Item 3.03
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Material Modification to Rights of Security Holders.
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On May 17, 2018, Oaktree
Capital Group, LLC (
Oaktree
) issued 7,200,000 units of its 6.625% Series A Preferred Units (the
Series A Preferred Units
) pursuant to a previously announced underwritten public offering. In connection with the
issuance of the Series A Preferred Units, Oaktree amended and restated its Third Amended and Restated Operating Agreement on May 17, 2018 (as amended and restated, the
Fourth Amended and Restated Operating Agreement
) and
approved a Unit Designation with respect to the Series A Preferred Units (the
Unit Designation
) to create and fix the rights, preferences and powers of the Series A Preferred Units. Also, in connection with the issuance of the
Series A Preferred Units, on May 17, 2018, the limited partnership agreement of Oaktree Capital I, L.P. was amended and restated and a unit designation with respect to preferred interests with economic terms designed to materially mirror those
of the Series A Preferred Units was approved.
When, as and if declared by the board of directors of Oaktree, distributions on the Series
A Preferred Units will be payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning on September 15, 2018, at a rate per annum equal to 6.625%. Distributions on the Series A Preferred Units
are
non-cumulative.
Subject to certain exceptions, unless distributions have been declared and
paid or declared and set apart for payment on the Series A Preferred Units for a quarterly distribution period, during the remainder of that distribution period, Oaktree may not declare or pay or set apart payment for distributions on any Junior
Units (as defined in the Unit Designation) and Oaktree may not repurchase any Junior Units. These restrictions are not applicable during the initial distribution period, which is the period from May 17, 2018, the original issue date, to, but
excluding, September 15, 2018.
The Series A Preferred Units may be redeemed at Oaktrees option, in whole or in part, at any
time on or after June 15, 2023 at a price of $25.00 per Series A Preferred Unit, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. Holders of Series A Preferred Units
will have no right to require the redemption of the Series A Preferred Units.
If a Change of Control Event (as defined in the Unit
Designation) occurs prior to June 15, 2023, the Series A Preferred Units may be redeemed at Oaktrees option, in whole but not in part, upon at least 30 days notice, within 60 days of the occurrence of such Change of Control Event at
a price of $25.25 per Series A Preferred Unit, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. If (i) a Change of Control Event occurs (whether before, on or after
June 15, 2023) and (ii) Oaktree does not give notice prior to the 31st day following the Change of Control Event to redeem all the outstanding Series A Preferred Units, the distribution rate per annum on the Series A Preferred Units will
increase by 5.00%, beginning on the 31st day following such Change of Control Event.
If a Series A Tax Event or a Rating Agency Event
(each as defined in the Unit Designation) occurs prior to June 15, 2023, the Series A Preferred Units may be redeemed at Oaktrees option, in whole but not in part, upon at least 30 days notice, within 60 days of the occurrence of
such Series A Tax Event or a Rating Agency Event, as applicable, at a price of $25.50 per Series A Preferred Unit, plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions.
The description of the terms of the Series A Preferred Units in this Item 3.03 is qualified in
its entirety by reference to the Fourth Amended and Restated Operating Agreement, the Unit Designation and the form of 6.625% Series A Preferred Units Certificate, which are included as Exhibits 3.1, 3.2 and 4.1, respectively, to this Current Report
on Form
8-K
and are incorporated by reference herein.
The description of the terms of the
amendments to the limited partnership agreement and the unit designation of Oaktree Capital I, L.P. in this Item 3.03 is qualified in its entirety by reference to Oaktree Capital I, L.P.s amended and restated limited partnership agreement and
unit designation, each of which will be filed as an exhibit to Oaktrees Form
10-Q
report for the fiscal quarter ending June 30, 2017.