Exhibit 10.3

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”),
dated as of April 15, 2014, is hereby entered into by and among Moelis &
Company, a Delaware corporation (the “Corporation”), Moelis Holdings
Feeder, Inc., a Delaware corporation (“Feeder”), Moelis & Company Group LP, a
Delaware limited partnership (the “Partnership”), and each of the Partners
listed on Schedule 1 hereto.

 

RECITALS

 

WHEREAS, the Partners hold interests in Moelis & Company Partner Holdings LP, a
Delaware limited partnership (“Partner Holdings”), or hold interests in one or
more other entities which in turn hold interests in Partner Holdings;

 

WHEREAS, Partner Holdings holds Common Units in the Partnership (“Common
Units”), which is treated as a partnership for United States federal income tax
purposes;

 

WHEREAS, the interest holders in Partner Holdings are treated for U.S. federal
income tax purposes as the owners of such Common Units;

 

WHEREAS, the interest holders in Partner Holdings will be treated for U.S.
federal income tax purposes as selling a portion of such Common Units (the
“Initial Sale”) to the Corporation and Feeder, a direct wholly-owned Subsidiary
of the Corporation, pursuant to the transactions described in the registration
statement on Form S-1 initially filed with the Securities and Exchange
Commission on March 4, 2014 (Registration No. 333-194306), as amended prior to
the date hereof, including the initial public offering of shares of Class A
common stock (the “Class A Shares”) by the Corporation (the “IPO”);

 

WHEREAS, a wholly-owned Subsidiary of the Corporation will become the general
partner of, and will hold general partnership units in, the Partnership;

 

WHEREAS, the Common Units are exchangeable with the Corporation in certain
circumstances for Class A Shares in the Corporation and/or cash pursuant to
Section 14.1(a) of the Partnership Agreement;

 

WHEREAS, the Partnership and certain direct and indirect Subsidiaries treated as
partnerships for United States federal income tax purposes will have in effect
an election under section 754 of the Internal Revenue Code of 1986, as amended
(the “Code”), for the Taxable Year of the IPO Date and for each other Taxable
Year in which an exchange by a Partner of Common

 

--------------------------------------------------------------------------------

 

Units for Class A Shares and/or cash occurs, which election is intended to
result in an adjustment to the tax basis of the assets owned by the Partnership
and such Subsidiaries, solely with respect to Feeder or the Corporation, at the
time of an exchange by a Partner of Common Units for Class A Shares and/or cash
or any other acquisition of Common Units for cash or otherwise, (collectively,
including the Initial Sale, an “Exchange”) (such time, the “Exchange Date”)
(such assets and any asset whose tax basis is determined, in whole or in part,
by reference to the adjusted basis of any such asset, the “Adjusted Assets”) by
reason of such Exchange and the receipt of payments under this Agreement;

 

WHEREAS, the income, gain, loss, expense and other Tax items of (i) the
Partnership and such Subsidiaries solely with respect to Feeder or the
Corporation may be affected by the Basis Adjustment (defined below) with respect
to the Adjusted Assets and (ii) Feeder or the Corporation may be affected by the
Imputed Interest (as defined below);

 

WHEREAS, the parties to this Agreement desire to make certain arrangements with
respect to the effect of the Basis Adjustment and Imputed Interest on the actual
liability for Taxes of Feeder or the Corporation.

 

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

 

ARTICLE I

 

DEFINITIONS

 

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

 

“AAA” has the meaning set forth in Section 7.08(c) of this Agreement.

 

“Adjusted Asset” is defined in the recitals of this Agreement.

 

“Advisory Firm” means any accounting firm or any law firm, in each case that is
nationally recognized as being expert in Tax matters and that is agreed to by
the Board.

 

“Advisory Firm Letter” shall mean a letter from the Advisory Firm stating that
the relevant schedule, notice or other information to be provided by the
Corporation to the Applicable Partner and all supporting schedules and work
papers were prepared in a manner consistent with the

 

2

--------------------------------------------------------------------------------

 

terms of this Agreement and, to the extent not expressly provided in this
Agreement, on a reasonable basis in light of the facts and law in existence on
the date such schedule, notice or other information is delivered to the
Applicable Partner.

 

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

 

“Agreed Rate” means LIBOR.

 

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

 

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

 

“Amount Realized” means, in respect of an Exchange by an Applicable Partner, the
amount that is deemed for purposes of this Agreement to be the amount realized
by the Applicable Partner on the Exchange, which shall be the sum of (i) the
Market Value of the Class A Shares, the amount of cash and the amount or fair
market value of other consideration transferred to the Exchanging Member in the
Exchange and (ii) the Share of Liabilities attributable to the Common Units
Exchanged.

 

“Applicable Partner” means any Partner to whom any portion of a Realized Tax
Benefit is Attributable hereunder.

 

“Attributable”:  The portion of any Realized Tax Benefit of Feeder or the
Corporation that is “Attributable” to any Partner shall be determined by
reference to the assets from which arise the depreciation, amortization or other
similar deductions for recovery of cost or basis (“Depreciation”) and with
respect to increased basis upon a disposition of an asset or Imputed Interest
that produce the Realized Tax Benefit, under the following principles:

 

(i)                                     Any Realized Tax Benefit arising from a
deduction to Feeder or the Corporation with respect to a Taxable Year for
Depreciation arising in respect of a Basis Adjustment to an Adjusted Asset is
Attributable to the Applicable Partner to the extent that the ratio of all
Depreciation for the Taxable Year in respect of Basis Adjustments resulting from
all Exchanges by the Applicable Partner bears to the aggregate of all
Depreciation for the Taxable Year in respect of Basis Adjustments resulting from
all Exchanges by all Partners.

 

(ii)                                  Any Realized Tax Benefit arising from the
disposition of an asset is Attributable to the Applicable Partner to the extent
that the ratio of all Basis Adjustments resulting from all Exchanges by the
Applicable Partner with

 

3

--------------------------------------------------------------------------------

 

respect to such asset bears to the aggregate of all Basis Adjustments resulting
from all Exchanges by all Partners with respect to such asset.

 

(iii)                               Any Realized Tax Benefit arising from a
deduction to Feeder or the Corporation with respect to a Taxable Year in respect
of Imputed Interest is Attributable to the Applicable Partner that is required
to include the Imputed Interest in income (without regard to whether such
Partner is actually subject to tax thereon).

 

(iv)                              For the avoidance of doubt, in the case of a
Basis Adjustment arising with respect to an Exchange under section 734(b) of the
Code, depreciation, amortization or other similar deductions for recovery of
cost or basis shall constitute Depreciation only to the extent that such
depreciation, amortization or other similar deductions may produce a Realized
Tax Benefit (and not to the extent that such depreciation, amortization or other
similar deductions may be for the benefit of a Person other than Feeder or the
Corporation), as reasonably determined by the Corporation.

 

“Basis Adjustment” means the adjustment to the Tax basis of an Adjusted Asset
under section 732 of the Code (in situations where, as a result of one or more
Exchanges, a Partnership becomes an entity that is disregarded as separate from
its owner for tax purposes) or sections 734(b) or 743(b) and section 754 of the
Code (including in situations where, following an Exchange, a Partnership
remains in existence as an entity for Tax purposes) and, in each case,
comparable sections of state, local and foreign Tax laws (as calculated under
Section 2.01 of this Agreement) as a result of an Exchange and the payments made
pursuant to this Agreement.  Notwithstanding any other provision of this
Agreement, the amount of any Basis Adjustment resulting from (i) an Exchange of
one or more Common Units shall be determined without regard to any Pre-Exchange
Transfer of such Common Units and as if any such Pre-Exchange Transfer had not
occurred.  For the avoidance of doubt, any adjustments under section 734(b) of
the Code arising before the Initial Sale or as a result of the transactions
undertaken in connection therewith (“Pre-Existing Section 734(b) Adjustments”)
shall not be treated as Exchanges under this Agreement.  Further, for purposes
of all calculations made and benefits due under this Agreement, any Pre-Existing
Section 734(b) Adjustments shall be disregarded.  The preceding sentence is
intended to ensure that the amounts of the adjustments under section 743(b) of
the Code arising in connection with Exchanges from and after the date of the
Initial Sale and computed under Section 2.01 of this Agreement are not decreased
by the amount of any Pre-Existing Section 734(b) Adjustments, and the preceding
sentence shall be interpreted and applied consistently with such intention.

 

“Beneficial Ownership” (including correlative terms) shall have the meaning
ascribed to that term in Rule 13d-3 promulgated under the Exchange Act.

 

“Board” means the board of directors of the Corporation.

 

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

 

4

--------------------------------------------------------------------------------

 

“Change of Control” means the occurrence of any of the following events:

 

(i)                                     any Person or any group of Persons
acting together which would constitute a “group” for purposes of
Section 13(d) of the Exchange Act, or any successor provisions thereto,
excluding any Permitted Transferee or any group of Permitted Transferees,
becomes the Beneficial Owner, directly or indirectly, of securities of the
Corporation representing more than fifty percent (50%) of the combined voting
power of the Corporation’s then outstanding voting securities; or

 

(ii)                                  the following individuals cease for any
reason to constitute a majority of the number of directors of the Corporation
then serving: individuals who, on the IPO Date, constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Corporation) whose appointment or election by the Board or nomination for
election by the Corporation’s shareholders was approved or recommended by a vote
of at least two-thirds (2/3) of the directors then still in office who either
were directors on the IPO Date or whose appointment, election or nomination for
election was previously so approved or recommended by the directors referred to
in this clause (ii); or

 

(iii)                               there is consummated a merger or
consolidation of the Corporation or any direct or indirect subsidiary of the
Corporation with any other corporation or other entity, and, immediately after
the consummation of such merger or consolidation, either (x) the members of the
Board immediately prior to the merger or consolidation do not constitute at
least a majority of the board of directors of the company surviving the merger
or, if the surviving company is a subsidiary, the ultimate parent thereof, or
(y) all of the Persons who were the respective Beneficial Owners of the voting
securities of the Corporation immediately prior to such merger or consolidation
do not Beneficially Own, directly or indirectly, more than fifty percent (50%)
of the combined voting power of the then-outstanding voting securities of the
Person resulting from such merger or consolidation; or

 

(iv)                              the shareholders of the Corporation approve a
plan of complete liquidation or dissolution of the Corporation, or there is
consummated an agreement or series of related agreements for the sale or other
disposition, directly or indirectly, by the Corporation of all or substantially
all of the Corporation’s assets, other than the sale or other disposition by the
Corporation of all or substantially all of the Corporation’s assets to an
entity, at least fifty percent (50%) of the combined voting power of the voting
securities of which are Beneficially Owned by shareholders of the Corporation in
substantially the same proportions as their Beneficial Ownership of such
securities of the Corporation immediately prior to such sale.

 

5

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, (i) a “Change in Control” shall not be deemed to
have occurred (x) as a result of any transaction or series of integrated
transactions following which Kenneth Moelis or any of his Affiliates possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the Corporation (or any successor thereto), whether
through the ownership of voting securities, as trustee or executor, by contract
or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the Board or
the board of directors or similar body governing the affairs of any successor to
the Corporation or (y) except with respect to clause (ii) and clause
(iii)(x) above, by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
shares of the Corporation immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Corporation
immediately following such transaction or series of transactions.  For purposes
of this definition, “Permitted Transferee” means a shareholder’s family members
or a trust for the benefit of the shareholder and/or family members.

 

“Class A Shares” is defined in the recitals of this Agreement.

 

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

 

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

 

“Competitive Enterprise” means any business enterprise that is engaged, or owns
or controls a significant interest in any entity that is engaged, in either
case, primarily or in any substantial manner in any place in the world in
(x) investment banking or securities activities or financial services,
including, without limitation, private equity, hedge fund or other asset or
investment management businesses, or (y) any business activities in which the
Corporation or any of its Affiliates are engaged primarily or in any substantial
manner; in each case excluding Moelis & Company Holdings LP and its Affiliates.

 

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.

 

“Corporate Entity” means any direct Subsidiary of the Corporation which is
classified as a corporation for U.S. federal income tax purposes.

 

“Corporation” is defined in the preamble of this Agreement.

 

6

--------------------------------------------------------------------------------

 

“Corporation Return” means the U.S. federal Tax Return and/or state and/or local
and/or foreign Tax Return, as applicable, of the Corporation and/or Feeder filed
with respect to Taxes of any Taxable Year.

 

“Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative
amount of Realized Tax Benefits for all Taxable Years of Feeder and the
Corporation, up to and including such Taxable Year, net of the cumulative amount
of Realized Tax Detriments for the same period.  The Realized Tax Benefit and
Realized Tax Detriment for each Taxable Year shall be determined based on the
most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at
the time of such determination.

 

“Default Rate” means LIBOR plus 400 basis points.

 

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

 

“Detrimental Activities” means any of the following:

 

(i)                       Competitive Activities.  The Partner, directly or
indirectly, provides services to, engages in, has any equity interest in, or
manages or operates any Competitive Enterprise; provided, however, that the
Partner shall be permitted to acquire a passive equity interest of not more than
five percent (5%) of such Competitive Enterprise’s outstanding publicly traded
equity interests.

 

(ii)                    Solicitation Activities.  The Partner, directly or
indirectly, recruits or otherwise solicits, encourages or induces any limited
partner, employee, independent contractor, consultant, service provider or
supplier of the Corporation or any of its Affiliates (i) to terminate his, her
or its employment or arrangement with the Corporation or any of its Affiliates,
or (ii) to otherwise change his, her or its relationship with the Corporation or
any of its Affiliates.

 

(iii)                 Disparagement Activities.  The Partner disparages in any
material respect the Corporation, any of its products or practices, or any of
its directors, officers, agents, representatives, stockholders or Affiliates,
either orally or in writing, except for truthful statements required by law,
regulation, subpoena, court order, or similar legal requirement.

 

(iv)                Attestation.  The Partner fails to timely execute an
attestation to the effect that Partner has not engaged in the acts described in
clauses (i)-(iii) above prior to each Exchange or at such other times reasonably
requested by the Corporation.

 

7

--------------------------------------------------------------------------------

 

(v)                   Breach. The Partner breaches in any material respect, as
determined by the Corporation, any agreement the Partner may have with the
Corporation or any of its Affiliates, including without limitation, obligations
relating to confidentiality.

 

“Disability” means, with respect to any Partner, the Partner’s inability due to
illness or other physical or mental impairment to substantially perform his
duties to the Corporation or an Affiliate for a period of 90 consecutive days
during any six-month period or for 180 days during any 12-month period, as
determined in the good faith discretion of the Corporation.

 

“Dispute” has the meaning set forth in Section 7.08(c) of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

“Exchange” is defined in the recitals of this Agreement, and “Exchanged” and
“Exchanging” shall have correlative meanings.  For the avoidance of doubt, if
the Partnership exercises its rights to redeem Partnership Common Units under
Section 7.3 of the Partnership Agreement, such redemption shall be considered an
Exchange under this Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

 

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

 

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

 

“Exchange Payment” is defined in Section 5.01 of this Agreement.

 

8

--------------------------------------------------------------------------------

 

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

 

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

 

“Feeder” is defined in the recitals of this Agreement.

 

“Hypothetical Tax Liability” means, with respect to any Taxable Year, the
liability for Taxes of Feeder and/or the Corporation (and/or the Partnership,
but only with respect to Taxes imposed on the Partnership and allocable to
Feeder and/or the Corporation) using the same methods, elections, conventions
and similar practices used on the relevant Corporation Return (and/or Tax Return
of the Partnership) but using the Non-Stepped Up Tax Basis instead of the tax
basis reflecting the Basis Adjustments of the Adjusted Assets and excluding any
deduction attributable to Imputed Interest.

 

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

 

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

 

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

 

“Individual Valuation Assumptions” shall mean, as of an Early Termination Date,
the assumptions that (1) in each Taxable Year ending on or after such Early
Termination Date, Feeder and/or the Corporation will have taxable income
sufficient to fully utilize the deductions arising from the Basis Adjustment and
the Imputed Interest during such Taxable Year, (2) the federal income tax rates
and state, local and foreign income tax rates that will be in effect for each
such Taxable Year will be those specified for each such Taxable Year by the Code
and other law as in effect on the Early Termination Date, (3) any loss
carryovers generated by the Basis Adjustment or the Imputed Interest and
available as of the date of the Early Termination Schedule will be utilized by
Feeder and/or the Corporation on a pro rata basis from the date of the Early
Termination Schedule through the scheduled expiration date of such loss
carryovers, and (4) any non-amortizable assets are deemed to be disposed of on
the fifteenth anniversary of the earlier of the Basis Adjustment and the Early
Termination Date, provided, that in the event of a Change of Control
non-amortizable assets shall be deemed disposed of at the earlier of (i) the
time of sale of the relevant asset or (ii) as generally provided in this
Valuation Assumption (4).

 

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

 

“IPO” is defined in the recitals of this Agreement.

 

9

--------------------------------------------------------------------------------

 

“IPO Date” means the date on which Class A Shares in the Corporation are sold in
an initial public offering.

 

“IRS” means the United States Internal Revenue Service.

 

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

 

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

 

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

 

“Net Tax Benefit” has the meaning set forth in Section 3.01(b) of this
Agreement.

 

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

 

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

 

“Old Holdings” has the meaning set forth in Section 7.15(b) of this Agreement.

 

“Partner” means each party hereto (other than the Corporation, Feeder and the
Partnership), and each other Person who from time to time executes a joinder to
this Agreement in form and substance reasonably satisfactory to the Corporation.
For the avoidance of doubt, Schedule 1 hereto may provide limitations on the
extent to which benefits of this Agreement may be available to a particular
Partner.

 

10

--------------------------------------------------------------------------------

 

“Partnership” is defined in the preamble of this Agreement.

 

“Partnership Agreement” means the Amended and Restated Limited Partnership
Agreement of the Partnership, as such is from time to time amended or restated.

 

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

 

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

 

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

 

“Realized Tax Benefit” means, for a Taxable Year and for all Taxes collectively,
the net excess, if any, of the Hypothetical Tax Liability over the actual
liability for Taxes of Feeder and/or the Corporation (or the Partnership, but
only with respect to Taxes imposed on the Partnership and allocable to Feeder
and/or the Corporation for such Taxable Year), such actual Tax liability to be
computed with the adjustments described in this Agreement. If all or a portion
of the actual liability for Taxes of Feeder and/or the Corporation, or the
Partnership (but only with respect to Taxes imposed on the Partnership and
allocable to Feeder and/or the Corporation for such Taxable Year), for the
Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable
Year, such liability shall not be included in determining the Realized Tax
Benefit unless and until there has been a Determination.

 

“Realized Tax Detriment” means, for a Taxable Year and for all Taxes
collectively, the net excess, if any, of the actual liability for Taxes of
Feeder and/or the Corporation (or the Partnership, but only with respect to
Taxes imposed on the Partnership and allocable to the Corporation for such
Taxable Year) over the Hypothetical Tax Liability for such Taxable Year, such
actual Tax liability to be computed with the adjustments described in this
Agreement. If all or a portion of the actual liability for Taxes of Feeder
and/or the Corporation, or the Partnership (but only with respect to Taxes
imposed on the Partnership and allocable to Feeder and/or the Corporation for
such Taxable Year), for the Taxable Year arises as a result of an audit by a
Taxing Authority of any Taxable Year, such liability shall not be included in
determining the Realized Tax Detriment unless and until there has been a
Determination.

 

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

 

11

--------------------------------------------------------------------------------

 

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

 

“Rules” has the meaning set forth in Section 7.08(c) of this Agreement.

 

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

 

“Share of Liabilities” means, as to any Common Unit at the time of an exchange,
the portion of the relevant Partnership’s “liabilities” (as such term is defined
in section 752 and section 1001 of the Code) allocated to that Common Unit
pursuant to section 752 of the Code and the applicable Treasury Regulations.

 

“Specified Partner” means, as of any date of determination, any Applicable
Partner who has Exchanged Common Units in one or more Exchanges with an
aggregate Amount Realized of $50,000,000 (fifty million dollars) or more.

 

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

 

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

 

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

 

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

 

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

 

“Taxes” means any and all U.S. federal, state, local and foreign taxes,
assessments or similar charges that are based on or measured with respect to net
income or profits, whether on an exclusive or on an alternative basis, and any
interest related to such Tax.

 

12

--------------------------------------------------------------------------------

 

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

 

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

 

“Valuation Assumptions” shall mean, as of an Early Termination Date, the
assumptions that (1) in each Taxable Year ending on or after such Early
Termination Date, Feeder and/or the Corporation will have taxable income
sufficient to fully utilize the deductions arising from the Basis Adjustment and
the Imputed Interest during such Taxable Year, (2) the federal income tax rates
and state, local and foreign income tax rates that will be in effect for each
such Taxable Year will be those specified for each such Taxable Year by the Code
and other law as in effect on the Early Termination Date, (3) any loss
carryovers generated by the Basis Adjustment or the Imputed Interest and
available as of the date of the Early Termination Schedule will be utilized by
Feeder and/or the Corporation on a pro rata basis from the date of the Early
Termination Schedule through the scheduled expiration date of such loss
carryovers, (4) any non-amortizable assets are deemed to be disposed of on the
fifteenth anniversary of the earlier of the Basis Adjustment and the Early
Termination Date, provided, that in the event of a Change of Control
non-amortizable assets shall be deemed disposed of at the earlier of (i) the
time of sale of the relevant asset or (ii) as generally provided in this
Valuation Assumption (4), and (5) if, at the Early Termination Date, there are
Units that have not been Exchanged, then each such Unit shall be deemed to be
Exchanged for the Market Value of the Class A Shares and the amount of cash that
would be transferred if the Exchange occurred on the Early Termination Date.

 

ARTICLE II

 

DETERMINATION OF REALIZED TAX BENEFIT

 

Section 2.01                             Basis Adjustment.  For purposes of this
Agreement, as a result of an Exchange, the Partnership shall be deemed to be
entitled to a Basis Adjustment for each of its Adjusted Assets with respect to
Feeder and/or the Corporation, the amount of which Basis Adjustment shall be the
excess, if any, of (i) the sum of (x) the Amount Realized by the Applicable
Partner in the Exchange, to the extent attributable to such Adjusted Asset, plus
(y) the amount of payments made pursuant to this Agreement with respect to such
Exchange, to the extent attributable to such Adjusted Asset, over (ii) Feeder’s
and/or the Corporation’s share of the Partnership’s Tax basis for such Adjusted
Asset immediately after the Exchange, attributable to the Common Units
Exchanged, determined as if (x) the Partnership remains in existence as an
entity for tax purposes, and (y) the Partnership had not made the election
provided by section 754 of the Code.  For the avoidance of doubt, payments made
under this Agreement shall not be treated as resulting in a Basis Adjustment to
the extent such payments are treated as Imputed Interest.

 

13

--------------------------------------------------------------------------------

 

Section 2.02                             Exchange Basis Schedule. Within 180
calendar days after the filing of the U.S. federal income tax return of the
Corporation for each Taxable Year in which any Exchange has been effected, the
Corporation shall deliver to the Applicable Partner a schedule (the “Exchange
Basis Schedule”) that shows, in reasonable detail, for purposes of Taxes,
(i) the actual unadjusted tax basis of the Adjusted Assets as of each applicable
Exchange Date, (ii) the Basis Adjustment with respect to the Adjusted Assets as
a result of the Exchanges effected in such Taxable Year and all prior Taxable
Years, calculated (a) in the aggregate and (b) solely with respect to Exchanges
by the Applicable Partner, (iii) the period or periods, if any, over which the
Adjusted Assets are amortizable and/or depreciable and (iv) the period or
periods, if any, over which each Basis Adjustment is amortizable and/or
depreciable (which, for non-amortizable assets shall be based on the Valuation
Assumptions).

 

Section 2.03                             Tax Benefit Schedule. Within 180
calendar days after the filing of the U.S. federal income tax return of the
Corporation for any Taxable Year in which there is a Realized Tax Benefit or
Realized Tax Detriment, the Corporation shall provide to the Applicable Partner
a schedule showing, in reasonable detail, the calculation of the Realized Tax
Benefit or Realized Tax Detriment for such Taxable Year (a “Tax Benefit
Schedule”). The Schedule will become final as provided in Section 2.04(a) of
this Agreement and may be amended as provided in Section 2.04(b) of this
Agreement (subject to the procedures set forth in Section 2.04(b)).

 

Section 2.04                             Procedures, Amendments

 

(a)                                 Procedure. Every time the Corporation
delivers to the Applicable Partner an applicable Schedule under this Agreement,
including any Amended Schedule delivered pursuant to Section 2.04(b), but
excluding any Early Termination Schedule or amended Early Termination Schedule,
the Corporation shall also (x) deliver to any Specified Partner schedules and
work papers providing reasonable detail regarding the preparation of the
Schedule and an Advisory Firm Letter supporting such Schedule and (y) in the
event that a Change of Control has occurred prior to such time, allow any
Specified Partner reasonable access at no cost to the appropriate
representatives at the Corporation and the Advisory Firm in connection with a
review of such Schedule.  The applicable Schedule shall become final and binding
on all parties unless the Applicable Partner, within 30 calendar days after
receiving an Exchange Basis Schedule or amendment thereto or within 30 calendar
days after receiving a Tax Benefit Schedule or amendment thereto, provides the
Corporation with notice of a material objection to such Schedule (“Objection
Notice”) made in good faith.  If the parties, for any reason, are unable to
successfully resolve the issues raised in such notice within 30 calendar days of
receipt by the Corporation of an Objection Notice, if with respect to an
Exchange Basis Schedule, or within 30 calendar days of receipt by the
Corporation of an Objection Notice, if with respect to a Tax Benefit Schedule,
after such Schedule was delivered to the Applicable Partner, the Corporation and
the Applicable Partner shall employ the reconciliation procedures  as described
in Section 7.09 of this Agreement (the “Reconciliation Procedures”).

 

(b)                                 Amended Schedule. The applicable Schedule
for any Taxable Year shall be amended from time to time by the Corporation
(i) in connection with a Determination affecting such Schedule, (ii) to correct
material inaccuracies in the Schedule identified as a result of

 

14

--------------------------------------------------------------------------------

 

the receipt of additional factual information relating to a Taxable Year after
the date the Schedule was provided to the Applicable Partner or the correction
of computational errors set forth in such Schedule, (iii) to comply with the
Expert’s determination under the Reconciliation Procedures, (iv) to reflect a
material change in the Realized Tax Benefit or Realized Tax Detriment for such
Taxable Year attributable to a carryback or carryforward of a loss or other tax
item to such Taxable Year, (v) to reflect a material change in the Realized Tax
Benefit or Realized Tax Detriment for such Taxable Year attributable to an
amended Tax Return filed for such Taxable Year, or (vi) to adjust the Exchange
Basis Schedule to take into account payments made pursuant to this Agreement
(such Schedule, an “Amended Schedule”).  In the event that the Corporation
delivers an Amended Schedule to an Applicable Partner pursuant to
Section 2.04(b)(ii) within 180 days of the payment of the Tax Benefit Payment,
if any, related to the original Schedule being amended by such Amended Schedule,
the Applicable Partner shall, unless otherwise determined by the Corporation in
its sole discretion, be obligated to refund to the Corporation the amount (if
any) by which the Tax Benefit Payment made pursuant to such original schedule
exceeds the Tax Benefit Payment as computed pursuant to the Amended Schedule.

 

Section 2.05                             Limitation of Benefits. Notwithstanding
anything to the contrary contained in this Agreement, unless otherwise
determined by the Corporation in its sole discretion, in the event that a
Partner’s  employment or service with the Corporation and all of its Affiliates
is terminated prior to the date of an Exchange for any reason and such Partner
engages in Detrimental Activities prior to the date of such Exchange, such
Partner shall not be entitled to any benefits hereunder with respect to such
Exchange, including, for the avoidance of doubt, the right to the receipt of any
Tax Benefit Payments attributable to Basis Adjustments arising from such
Exchange.  For the avoidance of doubt, such termination shall not impact a
Partner’s rights hereunder with respect to Exchanges occurring on or prior to
the date of such termination.

 

Section 2.06                             Treatment of Initial Sale. The
undersigned parties hereby acknowledge and agree that the interest holders in
Partner Holdings will be treated for U.S. federal income tax purposes as selling
a portion of the Common Units held by such interest holders in the Initial
Sale.  The Corporation will determine in good faith the portion of such Common
Units deemed sold by each Partner or other interest holder in Partner Holdings
and will notify each Partner or other interest holder of its determination with
respect thereto within 180 days following the Initial Sale, which determination
will be binding upon the Corporation, Feeder, the Partnership and the Partners. 
For all purposes of this Agreement, each Partner shall be treated as though such
Partner had directly sold a portion of the aggregate Common Units deemed sold
for U.S. federal income tax purposes, with such portion being a percentage of
such Common Units equal to the percentage of the cash proceeds of the Initial
Sale distributed to such Partner (either directly by Partner Holdings or to such
Partner through other entities through which such Partner holds an interest in
Partner Holdings) compared to the total cash proceeds received by Partner
Holdings in the Initial Sale.

 

15

--------------------------------------------------------------------------------

 

ARTICLE III

 

TAX BENEFIT PAYMENTS

 

Section 3.01                             Payments

 

(a)                                 Within fifteen (15) calendar days of a Tax
Benefit Schedule delivered to an Applicable Partner becoming final in accordance
with Section 2.04(a), or earlier in the Corporation’s discretion, the
Corporation shall pay to the Applicable Partner for such Taxable Year the Tax
Benefit Payment determined pursuant to Section 3.01(b) in the amount
Attributable to the Applicable Partner. Each such Tax Benefit Payment shall be
made by wire transfer of immediately available funds to a bank account of the
Applicable Partner previously designated by such Partner to the Corporation. 
For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of
estimated tax payments, including, without limitation, federal income tax
payments.

 

(b)                                 A “Tax Benefit Payment” means an amount, not
less than zero, equal to the sum of the Net Tax Benefit and the Interest
Amount.  The “Net Tax Benefit” for each Taxable Year shall be an amount equal to
the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the
end of such Taxable Year over the total amount of payments previously made under
this Section 3.01, excluding payments attributable to Interest Amount; provided,
however, that for the avoidance of doubt, no Partner shall be required to return
any portion of any previously made Tax Benefit Payment.  The “Interest Amount”
for a given Taxable Year shall equal the interest on the Net Tax Benefit for
such Taxable Year calculated at the Agreed Rate from the due date (without
extensions) for filing the Corporation Return with respect to Taxes for the most
recently ended Taxable Year until the Payment Date.  In the case of a Tax
Benefit Payment made in respect of an Amended Schedule, the “Interest Amount”
shall equal the interest on the Net Tax Benefit for such Taxable Year calculated
at the Agreed Rate from the date of such Amended Schedule becoming final in
accordance with Section 2.04(a) until the Payment Date.  Notwithstanding the
foregoing, for each Taxable Year ending on or after the date of a Change of
Control, all Tax Benefit Payments, whether paid with respect to Units that were
Exchanged (i) prior to the date of such Change of Control or (ii) on or after
the date of such Change of Control, shall be calculated by using Valuation
Assumptions (1), (3), and (4), substituting in each case the terms “the date on
which a Change of Control becomes effective” for an “Early Termination Date”. 
The Net Tax Benefit and the Interest Amount shall be determined separately with
respect to each separate Exchange, on a Common Unit-by-Common Unit basis by
reference to the Amount Realized by the Applicable Partner on the Exchange of a
Common Unit and the resulting Basis Adjustment to Feeder and/or the
Corporation.  For purposes of this Section 3.01(b), the amendment to the
definition of “Agreed Rate” set forth herein shall be effective as of the date
of the Prior Agreement.  Notwithstanding any provision of this Agreement to the
contrary, any Partner may elect with respect to any Exchange to limit the
aggregate Tax Benefit Payments made to such Partner in respect of any such
Exchange to a specified percentage of the Amount Realized by such Partner with
respect to such Exchange (or such other limitation selected by the Partner and
consented to by the Corporation, which consent shall not be unreasonably
withheld).  The Partner shall exercise its rights under the preceding sentence
by notifying the Corporation of its desire to impose such a limit and the
specified percentage (or such other limitation selected by the Partner) and such
other details

 

16

--------------------------------------------------------------------------------

 

as may be necessary (including whether such limit includes the Interest Amounts
in respect of any such Exchange) in such manner and at such time (but in no
event later than the date of any such Exchange) as reasonably directed by the
Corporation; provided, however, that, in the absence of such direction, the
Partner shall give such notice in the same manner as is required by the
Partnership Agreement of notice given to the partners under the Partnership
Agreement, with such notice given contemporaneously with the Partner’s notice of
intention to compel redemption delivered pursuant to the Partnership Agreement.
For purposes of the computation of any Tax Benefit Payment, each Partner who is
entitled to receive Tax Benefit Payments under this Agreement shall be deemed to
share the gains and losses of the Partnership under section 704(c)(1)(A) of the
Code (and the principles thereof) as of the IPO Date in proportion to the
Partner’s number of Common Units as of the IPO Date.

 

Section 3.02                             No Duplicative Payments. It is intended
that the provisions of this Agreement will not result in duplicative payment of
any amount (including interest) required under this Agreement. It is also
intended that the provisions of this Agreement will result in 85% of the
Cumulative Net Realized Tax Benefit, and the Interest Amount thereon, being paid
to the Partners pursuant to this Agreement.  The provisions of this Agreement
shall be construed in the appropriate manner so that these fundamental results
are achieved.

 

Section 3.03                             Pro Rata Payments. For the avoidance of
doubt, to the extent (i) Feeder’s or the Corporation’s deductions with respect
to any Basis Adjustment is limited in a particular Taxable Year or (ii) the
Corporation lacks sufficient funds to satisfy its obligations to make all Tax
Benefit Payments due in a particular Taxable Year, the limitation on the
deductions, or the Tax Benefit Payments that may be made, as the case may be,
shall be taken into account or made for the Applicable Partner in the same
proportion as Tax Benefit Payments would have been made absent the limitations
set forth in clauses (i) and (ii) of this paragraph, as applicable.

 

ARTICLE IV

 

TERMINATION

 

Section 4.01                             Early Termination and Breach of
Agreement.

 

(a)                                 The Corporation may terminate this Agreement
with respect to all of the Common Units held (or previously held and exchanged)
by all Partners at any time by paying to all of the Partners the Early
Termination Payment; provided, however, that this Agreement shall only terminate
upon the receipt of the Early Termination Payment by all Partners, and provided,
further, that the Corporation may withdraw any notice to execute its termination
rights under this Section 4.01(a) prior to the time at which any Early
Termination Payment has been paid.  Upon payment of the Early Termination
Payments by the Corporation under this Section 4.01(a), neither the Applicable
Partners nor the Corporation shall have any further payment obligations under
this Agreement in respect of such Partners, other than for any (a) Tax Benefit
Payment agreed to by the Corporation and an Applicable Partner as due and
payable but unpaid as of the Early Termination Notice and (b) Tax Benefit
Payment due for the Taxable Year ending with or including the date of the Early
Termination Notice (except to the extent that the amount described in clause
(b) is included in the Early Termination Payment).  For the avoidance of doubt,
if an Exchange occurs

 

17

--------------------------------------------------------------------------------

 

after the Corporation makes the Early Termination Payments with respect to all
Partners, the Corporation shall have no obligations under this Agreement with
respect to such Exchange, and its only obligations under this Agreement with
respect to such Exchange in such case shall be its obligations to all Partners
under Section 4.03(a).

 

(b)                                 The Corporation may terminate the rights
under this Agreement of any Partner who is not a Specified Partner with respect
to Exchanges occurring prior to the date thereof at any time by paying to such
Partner an Individual Early Termination Payment as calculated with respect to
such Partner (taking into account only those Exchanges that have occurred prior
to the date thereof, and for the avoidance of doubt not taking into account
Common Units not yet Exchanged, nor taking into account Common Units Exchanged
in prior Exchanges for which Individual Early Termination Payments have already
been received); provided, however, that the Corporation may withdraw any notice
to execute its termination rights under this Section 4.01(b) prior to the time
at which any Individual Early Termination Payment has been paid.  Upon payment
of the Individual Early Termination Payment by the Corporation to such Partner,
neither the Applicable Partner nor the Corporation shall have any further
payment obligations under this Agreement in respect of such Exchanges by such
Partner, other than for any (a) Tax Benefit Payment agreed to by the Corporation
and such Partner as due and payable but unpaid as of the Individual Early
Termination Notice and (b) Tax Benefit Payment due for the Taxable Year ending
with or including the date of the Individual Early Termination Notice (except to
the extent that the amount described in clause (b) is included in the Individual
Early Termination Payment).  For the avoidance of doubt, a termination pursuant
to this Section 4.01(b) shall not impact the rights or obligations of the
Corporation and such Partner with respect to Exchanges occurring after the date
of such termination.

 

(c)                                  In the event that the Corporation breaches
any of its material obligations under this Agreement with respect to one or more
Partners, whether as a result of failure to make any payment when due, failure
to honor any other material obligation required hereunder or by operation of law
as a result of the rejection of this Agreement in a case commenced under the
Bankruptcy Code or otherwise, and does not cure such breach within ninety (90)
days of receipt of notice of such breach from such Partner or Partners, then all
obligations hereunder with respect to such Partner or Partners shall be
accelerated and such obligations shall be calculated as if an Early Termination
Notice had been delivered on the date of such breach and shall include, but not
be limited to, (1) an Early Termination Payment calculated with respect to such
Partner or Partners pursuant to Section 4.01(a) as if an Early Termination
Notice had been delivered to such Partner or Partners on the date of the breach,
(2) any Tax Benefit Payment agreed to by the Corporation and such Partner or
Partners as due and payable but unpaid as of the date of a breach, and (3) any
Tax Benefit Payment due to such Partner or Partners for the Taxable Year ending
with or including the date of a breach.  Notwithstanding the foregoing, in the
event that the Corporation breaches this Agreement with respect to one or more
Partners, such Partners shall be entitled to elect to receive the amounts set
forth in clauses (1), (2) and (3), above or to seek specific performance of the
terms hereof.  The parties agree that the failure to make any payment due
pursuant to this Agreement within three months of the date such payment is due
shall be deemed to be a breach of a material obligation under this Agreement for
all purposes of this Agreement, and that it will not be

 

18

--------------------------------------------------------------------------------

 

considered to be a breach of a material obligation under this Agreement to make
a payment due pursuant to this Agreement within three months of the date such
payment is due.

 

(d)                                 The undersigned parties hereby acknowledge
and agree that the timing, amounts and aggregate value of Tax Benefit Payments
pursuant to this Agreement are not reasonably ascertainable.

 

Section 4.02                             Early Termination Notice. If the
Corporation chooses to exercise its right of early termination under
Section 4.01(a) or Section 4.01(b) above, the Corporation shall deliver to each
Partner whose rights are being terminated notice of such intention to exercise
such right (an “Early Termination Notice” in the case of an early termination
under Section 4.01(a) or an “Individual Early Termination Notice” in the case of
an early termination under Section 4.01(b)) and a schedule (the “Early
Termination Schedule”) specifying the Corporation’s intention to exercise such
right and showing in reasonable detail the calculation of the Early Termination
Payment or Individual Early Termination Payment with respect to such Partner.
The applicable Early Termination Schedule shall become final and binding on the
Corporation and such Partner unless such Partner, within 30 calendar days after
receiving the Early Termination Schedule provides the Corporation with notice of
a material objection to such Schedule made in good faith (“Material Objection
Notice”). If the parties, for any reason, are unable to successfully resolve the
issues raised in such notice within 30 calendar days after receipt by the
Corporation of the Material Objection Notice, the Corporation and the Partner
shall employ the Reconciliation Procedures as described in Section 7.09 of this
Agreement.

 

Section 4.03                             Payment upon Early Termination.
(a) Within fifteen (15) calendar days after agreement between the Applicable
Partner and the Corporation of an Early Termination Schedule, the Corporation
shall pay to the Applicable Partner an amount equal to the Early Termination
Payment or the Individual Early Termination Payment, as the case may be. Such
payment shall be made by wire transfer of immediately available funds to a bank
account designated by the Applicable Partner.

 

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

 

(c)                                  The “Individual Early Termination Payment”
as of the date of the delivery of an Early Termination Schedule shall equal with
respect to the Applicable Partner the present value, discounted at the Early
Termination Rate as of such date, of all Tax Benefit Payments that would be
required to be paid by the Corporation to the Applicable Partner beginning from
the Early Termination Date and assuming that the Individual Valuation
Assumptions are applied (taking into account only those Exchanges that have
occurred prior to the date of the applicable Individual Early Termination
Notice, and for the avoidance of doubt not taking into account Common Units not
yet Exchanged, nor taking into account Common Units Exchanged in prior Exchanges
for which Individual Early Termination Payments have already been received).

 

19

--------------------------------------------------------------------------------

 

ARTICLE V

 

SUBORDINATION AND LATE PAYMENTS

 

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

 

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

 

ARTICLE VI

 

NO DISPUTES; CONSISTENCY; COOPERATION

 

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

 

Section 6.02                             Consistency.  Feeder, the Corporation
and the Partners agree to report and cause to be reported for all purposes,
including federal, state, local and foreign Tax purposes and financial reporting
purposes, all Tax-related items (including without limitation the Basis
Adjustment and each Tax Benefit Payment) in a manner consistent with that
specified by the Corporation in any Schedule required to be provided by or on
behalf of the Corporation under this Agreement unless the Corporation or a
Partner receives a written opinion from an Advisory Firm that reporting in such
manner is more likely than not to result in an imposition of penalties pursuant
to the Code.  Any Dispute concerning such advice shall be subject to the terms
of Section 7.09.

 

Section 6.03                             Cooperation. The Partners shall each
(a) furnish to the Corporation in a timely manner such information, documents
and other materials as the Corporation may

 

20

--------------------------------------------------------------------------------

 

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

 

ARTICLE VII

 

MISCELLANEOUS

 

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

 

if to the Corporation, to:

 

399 Park Avenue, 5th Floor

New York, New York 10022

Phone: (212) 883-3800

Fax: (212) 880-4260

Attention: General Counsel

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036

Phone: (212) 735-3000

Fax: (212) 735-2000

Attention:      Joseph A. Coco, Esq.
Richard Aftanas, Esq.
John Rayis, Esq.

 

if to Feeder, to:

 

399 Park Avenue, 5th Floor

New York, New York 10022

Phone: (212) 883-3800

Fax: (212) 880-4260

Attention: General Counsel

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036

Phone: (212) 735-3000

Fax: (212) 735-2000

Attention:    Joseph A. Coco, Esq.
Richard Aftanas, Esq.
John Rayis, Esq.

 

if to the Partnership, to:

 

399 Park Avenue, 5th Floor

New York, New York 10022

Phone: (212) 883-3800

Fax: (212) 880-4260

Attention: General Counsel

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036

Phone: (212) 735-3000

Fax: (212) 735-2000

Attention:      Joseph A. Coco, Esq.
Richard Aftanas, Esq.
John Rayis, Esq.

 

21

--------------------------------------------------------------------------------

 

if to the Partners or any Partner, to:

 

the address and facsimile number set forth for such Partner in the records of
the Partnership.

 

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

 

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

 

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

 

Section 7.04                             Governing Law. This Agreement shall be
governed by, and construed in accordance with, the law of the State of Delaware,
without regard to the conflicts of laws principles thereof that would mandate
the application of the laws of another jurisdiction.

 

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

 

Section 7.06                             Successors; Assignment; Amendments;
Waivers. No Partner may assign this Agreement to any person without the prior
written consent of the Corporation; provided, however, (i) that, to the extent
Common Units are effectively transferred in accordance with the terms of the
Partnership Agreement, and any other agreements the Partners may have entered
into with each other, or a Partner may have entered into with the Corporation
and/or the Partnership, the transferring Partner shall assign to the transferee
of such Common Units the transferring Partner’s rights under this Agreement with
respect to such transferred Common Units, as long as such transferee has
executed and delivered, or, in connection with such transfer, executes and
delivers, a joinder to this Agreement, in form and substance reasonably
satisfactory to the Corporation, agreeing to become a “Partner” for all purposes
of this Agreement, except as otherwise provided in such joinder, and (ii) that,
once an Exchange has occurred, any and all payments that may become

 

22

--------------------------------------------------------------------------------

 

payable to a Partner pursuant to this Agreement with respect to such Exchange
may be assigned to any Person or Persons, as long as any such Person has
executed and delivered, or, in connection with such assignment, executes and
delivers, a joinder to this Agreement, in form and substance reasonably
satisfactory to the Corporation, agreeing to be bound by Section 7.12 and
acknowledging specifically the last sentence of the next paragraph.  For the
avoidance of doubt, to the extent a Partner or other Person transfers Common
Units to a Partner as may be permitted by any agreement to which the Partnership
is a party, the Partner receiving such Common Units shall have all rights under
this Agreement with respect to such transferred Common Units as such  Partner
has, under this Agreement, with respect to the other Common Units held by him.

 

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

 

No provision of this Agreement may be amended unless such amendment is approved
in writing by each of the Corporation and the Partnership, and by Partners who
would be entitled to receive at least two-thirds of the Early Termination
Payments payable to all Partners hereunder if the Corporation had exercised its
right of early termination under Section 4.01(a) on the date of the most recent
Exchange prior to such amendment (excluding, for purposes of this sentence, all
payments made to any Partner pursuant to this Agreement since the date of such
most recent Exchange); provided, that no such amendment shall be effective if
such amendment will have a disproportionate effect on the payments certain
Partners will or may receive under this Agreement unless at least two-thirds of
such Partners disproportionately effected (with such two-thirds threshold being
measured by the entitlement to Early Termination Payments as set forth in the
preceding portion of this sentence) consent in writing to such amendment. No
provision of this Agreement may be waived unless such waiver is in writing and
signed by the party against whom the waiver is to be effective.

 

All of the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the parties hereto and their
respective successors, assigns, heirs, executors, administrators and legal
representatives. The Corporation shall require and cause any direct or indirect
successor (whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, by written
agreement, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
if no such succession had taken place.

 

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

 

23

--------------------------------------------------------------------------------

 

Section 7.08                             Submission to Jurisdiction; Dispute
Resolution.

 

(a)                       Except as provided in Section 7.09. any Dispute as to
the interpretation of this Agreement shall be resolved by the Corporation in its
sole discretion, provided that such resolution shall reflect a reasonable
interpretation of the provisions of this Agreement and that such resolution
shall not be inconsistent with the fundamental results described in Section 3.02
of this Agreement.

 

(b)                       The remainder of this Section 7.08 shall not apply
with respect to claims of a Specified Partner arising out of, relating to or in
connection with the validity, negotiation, execution, performance or
non-performance of this Agreement.

 

(c)                        Except as otherwise expressly provided by
Section 7.08(a) or Section 7.09, any dispute, controversy or claim arising out
of or in connection with this Agreement, or the interpretation, breach,
termination or validity thereof (“Dispute”) shall be finally resolved by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”) then in effect (the “Rules”), except as modified
herein and such arbitration shall be administered by the AAA. The place of
arbitration shall be New York, New York.

 

(d)                       There shall be one arbitrator who shall be agreed upon
by the parties within twenty (20) days of receipt by respondent of a copy of the
demand for arbitration. If any arbitrator is not appointed within the time limit
provided herein, such arbitrator shall be appointed by the AAA in accordance
with the listing, striking and ranking procedure in the Rules, with each party
being given a limited number of strikes, except for cause. Any arbitrator
appointed by the AAA shall be a retired judge or a practicing attorney with no
less than fifteen years of experience with corporate and limited partnership
matters and an experienced arbitrator. In rendering an award, the arbitrator
shall be required to follow the laws of the state of Delaware.

 

(e)                        The award shall be in writing and shall briefly state
the findings of fact and conclusions of law on which it is based. The arbitrator
shall not be permitted to award punitive, multiple or other non-compensatory
damages. The award shall be final and binding upon the parties and shall be the
sole and exclusive remedy between the parties regarding any claims,
counterclaims, issues or accounting presented to the arbitrator.  Judgment upon
the award may be entered in any court having jurisdiction over any party or any
of its assets. Any costs or fees (including attorneys’ fees and expenses)
incident to enforcing the award shall be charged against the party resisting
such enforcement.

 

(f)                         All Disputes shall be resolved in a confidential
manner. The arbitrator shall agree to hold any information received during the
arbitration in the strictest of confidence and shall not disclose to any
non-party the existence, contents or results of the arbitration or any other
information about such arbitration. The parties to the arbitration shall not
disclose any information about the evidence adduced or the documents produced by
the other party in the arbitration proceedings or about the existence, contents
or results of the proceeding except as may be required by law, regulatory or
governmental authority or as may be necessary in an action in aid of arbitration
or for enforcement of an arbitral award.  Before making any disclosure permitted
by the

 

24

--------------------------------------------------------------------------------

 

preceding sentence (other than private disclosure to financial regulatory
authorities), the party intending to make such disclosure shall use reasonable
efforts to give the other party reasonable written notice of the intended
disclosure and afford the other party a reasonable opportunity to protect its
interests.

 

(g)                        Barring extraordinary circumstances (as determined in
the sole discretion of the arbitrator), discovery shall be limited to
pre-hearing disclosure of documents that each side will present in support of
its case, and non-privileged documents essential to a matter of import in the
proceeding for which a party has demonstrated a substantial need. The parties
agree that they will produce to each other all such requested non-privileged
documents, except documents objected to and with respect to which a ruling has
been or shall be sought from the arbitrator. There will be no depositions.

 

Section 7.09                             Reconciliation. In the event that the
Corporation and an Applicable Partner are unable to resolve a disagreement with
respect to the matters governed by Sections 2.04, 4.02 and 6.02 within the
relevant period designated in this Agreement (“Reconciliation Dispute”), the
Reconciliation Dispute shall be submitted for determination to a nationally
recognized expert (the “Expert”) in the particular area of disagreement mutually
acceptable to both parties. The Expert shall be a partner in a nationally
recognized accounting firm or a law firm (other than the Advisory Firm), and the
Expert shall not, and the firm that employs the Expert shall not, have any
material relationship with either the Corporation or the Applicable Partner or
other actual or potential conflict of interest. If the parties are unable to
agree on an Expert within fifteen (15) days of receipt by the respondent(s) of
written notice of a Reconciliation Dispute, the Expert shall be appointed by the
AAA. The Expert shall resolve any matter relating to the Exchange Basis Schedule
or an amendment thereto or the Early Termination Schedule or an amendment
thereto within 30 calendar days and shall resolve any matter relating to a Tax
Benefit Schedule or an amendment thereto within 15 calendar days or as soon
thereafter as is reasonably practicable, in each case after the matter has been
submitted to the Expert for resolution.  Notwithstanding the preceding sentence,
if the matter is not resolved before the date any payment that is the subject of
a disagreement would be due (in the absence of such disagreement) or any Tax
Return reflecting the subject of a disagreement is due, such payment shall be
paid on the date such payment would be due and such Tax Return may be filed as
prepared by the Corporation, subject to adjustment or amendment upon
resolution.  The costs and expenses relating to the engagement of such Expert or
amending any Tax Return shall be borne jointly by the Corporation and the
Applicable Partner, with each party bearing one-half of such costs.  The
Corporation and each Applicable Partner shall bear their own costs and expenses
of such proceeding.  Any dispute as to whether a dispute is a Reconciliation
Dispute within the meaning of this Section 7.09 shall be decided by the Expert. 
The Expert shall finally determine any Reconciliation Dispute and the
determinations of the Expert pursuant to this Section 7.09 shall be binding on
the Corporation and the Applicable Partner and may be entered and enforced in
any court having jurisdiction.

 

Section 7.10                             Withholding. The Corporation shall be
entitled to deduct and withhold from any payment payable pursuant to this
Agreement such amounts as the Corporation is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld and
paid over

 

25

--------------------------------------------------------------------------------

 

to the appropriate Taxing Authority by the Corporation, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
Applicable Partner.

 

Section 7.11                             Admission of the Corporation into a
Consolidated Group; Transfers of Corporate Assets.

 

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

 

(b)                       Notwithstanding any other provision of this Agreement,
if the Corporation or Feeder acquires one or more assets that, as of an Exchange
Date, have not been contributed to the Partnership (other than the Corporation’s
interests in the Partnership) (such assets, “Excluded Assets”), then all Tax
Benefit Payments due hereunder shall be computed as if such assets had been
contributed to the Partnership on the date such assets were first acquired by
the Corporation; provided, however, that if an Excluded Asset consists of stock
in a corporation, then, for purposes of this Section 7.11(b), such corporation
(and any corporation Controlled by such corporation) shall be deemed to have
contributed its assets to the Partnership on the date on which the Corporation
acquired stock of such corporation.

 

(c)                        If any entity that is obligated to make an Exchange
Payment hereunder transfers one or more assets to a corporation with which such
entity does not file a consolidated tax return pursuant to section 1501 of the
Code, such entity, for purposes of calculating the amount of any Exchange
Payment (e.g., calculating the gross income of the entity and determining the
Realized Tax Benefit of such entity) due hereunder, shall be treated as having
disposed of such asset in a fully taxable transaction on the date of such
contribution.  The consideration deemed to be received by such entity shall be
equal to the fair market value of the contributed asset (as reasonably
determined by the governing body, or the Person responsible for management, of
such entity acting in good faith), plus (i) the amount of debt to which such
asset is subject, in the case of a contribution of an encumbered asset or
(ii) the amount of debt allocated to such asset, in the case of a contribution
of a partnership interest.  If shares of Feeder are transferred such that Feeder
and the Corporation no longer join in the filing of a consolidated U.S. federal
income tax return pursuant to section 1501 of the Code (other than in a
transaction pursuant to which Feeder merges or liquidates for U.S. federal
income tax purposes into the Corporation or another member of the consolidated
group of which the Corporation is a member), Feeder shall be treated as having
disposed of its assets in a fully taxable transaction on the date of such
transfer for purposes of calculating the amount of any Exchange Payment.

 

Section 7.12                             Confidentiality.  Each Partner and
assignee acknowledges and agrees that the information of the Corporation is
confidential and, except in the course of performing any duties as necessary for
the Corporation and its Affiliates, as required by law or legal process or to

 

26

--------------------------------------------------------------------------------

 

enforce the terms of this Agreement, shall keep and retain in the strictest
confidence and not disclose to any Person any confidential matters, acquired
pursuant to this Agreement, of the Corporation, its Affiliates and successors
and the other Partners, confidential information concerning the Corporation, its
Affiliates and successors and the other Partners, including marketing,
investment, performance data, credit and financial information, and other
business affairs of the Corporation, its Affiliates and successors and the other
Partners learned of by the Partner heretofore or hereafter.  This clause 7.12
shall not apply to (i) any information that has been made publicly available by
the Corporation or any of its Affiliates, becomes public knowledge (except as a
result of an act of such Partner in violation of this Agreement) or is generally
known to the business community and (ii) the disclosure of information to the
extent necessary for a Partner to prepare and file his or her tax returns, to
respond to any inquiries regarding the same from any taxing authority or to
prosecute or defend any action, proceeding or audit by any taxing authority with
respect to such returns.  Notwithstanding anything to the contrary herein, each
Partner and assignee (and each employee, representative or other agent of such
Partner or assignee, as applicable) may disclose to any and all Persons, without
limitation of any kind, the tax treatment and tax structure of (x) Feeder, the
Corporation, the Partnership, the Partners and their Affiliates and (y) any of
their transactions, and all materials of any kind (including opinions or other
tax analyses) that are provided to the Partners relating to such tax treatment
and tax structure.

 

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

 

Section 7.13                             Partnership Agreement. To the extent
this Agreement imposes obligations upon the Partnership or a partner of the
Partnership, this Agreement shall be treated as part of the partnership
agreement of the Partnership as described in section 761(c) of the Code and
sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.

 

Section 7.14                             Joinder. The Corporation hereby agrees
that, to the extent it acquires a general partnership interest, managing member
interest or similar interest in any Person after the date hereof, it shall cause
such Person to execute and deliver a joinder to this Agreement promptly upon
acquisition of such interest, and such person shall be treated in the same
manner as the Partnership for all purposes of this Agreement.  The Corporation
hereby agrees to cause any Corporate Entity that acquires an interest in the
Partnership (or any entity described in the foregoing sentence) to execute a
joinder to this Agreement (to the extent such Person is not already a party
hereto) promptly upon such acquisition, and such Corporate Entity shall be
treated in the same manner as the Corporation for all purposes of this
Agreement.  The Partnership shall have the power and authority (but not the
obligation) to permit any Person who becomes a limited partner of the
Partnership to execute and deliver a joinder to this Agreement promptly upon
acquisition of limited partnership interests in the Partnership by such Person,
and such Person shall be treated as a “Partner” for all purposes of this
Agreement.

 

27

--------------------------------------------------------------------------------

 

Section 7.15                             Release of Claims.

 

(a)                       Each Partner acknowledges that the benefits to such
Partner under this Agreement are only possible as a result of the Initial Sale,
the IPO and the actions taken in connection therewith (including, without
limitation, the actions described in clause (ii), (iii) and (iv) of
Section 7.15(b) below).

 

(b)                       Each Partner, on behalf of himself or herself and his
or her successors and assigns, hereby completely releases and forever discharges
the Corporation, the Partnership, Partner Holdings, Moelis & Company Holdings
LP, a Delaware limited partnership (“Old Holdings”), and their respective
affiliates and direct or indirect former, current or future general partners,
managing members, directors or officers of any of the foregoing (collectively,
the “Released Parties”) from and against any and all claims, liabilities,
judgments, demands, costs, expenses (including attorneys’ fees), actions and
causes of action, of whatever kind or nature, whether known or unknown, accrued
or not yet accrued, suspected or unsuspected, that such Partner had, now has, or
may hereafter have against each of the Released Parties, in each case resulting
from or in any way related to (i) such Partner’s ownership of, or right to
receive, any equity interests in Old Holdings and its affiliates, (ii) the
restructuring of interests in Old Holdings and the separation of the advisory
and asset management businesses of Old Holdings, each in connection with the
Initial Sale and the IPO, including without limitation, the merger of Moelis
Merger Company LP, a Delaware limited partnership, with and into Old Holdings,
(iii) the Initial Sale and the IPO or (iv) any determinations (including
valuations) made by any Released Party in connection with such restructuring or
separation, including, without limitation, the value or nature of any
consideration received by such Partner in connection therewith, the Initial Sale
or the IPO, and each such determination shall be final and binding on such
Partner.  Each Partner understands the significance of its release of unknown
claims and waiver of statutory protection against a release of unknown claims. 
Each Partner expressly assumes the risk of such unknown and unanticipated claims
and agrees that this release applies to all claims, whether known, unknown or
unanticipated.  Each Partner party hereto expressly understands and acknowledges
that it is possible that unknown losses or claims exist or might come to exist
or that present losses may have been underestimated in amount, severity, or
both.  Accordingly, each Partner party hereto is deemed expressly to understand
provisions and principles of law such as Section 1542 of the Civil Code of the
State of California (as well as any and all provisions, rights and benefits
conferred by any law of any state or territory of the United States, or
principle of common law, which is similar or comparable to Section 1542), which
Section provides: GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.  Each Partner party hereto is hereby deemed to
agree that the provisions of Section 1542 and all similar federal or state laws,
rights, rules, or legal principles of California or any other jurisdiction that
may be applicable herein, are hereby knowingly and voluntarily waived and
relinquished with respect to the release in this Section 7.15.

 

Section 7.16                             Headings.  The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.

 

28

--------------------------------------------------------------------------------

 

[Signature pages follow]

 

29

--------------------------------------------------------------------------------

 

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

 

 

MOELIS & COMPANY

 

 

 

By:

/s/ Osamu Watanabe

 

Name:

Osamu Watanabe

 

Title:

General Counsel

 

 

 

 

 

MOELIS HOLDINGS FEEDER, INC.

 

 

 

By:

/s/ Osamu Watanabe

 

Name:

Osamu Watanabe

 

Title:

General Counsel

 

 

 

 

 

MOELIS & COMPANY GROUP LP

 

 

 

By:

/s/ Osamu Watanabe

 

Name:

Osamu Watanabe

 

Title:

General Counsel

 

 

 

 

 

MOELIS & COMPANY PARTNER HOLDINGS LLC

 

 

 

By:

/s/ Osamu Watanabe

 

Name:

Osamu Watanabe

 

Title:

General Counsel

 

 

 

 

 

MOELIS & CO. MANAGER LLC

 

 

 

By:

/s/ Osamu Watanabe

 

Name:

Osamu Watanabe

 

Title:

General Counsel

 

Signature Page to Tax Receivable Agreement

 

--------------------------------------------------------------------------------

 

The undersigned Partner expressly acknowledges that the benefits to the
undersigned under this Agreement are only possible as a result of the Initial
Sale, the IPO and the actions taken in connection therewith (including, without
limitation, the actions described in clause (ii), (iii) and (iv) of
Section 7.15(b) of this Agreement) and the undersigned expressly agrees to the
release of claims set forth in Section 7.15 of this Agreement.

 

 

 

Name:

 

 

 

 

 

 

 

 

Signature:

 

 

Signature Page to Tax Receivable Agreement

 

--------------------------------------------------------------------------------