foregoing, the New Guarantor does hereby guarantee to the Administrative
Agent, for the benefit of the Issuing Banks and the Lenders, the prompt payment of the Loan Obligations in full when due
as set forth in the Credit Agreement. Each reference to a Guarantor in the Credit Agreement and in this Supplement
shall be deemed to include the New Guarantor. The Credit Agreement is hereby incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the Administrative Agent that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or other similar laws affecting creditors rights generally, (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and
fair dealing.
SECTION 3. This Supplement may be executed in two or more counterparts, each of which shall constitute an original but
all of which, when taken together, shall constitute but one contract. This Supplement shall become effective when the
Administrative Agent shall have received a counterpart of this Supplement that bears the signature of the New Guarantor.
Delivery of an executed counterpart to this Supplement by facsimile or other electronic transmission shall be as effective
as delivery of a manually signed original.
SECTION 4. Except as expressly supplemented hereby, the Credit Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS
OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
SECTION 6. In the event any one or more of the provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in
the Credit Agreement shall not in any way be affected or impaired thereby. The parties shall endeavor in good- faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 9.01 of the
Credit Agreement.
SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent for its reasonable and documented outof- pocket expenses in connection with this Supplement, including the reasonable and documented fees, disbursements
and other charges of one primary outside counsel to the Administrative Agent.
[remainder of page intentionally left blank; signature page follows]
IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplement to the Credit Agreement as of the day
and year first above written.
[Name of New Guarantor]
By:
Name:
Title:
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Treated As Partnerships For
U.S. Federal Income Tax Purposes)
Administrative Agent). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.
Pursuant to the provisions of Section 2.17(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole
record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten
percent shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled
foreign corporation related to the Borrowers as described in Section 881(c)(3)(C) of the Code, and (v) no interest
payments in connection with any Loan Document are effectively connected with the undersigneds conduct of a U.S. trade
or business.
The undersigned has furnished the Administrative Agent and the applicable Borrower with a certificate of its non- U.S.
person status on IRS Form W- 8BEN. By executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform the applicable Borrower and the
Administrative Agent in writing and (2) the undersigned shall have at all times furnished the applicable Borrower and the
Administrative Agent a properly completed and currently effective certificate in either the calendar year in which payment
is to be made by the applicable Borrower or the Administrative Agent to the undersigned, or in either of the two calendar
years preceding each such payment.
[Foreign Lender]
By:
Name:
Title:
[Address]
Dated: ______________________, 20[ ]
(For Foreign Lenders That Are Treated As Partnerships For
Pursuant to the provisions of 2.17(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record
owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate,
(ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)),
(iii) neither the undersigned nor any of its partners/members is a bank within the meaning of Section 881(c)(3)(A) of the
Code, (iv) none of its partners/members is a ten percent shareholder of the Borrowers within the meaning of Section
871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrowers
as described in Section 881(c)(3)(C) of the Code, and (vi) no interest payments in connection with any Loan Document
are effectively connected with the undersigneds or its partners/members conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the applicable Borrower with IRS Form W- 8IMY
accompanied by one of the following forms from each of its partners/members claiming the portfolio interest exemption:
(i) an IRS Form W- 8BEN or (ii) and IRS Form W- 8IMY accompanied by an IRS Form W- 8BEN from each of such
partners/members beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so
inform the applicable Borrower and the Administrative Agent in writing and (2) the undersigned shall have at all times
furnished the applicable Borrower and the Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two
calendar years preceding each such payment.
[Foreign Lender]
By:
Name:
Title:
[Address]
Dated: ______________________, 20[ ]
(For Foreign Participants That Are Not Treated As Partnerships For
Pursuant to the provisions of Section 2.17(e) and Section 9.04(d) of the Credit Agreement, the undersigned hereby
certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this
certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent
shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to the Borrowers as described in Section 881(c)(3)(C) of the Code, and (v) no interest payments in
connection with any Loan Document are effectively connected with the undersigneds conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with a certificate of its non- U.S. person status on IRS Form W8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes,
the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years preceding each such payment.
[Foreign Participant]
By:
Name:
Title:
[Address]
Dated: ______________________, 20[ ]

(For Foreign Participants That Are Treated As Partnerships For
Pursuant to the provisions of Section 2.17(e) and Section 9.04(d) of the Credit Agreement, the undersigned hereby
certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its
partners/members are the sole beneficial owners of such participation, (iii) neither the undersigned nor any of its
partners/members is a bank within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a
ten percent shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its
partners/members is a controlled foreign corporation related to the Borrowers as described in Section 881(c)(3)(C) of
the Code, and (vi) no interest payments in connection with any Loan Document are effectively connected with the
undersigneds or its partners/members conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with IRS Form W- 8IMY accompanied by one of the following
forms from each of its partners/members claiming the portfolio interest exemption: (i) an IRS Form W- 8BEN or (ii) and
IRS Form W- 8IMY accompanied by an IRS Form W- 8BEN from each of such partners/members beneficial owners
that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2)
the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate
in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years
preceding each such payment.
[Foreign Participant]
By:
Name:
Title:
[Address]
Dated:
______________________, 20[ ]
Schedule 1.01
Designated Lenders on Closing Date
JPMorgan
Bank of America Merrill Lynch
Barclays
Citibank
Credit Suisse
Deutsche Bank
Goldman Sachs
Morgan Stanley
RBC
UBS
Wells Fargo
BMO
Mizuho
Nomura
Societe Generale
Schedule 2.01
Commitments and Loans
Lender
JPMorgan Chase Bank, N.A.
Bank of America, N.A.
Barclays Bank PLC
Citibank, N.A.
Credit Suisse AG, Cayman
Island Branch
Deutsche Bank Trust
Company Americas
Goldman Sachs Bank USA
Morgan Stanley Bank, N.A.
Royal Bank of Canada
UBS AG, Stamford Branch
Wells Fargo Bank, National
Association
BMO Harris Bank N.A.
Mizuho Bank, Ltd.
Nomura Corporate Funding
Americas, LLC
Societe Generale
Closing Date Term B Loans

$63,000,000
$55,500,000
$55,500,000
$55,500,000
$55,500,000
Initial Revolving Facility

Commitment
$42,000,000
$37,000,000
$37,000,000
$37,000,000
$37,000,000
Total
$105,000,000
$92,500,000
$92,500,000
$92,500,000
$92,500,000
$55,500,000
$37,000,000
$92,500,000
$55,500,000
$55,500,000
$55,500,000
$55,500,000
$55,500,000
$37,000,000
$37,000,000
$37,000,000
$37,000,000
$37,000,000
$92,500,000
$92,500,000
$92,500,000
$92,500,000
$92,500,000
$33,000,000
$33,000,000
$33,000,000
$22,000,000
$22,000,000
$22,000,000
$55,000,000
$55,000,000
$55,000,000
$33,000,000
$22,000,000
$55,000,000

L.P.
Total
* Subordinated Obligations
$271,727,272.73
$0
$271,727,272.73*
$1,021,727,272.73
$500,000,000
$1,521,727,272.73
Schedule 6.01
Indebtedness
None.
Schedule 6.02(a)
Liens
None.
Schedule 9.01
Notice Information
Party
Any Loan Party
Notice Address
Apollo Management Holdings, L.P.
c/o Apollo Management
Attention: Martin Kelly
Telephone: (212) 822- 0480
Facsimile: (646) 607- 0941
Email Address: mkelly@apollolp.com
with copy to:
Attention: John Suydam
Telephone: (212) 515- 3237
Facsimile: (212) 515- 3251
Email Address: jsuydam@apollolp.com
Administrative Agent and Initial Issuing

Bank
Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas
New York, NY 10019
Attention: Brad J. Finkelstein
Telephone: (212) 373- 3074
Facsimile: (212) 492- 0074
Email Address: bfinkelstein@paulweiss.com
For notices on the Credit Agreement:
500 Stanton Christiana Road, Ops 2
Newark, DE 19713
Attention: John Enyam
Telephone: (302) 634- 8833
Facsimile: (302) 634- 4733
Email Address: john.enyam@jpmorgan.com
For purposes other than draw/roll notices:
383 Madison Avenue, 23rd Floor
New York, NY 10179
Attention: Michael Kusner
Telephone: (212) 270- 5650
Email Address: michael.e.kusner@jpmorgan.com
[Signature Page to Credit Agreement]
[Signature Page to Credit Agreement]
Exhibit 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, Leon Black, certify that:
1. I have reviewed this Annual Report on Form 10- K for the year ended December 31, 2013 of Apollo Global Management, LLC;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a- 15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d15(f)) for the Registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the
d) Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the Registrants most recent
fiscal quarter (the Registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the Registrants internal control over financial reporting; and
5.
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control
over financial reporting.
Date: March 3, 2014

/s/ Leon Black
Leon Black
Exhibit 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Martin Kelly, certify that:
1. I have reviewed this Annual Report on Form 10- K for the year ended December 31, 2013 of Apollo Global Management, LLC
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a- 15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d15(f)) for the Registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b.
c. Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the
d. Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the Registrants most recent
fiscal quarter (the Registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the Registrants internal control over financial reporting; and
5.
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent
functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control
over financial reporting.
Date: March 3, 2014
/s/ Martin Kelly
Martin Kelly
Exhibit 32.1
Certification of the Chief Executive Officer
as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Leon Black, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that, to my knowledge:
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 3, 2014
/s/ Leon Black

Leon Black
*
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a
separate disclosure document.
Exhibit 32.2
Certification of the Chief Financial Officer
as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Martin Kelly, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that to my knowledge:
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 3, 2014
/s/ Martin Kelly
Martin Kelly
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a
separate disclosure document.

Apollo Global Management LLC 2013 Form 10K

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Apollo Global Management LLC 2013 Form 10K

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Table of Contents

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

9 West 57th Street, 43rd Floor

(212) 515- 3200

Title of each class

Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act: None

UNRESOLVED STAFF COMMENTS

MINE SAFETY DISCLOSURES

SELECTED FINANCIAL DATA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 62

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION

CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

CONTROLS AND PROCEDURES

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PRINCIPAL ACCOUNTING FEES AND SERVICES

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Forward- Looking Statements

Distressed Buyouts and Debt

Corporate Carve- outs

AUM: $49.9 billion(1)(2)

U.S. Performing Credit

Non- performing Loans

Global opportunistic and value added

Senior and subordinated debt

Commercial mortgage backed

AUM: $100.9 billion(1)(2)(3)

AUM: $9.3 billion(2)(3)

Strategic Investment Accounts(4)

(1) All data is as of December 31, 2013.

American Gaming Systems

McGraw- Hill Education

Corporate Carve- outs

Corporate Carve- Outs

Great Wolf Resorts

CORE Media Group

Gala Coral Group

Fund VII & VI

Norwegian Cruise Line

Prestige Cruise Holdings

Fund VII & VI

Corporate Carve- outs

Packaging & Materials

Fund IV, V & VI

Corporate Carve- outs

Prior to merger with Covalence Specialty Material Holdings

(1) Excludes sub- advised AUM.

or special- purpose vehicles incur

our AUM to decrease, lowering management fees from our

implementing new or updated information and financial systems and procedures;

the diversion of managements attention from our core

general market and economic

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL

Holding Company Structure

For the year ended December 31, 2012

For the year ended December 31, 2012