Exhibit 10.6

 

EXECUTION VERSION

 

 

TAX RECEIVABLE AGREEMENT (MERGERS)

among

VIRTU FINANCIAL, INC.,

 

SLP III EW FEEDER I, L.P.

 

and

 

HAVELOCK FUND INVESTMENTS PTE LTD.

 

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Dated as of April 15, 2015

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE I DEFINITIONS

2

 

 

Section 1.01

Definitions

2

 

 

ARTICLE II DETERMINATION OF REALIZED TAX BENEFIT

11

 

 

Section 2.01

Basis Adjustment and NOLs

11

Section 2.02

Realized Tax Benefit and Realized Tax Detriment

11

Section 2.03

Procedures, Amendments

12

 

 

ARTICLE III TAX BENEFIT PAYMENTS

13

 

 

 

Section 3.01

Payments

13

Section 3.02

No Duplicative Payments

14

Section 3.03

Pro Rata Payments; Coordination of Benefits With Other Tax Receivable Agreements

14

 

 

ARTICLE IV TERMINATION

15

 

 

 

Section 4.01

Termination, Early Termination and Breach of Agreement

15

Section 4.02

Early Termination Notice

16

Section 4.03

Payment upon Early Termination

17

 

 

ARTICLE V SUBORDINATION AND LATE PAYMENTS

17

 

 

Section 5.01

Subordination

17

Section 5.02

Late Payments by the Corporate Taxpayer

17

 

 

ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION

17

 

 

Section 6.01

Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters

17

Section 6.02

Consistency

18

Section 6.03

Cooperation

18

 

 

 

ARTICLE VII MISCELLANEOUS

18

 

 

 

Section 7.01

Notices

18

Section 7.02

Binding Effect; Benefit; Assignment

20

Section 7.03

Resolution of Disputes

21

Section 7.04

Counterparts

22

Section 7.05

Entire Agreement

22

Section 7.06

Severability

22

Section 7.07

Amendment

22

Section 7.08

Governing Law

22

Section 7.09

Reconciliation

22

 

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Section 7.10

Withholding

23

Section 7.11

Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of
Corporate Assets

23

Section 7.12

Confidentiality

24

Section 7.13

Change in Law

24

 

ii

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EXECUTION VERSION

 

TAX RECEIVABLE AGREEMENT (MERGERS)

 

This TAX RECEIVABLE AGREEMENT (MERGERS) (as amended from time to time, this
“Agreement”), dated as of April 15, 2015, is hereby entered into by and among
Virtu Financial, Inc., a Delaware corporation (the “Corporate Taxpayer”), SLP
III EW Feeder I, L.P., a Delaware limited partnership (the “SLP Stockholder”),
and Havelock Fund Investments Pte Ltd., a Singapore private limited company (the
“Temasek Stockholder”, and together with the SLP Stockholder, the
“Stockholders”), and each of the successors and assigns thereto.

 

WHEREAS, Virtu Financial LLC, a Delaware limited liability company (“OpCo”), is
treated as a partnership for U.S. federal income tax purposes;

 

WHEREAS, each of the Corporate Taxpayer, SLP III EW Feeder LLC (f/k/a SLP III EW
Feeder Corp.), a Delaware limited liability company (the “SLP/Temasek Blocker”),
Wilbur Investments LLC, a Delaware limited liability company (the “Temasek
Blocker”, and together with the SLP/Temasek Blocker, the “Blockers”), Virtu
Financial Merger Sub LLC, a Delaware limited liability company (“Virtu Sub I”)
and Virtu Financial Merger Sub II LLC, a Delaware limited liability company
(“Virtu Sub II”) is classified as an association taxable as a corporation for
U.S. federal income tax purposes;

 

WHEREAS, each of Virtu Financial Intermediate Holdings LLC, a Delaware limited
liability company (“Virtu Sub III”) and Virtu Financial Intermediate Holdings II
LLC, a Delaware limited liability company (“Virtu Sub IV”) is classified as a
disregarded entity for U.S. federal income tax purposes;

 

WHEREAS, following certain reorganization transactions, (i) the Stockholders
will hold all of the outstanding stock of the SLP/Temasek Blocker, (ii) the
SLP/Temasek Blocker will hold common interest units in OpCo (the “Common
Units”), and (iii) the Corporate Taxpayer will be the managing member of OpCo
and will hold, directly and/or indirectly, Common Units;

 

WHEREAS, in connection with the IPO (as defined below), (i) pursuant to the
provisions of the SLP/Temasek Merger Agreement (as defined below), (a) (x) the
SLP/Temasek Blocker will merge with and into Virtu Sub I, with the SLP/Temasek
Blocker surviving, and (y) the SLP/Temasek Blocker will merge with and into
Virtu Sub III, with Virtu Sub III surviving (together, the “SLP/Temasek
Merger”), and (b) the membership interests of the SLP/Temasek Blocker held by
the Stockholders will convert into (x) shares of Class A common stock, $0.00001
par value per share, of the Corporate Taxpayer (the “Class A Common Stock”),
(y) rights to receive payments hereunder and (z) rights to receive certain other
payments, and (ii) pursuant to the provisions of the Temasek Merger Agreement
(as defined below), (a) (x) the Temasek Blocker will merge with and into Virtu
Sub II, with the Temasek Blocker surviving, and (y) the Temasek Blocker will
merge with and into Virtu Sub IV, with Virtu Sub IV surviving (together, the
“Temasek Merger”, and together with the SLP/Temasek Merger, the “Mergers”), and
(b) the membership interests of the Temasek Blocker held by the Temasek
Stockholder will

 

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convert into (x) shares of Class A Common Stock, (y) rights to receive payments
hereunder and (z) rights to receive certain other payments;

 

WHEREAS, as a result of the Mergers, the Corporate Taxpayer will be entitled to
utilize certain net operating losses and capital losses of the Blockers
generated before the Mergers (including credit carryforwards to the extent
available) (the “NOLs” which, for purposes of clarification, shall not include
amounts that are duplicative of any carryovers of tax items attributable to any
Basis Adjustment);

 

WHEREAS, OpCo and each of its direct and indirect subsidiaries treated as a
partnership for U.S. federal income tax purposes had in effect an election under
Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”), for
current or prior Taxable Years (as defined below) in which (i) distributions
from OpCo were made and (ii) transfers and exchanges of partnership interests in
OpCo occurred;

 

WHEREAS, the income, gain, loss, expense and other Tax (as defined below) items
of the Corporate Taxpayer may be affected by (i) the NOLs, (ii) the Basis
Adjustment (as defined below) and (iii) Imputed Interest (as defined below); and

 

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

 

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

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01                             Definitions.

 

(a)                                 The following terms shall have the following
meanings for the purposes of this Agreement:

 

“Agreed Rate” means LIBOR plus 100 basis points.

 

“Attributable” means, with respect to a Stockholder, the portion of any Realized
Tax Benefit of the Corporate Taxpayer that is “attributable” to such
Stockholder, which 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”), with respect to increased basis upon a
disposition of an asset or Imputed Interest that produce the Realized Tax
Benefit and with respect to the NOLs, under the following principles:

 

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(i)                                     A portion of any Realized Tax Benefit
arising from a deduction to the Corporate Taxpayer with respect to a Taxable
Year for Depreciation arising in respect of a Basis Adjustment to a Reference
Asset attributable to the Common Units acquired in a Merger is Attributable to
such Stockholder to the extent of such Stockholder’s ownership of the Blocker
participating in such Merger.

 

(ii)                                  A portion of any Realized Tax Benefit
arising from the disposition of a Reference Asset is Attributable to such
Stockholder to the extent that the ratio of all Basis Adjustments (to the extent
not previously taken into account in the calculation of Realized Tax Benefits)
attributable to the Common Units acquired in a Merger (to the extent of such
Stockholder’s ownership of the Blocker participating in such Merger) with
respect to such Reference Asset bears to the aggregate of all Basis Adjustments
(to the extent not previously taken into account in the calculation of Realized
Tax Benefits) with respect to such Reference Asset.

 

(iii)                               A portion of any Realized Tax Benefit
arising from a deduction to the Corporate Taxpayer with respect to a Taxable
Year in respect of Imputed Interest is Attributable to such Stockholder to the
extent corresponding to amounts that such Stockholder is required to include in
income in respect of Imputed Interest (without regard to whether such
Stockholder is actually subject to tax thereon).

 

(iv)                              A portion of any Realized Tax Benefit arising
from the NOLs of a Blocker is Attributable to such Stockholder to the extent of
such Stockholder’s ownership of such Blocker.

 

(v)                                 For the avoidance of doubt, in the case of a
Basis Adjustment arising under Section 734(b) of the Code with respect to an
Exchange, depreciation, amortization or other similar deductions for recovery of
cost of basis shall constitute Depreciation only to the extent that such
depreciation, amortization or other similar deductions may produce or increase 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 the
Corporate Taxpayer), as reasonably determined by the Corporate Taxpayer.

 

(vi)                              A portion of any Realized Tax Benefit arising
from a carryover or carryback of any Tax item is Attributable to such
Stockholder to the extent such carryover or carryback is attributable to or
available for use because of the prior use of the Basis Adjustments, NOLs or
Imputed Interest with respect to which a Realized Tax Benefit would be
Attributable to such Stockholder pursuant to clauses (i)—(v) above.

 

Portions of any Realized Tax Detriment shall be Attributed to Stockholders under
principles similar to those described in clauses (i)—(vi) above.

 

“Basis Adjustment” means the adjustment to the tax basis of a Reference Asset
under Sections 732, 755 and 1012 of the Code and the Treasury Regulations
promulgated thereunder (in situations where, as a result of one or more
Exchanges, OpCo becomes an entity that is disregarded as separate from its owner
for U.S. federal income tax purposes) or under Sections 734(b), 743(b) and 755
of the Code and the Treasury Regulations promulgated

 

3

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thereunder (in situations where, following an Exchange, OpCo remains in
existence as an entity for U.S. federal income tax purposes) and, in each case,
comparable sections of state and local tax laws, as a result of (i) an Exchange,
(ii) the applicable Historical Transaction and (iii) the payments made pursuant
to the Tax Receivable Agreements.  For the avoidance of doubt, the amount of any
Basis Adjustment resulting from an Exchange (other than a Basis Adjustment
resulting from a Historical Transaction or a Merger) 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.

 

A “Beneficial Owner” of a security is a Person who directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares: (i) voting power, which includes the power to vote, or to direct the
voting of, such security and/or (ii) investment power, which includes the power
to dispose of, or to direct the disposition of, such security.

 

“Board” means the board of directors of the Corporate Taxpayer.

 

“Business Day” shall have the meaning ascribed to such term in the LLC
Agreement.

 

“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 Securities and Exchange Act of 1934, or any successor
provisions thereto, excluding (x) a corporation or other entity owned, directly
or indirectly, by the stockholders of the Corporate Taxpayer in substantially
the same proportions as their ownership of stock in the Corporate Taxpayer and
(y) any Person that would be deemed an SL Member, Temasek Equityholder or Viola
Member (as each such term is defined in the LLC Agreement, and assuming for this
purpose that such Person owned Units or securities of the Corporate Taxpayer),
is or becomes the Beneficial Owner, directly or indirectly, of securities of the
Corporate Taxpayer representing more than 50% of the combined voting power of
the Corporate Taxpayer’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 Corporate
Taxpayer then serving: individuals who, on the IPO Date, constitute the Board
and any new director whose appointment or election by the Board or nomination
for election by the Corporate Taxpayer’s shareholders was approved or
recommended by a vote of at least a majority 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 Corporate Taxpayer with any other corporation or other
entity, and, immediately after the consummation of such merger or consolidation,
either (x) the Board immediately prior to the merger or consolidation does not
constitute at least a majority of the board of directors of the company

 

4

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surviving the merger or, if the surviving company is a Subsidiary, the ultimate
parent thereof, or (y) the voting securities of the Corporate Taxpayer
immediately prior to such merger or consolidation do not continue to represent
or are not converted into more than 50% of the combined voting power of the then
outstanding voting securities of the Person resulting from such merger or
consolidation or, if the surviving company is a Subsidiary, the ultimate parent
thereof; or

 

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

 

Notwithstanding the foregoing, except with respect to clause (ii) and clause
(iii)(x) above, a “Change of Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the shares of the
Corporate Taxpayer immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in,
and own substantially all of the shares of, an entity which owns all or
substantially all of the assets of the Corporate Taxpayer immediately following
such transaction or series of transactions.

 

“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 Taxpayer Return” means the federal and/or state and/or local Tax
Return, as applicable, of the Corporate Taxpayer 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 the Corporate Taxpayer,
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 500 basis points.

 

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

 

5

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amount of any liability for Tax and shall also include the acquiescence of the
Corporate Taxpayer to the amount of any assessed liability for Tax.

 

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

 

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

 

“Exchange” means an acquisition of Common Units or a purchase of Common Units
(i) by OpCo or the Corporate Taxpayer, including by way of an exchange of stock
of the Corporate Taxpayer for Common Units pursuant to the Exchange Agreement
(as defined in the Other Tax Receivable Agreements), in each case occurring on
or after the date of this Agreement or (ii) pursuant to the Mergers. Any
reference in this Agreement to Common Units “Exchanged” is intended to denote
Common Units subject to an Exchange.

 

“Governmental Authority” has the meaning set forth in the LLC Agreement.

 

“Historical Transaction” means (i) in the case of the SLP/Temasek Blocker, the
indirect acquisition of interests in OpCo by the SLP/Temasek Blocker pursuant to
the Transaction and Merger Agreement dated as of April 17, 2011 among OpCo and
the other parties thereto and (ii) in the case of the Temasek Blocker, the
acquisition of interests in OpCo by the Temasek Blocker pursuant to the Equity
Redemption and Purchase Agreement dated as of December 7, 2014 among the Temasek
Blocker, the Temasek Stockholder, the SLP Stockholder and the other parties
thereto.

 

“Hypothetical Tax Liability” means, with respect to any Taxable Year, the
liability for Taxes of (i) the Corporate Taxpayer and (ii) without duplication,
OpCo, but only with respect to Taxes imposed on OpCo and allocable to the
Corporate Taxpayer (or to the other members of the consolidated group of which
the Corporate Taxpayer is the parent), in each case using the same methods,
elections, conventions and similar practices used on the relevant Corporate
Taxpayer Return, but (w) using the Non-Stepped Up Tax Basis (as defined in each
of the Tax Receivable Agreements) as reflected on the Exchange Basis Schedule
(as defined in the Other Tax Receivable Agreements) and the Merger Basis
Schedule, including amendments thereto for the Taxable Year, (x) without taking
into account the use of NOLs, if any, (y) excluding any deduction attributable
to Imputed Interest for the Taxable Year, and (z) without taking into account
the carryover or carryback of any Tax item (or portions thereof) that is
attributable to or (without duplication) available for use because of the prior
use of any of the Basis Adjustments, NOLs or 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 and local
tax law with respect to the Corporate Taxpayer’s payment obligations under this
Agreement.

 

“IPO” means the initial public offering of Class A Common Stock of the Corporate
Taxpayer.

 

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“IPO Date” means the closing date of the IPO.

 

“IRS” means the U.S. Internal Revenue Service.

 

“LIBOR” means during any period, an interest rate per annum equal to the
one-year LIBOR reported, on the date two days prior to the first day of such
period, on the Telerate Page 3750 (or if such screen shall cease to be publicly
available, as reported on Reuters Screen page “LIBOR01” or by any other publicly
available source of such market rate) for London interbank offered rates for
United States dollar deposits for such period.

 

“LLC Agreement” means the Second Amended and Restated Limited Liability Company
Agreement of OpCo, dated as of the date hereof.

 

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

 

“Merger Agreements” means the SLP/Temasek Merger Agreement and the Temasek
Merger Agreement.

 

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

 

“Other Tax Receivable Agreements” means the Tax Receivable Agreement (SLP
Exchanges) and the Tax Receivable Agreement (non-SLP Exchanges).

 

“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 or distribution in respect of one or
more Common Units (i) that occurs prior to an Exchange of such Common Units, and
(ii) to which Section 743(b) or 734(b) of the Code applies.

 

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“Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the
Hypothetical Tax Liability over the actual liability for Taxes of (i) the
Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to
Taxes imposed on OpCo and allocable to the Corporate Taxpayer (or to the other
members of the consolidated group of which the Corporate Taxpayer is the parent)
for such Taxable Year.  If all or a portion of the actual liability for such
Taxes 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, the excess, if any, of the
actual liability for Taxes of (i) the Corporate Taxpayer and (ii) without
duplication, OpCo, but only with respect to Taxes imposed on OpCo and allocable
to the Corporate Taxpayer (or to the other members of the consolidated group of
which the Corporate Taxpayer is the parent) for such Taxable Year, over the
Hypothetical Tax Liability for such Taxable Year.  If all or a portion of the
actual liability for such Taxes 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.

 

“Reference Asset” means an asset that is held by OpCo, or by any of its direct
or indirect subsidiaries treated as a partnership or disregarded entity for
purposes of the applicable Tax, at the time of an Exchange.  A Reference Asset
also includes any asset that is “substituted basis property” under
Section 7701(a)(42) of the Code with respect to a Reference Asset.

 

“Schedule” means any of the following: (i) the Merger Basis Schedule, (ii) a Tax
Benefit Schedule, or (iii) the Early Termination Schedule.

 

“SLP/Temasek Merger Agreement” means that certain Agreement and Plan of Merger,
dated as of the date hereof, by and among the Corporate Taxpayer, Virtu Sub I,
Virtu Sub III, the SLP/Temasek Blocker and the Stockholders.

 

“Subsidiaries” shall have the meaning ascribed to such term in the LLC
Agreement.

 

“Tax Receivable Agreement (non-SLP Exchanges)” means the Tax Receivable
Agreement (non-SLP Exchanges), dated as of the date hereof, by and among the
Corporate Taxpayer, and certain members of OpCo as of the date hereof (other
than those members that are party to the Tax Receivable Agreement (SLP
Exchanges), the Corporate Taxpayer, Virtu Sub III and Virtu Sub IV).

 

“Tax Receivable Agreement (SLP Exchanges)” means the Tax Receivable Agreement
(SLP Exchanges), dated as of the date hereof, by and among the Corporate
Taxpayer and certain members of OpCo as of the date hereof (other than those
members that are party to the Tax Receivable Agreement (non-SLP Exchanges), the
Corporate Taxpayer, Virtu Sub III and Virtu Sub IV).

 

“Tax Receivable Agreements” means the Other Tax Receivable Agreements and this
Agreement.

 

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“Tax Return” means any return, declaration, report or similar statement required
to be filed with respect to Taxes (including any attached schedules), including
any information return, claim for refund, amended return and declaration of
estimated Tax.

 

“Taxable Year” means a taxable year of the Corporate Taxpayer as defined in
Section 441(b) of the Code or comparable section of state or local 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 the IPO
Date.

 

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

 

“Taxing Authority” shall mean any domestic, 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.

 

“Temasek Merger Agreement” means that certain Agreement and Plan of Merger,
dated as of the date hereof, by and among the Corporate Taxpayer, Virtu Sub II,
Virtu Sub IV, the Temasek Blocker and the Temasek Stockholder.

 

“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, the Corporate Taxpayer will have taxable income sufficient to
fully utilize the deductions arising from the Basis Adjustments and Imputed
Interest during such Taxable Year or future Taxable Years (including, for the
avoidance of doubt, Basis Adjustments and Imputed Interest that would result
from future Tax Benefit Payments that would be paid in accordance with the
Valuation Assumptions) in which such deductions would become available, (2) the
U.S. federal income tax rates and state and local 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 deductions arising from Basis
Adjustments, the NOLs or Imputed Interest that are available as of such Early
Termination Date will be utilized by the Corporate Taxpayer on a pro rata basis
from the Early Termination Date through the scheduled expiration date of such
loss carryovers, (4) any non-amortizable assets will be disposed of on the
fifteenth anniversary of the applicable Basis Adjustment; provided, that in the
event of a Change of Control, such non-amortizable assets shall be deemed
disposed of at the time of sale of the relevant asset (if earlier than such
fifteenth anniversary), and (5) if, at the Early Termination Date, there are
Common Units that have not been Exchanged, then each such Common Unit shall be
deemed to be Exchanged for the Market Value of the number of shares of Class A
Common Stock and the amount of cash that would be transferred if the Exchange
occurred on the Early Termination Date.

 

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(b)                                 Each of the following terms is defined in
the Section set forth opposite such term:

 

Term

 

Section

Agreement

 

Preamble

Amended Schedule

 

2.03(b)

Blockers

 

Recitals

Class A Common Stock

 

Recitals

Code

 

Recitals

Common Units

 

Recitals

Corporate Taxpayer

 

Preamble

Dispute

 

7.03(a)

Early Termination Effective Date

 

4.02

Early Termination Notice

 

4.02

Early Termination Payment

 

4.03(b)

Early Termination Schedule

 

4.02

e-mail

 

7.01

Expert

 

7.09

Interest Amount

 

3.01(b)

Material Objection Notice

 

4.02

Mergers

 

Recitals

Merger Basis Schedule

 

2.01

Net Tax Benefit

 

3.01(b)

NOLs

 

Recitals

Objection Notice

 

2.03(a)

OpCo

 

Recitals

Reconciliation Dispute

 

7.09

Reconciliation Procedures

 

2.03(a)

Senior Obligations

 

5.01

SLP Stockholder

 

Preamble

SLP/Temasek Blocker

 

Recitals

SLP/Temasek Merger

 

Recitals

Stockholders

 

Preamble

Tax Benefit Payment

 

3.01(b)

Tax Benefit Schedule

 

2.02(a)

Temasek Blocker

 

Recitals

Temasek Merger

 

Recitals

Temasek Stockholder

 

Preamble

Virtu Sub I

 

Recitals

Virtu Sub II

 

Recitals

Virtu Sub III

 

Recitals

Virtu Sub IV

 

Recitals

 

(c)                                  Other Definitional and Interpretative
Provisions.  The words “hereof”, “herein” and “hereunder” and words of like
import used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement.  The captions herein are included
for convenience of reference only and shall be ignored in the

 

10

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construction or interpretation hereof.  References to Articles and Sections are
to Articles and Sections of this Agreement unless otherwise specified.  Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular.  Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”, whether or not they are in fact followed by
those words or words of like import.  “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form.  References to any statute shall be deemed
to refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder.  References to any agreement or contract are
to that agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof.  References to any Person
include the successors and permitted assigns of that Person.  References from or
through any date mean, unless otherwise specified, from and including or through
and including, respectively.

 

ARTICLE II

 

DETERMINATION OF REALIZED TAX BENEFIT

 

Section 2.01                             Basis Adjustment and NOLs.  Within 120
calendar days after the filing of the U.S. federal income tax return of the
Corporate Taxpayer for the Taxable Year in which the Mergers have been effected
by the Stockholders, the Corporate Taxpayer shall deliver to each applicable
Stockholder participating in a Merger a schedule (the “Merger Basis Schedule”)
that shows, in reasonable detail necessary to perform the calculations required
by this Agreement, including (i) the Non-Stepped Up Tax Basis of the Reference
Assets as of each applicable Exchange Date, (ii) the Basis Adjustments with
respect to the Reference Assets attributable to the Common Units acquired in
such Merger, calculated in the aggregate, (iii) the period (or periods) over
which the Reference Assets are amortizable and/or depreciable, (iv) the period
(or periods) over which such Basis Adjustments are amortizable and/or
depreciable, (v) the NOLs of the applicable Blocker as of the date of the
Mergers, (vi) the scheduled expiration date (or dates) of such NOLs, and
(vii) the limitations, if any, to which the use of such NOLs are subject under
section 382 of the Code. As promptly as practicable, the Corporate Taxpayer and
the applicable Stockholders shall agree on a replacement Merger Basis Schedule
that reflects any adjustments necessary as a result of the IPO.

 

Section 2.02                             Realized Tax Benefit and Realized Tax
Detriment.

 

(a)                                 Tax Benefit Schedule.  Within 120 calendar
days after the filing of the U.S. federal income tax return of the Corporate
Taxpayer for any Taxable Year in which there is a Realized Tax Benefit or
Realized Tax Detriment a portion of which is Attributable to a Stockholder, the
Corporate Taxpayer shall provide to such Stockholder 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 Tax Benefit
Schedule will become final as provided in Section 2.03(a) and may be amended as
provided in Section 2.03(b) (subject to the procedures set forth in
Section 2.03(b)).

 

(b)                                 Applicable Principles.  The Realized Tax
Benefit or Realized Tax Detriment for each Taxable Year is intended to measure
the decrease or increase in the actual

 

11

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liability for Taxes of the Corporate Taxpayer for such Taxable Year attributable
to the Basis Adjustments, the NOLs and Imputed Interest, determined using a
“with and without” methodology.  For the avoidance of doubt, the actual
liability for Taxes will take into account the deduction of the portion of the
Tax Benefit Payment that must be accounted for as interest under the Code based
upon the characterization of Tax Benefit Payments as additional consideration
payable by the Corporate Taxpayer for the Common Units acquired in an Exchange. 
Carryovers or carrybacks of any Tax item attributable to the Basis Adjustment,
the NOLs or Imputed Interest shall be considered to be subject to the rules of
the Code and the Treasury Regulations or the appropriate provisions of U.S.
state and local income and franchise tax law, as applicable, governing the use,
limitation and expiration of carryovers or carrybacks of the relevant type.  If
a carryover or carryback of any Tax item includes a portion that is attributable
to the Basis Adjustment, the NOLs or Imputed Interest and another portion that
is not, such portions shall be considered to be used in accordance with the
“with and without” methodology.

 

Section 2.03                             Procedures, Amendments.

 

(a)                                 Procedure.  Every time the Corporate
Taxpayer delivers to a Stockholder an applicable Schedule under this Agreement,
including any Amended Schedule delivered pursuant to Section 2.03(b) and any
Early Termination Schedule or amended Early Termination Schedule, the Corporate
Taxpayer shall also (x) deliver to such Stockholder schedules, valuation reports
(if any), and work papers, as determined by the Corporate Taxpayer or requested
by such Stockholder, providing reasonable detail regarding the preparation of
the Schedule and (y) allow such Stockholder reasonable access at no cost to the
appropriate representatives at the Corporate Taxpayer, as determined by the
Corporate Taxpayer or requested by such Stockholder, in connection with a review
of such Schedule.  Without limiting the application of the preceding sentence,
each time the Corporate Taxpayer delivers to a Stockholder a Tax Benefit
Schedule, in addition to the Tax Benefit Schedule duly completed, the Corporate
Taxpayer shall deliver to such Stockholder the Corporate Taxpayer Return, the
reasonably detailed calculation by the Corporate Taxpayer of the Hypothetical
Tax Liability, the reasonably detailed calculation by the Corporate Taxpayer of
the actual Tax liability, as well as any other work papers as determined by the
Corporate Taxpayer or requested by such Stockholder.  An applicable Schedule or
amendment thereto shall become final and binding on all parties 30 calendar days
from the first date on which a Stockholder has received the applicable Schedule
or amendment thereto unless such Stockholder (i) within 30 calendar days after
receiving an applicable Schedule or amendment thereto, provides the Corporate
Taxpayer with notice of a material objection to such Schedule (“Objection
Notice”) made in good faith or (ii) provides a written waiver of such right of
any Objection Notice within the period described in clause (i) above, in which
case such Schedule or amendment thereto becomes binding on the date the waiver
is received by the Corporate Taxpayer.  If the parties, for any reason, are
unable to successfully resolve the issues raised in the Objection Notice within
30 calendar days after receipt by the Corporate Taxpayer of an Objection Notice,
the Corporate Taxpayer and the applicable Stockholder shall employ the
reconciliation procedures as described in Section 7.09 (the “Reconciliation
Procedures”).

 

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

 

12

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result of the receipt of additional factual information relating to a Taxable
Year after the date the Schedule was provided to a Stockholder, (iii) to comply
with (A) the Expert’s determination under the Reconciliation Procedures or
(B) an Expert’s determination under the reconciliation procedures applicable to
the Other Tax Receivable Agreements, (iv) to reflect a 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, or
(v) to reflect a 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 (any such Schedule, an “Amended Schedule”).  The Corporate Taxpayer
shall provide an Amended Schedule to the applicable Stockholder within 30
calendar days of the occurrence of an event referenced in clauses (i) through
(v) of the preceding sentence.

 

ARTICLE III

 

TAX BENEFIT PAYMENTS

 

Section 3.01                             Payments.

 

(a)                                 Within five (5) Business Days after all of
the Tax Benefit Schedules (as defined in each of the Tax Receivable Agreements)
with respect to a Taxable Year delivered to (i) the Stockholders pursuant to
this Agreement and (ii) any Persons who could, under the Other Tax Receivable
Agreements, be entitled to Tax Benefit Payments become final in accordance with
Section 2.03(a) and Section 2.03(a) of the Other Tax Receivable Agreements, the
Corporate Taxpayer shall pay to each Stockholder for such Taxable Year the Tax
Benefit Payment with respect to such Stockholder in the amount determined
pursuant to Section 3.01(b).  Such Tax Benefit Payment shall be made by wire
transfer of immediately available funds to the bank account previously
designated by the applicable Stockholder to the Corporate Taxpayer or as
otherwise agreed by the Corporate Taxpayer and such Stockholder.  For the
avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated
tax payments, including federal estimated income tax payments.

 

(b)                                 A “Tax Benefit Payment” means, with respect
to a Stockholder, an amount, not less than zero, equal to the sum of the amount
of the Net Tax Benefit Attributable to such Stockholder and the related Interest
Amount.  For the avoidance of doubt, for Tax purposes, the Interest Amount shall
not be treated as interest but instead shall be treated as additional
consideration payable pursuant to the applicable Merger Agreements, unless
otherwise required by law.  Subject to Section 3.03(a), the “Net Tax Benefit”
for a 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
sum of (i) the total amount of Tax Benefit Payments previously made under this
Section 3.01 (excluding payments attributable to Interest Amounts) and (ii) the
total amount of Tax Benefit Payments (as defined in the Other Tax Receivable
Agreements) previously made under Section 3.01 of the Other Tax Receivable
Agreements (excluding payments attributable to Interest Amounts (as defined in
the Other Tax Receivable Agreements)); provided, for the avoidance of doubt,
that a Stockholder shall not be required to return any portion of any previously
made Tax Benefit Payment.  The “Interest Amount” shall equal the interest on the
amount of the Net Tax Benefit Attributable to a Stockholder calculated at the
Agreed Rate from the due date (without extensions) for filing the Corporate
Taxpayer

 

13

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Return with respect to Taxes for such Taxable Year until the Payment Date of the
applicable Tax Benefit Payment.  Notwithstanding the foregoing, unless a
Stockholder elects to receive the lump-sum payment pursuant to the following
sentence, for each Taxable Year ending on or after the date of a Change of
Control, all Tax Benefit Payments shall be calculated by utilizing Valuation
Assumptions (1) and (3), substituting in each case the terms “the closing date
of a Change of Control” for an “Early Termination Date.”  In connection with any
Change of Control (other than a Change of Control caused solely by the
applicable Stockholder), at the election of a Stockholder, all obligations
hereunder with respect to such Stockholder shall be accelerated and such
obligations shall be calculated as if an Early Termination Notice had been
delivered on the date of such election and shall include, but not be limited to,
(1) the Early Termination Payment to such Stockholder calculated as if an Early
Termination Notice had been delivered on the date of such election, (2) any Tax
Benefit Payment agreed to by the Corporate Taxpayer and such Stockholder as due
and payable but unpaid as of the date of such Stockholder’s election, and
(3) any Tax Benefit Payment due for the Taxable Year ending with or including
the date of such Stockholder’s election; provided, that procedures similar to
the procedures of Section 4.02 shall apply with respect to the determination of
the amount payable by the Corporate Taxpayer pursuant to this sentence. 
Notwithstanding anything to the contrary in this Agreement, after any lump-sum
payment under this Section 3.01(b) or Article IV or Section 3.01(b) or
Article IV of the other Tax Receivable Agreements in respect of present or
future Tax attributes subject to the Tax Receivable Agreements, the Tax Benefit
Payment, Net Tax Benefit and components thereof shall be calculated without
taking into account any such attributes or any such lump-sum payment.

 

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.  In
addition, it is intended that the provisions of this Agreement will not result
in a duplicative payment of any amount payable under the Other Tax Receivable
Agreements. The provisions of this Agreement shall be construed in the
appropriate manner to ensure such intentions are realized.

 

Section 3.03                             Pro Rata Payments; Coordination of
Benefits With Other Tax Receivable Agreements.

 

(a)                                 Notwithstanding anything in Section 3.01 to
the contrary, to the extent that the aggregate tax benefit of the Corporate
Taxpayer’s reduction in Tax liability as a result of the Basis Adjustments, the
NOLs and Imputed Interest under the Tax Receivable Agreements (as such terms are
defined in each Tax Receivable Agreement) is limited in a particular Taxable
Year because the Corporate Taxpayer does not have sufficient taxable income to
fully utilize available deductions and other attributes, the limitation on the
tax benefit for the Corporate Taxpayer shall be allocated among the Tax
Receivable Agreements (and among all parties eligible for payments thereunder)
in proportion to the respective amounts of Tax Benefit Payments (as defined in
each Tax Receivable Agreement) that would have been determined under the Tax
Receivable Agreements (and allocated among such parties) if the Corporate
Taxpayer had sufficient taxable income so that there were no such limitation;
provided, that for purposes of allocating among the Tax Receivable Agreements
(and among all parties eligible for payments thereunder) the aggregate Tax
Benefit Payments under the Tax Receivable Agreements with respect to any Taxable
Year, the operation of this Section 3.03(a) with respect

 

14

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to any prior Taxable Year shall be taken into account, it being the intention of
the parties to the Tax Receivable Agreements for each party eligible for
payments thereunder to receive, in the aggregate, Tax Benefit Payments in
proportion to the aggregate Net Tax Benefits Attributable to such party had this
Section 3.03(a) never operated.

 

(b)                                 After taking into account Section 3.03(a),
if for any reason the Corporate Taxpayer does not fully satisfy its payment
obligations to make all Tax Benefit Payments due under the Tax Receivable
Agreements in respect of a particular Taxable Year, then the Corporate Taxpayer
and each Stockholder agree that (i) the Corporate Taxpayer shall pay the same
proportion of each Tax Benefit Payment due under each of the Tax Receivable
Agreements in respect of such Taxable Year, without favoring one obligation over
the other, and (ii) no Tax Benefit Payment shall be made in respect of any
Taxable Year until all Tax Benefit Payments in respect of prior Taxable Years
have been made in full.

 

(c)                                  The parties hereto agree that the parties
to the Other Tax Receivable Agreements are expressly made third party
beneficiaries of the provisions of this Section 3.03.

 

ARTICLE IV

 

TERMINATION

 

Section 4.01                             Termination, Early Termination and
Breach of Agreement.

 

(a)                                 Unless terminated earlier pursuant to
Section 4.01(b) or Section 4.01(c), this Agreement will terminate when there is
no further potential for a Tax Benefit Payment pursuant to this Agreement. Tax
Benefit Payments under this Agreement are not conditioned on any Stockholder
retaining an interest in the Corporate Taxpayer (or any successor thereto).

 

(b)                                 The Corporate Taxpayer may terminate this
Agreement with respect to a Stockholder by paying to such Stockholder the Early
Termination Payment; provided, however, that the Corporate Taxpayer may withdraw
any notice to execute its termination rights under this Section 4.01(b) prior to
the time at which any Early Termination Payment has been paid.  Upon payment of
the Early Termination Payment to a Stockholder by the Corporate Taxpayer in
accordance with this Section 4.01(b), neither such Stockholder nor the Corporate
Taxpayer shall have any further payment obligations under this Agreement, other
than for any (1) Tax Benefit Payment agreed to by the Corporate Taxpayer and
such Stockholder as due and payable but unpaid as of the Early Termination
Notice and (2) 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 (2) is included in the Early Termination
Payment).  If the Corporate Taxpayer terminates, or proposes to terminate, any
Tax Receivable Agreement (including this Agreement) with respect to any Person
entitled to receive payment under such Tax Receivable Agreement, then each
Stockholder shall have the right to cause the Corporate Taxpayer to make an
Early Termination Payment to it under this Agreement; provided that the
procedures of this Article IV shall apply to such Early Termination Payment as
if the Corporate Taxpayer had delivered an Early Termination Notice to such
Stockholder.

 

15

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(c)                                  In the event that the Corporate Taxpayer
breaches any of its material obligations under this Agreement, 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, then all obligations with respect to a Stockholder hereunder 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) the Early Termination Payment with respect to such
Stockholder calculated as if an Early Termination Notice had been delivered on
the date of a breach, (2) any Tax Benefit Payment agreed to by the Corporate
Taxpayer and such Stockholder as due and payable but unpaid as of the date of a
breach, and (3) any Tax Benefit Payment due for the Taxable Year ending with or
including the date of a breach; provided that procedures similar to the
procedures of Section 4.02 shall apply with respect to the determination of the
amount payable by the Corporate Taxpayer pursuant to this sentence. 
Notwithstanding the foregoing, in the event that the Corporate Taxpayer breaches
this Agreement, each Stockholder 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
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. Notwithstanding anything in this Agreement to the contrary, it
shall not be a breach of this Agreement if the Corporate Taxpayer fails to make
any payment due pursuant to this Agreement when due to the extent the Corporate
Taxpayer has insufficient funds to make such payment; provided that the interest
provisions of Section 5.02 shall apply to such late payment (unless the
Corporate Taxpayer does not have sufficient cash to make such payment as a
result of limitations imposed by credit agreements to which the Corporate
Taxpayer or its Subsidiaries is a party, in which case Section 5.02 shall apply,
but the Default Rate shall be replaced by the Agreed Rate); provided, further,
that the Corporate Taxpayer shall promptly (and in any event, within two
(2) Business Days), pay all such unpaid payments, together with accrued and
unpaid interest thereon, immediately following such time that the Corporate
Taxpayer has, and to the extent the Corporate Taxpayer has, sufficient funds to
make such payment, and the failure of the Corporate Taxpayer to do so shall
constitute a breach of this Agreement.  For the avoidance of doubt, all cash and
cash equivalents used or to be used to pay dividends by, or repurchase equity
securities of, the Corporate Taxpayer shall be deemed to be funds sufficient and
available to pay such unpaid payments, together with any accrued and unpaid
interest thereon.

 

Section 4.02                             Early Termination Notice.  If the
Corporate Taxpayer chooses to exercise its right of early termination with
respect to a Stockholder under Section 4.01(b) above, the Corporate Taxpayer
shall deliver to such Stockholder notice of such intention to exercise such
right (“Early Termination Notice”) and a schedule (the “Early Termination
Schedule”) specifying the Corporate Taxpayer’s intention to exercise such right
and showing in reasonable detail the calculation of the Early Termination
Payment for such Stockholder.  The Early Termination Schedule shall become final
and binding on a Stockholder 30 calendar days from the first date on which such
Stockholder has received such Schedule or amendment thereto unless such
Stockholder (i) within 30 calendar days after receiving the Early Termination

 

16

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Schedule, provides the Corporate Taxpayer with notice of a material objection to
such Schedule made in good faith (“Material Objection Notice”) or (ii) provides
a written waiver of such right of a Material Objection Notice within the period
described in clause (i) above, in which case such Schedule becomes binding on
the date the waiver is received by the Corporate Taxpayer (such 30 calendar day
date as modified, if at all, by clauses (i) or (ii), the “Early Termination
Effective Date”).  If the Corporate Taxpayer and a Stockholder, for any reason,
are unable to successfully resolve the issues raised in such notice within 30
calendar days after receipt by the Corporate Taxpayer of the Material Objection
Notice, the Corporate Taxpayer and such Stockholder shall employ the
Reconciliation Procedures.

 

Section 4.03                             Payment upon Early Termination.

 

(a)                                 Within three Business Days after the Early
Termination Effective Date, the Corporate Taxpayer shall pay to the applicable
Stockholder an amount equal to the Early Termination Payment with respect to
such Stockholder.  Such payment shall be made by wire transfer of immediately
available funds to a bank account or accounts designated by the applicable
Stockholder or as otherwise agreed by the Corporate Taxpayer and such
Stockholder.

 

(b)                                 “Early Termination Payment”, with respect to
a Stockholder, shall equal the present value, discounted at the Early
Termination Rate as of the Early Termination Effective Date, of all Tax Benefit
Payments that would be required to be paid by the Corporate Taxpayer to such
Stockholder beginning from the Early Termination Date and assuming that the
Valuation Assumptions are applied.

 

ARTICLE V
SUBORDINATION AND LATE PAYMENTS

 

Section 5.01                             Subordination. Notwithstanding any
other provision of this Agreement to the contrary, any Tax Benefit Payment or
Early Termination Payment required to be made by the Corporate Taxpayer to a
Stockholder under this Agreement 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
Corporate Taxpayer and its Subsidiaries (“Senior Obligations”) and shall rank
pari passu with all current or future unsecured obligations of the Corporate
Taxpayer that are not Senior Obligations.

 

Section 5.02                             Late Payments by the Corporate
Taxpayer.  The amount of all or any portion of any Tax Benefit Payment or Early
Termination Payment not made to a Stockholder 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 Tax Benefit Payment or
Early Termination Payment was due and payable.

 

ARTICLE VI
NO DISPUTES; CONSISTENCY; COOPERATION

 

Section 6.01                             Participation in the Corporate
Taxpayer’s and OpCo’s Tax Matters.  Except as otherwise provided herein, the
Corporate Taxpayer shall have full

 

17

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responsibility for, and sole discretion over, all Tax matters concerning the
Corporate Taxpayer and OpCo, including the preparation, filing or amending of
any Tax Return and defending, contesting or settling any issue pertaining to
Taxes.  Notwithstanding the foregoing, the Corporate Taxpayer shall notify each
Stockholder of, and keep such Stockholder reasonably informed with respect to,
the portion of any audit of the Corporate Taxpayer and OpCo by a Taxing
Authority the outcome of which is reasonably expected to affect the rights and
obligations of such Stockholder under this Agreement, and shall provide to such
Stockholder reasonable opportunity to provide information and other input to the
Corporate Taxpayer, OpCo and their respective advisors concerning the conduct of
any such portion of such audit; provided, however, that the Corporate Taxpayer
and OpCo shall not be required to take any action that is inconsistent with any
provision of the LLC Agreement.

 

Section 6.02                             Consistency.  The Corporate Taxpayer
and the Stockholders agree to report and cause to be reported for all purposes,
including federal, state and local Tax purposes and financial reporting
purposes, all Tax-related items (including the Basis Adjustments and each Tax
Benefit Payment) in a manner consistent with that specified by the Corporate
Taxpayer in any Schedule required to be provided by or on behalf of the
Corporate Taxpayer under this Agreement unless otherwise required by law. Any
dispute as to required Tax or financial reporting shall be subject to
Section 7.09.

 

Section 6.03                             Cooperation.  Each of the Corporate
Taxpayer and the Stockholders shall (a) furnish to the other party in a timely
manner such information, documents and other materials as the other party may
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 other party and its representatives
to provide explanations of documents and materials and such other information as
the other party 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 Corporate Taxpayer shall reimburse
each Stockholder for any reasonable third-party costs and expenses incurred
pursuant to this Section 6.03.

 

ARTICLE VII
MISCELLANEOUS

 

Section 7.01                             Notices.  All notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile transmission and electronic mail (“e-mail”) transmission, so long as a
receipt of such e-mail is requested and received) and shall be given to such
party 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 Corporate Taxpayer, addressed to it at:

 

Virtu Financial LLC

645 Madison Avenue

New York, New York 10022

Attention: Legal Department

 

18

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Facsimile No.: (212) 418-0100

E-mail: legal@virtu.com

 

With copies (which shall not constitute notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Facsimile No.: (212) 757-3990

Attention:

John C. Kennedy

 

Jeffrey D. Marell

E-mail:

jkennedy@paulweiss.com

 

jmarell@paulweiss.com

 

If to the SLP Stockholder, addressed to it at:

 

c/o Silver Lake

2775 Sand Hill Road, Suite 100

Menlo Park, California 94025

Telephone: (650) 233-8120

Attention: Karen King

Facsimile: (650) 233-8125

E-mail: karen.king@silverlake.com

 

9 West 57th Street, 32nd Floor

New York, NY 10019

Telephone: (212) 981-5600

Attention: Andrew J. Schader

Facsimile: (212) 981-3535

E-mail: andy.schader@silverlake.com

 

With copies (which shall not constitute notice) to:

 

Simpson Thacher & Bartlett LLP

2475 Hanover Street

Palo Alto, California 94304

Attention:

Rich Capelouto

 

Atif I. Azher

Facsimile No.: (650) 251-5002

E-mail:

rcapelouto@stblaw.com

 

aazher@stblaw.com

 

If to the Temasek Stockholder, addressed to it at:

 

Temasek Holdings (Private) Limited

14th Floor, 375 Park Avenue

New York, NY 10152

 

19

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Attention:

Mukul Chawla

Email:

mukul@temasek.com.sg

 

and

 

Temasek Holdings (Private) Limited

60b Orchard Road

#06-18 Tower 2

The Atrium@Orchard

Singapore 238891

Attention:

Pradyumna Agrawal

Email:

pradyumna@temasek.com.sg

 

With copies (which shall not constitute notice) to:

 

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

Attention:

Damien R. Zoubek

Facsimile:

(212) 474-3700

Email:

dzoubek@cravath.com

and

Attention:

Ting S. Chen

Facsimile:

(212) 474-3700

Email:

tchen@cravath.com

 

All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a
Business Day in the place of receipt.  Otherwise, any such notice, request or
communication shall be deemed to have been received on the next succeeding
Business Day in the place of receipt

 

Section 7.02                             Binding Effect; Benefit; Assignment.

 

(a)                                 The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.  No provision of this Agreement is intended
to confer any rights, benefits, remedies, obligations or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns.  The Corporate Taxpayer 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 Corporate Taxpayer, by
written agreement, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporate Taxpayer would be
required to perform if no such succession had taken place.

 

(b)                                 A Stockholder may assign any of its rights
under this Agreement to any Person 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 of Exhibit A, agreeing to become a
“Stockholder” for all purposes of this Agreement, except as otherwise provided
in such

 

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joinder; provided, that a Stockholder’s rights under this Agreement shall be
assignable by such Stockholder under the procedure in this
Section 7.02(b) regardless of whether such Stockholder continues to hold any
interests in the Corporate Taxpayer or has fully transferred any such interests.

 

Section 7.03                             Resolution of Disputes.

 

(a)                                 Except for Reconciliation Disputes subject
to Section 7.09, any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in
connection with the validity, negotiation, execution, interpretation,
performance or non-performance of this Agreement (including the validity, scope
and enforceability of this arbitration provision) (each a “Dispute”) shall be
finally settled by arbitration conducted by a single arbitrator in Delaware in
accordance with the then-existing Rules of Arbitration of the International
Chamber of Commerce. If the parties to the Dispute fail to agree on the
selection of an arbitrator within ten (10) days of the receipt of the request
for arbitration, the International Chamber of Commerce shall make the
appointment. The arbitrator shall be a lawyer admitted to the practice of law in
the State of Delaware and shall conduct the proceedings in the English
language.  Performance under this Agreement shall continue if reasonably
possible during any arbitration proceedings.

 

(b)                                 Notwithstanding the provisions of paragraph
(a), the Corporate Taxpayer may bring an action or special proceeding in any
court of competent jurisdiction for the purpose of compelling a party to
arbitrate, seeking temporary or preliminary relief in aid of an arbitration
hereunder, and/or enforcing an arbitration award and, for the purposes of this
paragraph (b), each Stockholder (i) expressly consents to the application of
paragraph (c) of this Section 7.03 to any such action or proceeding, (ii) agrees
that proof shall not be required that monetary damages for breach of the
provisions of this Agreement would be difficult to calculate and that remedies
at law would be inadequate, and (iii) irrevocably appoints the Corporate
Taxpayer as agent of such Stockholder for service of process in connection with
any such action or proceeding and agrees that service of process upon such
agent, who shall promptly advise such Stockholder of any such service of
process, shall be deemed in every respect effective service of process upon such
Stockholder in any such action or proceeding.

 

(c)                                  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE CHANCERY COURT OF THE STATE OF DELAWARE OR, IF SUCH
COURT DECLINES JURISDICTION, THE COURTS OF THE STATE OF DELAWARE SITTING IN
WILMINGTON, DELAWARE, AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT
OF DELAWARE SITTING IN WILMINGTON, DELAWARE, AND ANY APPELLATE COURT FROM ANY
THEREOF, FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH
THE PROVISIONS OF THIS SECTION 7.03, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN
ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR
CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit,
action or proceeding to compel arbitration, to obtain temporary or preliminary
judicial relief in aid of arbitration, or to confirm an arbitration award. The
parties acknowledge that the fora designated by this paragraph (c) have a
reasonable relation to this Agreement, and to the parties’ relationship with one
another.

 

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(d)                                 The parties hereby waive, to the fullest
extent permitted by applicable law, any objection which they now or hereafter
may have to personal jurisdiction or to the laying of venue of any such
ancillary suit, action or proceeding brought in any court referred to in the
preceding paragraph of this Section 7.03 and such parties agree not to plead or
claim the same.

 

Section 7.04                             Counterparts.  This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.  Until and unless each party has received a counterpart hereof
signed by the other party hereto, this Agreement shall have no effect and no
party shall have any right or obligation hereunder (whether by virtue of any
other oral or written agreement or other communication).

 

Section 7.05                             Entire Agreement.  This Agreement and
the other Reorganization Documents (as such term is defined in the LLC
Agreement) constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.  Except to the extent provided in
Section 3.03, nothing in this Agreement shall create any third-party beneficiary
rights in favor of any Person or other party hereto.

 

Section 7.06                             Severability.  If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other Governmental Authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated 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 a determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the fullest extent possible.

 

Section 7.07                             Amendment.  No provision of this
Agreement may be amended unless such amendment is approved in writing by the
Corporate Taxpayer and the Stockholders.  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.

 

Section 7.08                             Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflicts of law rules of such State that would result in
the application of the laws of any other State.

 

Section 7.09                             Reconciliation.  In the event that the
Corporate Taxpayer and a Stockholder are unable to resolve a disagreement with
respect to the matters governed by Sections 2.03, 3.01(b), 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 or principal in a
nationally recognized accounting or law firm, and unless the Corporate Taxpayer
and such Stockholder agree otherwise, the Expert shall not, and the firm that
employs the Expert shall not, have any material

 

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relationship with the Corporate Taxpayer or such Stockholder or other actual or
potential conflict of interest.  If the parties are unable to agree on an Expert
within fifteen (15) calendar days of receipt by the respondent(s) of written
notice of a Reconciliation Dispute, the Expert shall be appointed by the
International Chamber of Commerce Centre for Expertise. 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 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, the undisputed amount shall be paid on the date
prescribed by this Agreement and such Tax Return may be filed as prepared by the
Corporate Taxpayer, 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 by the Corporate Taxpayer, except as provided in the next
sentence.  The Corporate Taxpayer and such Stockholder shall bear their own
costs and expenses of such proceeding, unless (i) the Expert substantially
adopts such Stockholder’s position, in which case the Corporate Taxpayer shall
reimburse such Stockholder for any reasonable out-of-pocket costs and expenses
in such proceeding, or (ii) the Expert substantially adopts the Corporate
Taxpayer’s position, in which case such Stockholder shall reimburse the
Corporate Taxpayer for any reasonable out-of-pocket costs and expenses in 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 Corporate
Taxpayer and such Stockholder and may be entered and enforced in any court
having jurisdiction.

 

Section 7.10                             Withholding.  The Corporate Taxpayer
shall be entitled to deduct and withhold from any payment payable pursuant to
this Agreement such amounts as the Corporate Taxpayer 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 to the appropriate Taxing Authority by the Corporate
Taxpayer, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the applicable Stockholder. The Corporate
Taxpayer and the Stockholders agree that Imputed Interest qualifies, under the
law in effect on the date hereof, as “portfolio interest” within the meaning of
Sections 871(h) and 881(c) of the Code and shall not take any contrary position
on any Tax Return or in any communication with any Taxing Authority unless
required by a final determination or a change in applicable law (in which case
Section 7.13 shall apply).

 

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

 

(a)                                 If the Corporate Taxpayer is or 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 or local law, then: (i) the provisions of
this Agreement shall be applied with respect to the group as a whole; and (ii) 

 

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Tax Benefit Payments, 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)                                 If any entity that is obligated to make a
Tax Benefit Payment or Early Termination Payment hereunder transfers one or more
assets to a corporation (or a Person classified as a corporation for U.S.
federal income tax purposes) 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 Tax Benefit Payment or Early Termination 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.  For purposes of this Section 7.11,
a transfer of a partnership interest shall be treated as a transfer of the
transferring partner’s share of each of the assets and liabilities of that
partnership.

 

Section 7.12                             Confidentiality.  Section 12.11
(Confidentiality) of the LLC Agreement as of the date of this Agreement shall
apply to any information of the Corporate Taxpayer provided to the Stockholders
and their assignees pursuant to this Agreement.

 

Section 7.13                             Change in Law.  Notwithstanding
anything herein to the contrary, if, in connection with an actual or proposed
change in law, a Stockholder reasonably believes that the existence of this
Agreement could cause income (other than income arising from receipt of a
payment under this Agreement) recognized by such Stockholder (or direct or
indirect equity holders in such Stockholder) upon an Exchange to be treated as
ordinary income rather than capital gain (or otherwise taxed at ordinary income
rates) for U.S. federal income tax purposes or would have other material adverse
tax consequences to the Corporate Taxpayer or such Stockholder or any direct or
indirect owner of such Stockholder, then at the election of such Stockholder and
to the extent specified by such Stockholder, this Agreement (i) shall cease to
have further effect with respect to such Stockholder, (ii) shall not apply to an
Exchange occurring after a date specified by such Stockholder, or (iii) shall
otherwise be amended in a manner determined by such Stockholder; provided, that
such amendment shall not result in an increase in payments under this Agreement
to such Stockholder at any time as compared to the amounts and times of payments
that would have been due to such Stockholder in the absence of such amendment.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Corporate Taxpayer and the Stockholders set forth below
have duly executed this Agreement as of the date first written above.

 

 

 

CORPORATE TAXPAYER:

 

 

 

 

 

VIRTU FINANCIAL, INC.

 

 

 

 

 

By:

/s/ Douglas A. Cifu

 

 

Name:

Douglas A. Cifu

 

 

Title:

Chief Executive Officer

 

Signature Page to Tax Receivable Agreement (Mergers)

 

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SLP STOCKHOLDER:

 

 

 

 

 

SLP III EW FEEDER I, L.P.

 

 

 

 

 

By: Silver Lake Technology Associates III, L.P., its general partner

 

 

 

By: SLTA III (GP), L.L.C., its general partner

 

 

 

By: Silver Lake Group, L.L.C., its managing member

 

 

 

/s/ Michael Bingle

 

By:

Michael Bingle

 

Title:

Managing Member

 

Signature Page to Tax Receivable Agreement (Mergers)

 

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TEMASEK STOCKHOLDER:

 

 

 

 

 

HAVELOCK FUND INVESTMENTS PTE LTD.

 

 

 

 

 

By:

/s/ PNG Chin Yee

 

 

Name: PNG Chin Yee

 

 

Title: Authorized Signatory

 

Signature Page to Tax Receivable Agreement (Mergers)

 

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Exhibit A

 

Form of Joinder

 

This JOINDER (this “Joinder”) to the Tax Receivable Agreement (as defined
below), dated as of                         , by and among Virtu
Financial, Inc., a Delaware corporation (the “Corporate Taxpayer”), and
                             (“Permitted Transferee”).

 

WHEREAS, on                         , Permitted Transferee acquired (the
“Acquisition”) the right to receive any and all payments that may become due and
payable under the Tax Receivable Agreement (as defined below) (the “Acquired
Interests”) from                              (“Transferor”); and

 

WHEREAS, Transferor, in connection with the Acquisition, has required Permitted
Transferee to execute and deliver this Joinder pursuant to Section 7.02(b) of
the Tax Receivable Agreement (Mergers), dated as of April 15, 2015, by and among
the Corporate Taxpayer, SLP III EW Feeder I, L.P., a Delaware limited
partnership, and Havelock Fund Investments Pte Ltd., a Singapore private limited
company (the “Tax Receivable Agreement”).

 

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

 

Section 1.01                             Definitions.  To the extent capitalized
words used in this Joinder are not defined in this Joinder, such words shall
have the respective meanings set forth in the Tax Receivable Agreement.

 

Section 1.02                             Joinder.  Permitted Transferee hereby
acknowledges and agrees to become a “Stockholder” (as defined in the Tax
Receivable Agreement) for all purposes of the Tax Receivable Agreement. 
Permitted Transferee hereby acknowledges the terms of Section 7.02(b) of the Tax
Receivable Agreement and agrees to be bound by Section 7.12 of the Tax
Receivable Agreement.

 

Section 1.03                             Notice.  Any notice, request, consent,
claim, demand, approval, waiver or other communication hereunder to Permitted
Transferee shall be delivered or sent to Permitted Transferee at the address set
forth on the signature page hereto in accordance with Section 7.01 of the Tax
Receivable Agreement.

 

Section 1.04                             Governing Law. This Joinder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflicts of law rules of such State that would result in
the application of the laws of any other State.

 

IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by
Permitted Transferee as of the date first above written.

 

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[PERMITTED TRANSFEREE]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

Address for notices:

 

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